<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 June 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
August 12, 1999.
<PAGE> 2
REGENT COMMUNICATIONS, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1999
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations for the three
months and six months ended June 30, 1999 (unaudited) and
June 30, 1998 (unaudited)
Condensed Consolidated Balance Sheets as of
June 30, 1999 (unaudited) and December 31, 1998
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1999 (unaudited) and June 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 4. Submission of Matters to a Vote of Security Holders
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 Six Months Ended
June 30, June 30,
-------------------------------- --------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Gross broadcast revenues $ 6,802,937 $ 2,866,077 $ 11,628,861 $ 4,479,282
Less agency commissions 487,634 267,951 793,568 416,079
------------ ------------ ------------ ------------
Net broadcast revenues 6,315,303 2,598,126 10,835,293 4,063,203
Station operating expenses 4,358,220 1,599,738 8,146,685 2,698,649
Depreciation and amortization 1,047,147 396,388 1,818,856 686,936
Corporate general and
administrative expenses 544,109 734,542 1,159,130 860,070
------------ ------------ ------------ ------------
Operating income (loss) 365,827 (132,542) (289,378) (182,452)
Interest expense 624,341 582,838 1,486,807 1,086,608
Other income, net 1,904 8,622 85,040 20,773
------------ ------------ ------------ ------------
Loss before extraordinary item (256,610) (706,758) (1,691,145) (1,248,287)
Extraordinary loss from debt
extinguishment, net of taxes -- (1,170,080) -- (1,170,080)
------------ ------------ ------------ ------------
Net loss $ (256,610) $ (1,876,838) $ (1,691,145) $ (2,418,367)
============ ============ ============ ============
Loss applicable to common shares:
Net loss $ (256,610) $ (1,876,838) $ (1,691,145) $ (2,418,367)
Preferred stock dividend requirements
and accretion (1,521,808) (4,814,846) (2,561,000) (5,093,639)
------------ ------------ ------------ ------------
Loss applicable to common shares $ (1,778,418) $ (6,691,684) $ (4,252,145) $ (7,512,006)
============ ============ ============ ============
Basic and diluted net loss per common share:
Before extraordinary item $ (7.41) $ (23.00) $ (17.72) $ (26.42)
Extraordinary item -- (4.88) -- (4.88)
------------ ------------ ------------ ------------
Net loss per common share $ (7.41) $ (27.88) $ (17.72) $ (31.30)
============ ============ ============ ============
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>
June 30, 1999 December 31, 1998
------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,760,004 $ 478,545
Accounts receivable, less allowance for doubtful
accounts of $249,000 in 1999 and $268,000 in 1998 4,282,758 3,439,372
Other current assets 297,708 200,828
Assets held for sale 14,713,163 7,500,000
------------ ------------
Total current assets 21,053,633 11,618,745
Property and equipment, net 9,268,558 9,303,975
Intangibles, net 48,910,286 45,023,940
Other assets, net 1,715,185 1,671,210
------------ ------------
Total assets $ 80,947,662 $ 67,617,870
============ ============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 501,948 $ 1,005,327
Accrued expenses 1,479,091 2,772,612
Interest payable 309,840 769,367
Notes payable 6,000,000 7,500,000
Current portion of long-term debt 8,990,000 980,000
------------ ------------
Total current liabilities 17,280,879 13,027,306
------------ ------------
Long-term debt, less current portion 32,410,000 34,617,500
Warrants and other long-term liabilities 2,391,452 2,643,579
------------ ------------
Total liabilities 52,082,331 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: $3,540,717 3,540,717 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: $5,595,205 5,595,205
5,372,054
Series D convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized;
1,000,000 shares issued and outstanding-liquidation value: $5,405,003 5,405,003 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: $21,931,700 21,931,700 12,839,454
Series G convertible preferred stock, $5.00 stated value, 2,000,000 shares authorized;
372,406 shares issued and outstanding-liquidation value: $1,949,265 1,949,265 0
Series H convertible preferred stock, $5.50 stated value, 2,000,000 shares authorized;
636,363 shares issued and outstanding-liquidation value: $3,509,315 3,509,315 0
------------ ------------
Total redeemable preferred stock 41,931,205 26,876,058
Shareholders' deficit:
Preferred stock:
Series C convertible preferred stock, $5.00 stated value, 4,000,000 shares authorized;
3,729,080 shares issued and outstanding-liquidation value: $19,962,400 1,584,905 1,584,820
Series E convertible preferred stock, $5.00 stated value, 5,000,000 shares authorized;
447,842 shares issued and outstanding-liquidation value: $2,402,626 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 2,120,145 3,948,384
Retained deficit (19,012,534) (17,321,387)
------------ ------------
Total shareholders' deficit (13,065,874) (9,546,573)
------------ ------------
Total liabilities and shareholders' deficit $ 80,947,662 $ 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>
Six Months Ended June 30,
--------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Net cash used in operating activities $ (1,825,876) $ (898,400)
------------ ------------
Cash flows from investing activities:
Acquisitions of radio stations, net of cash acquired (13,339,872) (29,089,991)
Capital expenditures (986,727) (62,120)
Proceeds from sale of radio station 1,600,000 --
------------ ------------
Net cash used in investing activities (12,726,599) (29,152,111)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt 9,300,000 35,500,000
Proceeds from issuance of Series A, B, D, F, G & H
Convertible Preferred Stock 13,621,390 18,150,000
Principal payments on long-term debt (3,497,500) (20,716,660)
Payment of notes payable (1,500,000) --
Payments for deferred financing costs (274,558) (1,292,042)
Payment for issuance costs (1,815,398) (1,356,393)
------------ ------------
Net cash provided by financing activities 15,833,934 30,284,905
------------ ------------
Net increase in cash and cash equivalents 1,281,459 234,394
Cash at beginning of period 478,545 535,312
------------ ------------
Cash at end of period $ 1,760,004 $ 769,706
============ ============
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 the Company $ 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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REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
Regent Communications, Inc. (including its wholly-owned
subsidiaries, the "Company") was formed to acquire, own and operate radio
stations in small and medium-sized markets in the United States. The Company
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 the
Company'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 the Company at the option of the holder subsequent to June
15, 2003. The acquisition has been treated for accounting purposes as the
acquisition of the Company 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 have been retroactively
restated to reflect the number of common shares outstanding subsequent to the
merger, with the difference between the par value of the Company's and Faircom's
common stock recorded as an offset to additional paid-in capital.
The condensed consolidated financial statements of the Company 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. 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 the Company's Form 10-K filed March 31, 1999.
2. CONSUMMATED AND PENDING ACQUISITIONS AND DIVESTITURES
On June 15, 1998, concurrent with the Faircom merger, the following
acquisitions (the "June 15 Acquisitions") were consummated:
The Company acquired all of the outstanding capital stock of The Park
Lane Group ("Park Lane") for approximately $24,038,000 in cash and assumed
liabilities. Park Lane owned 16 radio stations in California and Arizona. At the
time of the acquisition, the Company entered into a one-year consulting and
non-competition agreement with the President of Park Lane, providing for the
payment of a fee of $200,000.
The Company acquired the licenses issued by the Federal Communications
Commission ("FCC") and related assets used in the operation of radio stations
KIXW(AM) and KZXY(FM) in Apple Valley, California from Ruby Broadcasting, Inc.
("Ruby") for $5,985,000 in cash.
The Company acquired the FCC licenses and related assets used in the
operation of radio stations KFLG(AM) and KFLG(FM) in Bullhead City, Arizona from
Continental Radio Broadcasting, L.L.C. for
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<PAGE> 7
approximately $3,747,000 in cash. The Company separately acquired the accounts
receivables of these stations for an additional purchase price of approximately
$130,000.
The Company acquired all of the outstanding capital stock of Alta
California Broadcasting, Inc. ("Alta") for $2,635,000 in cash and assumed
liabilities and 205,250 shares of the Company's Series E Convertible Preferred
Stock. Alta owned four radio stations in California.
The Company acquired all of the outstanding capital stock of Topaz
Broadcasting, Inc. ("Topaz"), an affiliate of Ruby, for 242,592 shares of the
Company's Series E Convertible Preferred Stock. Immediately following the
acquisition of Topaz, the Company acquired the FCC licenses and operating assets
of radio station KIXA(FM) in Lucerne Valley, California for $215,000 in cash and
assumed liabilities, pursuant to an Asset Purchase Agreement between Topaz and
RASA Communications Corp.
The June 15 Acquisitions were accounted for under the purchase method
of accounting and the fair value of the acquired assets were determined by
independent valuations.
The Company allocated the aggregate purchase price for the June 15
Acquisitions as follows:
<TABLE>
<S> <C>
Accounts receivable $ 143,000
Broadcasting equipment and furniture and fixtures 6,503,000
FCC licenses 30,328,000
Goodwill 1,853,000
Other 360,000
------------
$ 39,187,000
============
</TABLE>
Goodwill and FCC licenses related to the June 15 Acquisitions are being
amortized over a 40-year period.
The sources for the cash portion of the consideration paid by the
Company for the June 15 Acquisitions and the Faircom merger, aggregating
approximately $52,900,000 (including approximately $21,100,000 of assumed debt
refinanced with borrowings under the Company's senior reducing revolving credit
facility and $3,700,000 of transaction costs), were $34,400,000 borrowed under
the Company's senior reducing revolving credit facility, $18,150,000 in
additional equity from the sale of the Company's convertible preferred stock and
approximately $350,000 of the Company's funds.
On November 30, 1998, the Company purchased substantially all of the
assets of radio station KOSS(FM) (formerly KAVC(FM)) located in Lancaster,
California from Oasis Radio, Inc. for $1,600,000 in cash. The acquisition was
financed through the issuance of additional shares of Series F convertible
preferred stock.
On March 1, 1999, the Company sold the FCC licenses and related assets
used in the operations of WSSP(FM) in Charleston, South Carolina for
approximately $1,600,000 in cash. The Company had previously issued a note for
$1,500,000 to a third party 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 the Company which has been included in other income in the
accompanying condensed consolidated statement of operations.
On May 6, 1999, the Company purchased 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 from WJON Broadcasting
Company 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 the Company's senior reducing
credit
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<PAGE> 8
facility. Approximately $10,700,000 of the purchase price has been allocated to
the FCC licenses and is being amortized over a 40-year period. The remaining
$2,000,000 was allocated to property and equipment. An independent valuation is
currently being completed and may result in adjustments being made to the
original purchase price allocation.
The results of operations of the acquired businesses are included in
the Company's financial statements since the respective dates of acquisition.
The following unaudited pro forma data summarizes the combined results
of operations of the Company, Faircom, the stations acquired as part of the June
15 Acquisitions and KOSS(FM), as though the acquisitions had occurred at the
beginning of 1998, and the St. Cloud Stations, as though their acquisition had
occurred at the beginning of each period. The Company's 1999 disposition of
WSSP(FM) is not material to the results of the Company.
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net broadcast revenues $11,862,006 $10,988,999
Net loss before extraordinary item $(1,702,894) $(2,414,770)
Net loss $(1,702,894) $(3,584,850)
Net loss per common share before extraordinary item:
Basic and diluted $ (18.55) $ (39.99)
Net loss per common share:
Basic and diluted $ (18.55) $ (44.86)
</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 5, 1999, the Company entered into an agreement to sell 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 have been reclassified to assets held for sale in the
accompanying June 30, 1999 condensed consolidated balance sheet. The transaction
is subject to FCC consent.
On March 30, 1999, the Company entered into an agreement to sell the
FCC licenses and related assets used in the operation of radio stations
KZGL(FM), KVNA(AM) and KVNA(FM) in Flagstaff, Arizona (the "Flagstaff Stations")
for approximately $2,425,000 in cash to an unrelated third party. Approximately
$2,375,000 of FCC licenses and related long-lived assets have been reclassified
to assets held for sale in the accompanying June 30, 1999 condensed consolidated
balance sheet. The transaction is subject to FCC consent.
On May 18, 1999, the Company entered into an agreement to purchase 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 for approximately
$13,500,000 in cash. The Company provided a $675,000 letter of credit as an
escrow deposit in this transaction.
On July 9, 1999, the Company entered into an agreement to sell the FCC
licenses and related assets used in the operation of radio stations KRLT(FM) AND
KOWL(AM) in Lake Tahoe, California (the "Lake Tahoe Stations") for approximately
$1,250,000 in cash to an unrelated third party. Approximately $1,200,000 of FCC
licenses and related long-lived assets have been reclassified to assets held for
sale in the accompanying June 30, 1999 condensed consolidated balance sheet. The
transaction is subject to FCC consent.
On July 29, 1999, the Company 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 the Company's $7.50 Series I Convertible Preferred Stock.
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<PAGE> 9
The transaction is subject to FCC consent. The Company provided a $2,200,000
letter of credit as an escrow deposit in this transaction.
On August 1, 1999, the Company sold the FCC licenses and related assets
used in the operations of KCBQ(AM) in San Diego, California for approximately
$6,000,000 in cash. The Company had previously issued a note for $6,000,000 to a
third party which was collateralized by the assets of the station. Upon
consummation of the sale, the note was repaid.
3. CAPITAL STOCK
In January 1999, the Company issued 372,406 shares of Series G
Convertible Preferred Stock for $5.00 per share to certain executive officers of
the Company and 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 the Credit Agreement and fund working capital needs of
the Company.
In February 1999, the Company issued 633,652 shares of Series F
Convertible Preferred Stock for $5.00 per share to existing Series F holders.
The proceeds were used to finance certain capital improvements, fund deferred
transaction costs related to the June 15 Acquisitions and the Faircom merger and
fund working capital needs of the Company.
In April 1999, the Company issued 1,016,348 shares of 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, the Company 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 the Company's
Certificate of Incorporation, and the additional shares of preferred stock have
not been designated as a specific series.
In June 1999, the Company issued 636,363 shares of 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 the Company's
Board of Directors upon and subject to certain conditions.
4. ASSETS HELD FOR SALE
As of June 30, 1999, the Company had signed definitive agreements to
sell the Kingman Stations, the Flagstaff 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. The Company expects these dispositions to be completed within one
year of June 30, 1999. As a result, the Company has reclassified approximately
$8,925,000 of long-term debt to current debt and approximately $8,713,000 in
long-term assets to assets held for sale in the accompanying June 30, 1999
condensed consolidated balance sheet. The assets classified as assets held for
sale as of June 30, 1999 have been 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.
In addition, the assets of KCBQ (AM), which were sold on August 1,
1999, also have been classified as assets held for sale in the accompanying June
30, 1999 condensed consolidated balance sheet.
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 the Company'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.
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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. See Notes 1 and 2 to Regent's
Condensed Consolidated Financial Statements included as part of this Form 10-Q.
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 which 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 revenue, 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 acquisition of the St. Cloud stations,
the results of Regent's operations in 1999 are not comparable to those of 1998,
nor are they necessarily indicative of results in the future.
The key focus from the consummation of the June 15, 1998 transactions
into 1999 was developing the platform from which Regent could carry out its
operating strategies as a much larger radio company. Development of the platform
required significant expenditures. These costs are viewed by Regent as
investment costs which will provide returns to Regent in future years.
Operationally, Regent replaced general managers in eight of its markets and
added or replaced general sales managers in six markets in order to implement
aggressive sales programs. Regent invested significantly in the hiring and
training of sales personnel and in increased promotional spending in all
markets. While many of these changes took place prior to 1999, the operational
improvements take some time to manifest even though the cost increases were
immediate.
In addition, Regent developed a corporate staff which it believes is
capable of supporting a much larger operation and now maintains primary
executive and administrative offices located in Covington, Kentucky, as well as
the New York corporate office utilized by Faircom at the time of its merger with
Regent. The cost of executive personnel and administrative expense amounted to
approximately $544,000 in the three months ended June 30, 1999, versus
approximately $735,000 in the comparable period in 1998. The 1998 costs include
$530,000 in one-time compensation expense for stock options granted June 15,
1998 to two officers of Faircom pursuant to the terms of the merger between
Faircom and Regent. Corporate general and administrative expense of $1,160,000
increased for the six months ended June 30, 1999 versus $860,000 for the
comparable period in 1998 due to the increase in corporate staff and facilities
partially offset by the one-time compensation charge in 1998.
Operating income of $515,000 for the three months ended June 30, 1999
compared favorably with an operating loss of $132,000 for the same period in
1998. Additionally, the operating loss of $140,000 for the six months ended June
30, 1999 compared favorably with an operating loss of $182,000 for the same
period in 1998.
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Interest expense of $624,000 for the three months ended June 30, 1999
and $1,487,000 for the six months ended June 30, 1999 increased versus the
comparable periods in 1998 as a result of the June 15 transactions, and to a
lesser extent, the acquisition of the St. Cloud stations. This increase in
interest expense was partially offset by a $311,000 reduction in the carrying
value of the "put" warrants classified as a long-term liability in the
accompanying June 30, 1999 condensed consolidated balance sheet.
LIQUIDITY AND CAPITAL RESOURCES
In the six months ended June 30, 1999, net cash used in operating
activities was $1,826,000 compared with net cash used in operating activities of
$898,000 for 1998. In the six months ended June 30, 1999, proceeds from the
issuance of preferred stock provided substantially all of the funds used in
operating activities, as well as 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 (with the exception of the borrowing of
$8,500,000 which was used to help finance the purchase of the St. Cloud
stations). As a result, there was a net increase in cash of $1,281,000 in the
six months ended June 30, 1999 compared with a net increase of $234,000 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 $53,625,000 at June 30, 1999). Regent's credit agreement permits the
borrowing of available credit for working capital and acquisitions, including
related acquisition expenses. In addition, Regent may request from time to time
that the lenders issue letters of credit in accordance with the same provisions
as the credit facility. At June 30, 1999, Regent had borrowed $40,735,000 under
its credit agreement. The remaining unused portion of the credit facility of
$12,890,000 was available to finance other acquisitions, subject to restrictions
contained in the credit agreement.
Beginning January 1, 1999, 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, Regent must reduce its outstanding borrowings
during the third quarter of 1999. It intends to do this through proceeds from
the sales of the Arizona stations and the Lake Tahoe stations. The sale of four
of the seven Arizona stations is expected to close during the third quarter of
1999. Sale of the others could be delayed into the fourth quarter, depending on
the timing of FCC consent. If these sales were to be delayed, Regent will
request waivers from its lenders to allow more time for the sales to close or
will raise additional equity to reduce its debt.
Interest under the credit agreement is payable, at the option of
Regent, at alternative rates equal to the LIBOR rate (established June 3, 1999
at 8.63% and May 21, 1999 at 8.56% and effective at those same rates at June 30,
1999) plus 1.50% to 3.50%, or the base rate announced by the Bank of Montreal
(7.75% at June 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 will 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
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<PAGE> 12
quarter of 1999, the holders of the Series F convertible preferred stock
purchased an additional 1,016,348 shares 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 in
funds 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 an additional $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, an existing investor and a new investor
have committed to purchase an additional $8,500,000 of Series H convertible
preferred stock in August 1999. Of the proceeds, $1,000,000 will be used to pay
down borrowings under Regent's credit facility. The balance of the proceeds,
along with additional borrowings under its credit agreement, will be used to
finance the acquisition and initial capital expenditure and working capital
needs of the Erie stations.
Based on current interest rates and accrued interest expense as of June
30, 1999, Regent believes its interest payments for the remainder of 1999 will
be approximately $1,925,000. Scheduled debt principal payments are expected to
be $33,000 for the remainder of 1999. Corporate general and administrative
expense and capital expenditures for the remainder of 1999 are estimated to be
approximately $1,030,000 and $530,000, respectively. Most of the planned capital
expenditures are required to be made in 1999 under the terms of the credit
agreement. During the first and second quarters of 1999, Regent paid
approximately $1,421,000 of professional fees which were mostly incurred in
connection with the June 15, 1998 transactions. Regent has paid the remaining
balance of approximately $65,000 in the third quarter. For these payments to be
made over the balance of 1999, aggregating $3,583,000, Regent has used or will
utilize net cash provided by operations, current cash balances, proceeds from
the issuance of Series F and G convertible preferred stock received in the first
quarter of 1999 and the $3,500,000 of proceeds from the sale of the Series H
convertible preferred stock received in the second quarter of 1999.
Pursuant to the terms of its credit agreement, Regent is required to
reduce its outstanding borrowings under its credit agreement by an amount equal
to the net proceeds received from the sales of its Arizona and Lake Tahoe
stations. Regent believes net cash from operations, cash balances, and the net
proceeds from the sales of its Arizona stations and Lake Tahoe stations will be
sufficient to reduce borrowings under its credit agreement to allow Regent to
maintain compliance with all covenants and 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.
In addition to the pending acquisition of stations in Utica-Rome and
Watertown, New York, Regent is actively pursuing a number of acquisitions of
radio stations in a number of markets. This pending acquisition and any such
additional acquisitions would be financed from borrowings against the unused
portion of the credit agreement (less any utilization of such portion for
working capital needs), and through additional equity or high yield debt
offerings. There can be no assurance, however, that any of such acquisitions
will be consummated or that all or any portion of such financing will be
available.
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
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<PAGE> 13
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 $40,735,000
principal amount outstanding under Regent's credit facility at June 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 $6,335,000 would not be material.
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 which have been determined to be
non-compliant will be upgraded and tested by the end of the third quarter of
1999. 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 will
occur by the end of the third quarter of 1999. Most of the replacements will
take place by the end of the third quarter; however, a portion will occur in the
fourth quarter.
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<PAGE> 14
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
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 90% complete, with the installation of new Year 2000
compliant broadcast systems having been completed for Regent's stations in all
of its markets except the Redding, California market, which will occur in the
third quarter in conjunction with an expansion of Regent's facility in the
market. The costs of the upgrade project have been included in capital
expenditures. Regent plans to conduct and complete its own testing of the
broadcast systems at all of its stations by the end of the third quarter of
1999. The cost associated with this testing is expected to be immaterial.
The traffic scheduling and billing systems currently utilized at
Regent's stations are provided by two suppliers on a Year 2000 compliant basis,
with the exception of Regent's stations located in the Victorville, California
market. To confirm Year 2000 compliance of its traffic and billing systems,
Regent tested these systems during the second quarter of 1999. By the third
quarter of 1999, Regent intends to have replaced its traffic and billing systems
at the Victorville stations with a system provided by suppliers utilized by
Regent's other stations.
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 has begun and is ongoing.
With respect to the stations which Regent has agreed to acquire, the
Year 2000 assessment phase has been commenced and is continuing. Regent expects
its acquisition of the Erie stations to be consummated on August 31, 1999 and
believes that it will be able to complete its assessment of Year 2000 compliance
and perform all remediation and testing on those stations in the third and
fourth quarters of 1999. Regent's agreement to acquire stations in Utica-Rome
and Watertown, New York was signed on July 29, 1999 and 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 seller has 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.
Required capital expenditures, if any, for remediation of non-compliant systems
at the Erie stations will be funded out of the initial capital budget. Expenses
related to remediation at the Erie stations, if any, are not expected to be
material. To the extent that any material Year 2000 problems are discovered at
the Utica-Rome or Watertown stations, Regent will have a contractual claim
against the seller for any 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
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<PAGE> 15
external and non-IT system risks and the testing to be undertaken by Regent,
contingency plans will be developed for all critical systems by the end of the
third quarter of 1999. Testing of contingency plans will occur in the third and
fourth quarters 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 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) During the second quarter of 1999, Regent issued additional shares
of its preferred stock as follows:
On April 29, 1999, Regent's stockholders 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.
On April 28, 29 and 30, 1999, Regent sold 1,016,348 shares of Series F
convertible preferred stock to existing Series F holders at $5.00 per share to
fund the purchase by Regent of FCC licenses and other assets from WJON
Broadcasting Company.
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<PAGE> 16
On June 21 and 23, 1999, Regent issued a total of 636,363 shares of
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.
These issuances of securities were privately-negotiated transactions
based upon exemptions 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.
Both the Series F Convertible Preferred Stock and the Series H
Convertible Preferred Stock are 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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Regent Communications, Inc. 1999 Annual Meeting of Stockholders was
held on April 29, 1999. At the annual meeting, the stockholders were asked to
vote upon (1) the election of directors, and (2) a proposal to amend Regent's
Amended and Restated Certificate of Incorporation to increase the number of
authorized shares of preferred stock from 20,000,000 to 40,000,000 and the
number of authorized shares of common stock from 30,000,000 to 60,000,000.
The results of the voting were as follows:
(1) Regent's seven incumbent directors were re-elected to serve
until the next annual meeting of stockholders and until their
successors are elected and qualified. The directors were
elected as follows:
<TABLE>
<CAPTION>
Shares Voted Shares
Name of Director "FOR Withheld
---------------- ------------- --------
<S> <C> <C>
Terry S. Jacobs 6,251,157 0
William L. Stakelin 6,251,157 0
Joel M. Fairman 6,251,017 140
R. Glen Mayfield 6,251,157 0
William H. Ingram 6,251,157 0
Richard H. Patterson 6,251,157 0
John H. Wyant 6,251,157 0
</TABLE>
(2) The proposal to amend Regent's Amended and Restated
Certificate of Incorporation to increase the number of
authorized shares of preferred stock from 20,000,000 to
40,000,000 and the number of authorized shares of common stock
from 30,000,000 to 60,000,000 was adopted by the affirmative
vote of more than the required vote necessary for approval by
Regent's outstanding shares entitled to vote thereon. The
results of the voting were as follows:
<TABLE>
<S> <C>
Shares Voted "FOR" - 7,249,920
Shares Voted "AGAINST" - 182
Shares "ABSTAINING" - 1,055
</TABLE>
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<PAGE> 17
ITEM 5. OTHER INFORMATION
On May 18, 1999, Regent entered into an agreement to purchase WXKC(FM),
WRIE(AM) and WXTA(FM), serving the Erie, Pennsylvania area, for a purchase price
of approximately $13.5 million payable in cash. The completion of this
transaction is subject to a number of conditions, including FCC consent, and is
expected to occur during the third quarter of 1999.
On July 29, 1999, Regent entered into an agreement to acquire WODZ(FM),
WLZW(FM), WFRG(FM), WIBX(AM), and WRUN(AM) serving the Utica-Rome, New York area
and WCIZ(FM), WFRY(FM), WTNY(AM), and WUZZ(AM) in Watertown, New York for a
purchase price of $44 million in cash and 100,000 shares of Regent's preferred
stock. 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.
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
Regent did not file a Report on Form 8-K during the second
quarter of 1999.
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<PAGE> 18
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: August 16, 1999 By: /s/ TERRY S. JACOBS
--------------------------------------------
Terry S. Jacobs, Chairman of the Board
and Chief Executive Officer
Date: August 16, 1999 By: /s/ ANTHONY A. VASCONCELLOS
-------------------------------------------
Anthony A. Vasconcellos,
Chief Financial Officer and
Vice President
(Chief Accounting Officer)
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<PAGE> 19
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 May 18, 1999 by and
among Media One Group-Erie, Ltd., Cuzco LLC, James T.
Embrescia and Thomas J. Embrescia, Regent Broadcasting of
Erie, Inc. and Regent Licensee of Erie, 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:
Schedules:
1.2.8 Miscellaneous Excluded Assets
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
Exhibits:
A Form of Indemnification Escrow Agreement
B Form of Letter of Credit
C Form of Deposit Escrow Agreement
D Form of Assignment and Assumption Agreement
E Form of Non-Competition Agreement
F Form of Lease Agreement
2(b) Asset Purchase Agreement dated as of July 29, 1999 by and
among Forever of NY, Inc., Forever of NY, LLC and Forever
Broadcasting, as sellers, and Regent Broadcasting of
Utica/Rome, Inc., Regent Licensee of Utica/Rome, Inc., Regent
Broadcasting of Watertown, Inc., Regent Licensee of Watertown,
Inc., as buyers, and Regent Communications, Inc.
E-1
<PAGE> 20
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:
Schedules:
1.2.8 Excluded Real Property
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
Exhibits:
A Form of Certificate of Designation
B Form of Indemnification Escrow Agreement
C Form of Deposit Escrow Agreement
D Form of Assignment and Assumption Agreement
E Form of Opinion Letter of Sellers'
Corporate Counsel
F Form of Opinion Letter of Sellers'
FCC Counsel
G Form of Non-Competition Agreement
H Form of Opinion Letter of Counsel for
Buyers and Regent
I Form of Lease Agreement
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
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
E-2
<PAGE> 21
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).
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).
E-3
<PAGE> 22
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 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
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<PAGE> 23
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)
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
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<PAGE> 24
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)
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)
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)
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
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:
<TABLE>
<S> <C>
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
River Cities Capital Fund Limited Partnership 20,000
William H. Ingram 10,000
</TABLE>
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<PAGE> 25
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:
<TABLE>
<S> <C>
Joel M. Fairman 3,319 shares
William L. Stakelin 3,200 shares
</TABLE>
4. Two substantially identical Stock Purchase Agreements were entered into
for the purchase of Series H Convertible Preferred Stock as follows:
<TABLE>
<S> <C>
Blue Chip Capital Fund II Limited Partnership 363,636 shares
PNC Bank, N.A., Trustee 181,818 shares
</TABLE>
E-7
<PAGE> 1
Exhibit 2(a)
ASSET PURCHASE AGREEMENT
by and among
MEDIA ONE GROUP-ERIE, LTD.,
CUZCO LLC,
JAMES T. EMBRESCIA,
THOMAS J. EMBRESCIA,
REGENT BROADCASTING OF ERIE, INC.
and
REGENT LICENSEE OF ERIE, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - PURCHASE OF ASSETS
1.1 Transfer of Assets..............................................................................1
1.2 Excluded Assets.................................................................................2
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 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.................................................................................8
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 Absence of Conflicting Agreements or Required Consents..........................................9
6.5 Commissions or Finder's Fees...................................................................10
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
6.6 Litigation.....................................................................................10
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER
7.1 Organization and Standing......................................................................10
7.2 Authorization and Binding Obligation...........................................................10
7.3 Absence of Conflicting Agreements or Required Consents.........................................10
7.4 Government Authorizations......................................................................11
7.5 Compliance with FCC Regulations................................................................12
7.6 Taxes ......................................................................................12
7.7 Personal Property..............................................................................13
7.8 Real Property..................................................................................13
7.9 Contracts......................................................................................14
7.10 Status of Contracts, etc.......................................................................14
7.11 Environmental..................................................................................14
7.12 Intellectual Property..........................................................................15
7.13 Financial Statements...........................................................................15
7.14 Personnel Information..........................................................................15
7.15 Litigation.....................................................................................16
7.16 Compliance With Laws...........................................................................16
7.17 Employee Benefit Plans.........................................................................16
7.18 Commissions or Finder's Fees...................................................................17
7.19 Conduct of Business in Ordinary Course; Adverse Change.........................................17
7.20 Instruments of Conveyance; Good Title..........................................................17
7.21 Undisclosed Liabilities........................................................................17
7.22 Full Disclosure................................................................................17
ARTICLE 8 COVENANTS OF BUYERS
8.1 Closing........................................................................................18
8.2 Notification...................................................................................18
8.3 No Inconsistent Action.........................................................................18
8.4 Other Erie Transactions........................................................................18
ARTICLE 9 COVENANTS OF SELLER
9.1 Pre-Closing Covenants............................................................................18
9.2 Notification.....................................................................................20
9.3 No Inconsistent Action...........................................................................20
9.4 Closing ......................................................................................21
9.5 Other Items......................................................................................21
9.6 Exclusivity......................................................................................21
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
9.7 Supplements to Schedules.........................................................................21
ARTICLE 10 JOINT COVENANTS
10.1 Confidentiality................................................................................22
10.2 Cooperation....................................................................................22
10.3 Control of Stations............................................................................22
10.4 Consents to Assignment.........................................................................23
10.5 Filings ......................................................................................23
10.6 Bulk Sales Laws................................................................................23
10.7 Employee Matters...............................................................................23
ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS
11.1 Representations, Warranties and Covenants......................................................24
11.2 Governmental Consents..........................................................................24
11.3 Governmental Authorizations....................................................................24
11.4 Adverse Proceedings............................................................................25
11.5 Third-Party Consents...........................................................................25
11.6 Closing Documents..............................................................................25
11.7 Satisfactory Investigation of Station Facilities...............................................25
11.8 Environmental Studies..........................................................................25
11.9 No Adverse Change..............................................................................26
ARTICLE 12 CONDITIONS OF CLOSING BY SELLER
12.1 Representations, Warranties and Covenants......................................................26
12.2 Governmental Consents..........................................................................26
12.3 Adverse Proceedings............................................................................26
12.4 Closing Documents..............................................................................27
ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES
13.1 Expenses.......................................................................................27
13.2 Specific Charges...............................................................................27
ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Seller's Documents.............................................................................27
14.2 Buyers' Documents..............................................................................28
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC.
15.1 Survival of Representations, Etc...............................................................29
15.2 Indemnification................................................................................30
15.3 Procedures: Third Party and Direct Indemnification Claims......................................30
ARTICLE 16 TERMINATION RIGHTS
16.1 Termination....................................................................................31
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...................................................................................33
17.2 Certain Interpretive Matters and Definitions...................................................34
17.3 Further Assurances.............................................................................34
17.4 Preservation of Records........................................................................34
17.5 Benefit and Assignment.........................................................................34
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
</TABLE>
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<PAGE> 6
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.2.8 Miscellaneous Excluded Assets
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
Exhibit A Indemnification Escrow Agreement
B Form Letter of Credit
C Deposit Escrow Agreement
D Assignment and Assumption Agreement
E Non-Competition Agreement
F Lease Agreement
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<PAGE> 7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
this 18th day of May, 1999 by and among MEDIA ONE GROUP-ERIE, LTD., an Ohio
limited liability company (hereinafter referred to as " Seller "), REGENT
BROADCASTING OF ERIE, INC., a Delaware corporation ("RBI"), and REGENT LICENSEE
OF ERIE, INC., a Delaware corporation ("RLI") (RBI and RLI collectively referred
to as "Buyers"), and CUZCO LLC, an Ohio limited liability company, and JAMES T.
EMBRESCIA AND THOMAS J. EMBRESCIA.
RECITALS
WHEREAS, Seller owns and operates radio stations WXKC-FM and WRIE-AM
licensed to Erie, Pennsylvania, and WXTA-FM, licensed to Edinboro, Pennsylvania
(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 assume from Seller (provided that RLI shall only assume Seller's
rights and obligations under the Stations Licenses, as defined below), 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 useful in
connection with the operation of the Stations, including but not
<PAGE> 8
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, buildings and other improvements on real property, 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 useful
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 $10,000 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) such additional existing contracts as may be added to Schedule 7.9
within fourteen (14) days following the execution of this Agreement with the
prior written consent of Buyers, (b) 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 (c) 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, that the parties acknowledge that the Seller currently has
Barter Payables (the aggregate value of time owed pursuant to contracts for the
sale of advertising in exchange, in whole or in part, for merchandise or
services ("Trade Agreements")) of approximately $170,000 in connection with the
Trade Agreements listed on Schedule 7.9. Seller shall use its best efforts to
reduce the Barter Payables by as much as reasonably possible between the date
hereof and the Closing Date.
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 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
-2-
<PAGE> 9
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 filings with the FCC and all
written Contracts to be assigned hereunder, logs, software programs and 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;
and
1.1.8 except for Excluded Assets, such other assets, properties,
interests and rights owned by Seller that are used or useful in connection with
the operation of the Stations.
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 Assumed Liabilities 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, asset or money market accounts and
all such similar accounts or investments;
1.2.2 all investment securities and accounts receivable or
notes receivable for services performed by Seller in connection with the
operation of the Stations prior to the Closing Date and all security deposits
paid and held under any contract or lease agreement;
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;
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<PAGE> 10
1.2.5 Seller's governing 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; and
1.2.8 any right, property or asset described in Schedule
1.2.8.
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 or 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): (a) under the Contracts; (b) for operating expenses and other
liabilities of the Stations; (c) for accrued vacations of those of Sellers'
employees who become employees of RBI; and (d) all property taxes and other
governmental charges on the Stations Assets; and RLI shall assume the
obligations of Seller arising or to be performed on or after the Closing Date
(except to the extent such obligations represent liabilities for activities,
events or transactions occurring on or prior to the Closing Date) under the
Stations Licenses. 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 Buyers, other than the Assumed
Liabilities. Seller will retain all liabilities and obligations of the Seller,
other than the Assumed Liabilities, including but not limited to, the obligation
to 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,
-4-
<PAGE> 11
profit-sharing plans, 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
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 Thirteen Million Five Hundred Thousand
Dollars ($13,500,000.00), subject to adjustment pursuant to the provisions of
Sections 3.2 and 3.3 below (the "Purchase Price"). The Purchase Price shall be
paid in cash by wire transfer of immediately-available funds to Seller, pursuant
to wire instructions provided by Seller. Notwithstanding the foregoing, the
parties agree that at the Closing, Buyers, Seller and Bank One Trust Company,
NA, Columbus, Ohio, 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 a letter of credit substantially in the
form attached as Exhibit B hereto in the amount of Three Hundred Thousand
Dollars ($300,000.00), which funds shall be held in escrow for a period of at
least one year from 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.
3.2 Escrow Deposit. (a) Within five (5) business days of the execution
and delivery of this Agreement, Buyers, Seller and Bank One Trust Company, NA,
Columbus, Ohio, as Escrow Agent (the "Deposit Escrow Agent"), shall enter into a
Deposit Escrow Agreement in the form of Exhibit C 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 Six Hundred Seventy-Five Thousand Dollars
($675,000.00), or alternatively, deliver an irrevocable, stand-by letter of
credit for such amount in form and substance acceptable to Seller, 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 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
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as provided in Section 16.4 hereto for Buyers' material breach of this Agreement
(the payment of such sum to Seller thereby discharging in full any liability
Buyers may have to Seller), and the interest accrued on the Escrow Deposit shall
be paid to Buyers; 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 the interest accrued thereon shall be paid or
returned to Buyers.
3.3 Proration of Income and Expenses.
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 Erie, Pennsylvania 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, amounts due or to
become due under Contracts, rents and similar prepaid and deferred items, but
shall exclude any prorations for accrued vacation and sick leave.
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. The parties shall in good faith
attempt to agree prior to Closing upon an allocation of the Purchase Price among
the Stations Assets. If the parties cannot agree upon an allocation, such
allocation shall be based upon an appraisal prepared by BIA Consulting, Inc. or
another appraiser mutually satisfactory to the parties, and such appraisal and
allocation shall be completed post-Closing unless otherwise agreed to by the
parties. Any costs of such appraisal shall be paid one-half by Buyers and
one-half by Sellers. 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.
Notwithstanding the foregoing, the allocation to any covenant not to compete
shall not exceed One Hundred Thousand Dollars ($100,000.00).
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3.5 Collection of Accounts Receivable. The accounts receivable of
Seller for the sale of advertising time on the Stations 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 such efforts as are reasonable and in the ordinary course of
business to collect the Accounts on Seller's behalf for a period of ninety (90)
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 an 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 on account of
Seller's Accounts shall be remitted in full to Seller by the 15th day of each
month following the month during which such collections occurred. 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 or has specifically indicated
payment is intended to be to its account with RBI, in which event RBI shall be
entitled to apply the payment made by the account debtor to RBI's account
receivable, but RBI shall immediately return the disputed account to Seller for
collection. 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.
ARTICLE 4
CLOSING
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
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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 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 materially 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, other than conditions applicable to the
radio broadcast industry as a whole. 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 by the exchange
of documents by overnight delivery or in the offices of Strauss & Troy, The
Federal Reserve Bank Building, 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 materially adverse to Buyers or any Affiliate of Buyers other than
conditions applicable to the radio broadcast industry as a whole (the "FCC
Consent").
5.2 FCC Application. Within five (5) business days after the delivery of
the Escrow Deposit to the Escrow Agent, 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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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 RBI will be authorized to conduct business within the
State of Pennsylvania.
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. There are no facts which, under the
Communications Act of 1934, as amended, or the existing rules and regulations of
the FCC, would disqualify RLI as an assignee of the Stations Licenses.
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 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 not affiliated with
Buyers; (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.
6.5 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.
6.6 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,
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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.
6.7 Financial Qualifications. Buyers have sufficient financial ability on
their own or from committed sources (subject to customary closing conditions) to
complete 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 liability company
duly organized, validly existing and in good standing under the laws of the
State of Ohio, is authorized to conduct business within the State of
Pennsylvania, 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 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 articles
of organization or operating agreement (or other charter or organizational
documents), or any applicable 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.
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7.4 Government Authorizations.
7.4.1 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 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 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 members, managers, officers, or employees. The operations of
the Stations are in accordance in all material respects 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 members,
managers, officers, 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.
7.4.4 Each Station is operating at the authorized power level
specified in the respective Station License.
7.4.5 To the best of Seller's knowledge: (i) 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 (ii) 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.
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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 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 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, any applicable 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 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. Schedule 7.7 hereto contains a list of all
material items of tangible personal property owned by Seller and used or useful
in the conduct of the business and operations of the Stations. 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 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
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Stations Assets are in good operating condition (considering their age), are
free from all material defect and damage, are suitable for the purposes for
which they are now being used, and have been properly maintained in a manner
consistent with generally accepted standards of good engineering practice.
7.8 Real Property .
7.8.1 Seller owns no real property although it does own
improvements on real property, such as transmitter buildings. Schedule 7.8
hereto contains a complete and accurate list and description of all real
property (including without limitation, real property on which is situated the
towers, transmitters, transmitter buildings, studio and offices of the Stations)
used by Seller in connection with the operations of the Stations, stating which
of the improvements thereon are leased and which are owned by Seller (the "Real
Estate").
7.8.2 Seller 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 Real Estate.
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 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.
7.8.3 Seller has full legal and practical access to all of the
Real Estate, and all easements, rights of way, and real property licenses
relating to Seller's use thereof have been properly recorded in the appropriate
public recording offices. The 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 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. No utility lines serving such 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 used or useful in the operation of the
Stations and situated on the Real Estate are in good and technically sound
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. 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.
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
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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 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 material respects with all Contracts and is not in
material 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 guaranteed fixed position.
7.11 Environmental. 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 the 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. Sections 9601 et seq., Toxic Substances
Control Act. 15 U. S. C. Section Section 2601 et seq., the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Sections 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 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. The Stations Assets and Seller's use thereof are not in violation of any
Environmental Laws or any occupational, safety and health or other applicable
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,
and 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
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any of the Intellectual Property is 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.
7.13 Financial Statements. Set forth in Schedule 7.13 are complete
copies of the financial statements of Seller relating to the Stations for the
years ended December 31, 1997 and 1998, together with monthly income statements
for the Stations for each month ended after January 1, 1999 (collectively, the
"Financial Statements"). The Financial Statements are prepared in accordance
with the books and records of Seller and in accordance with generally accepted
accounting principles consistently applied and maintained throughout the periods
indicated except for the absence of footnotes, standard year-end adjustments,
and as has been disclosed in Schedule 7.13. The Financial Statements present
fairly the financial condition, results of operations and cash flow of the
Stations for the periods indicated. None of the Financial Statements materially
understates the true costs and expenses of conducting the business and
operations of the Stations, fails to disclose any material liability, or
materially inflates (or will inflate) the revenues of the Stations for any
reason.
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
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, as of the date of
this Agreement, has received no notice that any employee 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
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.
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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. 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 material 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 in all material respects
with all laws, regulations and governmental orders applicable to the conduct of
the business and operations of the Stations, and its present use of the Stations
Assets does not violate any of such laws, regulations or orders.
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 Bergner & Co., whose fees
shall be paid 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
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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 Assumed Liabilities and except as set
forth in Schedule 7.7 and Schedule 7.8 hereto.
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 knowledge of James T. Embrescia 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 Buyers 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. Neither Buyers nor their Affiliates shall
take any action which is materially inconsistent with Buyers' 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.
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8.4 Other Erie Transactions. Between the date hereof and the Closing
Date or the earlier termination of this Agreement in accordance with its terms,
except with the prior written consent of Seller, neither Buyer nor any of
Buyer's Affiliates shall enter into any legally binding agreement to purchase or
enter into any legally binding local marketing agreement with, any radio station
licensed to Erie, Pennsylvania.
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.
9.1.3 Seller shall operate the Stations in all material
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 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 Except for changes or 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 or specific increases in the rates
of salaries or compensation payable to employees of the Stations (that 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 or increase in compensation
to any executive management employee of the Stations (that shall in the
aggregate exceed 5 % of such employee's 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) decrease the
advertising rates in effect as of the date hereof, or (g) enter into any Trade
Agreements. For purposes of obtaining the consent of Buyers for the matters
described in Sections 1.1.3 and 9.1.5, Seller shall give Buyers written notice
by facsimile of the proposed barter agreement or operational change and if
Seller does not receive an objection within 72 hours of the giving of such
notice, then Buyers will be deemed to have consented to the matter covered by
such notice.
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 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 Buyers 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 to enable Buyers'
representatives to audit the Financial Statements or for any other purpose) 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).
9.1.8 Not less than ten (10) business days prior to the
Closing Date, Seller, at its expense, shall provide to Buyers (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 Real Estate which is used as a tower/antenna
site, 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 its senior lenders may approve or
require, and (b) where needed to obtain title insurance commitments, up-to-date
surveys of all Real Estate
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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 and the title insurance company, and each
prepared by a registered land surveyor.
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 its 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 within 72 hours or operations are returned
to full licensed power and antenna height within thirty (30) 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 seventy-two (72)
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 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 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' 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 member,
manager, officer, employee or other representative of
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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 Supplements to Schedules. Seller shall have the right within
fourteen (14) days following the date of this Agreement to submit to Buyers
supplements to Schedules 7.7, 7.9, and 7.14, to submit complete copies of all
Contracts, and to asterisk those which require consent to assignment. Buyers
shall have ten (10) days thereafter to review copies of all Contracts, to
identify on Schedule 7.9 those Contracts which are "material", and to accept
such Schedules, as supplemented, in whole or in part, and to the extent modified
and accepted by Buyers, such Schedules, as accepted, shall become a part of this
Agreement. To the extent any Contract or the content of any supplement, or part
thereof, is rejected by Buyers, such Contract and/or the portion rejected shall
not become a part of the Schedules; provided, however, Buyers may not reject any
Contract on Schedule 7.9 which was entered into by Seller in the ordinary course
of business, would be terminable by RBI after Closing at no cost on not more
than thirty (30) days' notice, and which involves the expenditure of no more
than $10,000 annually.
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 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
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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, 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.
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 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 date hereof and on and as of the Closing Date as if
made on and as of that date, except for changes (a) expressly permitted or
contemplated by the terms of this Agreement; or (b) in the ordinary course of
business which are not, either individually or in the aggregate, material and
adverse.
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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.
11.1.3 Buyers shall have received a certificate, dated as of the
Closing Date, from Seller, executed by the Manager of Seller to the effect that:
(a) the representations and warranties of Seller contained in this Agreement are
true and complete in all respects on and as of the Closing Date as if made on
and as of that date except for changes (i) expressly permitted or contemplated
by the terms of this Agreement; or (ii) in the ordinary course of business which
are not, either individually or in the aggregate, material and adverse; 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, subject to the provisions of Section 4. 1 hereof, 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
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,
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including, without limitation, each of the documents required to be delivered by
it pursuant to Article 14.
11.7 Satisfactory Investigation of Station Facilities. Buyers shall
have conducted such examination and investigation of the Real Estate and title
thereto, studios, transmitter facilities, and other Stations Assets and
personnel on matters as Buyers deem advisable or appropriate and shall have
determined that the findings and results of such examination and investigation
are satisfactory in its sole discretion. If Buyers do not advise Seller in
writing within thirty (30) days after the date of this Agreement of any
unsatisfactory findings or results, this condition shall be deemed waived. If
Buyers do advise Seller of any unsatisfactory findings or results involving
costs to cure the same in excess of $5,000 in the aggregate, and such are
capable of being cured by Seller to Buyers' reasonable satisfaction, Seller
shall cause the same to be cured to Buyers' reasonable satisfaction prior to
Initial Approval; provided, however, if the costs to cure are in excess of
$175,000 in the aggregate, Seller may instead terminate this Agreement.
11.8 Environmental Studies. Buyers shall have obtained within
forty-five (45) days following the date of this Agreement Phase I environmental
assessment reports on the Real Estate confirming the representations and
warranties of Seller on environmental matters; provided, however, if Buyers
elect not to obtain such environmental reports, Buyers shall be deemed to have
waived the condition of Closing contained in this Section 11.8.
11.9 Revenue Decline. The cash advertising sales of the Stations for
the current year through the end of the month preceding the Closing Date shall
be no less than 90% of the amount of cash revenue for the corresponding period
of 1998.
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 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.
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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; 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 Consent shall have been obtained
and, subject to the provisions of Section 4.1 hereof, shall have become a Final
Order.
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.
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 shall be paid
one-half by Buyers and one-half by Seller. The filing or grant fees for the FCC
Application shall be paid one-half by Buyers and one-half by Seller. Each party
shall pay any other 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. Any fees or commission due
Bergner & Co. as a result of this transaction shall be paid by Seller.
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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 Buyers the following:
14.1.1 Certified resolutions of all requisite action of the
members and manager 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 Ohio; 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 Pennsylvania, 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 Assumed Liabilities or as set forth on Schedule 7.7 and
Schedule 7.8.
14.1.5 An Assignment and Assumption Agreement in the form of
Exhibit D effectuating the assignment and assumption of the Assumed Liabilities
(the "Assignment and Assumption Agreement");
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, in a form reasonably acceptable
to Buyers, 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, dated as of the Closing Date;
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14.1.10 A Non-Competition Agreement in the form of Exhibit E
(the "Non-Competition Agreement") executed by Seller and Seller's Affiliates,
including James T. Embrescia and Thomas J. Embrescia;
14.1.11 A Lease Agreement in the form of Exhibit F (the "Lease
Agreement") executed by CUZCO LLC; and
14.1.12 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 Buyer's counsel in a form
reasonably acceptable to Seller, 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;
14.2.8 The Lease Agreement; and
14.2.9 Such additional information, materials, agreements,
documents and instruments as Seller and its counsel may reasonably request in
order to consummate the Closing.
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 Buyers and Seller in this
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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 All Agreements and the Warranties in Sections 6.2, 6.5,
7.2, the third sentence of 7.7, 7.18 and 7.20 shall survive the Closing for a
period from the Closing Date equal to the statute of limitations for written
contracts in Pennsylvania.
15.1.2 The Warranties in Section 7.11 relating to
environmental matters and 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 All other Warranties shall survive for a period of one
(1) year from the Closing Date.
15.1.4 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.
15.1.5 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.
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 Each 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 Agreements and Warranties given or made by it
in this Agreement; (b) those Assumed Liabilities assumed by it, 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.
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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 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.
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15.3.5 Notwithstanding the provisions in Section 15.2, neither
Seller nor Buyers 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 $25,000.00, but then the indemnification shall apply to
all Damages.
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 designates the FCC Application
for evidentiary hearing; or
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 November 30,
1999; or
16.1.7 By written notice of Buyers to Seller if it shall
become apparent in both Seller's and Buyers' judgment reasonably exercised that
any condition to Buyers' obligation to close as set forth in Article 11 hereof
will not be satisfied on or before November 30, 1999; or
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16.1.8 By written notice of Buyers to Seller under the
conditions set forth in Section 9.2 hereof;
16.1.9 By written notice of Seller to Buyers under the
conditions set forth in Section 11.7 hereof; OR
16.1.10 By written notice of Seller to Buyers if the Escrow
Deposit has not been timely delivered by Buyers in accordance with Section 3.2
hereof by reason of a default by Buyers.
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 it. 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, Buyers shall be entitled to reimbursement by Seller of reasonable legal
fees and expenses incurred by Buyers.
16.4 Seller's Liquidated Damages. As more fully described in the
Deposit Escrow Agreement, in the event this Agreement is terminated 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
MISCELLANEOUS PROVISIONS
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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 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 its
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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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 Ohio, 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: Media One Group-Erie, Ltd.
Four Commerce Park Square, Suite 600
23200 Chagrin Boulevard
Cleveland, Ohio 44122
Fax: (216) 464-7609
Attn: Mr. James T. Embrescia
Copy to: Fisher Wayland Cooper Leader &
Zargoza L.L.P.
2001 Pennsylvania Avenue, N.W.
Suite 400
Washington, D.C. 20006-1851
Fax: (202) 296-6518
Attn: David D. Oxenford, Esq.
To Buyers: Regent Broadcasting of Erie, Inc.
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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) 241-8289
Attn: Alan C. Rosser, Esq.
For purposes of obtaining the consent of Buyers for the matters discussed in
Section 9.1.5, Seller shall give Buyers written notice by facsimile of the
proposed action and, if Seller does not receive an objection by 6:00 p.m., local
Pennsylvania time, on the sixth (6th) business day after the date on which such
notice is sent, then Buyers will be deemed to have consented to the matter which
is the subject of such notice.
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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
REGENT BROADCASTING OF ERIE, INC.
By: /s/ Terry S. Jacobs
Name: /s/ Terry S. Jacobs
Title: Chairman and Chief Financial Officer
REGENT LICENSEE OF ERIE, INC.
By: /s/ Terry S. Jacobs
Name: /s/ Terry S. Jacobs
Title: Chairman and Chief Financial Officer
MEDIA ONE GROUP-ERIE, LTD.
By: /s/ James T. Embrescia
Name: /s/ James T. Embrescia
Title: Manager
CUZCO LLC, solely for the purpose of agreeing
to execute and deliver the Lease Agreement at
the Closing
By: /s/ James T. Embrescia
Name: /s/ James T. Embrescia
Title: Manager
and,
Solely for the purpose of
agreeing to execute and
deliver the Non-Competition
Agreement:
/s/ James T. Embrescia
JAMES T. EMBRESCIA
/s/ Thomas J. Embrescia
THOMAS J. EMBRESCIA
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Exhibit 2(b)
ASSET PURCHASE AGREEMENT
by and among
FOREVER OF NY, INC.,
FOREVER OF NY, LLC,
and
FOREVER BROADCASTING, LLC
(collectively, "Sellers")
and
REGENT BROADCASTING OF UTICA/ROME, INC.,
REGENT BROADCASTING OF WATERTOWN, INC.,
REGENT LICENSEE OF UTICA/ROME, INC.
and
REGENT LICENSEE OF WATERTOWN, INC.
(collectively, "Buyers")
and
REGENT COMMUNICATIONS, INC.
("Regent")
<PAGE> 2
TABLE OF CONTENTS
Page
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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...................................7
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......................................10
6.4 Absence of Conflicting Agreements or Required Consents.........10
6.5 Commissions or Finder's Fees...................................10
6.6 Litigation.....................................................10
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Page
----
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLERS
7.1 Organization and Standing......................................10
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..........................................................12
7.7 Personal Property..............................................13
7.8 Real Property..................................................13
7.9 Contracts......................................................14
7.10 Status of Contracts, etc.......................................14
7.11 Environmental..................................................15
7.12 Intellectual Property..........................................15
7.13 Financial Statements...........................................16
7.14 Personnel Information..........................................16
7.15 Litigation.....................................................16
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 Change.........17
7.20 Instruments of Conveyance; Good Title..........................17
7.21 Undisclosed Liabilities........................................17
7.22 Acquisition of Preferred Stock.................................18
7.23 Full Disclosure................................................19
ARTICLE 8 COVENANTS OF BUYERS
8.1 Closing........................................................19
8.2 Notification...................................................19
8.3 No Inconsistent Action.........................................20
8.4 Preferred Stock................................................20
ARTICLE 9 COVENANTS OF SELLERS
9.1 Pre-Closing Covenants..........................................20
9.2 Notification...................................................22
9.3 No Inconsistent Action.........................................23
9.4 Closing........................................................23
9.5 Other Items....................................................23
9.6 Exclusivity....................................................23
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ARTICLE 10 JOINT COVENANTS
10.1 Confidentiality................................................24
10.2 Cooperation....................................................24
10.3 Control of Stations............................................24
10.4 Consents to Assignment.........................................24
10.5 Filings........................................................25
10.6 Bulk Sales Laws................................................25
10.7 Employee Matters...............................................25
ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS
11.1 Representations, Warranties and Covenants......................26
11.2 Governmental Consents..........................................26
11.3 Governmental Authorizations....................................26
11.4 Adverse Proceedings............................................27
11.5 Third-Party Consents...........................................27
11.6 Closing Documents..............................................27
11.7 Environmental Site Assessments.................................27
11.8 Investigation of Station Facilities............................28
ARTICLE 12 CONDITIONS OF CLOSING BY SELLERS
12.1 Representations, Warranties and Covenants......................29
12.2 Governmental Consents..........................................29
12.3 Adverse Proceedings............................................29
12.4 Closing Documents..............................................29
ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES
13.1 Expenses.......................................................30
13.2 Specific Charges...............................................30
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ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Sellers' Documents.............................................30
14.2 Buyers' Documents..............................................31
ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC.
15.1 Survival of Representations, Etc...............................32
15.2 Indemnification................................................33
15.3 Procedures: Third Party and Direct Indemnification Claims......33
ARTICLE 16 TERMINATION RIGHTS
16.1 Termination....................................................34
16.2 Liability......................................................35
16.3 Monetary Damages, Specific Performance and Other Remedies......35
16.4 Sellers' Liquidated Damages....................................35
ARTICLE 17 MISCELLANEOUS PROVISIONS
17.1 Risk of Loss...................................................36
17.2 Certain Interpretive Matters and Definitions...................36
17.3 Further Assurances.............................................36
17.4 Preservation of Records........................................36
17.5 Benefit and Assignment.........................................37
17.6 Amendments.....................................................37
17.7 Headings.......................................................37
17.8 Governing Law..................................................37
17.9 Notices........................................................37
17.10 Counterparts...................................................38
17.11 No Third Party Beneficiaries...................................38
17.12 Severability...................................................38
17.13 Entire Agreement...............................................38
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LIST OF SCHEDULES AND EXHIBITS
Schedule 1.2.8 Excluded Real Property
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
Exhibit A Form of Certificate of Designation
B Indemnification Escrow Agreement
C Deposit Escrow Agreement
D Assignment and Assumption Agreement
E Opinion Letter of Sellers' Corporate Counsel
F Opinion Letter of Sellers' FCC Counsel
G Non-Competition Agreement
H Opinion Letter of Counsel for Buyers and Regent
I Lease Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
this 29th day of July, 1999 by and among FOREVER OF NY, INC., a Georgia
corporation ("Forever, Inc."), FOREVER OF NY, LLC, a Delaware limited liability
company ("Forever, LLC"), and FOREVER BROADCASTING, LLC, a Delaware limited
liability company ("Forever Broadcasting") (Forever, Inc., Forever, LLC, and
Forever Broadcasting collectively referred to as "Sellers") and REGENT
BROADCASTING OF UTICA/ROME, INC., a Delaware corporation ("RBU"), REGENT
LICENSEE OF UTICA/ROME, INC., a Delaware corporation ("RLU"), REGENT
BROADCASTING OF WATERTOWN, INC., a Delaware corporation ("RBW"), and REGENT
LICENSEE OF WATERTOWN, INC., a Delaware corporation ("RLW") (RBU, RLU, RBW, and
RLW collectively referred to as "Buyers"), and REGENT COMMUNICATIONS, INC.
("Regent").
RECITALS
WHEREAS, Sellers own and operate radio stations WODZ-FM, WLZW-FM,
WFRG-FM, WIBX-AM and WRUN-AM, licensed to Utica/Rome, New York (the "Utica/Rome
Stations"), and WCIZ-FM, WFRY-FM, WTNY-AM, and WUZZ-AM, licensed to Watertown,
New York (the "Watertown Stations") (together the "Stations" and each
individually, a "Station") pursuant to licenses issued by the Federal
Communications Commission ("FCC"), and
WHEREAS, Sellers desire 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),
Sellers shall sell, assign, transfer, convey and deliver to Buyers, Buyers shall
purchase, and RBU and RBW shall assume from Sellers, all of the right, title and
interest of Sellers in and to the assets, properties, interests and rights of
Sellers of whatsoever kind and nature, real and personal, tangible and
intangible, owned or leased (to the extent of Sellers' leasehold interest) by
Sellers as the case may be, wherever situated, which are used or useful in the
operation of the Stations (the "Stations Assets"), as described in this Section
1. 1:
1.1.1 all licenses, permits and other authorizations issued
to Sellers by any governmental or regulatory authority including without
limitation those issued by the FCC (the
<PAGE> 8
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 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, 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 Sellers' rights therein, owned, leased (to
the extent of Sellers' leasehold interest) or held by Sellers and used or useful
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 Sellers; provided, however, Sellers agree 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 $10,000 in the aggregate unless Sellers have
obtained the prior written approval of RBU and RBW 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 or Schedule 7.9, together with
(a) all advertising contracts entered into or acquired by Sellers between the
date hereof and the Closing Date in the ordinary course of business, consistent
with past practices of Sellers; and (b) any other contracts, agreements, leases
and legal binding contractual rights entered into or acquired by Sellers between
the date hereof and the Closing Date, which RBU or RBW 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 $40,000.
1.1.4 subject to the limitation set forth in Schedule 7.12,
all of Sellers' rights in and to the call letters of the Stations, and any
variation thereof, and 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
Sellers, 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 Sellers, whether recorded on tape or other medium or
intended for live performance, and all copyrights owned by or licensed to
Sellers that are used or useful in connection with the operation of the
Stations, including all such programs, materials, elements and copyrights
acquired by Sellers between the date hereof and the Closing Date;
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1.1.6 all of Sellers' 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 filings with
the FCC and all written Contracts to be assigned hereunder, logs, software
programs and 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 Sellers' 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.
The Stations Assets for the Utica/Rome Stations shall be transferred to
RBU and the Stations Assets for the Watertown Stations shall be transferred to
RBW (except for the Stations Licenses which shall be transferred to RLU and RLW,
respectively) 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.
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 Sellers on hand
and/or in banks, including without limitation 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 for services performed by Sellers 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 Sellers
disposed of or consumed in the ordinary course of business consistent with the
past practices of Sellers 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 Sellers;
1.2.5 Sellers' corporate minute books and records, tax
returns, corporate stock record books and such other books and records as
pertain to the organization, existence or share capitalization of Sellers and
duplicate copies of such records as are necessary to enable Sellers to
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file their tax returns and reports, as well as any other records or materials
relating to Sellers 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, Sellers relating to property or equipment repaired, replaced or
restored by Sellers 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
Sellers; and
1.2.8 the real property identified as "Excluded Real
Property" on Schedule 1.2.8.
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, RBU, with respect to the
Utica/Rome Stations, and RBW, with respect to the Watertown Stations, shall
assume the obligations of Sellers 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) all property taxes and
other governmental charges on the Stations Assets, and (c) the obligations
relating to vacation and sick pay identified on Schedule 7.14 to be assumed by
RBU and RBW. 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
Sellers of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or not disclosed to Buyer, other than as to RBU and RBW
the Assumed Liabilities. Sellers will retain and pay, satisfy, discharge and
perform in accordance with the terms thereof, all liabilities and obligations of
the Sellers, 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 Sellers 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 Sellers.
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All of such liabilities, obligations and commitments of Sellers described in
this Section 2.2 shall be referred to herein collectively as the "Retained
Liabilities."
ARTICLE 3
CONSIDERATION
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 Sellers pursuant to Section 2.1 above, Buyers shall, at the Closing (as
hereinafter defined), deliver to Sellers consideration (the "Purchase Price"),
subject to cash adjustment pursuant to the provisions of Sections 3.2 and 3.3
below with the payment by Buyers of $44,000,000 in cash by wire transfer and the
issuance by Regent of 100,000 fully-paid and nonassessable shares of the $7.50
Series I Convertible Preferred Stock of Regent (the "Preferred Stock"), having
such express terms as are set forth in the form of the Certificate of
Designation attached as Exhibit A, to the following designees (upon their
submission to Regent of such documentation as may reasonably be required for
compliance with applicable securities laws) in the number of shares specified:
(a) The Kerby Eugene Confer Grantor Retained Annuity Trust -- 40,000; (b) The
Donald J. Alt Grantor Retained Annuity Trust -- 40,000; (c) Carol B. O'Leary --
15,000; and (d) Lynn A. Deppen -- 5,000. In the event, however, that on or prior
to the Closing Date Regent shall issue in a public offering equity securities of
Regent and in preparation for or upon such offering Regent shall require
conversion of all shares of Regent's outstanding Series E Convertible Preferred
Stock into shares of Regent Common Stock, then Regent shall have the option to
issue at the Closing in lieu of the Preferred Stock 100,000 fully-paid and
nonassessable shares of Common Stock of Regent (in which event all
representations and warranties with respect to the Preferred Stock shall mean
with reference to such Common Stock). Notwithstanding the foregoing, the parties
agree that at the Closing, Buyers, Sellers and Capers, Dunbar, Sanders &
Bruckner, as Escrow Agent (the "Indemnification Escrow Agent"), shall enter into
an Indemnification Escrow Agreement in the form of Exhibit B hereto (the
"Indemnification Escrow Agreement") pursuant to which Sellers shall deposit with
the Indemnification Escrow Agent $1,118,750.00, which funds shall be held in
escrow for a period of eighteen (18) months beginning with the first full month
following the Closing Date, subject to the use of such funds to satisfy
indemnification claims of Buyers and Regent pursuant to Section 15.2.1 hereof,
and their administration and release as specifically provided for in the
Indemnification Escrow Agreement. Pursuant to the Indemnification Escrow
Agreement, (i) on the first anniversary of the Closing Date, $559,375 of the
Escrow Deposit together with the earnings on such portion less the amount of any
then unresolved pending claims by the Buyer shall be released from the Escrow
Deposit and paid to Seller; and (ii) eighteen (18) months after the Closing
Date, the balance of the Escrow Deposit together with earnings thereon less the
amount of any then unresolved pending claims by Buyer shall be released from
Escrow and paid to the Seller.
3.2 Escrow Deposit. (a) Within five (5) business days after the
execution and delivery of this Agreement, Buyers, Sellers and Capers, Dunbar,
Sanders & Bruckner, as Escrow Agent (the "Deposit Escrow Agent"), shall enter
into a Deposit Escrow Agreement in the form of Exhibit C hereto (the "Deposit
Escrow Agreement") pursuant to which Buyers shall deposit the
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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 $2,200,000.00, or alternatively, deliver
an irrevocable, stand-by letter of credit for such amount in form and substance
acceptable to Sellers, 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
Sellers 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 as set forth in
Section 16.1.3 hereof, the Escrow Deposit shall be paid to or delivered for draw
thereon to Sellers as liquidated damages as provided in Section 16.4 hereto for
Buyers' material breach of this Agreement (the payment of such sum to Sellers
shall discharge any liability Buyers may have to Sellers), and the interest
accrued on the Escrow Deposit shall be paid to Buyers; 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.
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 Buyers and Sellers 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, and other employee benefits (excluding vacation and sick pay
obligations to be assumed by RBU and RBW, as provided in Schedule 7.14) for
employees hired by RBU or RBW, amounts due or to become due under Contracts, any
negative barter balance in excess of $40,000, 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 Sellers and
one-half by Buyers.
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3.4 Allocation of Purchase Price. The parties shall in good faith
attempt to agree prior to Closing upon an allocation of the Purchase Price among
the Stations Assets. If after good faith negotiations, the parties cannot reach
agreement on the allocation in connection with jointly completing Form 8594, the
parties agree that there will be no further obligation on the part of any party
to jointly complete the application and the parties may file From 8594 without
any input from the other. Sellers 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 $40,000.00
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.
3.6 Collection of Accounts Receivable. The accounts receivable of
Sellers are not included among the Stations Assets. Nevertheless, at Closing,
Sellers shall supply RBU and RBW with a list of Sellers' accounts receivable as
of the Closing Date (the "Accounts"), and RBU and RBW shall use such efforts as
are reasonable and in the ordinary course of business (including but not limited
to transmittal of periodic statements of amounts due and owing) to collect the
Accounts on Sellers' behalf for a period beginning with the Closing Date and
ending with the last day of the fourth full calendar month following 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, Sellers shall not solicit any
monies from an account debtor who, after Closing, continues to do business with
the Stations, provided that during such period Sellers may act to preserve their
rights against a bankrupt debtor or commence suit or otherwise take action
against any debtor that disputes or refuses to pay the amount of, or liability
for, an Account. If Sellers receive a payment from an account debtor during the
Collection Period, they shall so notify RBU and RBW. RBU and RBW may endorse and
deposit in their own names and collect any and all checks and other instruments
for the payment of money that RBU or RBW may receive in payment of Accounts. RBU
and RBW shall receive no remuneration for their services and shall not be liable
for non-collection, or failure of any such collection, except due to their own
gross negligence or intentional misconduct. Upon termination of their duties
hereunder, RBU and RBW shall deliver to Sellers all of their 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 RBU
and RBW on account of Sellers' Accounts shall be remitted in full to Sellers on
the tenth day of each calendar month following the Closing Date, for amounts
received during the preceding calendar month during the Collection Period. RBU
and RBW Buyer shall deliver to Sellers an accounting showing the amount they
received during each 30-day period on each
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<PAGE> 14
account. If both Sellers and RBU or RBW are entitled to accounts receivable
from the same account debtor, all payments received during the Collection Period
shall be first applied to Sellers' 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 Sellers or has specifically indicated payment is
intended to be to its account with RBU or RBW, in which event RBU or RBW shall
be entitled to apply the payment made by the account debtor to RBU's or RBW's
account receivable. At the conclusion of the Collection Period and after
remittance of all amounts collected, RBU and RBW will thereafter have no further
responsibility with respect to the collection of the Accounts, and RBU and RBW
may apply all collections received by them from any Account party who continues
business with RBU or RBW to obligations owing to RBU or RBW, except for any
payment received by RBU or RBW which such Account party specifies is for amounts
owed to Sellers, in which event such specified amounts shall be paid over to
Sellers. RBU and RBW shall not have the right to compromise, settle or adjust
the amounts of any one of the Accounts without Sellers' prior written consent.
Sellers shall promptly pay all sales commissions relating to all of their
accounts receivable whenever Sellers receive payment thereon; provided, however,
RBU and RBW may do so on Sellers' behalf for employees who are hired by them
and pay the net commission to Sellers.
ARTICLE 4
CLOSING
4.1 Closing. Except as otherwise mutually agreed upon by Buyers and
Sellers, 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), (c) December 22, 1999; or (d) such other date as may be mutually agreed
by the parties hereto (the "Closing Date"). 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, 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 adverse to Buyers or any Affiliate (as
hereinafter defined) of Buyers with respect to the assignment of the FCC
Licenses to RLU or RLW or the continued operation by Buyers of the Stations or
the Stations Assets. 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
Sellers that the Closing and the assignment of the Stations Licenses and the
transfer of the Stations Assets
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are expressly conditioned on and are subject to the prior consent and approval
of the FCC without the imposition of any conditions adverse to Buyers or any
Affiliate of Buyers (the "FCC Consent").
5.2 FCC Application. Within five (5) business days after the execution
of this Agreement, Buyers and Sellers shall file an application with the FCC for
the FCC Consent (the "FCC Application"). Buyers and Sellers 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 Sellers shall have any obligation to satisfy complainants or the FCC
by taking any steps which would have a material adverse effect upon Buyers or
Sellers or upon any of their respective Affiliates). If the FCC Consent imposes
any condition on Buyers or Sellers or any of their respective Affiliates, such
party shall use its best efforts to comply with such condition; provided,
however, that neither Buyers nor Sellers 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.
5.3 Antitrust. Sellers 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
Sellers, 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 Sellers:
6.1 Organization and Standing. Regent and Buyers are corporations duly
organized validly existing and in good standing under the laws of the State of
Delaware, and by the Closing Date RBU and RBW will be authorized to conduct
business within the State of New York.
6.2 Authorization and Binding Obligations. Regent and 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. Regent and 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 Sellers, this Agreement will constitute the legal, valid and
binding obligation of Regent and Buyers,
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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, there
are no facts which, under the Communications Act of 1934, as amended, or the
existing rules and regulations of the FCC, would disqualify RLU or RLW as an
assignee of the Stations Licenses.
6.4 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
Regent and Buyers: (a) do not conflict with the provisions of the articles of
incorporation or by-laws of Regent or 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 Regent or 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 Regent or either Buyer is now subject.
6.5 Commissions or Finder's Fees. Neither Regent or Buyers nor any
person or entity acting on behalf of Regent or 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.
6.6 Litigation. Neither Regent nor Buyers is 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 Regent or Buyers that
would affect Regent's or Buyers' ability to carry out the transactions
contemplated by this Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers make the following representations and warranties to Regent and
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 Regent or Buyers:
7.1 Organization and Standing. Forever, Inc. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia. Forever, LLC and Forever Broadcasting are each limited liability
companies duly organized, validly existing and in good standing under the laws
of the State of Delaware. Forever, Inc. is authorized to conduct business within
the State of New York, 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.
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7.2 Authorization and Binding Obligation. Each of Sellers 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 Sellers and,
assuming the due authorization, execution and delivery of this Agreement by
Regent and Buyers, constitutes the legal, valid and binding obligation of
Sellers enforceable against them 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 performance of this Agreement by Sellers:
(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 Sellers' articles
of incorporation or organization or bylaws (or other charter or organizational
documents), or any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority by which Sellers 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 Sellers 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 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). Sellers have 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 Sellers are the authorized legal holders 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
Sellers' 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
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and are unimpaired by any act or omission of Sellers or their members, managers,
officers, or employees. 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 Sellers' knowledge, threatened, and to the best of
Sellers' knowledge there has not been any act or omission of Sellers or any of
their members, managers, officers, 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.
7.4.4 Except as set forth in Schedule 7.4, each Station is
operating with the maximum 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 Sellers have 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 All reports, forms, and statements required to be
filed by Sellers with the FCC with respect to the Stations since the grant of
the last renewal of the Stations Licenses have been filed and are complete and
accurate in all material respects.
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 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 Sellers' knowledge, there are no filed claims to
the contrary.
7.6 Taxes. Sellers have 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 them, and have paid in full all taxes, estimated
taxes, interest, assessments, and penalties due and payable by them. All returns
and forms which have been filed have been true and correct in all material
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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 Sellers and has not been paid by
Sellers. There are no present disputes as to taxes of any nature payable by
Sellers which in any event could adversely affect any of the Stations Assets or
the operation of the Stations by Buyers. Sellers have not been advised that any
of their tax returns, federal, state, local or foreign, have been or are being
audited. Sellers do 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 Sellers and
used or useful in the conduct of the business and operations of the Stations.
Schedule 7.7 also separately lists any material tangible personal property
leased by Sellers pursuant to leases included within the Contracts. Except as
disclosed in Schedule 7.7, Sellers have, and following the Closing, RBU and RBW
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 (a) liens for taxes not yet due and
payable, (b) liens described in Schedule 7.7 which will be released and
discharged on or prior to the Closing Date, and (c) the Assumed Liabilities. The
properties listed in Schedule 7.7, along with those properties subject to lease
and included among the Contracts, constitute all 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, are suitable for the purposes for which they are now being used, 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 Sellers in connection with the
operations of the Stations, identifying thereon the real property that is owned
by Sellers (the "Owned Real Estate") or leased by Sellers (the "Leased Real
Estate") (collectively, the "Real Estate").
7.8.2 Sellers 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
detract from or impair the existing or future use of the property affected as a
radio broadcasting facility ("Permitted Encumbrances") and except for such liens
as will be released and discharged on or prior to the Closing Date.
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7.8.3 Sellers enjoy 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. Sellers have 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
RBU or RBW 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 RBU or
RBW.
7.8.4 To the best of Sellers' knowledge, Sellers have full
legal and practical access to all of the Real Estate, and all easements and
rights of way relating to Sellers' use thereof have been properly recorded in
the appropriate public recording offices. The Real Estate (exclusive of the
Excluded 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, to the best of Sellers' knowledge, none of the buildings,
structures, improvements or fixtures constructed on any 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 Sellers'
knowledge, no utility lines serving such Real Estate from a public right-of-way
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 are in
good and technically sound 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. There is no
pending or, to the best knowledge of Sellers, threatened condemnation or other
legal proceeding or action of any kind relating to such real property and/or
title thereto.
7.9 Contracts. Schedule 7.9 lists all Contracts to which Sellers are
parties, or which are binding on Sellers, 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 Sellers 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. Sellers have 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.
Sellers
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have complied in all respects with all Contracts and are not in default beyond
any applicable grace periods under any thereof and, to the best of Sellers'
knowledge, no other contracting party is in default under any thereof.
7.11 Environmental. Except as set forth in Schedule 7.11, Sellers have
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. Other than PCBs contained in operating equipment as permitted by
the Environmental Laws, to the best of Sellers' 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. Sections 9601 et seq.,
Toxic Substances Control Act. 15 U. S. C. Section Section 2601 et seq., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 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 Sellers, or to Sellers' best knowledge any predecessor in interest to
Sellers, in violation of applicable laws or regulations, or 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. The Stations Assets and
Sellers' use thereof are not in violation of any Environmental Laws or any
occupational, safety and health or other applicable law now in effect. Sellers
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 by Sellers
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,
and owned by Sellers or under which Sellers are licensees and which is used in
the conduct of Sellers' business and operations with regard to the Stations.
Except as set forth on Schedule 7.12, to the best of Sellers' knowledge: (a)
Sellers' right, title and interest in the Intellectual Property as owner or
licensee, as applicable, are 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 Sellers, 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 Sellers, and all of Sellers' uses of such
computer software are authorized under such licenses; (c) all of Sellers' right,
title and interest in and to the Intellectual Property shall be assignable to
RBU and RBWat Closing, and upon such assignment, except as set forth in Schedule
7.12, 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 Sellers in connection with Sellers' business or
operations. All material hardware and software products used by Sellers in the
operation of the Stations will be able to accurately process date data
(including, but not limited to calculating, comparing and sequencing)
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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. Set forth in Schedule 7.13 (to be
supplemented for periods up to the Closing Date) is a listing of the balance
sheets and income statements of Sellers relating to the Stations which have been
provided to Buyers (collectively, the "Financial Statements"). The Financial
Statements are prepared in accordance with the books and records of Sellers and
in accordance with generally accepted accounting principles consistently applied
and maintained throughout the periods indicated except for the absence of
footnotes, standard year-end adjustments, and as has been disclosed in Schedule
7.13. The Financial Statements present fairly the financial condition, results
of operations and cash flows of the Stations for the periods indicated. None of
the Financial Statements understates the true costs and expenses of conducting
the business and operations of the Stations, fails to disclose any material
liability, or inflates (or will inflate) the revenues of the Stations for any
reason.
7.14 Personnel Information.
7.14.1 A true and complete list of all persons employed at the
Stations, including date of hire and job title has been delivered to Buyers, and
Buyers acknowledge receipt thereof. Sellers have received no notice that, and
Sellers are not aware of, any individual employee who intends 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, Sellers, with
respect to the Stations, are not parties to any contract or agreement with any
labor organization, nor have Sellers 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 Sellers at the Stations.
Sellers have no knowledge of any organization effort currently being made or
threatened by or on behalf of any labor union with respect to employees of
Sellers at the Stations.
7.14.3 Except as disclosed in Schedule 7.14, Sellers, with
respect to the Stations, have 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, Sellers are 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 Sellers, threatened against Sellers 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
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authorized to resolve disputes. In particular, but without limiting the
generality of the foregoing, to the best knowledge of Sellers, 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: (a)
Sellers are not in material violation of, nor have Sellers received any notice
asserting any non-compliance by them 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; (b) Sellers are
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 (c) Sellers are in all material respects in compliance
with all laws, regulations and governmental orders applicable to the conduct of
the business and operations of the Stations, and their present use of the
Stations Assets does not violate any of such laws, regulations or orders.
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 Sellers employed at the Stations, and a brief description
thereof. Sellers do 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 Sellers employed at the Stations.
7.18 Commissions or Finder's Fees. Neither Sellers nor any person or
entity acting on behalf of Sellers have 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 Bergner & Co., whose fees
shall be paid entirely by Sellers.
7.19 Conduct of Business in Ordinary Course; Adverse Changes. Since
December 31, 1998: (a) Sellers have conducted the business of the Stations only
in the ordinary course consistent with Sellers' past practices; (b) there has
not been any material adverse change in the business, assets, properties,
prospects or condition (financial or otherwise) of any of the Stations, or any
damage, destruction, or loss affecting any of the Stations Assets; and (c)
Sellers have 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 Sellers 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 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 Sellers, the Stations or the
Stations Assets exists which could, after the Closing, result in any
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form of transferee or successor 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 Acquisition of Preferred Stock.
(a) Non-Registration. Sellers understand that the offering and
sale of the 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
Preferred Stock has not been registered under the 1933 Act or under the
securities laws of any state, and that Regent will be under no obligation to
effect any such registration.
(b) Investment Intent. Sellers are acquiring the Preferred
Stock for their own account, for investment and not with a view to resale,
distribution, or other disposition, and Sellers have no present plans to enter
into any contract, undertaking, agreement or arrangement for any such resale,
distribution or other disposition. Sellers understand that the Preferred Stock
and the shares of common stock into which the Preferred Stock is convertible
(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 Sellers' representations as expressed herein. Sellers will not sell or
otherwise transfer the Preferred Stock without registration under the 1933 Act
and applicable state securities laws, or pursuant to an exemption from the
registration requirements thereof which, in the opinion of counsel reasonably
acceptable to Regent, is available for the transaction.
(c) Rule 144. Sellers acknowledge that the Preferred Stock and
the Conversion Stock must be held indefinitely unless subsequently registered
under the Securities Act or unless an exemption from such registration is
available. Sellers 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 Regent, 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. Sellers understand that no public market
now exists for the Preferred Stock and that neither Regent nor the Buyers have
made any assurances that a public market will ever exist for the Preferred
Stock.
(e) Status of Sellers. Each of Sellers: (i) is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D promulgated
under the 1933 Act, inasmuch as Sellers meet the requirements of subparagraph
(a)(3) of Rule 501; and (ii) was not formed for the primary purpose of evading
federal or state securities laws.
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(f) Opportunity to Review Books and Records. Sellers have had
a reasonable opportunity to inspect all documents, books and records pertaining
to Regent and the Preferred Stock and confirm that the Preferred Stock is being
purchased without Sellers' receipt of any offering literature.
(g) Opportunity for Questions. Sellers have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of Regent concerning Regent, its business and operations, the
terms of the Preferred Stock and all other aspects of investment in Regent, and
all such questions have been answered to the full satisfaction of Sellers.
(h) Manner of Purchase. Sellers are not subscribing for the
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
Regent.
7.23 Full Disclosure. No representation or warranty made by Sellers
contained in this Agreement nor any certificate, document or other instrument
furnished or to be furnished by Sellers 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 Sellers' 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 Sellers' knowledge (or similar terms),
it shall mean to the actual knowledge of the President, chief financial officer
and chief engineer of Forever, Inc., after having made due inquiry of the
employees, representatives and agents of Sellers 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 Sellers as provided in Article I hereof
and RBU and RBW shall assume the Assumed Liabilities of Sellers as provided in
Article 2 hereof.
8.2 Notification. Buyers will provide Sellers 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 Sellers of any
litigation, arbitration or administrative proceeding pending or, to their
knowledge, threatened against Buyers which challenges the transactions
contemplated hereby.
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8.3 No Inconsistent Action. Buyers shall not take any action which is
materially inconsistent with their 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.
8.4 Preferred Stock. The Preferred Stock, when issued in compliance with
the provisions of this Agreement, will be validly issued, fully paid and
nonassessable. The Preferred 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 Regent or Buyers; provided, however, that the
Preferred Stock and common stock issued upon any conversion thereof will be
subject to restrictions on transfer under state and/or federal securities laws.
The issuance of the Preferred Stock will not violate any preemptive rights
available to the holders of any of Regent's securities. The Preferred Stock
shall have the rights, preferences, privileges and restrictions set forth in the
Certificate attached as Exhibit A.
ARTICLE 9
COVENANTS OF SELLERS
9.1 Pre-Closing Covenants. Sellers covenant and agree 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, Sellers
shall act in accordance with the following:
9.1.1 Sellers shall 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 its books and records in accordance
with prior practice, maintaining the present condition of the Stations Assets,
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 their reasonable best efforts to
retain at the Stations the services of all active employees, consultants and
agents of the Stations.
9.1.2 Sellers shall use their 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 Sellers 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
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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 Sellers which would cause
the FCC to deny its consent to the transactions contemplated by this Agreement
come to Sellers' attention, Sellers will promptly notify Buyers thereof and will
use their 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 and incentives granted to employees in connection
with the sale of the Stations, Sellers 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 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 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 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 or waive any default or
breach thereunder; or (f) change the advertising rates in effect as of the date
hereof.
9.1.6 Sellers shall give or cause the Stations to give Buyers
and Buyers' counsel, accountants, auditors, engineers and other representatives,
at Buyers' reasonable request and upon reasonable notice, full and reasonable
access to all of Sellers' 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 Buyers 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 to enable Buyers' representatives to audit the
Financial Statements, or for any other purpose) that Buyers may reasonably
request. Sellers shall execute and deliver any consents reasonably requested by
Buyers or Buyers' auditors in connection with an audit of the Financial
Statements for the Stations. 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 Sellers shall use their 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 Sellers to such third party).
9.1.8 Sellers shall:
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(a) refrain from making any sale, lease,
transfer or other disposition of any of the Stations Assets having a value in
excess of $10,000 in the aggregate, other than in the normal course of business
at fair market value in connection with replacements of equal or greater value
without the prior approval of Buyers, which approval will not be unreasonably
withheld;
(b) maintain insurance on the Stations Assets
for loss or damage by fire and all other hazards and risks for full replacement
cost and for comprehensive liability coverage in amounts consistent with prudent
business practices;
(c) if requested by Buyers, with respect to any
Contract which can be terminated or not renewed by Sellers in compliance with
the terms thereof, notify the other parties to such Contract that Sellers elect
to terminate (or, if applicable, elect not to renew) such Contract; and
(d) achieve cash advertising sales of
the Stations in the Utica/Rome market and in the Watertown market, respectively,
which shall, for the trailing twelve (12) months through the end of the month
preceding the Closing Date, be no less than 95% of the amount of such sales, in
each of such markets, for the corresponding twelve-month period in the prior
year; and
(e) within thirty (30) days following the end of
each calendar month, provide Buyers 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).
9.1.9 Within sixty (60) days after the date of this Agreement,
Sellers, at their expense, shall provide to Buyers title insurance commitments,
issued by a title insurance company reasonably satisfactory to Buyers, agreeing
to issue to Buyers and their senior lender, on the most current standard ALTA
form, leasehold, owners and lenders policies of title insurance with respect to
all Real Estate, together with a copy of each document to which reference is
made in such commitments, for insuring title in full accordance with the
representations and warranties set forth herein and subject only to standard
survey exceptions and exceptions for Permitted Encumbrances, and with such
standard form endorsements, as Buyers' senior lenders may reasonably require.
9.2 Notification. Sellers 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. Sellers agree 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. Other than conditions already disclosed on Schedule 7.4, Sellers 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 a licensed power and antenna height so that its signal
substantially covers the applicable market within five (5) days of such event
and to full licensed power and antenna height within thirty (30) days of such
event, or if more than five (5)
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such events occur within any thirty (30) day period, or if any of the Stations
shall be off the air for more than seventy-two (72) consecutive hours, then
Buyers shall have the right to terminate this Agreement.
9.3 No Inconsistent Action. Sellers shall not take any action which is
materially inconsistent with their obligations under this Agreement nor take any
action which would cause any representation or warranty of Sellers 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, Sellers
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, Sellers 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' 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 is not in the ordinary course of business consistent with past
practices.
9.6 Exclusivity. Sellers agree 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, Sellers agree that neither Sellers, nor any
shareholders, members, manager, director, officer, employee or other
representative of Sellers: (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 Sellers
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 their covenants or
agreements herein contained and such default shall not be cured within fifteen
(15) business days of notice of default served by Sellers, Sellers' obligations
under this Section 9.6 shall be null and void.
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ARTICLE 10
JOINT COVENANTS
Regent, Buyers and Sellers 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,
Regent, Buyers and Sellers 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, each 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 others.
10.2 Cooperation. Subject to express limitations contained elsewhere
herein, Regent, Buyers and Sellers 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. Regent and 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
Sellers.
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
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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 RBU and RBW of the Contracts, this Agreement and any assignment
executed pursuant hereto, to the extent permitted by law, shall constitute an
equitable assignment by Sellers to RBU and RBW of all of Sellers' rights,
benefits, title and interest in and to the Contracts, and where necessary or
appropriate, RBU and RBW shall be deemed to be Sellers' agent for the purpose of
completing, fulfilling and discharging all of Sellers' rights and liabilities
arising after the Closing Date under such Contracts. Sellers shall use their
reasonable best efforts to provide RBU and RBW with the financial and business
benefits of such Contracts (including, without limitation, permitting RBU and
RBW to enforce any rights of Sellers arising under such Contracts), and RBU and
RBW shall, to the extent they are provided with the benefits of such Contracts,
assume, perform and in due course pay and discharge all debts, obligations and
liabilities of Sellers under such Contracts to the extent that RBU and RBW were
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, Buyers and Sellers 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 Sellers with
the provisions of the "bulk sales" or similar laws of any state. Sellers agree
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 Sellers to comply with any "bulk sales"
or similar laws.
10.7 Employee Matters. Sellers shall be responsible for the payment of
all compensation and accrued employee benefits (excluding obligations relating
to vacation and sick pay identified in Schedule 7.14 to be assumed by RBU and
RBW) payable to all employees up to the Closing Date. Sellers acknowledge and
agree that they, and not Buyers, are 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 Sellers,
relating to the period up to the Closing Date, with the exception of those
obligations to current employees of Sellers who are hired by RBU or RBW relating
to vacation and sick pay, which are identified in Schedule 7.14 to be assumed by
RBU or RBW. Sellers acknowledge and agree that they, and not Buyers, are and
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shall be solely responsible for any and all COBRA obligations existing or
arising as a result of this transaction. 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 Sellers at any time.
ARTICLE 11
CONDITIONS OF CLOSING BY BUYERS
The obligations of Buyers and Regent 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 Sellers 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 (a) expressly permitted or contemplated by the terms of this
Agreement; or (b) in the ordinary course of business which are not, either in
individually or in the aggregate, material and adverse.
11.1.2 All of the terms, covenants and conditions to be
complied with and performed by Sellers on or prior to the Closing Date shall
have been complied with or performed strictly with respect to Section 9.1.8(d)
and in all other cases in all material respects.
11.1.3 Buyers shall have received a certificate, dated as of
the Closing Date, from Sellers, executed by the President of Sellers to the
effect that: (a) the representations and warranties of Sellers 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) Sellers have complied
with or performed in all material respects all terms, covenants and conditions
to be complied with or performed by them 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, and all other consents or approvals
required from governmental authorities shall have been obtained.
11.3 Governmental Authorizations. Sellers shall be the holders 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.
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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 Sellers, an assignment by Sellers 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 Sellers shall have obtained and shall
have delivered to RBU and RBW all appropriate third-party consents in form and
substance acceptable to RBU and RBW (including estoppel certificates for the
leases related to the Leased Real Estate) in connection with the assignment of
the Material Contracts to RBU and RBW.
11.6 Closing Documents. Sellers 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 them pursuant to
Article 14.
11.7 Environmental Site Assessments.
11.7.1 Following execution of this Agreement, at Buyers'
expense, Buyers may engage an engineering environmental assessment firm, to
perform a Phase I Environmental Assessment for any or all of the Real Estate
(the "Environmental Assessment") and Sellers shall cooperate with Buyers and
such firm in performing such Environmental Assessment, and, upon completion, a
copy thereof shall immediately be provided Sellers. Delivery of the
Environmental Assessment to Buyers shall not relieve Sellers of any obligation
with respect to any representation, warranty or covenant of Sellers in this
Agreement or waive any condition to Buyers' obligations under this Agreement. If
the Environmental Assessment reveals the existence of Environmental Conditions
or Environmental Noncompliance (each as defined below) at any of the Real
Estate, Buyers shall have the right, exercisable by giving written notice to
Sellers within fifteen (15) days of the receipt by Buyers of the Environmental
Assessment (which specifies the nature of the Environmental Conditions or
Environmental Noncompliance revealed by the assessment) to terminate this
Agreement; provided, however, that Buyers' right to terminate this Agreement
based upon the findings of the Environmental Assessment will expire if the
Environmental Assessment has not been completed within sixty (60) days after the
date of this Agreement and a copy thereof delivered to Sellers.
11.7.2 Notwithstanding the foregoing, in the event the
Environmental Assessment discloses an Environmental Condition or Environmental
Noncompliance ("Environmental Problem") that can be remedied by the expenditure
of Twenty Five Thousand ($25,000) Dollars or less, Sellers will either remedy
the problem, at their expense, prior to the
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Closing Date or, failing that, the Purchase Price will be reduced by the amount,
as estimated in the Environmental Assessment, that will be required to remedy
the Environmental Problem, and the Closing will otherwise take place in the
manner, and at the time, provided for herein, and Sellers will not be
responsible for any remediation. In the event that the cost of remedying the
Environmental Problem will exceed Twenty Five Thousand ($25,000) Dollars,
Sellers shall have the option to reduce the Purchase Price by the full amount
of the estimated cost to remedy the problem, in which event the Closing will
take place and the Purchase Price will be so reduced, or to terminate this
Agreement, unless Buyers agree to be responsible for the remediation costs in
excess of Twenty Five Thousand ($25,000) Dollars.
11.7.3 For purposes of this Agreement and Section 11.7.1
above:
(i) "Hazardous Materials" means the definition
set forth in Section 7.11 hereof.
(ii) "Environmental Conditions" means conditions of
the environment, including the ocean, natural resources (including flora and
fauna), soil, surface water, ground water, any present or potential drinking
water supply, subsurface strata or the ambient air, relating to or arising out
of the use, handling, storage, treatment, recycling, generation, transportation,
release, spilling, leaking, pumping, pouring, emptying, discharging, injecting,
escaping, leaching, disposal, dumping or threatened release of Hazardous
Materials by Sellers or Sellers' predecessors in interest.
(iii) "Environmental Noncompliance" means, but is not
limited to: (1) the release or threatened release of any Hazardous Materials
into the environment, any storm drain, sewer, septic system or publicly owned
treatment works, in violation of any effluent or emission limitations, standards
or other criteria or guidelines established by any federal, state or local law,
regulation, rule, ordinance, plan or order; and (2) any facility operations,
procedures, designs, etc., which do not conform to the New York or federal
statutory or regulatory requirements, or any other Environmental Laws intended
to protect public health, welfare and the environment.
11.8 Investigation of Station Facilities. Buyers shall conduct such
examination and investigation of the Real Estate and title thereto, studios,
transmitter facilities, and other Stations Assets and personnel on matters as
Buyers deem advisable or appropriate . This investigation may include the
obtaining of surveys of all Real Estate, 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 required by Buyers or
the title insurance company, each containing a surveyor certificate reasonably
acceptable to Buyers and the title insurance company, and each prepared by a
registered land surveyor satisfactory to Buyers. If, within sixty (60) days
after the date of this Agreement, Buyers advise Seller of any findings or
results which are inconsistent with the substance of Sellers' representations
and warranties and which involve costs to cure the same in excess of $5,000 in
the aggregate, and such are capable of being cured by Sellers to Buyers'
reasonable satisfaction, Sellers shall have caused the same to be cured to
Buyers'
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reasonable satisfaction prior to the Closing Date; provided, however, if the
costs to cure are in excess of $175,000 in the aggregate, Sellers may instead
terminate this Agreement.
ARTICLE 12
CONDITIONS OF CLOSING BY SELLERS
The obligations of Sellers hereunder are, at their 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 and Regent on or prior to the Closing Date shall
have been complied with or performed in all material respects.
12.1.3 Sellers shall have received a certificate, dated as of
the Closing Date, executed by the President of Buyers and Regent, 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 and
Regent have complied with or performed in all material respects all terms,
covenants and conditions to be complied with or performed by them on or prior to
the Closing Date.
12.2 Governmental Consents. The FCC Consent shall have been obtained
and shall have become a Final Order, and all other consents or approvals
required from governmental authorities 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 Sellers, 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 by Sellers.
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 Sellers, on the one
hand, and Buyers, on the other hand, and any fees payable pursuant to the
Hart-Scott-Rodino Act, if applicable, shall be paid by Buyers. Any fees or
commission due Bergner & Co. as a result of this transaction shall be paid by
Sellers.
ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Sellers' Documents. At the Closing, Sellers shall deliver or
cause to be delivered to Buyers the following:
14.1.1 Certified resolutions of all requisite corporate or
other action of Sellers approving the execution and delivery of this Agreement
and authorizing the consummation of the transactions contemplated hereby;
14.1.2 A certificate of Sellers, dated the Closing Date, in
the form described in Section 11.1.3;
14.1.3 Governmental certificates showing that: (a) Sellers are
duly organized and in good standing in the states of their respective
incorporation or organization; (b) Sellers have filed all returns, paid all
taxes due thereon and are currently subject to no assessment; and Forever, Inc.
is in good standing in the State of New York, 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 reasonably satisfactory to Buyers and Buyers'
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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 D effectuating the assignment and assumption of the Assumed Liabilities
(the "Assignment and Assumption Agreement");
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 to be maintained by the FCC 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 Sellers' corporate counsel, on
which Buyers' lenders shall be entitled to rely, in substantially the form
attached as Exhibit E, dated as of the Closing Date;
14.1.9 A written opinion of Sellers' FCC counsel, in
substantially the form attached as Exhibit F, dated as of the Closing Date;
14.1.10 A Non-Competition Agreement in the form of Exhibit G
(the "Non-Competition Agreement") executed by Sellers, Donald J. Alt, Kerby E.
Confer, Carol O' Leary, Lynn A. Deppen, Thomas Yourchak, and Christine Hillard;
14.1.11 If required as provided in Schedule 1.2.8, a Lease
Agreement in the form of Exhibit I (the "Lease Agreement") executed by Forever,
Inc.; and
14.1.12 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 Sellers the following:
14.2.1 Certified resolutions of the Board of Directors of
Buyers and Regent approving the execution and delivery of this Agreement and
authorizing the consummation of the transactions contemplated hereby;
14.2.2 A certificate of Buyers and Regent, 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;
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14.2.5 A written opinion of Buyers' and Regent's counsel in
substantially the form attached as Exhibit H, dated as of the Closing Date;
14.2.6 The cash portion of the Purchase Price in
accordance with Section 3.1 hereof;
14.2.7 The Preferred Stock;
14.2.8 The Non-Competition Agreement executed by Buyers;
14.2.9 The Lease Agreement executed by RBW; and
14.2.10 Such additional information, materials, agreement,
documents and instruments as Sellers and their counsel may reasonably request in
order to consummate the Closing.
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 Regent, Buyers and Sellers in this Agreement shall survive
the Closing (regardless of any knowledge, investigation, audit or inspection at
any time made by or on behalf of Regent, Buyers or Sellers) 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 New York.
15.1.2 The Warranties in Sections 6.2, 6.5, 7.2, the third
sentence of 7.7, 7.18 and 7.20 shall survive the Closing without limitation.
15.1.3 The Warranties in Section 7.11 in Section 7.6 or
otherwise relating to the federal, state, local or foreign tax obligations of
Sellers 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 relating to
environmental matters shall terminate on the Closing Date.
15.1.5 All other Warranties shall survive for a period of
eighteen (18) months 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
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<PAGE> 39
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 Regent, Buyers or Sellers 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.
15.2 Indemnification.
15.2.1 Sellers shall defend, indemnify and hold harmless
Regent and Buyers from and against any and all losses, costs, damages,
liabilities and expenses, including reasonable attorneys' fees and expenses
("Damages") incurred by Regent or Buyers arising out of or related to: (a) any
breach of the Warranties given or made by Sellers in this Agreement; (b) any
breach of the Agreements made by Sellers 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 RBU, RBW and Regent shall defend, indemnify and hold
harmless Sellers from and against any and all Damages incurred by Sellers
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.
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15.3.2 In the event that the indemnifying party shall elect
not to undertake such defense or opposition, or written (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 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 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, no
party 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 $25,000.00.
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 Sellers,
this Agreement may be terminated on such terms and conditions as so agreed; or
16.1.2 By written notice of Buyers to Sellers if Sellers
breach in any material respect any of their representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of their 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
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16.1.3 By written notice of Sellers to Buyers if Regent or
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 Sellers; or
16.1.4 By written notice of Buyers to Sellers or by Sellers to
Buyers if the FCC denies the FCC Application; or
16.1.5 By written notice of Buyers to Sellers, or by Sellers
to Buyers, if any court of competent jurisdiction, legislative body or
governmental or regulatory agency 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
16.1.6 By written notice of Buyers to Sellers, or by Sellers
to Buyers, if the Closing shall not have been consummated on or before June 30,
2000; or
16.1.7 By written notice of Buyers to Sellers 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 Sellers refuse 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 it. If any action is
brought by Buyers to enforce this Agreement, Sellers shall waive the defense
that there is an adequate remedy at law. In the event of a default by Sellers,
which results in the filing of a lawsuit for damages, specific performance, or
other remedy, Buyers shall be entitled to reimbursement by Sellers of reasonable
legal fees and expenses incurred by Buyers.
16.4 Sellers' Liquidated Damages. As more fully described in the
Deposit Escrow Agreement, in the event this Agreement is terminated solely
because of Buyers' or Regent'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 Sellers, and the proceeds thereof shall constitute
liquidated damages. It is understood and agreed that such liquidated damages
amount represents Regent's, Buyers' and Sellers' reasonable estimate of actual
damages and does not constitute a penalty.
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Recovery of liquidated damages shall be the sole and exclusive remedy of Sellers
against Buyers and Regent for failing to consummate this Agreement as a result
of Buyers' or Regent's material breach hereof, and shall be applicable
regardless of the actual amount of damages sustained and all other remedies are
deemed waived by Sellers.
ARTICLE 17
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 Sellers. Sellers 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
Sellers 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 Sellers 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, Sellers shall from time to
time, at the request of and without further cost or expense to Buyers or Regent,
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 RBU and RBW shall from time to time, at
the request of and without further cost or expense to Sellers, execute and
deliver such other instruments and take such other actions as may reasonably be
requested in order more effectively to relieve Sellers of any obligations being
assumed by RBU and RBW hereunder.
17.4 Preservation of Records. Subject to Section 10.1 hereof, RBU and
RBW hereby agree that they will preserve and make available to Sellers and their
attorneys and accountants (including the right to inspect and copy at Sellers'
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 pursuant to this
Agreement as
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Sellers 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 Sellers.
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. Sellers may not voluntarily or involuntarily assign their
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 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, Sellers 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 New York, 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 Sellers, by notifying Buyers, and in the case
of Buyers, by notifying Sellers:
To Sellers: Forever of NY, Inc.
One Forever Drive
Hollidaysburg, PA 16648
Fax: (814) 943-2754
Attn: Ms. Carol B. O'Leary, President
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<PAGE> 44
Copy to: Robert F. Wright, Jr.
First Union Bank Bldg.
699 Broad Street
Augusta, GA 30901
Fax: (706) 724-7776
To Regent or Buyers: 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.
[SIGNATURES ON FOLLOWING PAGE]
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<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
REGENT BROADCASTING OF
UTICA/ROME, INC.
By: /s/ Terry S. Jacobs
Name: Terry S. Jacobs
Title: Chairman
REGENT LICENSEE OF
UTICA/ROME, INC.
By: /s/ Terry S. Jacobs
Name: Terry S. Jacobs
Title: Chairman
REGENT BROADCASTING OF
WATERTOWN, INC.
By: /s/ Terry S. Jacobs
Name: Terry S. Jacobs
Title: Chairman
REGENT LICENSEE OF WATERTOWN, INC.
By: /s/ Terry S. Jacobs
Name: Terry S. Jacobs
Title: Chairman
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
Name: Terry S. Jacobs
Title: Chairman
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<PAGE> 46
FOREVER OF NY, INC.
By: /s/ Donald J. Alt
Name: Donald J. Alt
Title: Secretary
FOREVER OF NY, LLC
By: /s/ Donald J. Alt
Name: Donald J. Alt
Title: Member
FOREVER BROADCASTING, LLC
By: /s/ Donald J. Alt
Name: Donald J. Alt
Title: Member
- 40 -
<PAGE> 1
Exhibit 3(c)
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,
and 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.
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 4,000,000 shares
to 2,000,000 shares, in accordance with the provisions of section 151 of the
General Corporation Law of the State of Delaware. The 2,000,000 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 consent to be executed by its Chairman/Chief Executive Officer this 18th
day of June, 1999.
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
Terry S. Jacobs, Chairman and
Chief Executive Officer
<PAGE> 1
Exhibit 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.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation") is
REGENT COMMUNICATIONS, INC.
2. The certificate of incorporation (as amended) of the corporation
authorizes the issuance of 20,000,000 shares of Preferred Stock (of a par value
of $.01 each) and expressly vests in the Board of Directors of the corporation
the authority provided therein to issue any or all of said shares in one or more
series and by resolution or resolutions, the designation, number, full or
limited voting powers, or the denial of voting powers, preferences and relative,
participating, optional, and other special rights and the qualifications,
limitations, restrictions, and other distinguishing characteristics of each
series to be issued.
3. The Board of Directors of the corporation, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
designating a new series of Preferred Stock as Series H Preferred Stock:
"RESOLVED, that the Board of Directors hereby designates a new series
of Preferred Stock to be known as "Series H Convertible Preferred
Stock", the number, amount, stated value, voting powers, preferences
and relative, participating, optional and other special rights of
which, and the qualifications, limitations or restrictions thereon,
are set forth on Exhibit A attached hereto;
RESOLVED FURTHER, that the statements contained in the foregoing
resolution designating the said Series H Preferred Stock shall, upon
the effective date of said series, be deemed to be included in and be
a part of the certificate of incorporation of the Company pursuant to
the provisions of Sections 104 and 151 of the General Corporation Law
of the State of Delaware;
RESOLVED FURTHER, that the officers of the Company and each of them
individually hereby are authorized to execute and deliver, for and on
behalf of the Company a Certificate of Designation to be filed with
the Delaware Secretary of State and any other documents or filings
required by applicable law required to amend the Company's Certificate
and to otherwise effectuate the intent of the foregoing resolutions."
The effective time and date of the series herein certified shall be the filing
of this certificate.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned officer has executed this document
the 18th day of June, 1999.
/s/ Terry S. Jacobs
Terry S. Jacobs, Chairman and
Chief Executive Officer
COMMONWEALTH OF KENTUCKY )
)SS:
COUNTY OF KENTON )
BE IT REMEMBERED, that on this 18th day of June, 1999, before me, the
subscriber, a Notary Public in and for said county, personally came Terry S.
Jacobs, the Chairman and Chief Executive Officer of Regent Communications, Inc.,
and acknowledged that he signed the foregoing instrument on behalf of said
corporation and that the signing thereof is his voluntary act and deed and the
voluntary act and deed of said corporation.
IN TESTIMONY THEREOF, I have hereunto subscribed my name and affixed
my seal on this day and year aforesaid.
/s/ Peggy Hammons Alig
Notary Public
<PAGE> 3
EXHIBIT A
SECTION 1. DESIGNATION, AMOUNT AND STATED VALUE.
The shares of such series shall be designated as Series H Convertible
Preferred (the "Series H Preferred") and the number of shares constituting such
series shall be 2,000,000 shares. The stated value of the Series H Preferred
shall be $5.50 per share, the original per share issue price (the "Stated
Value").
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
The holders of shares of the Series H Preferred shall be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation
out of funds legally available for such purpose, cumulative dividends payable
quarterly in cash on the first business day of January, April, July and October
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), accruing commencing with the date of issue of such shares, on shares of
the Series H Preferred at the rate of $.55 per share per annum; provided,
however, that if and to the extent that the holder of a share of the Series H
Preferred does not receive a cash dividend on any given Quarterly Dividend
Payment Date in full payment of the accrued and unpaid dividend on such share of
the Series H Preferred or any previously cumulated dividend on such share for
the period ending on such Quarterly Dividend Payment Date and beginning on the
immediately preceding Quarterly Dividend Payment Date (or, if such share was
first issued during such period, beginning on the date of such issuance), such
unpaid portion of such dividend shall be cumulative and shall itself accrue,
whether or not declared and whether or not the Corporation has at the time funds
legally available for such purpose, from and after such date, until the date so
paid in full, dividends on a daily basis at a rate of 10% per annum, compounded
quarterly. No interest shall be paid on accrued but unpaid dividends.
SECTION 3. VOTING RIGHTS.
In addition to voting rights required by law or by the Company's
Amended and Restated Certificate of Incorporation, as amended or restated from
time to time (the "Certificate of Incorporation"), subject to restrictions
contained in the Certificate of Incorporation the holders of Series H Preferred
shall be entitled to vote on all matters submitted to a vote of the
Corporation's stockholders. Except as otherwise required by law or provided by
the Certificate of Incorporation or by the Board of Directors pursuant to
Subpart C of Article Fourth of the Certificate of Incorporation, the holders of
the Series H Preferred shall vote together with the holders of all other series
of the Corporation's voting preferred stock and the holders of the Corporation's
Common Stock as one class with one vote per share (in the case of Preferred
Stock, subject to adjustments as provided in Section 7 below and if convertible
into Common Stock, one vote per share of Common Stock into which such
convertible Preferred Stock is then convertible) on all matters submitted to a
vote of the Corporation's stockholders.
<PAGE> 4
SECTION 4. CERTAIN RESTRICTIONS.
Whenever dividends payable on the Series H Preferred as provided in
Section 2 are in arrears, thereafter and until dividends, including all accrued
dividends, on shares of the Series H Preferred outstanding shall have been paid
in full or declared and set apart for payment, the Corporation shall not (A) pay
dividends on, make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series H
Preferred, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of any
such junior stock, (B) pay dividends on or make any other distributions on any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series H Preferred, except dividends paid
ratably on the Series H Preferred and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled, (C) redeem or purchase or
otherwise acquire for consideration any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series H
Preferred, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior to the Series H Preferred or in
satisfaction of contractual obligations to do so entered into with the written
consent of the holders of a majority of outstanding shares of Series F
Preferred, Series G Preferred and Series H Preferred, voting together as one
class on the matter (including, without limitation, in satisfaction of the
provisions contained in the Stockholders' Agreement), or (D) purchase or
otherwise acquire for consideration any shares of the Series H Preferred, or any
shares of stock ranking on a parity with the Series H Preferred except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall unanimously determine in good faith will result in
fair and equitable treatment among the respective series of classes or except
pursuant to the provisions of the Stockholders' Agreement.
SECTION 5. REACQUIRED SHARES.
Any shares of the Series H Preferred which have been converted to
Common Stock or have been purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, or otherwise in accordance with Delaware General
Corporation Law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (A) to the holders of the Series H Preferred unless,
prior thereto, the holders of the Series B Preferred shall have received the
Stated Value per share, plus an amount equal to unpaid dividends thereon,
including accrued dividends, whether or not declared, to the date of such
payment, or (B) to the holders of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series H Preferred
unless, prior thereto, the holders of Series H Preferred shall have received the
Stated Value per share, plus an amount equal to unpaid dividends thereon,
including accrued dividends, whether or not declared, to the date of such
payment, or (C) to the holders of stock ranking on a parity
<PAGE> 5
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series H Preferred, except distributions made ratably on the Series H Preferred
and all other such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up.
SECTION 7. CONVERSION.
[a] Optional Conversion. Subject to the provisions for
adjustment hereinafter set forth, each share of the Series H Preferred
shall be convertible at any time at the option of the holder thereof,
in the manner hereinafter set forth, into one (1) fully paid and
nonassessable share of Common Stock of the Corporation.
[b] Mandatory Conversion. Subject to the provisions for
adjustment set forth in this Section 7, each share of the Series H
Preferred shall be convertible at the option of the Board of Directors
into one (1) fully paid and nonassessable share of Common Stock of the
Corporation in the event of, and concurrently with the closing of, a
public offering of Common Stock of the Corporation at a per share
price of at least $12.00 (subject to adjustment for stock splits,
stock dividends, reverse stock splits and the like) with gross
proceeds to the Corporation of at least $25,000,000 (excluding the
effect of any over-allotment option).
[c] The number of shares of Common Stock into which each share
of the Series H Preferred is convertible shall be adjusted from time
to time as follows:
[i] In case the Corporation shall at any time or from
time to time after the issuance of such share of Series H
Preferred declare or pay any dividend on its Common Stock
payable in its Common Stock or effect a subdivision of the
outstanding shares of its Common Stock into a greater number
of shares of Common Stock (by reclassification or otherwise),
then, and in each such case, the number of shares of Common
Stock into which each share of the Series H Preferred is
convertible shall be adjusted so that the holder of each share
thereof shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by
multiplying (a) the number of shares of Common Stock into
which such share was convertible immediately prior to the
occurrence of such event by (b) a fraction, the numerator of
which is the sum of (I) the number of shares of Common Stock
into which such share was convertible immediately prior to the
occurrence of such event plus (II) the number of shares of
Common Stock which such holder would have been entitled to
receive in connection with the occurrence of such event had
such share been converted immediately prior thereto, and the
denominator of which is the number of shares of Common Stock
determined in accordance with clause (I) above. An adjustment
made pursuant to this subparagraph [c][i] shall become
effective (a) in the case of any such dividend, immediately
after the close of business on the record date for the
determination of holders of Common Stock entitled to receive
such dividend, or (b) in the case of any such subdivision, at
the close of business on the day immediately prior to the day
upon which such corporate action becomes effective.
[ii] In case the Corporation at any time or from time
to time after the issuance of such share of Series H Preferred
shall combine or consolidate the
<PAGE> 6
outstanding shares of its Common Stock into a lesser number
of shares of Common Stock, by reclassification or otherwise,
then, and in each such case, the number of shares of Common
Stock into which each share of the Series H Preferred is
convertible shall be adjusted so that the holder of each
share thereof shall be entitled to receive, upon the
conversion thereof, the number of shares of Common Stock
determined by multiplying (a) the number of shares of Common
Stock into which such share was convertible immediately
prior to the occurrence of such event by (b) a fraction, the
numerator of which is the number of shares which the holder
would have owned after giving effect to such event had such
share been converted immediately prior to the occurrence of
such event and the denominator of which is the number of
shares of Common Stock into which such share was convertible
immediately prior to the occurrence of such event. An
adjustment made pursuant to this subparagraph b[ii] shall
become effective at the close of business on the date
immediately prior to the day upon which such corporate
action becomes effective.
[iii] In case the Corporation after the issuance of
such share of Series H Preferred shall: (A) issue any options,
warrants, or other rights (excluding options to purchase
Common Stock issued to management of the Corporation
exercisable for up to the lesser of 2,000,000 shares of Common
Stock (subject to adjustment pursuant to provisions
applicable to the options in the case of stock splits, reverse
stock splits and the like) or that number of shares of Common
Stock equal to fifteen percent (15%) of the aggregate number
of outstanding shares of Common Stock and other equity
securities of the Corporation exercisable for the purchase of,
or convertible into, Common Stock, computed on a fully-diluted
basis) entitling the holder thereof to subscribe for, or
purchase, Common Stock at a price per share which, when added
to the amount of consideration received or receivable by the
Corporation for such options, warrants, or other rights, is
less than the then fair market value per share of the Common
Stock at the date of such issuance; (B) issue or sell
securities of the Corporation convertible into, or
exchangeable for, Common Stock at a price per share which,
when added to the amount of consideration received or
receivable, from the Corporation for such exchangeable or
convertible securities, is less than the then fair market
value of a share of Common Stock at the date of such issuance;
or (C) issue or sell additional shares of Common Stock for
consideration representing less than the then fair market
value of the Common Stock at the date of such issuance; then
the number of shares of Common Stock into which each share of
the Series H Preferred is convertible shall be adjusted
so that, thereafter, until further adjusted, the holder of
each share thereof shall be entitled to receive, upon the
conversion thereof, the number of shares of Common Stock
determined by multiplying (w) the number of shares of Common
Stock into which such shares are convertible immediately prior
to the occurrence of such event by (x) a fraction, the
numerator of which shall be the number of shares of Common
Stock outstanding prior to such issuance plus the number of
additional shares of Common Stock issuable upon exercise of
such options, warrants, or rights, or exchangeable or
convertible securities, or the additional number of shares of
Common Stock issued at such time, and the denominator of
which shall be the number of shares of Common Stock
outstanding prior to such issuance plus the number of shares
of Common Stock that either (y) the sum of the aggregate
exercise price of the total number of shares of Common Stock
issuable upon exercise of such options,
<PAGE> 7
warrants, or rights, or upon conversion or exchange of such
convertible securities, and the aggregate amount of
consideration, if any, received or receivable by the
Corporation for such options, warrants, or rights, or
convertible or exchangeable securities, or (z) the aggregate
consideration received in connection with the sale of shares
of its Common Stock for less than the then fair market
value, as the case may be, would purchase at the then fair
market value.
[iv] In the event that, at any time, or from
time to time, after the issuance of such share of the Series H
Preferred, the Common Stock issuable upon conversion of the
Series H Preferred is changed into the same or a different
number of shares of any class or classes of stock, whether by
recapitalization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend, or a
reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section 7), then, and in any
such event, each holder of Series H Preferred shall have the
right thereafter to convert such stock into the kind and
amount of stock and other securities and property receivable
upon such recapitalization, reclassification, or other change,
by holders of the number of shares of Common Stock into which
such shares of Series H Preferred could have been converted
immediately prior to such recapitalization, reclassification,
or change, all subject to further adjustment as provided
herein.
[v] If at any time, or from time to time
after the issuance of such share of the Series H Preferred,
there is a capital reorganization of the Common Stock other
than a recapitalization, subdivision, combination,
reclassification, or exchange of shares provided for elsewhere
in this Section 7) or a merger or consolidation of the
Corporation with or into another corporation, or the sale of
all, or substantially all, of the Corporation's properties and
assets to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, provision
shall be made so that the holders of the Series H Preferred
shall thereafter be entitled to receive upon conversion of the
Series H Preferred the number of shares of stock or other
securities or property to which a holder of the number of
shares of Common Stock deliverable upon conversion would have
been entitled on such capital reorganization, merger,
consolidation, or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions
of this Section 7 with respect to the rights of the holders of
Series H Preferred after the reorganization, merger,
consolidation, or sale to the end that the provisions of this
Section 7 shall be applicable after that event and be as
nearly equivalent as may be practicable.
[vi] Upon the expiration of any rights,
options, warrants or conversion or exchange privileges which
caused an adjustment pursuant to this Section 7 to be made, if
any thereof shall not have been exercised, the number of
shares of Common Stock into which each share of the Series H
Preferred is convertible shall, upon such expiration, be
readjusted and shall thereafter be such as it would have been
had it been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (a)
the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion or
exchange privileges and (b) such shares of Common Stock, if
<PAGE> 8
any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for
the issuance, sale or grant of all such rights, options,
warrants or conversion or exchange privileges, whether or not
exercised.
[vii] In addition to any other adjustment
pursuant to this Section 7 [c], if WPG Corporate Development
Associates V, L.L.C. ("WPG"), WPG Corporate Development
Associates V (Overseas), L.P., or any affiliate or assignee
thereof does not purchase at least 1,363,636 shares in the
aggregate of Series H Preferred on or before the earliest to
occur of (i) August 31, 1999, (ii) such earlier date as is
mutually agreed upon by the Company and WPG, and (iii) the
date of the closing of the purchase by the Corporation of the
assets of radio stations WXKC-FM, WRIE-AM and WXTA-FM pursuant
to that certain Asset Purchase Agreement dated May 18, 1999
relating thereto, then Section 7 [a] and [b] above shall be
modified to provide that each share of Series H Preferred
shall be convertible into a number of shares of Common Stock
equal to the greater of (x) one (1) and (y) a fraction, the
numerator of which is $5.50 and the denominator of which is
the effective conversion price per share of Common Stock of
the next subsequent issuance of Common Stock or any series of
convertible Preferred Stock by the Corporation in which the
gross proceeds to the Corporation are not less than
$2,000,000.
[d] If any adjustment in the number of shares of Common Stock
into which each share of the Series H Preferred may be converted
required pursuant to this Section 7 would result in an increase or
decrease of less than 1% in the number of shares of Common Stock into
which each share of the Series H Preferred is then convertible, the
amount of any such adjustment shall be carried forward and adjustment
with respect thereto shall be made at the time of and together with
any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least
1% of the number of shares of Common Stock into which each share of
the Series H Preferred is then convertible; provided that any such
adjustments carried forward shall be made immediately following
receipt of notice from a holder of the intent to convert all or a
portion of the Series H Preferred such that upon conversion the holder
shall receive such number of shares of Common Stock as such holder is
entitled, taking into account all adjustments required by this Section
7. All calculations under this paragraph [d] shall be made to the
nearest one-hundredth of a share.
[e] The holder of any shares of the Series H Preferred may
convert such shares into shares of Common Stock pursuant to paragraph
[a] of this Section 7 by surrendering for such purpose to the
Corporation, at its principal office or at such other office or agency
maintained by the Corporation for that purpose, a certificate or
certificates representing the shares of Series H Preferred to be
converted (or if such certificate or certificates cannot be found, an
affidavit of lost securities in form and substance acceptable to the
Corporation) accompanied by a written notice stating that such holder
elects to convert all or a specified number of such shares in
accordance with the provisions of this Section 7 and specifying the
name or names in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. In case such
notice shall specify a name or names other than that of such holder,
such notice shall be accompanied by payment of all transfer taxes
payable upon the issuance of shares of Common Stock in such name or
names. As promptly as practicable, and in any event within
<PAGE> 9
five business days after the surrender of such certificates and the
receipt of such notice relating thereto and, if applicable, payment of
all transfer taxes, the Corporation shall deliver or cause to be
delivered (i) certificates representing the number of validly issued,
fully paid and nonassessable shares of Common Stock of the Corporation
to which the holder of the Series H Preferred so converted shall be
entitled and (ii) if less than the full number of shares of the Series
H Preferred evidenced by the surrendered certificate or certificates
are being converted, a new certificate or certificates, of like tenor,
for the number of shares evidenced by such surrendered certificate or
certificates less the number of shares converted. Such conversions
shall be deemed to have been made at the close of business on the date
of giving of such notice and of such surrender of the certificate or
certificates representing the shares of the Series H Preferred to be
converted so that the rights of the holder thereof shall cease except
for the right to receive Common Stock of the Corporation in accordance
herewith and any accumulated, accrued or unpaid dividends pursuant to
paragraph [g] below, and the converting holder shall be treated for
all purposes as having become the record holder of such Common Stock
of the Corporation at such time.
[f] The Series H Preferred shall convert to Common Stock of
the Corporation pursuant to paragraph [b] of this Section 7
automatically upon notice in writing to the stockholders, including
all holders of the Series H Preferred, setting forth the date of such
conversion and the material terms of the triggering public offering.
As promptly as practicable after such notice, and in any event within
five business days after the surrender of certificates for the Series
H Preferred (if required by the Board of Directors), the Corporation
shall deliver or cause to be delivered to each holder of Series H
Preferred certificates representing the number of validly issued,
fully paid and nonassessable shares of Common Stock of the Corporation
to which such holder of the Series H Preferred so converted shall be
entitled. Such conversion shall be deemed to have been made at the
close of business on the date set forth in such notice of mandatory
conversion so that the rights of the holder thereof shall cease with
or without surrender of certificates for the Series H Preferred,
except for the right to receive Common Stock of the Corporation in
accordance herewith and any accumulated, accrued or unpaid dividends
pursuant to paragraph [g] below, and the converting holder shall be
treated for all purposes as having become the record holder of such
Common Stock of the Corporation at such time.
[g] Upon conversion of any shares of the Series H Preferred
pursuant to paragraph [a] or [b] of this Section 7, the holder thereof
shall be entitled to receive any accumulated, accrued or unpaid
dividends in respect of the shares so converted (whether or not
declared or otherwise payable as of such date of conversion),
including any dividends on such shares of the Series H Preferred
declared prior to such conversion if such holder held such shares on
the record date fixed for the determination of holders of the Series H
Preferred entitled to receive payment of such dividend.
[h] The Corporation shall at all times reserve and keep
available out of its authorized Common Stock the full number of shares
of Common Stock of the Corporation issuable upon the conversion of all
outstanding shares of the Series H Preferred.
[i] For purposes of this Section, "fair market value" shall be
as determined by the Board of Directors in such manner as they shall
deem appropriate in their discretion, unless the holder(s) of more
than twenty-five percent (25%) of the outstanding shares of Preferred
Stock
<PAGE> 10
of the Corporation demand in good faith and in writing that "fair
market value" be determined by an appraiser, who shall be mutually
acceptable to the Board of Directors and such holders, whose
determination shall be binding and whose fees and expenses shall be
paid by the Corporation.
SECTION 8. REPORTS AS TO ADJUSTMENTS.
Whenever the number of shares of Common Stock into which the shares of
the Series H Preferred are convertible is adjusted as provided in Section 7, the
Corporation will (A) promptly compute such adjustment and furnish to each
transfer agent for the Series H Preferred a certificate, signed by a principal
financial officer of the Corporation, setting forth the number of shares of
Common Stock into which each share of the Series H Preferred is convertible as a
result of such adjustment, a brief statement of the facts requiring such
adjustment and the computation thereof and when such adjustment will become
effective and (B) promptly mail to the holders of record of the outstanding
shares of the Series H Preferred a notice stating that the number of shares into
which the shares of Series H Preferred are convertible has been adjusted and
setting forth the new number of shares into which each share of the Series H
Preferred is convertible as a result of such adjustment and when such adjustment
will become effective. Notwithstanding the foregoing, the Corporation shall
incur no liability for its failure to take any action set forth in this Section
8, nor shall such failure affect the validity, rights or preferences of any
shares of the Series H Preferred.
SECTION 9. RANKING.
The Series H Preferred shall rank senior to the Common Stock and any
other series of Preferred Stock of the Corporation hereafter created (except for
the Series B Preferred, which shall rank senior to the Series H Preferred, and
except for the Series A Preferred, the Series C Preferred, the Series D
Preferred, the Series E Preferred, the Series F Preferred, the Series G
Preferred, and any other series of Preferred Stock which the Board of Directors
shall establish and designate to rank equal therewith pursuant to Subpart C of
Article Fourth of the Company's Certificate of Incorporation, with which it
shall rank equal), as to the payment of dividends and the distribution of assets
and rights upon liquidation, dissolution or winding up of the Corporation.
SECTION 10. DIRECTORSHIP.
Upon and subject to the purchase of at least 1,750,000 shares in the
aggregate of the Series H Preferred, the holders of the Series H Preferred, as a
class, shall be entitled to be represented on the Board of Directors by one
Director (the "Series H Director") who, upon nomination by such holders, as a
class, will stand for election by voting by the holders of the Preferred Stock
entitled to vote for the election of directors (subject to limitations in
Article Fourth of the Certificate of Incorporation or established by the Board
of Directors pursuant to Section C of Article Fourth of the Certificate of
Incorporation) and holders of Common Stock together, except under circumstances
where the number of individuals nominated for election exceeds the number of
Directors to be elected. In the event the number of individuals nominated for
election exceeds the number of Directors to be elected, then the holders of the
Series H Preferred shall have the sole right to vote for, elect and remove the
individual nominated by them, as a class, to serve as the Series H Director, and
in such event the further right to vote for, elect or remove any of the other
Directors who are not to be elected solely by the holders of
<PAGE> 11
another class or series of Preferred Stock. The Series H Director, upon being
elected, will serve for the same term and have the same voting powers as other
Directors. The right to elect the Series H Director pursuant to the terms hereof
shall be exercisable by the holders of a majority of the Series H Preferred at
their option upon at least 60 days notice to the Corporation; provided, however,
if the Corporation is subject to the reporting requirements of the Securities
Exchange Act of 1934, such notice must be provided on or before the date
established by the Corporation for the submission of proposals pursuant to the
proxy rules promulgated under the Securities Exchange Act of 1934. The Series H
Director shall serve as a member of the Acquisitions Committee of the Board of
Directors (or any other Committee of the Board performing such functions).
<PAGE> 1
Exhibit 4(z)
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS'
AGREEMENT (this "Second Amendment") is made and entered into as of June 21, 1999
and amends that certain Second Amended and Restated Stockholders' Agreement
among Regent Communications, Inc. and certain of its stockholders, as amended
(the "Stockholders' Agreement"). Capitalized terms used herein without
definition shall have the same meanings as set forth in the Stockholders'
Agreement.
W I T N E S S E T H:
THAT, WHEREAS, the Company intends to designate and issue shares of a
new series of convertible preferred stock entitled Series H Convertible
Preferred Stock (the "Series H Preferred Stock"); and
WHEREAS, in conjunction with the issuance of the Series H Preferred
Stock, certain amendments to the Stockholders' Agreement are desired; and
WHEREAS, the Stockholders signing this Amendment hold more than fifty
percent (50%) of the Common Stock Beneficially Owned by all Stockholders,
thereby permitting the Company and Stockholders signing below to amend the
Stockholders' Agreement pursuant to Section 16 thereof.
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, it is agreed as follows:
1. Amendments. The Stockholders' Agreement is hereby amended as
follows:
(a) The definition of "Eligible Put Shares" is expanded to
include the Series H Preferred Stock, and accordingly, subpart (v) of the
definition is changed to state "(v) any series of preferred stock first created
by the Board of Directors after the date hereof other than the Company's 10%
Series G Convertible Preferred Stock, $.01 par value and the Company's 10%
Series H Convertible Preferred Stock, $.01 par value."
(b) The definition of "Preferred Stock" is amended to state in
its entirety as follows:
"'Preferred Stock' means any or all of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, or Series H Preferred Stock."
(c) The following definitions shall be added to the
Stockholders' Agreement:
"'Series H Director" means the one director entitled to be
nominated to serve by the holders of Series H Preferred Stock,
voting as a class,
<PAGE> 2
pursuant to the provisions of Article FOURTH, Paragraph F,
Section 11, of the Amended and Restated Charter."
"'Series G Preferred Stock' means the Company's 10% Series G
Convertible Preferred Stock, $.01 par value, together with all
shares of Common Stock issued upon conversion of such shares."
"'Series H Preferred Stock' means the Company's 10% Series H
Convertible Preferred Stock, $.01 par value, together with all
shares of Common Stock issued upon conversion of such shares."
(d) Section 2(a)(ii) shall be expanded to include a Series H
Director to be designated by WP&G and, accordingly, subparagraph (7) is
renumbered as "(8)" and a new subparagraph (7) is added to Section 2(a)(ii) as
follows:
"(7) one person designated by WP&G, who shall initially be
Kenneth Hanau (and who shall constitute the Series H
Director); and"
(e) Section 30 of the Stockholders' Agreement is expanded to
include the Series H Preferred Stock, and accordingly, is amended to state in
its entirety as follows:
"30. Automatic Amendment to Series G and Series H
Preferred Stock. In the event any of the terms of the Series F
Preferred Stock (other than amendments which provide the
holders of the Series F Preferred Stock with increased or
additional voting or consent rights or board representation),
as set forth in the Amended and Restated Charter, are amended,
the corresponding terms of the Series G Preferred Stock and
Series H Preferred Stock shall be similarly amended
automatically and without the necessity of a vote of the
holders of the Series G Preferred Stock or Series H Preferred
Stock so as to keep the terms of the three Series consistent
(or, in the case of a change in the stated value or dividend
rate of the Series F Preferred Stock, to keep such
corresponding terms of the Series G Preferred Stock and the
Series H Preferred Stock proportionately similar), purchase
and acceptance of delivery of the Series G Preferred Stock and
Series H Preferred Stock being deemed consent to any such
automatic amendment."
2. Termination of Certain Provisions. Notwithstanding the provisions of
Section 10 of the Certificate of Designation filed with the Delaware Secretary
of State on behalf of the Company on June 21, 1999 designating the Series H
Preferred Stock (the "Certificate of Designation"), in the event WP&G does not
purchase at least 1,363,636 shares of the Series H Preferred Stock on or before
August 31, 1999 pursuant to the terms of that certain Stock Purchase Agreement
between the Company and WP&G as originally executed on June 22, 1999, the
definition of "Series H Director" shall be deleted from the Stockholders'
Agreement and the provisions of Paragraph 1(d) above and the provisions of
Section 10 of the Certificate of Designation shall terminate and be of no
further force or effect and from and after such date, no holder of Series H
Preferred Stock shall claim or assert any right to nominate, approve, or elect a
director under such sections.
<PAGE> 3
3. Remainder of Agreement. Except as specifically amended hereby, the
terms, conditions and provisions of Stockholders' Agreement remain in full force
and effect.
4. Counterparts. This Second 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.
IN WITNESS WHEREOF, the signatories below have caused this Second
Amendment to be executed and delivered as of the date first above written.
REGENT COMMUNICATIONS, INC. WALLER-SUTTON MEDIA PARTNERS,
L.P.
By: /s/ Terry S. Jacobs By: Waller-Sutton Media, L.L.C.,
---------------------------
Its: Chairman and CEO Its: /s/ William H. Ingram
--------------------------- --------------------------------
/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
--------------------------------
/s/ Joel M. Fairman Its: Manager
- ------------------------------- --------------------------------
JOEL M. FAIRMAN
MIAMI VALLEY VENTURE FUND, L.P. PNC BANK, N.A., TRUSTEE
By: Blue Chip Venture Company of
Dayton, Ltd., By: /s/ Louis E. Valker
its Special Limited Partner --------------------------------
Its: Vice President
-------------------------------
By: /s/ John H. Wyant
---------------------------
John H. Wyant, Manager
<PAGE> 1
Exhibit 4(aa)
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") dated as of the 21st
day of June, 1999 between REGENT COMMUNICATIONS, INC., a Delaware corporation
(the "Company") and WALLER-SUTTON MEDIA PARTNERS, L.P., a Delaware limited
partnership (the "Buyer").
1. Authorization. The Company will authorize the sale and issuance
under this Agreement of 90,909 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 Buyer, and Buyer agrees that it will purchase from the
Company on the Closing Date, 90,909 shares of the Series H Convertible Preferred
Stock.
3. Closing Date. The closing of the purchase and sale of the Series H
Preferred Stock hereunder shall be on June 21, 1999 (the "Closing") or at such
other time upon which the Company and Buyer 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 Four Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine and 50/100 Dollars
($499,999.50) ($5.50 per share) (the "Purchase Price"), which sum Buyer 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 Buyer the following:
(a) a stock certificate or certificates representing the
Series H Preferred Stock duly issued in the name of Buyer and bearing the
legends set forth in Section 7(j) hereof; and
(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 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 Buyer as follows:
<PAGE> 2
(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 and under certain other restrictions as set forth in that certain Second
Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among the
Company, Waller-Sutton Media Partners, L.P. et al., as amended. 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.
(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
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<PAGE> 3
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 Buyer's
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 Buyer 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 first 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 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 first quarter 10-Q ("the Financial
Statements") fairly present, in all material
-3-
<PAGE> 4
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"). In the event, however, the Company does not
consummate the pending sale of its Kingman and Flagstaff stations as required by
the Credit Agreement (which sales are subject to receipt of FCC approval), the
Company will require a waiver from its lenders.
7. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to the Company with respect to the purchase of the Shares as follows:
(a) Non-Registration. Buyer understands 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. Buyer is purchasing the Series H
Preferred Stock and the Conversion Stock for its own account, for investment and
not with a view to resale, distribution, or other disposition, and Buyer has no
present plans to enter into any contract, undertaking, agreement or arrangement
for any such resale, distribution or other disposition. It understands 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 Buyer's representations as expressed herein. Buyer will not sell or
otherwise transfer the Series H Preferred Stock without registration under the
1933 Act and applicable state securities laws, or 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.
-4-
<PAGE> 5
(c) Rule 144. Buyer acknowledges 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.
It is 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. Buyer understands 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 Buyer. Buyer: (i) is an "accredited investor,"
as that term is defined in Rule 501(a) of Regulation D promulgated under the
1933 Act, inasmuch as Buyer meets the requirements of subparagraph (a)(3) of
Rule 501; (ii) was not formed for the primary purpose of evading federal or
state securities laws, and (iii) is a "Qualified Institutional Buyer" as defined
in 17 CFR .144A(a).
(f) Opportunity to Review Books and Records. Buyer has had a
reasonable opportunity to inspect all documents, books and records pertaining to
the Company and the Series H Preferred Stock and confirms that the Series H
Preferred Stock is being purchased without Buyer's receipt of any offering
literature.
(g) Opportunity for Questions. Buyer has 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 Buyer.
(h) Manner of Purchase. Buyer is 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. Buyer 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.
(j) Legends. Buyer understands that the certificate(s)
representing the Series H Preferred Stock shall bear legends in substantially
the following forms, and Buyer shall not transfer any
-5-
<PAGE> 6
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."
"The securities represented by this certificate are subject to the
terms and entitled to the benefits of that certain Registration Rights
Agreement dated as of June 15, 1998 among the Company and certain of
its stockholders, as the same may be amended from time to time, and
that certain Second Amended and Restated Stockholders' Agreement dated
as of June 15, 1998 among the Company and certain of its stockholders,
as the same may be amended from time to time."
(k) Authority of Buyer. This Agreement, when executed and
delivered by the Buyer will constitute the legal, valid and binding obligation
of Buyer, enforceable against Buyer 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 Buyer 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 Buyer is subject, nor result in a breach or violation by
Buyer 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 Buyer is a party or
by which Buyer or its assets are bound. Buyer is not a party 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 Buyer of this Agreement or such other documents as may
be delivered by Buyer in connection herewith.
-6-
<PAGE> 7
(m) Legal Proceedings. There is no action, suit, proceeding or
investigation pending (or, to the knowledge of Buyer, threatened) against Buyer
in, before or by any court, administrative agency or arbitrator affecting the
ability of Buyer to carry out the provisions of this Agreement and the
transactions contemplated hereby.
8. Buyer's Conditions to Closing. The Buyer's 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 Buyer.
(e) WPG Stock Purchase Agreement and Closing of Additional
Shares of Series H Preferred Stock. WPG Corporate Development Associates V,
L.L.C. ("WPG")and WPG Corporate Development Associates V (Overseas), L.P. ("WPG
Overseas") shall have executed and delivered to the Company a Stock Purchase
Agreement pursuant to which WPG and WPG Overseas shall have agreed to purchase
from the Company an aggregate of 1,363,636 shares of the Series H Preferred
Stock on or before the earliest of (i) August 31, 1999, (ii) such earlier date
as is mutually agreed upon by the Company and WPG, and (iii) the closing of the
purchase by the Company of the Erie, Pennsylvania radio stations, and the
Company shall have sold an aggregate of 545,454 shares of the Series H Preferred
Stock prior to or concurrently with the Closing hereunder.
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 Buyer in Section 7 hereof shall be true
and correct when made, and shall be true and correct on the Closing Date.
-7-
<PAGE> 8
(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
Buyer for its legal fees incurred in connection with the negotiation, execution
and performance of this Agreement.
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
-8-
<PAGE> 9
(ii) if to Buyer, addressed to:
Waller-Sutton Media Partners, L.P.
c/o Waller-Sutton Management Group, Inc.
1 Rockefeller Plaza, Suite 3300
New York, N.Y. 10020
Attn: Cathy M. Brienza
Facsimile: (212) 218-4355
with copies to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, N.Y. 10112
Attn: Ronald Greenberg, Esq.
Facsimile: (212) 698-7825
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 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.
-9-
<PAGE> 10
(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 Buyer 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.
[SIGNATURES ON FOLLOWING PAGE]
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<PAGE> 11
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/ William L. Stakelin
------------------------------------------------
Its: President
------------------------------------------------
BUYER:
WALLER-SUTTON MEDIA PARTNERS, L.P.
By: Waller-Sutton Media, L.L.C., its General Partner
By: /s/ William H. Ingram
------------------------------------------
Its: Chairman
------------------------------------------
-11-
<PAGE> 1
Exhibit 4(bb)
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") dated as of the 21st
day of June, 1999 among REGENT COMMUNICATIONS, INC., a Delaware corporation (the
"Company"), WPG CORPORATE DEVELOPMENT ASSOCIATES V, L.L.C., a Delaware limited
liability company ("WPG") and WPG CORPORATE DEVELOPMENT ASSOCIATES V (OVERSEAS),
L.P., a Delaware limited partnership ("WPG Overseas") (WPG and WPG Overseas
collectively referred to as the "Buyers").
1. Authorization. The Company will authorize the sale and issuance
under this Agreement of 1,363,636 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 each of the Buyers agrees that it will purchase
from the Company on the Closing Date, shares of the Series H Convertible
Preferred Stock, as follows:
<TABLE>
<S> <C>
WPG 1,180,909 shares
WPG Overseas 182,727 shares
</TABLE>
3. Closing Date. The closing of the purchase and sale of the Series H
Preferred Stock hereunder (the "Closing") shall be the earliest of (i) August
31, 1999, (ii) such earlier date as is mutually agreed upon by the Company and
WPG, and (iii) the date of the closing of the purchase by the Company of the
assets of radio stations WXKC-FM, WRIE-AM and WXTA-FM pursuant to that certain
Asset Purchase Agreement dated May 18, 1999 among the Company, Media One
Group-Ltd., Regent Broadcasting of Erie, Inc., Regent Licensee of Erie, Inc.,
CUZCO LLC, James T Embrecia and Thomas J. Embrecia. (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 Seven Million Four Hundred Ninety-Nine Thousand Nine Hundred Ninety-Eight
Dollars ($7,499,998.00) ($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) stock certificates representing the Series H Preferred
Stock duly issued in the names 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
<PAGE> 2
(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 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 and under certain other restrictions as set forth in that certain Second
Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among the
Company, Waller-Sutton Media Partners, L.P. et al., as amended. 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
<PAGE> 3
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.
(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 first 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 such
<PAGE> 4
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 first 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"). In the event, however, the Company does not
consummate the pending sale of its Kingman and Flagstaff stations as required by
the Credit Agreement (which sales are subject to receipt of FCC approval), the
Company will require a waiver from its lenders.
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. Buyers
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
<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.
Buyers 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. Each of the Buyers: (i) is an
"accredited investor," as that term is defined in Rule 501(a) of Regulation D
promulgated under the 1933 Act, inasmuch as Buyer meets the requirements of
subparagraph (a)(3) of Rule 501; and (ii) was not formed for the primary purpose
of evading federal or state securities laws.
(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.
(j) Legends. Buyers understand that the certificates
representing the Series H Preferred Stock shall bear legends in substantially
the following forms, and Buyers shall not transfer
<PAGE> 6
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."
"The securities represented by this certificate are subject to the
terms and entitled to the benefits of that certain Registration Rights
Agreement dated as of June 15, 1998 among the Company and certain of
its stockholders, as the same may be amended from time to time, and
that certain Second Amended and Restated Stockholders' Agreement dated
as of June 15, 1998 among the Company and certain of its stockholders,
as the same may be amended from time to time."
(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 respective 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.
<PAGE> 7
(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.
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 its legal fees incurred in connection with the negotiation, execution
and performance of this Agreement.
<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:
WPG Corporate Development Associates V, L.L.C.
One New York Plaza
New York, N.Y. 10004-1950
Attn: Kenneth J. Hanau
Facsimile: (212) 908-0112
<PAGE> 9
with copies to:
Finn Dixon & Herling LLP
One Landmark Square
Stamford, CT 06901
Attn: Michael Herling, Esq.
Facsimile: (203) 348-5777
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 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
<PAGE> 10
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.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE> 11
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/ William L. Stakelin
------------------------------------------------------
Its: /s/ President
------------------------------------------------------
BUYERS:
WPG CORPORATE DEVELOPMENT ASSOCIATES V, L.L.C.
By: WPG PE Fund Adviser II, L.L.C., the Fund Investment
Adviser Member
By: /s/ Kenneth Hanau
------------------------------------------------------
Its: Member
------------------------------------------------------
WPG CORPORATE DEVELOPMENT ASSOCIATES V (Overseas), L.P.
By: /s/ Kenneth Hanau
------------------------------------------------------
Its: Member
------------------------------------------------------
<PAGE> 1
Exhibit 4(cc)
EXECUTION
REGENT COMMUNICATIONS, INC.
SEVENTH AMENDMENT TO CREDIT AGREEMENT
This SEVENTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT")
is dated as of June 30, 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 and that certain Sixth Amendment and Limited Consent to
Credit Agreement dated as of February 24, 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 allow Company and its Subsidiaries until September 30, 1999 to
consummate certain asset sales and repay the Loans with the proceeds thereof as
set forth below.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 6: AFFIRMATIVE COVENANTS
Subsection 6.13 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"6.13 SALE OF CERTAIN STATIONS.
On or before June 30, 1999 (or July 15, 1999 with respect to
the Lake Tahoe Stations only), Company and its Subsidiaries
shall have entered into definitive sale agreements and made
the appropriate filings with the FCC for the sale, for fair
market value Cash consideration, of the Flagstaff Stations,
the Kingman Stations, the Lake Tahoe Stations or any other
Station or combination of Stations
<PAGE> 2
the sale of which is reasonably expected to result in
aggregate Net Cash Proceeds sufficient (after application of
such proceeds in accordance with this Agreement) to achieve a
Leverage Ratio of no more than 6.75:1.00 (calculated on a pro
forma basis to give effect to such sales). Such sales shall be
consummated and the Net Cash Proceeds in respect thereof shall
be applied to repay the Loans and reduce the Commitments as
soon as practicable but, in any event, no later than September
30, 1999."
1.2 AMENDMENTS TO SECTION 7: NEGATIVE COVENANTS
Subsection 7.6 of the Credit Agreement is hereby amended by
amending and restating subsection 7.6D(iii) in its entirety as follows:
" (iii) Sale of Assets. For purposes of calculating the
Consolidated Total Debt Ratio only for any relevant period
through September 30, 1999, with respect to Stations which are
subject to pending Asset Sales in accordance with subsection
6.13, Company and its Subsidiaries may calculate Consolidated
Total Debt and Consolidated Operating Cash Flow on a pro forma
basis as if such 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."
SECTION 2. LIMITATION OF AMENDMENTS
Without limiting the generality of the provisions of
subsection 10.6 of the Credit Agreement, the amendments set forth above shall be
limited precisely as written and relate solely to the matters expressly set
forth in Sections 1 and 2 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.
2
<PAGE> 3
SECTION 3. 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.
SECTION 4. 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 5. 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.
3
<PAGE> 4
SECTION 6. 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.
(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. 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.
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
4
<PAGE> 5
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 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]
5
<PAGE> 6
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> 7
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.,
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> 8
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.,
each a Delaware corporation
By: /s/ Anthony A. Vasconcellos
---------------------------------------
Name: Anthony A. Vasconcellos
Title: Vice President and Chief Financial Officer
of each of the foregoing
S-3
<PAGE> 9
BANK OF MONTREAL, CHICAGO BRANCH,
individually and as Agent
By: /s/ Christopher T. Young
---------------------------------------
Name: Christopher T. Young
Title: Director
S-4
<PAGE> 10
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Documentation Agent
By: /s/ Kenneth M. Gacevich
---------------------------------------
Name: Kenneth M. Gacevich
Title: Duly Authorized Signatory
S-5
<PAGE> 11
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By: (signature not required)
---------------------------------------
Name:
Title:
S-6
<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 SIX MONTHS ENDED
JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,760,004
<SECURITIES> 0
<RECEIVABLES> 4,531,758
<ALLOWANCES> (249,000)
<INVENTORY> 0
<CURRENT-ASSETS> 21,053,633
<PP&E> 15,813,757
<DEPRECIATION> 6,545,199
<TOTAL-ASSETS> 80,947,662
<CURRENT-LIABILITIES> 17,280,879
<BONDS> 34,801,452
41,931,205
3,824,115
<COMMON> 2,400
<OTHER-SE> (16,892,389)
<TOTAL-LIABILITY-AND-EQUITY> 80,947,662
<SALES> 10,835,293
<TOTAL-REVENUES> 10,835,293
<CGS> 0
<TOTAL-COSTS> 11,124,671
<OTHER-EXPENSES> (85,040)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,486,807
<INCOME-PRETAX> (1,691,145)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,691,145)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,691,145)
<EPS-BASIC> (17.72)
<EPS-DILUTED> (17.72)
</TABLE>
