-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BHz0Ko92rJl+IzdmwVGXNDuu/Czebqnp+W5Zhaq7Wz6RoC7JLgrXM5akq0iUvrg8 cbHouSCH74UJE1IWfYBpWQ== 0000931763-01-502015.txt : 20020410 0000931763-01-502015.hdr.sgml : 20020410 ACCESSION NUMBER: 0000931763-01-502015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEASLEY BROADCAST GROUP INC CENTRAL INDEX KEY: 0001099160 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 650960915 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-29253 FILM NUMBER: 1780194 BUSINESS ADDRESS: STREET 1: 3033 RIVIERA DRIVE STREET 2: SUITE 200 CITY: NAPLES STATE: FL ZIP: 34103 BUSINESS PHONE: 9412635000 MAIL ADDRESS: STREET 1: 3033 RIVIERA DRIVE STREET 2: SUITE 200 CITY: NAPLES STATE: FL ZIP: 34103 10-Q 1 d10q.txt FORM 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2001 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-29253 BEASLEY BROADCAST GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 65-0960915 (State of Incorporation) (I.R.S. Employer Identification Number) 3033 Riviera Drive, Suite 200 Naples, Florida 34103 (Address of Principal Executive Offices and Zip Code) (941) 263-5000 (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, 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. Class A Common Stock, $.001 par value, 7,252,068 Shares Outstanding as of November 8, 2001 Class B Common Stock, $.001 par value, 17,021,373 Shares Outstanding as of November 8, 2001 ================================================================================
INDEX Page No. ------ PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) 1 Consolidated Balance Sheets of Beasley Broadcast Group, Inc. as of December 31, 2000 and September 30, 2001 1 Consolidated Statements of Operations of Beasley Broadcast Group, Inc.for the Three and Nine Months Ended September 30, 2000 and September 30, 2001 2 Consolidated Statements of Cash Flows of Beasley Broadcast Group, Inc. for the Nine Months Ended September 30, 2000 and September 30, 2001 3 Notes to Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk 20 PART II OTHER INFORMATION Item 1. Legal Proceedings 22 Item 2. Changes in Securities and Use of Proceeds 22 Item 3. Defaults Upon Senior Securities 22 Item 4. Submission of Matters to a Vote of Security Holders 22 Item 5. Other Information 22 Item 6. Exhibits and Reports on Form 8-K 22 SIGNATURES 23
PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BEASLEY BROADCAST GROUP, INC. CONSOLIDATED BALANCE SHEETS
December 31, September 30, 2000 2001 -------------- ----------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 5,742,628 $ 4,603,478 Accounts receivable, less allowance for doubtful accounts of $607,147 in 2000 and $624,344 in 2001 18,712,862 19,254,846 Trade sales receivable 843,843 1,475,284 Other receivables 980,504 1,414,066 Prepaid expenses and other 2,249,615 3,029,938 Deferred tax assets 176,000 3,839,000 ------------- ------------- Total current assets 28,705,452 33,616,612 Notes receivable from related parties 4,990,480 4,897,735 Property and equipment, net 15,619,688 21,314,732 Intangibles, net 164,893,584 263,327,547 Other investments 1,523,729 650,002 Other assets 2,425,631 2,604,729 ------------- ------------- Total assets $ 218,158,564 $ 326,411,357 ============= ============= Total Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term debt $ 8,352 $ 11,258,867 Accounts payable 2,355,006 4,552,339 Accrued expenses 6,986,006 6,512,200 Trade sales payable 798,198 1,184,279 Derivative financial instruments - 4,397,000 ------------- ------------- Total current liabilities 10,147,562 27,904,685 Long-term debt, less current installments 103,478,405 214,241,749 Deferred tax liabilities 25,575,000 23,534,000 ------------- ------------- Total liabilities 139,200,967 265,680,434 Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued - - Class A common stock, $.001 par value, 150,000,000 shares authorized, 7,252,068 issued and outstanding 7,252 7,252 Class B common stock, $.001 par value, 75,000,000 shares authorized, 17,021,373 issued and outstanding 17,021 17,021 Additional paid-in capital 106,633,932 106,633,932 Accumulated deficit (27,700,608) (45,927,282) ------------- ------------- Stockholders' equity 78,957,597 60,730,923 ------------- ------------- Total liabilities and stockholders' equity $ 218,158,564 $ 326,411,357 ============= =============
See accompanying notes to consolidated financial statements 1 BEASLEY BROADCAST GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS w
Three months ended September 30, Nine months ended September 30, -------------------------------- ------------------------------- 2000 2001 2000 2001 -------------- ------------- ------------- ------------- (Unaudited) (Unaudited) Net revenues $ 28,032,797 $ 28,702,673 $ 77,900,520 $ 84,759,628 ------------ ------------ ------------ ------------ Costs and expenses: Program and production 8,129,023 9,219,974 20,966,406 23,403,216 Sales and advertising 6,425,430 7,917,572 20,295,787 25,764,150 Station general and administrative 4,284,210 4,013,028 11,590,422 13,091,297 Corporate general and administrative 922,834 1,010,117 2,990,008 3,540,182 Equity appreciation rights -- -- 1,173,759 -- Depreciation and amortization 4,662,574 7,380,663 12,921,566 20,589,198 Impairment loss on long-lived assets -- 7,000,000 -- 7,000,000 ------------ ------------ ------------ ------------ Total costs and expenses 24,424,071 36,541,354 69,937,948 93,388,043 Operating income (loss) 3,608,726 (7,838,681) 7,962,572 (8,628,415) Other income (expense): Interest expense (2,093,204) (4,588,745) (6,616,605) (12,386,322) Loss on investment -- -- -- (1,585,417) Loss on decrease in fair value of derivative financial instruments -- (1,638,000) -- (4,463,000) Other non-operating expenses (200,000) (66,765) (264,552) (69,923) Interest income 101,111 97,792 374,204 335,304 Other non-operating income 14,444 404,776 37,611 2,984,099 ------------ ------------ ------------ ------------ Income (loss) before income taxes 1,431,077 (13,629,623) 1,493,230 (23,813,674) Income tax expense (benefit) 651,000 (2,086,000) 29,132,000 (5,546,000) ------------ ------------ ------------ ------------ Income (loss) before cumulative effect of accounting change 780,077 (11,543,623) (27,638,770) (18,267,674) Cumulative effect of accounting change (net of income tax effect) -- -- -- 41,000 ------------ ------------ ------------ ------------ Net income (loss) $ 780,077 $(11,543,623) $(27,638,770) $(18,226,674) ============ ============ ============ ============ Basic and diluted earnings per share: Income (loss) before cumulative effect of accounting change $ 0.03 $ (0.48) $ (1.19) $ (0.75) Cumulative effect of accounting change -- -- -- -- ------------ ------------ ------------ ------------ Net income (loss) $ 0.03 $ (0.48) $ (1.19) $ (0.75) ============ ============ ============ ============ Basic common shares outstanding 24,273,441 24,273,441 23,248,441 24,273,441 ============ ============ ============ ============ Diluted common shares outstanding 24,277,624 24,297,678 23,248,441 24,306,094 ============ ============ ============ ============
See accompanying notes to consolidated financial statements 2 BEASLEY BROADCAST GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, -------------------------------- 2000 2001 --------------- ------------- (Unaudited) Cash flows from operating activities: Net loss $ (27,638,770) $ (18,226,674) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 12,921,566 20,589,198 Impairment loss on long-lived assets - 7,000,000 Loss on investment - 1,585,417 Loss on decrease in fair value of derivative financial instruments - 4,397,000 Change in assets and liabilities net of effects of acquisitions and dispositions of radio stations: Increase in receivables (926,336) (1,315,394) Increase in prepaid expenses and other (202,885) (49,805) Increase in other assets (660,565) (1,652,551) Increase (decrease) in payables and accrued expenses (3,099,884) 1,944,995 Increase (decrease) in deferred tax liabilities 27,029,000 (5,704,000) ------------- ------------- Net cash provided by operating activities 7,422,126 8,568,186 Cash flows from investing activities: Expenditures for property and equipment (1,744,620) (2,261,127) Payments for acquisitions of radio stations (34,780,000) (128,305,753) Payments for signal upgrade - (2,477,000) Payment for purchase of equity investment (50,002) - Payments from related parties 556,796 92,745 Loans to stockholders (910,263) - Payments from stockholders 9,768,240 - ------------- ------------- Net cash used in investing activities (27,159,849) (132,951,135) ------------- ------------- Cash flows from financing activities: Proceeds from issuance of indebtedness 138,300,523 123,250,000 Principal payments on indebtedness (161,888,733) (6,201) Principal payments on related party notes (47,723,076) - Payments of loan fees (2,893,192) - Capital contributions 100,000 - Stockholder distributions (2,250,000) - Issuance of common stock 99,009,900 - Payment of initial public offering costs (2,593,238) - ------------- ------------- Net cash provided by financing activities 20,062,184 123,243,799 ------------- ------------- Net increase (decrease) in cash and cash equivalents 324,461 (1,139,150) Cash and cash equivalents at beginning of period 7,002,669 5,742,628 ============= ============= Cash and cash equivalents at end of period $ 7,327,130 $ 4,603,478 ============= ============= Cash paid for interest $ 9,880,801 $ 11,318,441 ============= ============= Cash paid for income taxes $ 26,825 $ 3,188,360 ============= ============= Supplement disclosure of non-cash investing and financing activities: Financed purchase of equity investment $ 3,000,000 $ - ============= ============= Equity investment acquired through placement of advertising air time $ 492,479 $ 711,690 ============= ============= Minority interests acquired through issuance of Class A common stock $ 8,370,064 $ - ============= ============= Principal payments on indebtedness through placement of advertising air time $ 1,282,778 $ 1,229,940 ============= =============
See accompanying notes to consolidated financial statements 3 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies (a) Interim Financial Statements In the opinion of management, the accompanying consolidated financial statements include all adjustments deemed necessary to summarize fairly and reflect the financial position and results of operations of Beasley Broadcast Group, Inc. ("the Company") for the interim periods presented. Results of the third quarter of 2001 are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained on Form 10-K for the year ended December 31, 2000. (b) Corporate Reorganization Prior to February 11, 2000, the Company's radio stations were operated through a series of subchapter S corporations, partnerships and limited liability companies related to one another through common ownership and control. These subchapter S corporations, partnerships and limited liability companies were collectively known as Beasley FM Acquisition Corp. and related companies ("BFMA") through February 10, 2000. The accompanying financial statements include the results of operations of BFMA from January 1, 2000 to February 10, 2000. The Company completed an initial public offering of common stock and the corporate reorganization on February 11, 2000. Immediately prior to the initial public offering, pursuant to the reorganization, affiliates of BFMA contributed their equity interests in those entities to the Company, a newly formed holding company, in exchange for common stock. Immediately after these transactions, the Company contributed the capital stock and partnership interests acquired to Beasley Mezzanine Holdings, LLC ("BMH") and BMH became a wholly-owned subsidiary of the Company. All S corporation elections were terminated and the resulting entities became C corporations. The reorganization and contribution of equity interests was accounted for in a manner similar to a pooling of interests as to the majority owners, and as an acquisition of minority interest using the purchase method of accounting. (c) Derivative Financial Instruments The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. The Company uses interest rate collar and swap agreements to specifically hedge against the potential impact of increases in interest rates on its credit facility. The Company records interest differentials as adjustments to interest expense and changes in fair value of its derivative financial instruments in the period they occur. (d) Revenue Recognition Revenue is recognized as advertising air time is broadcast and is net of advertising agency commissions. (e) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. (f) Earnings per Share Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock and were not anti-dilutive. 4 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (g) Accounting Change Effective January 1, 2001, the Company adopted SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments, including derivative instruments embedded in other contracts, and for hedging activities. In accordance with the transition provisions of SFAS 133, the Company recorded an asset of $66,000 to recognize its derivatives at fair value and the cumulative effect of the accounting change, as of January 1, 2001, in the statement of operations for the nine months ended September 30, 2001. The cumulative effect of the change, net of income tax effect, decreased the net loss $41,000 and did not change the net loss per share. (h) Recent Accounting Pronouncements In September 2000, the FASB issued SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." SFAS 140 provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. SFAS 140 replaced SFAS 125 and was effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. SFAS 140 was effective for transfers and servicing of financial assets and extinguishments occurring after March 31, 2001. The Company has adopted SFAS 140 with no material impact on its consolidated financial statements. In July 2001, the FASB issued SFAS 141, "Business Combinations", and SFAS 142, "Goodwill and Other Intangible Assets." SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 will also require that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The Company is required to adopt the provisions of SFAS 141 immediately, and SFAS 142 effective January 1, 2002. Furthermore, any goodwill or intangible assets determined to have an indefinite useful life that is acquired in a purchase business combination completed after June 30, 2001, but before SFAS 142 is adopted in full will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of SFAS 142. SFAS 141 will require upon adoption of SFAS 142, that the Company evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in SFAS 141 for recognition apart from goodwill. Upon adoption of SFAS 142, the Company will be required to reassess the useful lives and residual values of all intangible assets acquired, and make any necessary amortization period adjustments by the end of the first interim period after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company will be required to test the intangible asset for impairment in accordance with the provisions of SFAS 142 within the first interim period. Any impairment loss will be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in the first interim period. 5 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) In connection with the transitional goodwill impairment evaluation, SFAS 142 will require the Company to perform an assessment of whether there is an indication that goodwill is impaired as of the date of adoption. To accomplish this, the Company must identify its reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. The Company will then have up to six months from the date of adoption to determine the fair value of each reporting unit and compare it to the reporting unit's carrying amount. To the extent a reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and the Company must perform the second step of the transitional impairment test. In the second step, the Company must compare the implied fair value of the reporting unit's goodwill, determined by allocating the reporting unit's fair value to all of it assets (recognized and unrecognized) and liabilities in a manner similar to a purchase price allocation in accordance with SFAS 141, to its carrying amount, both of which would be measured as of the date of adoption. This second step is required to be completed as soon as possible, but no later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle in the Company's consolidated statement of operations. And finally, any unamortized negative goodwill existing at the date SFAS 142 is adopted must be written off as the cumulative effect of a change in accounting principle. As of the date of adoption, the Company expects to have unamortized goodwill in the amount of approximately $12.1 million, and unamortized FCC licenses, which the Company expects to qualify as identifiable intangible assets with indefinite useful lives, in the amount of approximately $240.4 million, all of which will be subject to the transition provisions of SFAS 141 and SFAS 142. Amortization expense related to goodwill was $1.1 million and $981,000 for the year ended December 31, 2000 and the nine months ended September 30, 2001, respectively. Amortization expense related to FCC licenses was $12.1 million and $14.5 million for the year ended December 31, 2000 and the nine months ended September 30, 2001, respectively. Because of the extensive effort needed to comply with adopting SFAS 141 and SFAS 142, it is not practicable to reasonably estimate the impact of adopting these statements on the Company's consolidated financial statements at the date of this report, including whether it will be required to recognize any transitional impairment losses as the cumulative effect of a change in accounting principle. (2) Acquisitions (a) Current Acquisitions As of February 1, 2001, the Company acquired all of the outstanding common stock of Centennial Broadcasting Nevada, Inc. and all of the membership interests in Centennial Broadcasting, LLC for an aggregate purchase price, subject to certain adjustments, of approximately $116.3 million, which included a working capital adjustment of approximately $2.8 million. Centennial Broadcasting Nevada, Inc. owns approximately 18.5% of the membership interests in Centennial Broadcasting, LLC. Centennial Broadcasting, LLC owns the radio stations KJUL-FM, KSTJ-FM and KKLZ-FM in Las Vegas, Nevada and WRNO-FM, KMEZ-FM and WBYU-AM in New Orleans, Louisiana. This acquisition was partially funded by surplus working capital and partially financed through the Company's credit facility. The acquisition was accounted for by the purchase method of accounting. On April 2, 2001, the Company acquired the assets of WKXC-FM and WSLT-FM in Augusta, Georgia for approximately $12.0 million. This acquisition was partially funded by surplus working capital and partially financed through the Company's credit facility. The acquisition was accounted for by the purchase method of accounting. 6 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The aggregate purchase price for the current acquisitions was allocated as follows: Accounts receivable, net $ 2,233,223 Prepaid expenses and other 730,518 Property and equipment 5,526,234 FCC broadcasting licenses 119,772,766 Goodwill 201,000 Other assets 6,625 Accounts payable (32,000) Accrued expenses (132,613) ---------------- $128,305,753 ================ (b) Unaudited Pro Forma Results of Operations The following unaudited pro forma information presents the results of operations for the three and nine months ended September 30, 2000 and 2001, with pro forma adjustments as if the acquisitions of the stations had occurred on January 1, 2000. This unaudited pro forma information is not necessarily indicative of what would have occurred had the acquisitions occurred on January 1, 2000 or of results that may occur in the future.
Three Months Ended September 30, Nine Months Ended September 30, ------------------------------------- -------------------------------------- 2000 2001 2000 2001 ---------------- ---------------- ----------------- ----------------- Net revenues $ 32,709,515 $ 28,702,673 $ 93,800,216 $ 86,396,655 ---------------- ---------------- ----------------- ----------------- Costs and expenses: Program and production 9,246,429 9,219,974 24,444,800 23,926,717 Sales and advertising 7,957,018 7,917,572 25,545,854 26,313,523 Station general and administrative 5,000,101 4,013,028 13,964,726 13,477,832 Corporate general and administrative 922,834 1,010,117 2,990,008 3,540,182 Equity appreciation rights - - 1,173,759 - Depreciation and amortization 6,911,116 7,380,663 20,359,773 21,338,712 Impairment loss on long-lived assets - 7,000,000 - 7,000,000 ---------------- ---------------- ----------------- ----------------- Total costs and expenses 30,037,498 36,541,354 88,478,920 95,596,966 Operating income (loss) 2,672,017 (7,838,681) 5,321,296 (9,200,311) Other income (expense): Interest expense (4,519,688) (4,588,745) (14,657,093) (13,066,765) Loss on investment - - - (1,585,417) Loss on decrease in fair value of derivative financial instruments - (1,638,000) - (4,463,000) Other non-operating expenses (200,000) (66,765) (264,552) (69,923) Interest income 101,111 97,792 374,204 335,304 Other non-operating income 14,444 404,776 37,611 2,984,099 ---------------- ---------------- ----------------- ----------------- Loss before income taxes (1,932,116) (13,629,623) (9,188,534) (25,066,013) Income tax expense (benefit) (477,000) (2,086,000) 25,519,000 (5,973,000) ---------------- ---------------- ----------------- ----------------- Loss before cumulative effect of accounting change (1,455,116) (11,543,623) (34,707,534) (19,093,013) Cumulative effect of accounting change (net of income tax effect) - - - 41,000 ---------------- ---------------- ----------------- ----------------- Net loss $ (1,455,116) $(11,543,623) $(34,707,534) $(19,052,013) ================ ================ ================= ================= Basic and diluted net loss per share $ (0.06) $ (0.48) $ (1.49) $ (0.78) ================ ================ ================= ================= Basic common shares outstanding 24,273,441 24,273,441 23,248,441 24,273,441 ================ ================ ================= ================= Diluted common shares outstanding 24,277,624 24,297,678 23,248,441 24,306,094 ================ ================ ================= =================
7 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (c) Pending Disposition On October 31, 2001, the Company entered into a definitive agreement with Wilks Broadcasting LLC to sell WRNO-FM and KMEZ-FM in the New Orleans market for approximately $23.0 million, subject to certain adjustments. In connection with the definitive agreement, the Company entered into a time brokerage agreement ("TBA"), which permits Wilks Broadcasting to operate WRNO-FM and KMEZ-FM, beginning November 1, 2001 in exchange for a monthly fee and reimbursement of certain expenses. The TBA will terminate upon the sale of WRNO-FM and KMEZ-FM, which the Company expects to complete during the first quarter of 2002. On October 31, 2001, the carrying amount of WRNO-FM and KMEZ-FM exceeded the sales price, therefore the Company recorded an impairment loss on long-lived assets of $7.0 million for the three and nine months ended September 30, 2001. (3) Intangibles Intangibles, at cost, is comprised of the following:
December 31, September 30, 2000 2001 ----------------- ----------------- FCC broadcasting licenses $188,307,206 $304,214,612 Goodwill 25,219,054 25,404,561 Advertising base 4,139,251 3,633,752 Loan fees 5,816,671 4,252,268 Noncompete agreements 1,120,000 - Other intangibles 6,011,469 3,048,548 ----------------- ----------------- 230,613,651 340,553,741 Less accumulated amortization (65,720,067) (77,226,194) ----------------- ----------------- $164,893,584 $263,327,547 ================= =================
(4) Other Investments In December 1999, the Company entered into an agreement to purchase 750,000 shares of preferred stock of eTour, Inc. in exchange for $3.0 million of advertising air time. The Company earned these shares as advertisements were placed over the term of the agreement. For the nine months ended September 30, 2001, eTour, Inc. placed advertising air time totaling approximately $712,000, and for the nine months ended September 30, 2001, the Company earned approximately 178,000 shares. The shares contain restrictions that generally limit the Company's ability to sell or otherwise dispose of them. The investment was recorded using the cost method of accounting. On May 7, 2001, the Company received a letter from the management of eTour stating that eTour is in the process of winding down. Based on this information, the Company stopped placement of any further advertising air time for eTour and recorded a loss on investment of approximately $1.6 million, the recorded cost of the 396,354 shares earned as of May 7, 2001. 8 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (5) Long-Term Debt On August 14, 2001, the Company entered into an amendment to its credit agreement that revised certain financial covenants. As of September 30, 2001, the maximum commitment under the credit facility is $300.0 million and the outstanding balance is $225.5 million. The credit facility bears interest at either the base rate or LIBOR plus a margin that is determined by the Company's debt to cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds effective rate plus 0.5%. As of December 31, 2000 and September 30, 2001, the credit facility carried interest at an average rate of 7.9375% and 6.625%, respectively. Interest is generally payable monthly through maturity on June 30, 2008. The scheduled reductions in the amount available under the credit facility may require principal repayments if the outstanding balance at that time exceeds the new maximum amount available under the credit facility. The Company has entered into interest rate hedge agreements as discussed in note 8. The credit agreement requires the Company to maintain certain financial ratios and includes restrictive covenants. The restrictive covenants prohibit the payment of dividends. The loans are secured by substantially all assets of the Company. On January 14, 2000, the Company executed a $3.0 million promissory note in favor of FindWhat.com as consideration for the purchase of 600,000 shares of common stock. The note bears interest at 5.73% per annum and matures on January 14, 2002. All outstanding principal and accrued interest is due at maturity, however the Company may repay the note in full with an equivalent amount of advertising air time as specified in the loan agreement and a related advertising agreement with FindWhat.com. As of September 30, 2001, the outstanding principal amount has been repaid in full through the placement of advertising air time. The note is guaranteed by BFMA. (6) Related Party Transactions The Company leases office and studio broadcasting space in Ft. Myers, Florida from its principal stockholder, George G. Beasley. For the three and nine months ended September 30, 2000, rental expense paid to Mr. Beasley was approximately $24,000 and $72,000, respectively. For the three and nine months ended September 30, 2001, rental expense paid to Mr. Beasley was approximately $25,000 and $76,000, respectively. The Company leases a radio tower in Augusta, Georgia from Wintersrun Communications, Inc. ("WCI"), which is owned by George G. Beasley and Brian E. Beasley. For the three and nine months ended September 30, 2000, rental expense paid to WCI was approximately $5,000 and $14,000, respectively. For the three and nine months ended September 30, 2001, rental expense paid to WCI was approximately $6,000 and $17,000, respectively. The Company leases office and studio broadcasting space in Boca Raton, Florida from Beasley Family Towers, Inc. ("BFT"). For the three and nine months ended September 30, 2000, rental expense paid to BFT was approximately $21,000 and $24,000, respectively. For the three and nine months ended September 30, 2001, rental expense paid to BFT was approximately $18,000 and $54,000, respectively. The Company leases office space in Naples, Florida from Beasley Broadcasting Management Corp. ("BBMC"), which is wholly-owned by George G. Beasley. For the three and nine months ended September 30, 2000, rental expense paid to BBMC was approximately $23,000 and $63,000, respectively. For the three and nine months ended September 30, 2001, rental expense paid to BBMC was approximately $26,000 and $76,000, respectively. The Company leases certain radio towers from BFT. The lease agreements expire on December 28, 2020. For the three and nine months ended September 30, 2001, rental expense paid to BFT was approximately $120,000 and $361,000, respectively. Notes receivable from BFT are due in monthly payments, including interest at 6.77%. The notes mature on December 28, 2020. For the three and nine months ended September 30, 2001, interest income on the notes receivable from BFT was approximately $86,000 and $258,000, respectively. 9 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (7) Commitments and Contingencies In 1997, the Company entered into contracts for the radio broadcast rights relating to the Miami Dolphins, Florida Marlins and Florida Panthers sports franchises. These contracts grant WQAM-AM the exclusive, English language rights for live radio broadcasts of the sporting events of these franchises for a five- year term that began in 1997. The contracts require the Company to pay certain fees and to provide commercial advertising and other considerations. For the three and nine months ended September 30, 2000, the contract expense calculated on a straight-line basis and other direct expenses exceeded related revenues by $1.6 million and $3.4 million, respectively. For the three and nine months ended September 30, 2001, the contract expense calculated on a straight-line basis and other direct expenses exceeded related revenues by $1.6 million and $3.1 million, respectively. Unless the Company is able to increase its revenues under these contracts during the remaining three quarters, the contracts are likely to have a material adverse effect on the Company's results of operations. However, in light of the uncertainty regarding future revenues, the amount of any future loss cannot be determined at this time. In the normal course of business, the Company is party to various legal matters. The ultimate disposition of these matters will not, in management's judgment, have a material adverse effect on the Company's financial position. (8) Derivative Financial Instruments The Company uses interest rate collar and swap agreements to hedge against the potential impact of increases in interest rates on the credit facility. For the three and nine months ended September 30, 2000, the Company received additional interest of approximately $25,000 and $113,000, respectively. For the three and nine months ended September 30, 2001, the Company paid additional interest of approximately $468,000 and $574,000, respectively. The amount received or paid is based on the differential between the specified rates of the collar and swap agreements and the variable interest rate of the credit facility. As of September 30, 2001, the Company's collar agreements are summarized in the following chart:
Estimated Notional Expiration Fair Agreement Amount Floor Cap Date Value -------------------- ------------- --------- -------- ---------------- --------------- Interest rate $20,000,000 6.69% 8% May 2002 $ (528,000) collar Interest rate $20,000,000 5.45 % 7.5% November 2002 (635,000) collar Interest rate $20,000,000 5.75 % 7.35% November 2002 (700,000) collar Interest rate $55,000,000 4.95 % 7% October 2003 (2,534,000) collar --------------- $(4,397,000) ===============
(9) Other Non-Operating Income On March 23, 2001, the Company received a $2.6 million payment on a related party receivable previously written off prior to the Company's initial public offering on February 11, 2000. The resulting gain is recorded in other non-operating income in the consolidated statement of operations for the nine months ended September 30, 2001. 10 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (10) Income Taxes Income tax expense (benefit) from continuing operations is as follows:
Three months ended September 30, Nine months ended September 30, ----------------------------------- ---------------------------------- 2000 2001 2000 2001 ---------------- --------------- --------------- --------------- Federal: Current $ 957,000 $ - $ 1,722,000 $ - Deferred (424,000) (1,858,000) 22,130,000 (4,677,000) ---------------- --------------- --------------- --------------- 533,000 (1,858,000) 23,852,000 (4,677,000) State: Current 212,000 70,000 381,000 183,000 Deferred (94,000) (298,000) 4,899,000 (1,027,000) ---------------- --------------- --------------- --------------- 118,000 (228,000) 5,280,000 (844,000) ---------------- --------------- --------------- --------------- $ 651,000 $ (2,086,000) $29,132,000 $ (5,521,000) ================ =============== =============== ===============
Income tax expense (benefit) differs from the amounts that would result from applying the federal statutory rate of 34% to the Company's net loss as follows:
Three months ended September 30, Nine months ended September 30, ----------------------------------- ----------------------------------- 2000 2001 2000 2001 --------------- ---------------- ---------------- --------------- Expected tax expense (benefit) $ 487,000 $(4,634,000) $ 508,000 $(8,074,000) State income taxes, net of federal benefit 66,000 (89,000) 69,000 (495,000) Establishment of deferred tax assets and liabilities upon conversion from a subchapter S corporation to a subchapter C corporation on February 11, 2000 - - 28,297,000 - Non-deductible impairment loss on long- lived assets - 2,380,000 - 2,380,000 Non-deductible depreciation and amortization of Centennial Broadcasting acquisition - 145,000 - 387,000 Non-deductible amortization of minority interest acquisitions 54,000 47,000 140,000 142,000 Other 44,000 65,000 118,000 139,000 --------------- ---------------- ---------------- --------------- $ 651,000 $(2,086,000) $29,132,000 $(5,521,000) =============== ================ ================ ===============
Temporary differences that give rise to the components of deferred tax assets and liabilities, as of December 31, 2000 and September 30, 2001 are as follows:
2000 2001 ---------------- ---------------- Allowance for doubtful accounts $ 176,000 $ 241,000 Derivative financial instruments - 1,698,000 Net operating loss carryforwards - 1,900,000 Unrealized loss on investment 927,000 927,000 ---------------- ---------------- Gross deferred tax assets 1,103,000 4,766,000 Property and equipment (869,000) (1,302,000) Intangibles (25,633,000) (23,159,000) ---------------- ---------------- Gross deferred tax liabilities (26,502,000) (24,461,000) ---------------- ---------------- Net deferred tax liabilities $ (25,399,000) $ (19,695,000) ================ ================
11 BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (11) Segment Information Segment information is as follows:
Three months ended September 30, Nine months ended September 30, ------------------------------------- ----------------------------------- --------------- --- --------------- 2000 2001 2000 2001 ---------------- ----------------- --------------- --------------- Net revenues: Radio Group One $ 18,573,723 $ 16,243,258 $ 49,794,648 $ 48,552,113 Radio Group Two 9,459,074 8,796,766 28,105,872 25,971,437 Radio Group Three - 3,662,649 - 10,236,078 ---------------- ----------------- --------------- --------------- Total net revenues 28,032,797 28,702,673 77,900,520 84,759,628 ---------------- ----------------- --------------- --------------- Broadcast cash flow: Radio Group One $ 5,795,527 $ 3,905,126 $ 15,144,024 $ 12,761,400 Radio Group Two 3,398,607 2,640,430 9,903,881 6,895,005 Radio Group Three - 1,006,543 - 2,844,560 ---------------- ----------------- --------------- --------------- Total broadcast cash flow 9,194,134 7,552,099 25,047,905 22,500,965 ---------------- ----------------- --------------- --------------- Reconciliation to income (loss) before income taxes: Corporate general and administrative $ (922,834) $ (1,010,117) $ (2,990,008) $ (3,540,182) Equity appreciation rights - - (1,173,759) - Depreciation and amortization (4,662,574) (7,380,663) (12,921,566) (20,589,198) Impairment loss on long-lived assets - (7,000,000) - (7,000,000) Interest expense (2,093,204) (4,588,745) (6,616,605) (12,386,322) Other non-operating income (loss) (84,445) (1,202,197) 147,263 (2,798,937) ---------------- ----------------- --------------- --------------- Income (loss) before income taxes $ 1,431,077 $ (13,629,623) $ 1,493,230 $(23,813,674) ================ ================= =============== ===============
Radio Group One includes radio stations located in Miami-Ft. Lauderdale, FL, Ft. Myers-Naples, FL, West Palm Beach, FL and Greenville-New Bern-Jacksonville, NC. Radio Group Two includes radio stations located in Atlanta, GA, Philadelphia, PA, Boston, MA, Fayetteville, NC, and Augusta, GA. Radio Group Three includes radio stations located in Las Vegas, NV and New Orleans, LA. Broadcast cash flow consists of operating income (loss) before corporate general and administrative expenses, equity appreciation rights, depreciation and amortization and impairment loss on long-lived assets. (12) Equity Plan During the nine months ended September 30, 2001, the Company granted 105,000 stock options, with an exercise price per share equal to the closing stock price on the respective grant dates. The issued stock options have ten-year terms and generally vest ratably and become fully exercisable after a period of three to four years from the date of grant, however some contain performance-related provisions that may delay vesting beyond four years. During the three and nine months ended September 30, 2001, no options were exercised. During the nine months ended September 30, 2001, the number of options forfeited was 16,000. As of September 30, 2001, the number of options exercisable was 787,565 and the weighted-average exercise price of those options was $15.39. 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion together with the financial statements and related notes included elsewhere in this report. The results discussed below are not necessarily indicative of the results to be expected in any future periods. Certain matters discussed herein are forward-looking statements. This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect" or "anticipate" and other similar words. Such forward-looking statements may be contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations," among other places. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as economic changes, unforeseen media events that would cause the company to broadcast commercial free for any period of time, and changes in the radio broadcasting industry generally. Key risks to our company are described in our annual report on Form 10-K filed with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statement. General A radio broadcasting company derives its revenues primarily from the sale of broadcasting time to local and national advertisers. The advertising rates that a radio station is able to charge and the number of advertisements that can be broadcast without jeopardizing listener levels largely determine those revenues. Advertising rates are primarily based on three factors: . a radio station's audience share in the demographic groups targeted by advertisers, as measured principally by quarterly reports issued by The Arbitron Ratings Company; . the number of radio stations in the market competing for the same demographic groups; and . the supply of and demand for radio advertising time. Several factors may adversely affect a radio broadcasting company's performance in any given period. In the radio broadcasting industry, seasonal revenue fluctuations are common and are due primarily to variations in advertising expenditures by local and national advertisers. Typically, revenues are lowest in the first calendar quarter of the year. We generally incur advertising and promotional expenses to increase listenership and Arbitron ratings. However, because Arbitron reports ratings quarterly in most of our markets, any increased ratings, and therefore increased advertising revenues, tend to lag behind the incurrence of advertising and promotional spending. In the broadcasting industry, radio stations often utilize trade or barter agreements to reduce expenses by exchanging advertising time for goods or services. In order to maximize cash revenue from our spot inventory, we minimize our use of trade agreements and during the five years prior to 2000 have held barter revenues under 5% of our gross revenues and barter related broadcast cash flow under 3% of our broadcast cash flow. In 2000, barter revenues increased as a percentage of our gross revenues and barter related broadcast cash flow increased as a percentage of our broadcast cash flow due to our investments in eTour, Inc. and FindWhat.com. Due to the completion of our obligations to eTour, Inc. and FindWhat.com, we expect barter revenues and related broadcast cash flow to return to historical percentages of our gross revenues and broadcast cash flow during 2002. 13 We calculate same station results by comparing the performance of radio stations at the end of a relevant period to the performance of those same stations in the prior year's corresponding period, including the effect of barter revenues and expenses. These results exclude one station that changed formats during the fourth quarter of 2000, six stations that were acquired during the first quarter of 2001 and two stations acquired during the second quarter of 2001. Broadcast cash flow consists of operating income (loss) before corporate general and administrative expenses, equity appreciation rights, depreciation and amortization and impairment loss on long-lived assets and may not be comparable to similarly titled measures employed by other companies. Same station broadcast cash flow is the broadcast cash flow of the radio stations included in our same station calculations. Recent Event On October 31, 2001, we entered into a definitive agreement with Wilks Broadcasting LLC to sell WRNO-FM and KMEZ-FM in the New Orleans market for approximately $23.0 million, subject to certain adjustments. In connection with the definitive agreement, we entered into a time brokerage agreement ("TBA"), which permits Wilks Broadcasting to operate WRNO-FM and KMEZ-FM, beginning November 1, 2001 in exchange for a monthly fee and reimbursement of certain expenses. The TBA will terminate upon the sale of WRNO-FM and KMEZ-FM, which we expect to complete during the first quarter of 2002. On October 31, 2001, the carrying amount of WRNO-FM and KMEZ-FM exceeded the sales price, therefore we recorded an impairment loss on long-lived assets of $7.0 million for the three and nine months ended September 30, 2001. During the fourth quarter, we expect to record additional expenses related to severance and the assignment of contracts. Results of Operations Several factors affected our results of operations in the nine months ended September 30, 2000 that did not affect the corresponding period of the current year. First, we redeemed, for cash in the first quarter, equity appreciation rights previously granted to two of our station managers, as we do not believe this form of compensation is well-suited to public companies. In connection with this redemption, we recorded an expense of approximately $1.2 million in the first quarter of 2000. Second, in connection with our reorganization in February 2000, our net stockholders' equity was reduced by approximately $27.6 million to establish the net deferred tax liability resulting from the termination of our subchapter S status. As of February 1, 2001, we purchased three FM radio stations in the Las Vegas market and two FM and one AM radio stations in the New Orleans market for an aggregate purchase price of approximately $113.5 million, plus a working capital adjustment of approximately $2.8 million. This acquisition contributed to higher net revenues and station operating expenses during the three and nine months ended September 30, 2001. On April 2, 2001, we acquired two FM radio stations in the Augusta, Georgia market for approximately $12.0 million. This acquisition contributed to higher net revenues and station operating expenses during the three months and nine months ended September 30, 2001. On May 7, 2001, we received a letter from the management of eTour stating that eTour is in the process of winding down. Based on this information, we stopped placement of any further advertising air time for eTour and recorded a loss on investment of approximately $1.6 million, the recorded cost of the 396,354 shares earned as of May 7, 2001. In 1997, we entered into contracts for the radio broadcast rights relating to the Miami Dolphins, Florida Marlins and Florida Panthers sports franchises. These contracts grant WQAM-AM the exclusive, English language rights for live radio broadcasts of the sporting events of these franchises for a five-year term that began in 1997. The contracts require us to pay certain fees and to provide commercial advertising and other considerations. For the three and nine months ended September 30, 2000, the contract expense calculated on a straight-line basis and other direct expenses exceeded related revenues by $1.6 million and $3.4 million, respectively. For the three and nine months ended September 30, 2001, the contract expense calculated on a straight-line basis and other direct expenses exceeded related revenues by $1.6 million and $3.1 million, respectively. Unless we are able to generate increased revenues under these contracts during the remaining three quarters, the contracts are likely to have a material adverse effect on our results of operations. However, in light of the uncertainty regarding future revenues, the amount of any future loss cannot be determined at this time. 14 During the first three quarters of 2001, we have experienced a softer advertising environment due to slowing economic conditions. We expect this environment to continue into the fourth quarter and possibly into 2002. In response to the expected reduction in net revenues we have taken significant steps to cut costs not vital to programming and sales during the fourth quarter of 2001, including continued consolidation of our operations. Three Months ended September 30, 2001 Compared to the Three Months Ended September 30, 2000 Net Revenue. Net revenue increased 2.4% to $28.7 million for the three months ended September 30, 2001 from $28.0 million for three months ended September 30, 2000. The increase was primarily due to our radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001. The increase was partially offset by lower revenues at most of our radio stations due to the softer advertising environment and at WPTP-FM in the Philadelphia market due to a format change during the fourth quarter of 2000. On a same station basis, net revenues decreased 9.6% to $23.4 million for the three months ended September 30, 2001 from $25.9 million for three months ended September 30, 2000. Station Operating Expenses. Station operating expenses increased 12.3% to $21.2 million for the three months ended September 30, 2001 from $18.8 million for three months ended September 30, 2000. The increase was primarily due to our radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001. The increase was partially offset by lower station operating expenses at most of our radio stations in our response to the softer advertising environment. On a same station basis, station operating expenses decreased 2.0% to $16.7 million for the three months ended September 30, 2001 from $17.0 million for three months ended September 30, 2000. Broadcast Cash Flow. Broadcast cash flow decreased 17.9% to $7.6 million for the three months ended September 30, 2001 from $9.2 million for three months ended September 30, 2000. The decrease was primarily due to lower revenues at most of our radio stations due to the softer advertising environment and at WPTP-FM in the Philadelphia market due to a format change during the fourth quarter of 2000. The decrease was partially offset by additional broadcast cash flow associated with our radio station acquisitions in the Las Vegas market during the first quarter of 2001. On a same station basis, broadcast cash flow decreased 24.3% to $6.7 million for the three months ended September 30, 2001 from $8.9 million for three months ended September 30, 2000. Corporate General and Administrative Expenses. Corporate general and administrative expenses increased 9.5% to $1.0 million for the three months ended September 30, 2001 from $0.9 million for three months ended September 30, 2000. The increase was primarily due to higher general and administrative expenses associated with our radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001. Depreciation and Amortization. Depreciation and amortization increased 58.3% to $7.4 million for the three months ended September 30, 2001 from $4.7 million for three months ended September 30, 2000. The increase was primarily due to additional amortization and depreciation expense associated with our radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001. Interest Expense. Interest expense increased 119.2% to $4.6 million for the three months ended September 30, 2001 from $2.1 million for three months ended September 30, 2000. The increase was primarily due to increased borrowings under our credit facility to finance the radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001 with draws from our credit facility. Net Income (Loss). Net loss for the three months ended September 30, 2001 was $11.5 million compared to net income of $0.8 million for three months ended September 30, 2000. The change was primarily due to the decrease in broadcast cash flow, the increase in depreciation and amortization and interest expense, a $7.0 million impairment loss on long-lived assets due to the impending sale of WRNO-FM and KMEZ-FM in the New Orleans market and an additional $1.6 million loss in the fair value of our derivative financial instruments due to the adoption of SFAS 133 in 2001. 15 Nine Months ended September 30, 2001 Compared to the Nine Months Ended September 30, 2000 Net Revenue. Net revenue increased 8.8% to $84.8 million for the nine months ended September 30, 2001 from $77.9 million for nine months ended September 30, 2000. The increase was primarily due to our radio station acquisitions in the Miami-Ft. Lauderdale and West Palm Beach markets during the second quarter of 2000, in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001. The increase was partially offset by lower revenues at most of our radio stations due to the softer advertising environment and at WPTP-FM in the Philadelphia market due to the format change during the fourth quarter of 2000. On a same station basis, net revenues decreased 3.7% to $70.0 million for the nine months ended September 30, 2001 from $72.7 million for nine months ended September 30, 2000. Station Operating Expenses. Station operating expenses increased 17.8% to $62.3 million for the nine months ended September 30, 2001 from $52.9 million for nine months ended September 30, 2000. The increase was primarily due to our radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market during the second quarter of 2001. In addition, promotions budgets have been larger at most of our radio stations during the first two quarters of 2001 to help generate growth in net revenues. During the third quarter of 2001, the increases were partially offset by lower station operating expenses at most of our radio stations in our response to the continued softer advertising environment. On a same station basis, station operating expenses increased 3.2% to $49.2 million for the nine months ended September 30, 2001 from $47.7 million for nine months ended September 30, 2000. Broadcast Cash Flow. Broadcast cash flow decreased 10.2% to $22.5 million for the nine months ended September 30, 2001 from $25.0 million for nine months ended September 30, 2000. The decrease was primarily due to lower revenues at most of our radio stations due to the softer advertising environment and at WPTP-FM in the Philadelphia market due to a format change during the fourth quarter of 2000. The decrease was partially offset by additional broadcast cash flow associated with our radio station acquisitions in the Miami-Ft. Lauderdale and West Palm Beach markets during the second quarter of 2000, in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta market during the second quarter of 2001. On a same station basis, broadcast cash flow decreased 16.9% to $20.8 million for the nine months ended September 30, 2001 from $25.0 million for nine months ended September 30, 2000. Corporate General and Administrative Expenses. Corporate general and administrative expenses increased 18.4% to $3.5 million for the nine months ended September 30, 2001 from $3.0 million for nine months ended September 30, 2000. The increase was primarily due to higher general and administrative expenses associated with our radio station acquisitions in the Las Vegas and New Orleans markets during the first quarter of 2001 and in the Augusta, Georgia market in the second quarter of 2001. In addition, the increase is due to our operating as a public company for the entire first three quarters of 2001 as compared to a partial first three quarters in 2000. Depreciation and Amortization. Depreciation and amortization increased 59.3% to $20.6 million for the nine months ended September 30, 2001 from $12.9 million for nine months ended September 30, 2000. The increase was primarily due to additional amortization and depreciation expense associated with our radio station acquisitions in the Miami-Ft. Lauderdale and West Palm Beach in the second quarter of 2000, in the Las Vegas and New Orleans markets in the first quarter of 2001 and in the Augusta, Georgia market in the second quarter of 2001. Interest Expense. Interest expense increased 87.2% to $12.4 million for the nine months ended September 30, 2001 from $6.6 million for nine months ended September 30, 2000. The increase was primarily due to increased borrowings under our credit facility to finance the radio station acquisitions in the Miami-Ft. Lauderdale and West Palm Beach in the second quarter of 2000, in the Las Vegas and New Orleans markets in the first quarter of 2001 and in the Augusta, Georgia market in the second quarter of 2001 with draws from our credit facility. The increase was partially offset by a decrease in interest rates on our credit facility. Net Loss. Net loss for the nine months ended September 30, 2001 was $18.2 million compared to a net loss of $27.6 million for nine months ended September 30, 2000. The change was primarily due the establishment of a $27.6 million net deferred tax liability upon conversion from a series of subchapter S corporations to a series of subchapter C corporations as a result of the initial public offering and corporate reorganization in 2000. In 2000, the 16 net loss was also increased by the redemption of equity appreciation rights for $1.2 million. In 2001, the net loss was increased by a $7.0 million impairment loss on long-lived assets due to the impending sale of WRNO-FM and KMEZ-FM in the New Orleans market, a $1.6 million loss on investment and a $4.5 million loss in the fair value of our derivative financial instruments due to the adoption of SFAS 133 and decreased by a $2.6 million gain on a previously written off related party receivable. Liquidity and Capital Resources Overview. Historically, we have used a significant portion of our liquidity to consummate acquisitions. These acquisitions have been funded from one or a combination of the following sources: . our credit facility; . disposing of radio stations in transactions which are intended to qualify as like-kind exchanges under Section 1031 of the Internal Revenue Code; . internally-generated cash flow; and . advances to us from George G. Beasley, members of his family and affiliated entities. Other liquidity needs have been for debt service, working capital, distributions to equity holders and general corporate purposes, including capital expenditures. In the future, we expect that our principal liquidity requirements will be for working capital and general corporate purposes, including acquisitions of additional radio stations. We expect to finance future acquisitions through a combination of bank borrowings, internally generated funds and our stock. As of September 30, 2001, we held $4.6 million in cash and cash equivalents and had $74.5 million in availability under our credit facility. We believe that the cash available from operations as well as the availability from our credit facility should be sufficient to permit us to meet our financial obligations for at least the next twelve months. Net Cash Provided by (Used in) Operating Activities. Net cash provided by operating activities was $7.4 million and $8.6 million for the nine months ended September 30, 2000 and 2001, respectively. The change is primarily due to the $2.6 million gain on a previously written off related party receivable and the $3.8 million increase in non-cash working capital during the first nine months of 2001, partially offset by a decrease in broadcast cash flow totaling $2.5 million and additional interest expense associated with financing our radio station acquisitions totaling $5.8 million. In 2000, net cash provided by operating activities was decreased by the redemption of equity appreciation rights totaling $1.2 million and additional current income tax expense of $1.9 million. Net Cash Provided by (Used in) Investing Activities. Net cash used in investing activities was $27.2 million and $133.0 million for the nine months ended September 30, 2000 and 2001, respectively. The change is primarily due to the acquisition of three radio stations in the Las Vegas market, three radio stations in the New Orleans market and two radio stations in the Augusta, Georgia market in 2001 for an aggregate $128.3 million compared to the acquisition of two radio stations in the Atlanta market, one radio station in the Boston market, two radio stations in the Miami-Ft. Lauderdale market and one radio station in the West Palm Beach market in 2000 for an aggregate $34.8 million. In addition, net cash used in investing activities was also increased in 2001 by payments totaling $2.5 million for a signal upgrade. Net cash used in 2000 was offset by the repayment of loans to the former S corporation stockholders and increased by repayment of notes receivable from related parties and stockholders. Net Cash Provided by (Used in) by Financing Activities. Net cash provided by financing activities was $20.1 million and $123.2 million for the nine months ended September 30, 2000 and 2001, respectively. The change is primarily due to financing the acquisition of three radio stations in the Las Vegas market, three radio stations in the New Orleans market and two radio stations in the Augusta, Georgia market in 2001 for an aggregate $123.2 million compared to the acquisition of two radio stations in the Atlanta market, one radio station in the Boston market, two radio stations in the Miami-Ft. Lauderdale market and one radio station in the West Palm Beach market in 2000 for 17 an aggregate $34.8 million. In 2000, net cash was increased by the initial public offering proceeds, less associated costs, which were used to repay $58.5 million of the credit facility and all outstanding notes payable to related parties. In 2000, we also refinanced our credit facility with an outstanding balance of $102.2 million and paid loan fees totaling $2.9 million. In 2000, net cash was also decreased by distributions totaling $2.3 million to the former S corporation stockholders. Credit Facility. As of September 30, 2001, the maximum commitment under our credit facility was $300.0 million and the outstanding balance is $225.5 million. The credit facility consists of $150.0 million revolving credit loan and a $150.0 million term loan. The revolving credit loan includes a $50.0 million sub-limit for letters of credit. The credit facility bears interest at either the base rate or LIBOR plus a margin that is determined by our debt to cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds effective rate plus 0.5%. As of September 30, 2001, the credit facility carried interest at an average rate of 6.625%. Interest is generally payable monthly through maturity on June 30, 2008. The scheduled reductions in the amount available under the credit facility may require principal repayments if the outstanding balance at that time exceeds the new maximum available amount under the credit facility. The credit agreement requires us to maintain certain financial ratios and includes restrictive covenants. The loans are secured by substantially all assets of the company. As of September 30, 2001, the scheduled reductions of the maximum commitment of the credit facility for the next five fiscal years and thereafter are as follows:
Revolving Total Credit Credit Loan Term Loan Facility ---------------- ----------------- ---------------- 2002 $ - $ 15,000,000 $ 15,000,000 2003 - 22,500,000 22,500,000 2004 15,000,000 22,500,000 37,500,000 2005 22,500,000 22,500,000 45,000,000 Thereafter 112,500,000 67,500,000 180,000,000 ---------------- ----------------- ---------------- Total $150,000,000 $150,000,000 $300,000,000 ================ ================= ================
We must pay a quarterly unused commitment fee, which is based upon our total leverage to operating cash flow ratio and ranges from 0.25% to 0.375% of the unused portion of the maximum commitment. If the unused portion exceeds 50% of the maximum commitment, the fee is increased by 0.375%. For the three and nine months ended September 30, 2001, our unused commitment fee was approximately $71,000 and $256,000, respectively. We are required to satisfy financial covenants, which require us to maintain specified financial ratios and to comply with financial tests, such as ratios for maximum total leverage, minimum interest coverage and minimum fixed charges. On August 14, 2001, we entered into an amendment to our credit agreement that revised certain financial covenants as follows: . Maximum Total Leverage Test. For the period from April 1, 2001 through September 30, 2001, the required maximum ratio is 6.5 times. For the period from July 1, 2001 through March 30, 2002, the required maximum ratio is 7.0 times. As of March 31, 2002, the required maximum ratio is 6.25 times. For the period from April 1, 2002 through December 31, 2002, the required maximum ratio is 6.0 times. For each twelve-month period after December 31, 2002, the maximum ratio will decrease by 0.5 times. For all periods after January 1, 2006, the maximum ratio is 4.0 times. . Minimum Interest Coverage Test. From closing through September 30, 2001, our operating cash flow for the four quarters ending on the last day of each fiscal quarter must have not been less than 1.75 times the amount of our interest expense. For the period from October 1, 2001 through March 31, 2002, the minimum ratio is 1.5 times. For the period from April 1, 2002 through September 30, 2002, the minimum ratio is 1.75 times. For all periods after October 1, 2002, the minimum ratio is 2.0 times. In addition, the operating cash flow definition has been revised to disregard certain losses associated with the Florida Marlins sports contract until its expiration in the fourth quarter of 2001. As of September 30, 2001, we were in compliance with all applicable financial covenants. 18 The credit facility also prohibits us from paying cash dividends and restricts our ability to make other distributions with respect to our capital stock. The credit facility also contains other customary restrictive covenants. These covenants limit our ability to: . incur additional indebtedness and liens; . enter into certain investments or joint ventures; . consolidate, merge or effect asset sales; . make overhead expenditures; . enter sale and lease-back transactions; . sell or discount accounts receivable; . enter into transactions with affiliates or stockholders; . sell, assign, pledge, encumber or dispose of capital stock; or . change the nature of our business. Recent Pronouncements In September 2000, the FASB issued SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." SFAS 140 provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. SFAS 140 replaced SFAS 125 and was effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. SFAS 140 was effective for transfers and servicing of financial assets and extinguishments occurring after March 31, 2001. We have adopted SFAS 140 with no material impact on our consolidated financial statements. In July 2001, the FASB issued SFAS 141, "Business Combinations", and SFAS 142, "Goodwill and Other Intangible Assets." SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. SFAS 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. SFAS 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 will also require that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." We are required to adopt the provisions of SFAS 141 immediately, and SFAS 142 effective January 1, 2002. Furthermore, any goodwill or intangible assets determined to have an indefinite useful life that is acquired in a purchase business combination completed after June 30, 2001, but before SFAS 142 is adopted in full will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-SFAS 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of SFAS 142. SFAS 141 will require upon adoption of SFAS 142, that we evaluate our existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in SFAS 141 for recognition apart from goodwill. Upon adoption of SFAS 142, we will be required to reassess the useful lives and residual values of all intangible 19 assets acquired, and make any necessary amortization period adjustments by the end of the first interim period after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, we will be required to test the intangible asset for impairment in accordance with the provisions of SFAS 142 within the first interim period. Any impairment loss will be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle in the first interim period. In connection with the transitional goodwill impairment evaluation, SFAS 142 will require us to perform an assessment of whether there is an indication that goodwill is impaired as of the date of adoption. To accomplish this, we must identify our reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. We will then have up to six months from the date of adoption to determine the fair value of each reporting unit and compare it to the reporting unit's carrying amount. To the extent a reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and we must perform the second step of the transitional impairment test. In the second step, we must compare the implied fair value of the reporting unit's goodwill, determined by allocating the reporting unit's fair value to all of it assets (recognized and unrecognized) and liabilities in a manner similar to a purchase price allocation in accordance with SFAS 141, to its carrying amount, both of which would be measured as of the date of adoption. This second step is required to be completed as soon as possible, but no later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle in our consolidated statement of operations. And finally, any unamortized negative goodwill existing at the date SFAS 142 is adopted must be written off as the cumulative effect of a change in accounting principle. As of the date of adoption, we expect to have unamortized goodwill in the amount of approximately $12.1 million, and unamortized FCC licenses, which we expect to qualify as identifiable intangible assets with indefinite useful lives, in the amount of approximately $240.4 million, all of which will be subject to the transition provisions of SFAS 141 and SFAS 142. Amortization expense related to goodwill was $1.1 million and $981,000 for the year ended December 31, 2000 and the nine months ended September 30, 2001, respectively. Amortization expense related to FCC licenses was $12.1 million and $14.5 million for the year ended December 31, 2000 and the nine months ended September 30, 2001, respectively. Because of the extensive effort needed to comply with adopting SFAS 141 and SFAS 142, it is not practicable to reasonably estimate the impact of adopting these statements on our consolidated financial statements at the date of this report, including whether it will be required to recognize any transitional impairment losses as the cumulative effect of a change in accounting principle. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Market risk is the risk of loss arising from adverse changes in market rates and prices such as interest rates, foreign currency exchange rate and commodity prices. Our primary exposure to market risk is interest rate risk associated with our credit facility. Amounts borrowed under the credit facility incur interest at the London Interbank Offered Rate, or LIBOR, plus additional basis points depending on the outstanding principal balance under the credit facility. As of September 30, 2001, $225.5 million was outstanding under our credit facility. We evaluate our exposure to interest rate risk by monitoring changes in interest rates in the market place. To manage interest rate risk associated with our credit agreement, we have entered into several interest rate collar agreements. An interest rate collar is the combined purchase and sale of an interest rate cap and an interest rate floor so as to keep interest rate exposure within a defined range. We have purchased four interest rate collars. Under these agreements, our base LIBOR cannot exceed the cap interest rate and our base LIBOR cannot fall below our floor interest rate. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. As of December 31, 2000 and September 30, 2001, the notional amount upon maturity of these collar agreements is approximately $100.0 million and $115.0 million, respectively. 20 As of September 30, 2001, our collar agreements are summarized in the following chart:
Estimated Notional Expiration Fair Agreement Amount Floor Cap Date Value -------------------- ------------- --------- -------- ---------------- --------------- Interest rate $20,000,000 6.69% 8% May 2002 $ (528,000) collar Interest rate $20,000,000 5.45% 7.5% November 2002 (635,000) collar Interest rate $20,000,000 5.75% 7.35% November 2002 (700,000) collar Interest rate $55,000,000 4.95% 7% October 2003 (2,534,000) collar --------------- $ (4,397,000) ===============
21 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. We currently and from time to time are involved in litigation incidental to the conduct of our business, but we are not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 5. OTHER INFORMATION. Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Exhibit Number Description ----- ----------- 2.1 Agreement of purchase and sale of assets by and among Beasley FM Acquisition Corp., Beasley Broadcasting of Nevada, LLC, KJUL License, LLC, Wilks Broadcasting, LLC and Wilks License Co., LLC, dated as of October 31, 2001. 10.1 First amendment to credit agreement between Beasley Mezzanine Holdings, LLC and Fleet National Bank, as syndication agent, Bank of America, as documentation agent, the Bank of New York, as co-documentation agent and managing agent, and the Bank of Montreal, Chicago Branch, as administrative agent, dated August 14, 2001. 10.2 Time brokerage agreement by and among Beasley Broadcasting of Nevada, LLC, KJUL License, LLC and Wilks Broadcasting, LLC, dated as of October 31, 2001. 99.1 Press release for sale of WRNO-FM and KMEZ-FM in New Orleans, Louisiana. - ---------- (b) No reports on Form 8-K were filed during the three month period ended September 30, 2001 22 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 thereunto duly authorized. Date: November 9, 2001 BEASLEY BROADCAST GROUP, INC. /s/ George G. Beasley ------------------------------------ Name: George G. Beasley Title: Chairman of the Board and Chief Executive Officer Date: November 9, 2001 /s/ Caroline Beasley ------------------------------------ Name: Caroline Beasley Title: Vice President, Chief Financial Officer, Secretary, Treasurer and Director 23 EX-2.1 3 dex21.txt AGREEMENT OF PURCHASE AND SALE OF ASSETS AGREEMENT OF PURCHASE AND SALE OF ASSETS ---------------------------------------- This Agreement, dated as of October 31, 2001, by and among Beasley Broadcasting of Nevada, LLC. a North Carolina limited liability company ("Beasley"), KJUL License, LLC, a North Carolina limited liability company ("Licensing" and together with Beasley being hereinafter sometimes referred to as "Sellers"), and Wilks Broadcasting LLC, a Delaware limited liability company ("Buyer"), and Wilks License Co., LLC, a Delaware limited liability company ("License Co." and together with Buyer being hereinafter sometimes referred to as "Buyers"). W I T N E S S E T H: WHEREAS, Sellers are the owner of radio stations WRNO-FM, licensed to New Orleans, Louisiana and KMEZ(FM), licensed to Belle Chasse, Louisiana (the "Stations"), pursuant to certain authorizations issued by the Federal Communications Commission (the "Commission" or "FCC") and Sellers own or lease certain assets used or held for use in connection with the operation of the Stations; WHEREAS, Sellers desire to sell, assign and transfer the Stations, its FCC authorizations for the Stations and its interest in the assets and business of the Stations, and Buyers desire to acquire the Stations, the FCC authorizations for the Stations, and the assets and business of the Stations, all on the terms and subject to the conditions hereinafter set forth; and WHEREAS, concurrently with the execution and delivery of this Agreement, Buyer and Seller have entered into a Time Brokerage Agreement dated as of the date hereof (the "TBA"). NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein contained, and upon the terms and subject to the conditions hereinafter set forth, the parties hereto hereby agree as follows: ARTICLE 1 Purchase and Sale of Business and Assets ---------------------------------------- 1.1 Purchased Assets. Subject to and upon the terms and conditions ---------------- of this Agreement, Sellers shall sell, transfer, convey, assign, grant and deliver to Buyers, and Buyers shall purchase, at the Closing (as hereinafter defined) all right, title and interest in and to all business, properties, assets, machinery, equipment, furniture, fixtures, franchises, goodwill and rights of Sellers as a going concern, of every nature, kind and description, tangible and intangible, owned or leased, wheresoever located and whether or not carried or reflected on the books or records of any of Sellers, that are used or held for use in the operation of any of the Stations, including, without limitation, all properties, assets, rights, licenses, permits and franchises of and/or pertaining to any of the Stations, and all properties, assets and rights described in the form of Bill of Sale annexed as Exhibit 1.1 hereto (the "Bill ----------- of Sale"), but excluding the "Excluded Assets", as hereinafter defined. All of the foregoing are herein collectively referred to as the "Purchased Assets" and include without limitation all of the following (it being understood that License Co. shall acquire all right, title and interest of any of Sellers in and to the Commission Authorizations (as hereinafter defined) and Buyer shall acquire all of the other Purchased Assets): (a) Commission Authorizations. All right, title and interest of any ------------------------- of Sellers in and to all licenses, permits, approvals, construction permits and authorizations issued or granted by the FCC and used or held for use in the operation of any of the Stations, and any and all broadcast auxiliary facilities, boosters and repeaters associated with any of the Stations (hereinafter the "Commission Authorizations"), including, without limitation, all of those listed in Schedule 5.7(b) of the Disclosure Schedule (as such term --------------- is hereinafter defined), together with any applications therefor, renewals, extensions or modifications thereof and additions thereto. (b) Other Authorizations. All right, title and interest of any of -------------------- Sellers in and to all licenses, permits, variances, franchises, certifications, approvals, construction permits and authorizations issued or granted by any administrative body or licensing authority or governmental or regulatory agency, other than Commission Authorizations, used or held for use in the operation of any of the Stations and/or the ownership and/or use of the Purchased Assets (hereinafter the "Other Authorizations" and, collectively with the Commission Authorizations, the "Authorizations"), including, without limitation, all of those listed in Schedule 5.7(b) of the Disclosure Schedule, together with any --------------- applications therefor, renewals, extensions or modifications thereof and additions thereto. (c) Tangible Personal Property. All fixed and tangible personal -------------------------- property used or held for use, by or for any of the Stations and/or any of Sellers in the business or operation of any of the Stations as such operations are currently conducted, including, but not limited to, any physical assets and equipment, leasehold improvements, machinery, vehicles, furniture, fixtures, transmitting towers, transmitters, antennae, office materials and supplies, spare parts and music libraries, including, without limitation, those listed in Schedule 5.9 of the Disclosure Schedule, together with all replacements thereof, - ------------ additions and alterations thereto, and substitutions therefor, made between the date hereof and the Closing Date (hereinafter collectively the "Tangible Personal Property"), provided that to the extent any Tangible Personal Property is leased or co-owned by any of Sellers, only such leasehold or co-ownership interest will be included in the Purchased Assets. (d) Real Property. All land, buildings, improvements, fixtures, and ------------- transmitting towers (to the extent they constitute fixtures or other interests in real property and not Tangible Personal Property) and other real property owned by any of Sellers, and all right, title, and interest of any of Sellers in and to all leaseholds and other interests in real property and the buildings and improvements thereon and appurtenances thereto, including, without limitation, any easements, variances, and air rights, and all security deposits with respect to any of the foregoing (subject to the provisions of Section 2.5), used or held for use by or for any of the Stations and/or any of Sellers in the business or operation of any of the Stations as currently conducted (the foregoing hereinafter collectively called the "Real Properties"), provided that to the extent any Real Property is leased or co-owned by any of Sellers, only such leasehold or co-ownership interest will be included in the Purchased Assets. -2- (e) Advertising Contracts. All right, title and interest of any of --------------------- Sellers in and to all orders and agreements for the sale of advertising time on any of the Stations for cash and all trade, barter and similar agreements for the sale of advertising time on any of the Stations other than for cash, and all such orders and agreements for advertising time entered into in the ordinary course of business between the date hereof and the Closing Date, and to the extent the foregoing have not been performed as of the Closing Date, in each case to which any of Sellers or any of the Stations is a party and to be assumed by Buyer pursuant to this Agreement (hereinafter collectively "Advertising Contracts"). (f) Agreements. All right, title and interest of any of Sellers in ---------- and to the contracts, agreements, and leases, including, without limitation, all program licenses, and agreements and contracts to broadcast product or programs on any of the Stations, to which any of Sellers or any of the Stations is a party and to be assumed by Buyer pursuant to this Agreement (hereinafter, together with the Advertising Contracts, collectively, "Contracts"), and all rights of any of Sellers under all confidentiality agreements in favor of any of Sellers and/or any of the Stations and/or relating to any of the Stations. (g) Intangibles. All right, title and interest of any of Sellers in ----------- and to the call letters "WRNO-FM" and "KMEZ(FM)", together with all copyrights, trademarks, trade names, logos, slogans, jingles, service marks, applications for any of the foregoing, all telephone numbers and listings, trade secrets, confidential or proprietary information and other intangible property used or held for use by or for any of the Stations and/or any of Sellers in the business or operation of any of the Stations as currently operated, and any and all universal resource locators ("URLs"), domain names, of or maintained by or for any of the Stations, including without limitation, the URLs "www.wrno.com", and "www.oldschool1029.com" (the "Station URLs") and, the HTML code ("Code") created by or for any of Sellers exclusively for the sites directly accessed (e.g. sites with the same top level URL and not sites with other top level URLs even if such sites are maintained on the same server) through such Station URLs as of the date of this Agreement (collectively the "Site") and all goodwill associated with any of the above (hereinafter collectively the "Intangibles"). (h) Deposits and Prepaid Items. Subject to the provisions of Section -------------------------- 2.5, all right, title and interest of any of Sellers in and to all deposits and prepaid items relating to any of the Purchased Assets or the operation or business of any of the Stations (other than unearned insurance premiums). (i) Programs. All right, title and interest of any of Sellers in and -------- to all computer systems (including without limitation, management information and order systems, hardware, software, servers, computers, printers, scanners, monitors, peripheral and accessory devices and the related media, manuals, documentation and user guides) of or used by or for the Business, all right, title and interest of any of Sellers in and to all related claims, credits, and rights of recovery and set-off with respect thereto, and all of the right, title and interest (including by reason of license or lease) of any of Sellers or the Business in or to any software, computer program or software product owned, used, developed or being developed by or for the Business, whether for internal use or for sale or license to others, and any software, computer program or software product licensed by any of Sellers for use by the Business, and all proprietary rights of -3- any of Sellers or the Business, whether or not patented or copyrighted, associated therewith (collectively, "Programs"). (j) Documentation. All documentation, records and software, whether ------------- in electronic or print form, currently in the possession or under the control of any of Sellers evidencing, representing or containing or relating to any Program or used in the Business, including, without limitation, any manuals, functional and design specifications, user and programmer instructions, coding, testing notes, error reports and logs, patches and patch instructions, itemizations of development tools, and all other writings which would be necessary or helpful to a skilled programmer to understand, maintain and enhance any Program (collectively, "Documentation"). (k) FCC Logs. All FCC logs and similar records in the possession of -------- any of Sellers that relate to the operation of any of the Stations ("FCC Logs"). (l) Business Records. All reports, statements, books, financial ---------------- records, engineering and advertising reports, programming studies, consulting reports, marketing data, technical information, specifications, research and development information, engineering drawings, manuals, computer programs, tapes and software, business and personnel records, mailing and listener lists, lists of vendors or other suppliers and any other information in tangible form, used or held for use by or for any of the Stations and/or any of Sellers in the business or operation of any of the Stations or relating to any of the Purchased Assets (hereinafter collectively "Business Records"). (m) Goodwill. All goodwill in, and going concern value of, each of -------- the Stations (if any). 1.2 Excluded Assets. Notwithstanding anything set forth in Section 1.1, --------------- the Purchased Assets shall not include the following (the "Excluded Assets"): (a) All cash, cash equivalents or similar type investments of Sellers, such as certificates of deposit, money market accounts, commercial paper, Treasury bills and other marketable securities on hand and/or in banks or in inter-company or inter-affiliate accounts, any security deposits and any insurance policies, contracts of insurance, and any proceeds therefrom (except to the extent otherwise provided in Section 10.1 hereof), promissory notes, amounts due from employees, bonds, letters of credit, other similar items, and any cash surrender value in regard thereto. (b) All assets used or held for use exclusively in the operation of standard broadcast station WBYU(AM), New Orleans and those other assets listed in Schedule 1.2(b) of the Disclosure Schedule. --------------- (c) All supplies, spare parts and similar items of tangible personal property consumed in the ordinary course of business between the date of this Agreement and the Closing Date and in conformity with the terms and provisions of this Agreement. (d) Certain personal effects identified in Schedule 1.2(d) of the --------------- Disclosure Schedule. -4- (e) Sellers' Tax records, corporate seal, minute books, organizational documents, such books and records as pertain solely to the organization, existence and capitalization and Taxes of Sellers, such books and records as any Seller is required by law to retain, and duplicate copies of the books and records necessary to enable any Seller to file its Tax returns and reports. (f) All accounts receivable of Sellers and/or any of the Stations, as of 11:59 p.m., local time, on the day prior to the TBA Commencement Date (as herein defined), in respect of air time broadcast by Sellers prior to the TBA Commencement Date. (g) Any assets, trusts, insurance policies, contracts, reserves or arrangements relating to any compensation or benefit plan, contract or arrangement in effect as of the Closing Date including, without limitation, all pension, retirement, welfare, profit sharing, stock option or stock purchase, savings and thrift, bonus, incentive or deferred compensation, severance pay, vacation, sick pay, personal day and medical, vision, dental, accident, disability, life and other health and hospitalization insurance plans in which any current or former employee (or dependent of any such employee) of any of Sellers or any of the Stations participates or is entitled to benefits (the "Employee Benefit Plans"). (h) any interest in and to any refunds or overpayments of Taxes for periods prior to the Closing Date. (i) The accounting, payroll, general ledger and accounts payable software systems, used or held for use in the operation of the Stations; provided, however, that promptly after the TBA Commencement Date, Beasley will provide Buyer with a hard copy print out of the general ledger current as of the TBA Commencement Date. 1.3 Title to Purchased Assets. Title to all of the Purchased Assets ------------------------- shall be transferred to Buyers free and clear of any liens, pledges, charges, mortgages, security interests, restrictions, easements, liabilities, claims, title defects, encumbrances or rights of others of every kind and description (collectively, "Liens"), except for those Liens listed in Schedule 1.3 of the ------------ Disclosure Schedule, said Liens so listed being herein called the "Permitted Liens." 1.4 The Business. The business, operations, obligations and activities ------------ of Sellers principally related to any of the Stations and/or the use of any of the Purchased Assets in the operation of any of the Stations are herein collectively referred to as the "Business." 1.5 Assignments of Contracts. Buyer and Sellers acknowledge that the ------------------------ rights of Sellers under certain of the Contracts to be included in the Purchased Assets, and the rights and benefits thereunder necessary or appropriate or relating to the conduct of the business and activities of any of Sellers and/or any of the Stations, may not, by their terms, be assignable. Anything in this Agreement or in the Obligations Undertaking (as hereinafter defined) to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any such Contract and Buyer shall not be deemed to have assumed the same or to be required to perform any obligations thereunder, if an attempted assignment thereof, without the consent of a third party thereto, would constitute a breach thereof or in any material way affect the rights under any such Contract of Buyer or any of Sellers thereunder. In such event, Sellers will cooperate with -5- Buyer to provide for Buyer after the Closing all benefits to which any of Sellers is entitled under such Contracts, and any transfer or assignment to Buyer by any of Sellers of any such Contract or any right or benefit arising thereunder or resulting therefrom which shall require the consent or approval of any third party shall be made subject to such consent or approval being obtained. Sellers shall use their reasonable commercial efforts prior to, and if requested by Buyer after, the Closing Date to obtain all consents and approvals necessary or required for the transfer and assignment of the Contracts to Buyer, in each case in form and substance reasonably satisfactory to Buyer; it being understood, that such commercial efforts shall include Sellers paying the assignment fee under the Employment Agreement, dated November 20, 1998, between Stephen H. Johnson and John Walton and Beasley (formerly known as Centennial Broadcasting LLC). 1.6 Satisfaction of Liens. At the Closing, Sellers shall cause all --------------------- Liens on or relating to any of the Purchased Assets (other than Permitted Liens), to be released, extinguished and discharged in full, and shall deliver to Buyer instruments releasing, extinguishing and discharging all such Liens, and all rights and claims of any holder(s) of any of such Liens with respect to any of the Purchased Assets, all in such form and substance as Buyer shall reasonably require (collectively the "Lien Release Instruments"). 1.7 Receivables. At Closing, Sellers shall appoint Buyer their sole ----------- and exclusive agent for collecting Receivables during the Collection Period (as hereafter defined). In such regard, at Closing Sellers shall deliver to Buyer a complete and detailed statement showing the name, amount and age of each Receivable. From the Closing Date until 120 days thereafter (the "Collection Period"), Buyer shall endeavor to collect Receivables, as agent for Sellers and on Sellers' behalf, but in accordance with Buyer's normal collection procedures as in effect from time to time (and without being required to resort to litigation or collection proceedings), and, Sellers agree that during such period of time they shall refrain from taking action (whether in connection with collection or otherwise) in respect of the Receivables. Buyer shall have the right and authority to endorse, without recourse, with the name of any of Sellers, any checks received in respect of any Receivables. As soon as practicable, but in no event later than the 30th day of each calendar month beginning with the first full month after the Closing Date or the next business day thereafter if the 30th is not a business day, Buyer will furnish Sellers with an accounting of the Receivables collected during the preceding calendar month, and, on such day, Buyer shall remit to Beasley the net amount of all Receivables collected on Sellers' behalf by Buyer during such calendar month after deducting therefrom any applicable agency, sales and other commissions paid by Buyer as set forth below. Within 20 business days after the end of the Collection Period, Buyer will furnish Sellers with a final and up-to-date accounting of the Receivables, and thereafter Sellers shall be solely responsible for the collection of any remaining Receivables; provided, however, that any funds received by Buyer subsequent to the Collection Period on account of any Receivables paid or payable to any of Sellers, less any applicable agency, sales or other commissions to the extent paid by Buyer as set forth below, shall be remitted to Beasley as soon as practicable after the receipt of such funds. Sellers acknowledge and agree that all accounts receivable of any of the Stations that are earned from and after the Closing Date are the sole and exclusive property of Buyer. Buyer shall not be obligated to use any extraordinary efforts or retain counsel or a collection agency to collect any Receivable. To the extent that any amounts are received by Buyer from an obligor on both a Receivable and any other receivable of Buyer, such amounts, unless specifically allocated by the obligor, shall be allocated to payment of the oldest of such receivables first. Sellers shall be responsible for all -6- agency, sales and other commissions which are attributable to the Receivables and to the extent the same have not been paid by Sellers, during the Collection Period, Buyer may deduct the amount of such commissions from the amount to be remitted to Beasley and pay such commissions in accordance with Sellers' past customary practice. ARTICLE 2 Purchase Price; Letter of Credit; Payment; Assumption of Obligations ------------------------- 2.1 Purchase Price. Subject to and upon the terms and conditions of -------------- this Agreement, in reliance on the representations, warranties, covenants and agreements of Sellers contained herein, and in full payment and consideration for the sale, conveyance, assignment, transfer and delivery of the Purchased Assets by Sellers, Buyer will pay a total amount of Twenty Three Million United States Dollars (U.S. $23,000,000), subject to adjustment as herein provided (the "Purchase Price"), and payable as hereinafter provided. 2.2 Letter of Credit. ---------------- (a) Upon the execution and delivery of this Agreement, Buyer shall deposit with Michael J. Bergner as escrow agent (the "Escrow Agent"), as a good faith deposit, an irrevocable letter of credit ("Letter of Credit") in the stated principal amount of Three Million Dollars (U.S. $3,000,000). The Letter of Credit shall be held by the Escrow Agent, pursuant to the terms of an escrow agreement in the form of Exhibit 2.2 hereto (the "Escrow Agreement"), which ----------- Escrow Agreement shall be executed and delivered by Beasley, Buyer and the Escrow Agent simultaneously with the execution and delivery of this Agreement. The parties' rights and obligations with respect to the proceeds of the Letter of Credit shall be governed by clause (b) of this Section 2.2. (b) The Letter of Credit shall be held, distributed and/or drawn upon in accordance with the following requirements: (i) The Letter of Credit shall be returned to Buyer: (A) if at the latest time for the Closing referred to in Section 4.1 hereof (as may be modified by Section 8.1 hereof) a condition to Buyer's obligation to close the transactions contemplated by this Agreement has not been satisfied or waived and Buyer rightfully elects to terminate the Agreement; or (B) if this Agreement shall terminate for any reason specified in Article 3 of this Agreement; or (C) if this Agreement terminates for any reason other than as a result of a material breach or default by Buyer of its obligations under this Agreement or as a result of Buyer's wrongful failure to close as set forth in Section 2.2(b)(ii); it being understood that if Buyer and any of Sellers are in breach of their respective material obligations under this Agreement and the Agreement is terminated, the Letter of Credit shall be returned to Buyer; or (D) the Closing shall occur. (ii) Beasley shall be entitled to the proceeds of the Letter of Credit to compensate the Sellers for the damages they shall suffer if the Closing shall not occur, if (A) this Agreement terminates as a result of a material breach or default by Buyer of its obligations under this Agreement so long as Sellers are not also in breach or default of any of -7- their respective material obligations under this Agreement or (B) the Closing does not occur and each of the following shall occur (x) at the latest time for the Closing referred to in Section 4.1 hereof (as may be modified by Section 8.1 hereof), all conditions to Buyer's obligations to close shall have been satisfied or waived, (y) the Sellers shall then be ready, willing and able to close and none of the Sellers shall be in material breach or default of their respective obligations under this Agreement, and (z) Buyer fails or refuses to close. (c) Anything to the contrary contained in this Agreement notwithstanding, under no circumstances shall any of the Sellers have any right or remedy under or in connection with this Agreement if this Agreement shall terminate for any reason whatsoever and/or in the event of any breach or default under this Agreement, other than such right as Seller may have to the proceeds of the Letter of Credit under the terms and conditions set forth in Section 2.2(b) above and as may be expressly provided in Section 8.4 and Article 9 herein. 2.3 Payment. At Closing (x) the Letter of Credit shall be returned ------- to Buyer, and (y) the sum of Nineteen Million Six Hundred Fifty Thousand United States Dollars (U.S. $19,650,000) in cash shall be paid by Buyer to Sellers by wire transfer of immediately available funds, to an account designated by Beasley or such other means as Sellers and Buyer shall agree and (z) a promissory note in the principal amount of Three Million Three Hundred Fifty Thousand United Stated Dollars (U.S. $3,350,000), and in the form attached hereto as Exhibit 2.3 (the "Note"), shall be delivered by Buyer to Sellers. ----------- 2.4 Allocation. Sellers and Buyer agree to allocate the Purchase ---------- Price among the Purchased Assets in accordance with the allocation schedule to be attached hereto as Schedule 2.4, which allocation schedule will reflect the ------------ allocation of the Purchase Price among the classes of assets specified by Section 1060 of the Code and will be determined after the date hereof but prior to Closing (the "Allocation Schedule"). If the parties are unable to agree on the final Allocation Schedule within 30 days after the Closing Date, a third- party appraiser selected by Buyer, and reasonably acceptable to Sellers, the fees of which, up to a maximum of $7,500 shall be borne equally by Buyer and Sellers, shall resolve the allocation of the consideration to any items with respect to which there is a dispute between the parties. In the event that the Purchase Price shall be adjusted pursuant to this Agreement, the Allocation Schedule shall be appropriately modified, on such basis as Buyer shall reasonably require, to reflect such adjustment. Seller and Buyer will each file an IRS Form 8594 consistent with the Allocation Schedule. 2.5 Certain Closing Prorations and Adjustments. (a) All utilities ------------------------------------------ charges, real estate and personal property taxes, security deposits and monthly rental payments under leases of Real Properties to be assumed by Buyer pursuant to this Agreement, accrued employee vacation and sick pay time, monthly equipment rental payments under Personal Property Leases (as hereinafter defined) assumed by Buyer pursuant to this Agreement, amounts payable (and security deposits in respect thereof) in respect of contracts and agreements assumed by Buyer pursuant to this Agreement, association dues, business, license and annual FCC fees and similar prepaid items (to the extent included in the Purchased Assets) and similar accrued expenses shall be prorated between Sellers and Buyer as of Midnight on the day immediately preceding the Closing Date, and the net amount resulting from the foregoing in favor of Buyer or Sellers, as the -8- case may be, shall then be paid to such party at the Closing or credited against the Purchase Price in the event Sellers are to pay Buyer any such amount. If all the apportionments set forth above are not accomplished at the Closing, then, within ninety (90) days thereafter, representatives of Sellers and Buyer shall examine all appropriate books and records in order to make the determination of said apportionments. Payments in respect thereof shall be made within one hundred twenty (120) days after Closing, provided that if payments with respect to real or personal property taxes are based in whole or in part on the previous year's taxes, there shall be a later adjustment to reflect the current year's taxes when the bills are finally rendered. (b) All amounts paid prior to the Closing under all contracts, orders or commitments of any of the Stations for the sale of air time to be performed or aired on or after the Closing Date shall be paid by Sellers to Buyer or, at Buyer's option, credited against the Purchase Price, at the Closing. (c) Prior to Closing, the parties shall jointly prepare a schedule showing (i) the cumulative net value, as of the Effective Date of (and as defined in) the TBA (the "TBA Commencement Date"), of all advertising time required to be broadcast by the Station after the TBA Commencement Date pursuant to agreements included in the Contracts under which Beasley has agreed to provide commercial advertising time on any of the Stations in exchange for property or services in lieu of, or in addition to, cash ("Trade Agreements"), and (ii) the cumulative net value of all property or services to be received by any of the Stations after the TBA Commencement Date pursuant to Trade Agreements. The amount to be attributed to the value of remaining broadcast advertising time and goods and services hereunder shall be the amount specified in the Trade Agreement in question, as established at the time the Trade Agreement was entered into. To the extent the amount in clause (i) above exceeds the amount in clause (ii) above by more than Seven Thousand Five Hundred Dollars ($7,500), the Purchase Price due at Closing shall be decreased by such excess. (d) In the event of any dispute between the parties as to prorations or adjustments under this Section 2.5, the amounts not in dispute shall nonetheless be paid and adjusted for at the Closing, or within one hundred twenty (120) days thereafter as set forth in this Section above, and such disputes shall be promptly presented for resolution to an independent certified public accountant mutually acceptable to the parties. The accountant's resolution of the dispute shall be final and binding on the parties and a judgment may be entered thereon, provided, however, that any such accountant shall have no authority to assess damages or award attorney's fees or costs. The fees and expenses of such accountant shall be paid one-half (1/2) by Sellers and one-half (1/2) by Buyer. 2.6 Assumed Obligations. ------------------- (a) Except as otherwise provided in the TBA, from and after the Closing Date, Buyer shall assume and pay, perform and discharge the following liabilities and obligations relating to the Stations, but in each case only to the extent first accruing, and only with respect to periods, after the Closing Date (the "Assumed Obligations"): (i) liabilities and obligations arising or accruing after the Closing Date with respect to any (i) all contracts, agreements, leases, licenses or other -9- understandings or arrangements listed in Schedule 5.8(A) of the Disclosure --------------- Schedule and marked with an asterisk (*) to indicate that it is an "Assumed Contract", (ii) all Advertising Contracts (including Trade Agreements), and (iii) any other contract, agreement, lease, license or other understanding or arrangement entered into by any of Sellers with respect to any of the Stations pursuant to Section 7.1 hereof; (ii) liabilities and obligations arising or accruing after the Closing Date with respect to Buyer's ownership of the Purchased Assets and Buyer's operation of the Stations; and (iii) liabilities and obligations arising after the Closing Date, with respect to any property taxes, regulatory fees and other governmental charges on the Purchased Assets or the Stations for periods after the Closing Date during which Buyer owned the Stations. (b) Notwithstanding anything to the contrary contained herein, the Assumed Obligations shall not include any of the following debts, commitments, obligations or liabilities of any of Sellers (herein collectively referred to as the "Excluded Liabilities"): (i) any obligation or liability of any of Sellers based upon acts or omissions of any of Sellers occurring on or after the Closing Date; (ii) except as otherwise expressly provided in the TBA, any liabilities or obligations of any of Sellers resulting or arising from claims for personal injury or property damage arising prior to the Closing Date or out of any breach or default prior to the Closing Date by any of Sellers of any contract, commitment or obligation, whether imposed by law or otherwise; (iii) any obligations of either of Sellers under any stock option, stock purchase or profit-sharing plans or under any outstanding qualified or non-qualified stock options; (iv) any liabilities of either of Sellers to any of its present or former stockholders or partners as such or arising out of any action by either of Sellers in connection with the transactions contemplated by this Agreement; (v) any and all obligations of either of Sellers for indebtedness for borrowed money, including without limitation, capitalized leases for equipment not assumed by Buyer hereunder and amounts advanced by either of Sellers or any affiliate thereof to Seller or amounts otherwise owed or payable by either of Sellers to either of Sellers or any affiliate thereof, and any and all other intercompany obligations (whether current or long-term); (vi) except as otherwise expressly provided in the TBA, any and all debts, liabilities and obligations of either of Sellers incurred or accrued with respect to any period, or circumstances, or state of facts or occurrences, on or prior to the Closing Date, relating to bonuses, salaries, wages, commissions, incentive compensation, compensated absences, workmen's compensation, FICA, unemployment taxes, employee benefits, medical and health, deferred compensation, wage continuation, severance, termination, pension -10- (including any unfunded accrued or vested obligation), section 401(k) plans, cafeteria, child care, retirement, profit-sharing or similar plans or arrangements, with respect to any current or former employees of Sellers whether or not such employees become employees of Buyer; (vii) any and all domestic and foreign federal, state and local income, gains, or franchise Tax liabilities, imposed on either of Sellers or with respect to income or activities thereof, including interest and penalties, if any, imposed in respect of such taxes, and including any income or gains Tax with respect to the transactions contemplated by this Agreement; (viii) any and all liabilities and obligations of either of Sellers arising under this Agreement or any of the Seller Documents (including, without limitation, indemnification obligations and obligations to pay expenses arising out of the Agreement), or from its failure to perform any of its agreements contained therein or incurred by it in connection with the consummation of the transactions contemplated thereby, or for which either of Sellers is responsible under this Agreement, including, without limitation, fees of Sellers' lawyers, accountants and other advisors; (ix) except as otherwise expressly provided in the TBA, any and all liabilities and obligations with respect to claims, suits, legal, administrative, arbitral or other actions, proceedings and judgments with respect to causes of action or disputes arising, and other non-contractual liabilities of either of Sellers asserted or imposed, or arising out of, any events occurring, or circumstances or state of facts existing, on or prior to the Closing Date, including without limitation, personal injury, negligence, deceptive trade practices, libel or slander; (x) except as otherwise expressly provided in the TBA, any and all liabilities and obligations of either of Sellers based on or arising from the presence, use, disposal or treatment of any Hazardous Substance (as defined below) on, about or from any of the Real Properties or any discharge or release of a Hazardous Substance on or prior to the Closing Date or failure to obtain any license or permit required in connection with any Hazardous Substance or arising out of any non-compliance with any federal, foreign, state or local environmental, health or safety law, ordinance, code, rule regulation, order or requirement, in each case based on or arising from any act, transaction, state of facts or other condition or conduct which existed on or before the Closing Date. The term "Hazardous Substance" as used in this Agreement shall include, without limitation, gasoline, oil and other petroleum products, explosives, radioactive materials and related and similar materials, and any other substance or material defined as a hazardous, toxic or polluting substance or material by any federal, state or local law, ordinance, rule or regulation, including asbestos and asbestos-containing materials; (xi) except as otherwise expressly provided in the TBA, any and all debts, liabilities and obligations of either of Sellers with respect to any of the Excluded Assets or any Contract that is not an Assumed Contract; or (xii) any and all debts, liabilities or obligations as a guarantor, co-obligor or surety of either of Sellers or any affiliate of either of Sellers. -11- (c) Buyer shall, at the Closing, execute and deliver to Sellers an Obligations Undertaking (the "Obligations Undertaking"), substantially in the form of Exhibit 2.6 hereto, in order to effect the assumption of the Assumed ----------- Obligations by Buyer. Except for the Assumed Obligations, and except as otherwise provided in the TBA, Buyer shall not and does not assume any liability or obligation of any of Sellers, fixed or contingent, disclosed or undisclosed, and assumes no liability for any claim, debt, default, duties, obligations or liabilities of any of Sellers of any kind or nature, whether known or unknown, contingent or fixed, including with out limitation the Excluded Liabilities, all of which, to the extent that they exist from and after the Closing shall be retained and discharged by Sellers. ARTICLE 3 Application to and Consent By Commission ---------------------------------------- 3.1 Commission Consent. Consummation of the purchase and sale ------------------ provided for herein and the performance of the obligations of Sellers and Buyers to close under this Agreement are subject to the condition that the Commission shall have issued its approval, without any condition adverse to Buyers' operation of the Stations and outside of the ordinary course for similar transactions, of the assignment (the "Assignment") of the Commission Authorizations to License Co. in accordance with the terms of this Agreement (the "Initial Order"), and such approval shall have become a Final Order (as hereinafter defined). 3.2 Application For Commission Consent. (a) Sellers and Buyers agree ---------------------------------- to proceed expeditiously and with due diligence and to use their reasonable efforts and to cooperate with each other in seeking and applying (the "Assignment Application") for the Initial Order and the Final Order. Within five (5) business days after the date of this Agreement, each party shall prepare and file with the Commission the Assignment Application and all information, data, exhibits, resolutions, statements, and other materials necessary and proper in connection with such Assignment Application. Each party further agrees to expeditiously prepare and file with the FCC any Assignment Application amendments whenever such amendments are required by the Commission or its rules. For purposes of this Agreement, each party shall be deemed to be using its reasonable efforts with respect to obtaining the Final Order, and to be otherwise complying with the foregoing provisions of this Section 3.2, so long as it expeditiously and truthfully provides information necessary in completing the application process, expeditiously provides its comments on any filing materials, and uses its reasonable efforts to oppose attempts by third parties to resist, modify or overturn the grant of the Initial Order or the Final Order without prejudice to the parties' termination rights under this Agreement, it being further understood that neither the Sellers nor Buyers shall be required to expend any funds or efforts contemplated under this Article 3 unless the other(s) of them is concurrently and likewise complying with its obligations under this Article 3. (b) Except as otherwise provided herein, each party will be solely responsible for the expenses incurred by it in the preparation, filing and prosecution of its respective portion of the Assignment Application. All filing fees and grant fees imposed shall be paid one-half (1/2) by Sellers and one-half (1/2) by Buyer. -12- (c) Buyer and Sellers, each at their own respective expense, shall use their respective reasonable efforts to oppose any efforts or any requests by third parties for reconsideration or judicial review of the grant by the Commission of the Initial Order. 3.3 Notice of Application. Sellers shall, at their expense, give due --------------------- notice of the filing of the Assignment Application by such means as may be required by the rules and regulations of the Commission. 3.4 Absence of Commission Consent. This Agreement, prior to the ----------------------------- Closing, may be terminated by Sellers, on the one hand, or Buyers on the other hand, upon written notice to the other(s), if an Initial Order as to the assignment of the Station has not come into existence and effect within nine (9) months after the date hereof, or the Final Order as to the assignment of the Stations has not come into existence and effect within twelve (12) months after the date hereof; provided, however, that neither Sellers nor Buyers, as the case -------- ------- may be, may terminate this Agreement if any of Sellers, or any of Buyers, as the case may be, is in material default or breach under this Agreement, or if a delay in any decision or determination by the Commission respecting the Assignment Application has been caused, or materially contributed to, (i) by any failure of any of Sellers, or any of Buyers, as the case may be, to furnish, file or make available to the Commission information within its control; (ii) by the willful furnishing by any of Sellers, or any of Buyers, as the case may be, of incorrect, inaccurate or incomplete information to the Commission; or (iii) by any other action taken by any of Sellers, or any of Buyers, as the case may be, for the purpose of delaying the Commission's decision or determination respecting the Assignment Application. 3.5 Designation For Hearing. In the event the Commission shall, ----------------------- prior to the Closing, designate for hearing any aspect of the Assignment Application, Sellers, on the one hand, or Buyers, on the other hand, shall be entitled, upon notice to the other(s), which notice must be given within twenty (20) days after the terminating parties' receipt of notice of such designation for hearing, to terminate this Agreement; provided, however, that neither any of -------- ------- Sellers, nor any of Buyers, as the case may be, shall be entitled to terminate this Agreement if any of Sellers or any of Buyers, as the case may be, is in material default or breach of this Agreement. 3.6 Definition of Final Order. For purposes of this Agreement, the ------------------------- term "Final Order" shall mean a final order of the Commission which is not reversed, stayed, enjoined or set aside, and with respect to which no timely request for stay, reconsideration, review, rehearing or notice of appeal or determination to reconsider or review is pending, and as to which the time for filing any such request, petition or notice of appeal or for review by the Commission, and for any reconsideration, stay or setting aside by the Commission on its own motion or initiative, has expired. 3.7 Effect of Termination. No termination under this Article 3 shall --------------------- affect any rights or obligations under this Agreement arising by reason of any breach or default by any party under this Agreement prior to such termination or any remedy to which any party hereto may be entitled by reason of such breach or termination, each of which shall survive such termination. -13- ARTICLE 4 Closing; Deliveries; Conditions Precedent ----------------------------------------- 4.1 Closing. The Closing under this Agreement (the "Closing") shall ------- take place at the offices of Buyer's counsel, at 10:00 a.m., local time, on the later of March 31, 2002 and the fifth (5th) business day after the Initial Order becomes a Final Order, or such other date, place or time as the parties hereto shall mutually agree upon. The date of the Closing is herein called the "Closing Date". (a) All proceedings to be taken and all documents to be executed and delivered by the parties at the Closing shall be deemed to have been taken and executed simultaneously and no proceedings shall be deemed taken nor any documents executed or delivered until all have been taken, executed and delivered. 4.2 Sellers' Deliveries. At the Closing, Sellers shall deliver to ------------------- Buyers: (a) the Bill of Sale, executed by Sellers; (b) [Intentionally Omitted] (c) an assignment of lease in the form of Exhibit 4.2(c) hereto -------------- (each a "Lease Assignment") which respect to each of the leases of the Real Properties listed in Schedule 5.8 of the Disclosure Schedule (each a "Lease"), ------------ executed by the lessee thereunder, in each case together with: (i) the written consent to the assignment of each Lease, other than those deemed immaterial by Buyer; and (ii) such estoppel agreements ("Estoppels") of the landlord, in form and substance reasonably required by Buyer and Buyer's institutional lenders, with respect to such Lease and Lease Assignment, if any, as Sellers shall have received prior to the Closing Date, and Sellers shall use reasonable efforts (not to include the payment of any fee or cost of any landlord) to so obtain the same from each landlord; and (iii) such non-disturbance agreements ("NDA's") from the landlord's mortgagees in favor of Buyer in form and substance reasonably required by Buyer, if any, as Sellers shall have received prior to the Closing Date, and Sellers shall use reasonable efforts (not to include the payment of any fee or cost of any landlord) to so obtain the same from each mortgagee of each landlord; and (iv) such memoranda in recordable form, as to such lease and the assignment thereof to Buyer, executed by the landlord, if any, as Sellers shall have received prior to the Closing Date and Sellers shall use reasonable efforts (not to include the payment of any fee or cost of any landlord) to so obtain the same from each landlord; (d) instruments of assignment and transfer of all the Commission Authorizations and the Intangibles, executed by Sellers, in form reasonably required by Buyer; -14- (e) all Contracts, FCC Logs and Business Records not previously delivered to Buyers; (f) copies of corporate and limited liability company resolutions of the Sellers authorizing, by approval of the board of directors and the members and board of managers of the Sellers, the execution and delivery of this Agreement and each exhibit hereto and the consummation of the transactions contemplated hereby and thereby, certified by an executive officer of each of the Sellers; (g) a certificate of good standing with respect to Beasley, issued as of a recent date by the Secretary of State of the State of North Carolina and a certificate of foreign qualification with respect to Beasley, issued as of a recent date by the Secretary of State of the State of Louisiana; (h) irrevocable written instructions to the Escrow Agent to return the Letter of Credit to Buyer; (i) a License, substantially in the form attached as Exhibit ------- 4.2(i) (the "License"), executed by Sellers, provided that landlord's consent to - ------ the same has been obtained; (j) such other good and sufficient instruments of conveyance, assignment and transfer, as Buyer shall reasonably require, each in form and substance reasonably required by Buyer, and as shall be effective to vest in Buyers title to the Purchased Assets as contemplated by this Agreement; and (k) all other documents required by the terms of this Agreement to be delivered to Buyers at the Closing. 4.3 Buyers' Deliveries. At the Closing, Buyers will deliver: ------------------ (a) the portion of the Purchase Price, as the same may be adjusted in accordance with the terms of this Agreement, payable in cash at the Closing; (b) the Note; (c) each Lease Assignment, duly executed by Buyer; (d) the Obligations Undertaking, duly executed by Buyer; (e) certificates of good standing with respect to each of Buyers, each issued as of a recent date by the Secretary of State of Delaware and a certificate of foreign qualification with respect to Buyer, issued as of a recent date by the Secretary of State of Louisiana; (f) an Equity Subscription Agreement to be entered into by and among Buyer, Wicks Communications & Media Partners L.P., Wicks Parallel (Limited) Partnership I, L.P. and Wilks Broadcasting Holdings, LLC, in the form attached hereto as Exhibit 4.3(f) (the "Equity Subscription Agreement"), -------------- executed by the parties thereto; -15- (g) the License, executed by Buyer, provided that landlord's consent to the same has been obtained; (h) copies of all necessary limited liability company resolutions of Buyer authorizing the execution and delivery of this Agreement and each exhibit hereto and the consummation of the transactions contemplated hereby and thereby, certified by an officer of Buyer; and (i) all other documents required by the terms of this Agreement to be delivered to Sellers at the Closing. 4.4 Further Assurances. At any time and from time to time after the ------------------ Closing, at Buyer's request, and without further consideration, Sellers will execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation, and take such actions, as Buyer may reasonably deem necessary or desirable in order more effectively to transfer, convey and assign to Buyers, and to confirm Buyers' title to, all of the Purchased Assets, to put Buyers in actual possession and operating control thereof, and to assist Buyers in exercising all rights with respect thereto. 4.5 Buyers' Conditions Precedent. The obligations of the Buyers ---------------------------- under this Agreement to proceed with the transactions contemplated hereby are, at the option of the Buyer, subject to the fulfillment of the following conditions at or prior to the Closing: (a) no action, suit or proceeding shall have been instituted against any of Sellers or against any of Buyers by, in or before any court, tribunal or governmental body or agency, and be unresolved, to restrain, prevent, enjoin or prohibit, or to obtain substantial damages by reason of, any of the transactions contemplated hereby and no order shall have been issued, to restrain, prevent, enjoin or prohibit, or to obtain substantial damages by reason of, any of the transactions contemplated hereby; (b) the representations and warranties of any of the Sellers contained in this Agreement, any Schedules and Exhibits hereto and/or any certificates or documents delivered in connection with this Agreement shall be true and correct in all respects when made, and, except for changes expressly permitted by this Agreement, shall also be true and correct in all respects on and as of the Closing Date as if made on and as of that date and as though the Closing Date were substituted for the date of this Agreement, except (i) to the extent that any such representations and warranties were made only as of a date specified therein, and as to such representations and warranties the same shall continue on the Closing Date to have been true and correct as of the specified date, and (ii) where the breach of any of such representations or warranties does not have, and could not reasonably be expected to have, either individually or in the aggregate for all representations and warranties, a material adverse effect on the financial condition, business or operating results of the Stations taken as a whole or any Seller's ability to consummate the transactions contemplated hereby (a "Material Adverse Effect") (except that for purposes of application of this clause (ii) all materiality and material adverse effect qualifications within all representations and warranties shall be deemed omitted); -16- (c) each covenant, agreement and obligation required by the terms of this Agreement to be complied with and performed by any of the Sellers, at or prior to the Closing shall have been duly and properly complied with and performed except where the noncompliance or nonperformance does not have, and could not reasonably be expected to have, individually or in the aggregate for all covenants, agreements and obligations, a Material Adverse Effect (except that for purposes of application of this subsection (c) all materiality and material adverse effect qualifications within all covenants, agreements and obligations shall be deemed omitted); (d) the Final Order shall have been granted by the Commission and License Co. shall be entitled to be the holder of the Commission Authorizations; (e) all consents necessary to the assignment to Buyer of those Contracts listed in Schedule 4.5(e) of the Disclosure Schedule, shall have been --------------- obtained and there shall have been delivered to Buyer executed counterparts reasonably satisfactory in form and substance to Buyer of such consents (the "Consents"); (f) Buyer shall have received an opinion of Sellers' counsel Latham & Watkins, dated the Closing Date, addressed to Buyers and permitting reliance thereon by Buyers' lenders, and favorably opining as to the matters included in Exhibit 4.5(f) hereto, in form and substance reasonably satisfactory -------------- to Buyer; and (g) there shall be delivered to and for the benefit of Buyers and Buyers' lenders a certificate of (i) Sellers executed on the Closing Date that the conditions set forth in subsections (b) through (e) of this Section 4.5 have been fulfilled. 4.6 Sellers' Conditions Precedent. The obligations of Sellers under ----------------------------- this Agreement to proceed with the transactions contemplated hereby are, at the option of Sellers, subject to the fulfillment of each of the following conditions at or prior to the Closing: (a) the representations and warranties of Buyer contained in this Agreement or any exhibits hereto or any certificates or documents delivered by it to Sellers in connection with this Agreement shall be true and correct in all respects when made, and, except for changes expressly permitted by this Agreement, shall also be true and correct in all respects on and as of the Closing Date as if made on and as of that date and as though the Closing Date were substituted for the date of this Agreement, except (i) to the extent that any such representations and warranties were made only as of a date specified therein, and as to such representations and warranties the same shall continue on the Closing Date to have been true and correct as of the specified date, and (ii) where the breach of any such representations or warranties does not have, and could not reasonably be expected to have, either individually or in the aggregate for all representations and warranties, a material adverse effect on Buyer's ability to consummate the transactions contemplated hereby (except that for purposes of application of this clause (ii) all materiality and material adverse effect qualifications within all representations and warranties shall be deemed omitted); (b) each covenant, agreement and obligation required by the terms of this Agreement to be complied with and performed by any of Buyers, at or prior to the Closing -17- shall have been duly and properly complied with and performed, except where the noncompliance or nonperformance does not have, and could not reasonably be expected to have, individually or in the aggregate for all covenants, agreements and obligations, a material adverse effect on Buyer's ability to consummate the transactions contemplated hereby (except that for purposes of application of this subsection (b) all materiality and material adverse effect qualifications within all covenants, agreements and obligations shall be deemed omitted); (c) there shall be delivered to Sellers a certificate of Buyer executed on the Closing Date that the conditions set forth in subsections (a) and (b) of this Section 4.6 have been fulfilled; and (d) the Final Order shall have been granted by the Commission and License Co. shall be entitled to be the holder of the Commission Authorizations. 4.7 Sellers' Cooperation With Respect to Like-Kind Exchange. Sellers -------------------------------------------------------- agree that Buyers' acquisitions of the Purchased Assets (or a portion thereof) may, at Buyers' election, be part of a like-kind exchange of property covered by Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code") (a "Like-Kind Exchange"). If Buyer so elects, Sellers shall cooperate with Buyers to effect such Like-Kind Exchange, by consenting to and acknowledging assignment of Buyers' rights under this Agreement to a qualified intermediary, as such term is defined in Treasury Regulation (S) 1.1031(k)-1(g)(4), or to an exchange accommodation titleholder under Revenue Procedure 2000-37. 4.8 Effect of TBA on Closing Conditions. To the extent that any ----------------------------------- party hereto fails to fulfill a closing condition to the other party's obligation to close (as set forth in Section 4.5 or 4.6, as applicable), and such failure is caused by actions taken or not taken (when such actions should have been taken) by the other party pursuant to the TBA, such condition to closing shall nevertheless be deemed to have been waived. ARTICLE 5 Representations and Warranties of Sellers --------------------- The Sellers hereby jointly and severally make each of the following representations and warranties: 5.1 Organization, Standing and Qualification. (a) Parent is a ---------------------------------------- corporation validly existing and in good standing under the laws of the State of Delaware. Beasley is a limited liability company validly existing and in good standing under the laws of the State of North Carolina and is qualified to conduct business in the State of Louisiana. Licensing is a limited liability company validly existing and in good standing under the laws of the State of North Carolina and is qualified to conduct business where so required and neither of Sellers is required to be qualified to do business in any other jurisdiction in connection with the operation of any of the Stations or the Business; and each of the Sellers has all requisite power and authority and is entitled to own, lease and operate its properties and to carry on its business as and in the places such properties are now owned, leased or operated and where such business is presently conducted. Except as set forth in Schedule 5.1 of ------------ the disclosure schedule delivered by -18- Sellers to Buyers concurrently with the execution and delivery hereof and making express reference to this Agreement (the "Disclosure Schedule"), the operations of the Stations and the Business, have not been conducted through any direct or indirect subsidiary, shareholder, member or affiliate of any of Sellers, and none of the business, assets, properties or rights of or related to any of the Stations or the Business is held, owned, used or conducted by any shareholder, member or affiliate of any of Sellers. 5.2 Authority of Sellers. Each of the Sellers has all requisite -------------------- power and authority to execute, deliver and perform this Agreement and each other agreement, document and instrument to be executed, delivered or performed by such of the Sellers in connection with this Agreement (the "Seller Documents") and to carry out the transactions contemplated hereby and thereby. This Agreement constitutes, and, when executed and delivered at the Closing, each other Seller Document will constitute, the legal, valid and binding obligation of each of the Sellers as is party thereto. All corporate, limited liability company shareholder and member proceedings and action required to be taken by each of the Sellers relating to the execution, delivery and performance of this Agreement and the Seller Documents and the consummation of the transactions contemplated hereby and thereby shall have been duly taken by the Closing. 5.3 No Violation. Except for the filing of the Assignment ------------ Application and the granting of the Initial Order and the Final Order, and except as indicated in Schedule 5.3 of the Disclosure Schedule: ------------ (a) The execution, delivery and performance of this Agreement and the Seller Documents and the consummation of the transactions contemplated hereby and thereby, will not (i) conflict with or violate any provision of the Articles of Organization or Limited Liability Company Operating Agreement of any of the Sellers, (ii) with or without the giving of notice or the passage of time, or both, result in a breach of, or violate, or be in conflict with, or constitute a default under, or permit the termination of, or cause or permit acceleration under, any agreement or instrument of any debt or obligation to which any of the Sellers is a party or to or by which it or any of the Purchased Assets is subject or bound, or result in the loss or adverse modification of any of the Authorizations or Intangibles, (iii) require the consent of any party to any agreement or commitment to which either Seller is a party, or to or by which it or the Purchased Assets is subject or bound, (iv) result in the creation or imposition of any Lien other than Permitted Liens upon any of the Purchased Assets, or (v) violate any law, rule or regulation or any order, judgment, decree or award of any court, governmental authority or arbitrator to or by which any of the Sellers or any of the Purchased Assets is subject or bound. (b) No consent, approval or authorization of, or declaration, filing or registration with, or notice to, any governmental or regulatory authority or any other third party is required to be obtained or made by any of the Sellers in connection with the execution, delivery and performance of this Agreement or the Seller Documents or the consummation of the transactions contemplated hereby and thereby. 5.4 Financial Statements. Sellers have delivered to Buyer copies of -------------------- the balance sheets and related statements of income and cash flow of each of the Stations as at and for the fiscal year ended December 31, 2000, and as at and for the eight-month period ended August 31, 2001 (the "Financial Statements"). Except for the variations expressly noted in said -19- Schedule 5.4 of the Disclosure Schedule, all of the Financial Statements have - ------------ been prepared in accordance with generally accepted accounting principles (except for the absence of footnotes and normal and customary year-end adjustments), consistently applied and maintained throughout the periods indicated, and fairly present the financial condition of the Stations as at their respective dates and the results of operations of the Stations for the periods covered thereby. Except as disclosed in Schedule 5.4 of the Disclosure ------------ Schedule, such Financial Statements do not contain any items of special or nonrecurring income or any other income not earned in the ordinary course of business, and reflect no operations or business other than those of the Stations, except as expressly specified therein, and include all adjustments, which consist only of normal recurring accruals, necessary for such fair presentation. 5.5 Title to and Condition of Purchased Assets. Except for the ------------------------------------------ assets and properties leased to Sellers, and except as set forth on Schedule 5.5 ------------ of the Disclosure Schedule, Sellers have good and marketable title to all of the assets and properties which any of them owns or uses in the operation of any of the Stations or the Business. Except as set forth on Schedule 5.5 of the ------------ Disclosure Schedule, none of the Purchased Assets is subject to any Lien other than Permitted Liens. The Purchased Assets are in all material respects in good operating condition and repair, are reasonably suitable for the purposes currently used, and are reasonably adequate and sufficient for the operations of the Stations as currently operated. Sellers enjoy peaceful possession of all leased real property , including, where relevant, the buildings and improvements thereon, in conformance with the relevant lease agreement, used in the Business. 5.6 Litigation. Except as set forth in Schedule 5.6 of the ---------- ------------ Disclosure Schedule: there is no action, suit, proceeding, arbitration or investigation pending, or to the knowledge of any of the Sellers threatened, against or affecting any of the Sellers in connection with any of the Stations or the Business or any of the assets, properties, business or employees (in their capacity as employees) of any of the Stations or the Business or the transactions contemplated by this Agreement, and there is not outstanding any order, writ, injunction, award or decree of any court or arbitrator or any federal, state, municipal or other governmental department, commission, board, agency or instrumentality to which any of the Stations or any of the Sellers in connection with any of the Stations or the Business is subject or otherwise applicable to the Business, or the Purchased Assets, nor is any of them in default with respect to any such order, writ, injunction, award or decree. 5.7 Compliance; Properties; Authorizations. (a) Except as set forth -------------------------------------- in Schedule 5.7 of the Disclosure Schedule, each of Sellers and each of the ------------ Stations has complied in all material respects, with all laws, rules, regulations, ordinances, orders, judgments and decrees applicable to any of the Stations or any of Sellers, in connection with any of the Stations or the Business, any of the employees thereof, or any of the Real Properties and/or any aspect of a Station's operations, including, without limitation, any laws, rules, regulations, ordinances, codes, orders, judgments or decrees as to zoning, building requirements or standards, hiring, employment, or environmental, health and/or safety matters. Each Seller has all material approvals, certificates, authorizations, consents, licenses, franchises, orders and permits, including, without limitation, all Authorizations, necessary or useful to the operation of the Stations, the conduct of the Business and/or the use of the Purchased Assets and/or each of the Real Properties, all of which are identified in Schedule 5.7. ------------ -20- (b) Licensing is the holder of the Commission Authorizations listed on Schedule 5.7(b) of the Disclosure Schedule. All such Commission --------------- Authorizations are validly existing authorizations for the operation of the facilities described therein under the Communications Act of 1934, as amended (the "Communications Act"). The Commission Authorizations identified in Schedule -------- 5.7(b) of the Disclosure Schedule constitute all of the licenses and - ------ authorizations required under the Communications Act or the rules, regulations, and policies of the FCC in connection with the Business or the operation of the Stations as currently operated. The Commission Authorizations are in full force and effect and are unimpaired by any act or omission of any of Sellers or any members, stockholders, officers, directors, employees or agents of any of Sellers. There is no condition imposed by the FCC as part of any Commission Authorization that is neither set forth on the face thereof as issued by the FCC nor contained in the rules and regulations of the FCC applicable generally to stations of the type, nature, class or location of the Stations. All FCC regulatory fees for each of the Stations have been paid, and all broadcast towers from which any of the Stations operates have been duly registered with the FCC if such registration is required. Except as set forth on Schedule 5.7(b) --------------- of the Disclosure Schedule, there is no action pending nor, to the knowledge of any of the Sellers, threatened by or before the FCC or other body to revoke, refuse to renew, suspend or adversely modify any of the Commission Authorizations, or any action which may result in the denial of any pending application, the issuance of any cease and desist order, or the imposition of any administrative sanction with respect to any of the Stations or its operation, except for the Assignment Application before the FCC to transfer the Commission Authorizations pursuant hereto. Except as set forth on Schedule -------- 5.7(b) of the Disclosure Schedule, there is not pending to the best knowledge of - ------ any of the Sellers, any investigation, by or before the FCC, or any order to show cause, notice of violation, notice of apparent liability, or notice of forfeiture or complaint by, before or with the FCC against any of Sellers or members, stockholders, officers, directors, or affiliates of any of Sellers with respect to the Stations nor, to the knowledge of any of the Sellers, is any of the foregoing threatened. Each of the Stations is operating, in all material respects, in compliance with the Commission Authorizations, the Communications Act, and the current rules, regulations, and policies of the FCC. Sellers have timely filed all reports, forms and statements required to be filed with the FCC. All applications for the Authorizations submitted by Sellers were true and correct when made. None of Sellers has received any notice with respect to any of the Commission Authorizations or any Station's compliance with the Communications Act that might cause the FCC not to consent to the assignment of the Commission Authorizations as contemplated by this Agreement. To the knowledge of Sellers, no Station is shortspaced to any present or proposed broadcast station or frequency/channel allotment that is not otherwise fully consistent with Section 73.215 of the FCC's rules and regulations. No Station is causing, nor receiving, any interference which the FCC would deem to be objectionable. 5.8 Schedules. Schedule 5.8(A) of the Disclosure Schedule contains a --------- --------------- true, complete and accurate list of the following: (a) all Real Properties, together with each lease, sublease or license related to any of the Stations under which any of Sellers holds any leasehold or other interest or right to the use thereof (the "Real Property Leases") or pursuant to which any of Sellers has leased, assigned, sublet or granted any rights therein or with respect thereto; -21- (b) all items of machinery, equipment, vehicles, furniture, fixtures, transmitting towers, transmitters, antennas, spare parts, music libraries and other tangible personal property owned and used by any of Sellers in the operation of the Stations or the Business or included in the Purchased Assets, except for items having a value of less than $10,000, which do not, in the aggregate, have a total value of more than $50,000; (c) all trademarks, trademark registrations, and applications therefor, service marks, service mark registrations, and applications therefor, trade names, patents and patent applications, copyrights and copyright registrations, and applications therefor, domain names, owned and used by any of Sellers in the operation of any of the Stations or the Business as currently conducted; and all contracts, agreements, commitments or licenses relating to any patent(s), trademark(s), trade name(s), copyright(s), software, know-how, trade secret(s), proprietary information and other Intangible(s) to which any of Sellers in the operation of any of the Stations or the Business as currently conducted is a party or by which any of Sellers in the operation of any of the Stations or the Business as currently conducted is bound; (d) all contracts, agreements, commitments, barter agreements, purchase orders for material reasonably expected to be delivered after the TBA Commencement Date, leases, licenses or other understandings or arrangements relating to any of the Stations, the Business or the Purchased Assets and to which any of Sellers or any of the Stations is a party or by which it or any of the Sellers or Stations is bound, but excluding (A) purchase orders for necessary supplies or services made in the ordinary course of business (on customary terms and conditions and consistent with past practice) involving payments or receipts by any of Sellers of less than $10,000 in any single case or series of related orders, and (B) contracts entered into in the ordinary course of business on customary terms and conditions involving payments or receipts during the entire life of such contracts of less than $15,000 in the case of any single contract but not more than $75,000 in the aggregate; (e) all collective bargaining agreements, all employment and consulting agreements, and all Employee Benefit Plans and any other employee benefit plan, agreement, arrangement, commitment and/or practice, to which any of Sellers is a party or bound and which covers or relates to any of the employees of any of the Stations; (f) as of a date no earlier than September 30, 2001, all receivables of the Stations, together with an aging thereof; (g) the names and current annual salary rates and commission schedules of all persons (including independent commission agents) employed or engaged by any of Sellers in connection with any of the Stations, and showing separately for each such person the amounts paid or payable as salary, bonus payments, commissions and direct and indirect compensation for the period from February 1, 2001 through September 30, 2001; and (h) all fire, theft, casualty, liability and other insurance policies insuring any of Sellers in connection with any of the Stations, specifying with respect to each such policy the name of the insurer, the risk insured against, the limits of coverage, the deductible amount (if any), the premium rate and the date through which coverage will continue by virtue of premiums already paid. -22- True and complete copies of all contracts, agreements, plans, arrangements, commitments and documents currently in effect and to be assumed by Buyer pursuant to this Section 5.8 or to be performed by Buyer pursuant to Section 1.5 (to the extent in writing or if not in writing, an accurate summary thereof), together with any and all current amendments thereto, have been delivered to Buyer. Schedule 5.8 may be supplemented prior to Closing to ------------ reflect additions or deletions necessitated by actions taken in compliance with Section 7.1 herein. Except as set forth in Schedule 5.8(B) of the Disclosure Schedule, all --------------- of the contracts, agreements and commitments required to be listed pursuant to this Section 5.8 (other than those which have been fully performed) are in full force and effect, do not require the consent or approval of any party to the assignment thereof and will be unaffected by the sale or other transfer of the Purchased Assets to Buyer. To the knowledge of the Sellers, there is not under any contract, agreement or commitment required to be listed pursuant to this Section 5.8, any existing material default or event which, after notice or lapse of time, or both, would constitute a material default or result in a right to accelerate or loss of material rights. 5.9 Insurance. The properties and assets of Sellers, which are of an --------- insurable character and are used or useful in the Business, are insured as set forth in Schedule 5.8 of the Disclosure Schedule against loss or damage by fire --------------------------------------- or other risks, and Sellers maintain liability insurance, to the extent and in the manner and covering such risks as set forth in Schedule 5.8 of the Disclosure Schedule. The coverage under each such policy of insurance set forth in Schedule 5.8 of the Disclosure Schedule is in full force and effect, and no notice of cancellation or nonrenewal with respect to, or disallowance of any claim under, any such policy has been given to any of the Sellers. 5.10 Absence of Changes or Events. Except as set forth in Schedule ---------------------------- 5.10 of the Disclosure Schedule, since February 1, 2001 each of Sellers has conducted the business of each of the Stations only in the ordinary course in a manner consistent with past practices. Without limiting the foregoing, since such date (and with respect to (iv) below as of the date of this Agreement), neither of Sellers in connection with any of the Stations nor any of the Stations has, except as set forth on said Schedule 5.10: (i) incurred any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade obligations incurred in the ordinary course of business and consistent with its prior practice, and except for liabilities, in any case or in the aggregate, that neither have had nor reasonably could be expected to have a material adverse affect on the financial condition, assets, or operations of the Business or any of the Stations; (ii) sold, transferred, leased to others or otherwise disposed of any of its assets, except for supplies consumed and inoperative, obsolete equipment disposed of in the ordinary course of business; (iii) accepted any prepayment for the sale of air time or canceled or compromised any substantial debt or claim, or waived or released any right of substantial value or collected or compromised any accounts receivable other than in the ordinary course of business consistent with past practice; -23- (iv) received any notice from any advertiser that it, nor has knowledge that any advertiser, intends to cease doing business with any of the Stations, which, in any case or in the aggregate, has had, or could reasonably be expected to have, a material adverse effect on the financial condition, assets, or operations of the Business or any of the Stations; (v) made any change or changes (in excess of 5% per annum) in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, conditionally or otherwise, and whether as bonus, extra compensation, pension or severance or vacation pay or otherwise, to any director, officer, employee, salesman, representative or agent, except for such changes that are expressly set forth in employment contracts or agreements that have been disclosed and provided to Buyer pursuant to Section 5.8; (vi) entered into any transaction, contract or commitment other than in the ordinary course of business on customary terms and conditions, or paid or agreed to pay any brokerage, finder's fee, or other compensation in connection with, or incurred any severance pay obligations by reason of, this Agreement or the transactions contemplated hereby; or (vii) entered into any agreement or made any commitment to take any of the types of actions described in any of subsections (i), (ii), (iii), (v) or (vi) above. 5.11 Intangibles. Except as set forth in Schedule 5.11 of the ----------- ------------- Disclosure Schedule, and except in regard of the Site (to which Sellers make no representation), Sellers own or possess all authorizations necessary from the FCC to use the call letters "WRNO-FM" and "KMEZ(FM)", together with all copyrights, trademarks, trade names, logos, slogans, jingles, service marks and other proprietary rights and Intangibles used in the operation of any of the Stations. None of the Sellers has any knowledge of any infringement or unlawful, unauthorized or conflicting use of any of the foregoing, or of the use of any call letters, slogan or logo by any broadcast station in any of the areas served by any of the Stations which may be confusingly similar to any of the call letters, slogans and logos currently used by any of the Stations. To the Sellers' knowledge, none of Sellers or the Stations is infringing upon or otherwise acting adversely to any copyright, trademark, trademark right, service mark, service mark right, trade name, service name, slogan, call letter, logo, jingle, license or any other proprietary right owned or used by any other person or entity. 5.12 Environmental Matters. --------------------- (a) Except as set forth in Schedule 5.12 of the Disclosure ------------- Schedule, neither of Sellers, nor, to the knowledge of the Sellers, any prior owner, tenant or occupant of any part of any of the Real Properties, has at present or at any time stored, treated, released, disposed of or discharged any Hazardous Substance (as hereinafter defined) on, about, from or affecting any of the Real Properties in any material amounts and to the knowledge of the Sellers, no Seller has any liability which is based upon or related to any environmental condition under or about any of the Real Properties, and, to the knowledge of the Sellers, there is no reasonable basis for any such liability arising; and, to the knowledge of the Sellers, none of the Real Properties contains any asbestos or asbestos-containing materials or any underground storage -24- tank. The radio frequency emissions from each of the Stations' main antenna comply with the FCC's guidelines regarding RF radiation. (b) Except as set forth in Schedule 5.12 of the Disclosure ------------- Schedule, neither of Sellers, nor, to the knowledge of the Sellers, any prior or current owner, tenant or occupant of any part of any of the Real Properties, has received (i) any notification or advice from or given or been required to have given any report or notice to any governmental agency or authority or any other person or entity involving the use, management, handling, transport, treatment, generation, storage, spill, escape, seepage, leakage, spillage, emission, release, discharge, remediation or clean-up of any Hazardous Substance on or about any of the Real Properties or caused by any of Sellers or any affiliate thereof (a "Hazardous Discharge"), or (ii) received any complaint, order, citation or notice with regard to a Hazardous Substance or any other environmental, health or safety matter affecting any of the Real Properties or the Business or operations conducted thereat (an "Environmental Complaint"), whether under the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") or under any other federal, state or local law, ordinance, rule or regulation. 5.13 Employee Benefits. ----------------- (a) All Employee Benefit Plans in which any employee of any of the Stations participates are listed in Schedule 5.8 of the Disclosure Schedule ------------ and, to the best of Sellers' knowledge, each, in all material respects, conform to, and the administration thereof is in compliance with, all applicable laws and regulations. To the best of Sellers' knowledge, any Employee Benefit Plan intended to be qualified under Section 401(a) of the Code is so qualified, continues to be qualified, and complies with all applicable requirements of ERISA. Sellers know of no fact or set of circumstances that has adversely affected, or is reasonably likely to affect adversely, the qualification of such Employee Benefit Plan. Neither the operation or the administration of any Employee Benefit Plan, nor the sale of the Purchased Assets under this Agreement, will result in Buyer incurring or suffering any liability, nor will Buyer incur any liability for, with respect to or on account of any Employee Benefit Plan. None of Sellers participates in, maintains or contributes to or has any liability or obligation under or with respect to any multi-employer employee benefit plan as defined in Section 3(37) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (whether by reason of being a member of an affiliated group of companies, one of which maintains such a plan, or otherwise), nor has any of Sellers participated in, maintained, contributed to or incurred any liability or obligation with respect to any such plan. Each of Sellers has complied in all material respects with applicable reporting and disclosure requirements for each Employee Benefit Plan. (b) Schedule 5.13(b) of the Disclosure Schedule lists each present and former employee of any of Sellers or the Business who is currently claiming or is entitled to any health care related benefits mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), or any of the rules or regulations thereunder. (c) Neither Sellers nor either of the Stations has, since February 1, 2001, encountered any labor union organizing activity or had any actual or threatened employee strike, work stoppage, slowdown or lockout. -25- 5.14 [Intentionally Omitted] --------------------- 5.15 Taxes. All taxes of Sellers that could give rise to a Lien ----- (other than a Permitted Lien) on the Purchased Assets in the hands of the Buyer have been paid in full. 5.16 Records. The FCC Logs and Business Records of each of the ------- Stations are complete and correct in all material respects. 5.17 Receivables. Except as set forth in Schedule 5.17 of the ----------- ------------- Disclosure Schedule, all accounts receivable of any of Sellers in respect of any of the Stations have arisen only from bona fide transactions with unrelated third parties in the ordinary course of business. 5.18 Disclosure. No representation or warranty by any of the Sellers ---------- contained in this Agreement nor any written statement or certificate furnished or to be furnished by or on behalf of any of the Sellers to Buyers or any of their representatives in connection with this Agreement contains or will contain any untrue statement of a material fact. ARTICLE 6 Representations and Warranties of Buyer --------------------------------------- Buyer represents and warrants to Seller that: 6.1 Organization and Standing. Each of Buyer and License Co. is a ------------------------- limited liability company validly existing and in good standing under the laws of the State of Delaware. On the Closing Date, Buyer will be qualified to do business in Louisiana as a foreign limited liability company. 6.2 Authority of Buyers. Each of the Buyers have all requisite ------------------- limited company power and limited liability company authority to execute, deliver and perform this Agreement and each other agreement, document and instrument to be executed, delivered or performed by such of the Buyers in connection with this Agreement (the "Buyer Documents") and to carry out the transactions contemplated hereby and thereby. This Agreement constitutes, and, when executed and delivered at the Closing, each other Buyer Document will constitute, the legal, valid and binding obligation of Buyers. All limited liability company proceedings and limited liability company action required to be taken by Buyers relating to the execution, delivery and performance of this Agreement and the Buyer Documents and the consummation of the transactions contemplated hereby and thereby shall have been duly taken by the Closing. 6.3 Litigation. Except for administrative rule making or other ---------- proceedings of general applicability to the broadcast industry and except for the Assignment Application contemplated by this Agreement and matters pertaining thereto, and except for any matter or item covered by Article 5 hereof: there is no action, suit or proceeding pending, or to the knowledge of Buyers threatened, against Buyers, which, in any case or in the aggregate, materially adversely affects the ability of Buyers to consummate the transactions contemplated hereby. 6.4 No Violation. Except for the filing of the Assignment ------------ Application and the granting of the Initial Order and the Final Order, and except for the consent of Buyer's lenders -26- which will be obtained in connection with the Closing and for any item or matter covered by Article 5 hereof: (a) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, will not (i) conflict with or violate any provision of the Certificate of Formation or Limited Liability Company Agreement of either of Buyers, (ii) with or without the giving of notice or the passage of time, or both, result in a breach of, or violate, or be in conflict with, or constitute a default under, or permit the termination of, or cause or permit acceleration under, any material contract to which Buyer is a party or (iii) violate any law, rule or regulation or any order, judgment, decree or award of any court, governmental authority or arbitrator to or by which Buyer is subject or bound. (b) No consent, approval or authorization of, or declaration, filing or registration with, or notice to, any governmental or regulatory authority or any other third party is required to be obtained or made by Buyer in connection with the execution, delivery and performance of this Agreement or the Buyer Documents or the consummation of the transactions contemplated hereby and thereby. 6.5 Qualification. There are no facts regarding either of Buyers -------------- that would, under existing law and the existing rules, regulations, policies and procedures of the FCC disqualify License Co. as an assignee of the Commission Authorizations or as the owner and operator of the Stations. Notwithstanding the foregoing, it is acknowledged and agreed by the parties hereto that Buyer is not making any representation or warranty with respect to (i) any future amendment of Section 73.3555 of the Commission's Rules and Regulations or (ii) any existing or future rule, policy or action of the Commission relating to market shares of revenue or its related practice of "flagging" applications. There is no action, suit, notice of forfeiture or proceeding pending or to Buyer's knowledge threatened against Buyer or License Co. which would be reasonably likely to materially adversely impair the qualifications of License Co. to become a licensee of the Stations. ARTICLE 7 Certain Covenants ----------------- 7.1 Conduct of Business. During the period from the date of this ------------------- Agreement to and including the Closing Date, Sellers shall cause the operations of the Stations and the Business (other than those operations conducted by Buyer pursuant to the terms of the TBA) to be operated and conducted in the ordinary and usual course of business and consistent, in all material respects, with past practices. Without limiting the foregoing, prior to the Closing, Sellers, without the prior written consent of Buyer, shall not and shall not permit any of the Stations to: (a) by any act or omission surrender, modify adversely, forfeit, or fail to renew under regular terms any of the Authorizations, or give the FCC grounds to institute any proceeding for the revocation, suspension or modification of any of the Commission Authorizations, or fail to prosecute with due diligence any pending application with respect to any of the Commission Authorizations; -27- (b) dissolve or liquidate or sell, transfer, lease or otherwise dispose of any Purchased Assets, other than supplies consumed, or inoperative or obsolete property disposed of and replaced, in the ordinary and customary course of business, or obligate itself to do so; (c) amend, modify, change, alter, terminate, rescind or waive any rights or benefits under any contract, agreement or commitment required to be listed, or enter into any contract, agreement or commitment which, if in existence as of the date of this Agreement would have been required to be listed, under Schedule 5.8 of the Disclosure Schedule; ------------ (d) fail to maintain the Purchased Assets and the Real Properties in their current repair and condition, reasonable and ordinary wear and tear excepted; or cancel or fail to renew any of the current insurance policies or any of the coverage thereunder maintained for the protection of any of the Stations or the Purchased Assets; and (e) except as expressly contemplated by the TBA, perform, take any action or incur or permit to exist any of the acts, transactions, events or occurrences of the type described in any of clauses (i), (ii), (iii), (v), (vi) or (vii) of Section 5.10 hereof which would have been inconsistent with the representations and warranties set forth in Section 5.10 hereof had the same occurred after the Balance Sheet Date and prior to the date hereof. 7.2 Operations. During the period from the date of this Agreement to ---------- the Closing Date, Sellers shall have sole responsibility for the Stations and their operations (other than those operations conducted by Buyer pursuant to the terms of the TBA), and during such period, Sellers shall: (a) Operate the Stations (other than those operations conducted by Buyer pursuant to the terms of the TBA) in a manner consistent with the normal and prudent operation of commercial broadcast radio station of similar size and format and in accordance with the rules and regulations of the Commission and Authorizations and the TBA, and file all ownership reports, employment reports and other documents required to be filed during such period. (b) Deliver to Buyer within fourteen (14) days after the receipt thereof copies of any Commission inquiries reasonably expected to lead to a forfeiture or loss of license. 7.3 Changes in Information. During the period from the date of this ---------------------- Agreement to the Closing Date, Sellers shall give Buyer prompt written notice of any material change in, or any of the information contained in, the representations and warranties made in or pursuant to this Agreement or of any event or circumstance which, if it had occurred on or prior to the date hereof, would cause any of such representations or warranties not to be true and correct in any material respect. 7.4 Going Off the Air. If any of the Stations goes off the air for ----------------- any length of time for any engineering reason, act of God, or any other reason, Sellers shall immediately notify Buyer and shall take all reasonable steps to begin broadcasting as soon as possible. If such Station is unable to begin and to continue broadcasting with signal coverage and strength that -28- reasonably approximates its current signal coverage and strength within one hundred twenty (120) hours, Buyer may, at its option, terminate this Agreement without incurring any liability to any of the Sellers, provided that to be effective such notice from Buyer to terminate this Agreement must be delivered to Sellers within ten (10) business days after Buyer shall receive written notice from Sellers that normal operations of such Station shall have resumed. 7.5 Restrictions on Buyers. Except as provided in the TBA, nothing ---------------------- contained in this Agreement shall give Buyers any right to control the programming or operations of the Stations prior to the Closing Date and Sellers shall have complete control of the programming and operation of the Stations between the date hereof and the Closing Date and shall operate the Stations in conformity with the public interest, convenience and necessity and with all other applicable requirements of law. 7.6 Access to Information. During the period from the date of this --------------------- Agreement to the Closing Date, Buyer and its accountants, counsel and other representatives, shall be given reasonable and continuing access during normal business hours and on reasonable prior notice to all of the facilities, properties, books and records of the Stations, and they shall be furnished with such documents and information with respect to the affairs of the Stations as from time to time may reasonably be requested, and, in furtherance thereof, Buyer may retain an engineering firm of its own choosing at its own expense to conduct engineering due diligence into the adequacy, operation and condition of the Stations, and the transmission, receiving, broadcast, studio and production machinery, equipment, towers and facilities of and/or relating to the Stations, and their compliance with the standards of applicable law, provided that neither Buyers nor their agents do not interfere in any material respect with Sellers' operation of the Stations, provided that nothing herein shall restrict the access to be afforded to Buyer pursuant to the TBA. 7.7 Preservation of Business. Subject to the provisions of the TBA, ------------------------ during the period from the date of this Agreement to the Closing Date, Sellers shall use their reasonable commercial efforts to preserve intact the goodwill of the Stations and the Business, and the relationships of Sellers and the Stations with advertisers, customers, suppliers, employees, contracting parties, governmental authorities and others having business relations with any of Sellers or the Stations. 7.8 Brokerage or Finder's Fee. Buyer represents and warrants to ------------------------- Sellers, and Sellers represent and warrant to Buyer, that no person or entity, except as set forth below, is entitled to any brokerage commissions or finder's fees in connection with the transactions contemplated by this Agreement as a result of any action taken by the representing party or any of the affiliates, officers, directors or employees thereof. Except as expressly set forth below, Sellers shall be solely and exclusively responsible for all commissions, finders fees or other compensation claimed by any person or entity claiming to have dealt with or for Sellers, and Buyer shall be solely and exclusively responsible for all commissions, finder's fees or other compensation claimed by any person or entity claiming to have dealt with or for Buyer. If the Closing occurs, Buyer shall be responsible for payment of a fee in the amount of $400,000 to Michael J. Bergner of Bergner & Co. 7.9 Sales and Other Taxes. Sellers and Buyer shall each pay 50% of --------------------- all sales taxes, transfer taxes and intangibles taxes and similar government charges, filing fees and -29- recording and registration fees applicable to the transactions contemplated by this Agreement, including, without limitation, all taxes and similar charges, if any, payable upon the transfer of title to any Purchased Assets. Taxes, governmental charges or fees incurred upon the granting or recording of mortgages or deeds of trust by Buyer to Buyer's lenders shall be the responsibility of Buyer. Buyer and Beasley will cooperate to prepare and file with the proper public officials, as and to the extent necessary, all appropriate sales tax exemption certificates or similar instruments as may be necessary to avoid the imposition of sales, transfer and similar taxes on the transfer of Purchased Assets pursuant hereto. The provisions of this Section 7.9 shall not apply to filing and grant fees associated with the Assignment Application. The payment of such fees shall be governed by Section 3.2 hereof. 7.10 No Shop. Each of the Sellers agrees that from after the date ------- hereof and until the earlier of the termination of this Agreement in accordance with the terms hereof or twelve (12) months after the date hereof, none of the Sellers will sell, transfer or otherwise dispose of any of the Stations or any assets (except for dispositions of assets in the ordinary course of business as expressly permitted elsewhere in this Agreement) of any of Sellers to be included in the Purchased Assets (or any rights in any such stock or assets), and the Sellers will not enter into or pursue any discussions, or enter into any agreements (oral or written), with respect to, the sale or purchase of any of the Stations, or any option or warrant with respect to such sale, lease or other disposition of all or any portion of any of the Purchased Assets. The provisions of this Section 7.10 shall not be deemed to limit or negate any other obligations of the Sellers under this Agreement. 7.11 Bulk Transfer Laws. The parties do not believe that any bulk ------------------ transfer or fraudulent conveyance statute applies to the transactions contemplated by this Agreement. Sellers agree to indemnify and hold Buyers harmless against any claim by any creditor of any of Sellers or any claimant against either or both of Buyers as a result of a failure to comply with any such statute. 7.12 Environmental Notices. In the event that, on or prior to the --------------------- Closing, any of the Sellers receives any notice or advice from any governmental agency or authority or any other source with respect to a Hazardous Discharge or presence of a Hazardous Substance, they shall immediately notify Buyer and furnish to Buyer a copy of all such notices, correspondence and other documentation. Beasley shall promptly conduct all investigations, studies, sampling, testing and remediation which may be required in connection with any such notice or advice under any applicable federal, state and local laws, ordinances, rules and regulations. 7.13 Limited Audit Financial Statements. Sellers shall use ---------------------------------- reasonable commercial efforts to cooperate with the reasonable requests of Buyer in connection with the preparation after the date hereof of financial statements ("Limited Audited Financial Statements") for the Stations, for such period(s) as Buyer shall request, together with the report thereon (unqualified in any respect) consistent with said Limited Audit Procedures, of certified public accountants selected by Buyer (the "Auditors"), which report shall be addressed directly to Buyer. The fees, costs and expenses of such Auditors for such limited audit of such Limited Audited Financial Statements shall be borne by Buyer and Buyer shall reimburse Sellers for any reasonable out-of-pocket costs incurred by Sellers in cooperating with respect to such Limited -30- Audited Financial Statements. Buyer shall not cause any material disruption to the Sellers' operations in its preparation of Limited Audited Financial Statements. 7.14 Public Announcements. The parties will coordinate and consult -------------------- with one another and obtain the prior approval of the other party, which shall not be unreasonably withheld, before making any press release or other public announcement concerning the transactions contemplated under this Agreement; provided, however, that a party may, without the prior written consent of the - -------- ------- other party, issue such press release or make such public statement as may be required by any law, rule, regulation, ordinance, order, judgment or decree or any listing agreement with a national securities exchange to which it or any of its affiliates is a party if it has used all reasonable efforts to consult with the other party and to obtain such party's consent but has been unable to do so in a timely manner. Nothing in this Section shall prevent either party from disclosing information to its accountants, attorneys, lenders, investors, or other advisors ("Representatives"), who shall be advised of the confidential nature of such information and such party so disclosing such information shall be responsible for any unauthorized disclosure by any of its Representatives. 7.15 Nonsolicitation. For a period of one (1) year from the Closing --------------- Date hereof, no Seller shall or shall permit any person or entity directly or indirectly (alone or together with others) controlling, controlled by, affiliated with or related to, any of the Sellers to, directly or indirectly (including through ownership, management, operation or control of any other person or entity, or participation in the ownership, management, operation or control of any other person or entity, or by being connected with or having any interest in, as a stockholder, agent, consultant, partner or otherwise, any other person or entity) without the express prior written consent of Buyer, directly or indirectly employ or retain or attempt to employ or retain or knowingly arrange or solicit to have any other person or entity employ or retain, whether as an employee or consultant, any person who becomes a Transferred Employee or who is in the employ of Buyer or any of Buyer's affiliates at the Stations at any time while the License is in effect other than those employees who have resigned at least 30 days prior to any such employment or solicitation by any of the Sellers. ARTICLE 8 Termination ----------- 8.1 Termination. This Agreement may be terminated at any time prior ----------- to Closing as follows: (a) by mutual written consent of Buyer and Beasley; (b) by written notice from Buyer, (i) if none of Buyers is then in material breach of this Agreement, (ii) if any of the Sellers has continued in breach of this Agreement for thirty (30) days after written notice of such breach from Buyer is received by any of the Sellers; such breach is not cured by the last day of such 30-day period (the "Cure Period") (which date shall be the new Closing Date if that date occurs after the date that would be the Closing Date pursuant to Section 4.1); provided, however, that if such breach cannot be reasonably cured within such period but can be cured before the Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent -31- efforts to cure continue, but not beyond the Closing Date, and (iii) such continuing breach shall have, or could reasonably be expected to have, a Material Adverse Effect; (c) by written notice from Beasley, if (i) none of the Sellers is then in material breach of this Agreement, (ii) any of the Buyers has continued in breach of this Agreement for thirty (30) days after written notice of such breach from Beasley is received by any of the Buyers, and such breach is not cured by the end of the Cure Period; provided, however, that if such breach cannot be reasonably cured within such period but can be cured before the Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date, provided further that, in the event of a default by Buyer in payment of the Purchase Price hereunder, in no event will the Cure Period extend for more than 15 days and (iii) such continuing breach shall have, or could reasonably be expected to have, a material adverse effect on Buyer's ability to consummate the transactions contemplated hereby; (d) by written notice by Buyer to Beasley, or by Beasley to Buyer, if the FCC denies the Assignment Application; (e) as provided in Section 3.4; (f) as provided in Section 10.1; (g) by written notice of Beasley to Buyer if the Closing shall not have been consummated on or before the date twelve months after the date of this Agreement provided that none of the Sellers are then in breach or default; or (h) by written notice of Buyer to Beasley if the Closing shall not have been consummated on or before the date twelve months after the date of this Agreement provided that none of the Buyers are then in breach or default; 8.2 Effect of Termination. --------------------- Upon termination of this Agreement, each party shall thereafter remain liable for breach of this Agreement prior to such termination, subject, however, to Section 8.4 hereof. 8.3 Specific Performance. The Sellers agree that the Purchased -------------------- Assets include unique property that cannot be readily obtained on the open market and that Buyers will be irreparably injured if this Agreement, including Section 7.15, is not specifically enforced. Therefore, Buyers shall have the right specifically to enforce the performance of the Sellers under this Agreement without the necessity of posting any bond or other security, and the Sellers hereby waive the defense in any such suit that Buyers have an adequate remedy at law and agree not to interpose any opposition, legal or otherwise, as to the propriety of specific performance as a remedy. In addition, if any dispute arises concerning action in violation of any provision of Section 7.15, the Sellers agree that Buyer may seek an injunction restraining such action pending determination of such controversy and that no bond or other security shall be required in connection therewith. The remedy of specifically enforcing any or all of the provisions of this Agreement in accordance with this Section 8.3 shall not be exclusive of any other rights and -32- remedies which Buyers may otherwise have, all of which rights and remedies shall be cumulative. 8.4 Liquidated Damages. If any of the Sellers terminates this ------------------ Agreement due to Buyer's failure to consummate the Closing on the Closing Date in accordance with this Agreement or if this Agreement is otherwise terminated by any of the Sellers pursuant to Section 8.1(c), then Buyer shall pay Beasley as the sole and exclusive remedy of the Sellers (or any of them) and as liquidated damages an amount equal to Five Million U.S. Dollars ($5,000,000), as such amount may be reduced pursuant to Section 14(c) of the TBA, which payment is inclusive of (and not in addition to) the draw proceeds of the Letter of Credit to the extent remitted to any of the Sellers. It is understood and agreed that such liquidated damages amount represents Buyer's and Beasley's reasonable estimate of actual damages and does not constitute a penalty, and that none of Buyers shall have any other liability or obligation whatsoever arising out of or in connection with this Agreement or the TBA if the Closing shall not occur. ARTICLE 9 Indemnification --------------- 9.1 Obligation to Indemnify. (a) Following the Closing, Buyer ----------------------- hereby agrees to save, indemnify and hold harmless Sellers, and the directors, officers and managers of each of Sellers (collectively with Sellers, the "Seller Indemnitees"), from and against, and shall on demand reimburse the Seller Indemnitees for: (i) any loss, liability, damage, or deficiency suffered or incurred by any of the Seller Indemnitees by reason of or in connection with any of the Assumed Obligations, including any failure by Buyer to comply with the Obligations Undertaking; (ii) any and all loss, liability, damage or deficiency suffered or incurred by any of the Seller Indemnitees by reason of any misrepresentation or breach of warranty by Buyers or nonfulfillment of any covenant or agreement to be performed or complied with by Buyers under this Agreement or in any agreement, certificate, document or instrument executed by any of Buyers and delivered to Sellers pursuant to or in connection with this Agreement; (iii) any and all loss, liability, damage, or deficiency suffered or incurred by any of the Seller Indemnitees by reason of the operation by Buyer of the Stations after the Closing; (iv) any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, including reasonable attorneys' fees, incident to any of the foregoing, or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof, or in enforcing any of the obligations under this Section 9.1(a). (b) Following the Closing, the Sellers hereby jointly and severally, agree to save, indemnify and hold harmless Buyers, and the officers, managers and members of each of Buyers (collectively with Buyers, the "Buyer Indemnitees"), from, against and in respect of, and shall on demand reimburse the Buyer Indemnitees for: -33- (i) any and all loss, liability, damage or deficiency suffered or incurred by any of the Buyer Indemnitees by reason of any misrepresentation, breach of warranty or nonfulfillment of any covenant or agreement to be performed or complied with by any of the Sellers under this Agreement or any agreement, certificate, document or instrument executed by any of the Sellers and delivered to any of Buyers pursuant to or in connection with this Agreement; (ii) any loss, liability, damage or deficiency suffered or incurred by any of the Buyer Indemnitees by reason of or in connection with any of the Excluded Liabilities; (iii) any and all loss, liability or damage suffered or incurred by any of the Buyer Indemnitees in respect of or in connection with any and all debts, liabilities and obligations of, and any and all violation of laws, rules, regulations, codes or orders by any of Sellers, direct or indirect, fixed, contingent, legal, statutory, contractual or otherwise, which exist at or as of the Closing Date or which arise after the Closing Date but which are based upon or arise from any act, transaction, circumstance, sale or providing of air time, goods or services, state of facts or other condition which occurred or existed, or the content of any program, advertisement or transmission broadcasted or aired, on or before the TBA Commencement Date, whether or not then known, due or payable, except to the extent specifically assumed by Buyer pursuant to the Obligations Undertaking; (iv) any and all loss, liability or damage suffered or incurred by any of the Buyer Indemnitees in respect of or in connection with any Employee Benefit Plan; and (v) any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, including, without limitation, reasonable attorneys' fees, incident to any of the foregoing or incurred in investigating or attempting to avoid the same or to oppose the imposition thereof, or in enforcing any of the obligations under this Section 9.1(b). 9.2 Survival and Other Matters. (a) Each representation, warranty, -------------------------- indemnity, covenant and agreement of any of the parties hereto shall survive the Closing; provided, however, that no party shall be entitled to assert claims against any other for (x) misrepresentations or breach of warranty, covenant or agreement under or pursuant to this Agreement unless the party asserting such claim shall notify the other in writing of such claim within twelve (12) months after the Closing Date; provided, however, that the foregoing twelve (12) month limitation on survival shall not apply to claims that may be asserted by a party hereto as a result of or arising out of (x) the actions, claims or demands of any party other than the party to this Agreement asserting such claim, (y) any of the Excluded Liabilities or (z) any of the Assumed Obligations (claims under any of clauses (x), (y) or (z) being referred to as "Third Party Claims"), and such Third Party Claims may be asserted at any time within three (3) years after the Closing Date. Notwithstanding the foregoing, in no event shall the Sellers, on the one hand, or Buyers, on the other hand, have any liabilities under or pursuant to this Agreement (x) for any misrepresentations or breaches of warranties, covenants or agreements contained herein (other than in respect of Third Party Claims) until such liabilities shall exceed $75,000 in the aggregate, at which time such indemnifying party shall be fully liable for all such liabilities, -34- including the first $75,000 or (y) in excess of Three Million Five Hundred Thousand Dollars ($3,500,000). (b) Anything to the contrary in this Agreement notwithstanding, Buyer shall be solely and exclusively responsible and liable for all obligations of any of Buyers, and License Co. shall not have or incur any liability whatsoever, arising out of this Agreement or any of the transactions contemplated hereby. (c) The amount of any and all loss, liability, damage or deficiency suffered by an indemnified party and subject to indemnification under this Section 9 shall be reduced by the net amount recovered by the indemnified party (after deducting all attorneys' fees, expenses, and other out-of-pocket costs of recovery) from any insurer or other third party. 9.3 Indemnification Sole Remedy. After Closing, except with respect --------------------------- to breaches or violations of Section 7.15 hereof, the right to indemnification pursuant to this Article 9 shall be the sole and exclusive remedy of any party in connection with any breach by another party of its representations, warranties, or covenants, in lieu of any remedy to which any party may otherwise be entitled as a result of any such breach. 9.4 Provisions Regarding Indemnification. ------------------------------------ (a) In connection with claims for indemnification or to be held harmless hereunder arising out of actions, suits or proceedings brought against an indemnified party by third parties, the following shall be applicable: (i) The indemnified party shall give prompt written notice to the indemnifying parties of any action, suit or proceeding brought against the indemnified party by a third party, which gives rise to a claim by the indemnified party against the indemnifying parties based on the indemnity agreements contained in this Agreement and copies of all pleadings relating thereto; provided, however, that the failure to so notify the indemnifying party shall not relieve the indemnifying party from its obligation to indemnify the indemnified party in such action, suit or proceeding except to the extent the failure to notify has materially prejudiced the indemnifying party's ability to defend the claim or proceeding. (ii) In the event any action, suit or proceeding is brought against the indemnified party, with respect to which any of the indemnifying parties may have liability under the indemnity agreements contained herein, the indemnifying party shall have the right, subject to the provisions of this Section 9.3, to defend the action, suit or proceeding, with counsel reasonably acceptable to the indemnified party, or compromise, settle or otherwise dispose of the same, all at the indemnifying parties' sole cost and expense. The indemnified party shall have the right to employ its own counsel in any such case, and the fees and expenses of such counsel shall be at the indemnified party's own expense unless (A) the employment of such counsel and the payment of such fees and the expenses shall have been authorized in writing by the indemnifying parties, in their sole discretion, in connection with the defense of such action, suit or proceeding, or (B) such indemnified party shall have reasonably concluded that there may be one or more defenses available to it that are in conflict with one or more of those available to any of the indemnifying parties, or (C) the indemnifying parties fail within a -35- reasonable time to employ counsel to represent the indemnified party, in the latter of which events the indemnifying parties shall not have the right to defend such action, suit or proceeding on behalf of the indemnified party. The indemnified party shall be kept informed of such action, suit or proceeding at all stages thereof whether or not it is so represented. Each party shall make available to the other party and its attorneys and accountants all books and records of such party necessary or useful to defend or compromise such action, suit or proceeding. (b) Notwithstanding the foregoing provisions of this Section 9.3, the indemnifying parties shall have no right to defend any action, suit or proceeding or compromise, settle or otherwise dispose of the same if: (i) such action, suit or proceeding is brought by or before the FCC; (ii) such action, suit or proceeding seeks injunctive or other equitable relief against the indemnified party; or (iii) any of the indemnifying parties is then in default in any of the material obligations thereof under this Agreement. (c) If an indemnified party fails to comply with any of its obligations under this Section 9.4, the indemnifying parties may offset against the indemnification liability otherwise payable by the indemnifying parties to the indemnified party the amount of damages actually suffered by the indemnifying parties as a result of such default. (d) If an indemnifying party is otherwise entitled to control the settlement of an action, suit or proceeding then, subject to the requirements and limitations of this Section 9.3, the indemnifying party will be entitled to control such settlement only if (i) the terms of such settlement require no more than the payment of money (i.e., such settlement does not require any indemnified party to admit any wrong doing or take or refrain from taking any action), (ii) the full amount of such monetary settlement is paid by the indemnifying party, and (iii) the indemnifying party receives as part of such settlement a legally binding and enforceable unconditional satisfaction and/or release, in form and substance reasonably satisfactory to the indemnifying party, providing that the action, suit or proceeding and any claimed liability or obligation of the indemnifying party with respect thereto is being fully satisfied by reason of such settlement and that the indemnifying party is being released from any and all obligations or liabilities it may have with respect thereto. (e) No indemnifying party shall have any right to defend any such action, suit or proceeding if the indemnifying party does not unconditionally acknowledge in writing, within a reasonable period of time after any indemnified party gives notice of such action, suit or proceeding, that each of the indemnifying parties is obligated to indemnify the indemnified party in full with respect to such action, suit or proceeding as provided in Section 9.1 hereof. (f) Buyer expressly waives any and all rights of set off or deduction in respect of any and all amounts due under the Note, whether such rights arise out of or in -36- connection with this Agreement, the TBA, at common law, in equity or under other applicable law. ARTICLE 10 Risk of Loss ------------ 10.1 Risk of Loss. Except to the extent expressly provided otherwise ------------ in the TBA, or caused by actions taken or not taken (when such actions should have been taken) by any of the Buyers either pursuant to this Agreement or the TBA or in breach of this Agreement or the TBA, (a) the risk of loss, damage or destruction to the Purchased Assets and/or the Real Properties from fire or other casualty or cause, shall be borne by Sellers at all times up to the Closing; and (b) it shall be the responsibility of Beasley to repair or cause to be repaired and to restore the affected property to its condition prior to any such loss, damage or destruction. In the event of any such loss, damage or destruction, the proceeds of any claim for any loss payable under any insurance policy with respect thereto shall be used to repair, replace or restore any such property to its former condition subject to the conditions stated below. In the event that property reasonably required for the normal operation of any of the Stations is not repaired, replaced or restored prior to the Closing, unless such damage was caused in whole or in material part by Buyer, including pursuant to Buyer's use of the Stations under the TBA, Buyer, at its sole option, upon written notice to Sellers: (a) may elect to postpone Closing until such time as the property has been repaired, replaced or restored, or (b) may elect to consummate the Closing and accept the property in its then condition, in which event Seller shall assign to Buyer all proceeds of insurance theretofore, or to be, received, covering the property involved; and if Buyer shall extend the time for Closing pursuant to clause (a) above, and the repairs, replacements or restorations are not completed within sixty (60) days after the later of the date on which Final Order for the Stations has come into existence and effect or March 31, 2002, Buyer may terminate this Agreement by giving written notice thereof to Sellers. ARTICLE 11 Miscellaneous ------------- 11.1 Binding Agreement. All the terms and provisions of this ----------------- Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their successors and permitted assigns. 11.2 Assignment. This Agreement and all rights of Buyers shall be ---------- assignable by Buyers to one or more subsidiaries or affiliates of Buyer, prior to the Closing upon prior notice to Sellers, and may be collaterally assigned to institutional lenders to Buyer, and, after the Closing may be assigned by Buyers in any manner they deem appropriate, in each case without the consent of any of the Sellers. This Agreement and all rights of Sellers shall be assignable by Sellers to one or more of its affiliates prior to the Closing upon prior notice to Buyer so long as such assignment would not delay the Closing, and may be collaterally assigned to institutional lenders to Sellers. In addition, this Agreement and all rights of Buyers shall be assignable to a qualified intermediary or exchange accommodation titleholder as and to the extent necessary under Treasury Regulations 1.1031 and Revenue Procedure 2000-37 to permit Buyers to treat the acquisition of the Purchased Assets (or a portion thereof) hereunder as part of a like kind exchange of property as contemplated by Section 4.7 hereof. Prior to the Closing, this -37- Agreement shall not be assignable by any of the Sellers without the prior written consent of Buyer. No assignment shall relieve the assigning party of its obligations hereunder. 11.3 Law To Govern. This Agreement, the Obligations Undertaking and ------------- the Non-Competition Agreement shall be construed and enforced in accordance with the internal laws of the State of New York, without regard to principles of conflict of laws. 11.4 Notices. All notices shall be in writing and shall be deemed to ------- have been duly given when (i) delivered personally (which shall include delivery by FedEx or other nationally-recognized, reputable overnight courier service that issues a receipt or other confirmation of delivery), (ii) three (3) business days after the date when deposited in the mail if mailed via registered or certified mail, return receipt requested, postage prepaid to the other party hereto at the addresses set forth below, or (iii) when transmitted by facsimile, with a copy mailed on the same day in the manner provided in clause (ii), when receipt is confirmed by telephone: if to any of Sellers, to: Beasley Broadcasting of Nevada, LLC 3033 Riviera Drive, Suite 200 Naples, FL 34103 Attn: B. Caroline Beasley with a copy to: Joseph D. Sullivan Arthur S. Landerholm Latham & Watkins 555 11/th/ Street, NW, Suite 1000 Washington, DC 20004 if to any of Buyers, to: Wilks Broadcasting LLC 9330 Old Southwick Pass Alpharetta, GA 30022 Attn: Mr. Jeffrey Wilks with copies to: The Wicks Group of Companies, L.L.C. 405 Park Avenue New York, NY 10022 Attn: Mr. Craig B. Klosk -38- and Golenbock, Eiseman, Assor, Bell & Peskoe 437 Madison Avenue New York, NY 10022 Attn: Nathan E. Assor, Esq. or to such other addresses as any such party may designate in writing in accordance with this Section 11.4. 11.5 Fees and Expenses. Except as expressly set forth in this ----------------- Agreement, each of the parties shall pay its own fees and expenses with respect to the transactions contemplated hereby. 11.6 Entire Agreement. This Agreement sets forth the entire ---------------- understanding of the parties hereto in respect of the subject matter hereof and may not be modified or amended except by a written agreement specifically referring to this Agreement signed by all of the parties hereto. This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter. 11.7 Waivers. Any failure by any party to this Agreement to comply ------- with any of its obligations hereunder may be waived by any Sellers in the case of a default by any of Buyers and by Buyer in case of a default by any of the Sellers. No waiver shall be effective unless in writing and signed by the party granting such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. 11.8 Severability. Any provision of this Agreement which is rendered ------------ unenforceable by a court of competent jurisdiction shall be ineffective only to the extent of such prohibition or invalidity and shall not invalidate or otherwise render ineffective any or all of the remaining provisions of this Agreement. 11.9 No Third-Party Beneficiaries. Nothing herein, express or ---------------------------- implied, is intended or shall be construed to confer upon or give to any person, firm, corporation or legal entity, other than the parties hereto, any rights, remedies or other benefits under or by reason of this Agreement or any documents executed in connection with this Agreement. 11.10 Affiliate. For purposes of this Agreement, the term --------- "affiliate" when used with respect to any person or entity, shall mean any person or entity which directly or indirectly, alone or together with others, controls, is controlled by or is under common control with such person or entity. 11.11 Drafting. No party shall be deemed to have drafted this -------- Agreement but rather this Agreement is a collaborative effort of the undersigned parties and their attorneys. 11.12 Counterparts. This Agreement may be executed in any number of ------------ counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. -39- 11.13 Headings. The Section and paragraph headings contained herein -------- are for the purposes of convenience only and are not intended to define or limit the contents of said Sections and paragraphs. 11.14 Use of Terms. Whenever required by the context, any pronoun ------------ used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. The use of the words "include" or "including" in this Agreement shall be by way of example rather than by limitation. Reference to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof. Unless otherwise indicated, reference in this Agreement to a "Section" or Article" means a Section or Article, as applicable, of this Agreement. When used in this Agreement, words such as "herein", "hereinafter", "hereof", "hereto", and "hereunder" shall refer to this Agreement as a whole, unless the context clearly requires otherwise. The use of the words "or," "either" and "any" shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. -40- IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. BEASLEY BROADCASTING OF NEVADA, LLC By: /s/ Caroline Beasley -------------------------------- Name: Caroline Beasley Title: Manager KJUL LICENSE, LLC By: /s/ Caroline Beasley -------------------------------- Name: Caroline Beasley Title: Manager WILKS BROADCASTING LLC By: /s/ Jamie M. Weston -------------------------------- Name: Jamie M. Weston Title: Vice President WILKS LICENSE CO., LLC By: /s/ Jamie M. Weston -------------------------------- Name: Jamie M. Weston Title: Vice President Beasley FM Acquisition Corp., a Delaware corporation, ("BFMA") hereby guarantees the full and complete performance of the obligations of Sellers under Section 9.1(b) hereof. BFMA hereby waives any defense that it may have that any future amendment, modification, or waiver of this Agreement renders its guarantee in the immediately preceding sentence unenforceable under New York Law. BFMA hereby consents to the choice of law provision of Section 11.3 of this Agreement and acknowledges and agrees that notices may be sent to it pursuant to Section 11.4 of this Agreement at the address set forth for the Sellers. BEASLEY FM ACQUISITION CORP. By: /s/ Caroline Beasley ------------------------- Name: Caroline Beasley Title: VP/CFO/Sec/Treas -41- Exhibit 1.1 ----------- BILL OF SALE ------------ This Bill of Sale is delivered to Wilks Broadcasting LLC, a Delaware limited liability company ("Buyer") and Wilks License Co., LLC, a Delaware limited liability company ("License Co." and together with Buyer being hereinafter referred to as "Buyers"), pursuant to the terms of the Agreement of Purchase and Sale of Assets (the "Agreement"), dated as of October 31, 2001, among Beasley Broadcasting of Nevada, LLC, a North Carolina limited liability company ("Beasley"), KJUL License, LLC, a North Carolina limited liability company ("Licensing" and together with Beasley being hereinafter referred to as "Sellers"), Buyer and License Co. Capitalized terms used but not defined herein are used with the definitions given them in the Agreement. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: 1. Sellers do hereby sell, transfer, convey, assign, grant and deliver to Buyer all right, title, and interest in and to all business, properties, assets, machinery, equipment, furniture, fixtures, franchises, and goodwill and rights of Sellers as a going concern, of every nature, kind and description, tangible and intangible, owned or leased, wheresoever located and whether or not carried or reflected on the books or records of Seller and used, held for use or useful in connection with the operation of any of radio stations WRNO(FM), New Orleans, Louisiana and KMEZ(FM), La Belle Chasse, Louisiana (individually, a "Station" and collectively, the "Stations"), as more specifically defined as the "Purchased Assets" (as such term is defined in the Agreement), free and clear of any debts, liens, pledges, charges, mortgages, security interests, restrictions, easements, liabilities, claims, title defects, encumbrances, or rights of others of every kind and description, except for Permitted Liens (as such term is defined in the Agreement), excluding however from this Bill of Sale the "Excluded Assets"; it being understood that License Co. is acquiring all right, title and interest of any of Sellers in and to the Commission Authorizations and Buyer is acquiring all of the other Purchased Assets. To have and to hold all of the foregoing and unto Buyers, their respective successors and assigns, forever. 2. This Bill of Sale is made pursuant to the terms of the Agreement and is made is without representation or warranty except those representations and warranties contained in and provided by the Agreement. This Bill of Sale does not create any obligations, covenants, representations or warranties or alter or amend any of the obligations, covenants, representations, or warranties contained in the Agreement. In the event of any inconsistency between this Bill of Sale and the Agreement, the Agreement shall control. 3. This Instrument shall inure to the benefit of and is binding upon the respective successors and assigns of Buyers and Sellers. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] 2 IN WITNESS WHEREOF, Seller has caused this instrument to be duly executed as of the __ day of ________, 200_. BEASLEY BROADCASTING OF NEVADA, LLC By:___________________________ Name: Title: KJUL LICENSE, LLC By:___________________________ Name: Title: 3 Exhibit 2.2 ----------- ESCROW AGREEMENT ---------------- This Escrow Agreement, dated as of ______ __, 2001, by and among Beasley Broadcasting of Nevada, LLC, a North Carolina limited liability company ("Seller"), Wilks Broadcasting LLC, a Delaware limited liability company ------ ("Purchaser") and Michael J. Bergner, as escrow agent only ("Escrow Agent"). --------- ------------ W I T N E S S E T H: ------------------- WHEREAS, simultaneously with the execution and delivery of this Escrow Agreement, Seller, KJUL License, LLC, a North Carolina limited liability company, Purchaser and Wilks License Co., LLC, a Delaware limited liability company, are executing and delivering to each other the Agreement of Purchase and Sale of Assets, dated as of the date hereof (the "Purchase Agreement"), ------------------ relating to the sale and purchase of the Purchased Assets (capitalized terms used herein and not otherwise defined are used herein with the meanings ascribed thereto in the Purchase Agreement); and WHEREAS, pursuant to the provisions of the Purchase Agreement, Seller and Purchaser have requested Escrow Agent (i) to hold in escrow in accordance with the provisions of the Purchase Agreement and this Escrow Agreement, the Letter of Credit, the proceeds of any drawings thereof, and any funds deposited hereunder in lieu of or in exchange for the release of the Letter of Credit, and (ii) to act as escrow agent hereunder; and WHEREAS, Escrow Agent is willing to hold the same in escrow in accordance with the provisions of this Escrow Agreement and to act as escrow agent hereunder; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows: FIRST: Seller and Purchaser hereby appoint Escrow Agent to serve as ----- escrow agent hereunder, subject to and in accordance with the provisions of this Escrow Agreement, and Escrow Agent agrees to act as escrow agent hereunder, subject to and in accordance with the provisions of this Escrow Agreement. SECOND: A. Escrow Agent acknowledges receipt of a letter of credit ------ issued by The Bank of New York ("Issuer") naming the Escrow Agent as ------ beneficiary, and in the amount of THREE MILLION UNITED STATES DOLLARS (U.S. $3,000,000), a copy of which is attached hereto as Exhibit A (such letter of credit, and/or any and all replacement letters of credit therefor or renewals thereof deposited with Escrow Agent hereunder being herein called the "Letter of --------- Credit"), and Escrow Agent agrees to hold the Letter of Credit, and the proceeds - ------ of any drawings on same and/or any funds deposited ("Draw Proceeds") by or on behalf of Purchaser under this Escrow Agreement in lieu of or in substitution for the Letter of Credit (collectively hereinafter referred to as the "Escrow ------ Proceeds"), in escrow, subject to and in accordance with the provisions of this - -------- Escrow Agreement. B. From time to time after the date hereof, Purchaser may elect to substitute for the Letter of Credit one or more Letters of Credit in an aggregate amount equal to the amount of the Letter of Credit to be so substituted for, and with substantially the same terms and conditions, and issued by the Issuer or a United States bank reasonably acceptable to Seller (a "Substitute Letter of Credit") in which event, Escrow Agent shall, together with --------------------------- Purchaser, arrange for a procedure for the simultaneous exchange of the Letter of Credit to be substituted for and such Substitute Letter of Credit, and, upon such exchange, such new Letter(s) of Credit shall be deemed to constitute the Letter of Credit held hereunder, and such Letter of Credit substituted for shall cease to be held under this Escrow Agreement and may be returned by Purchaser to the issuing bank for cancellation. If Escrow Agent shall have received notice from the Issuer that the Letter of Credit is not being renewed and if Purchaser does not provide the Escrow Agent with a Substitute Letter of Credit at least five (5) business days prior to the expiration of the Letter of Credit, the Escrow Agent shall, prior to the expiration of the Letter of Credit, draw on it and hold the proceeds thereof as Draw Proceeds in accordance with the terms hereof. THIRD: A. All Draw Proceeds (and any interest or income earned ----- thereon) shall, at the direction of Purchaser from time to time, be deposited and/or invested in any of the following (the Draw Proceeds with interest or income earned thereon, being referred to herein collectively as the "Escrow ------ Funds"): (i) obligations issued or guaranteed as to interest and principal by - ----- the government of the United States or any agency or instrumentality thereof; or (ii) obligations (including certificates of deposit and bankers' acceptances) of U.S. banks which at the date of investment have capital, surplus, and undivided profits (as of the date of their most recently published annual financial statements) in excess of $50,000,000; (iii) commercial paper which at the date of investment is rated A-1 by Standard & Poor's Corporation or Prime-1 by Moody's Investment Service, Inc. or, if not rated, is of equivalent quality; (iv) repurchase agreements fully secured by obligations of any of the kinds specified in clauses (i) through (iii) above and issued by any government bond dealer reporting to, trading with and recognized as a primary dealer by the Federal Reserve Bank of New York or by any bank or trust company organized in the United States of America which has a combined capital, surplus and undivided profits of not less than $50,000,000; or (v) interests in any money market fund or trust, the investments of which are principally restricted to obligations of any of the kinds specified in clauses (i) through (iv) above. None of the Escrow Funds shall become subject to the debts, obligations, liens, charges, claims or encumbrances of Escrow Agent. All interest and income earned on the Draw Proceeds ("Earnings") shall at all times be deemed earned by and the sole property of Purchaser and shall be disbursed to Purchaser from time to time by the Escrow Agent promptly upon Purchaser's request therefor; provided that if Seller delivers a Seller's Notice of Demand and the Escrow Agent ultimately delivers all or a portion of the Draw Proceeds in response, then Seller shall be entitled to any Earnings that may have accrued on the Draw Proceeds, or the portion thereof delivered to Seller, as the case may be, from the date upon which Seller gave the Seller's Notice of Demand. 2 B. If Escrow Agent is instructed by Purchaser to disburse all or any portion of the Escrow Funds to Seller, or to draw upon the Letter of Credit and to cause the proceeds thereof to become Draw Proceeds held in escrow under this Escrow Agreement, Escrow Agent shall comply with such instructions. C. If Escrow Agent is instructed by Seller to disburse all or any portion of the Escrow Funds to Purchaser, Escrow Agent shall comply with such instructions. D. In all events, Escrow Agent shall comply with the joint written instructions of Seller and Purchaser. FOURTH: A. If Seller believes that it is entitled to the entire Draw ------ Proceeds by reason of any entitlement thereto under Section 2.2(b)(ii) of the Purchase Agreement, and if Seller shall give notice to Purchaser and Escrow Agent requesting that Escrow Agent disburse the Draw Proceeds (and to draw upon the Letter of Credit to effectuate the foregoing), to Seller by reason thereof (such notice being referred to herein as a "Seller's Notice of Demand"), then: ------------------------- Escrow Agent shall promptly give notice to Purchaser advising Purchaser that it has received such Seller's Notice of Demand (any such notice being referred to herein as a "Escrow Agent's Notice of Seller's Demand"), and shall enclose with ---------------------------------------- Escrow Agent's Notice of Seller's Demand a photocopy of Seller's Notice of Demand. Unless, within twenty (20) days after the giving of Escrow Agent's Notice of Seller's Demand, Escrow Agent shall receive a notice from Purchaser objecting to Seller's Notice of Demand (any such notice is referred to as a "Purchaser's Notice of Dispute"), Escrow Agent shall disburse to Seller the ----------------------------- Escrow Funds (after having drawn upon the Letter of Credit). If Escrow Agent receives any such Purchaser's Notice of Dispute within the twenty (20) day period aforesaid, Escrow Agent shall not disburse to Seller any of the Draw Proceeds, unless (i) thereafter instructed to do so by Purchaser or (ii) required to do so by an order or judgment of a court of competent jurisdiction (a "Court") after the rights of Purchaser and Seller shall have been fully ----- adjudicated (with all rights of appeal having expired or terminated) by such Court. B. If Purchaser believes that it is entitled to the Draw Proceeds by reason of any entitlement thereto pursuant to the Purchase Agreement, and if Purchaser shall give notice to Escrow Agent and Seller requesting that Escrow Agent disburse all the Escrow Funds to Purchaser by reason thereof (such notice being referred to herein as a "Purchaser's Notice of --------------------- Demand"), then: Escrow Agent shall promptly give notice to Seller advising - ------ Seller that it has received such Purchaser's Notice of Demand (any such notice being referred to herein as a "Escrow Agent's Notice of Purchaser's Demand"), ------------------------------------------- and shall enclose with Escrow Agent's Notice of Purchaser's Demand a photocopy of Purchaser's Notice of Demand. Unless, within twenty (20) days after the giving of Escrow Agent's Notice of Purchaser's Demand, Escrow Agent shall receive a notice from Seller objecting to Purchaser's Notice of Demand (any such notice being referred to as a "Seller's Notice of Dispute"), Escrow Agent shall -------------------------- disburse to Purchaser the Draw Proceeds. If Escrow Agent receives any such Seller's Notice of Dispute within the twenty (20) day period aforesaid, Escrow Agent shall not disburse any of the Draw Proceeds, unless (i) thereafter instructed to do so by Seller or (ii) required to do so by an order or judgment of a Court after the rights of Purchaser and Seller have been fully adjudicated (with all rights of appeal having expired or terminated) by such Court. 3 C. Nothing contained herein shall limit or affect the entitlement of Purchaser to the Earnings and to the disbursement thereof to it upon its request to Escrow Agent. FIFTH: Except as in this Escrow Agreement expressly provided, Escrow ----- Agent shall not disburse to Seller or to Purchaser, or draw upon, all or any portion of the Escrow Funds and/or the Letter of Credit. SIXTH: A. Escrow Agent, when acting in good faith, shall not be ----- responsible for the identity, authority or rights of any person, firm or corporation executing or delivering or purporting to execute or deliver this Escrow Agreement or any document pursuant hereto (other than by or on behalf of Escrow Agent), or for the sufficiency, genuineness or validity of any such document. B. Escrow Agent shall not be liable or responsible for any act it may do or omit in the absence of gross negligence or willful misconduct. C. In the event that (a) Escrow Agent receives a written Notice of Dispute from Seller or Purchaser as provided in Article FOURTH, or (b) any controversy shall arise between Seller and Purchaser with respect to this Agreement, the Letter of Credit, the Escrow Funds, or any part thereof, or the right of any party or other person to receive the same, or the parties shall fail to designate another escrow agent if the Escrow Agent should resign as provided herein, Escrow Agent shall (i) withhold delivery of the Escrow Funds and the Letter of Credit or any disputed portion thereof, as the case may be, as provided in said Article FOURTH, until instructed in writing to do so by Purchaser and Seller or when required to do so by an order or judgment of a Court after the rights of Purchaser and Seller shall have been fully adjudicated (with all rights of appeal having expired or terminated) by such Court, or (ii) institute a bill of interpleader in any Court to determine the rights of the parties hereto (the right of Escrow Agent to institute such bill of interpleader shall not, however, be deemed to modify the manner in which Escrow Agent is entitled to make disbursements of the Escrow Funds or the Letter of Credit as herein above set forth other than to tender the same into the registry of such Court). Should a bill of interpleader be instituted, or should Escrow Agent be threatened with litigation or become involved in litigation in any manner whatsoever on account of this Escrow Agreement or the Letter of Credit or the Escrow Funds, then as between themselves and the Escrow Agent, Purchaser, on the one hand, and Seller, on the other hand, hereby agree each to pay Escrow Agent fifty (50) percent of Escrow Agent's reasonable attorneys' fees and any and all other disbursements, expenses, costs and damages of Escrow Agent in connection with or resulting from such threatened or actual litigation. In case any property held by Escrow Agent hereunder shall be attached, garnished or levied upon under any order of a Court, or the delivery thereof shall be stayed or enjoined by any order of any said Court, or any other order, judgment or decree shall be made or entered by any such Court affecting such property, or any part thereof, or any act of Escrow Agent shall be so stayed or enjoined, Escrow Agent is hereby expressly authorized in its sole discretion to obey and comply with all writs, orders, judgments or decrees so entered or issued, and in case Escrow Agent obeys and complies with any such writ, order, judgment or decree it shall not be liable to any of the parties hereto, their successors, heirs or personal representatives or to any other person, firm or corporation, by reason of such compliance, 4 notwithstanding that such writ, order, judgment or decree be subsequently reversed, modified, annulled, set aside or vacated. D. Escrow Agent undertakes to perform only such duties as are expressly set forth herein and shall not have any liability or responsibility arising under the Purchase Agreement or any other agreement to which Escrow Agent is not a party, even though reference thereto may be made herein. E. Escrow Agent may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties. F. Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving notice in writing of such resignation specifying a date when such resignation shall take effect. Within thirty (30) days after receipt of such notice, Purchaser and Seller shall appoint a new escrow agent, which Seller and Purchaser shall each find acceptable. In default of such a joint designation of a successor escrow agent, Escrow Agent shall retain the Letter of Credit and Escrow Funds as custodian thereof until otherwise directed by Purchaser and Seller, jointly, or until it has released the Letter of Credit and Escrow Funds, as the case may be, in accordance with this Escrow Agreement, in each case, without liability or responsibility. If no successor escrow agent is appointed within such thirty (30) day period, Escrow Agent shall be entitled to petition a Court for such appointment of a successor escrow agent and/or to deposit the Letter of Credit and Escrow Funds with such Court. G. Purchaser, on the one hand, and Seller, on the other hand, shall share equally the fees payable to Escrow Agent with respect to its services under this Escrow Agreement, and hereby agree jointly and severally to indemnify Escrow Agent for, and to hold it harmless against, any claim, liability or expense incurred by Escrow Agent, without bad faith and willful misconduct on the part of Escrow Agent, arising out of or in connection with its entering into this Escrow Agreement and carrying out of its duties hereunder, including the costs and expenses of litigation, investigation and reasonable attorneys' fees incurred by Escrow Agent in defending itself against any claim of liability resulting therefrom. The provisions of this Section SIXTH (G) shall survive termination of the escrow arrangement contemplated hereby. SEVENTH: A. All notices, requests, demands, instructions or other ------- communications required to or desired to be given hereunder shall be in writing, may, at the election of any sending party, be given on behalf of such party by (and under signature of) such party's attorneys, and shall be deemed given only three (3) business days after the mailing thereof, postage prepaid, by certified or registered mail (return receipt requested), or when delivered by hand or the next day after delivery to a nationally recognized courier service to the addresses indicated below: (1) If addressed to Seller, to it at: Beasley Broadcasting of Nevada, LLC 5 3033 Riviera Drive, Suite 200 Naples, FL 34103 Attn: B. Caroline Beasley with a copy to: Joseph D. Sullivan Arthur S. Landerhom Latham & Watkins 555 11/th/ Street, NW, Suite 1000 Washington, DC 20004 (2) If addressed to Purchaser, to it at: Wilks Broadcasting LLC 9330 Old Southwick Pass Alpharetta, Georgia 30022 Attn: Mr. Jeffrey Wilks with copies to: Golenbock, Eiseman, Assor, Bell & Peskoe 437 Madison Avenue New York, New York 10022 Attn: Nathan E. Assor, Esq. and The Wicks Group of Companies, L.L.C. 405 Park Avenue New York, NY 10022 Attn: Mr. Craig B. Klosk (3) If addressed to Escrow Agent, to it at: Michael J. Bergner 4400 N. Federal Hwy., Suite 200 Boca Raton, FL 33431 or such other address or addresses as may be expressly designated by any party by notice given in accordance with the foregoing provisions and actually received by the party to whom addressed. B. This Escrow Agreement shall not be binding and effective until duly executed and unconditionally delivered by Seller, Purchaser and Escrow Agent. 6 C. This Escrow Agreement may be executed in any number of counterparts each of which shall be deemed an original and all of which, together, shall constitute one and the same Escrow Agreement. EIGHTH: The covenants, conditions and agreements contained in this ------ Escrow Agreement shall bind and inure to the benefit of Seller, Purchaser, and Escrow Agent and their respective successors and assigns. No party hereto may assign any of its rights or obligations under this Escrow Agreement except any party may assign its rights and obligations hereunder if and to the extent it assigns its rights and obligations under the Purchase Agreement in accordance therewith, and except that this Section shall not be construed to impair Escrow Agent's right to resign under this Escrow Agreement. NINTH: This Escrow Agreement constitutes the entire agreement of the ----- parties with respect to the subject matter hereof, may not be amended or modified except by written agreement signed by Purchaser, Seller and Escrow Agent, and shall be governed by and construed and enforced in accordance with the internal laws of the State of New York (without giving effect to contrary rules of conflict of laws). 7 IN WITNESS WHEREOF, this Escrow Agreement has been executed as of the date first above written: BEASLEY BROADCASTING OF NEVADA, LLC By: ____________________________________ Name: Title: WILKS BROADCASTING LLC By: ____________________________________ Name: Title: MICHAEL J. BERGNER, as Escrow Agent only ____________________________________ 8 Exhibit A --------- 9 Exhibit 2.6 ----------- OBLIGATIONS UNDERTAKING ----------------------- OBLIGATIONS UNDERTAKING, dated as of ____________, 200_, by Wilks Broadcasting LLC, a Delaware limited liability company ("Purchaser"), in favor of Beasley Broadcasting of Nevada, LLC, a North Carolina limited liability company ("Seller"). W I T N E S S E T H: ------------------- WHEREAS, pursuant to an Agreement of Purchase and Sale of Assets, dated as of _____________, 2001, among Purchaser, Wilks License Co., LLC, a Delaware limited liability company, Seller, and KJUL License, LLC, a North Carolina limited liability company, (the "Agreement"; capitalized terms used but not defined herein are used with the definitions given them in the Agreement), Seller has concurrently herewith sold, assigned, transferred, conveyed and delivered the Assets to Purchaser; and WHEREAS, in partial consideration therefor, the Agreement requires Purchaser to execute and deliver to Seller this Obligations Undertaking; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt of which by Purchaser is hereby acknowledged, Purchaser hereby agrees as follows: 1. Purchaser hereby undertakes, assumes and agrees, subject to the limitations contained herein and in the Agreement, to perform, pay and discharge the Assumed Obligations relating to the Stations, but in each case only to the extent first accruing, and only with respect to the periods, after the Closing Date, including all contracts, agreements, leases, licenses or other understandings or arrangements listed on Schedule A hereto. 2. Nothing contained herein or in the Agreement shall require Purchaser to pay, perform or discharge any liabilities or obligations assumed hereby so long as Purchaser shall in good faith contest the amount or validity thereof. 3. Except for the Assumed Obligations, Buyer shall not and does not assume any liability or obligation of any of Sellers, fixed or contingent, disclosed or undisclosed, and assumes no liability for any claim, debt, default, duties, obligations or liabilities of any of Sellers of any kind or nature, whether known or unknown, contingent or fixed, all of which, to the extent that they exist from and after the Closing shall be retained and discharged by Sellers. 4. This Obligations Undertaking is made pursuant to the terms of the Agreement and is made without representation or warranty except those representations and warranties contained in and provided by the Agreement. This Obligations Undertaking does not create any additional obligations, covenants, representations or warranties or alter or amend any of the obligations, covenants, representations or warranties contained in the Agreement. In the event of any inconsistency between this Obligations Undertaking and the Agreement, the Agreement shall control. 5. No person or entity other than Seller shall have any rights under or by reason of, or be a third third-party beneficiary of, this Obligations Undertaking or the provisions contained herein. WILKS BROADCASTING LLC By:_____________________________________ Name: Title: 2 Schedule A ---------- [List of contracts to include those assumed pursuant to Section 2.6(a)(i) of the Purchase Agreement.] 3 Exhibit 4.2(c) -------------- LEASEHOLD ASSIGNMENT AGREEMENT ------------------------------ This Leasehold Assignment Agreement, dated as of the __day of _________, 200__, between Beasley Broadcasting of Nevada, LLC, a North Carolina limited liability company ("Assignor"), and Wilks Broadcasting LLC, a Delaware limited company ("Assignee"). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged: 1. Effective as of the date of the Closing (the "Effective Date") under that certain Agreement of Purchase and Sale of Assets, dated as of ________________, 2001, between Assignor and Assignee (the "Purchase Agreement"), Assignor does hereby assign, bargain, transfer, convey and set over unto Assignee, Assignor's entire interest in and under that certain [Lease Agreement], dated ___________ (the "Lease"), between _____________, as lessor, and _____, predecessor-in-interest to Assignor, as lessee, and covering certain premises and rights more fully described in the Lease, which description is hereby incorporated herein by reference, To have and to hold all of the foregoing and unto Assignee, its respective successors and assigns, forever. 2. Effective as of the Effective Date, Assignee assumes, and agrees to pay and discharge following said date, the unperformed and unfulfilled obligations of Assignor accruing under the Lease, but in all cases only to the extent that such obligations first accrue after said date. 3. Nothing contained herein shall be deemed to relieve Assignor of any of its obligations under the Lease with respect to any and all periods, occurrences and matters prior to or ending with, and/or otherwise accrued as of, the Effective Date. 4. This Leasehold Assignment Agreement is made pursuant to the terms of the Agreement and is made without representation or warranty except those representations and warranties contained in and provided by the Agreement. This Landlord Assignment Agreement does not create any additional obligations, covenants, representations or warranties or alter or amend any of the obligations, covenants, representations or warranties contained in the Agreement. In the event of any inconsistency between this Leasehold Assignment Agreement and the Agreement, the Agreement shall control. 5. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the date first above written. ASSIGNOR: BEASLEY BROADCASTING OF NEVADA, LLC By:___________________________ Name: Title: ASSIGNEE: WILKS BROADCASTING, LLC By:___________________________ Name: Title: The undersigned, being Lessor under the Lease, does hereby consent and agree to the assignment of the Lease as set forth in the foregoing Leasehold Assignment Agreement and acknowledges that, from and after the Effective Date, Assignee will become the lessee under the Lease. [LESSOR] By: Name: Title: [Note: Delivery of Landlord consent language is only a required closing delivery for those leases listed on Schedule 4.5(e).] Exhibit 4.5(f) -------------- OPINIONS OF COUNSEL FOR SELLER ---------- 1. Beasley is a limited liability company, and is, validly existing and in good standing under the laws of the State of North Carolina. Licensing is a limited liability company, and is validly existing and in good standing under the laws of the State of North Carolina. Each of the Sellers has the limited liability company power and authority to enter into each of the Documents (as such term is defined herein) to which it is a party and perform its obligations thereunder. 2. The execution, delivery and performance by each of the Sellers of each of the Documents to which it is a party have been duly authorized by all necessary limited liability company action of each of the Sellers. 3. Each of the Documents to which a Seller is a party constitutes a legally valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms. We express no opinion as to the enforceability of Section 7.15 of the Agreement or the remedies for enforcement thereof set forth in Section 8.3 of the Agreement. 4. The execution and delivery by each of the Sellers of the Documents to which it is a party, and the sale and assignment by the Sellers of the Purchased Assets and the Assumed Obligations on the date hereof do not: (i) violate the provisions of the Governing Documents [defined term to include Certificate of Formation and LLC Operating Agreement], (ii) result in the breach of or a default under any court or administrative orders, writs, judgments or decrees specifically directed to either of the Sellers and material to such Seller, (iii) violate any federal or New York statute, rule or regulation applicable to any of the Sellers. 5. Licensing holds all the authorizations, licenses and permits issued by the FCC listed on Schedule A hereto (the "FCC Licenses"). The FCC Licenses constitute all of the FCC licenses and authorizations that are necessary for Licensing to operate an FM radio broadcast station on channel 275 licensed to Belle Chasse, Louisiana and an FM radio broadcast station on channel 258 licensed to New Orleans, Louisiana in compliance with the technical and engineering specifications in the FCC Licenses and the applicable rules and policies of the FCC, provided that (a) we render no opinion as to whether actual construction or operations of such stations in conformity with the FCC Licenses is feasible as a practical matter, and (b) we render no opinion with respect to auxiliary authorizations issued under Part 74 of the FCC's rules or other ancillary authorizations, permits or registrations that do not authorize full service broadcast operations but may nevertheless be necessary for practical operation of a broadcast station. Each of the FCC Licenses is in full force and effect before giving effect to the assignment thereof to Purchaser. 6. The FCC has granted its consent for the assignment of the FCC Licenses from Licensing to License Co. pursuant to the Form 732 authorization attached as Schedule B hereto (the "FCC Consent"). No other consent of the FCC is required with regard to the FCC Licenses for the assignment of the FCC Licenses from Licensing to License Co. as described in the application filed for the FCC Consent The FCC gave public notice of the grant of the FCC Consent on [date]. The time within which any party in interest other than the FCC may seek administrative or judicial reconsideration or review of the FCC Consent has expired, and, to our knowledge based upon our review of the FCC Records, no petition for such reconsideration or review was timely filed with the FCC or with the appropriate court. The time within which the FCC may review the FCC Consent on its own motion has expired and, to our knowledge based upon our review of the FCC Records, the FCC has not undertaken such review. We advise you that notice must be given to the FCC upon consummation of an assignment of a broadcast license previously approved by the FCC. 7. Except for proceedings of general applicability to the radio industry and except as set forth in Schedule 5.7(b) of the Purchase Agreement, to our knowledge based solely on our examination of the FCC Records, there is no investigatory proceeding, petition or other legal or administrative proceeding pending before the FCC against any of the FCC Licenses that seeks, or is reasonably likely to result in, the revocation, non-renewal or material adverse modification of any of the FCC Licenses. [Note: the opinion is subject to customary assumptions, limitations, qualifications and exceptions and the following: "In rendering the opinions in paragraph 1, 2 and 4(i) as to (i) the valid existence and good standing of Sellers under the laws of the State of North Carolina, (ii) the due authorization of the execution, delivery and performance by each of the Sellers of each of the Documents to which it is a party, and (iii) the conformance with the Governing Documents of the execution and delivery by each of the Sellers of the Documents to which it is a party, and the sale and assignment by the Seller of the Purchased Assets and the Assumed Obligations, respectively, we have assumed, with your permission, that the Limited Liability Company Act of Delaware (the "LLCA") governs these matters. These matters are not governed by the LLCA, but are instead governed by the law of the State of North Carolina and we have not independently verified and we assume no responsibility for differences that may exist between the LLCA and the law of the State of North Carolina."] Schedule A ---------- WRNO-FM, New Orleans, Louisiana main station FM radio broadcasting license (Facility ID. 54890) KMEZ(FM), Belle Chasse, Louisiana main station FM radio broadcasting license (Facility ID. 12157) EX-10.1 4 dex101.txt 1ST AMENDMENT TO CREDIT AGREEMENT EXECUTIVE BEASLEY MEZZANINE HOLDINGS LLC FIRST AMENDMENT TO CREDIT AGREEMENT This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as of August 13, 2001 and entered into by and among Beasley Mezzanine Holdings LLC ("Borrower"), the financial institutions listed on the signature pages hereof ("Lenders"), the Credit Support Parties (as defined in the Section 4 below) and Bank of Montreal, Chicago Branch, as administrative agent for Lenders (in such capacity, "Administrative Agent"), and is made with reference to that certain Credit Agreement dated as of August 31, 2000, by and among Borrower, Lenders, the Agents named therein and Administrative Agent (the "Credit Agreement"). Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement. RECITALS WHEREAS, the Credit Support Parties and the Lenders desire to amend and modify the Credit Agreement 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 AND CERTAIN AGREEMENTS 1.1 Amendments to Section 1: Provisions Relating to Defined Terms -------------------------------------------------------------- A. Additional Definitions. Subsection 1.1 of the Credit Agreement is hereby amended by adding thereto the following additional definitions, which shall be inserted in proper alphabetical order: "First Amendment" means the First Amendment to this Agreement dated as of August 13, 2001. "First Amendment Effective Date" has the meaning set forth in the First Amendment. "Leverage Reduction Date" means the first date, after the First Amendment Effective Date, on which Borrower demonstrates a Consolidated Total Debt Ratio of 6.25:1.00 or less; provided that it is agreed that -------- Borrower may achieve such compliance through the utilization of the Marlins Addback, the repayment of Consolidated Total Debt with the proceeds of capital contributions, Permitted Equity Financings, or permitted Asset Sales and/or any other debt reduction transaction or increase to Consolidated Operating Cash Flow permitted by this Agreement. "Marlins Addback" shall mean, as of any date of determination, an amount (if positive) equal to the difference for the most recently concluded four (4) consecutive Fiscal Quarter period between (i) all amounts expensed by Borrower and its Subsidiaries with respect to any broadcast contracts or other arrangements with the Florida Marlins baseball team and related entities (excluding the Florida Panthers and the Miami Dolphins) minus (ii) all income amounts received by the Borrower and its ----- Subsidiaries with respect to such broadcast contracts and arrangements; provided that the Marlins Addback and all components thereof shall be -------- calculated consistent with past practice in accordance with GAAP and, in any event, shall not exceed $3,000,000 at any time; provided further that -------- ------- Marlins Addback shall be deemed to be zero (0) and shall be of no further force and effect on and after the Marlins Addback Termination Date. "Marlins Addback Period" means the period commencing on (i) the first date of any financial reporting period ending on or after June 30, 2001, that Borrower elects to include the Marlins Addback as provided in the definition of Consolidated Operating Cash Flow for such financial reporting period and ending on the date (the "Marlins Addback Termination Date") which is the earlier of (i) the date of delivery of any Compliance Certificate pursuant to this Agreement with respect to which Borrower elects not to include the Marlins Addback as provided in the definition of Consolidated Operating Cash Flow and (ii) September 30, 2002. "Marlins Addback Termination Date" has the meaning set forth in the definition of Marlins Addback Period. "Permitted Equity Financings" means the issuance of unsecured subordinated Indebtedness (including, without limitation, convertible debt) and/or preferred equity of Holdings (or a newly created wholly-owned Subsidiary of Holdings, which Subsidiary may hold capital stock of Borrower, any such newly created Subsidiary being referred to herein as "NewHoldco") in an aggregate combined principal amount not to exceed $75,000,000, the Net Securities Proceeds of which are contributed as common equity to Borrower and are applied by Borrower as required by subsection 2.4B(iii)(b) and the First Amendment to prepay Loans; provided that -------- Borrower and its Subsidiaries shall not have any obligations or liabilities under or in respect of any such Permitted Equity Financing and all such Permitted Equity Financing shall be issued pursuant to documentation containing rates, maturities, amortizations, covenants, remedies, subordination provisions and other material terms in form and substance reasonably satisfactory to Administrative Agent; provided further, that (i) -------- ------- in the event Holdings elects to create NewHoldco for the purpose of issuing all or any portion of such Permitted Equity Financings, NewHoldco shall be created pursuant to documentation in form and substance reasonably satisfactory to Administrative Agent and (ii) Holdings, NewHoldco, Borrower and the other Credit Parties shall enter into such amendments and modifications of this Agreement and the other Loan Documents as Administrative Agent shall reasonably request to reflect issuance of the Permitted Equity Financings, the existence of NewHoldco and preserve and maintain the rights and remedies of Administrative Agent and Lenders (including, without limitation, preserving and 2 maintaining the pledge of capital stock of Borrower pursuant to the Collateral Documents) in full force and effect as contemplated by this Agreement and the other Loan Documents prior to such issuance of Preferred Equity Securities or the creation of NewHoldco, as the case may be. B. Revised Definitions. Subsection 1.1 of the Credit Agreement is hereby further amended by revising the following definitions: (i) The definition of "Change of Control" is hereby amended by restating clause (i) thereof as follows: "(i) (a) Holdings ceasing for any reason to beneficially own and control (y) 100% of all equity interests of NewHoldco, to the extent NewHoldco is created and (z) (together with NewHoldco to the extent NewHoldco is created) 100% of the membership interests of Borrower or (b) any Credit Party ceasing for any reason (other than a transfer or an equity issuance permitted hereunder) to beneficially own and control at least 99.75% of the issued and outstanding shares of capital stock, partnership interests or other equity interests of its Subsidiaries;" (ii) The definition of "Consolidated Fixed Charges" is hereby amended by (a) deleting the parenthetical contained in clause (e) of such definition and (b) adding the following new clause (g) to the end thereof: "plus (g), without duplication, Restricted Junior Payments made pursuant to subsection 7.5" (iii) The definition of "Consolidated Operating Cash Flow" is hereby amended by: (a) restating clause (a)(i) in the first sentence thereof as follows: "(i) unusual, extraordinary or otherwise non-operating income, gains and losses, if any, for such period (other than for periods ending on or prior to June 30, 2001 to the extent previously included in the calculation of Consolidated Operating Cash Flow) and" (b) adding the following new clause (xi) to the first sentence thereof as follows: "(xi) expenses related to the format change of WPTP-FM that occurred in November 2000 in an aggregate amount not to exceed $1,545,547" (c) adding the following proviso to the end the first sentence thereof as follows: 3 "provided, however, that during the Marlins Addback Period -------- ------- Borrower shall be permitted at its election (such election to be evidenced by delivery of the first Compliance Certificate delivered hereunder utilizing such Marlins Addback) to use the Marlins Addback to increase (without duplication) the calculation of Consolidated Operating Cash Flow solely for purposes of calculating the Consolidated Total Debt Ratio for all purposes hereunder (but not for purposes of calculating compliance with any other financial covenant hereunder)" (iv) The definition of "Subordinated Indebtedness" is hereby restated as follows: "Subordinated Indebtedness" means, collectively, any obligation to pay principal, interest, premiums, penalty, fees, expenses, indemnities or any other charge under or in respect of any Indebtedness (including without limitation, convertible debt) or other obligations of Borrower or its Subsidiaries contractually subordinated in right of payment to the Obligations pursuant to documentation containing rates, maturities, amortizations, covenants, remedies, subordination provisions and other material terms in form and substance reasonably satisfactory to Requisite Lenders. 1.2 Amendments to Section 2: Amounts and Terms of Commitments and ------------------------------------------------------------- Loans ----- Interest on the Loans. Subsection 2.2A of the Credit Agreement is hereby amended by adding the following sentence to the end thereof as follows: "Anything to the contrary in this Agreement notwithstanding, (i) during the period from the First Amendment Effective Date until three Business Days after the date of delivery of the Compliance Certificate required hereunder for the Fiscal Quarter ended September 30, 2001, the Applicable Margin shall be the highest amount set forth above plus 0.50% ---- and (ii) without duplication of, or addition to, the increase set forth in the preceding clause (i), during any Marlins Addback Period each of the Applicable Margins set forth above shall be increased by 0.50%." 1.3 Amendments to Section 6: Borrower's Affirmative Covenants ---------------------------------------------------------- Clause (b) of subsection 6.1(i) of the Credit Agreement is hereby amended by adding the following clause after the parenthetical stating "(including combining cash flow information for each Station)": "setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year,". 4 1.4 Amendments to Section 7: Borrower's Negative Covenants ------------------------------------------------------- A. Indebtedness. (i) Subsection 7.1(vi) of the Credit Agreement is hereby amended by deleting the reference to "$100,000,000" set forth therein and substituting "$150,000,000" therefor. (ii) A new subsection 7.1(viii) is hereby added to subsection 7.1 as follows: "(viii) Holdings and NewHoldco may become and remain liable with respect to Permitted Equity Financings." B. Investments; Joint Ventures. Subsection 7.3(viii) of the Credit Agreement is hereby amended by adding the following proviso at the end of clause (b) thereof: "provided, that during the Marlins Addback Period, Borrower and -------- its Subsidiaries shall not be permitted to make any of the foregoing Investments in Cash and the aggregate amount of non-Cash Investments made during such Marlins Addback Period shall not exceed $5,000,000;" C. Restricted Junior Payments. (i) Subsection 7.5 of the Credit Agreement is hereby amended in its entirety as follows: "7.5 Restricted Junior Payments. -------------------------- The Credit Parties shall not, and shall not permit any of their respective Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Junior Payment; provided that (i) Borrower may make distributions to Holdings or NewHoldco for tax obligations incurred by Holdings or NewHoldco as a result of the capital structure of Holdings, NewHoldco and the Credit Parties or the operations or business of the Borrower and its Subsidiaries including the pass-through of income to Holdings or NewHoldco from the Credit Parties or as a result of the disposition by Holdings or NewHoldco of any interest in a Credit Party (including without limitation, capital gains taxes); (ii) as long as no Event of Default or Potential Event of Default has occurred and is continuing or would result therefrom: (a) as long as no Marlins Addback Period has occurred and is continuing or would result therefrom Borrower may make Cash distributions to Holdings or NewHoldco for the repurchase by Holdings pursuant to open market transactions in compliance with all applicable laws of publicly owned Equity Securities of Holdings' in an aggregate cumulative amount since the Closing Date not to exceed $25,000,000; (b) Borrower may make Cash advances (any such advance by Borrower or direct payment by Borrower or any of its Subsidiaries in lieu of making such advance, being a "Holdings Advance") to Holdings or NewHoldco in an amount sufficient to enable 5 Holdings to pay reasonable and customary fees, costs and expenses incurred by Holdings (and not payable to Affiliates of Holdings) in connection with the public issuance of Securities of Holdings (provided that each such -------- Holdings Advance is evidenced by a promissory note (which may consist of one master note that covers all Holding Advances from time to time) payable on demand by Borrower) and (c) Borrower may pay dividends to Holdings or NewHoldco to permit Holdings or NewHoldco to pay interest, dividends or other coupon in respect of Permitted Equity Financings in an aggregate amount not to exceed the corresponding amount of interest, dividends or other coupon then due and payable in accordance with the terms (without giving effect to any default, optional condition or other contingency) of such Permitted Equity Financings." D. Minimum Interest Coverage Ratio. (i) Subsection 7.6A of the Credit Agreement is hereby amended in its entirety as follows: "A. Minimum Interest Coverage Ratio. Borrower shall not permit the ratio of (i) Consolidated Operating Cash Flow to (ii) Consolidated Cash Interest Expense for any four consecutive Fiscal Quarter period ending as of the last day of any Fiscal Quarter of Borrower during any of the periods set forth below to be less than the correlative ratio indicated: ----------------------------------------------------------------- Periods Minimum Interest Coverage Ratio ----------------------------------------------------------------- Closing Date - September 30, 2001 1.75:1.00 ----------------------------------------------------------------- October 1, 2001 - March 31, 2002 1.50:1.00 ----------------------------------------------------------------- April 1, 2002 - September 30, 2002 1.75:1.00 ----------------------------------------------------------------- October 1, 2002 and thereafter 2.00:1.00 ----------------------------------------------------------------- " E. Maximum Consolidated Total Debt Ratio. (i) Subsection 7.6C of the Credit Agreement is hereby amended by deleting the table set forth therein in its entirety and substituting the following therefor: " 6 ------------------------------------------------------------- Periods Maximum Consolidated Total Debt Ratio ------------------------------------------------------------- Closing Date - March 31, 2001 6.75:1.00 ------------------------------------------------------------- April 1, 2001 - June 30, 2001 6:50:1.00 ------------------------------------------------------------- July 1, 2001 - March 30, 2002 7.00:1.00 ------------------------------------------------------------- March 31, 2002 6.25:1.00 ------------------------------------------------------------- April 1, 2002- December 31, 2002 6.00:1.00 ------------------------------------------------------------- January 1, 2003 - December 31, 2003 5.50:1.00 ------------------------------------------------------------- January 1, 2004 - December 31, 2004 5.00:1.00 ------------------------------------------------------------- January 1, 2005 - December 31, 2005 4.50:1.00 ------------------------------------------------------------- January 1, 2006 and thereafter 4.00:1.00 ------------------------------------------------------------- ; provided, that anything in the table set forth above to the contrary notwithstanding, for the period commencing on the Leverage Reduction Date through March 31, 2002, the required maximum Consolidated Total Debt Ratio shall be 6.25:1.00 and thereafter shall be as set forth in the table above." F. Restrictions on Fundamental Changes; Asset Sales and Acquisitions. Subsection 7.7(iv) of the Credit Agreement is hereby amended by adding the following proviso to the end thereof: "; provided that in the event Borrower and its Subsidiaries use -------- the proceeds of any Loans to enable the consummation of any such Permitted Acquisition or LMA, in addition to the requirements set forth above, Borrower shall demonstrate to Administrative Agent's reasonable satisfaction, that the Consolidated Total Debt Ratio is less than 6.25:1.00 (or, if less, the then-applicable ratio set forth in Section 7.6C with respect to the end of the Fiscal Quarter in which such consummation occurs) both before and after giving effect to such transaction." 1.5 Modification Regarding Application of Net Proceeds. -------------------------------------------------- Anything in the Credit Agreement to the contrary notwithstanding, during any Marlins Addback Period, 100% of all Net Cash Proceeds of Asset Sales and 100% of all Net Securities Proceeds received by any Obligor shall be immediately applied to prepay Revolving Loans (but not reduce the Revolving Loan Commitments) and any excess after such application shall be applied to prepay the Term Loans to the full extent thereof; provided that Borrower may, at its -------- option, elect pursuant to its prepayment notice under the Credit Agreement, to apply all or a portion of any such required prepayment to the prepayment of the Term Loans prior to such application to the Revolving Loans. 7 Section 2. CONDITIONS TO EFFECTIVENESS Section 1 of this Amendment shall become effective only upon the satisfaction of all of the following conditions precedent (the date of satisfaction of such conditions being referred to herein as the "First Amendment Effective Date") on or before August 31, 2001: A. Financial Information. Administrative Agent shall have received (i) financial projections demonstrating the Borrower's compliance with all covenants through the Stated Maturity Date and (ii) consolidated unaudited balance sheet and income and cash flow statements for the Borrower and its Subsidiaries for the six month period ending on June 30, 2001, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, and (iii) a pro forma Compliance Certificate giving effect to this First Amendment, all of the foregoing to be in form and substance satisfactory to Administrative Agent. B. Amendment Fee. Administrative Agent shall have received, for the ratable benefit of Lenders executing a counterpart hereof on or before August 13, 2001 (the "Consenting Lenders"), an amendment fee equal to 0.30% of the sum as of such date of the aggregate Commitments of the Consenting Lenders; provided, however, that of such 0.30% amendment fee, an amount equal to 0.20% of - -------- ------- such Commitments of Consenting Lenders shall be due and payable on the First Amendment Effective Date, and the remaining 0.10% of such Commitments of Consenting Lenders shall be due and payable on November 30, 2001 if the Leverage Reduction Date shall not have occurred by such date (and the First Amendment Effective Date has occurred). All such fees (or any portion thereof) once paid shall be non-refundable. C. Fees and Expenses. Borrower shall have paid all other fees and expenses in connection with the Credit Agreement and this Amendment due and payable at such time including, without limitation, the fees and expenses previously billed and described in Section 5B below. Section 3. BORROWER'S REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Borrower represents and warrants to each Lender that the following statements are true, correct and complete: A. Corporate Power and Authority. Each Credit Support Party has all requisite corporate power and authority to enter into this Amendment and each Credit Support Party has all requisite corporate power and authority to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement as amended by this Amendment (the "Amended Agreement") to the extent it is a party thereto. B. Authorization of Agreements. The execution and delivery of this Amendment and the performance of the Credit Agreement as amended by this Amendment (as so amended, the "Amended Agreement") have been duly authorized by all necessary corporate action on the part of each Credit Support Party to the extent it is a party thereto. 8 C. No Conflict. The execution, delivery and performance by each Credit Support Party of this Amendment and the performance by Borrower of the Amended Agreement do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to any Credit Support Party, the Certificate or Articles of Incorporation or Bylaws or similar organizational and governing documents of any Credit Support Party or any order, judgment or decree of any court or other agency of government binding on any Credit Support Party, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of any Credit Support Party, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of any Credit Support Party (other than Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of stockholders or any approval or consent of any Person under any Contractual Obligation of any Credit Support Party. D. Governmental Consents. The execution, delivery and performance by each Credit Support Party of this Amendment and the performance by Borrower of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body except for disclosure filings with the Securities and Exchange Commission. E. Binding Obligation. This Amendment and the Amended Agreement have been duly executed and delivered by each Credit Support Party party thereto and are the legally valid and binding obligations of such Credit Support Party, enforceable against such Credit Support Party in accordance with their respective terms to the extent such Credit Support Party is a party thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability. F. Incorporation of Representations and Warranties From Credit Agreement. After giving effect to this Amendment, 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 First 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. G. Absence of Default. After giving effect to this Amendment, 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. ACKNOWLEDGMENT AND CONSENT Each of Holdings, Borrower and each other Credit Party (each individually a "Credit Support Party" and collectively, the "Credit Support Parties") hereby acknowledges and agrees that each Loan Document to which it is a party is in full force and 9 effect and shall not be limited or impaired in any manner by the effectiveness of this Amendment and the transactions contemplated hereby. Section 5. MISCELLANEOUS A. Reference to and Effect on the Credit Agreement and the Other Loan Documents. (i) On and after the First Amendment Effective Date, 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 Administrative Agent or any Lender under, the Credit Agreement or any of the other Loan Documents. (iv) Any conforming grammatical, numerical or other corrections required by the modifications to the Credit Agreement and other Loan Documents (including, without limitation, the Compliance Certificate) set forth in this First Amendment shall be deemed made. B. Fees and Expenses. Borrower acknowledges that all costs, fees and expenses as described in subsection 10.2 of the Credit Agreement incurred by Administrative Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Borrower. 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 10 together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Amendment (other than the provisions of Section 1 hereof, the effectiveness of which is governed by Section 2 hereof) shall become effective upon the execution of a counterpart hereof by Holdings, Borrower, each other Credit Party and Requisite Lenders, and receipt by Borrower and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof. [Remainder of page intentionally left blank] 11 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. BORROWER: BEASLEY MEZZANINE HOLDINGS LLC By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO S-1 HOLDINGS: BEASLEY BROADCAST GROUP, INC. By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO S-2 OTHER CREDIT PARTIES: BEASLEY FM ACQUISITION CORP., By: /s/ Caroline Beasley ---------------------------- Name: Caroline Beasley Title: CFO BEASLEY BROADCASTING OF EASTERN NORTH CAROLINA, INC., By: /s/ Caroline Beasley ---------------------------- Name: Caroline Beasley Title: CFO BEASLEY BROADCASTING OF EASTERN PENNSYLVANIA, INC., By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO BEASLEY BROADCASTING OF ARKANSAS, INC., By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO S-3 W&B MEDIA, INC., By: /s/ Caroline Beasley ---------------------------- Name: Caroline Beasley Title: CFO BEASLEY BROADCASTING OF SOUTHWEST FLORIDA, INC., By: /s/ Caroline Beasley ---------------------------- Name: Caroline Beasley Title: CFO BEASLEY BROADCASTING OF COASTAL CAROLINA, INC., By: /s/ Caroline Beasley ---------------------------- Name: Caroline Beasley Title: CFO BEASLEY-REED ACQUISITION PARTNERSHIP, By: BEASLEY FM ACQUISITION CORP., its general partner By: /s/ Caroline Beasley ------------------------ Name: Caroline Beasley Title: CFO BEASLEY RADIO, INC., By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO S-4 WXTU LICENSE LIMITED PARTNERSHIP, WPOW LICENSE LIMITED PARTNERSHIP, WRXK LICENSE LIMITED PARTNERSHIP, WEWO LICENSE LIMITED PARTNERSHIP, WAZZ LICENSE LIMITED PARTNERSHIP, WDAS LICENSE LIMITED PARTNERSHIP, WJHM LICENSE LIMITED PARTNERSHIP, WIKS LICENSE LIMITED PARTNERSHIP, WMGV LICENSE LIMITED PARTNERSHIP, WXNR LICENSE LIMITED PARTNERSHIP, WFLB LICENSE LIMITED PARTNERSHIP, DILLON LICENSE LIMITED PARTNERSHIP By: BEASLEY FM ACQUISITION CORP., the general partner of each of the foregoing By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO KAAY LICENSE LIMITED PARTNERSHIP, By: BEASLEY FM ACQUISITION CORP., its general partner By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO WNCT LICENSE LIMITED PARTNERSHIP, By: BEASLEY BROADCASTING OF COASTAL CAROLINA, INC., its general partner By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO S-5 EASTERN NORTH CAROLINA LICENSE LIMITED PARTNERSHIP, By: BEASLEY BROADCASTING OF EASTERN NORTH CAROLINA, INC., its general partner By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO WTEL LICENSE LIMITED PARTNERSHIP, By: BEASLEY BROADCASTING OF EASTERN PENNSYLVANIA, INC., its general partner By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO WXKB LICENSE LIMITED PARTNERSHIP, By: BEASLEY BROADCASTING OF SOUTHWEST FLORIDA, INC., its general partner By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO WSFL LICENSE LIMITED PARTNERSHIP, By: W&B MEDIA, INC., its general partner By: /s/ Caroline Beasley --------------------------- Name: Caroline Beasley Title: CFO S-6 WQAM LICENSE LIMITED PARTNERSHIP, By: BEASLEY-REED ACQUISITION PARTNERSHIP, its general partner By: BEASLEY FM ACQUISITION CORP., its general partner By: /s/ Caroline Beasley -------------------------- Name: Caroline Beasley Title: CFO S-7 LENDERS: BANK OF MONTREAL, CHICAGO BRANCH, individually and as Administrative Agent By: /s/ Sarah Kim ------------------------------ Name: Sarah Kim Title: Director S-8 FLEET NATIONAL BANK By: /s/ Garret Komjathy -------------------------- Name: Garret Komjathy Title: Director S-9 BANK OF AMERICA, N.A. By: /s/ Steven P. Renwick ------------------------ Name: Steven P. Renwick Title: Vice President S-10 THE BANK OF NEW YORK By: /s/ Cynthia L. Rogers ------------------------- Name: Cynthia L. Rogers Title: Vice President S-11 ING (US) CAPITAL CORP. By: /s/ William James ---------------------- Name: William James Title: Director S-12 CREDIT SUISSE FIRST BOSTON By: /s/ David L. Sawyer ------------------------------- Name: David L. Sawyer Title: Vice President By: /s/ Kristin Lepri ------------------------------- Name: Kristin Lepri Title: Assistant Vice President S-13 U.S. BANK NATIONAL ASSOCIATION By: /s/ Kurt Imerman ___________________________ Name: Kurt Imerman Title: Senior Vice President S-14 WELLS FARGO BANK, NATIONAL ASSOCIATION By: /s/ Vipa Chiraprut ___________________________ Name: Vipa Chiraprut Title: Vice President S-15 COOPERATEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH By: /s/ Douglas W. Zylstra --------------------------- Name: Douglas W. Zylstra Title: Senior Vice President By: /s/ James S. Cunningham --------------------------- Name: James S. Cunningham Title: Managing Director/ Chief Risk Officer S-16 CITY NATIONAL BANK By: /s/ Patrick M. Drum ________________________________ Name: Patrick M. Drum Title: Vice President S-17 EX-10.2 5 dex102.txt TIME BROCKERAGE AGREEMENT TIME BROKERAGE AGREEMENT Time Brokerage Agreement ("Agreement") dated as of October 31, 2001, by and among BEASLEY BROADCASTING OF NEVADA, LLC a North Carolina limited liability company ("Beasley"), KJUL LICENSE, LLC, a North Carolina limited liability company ("License LLC" and together with Beasley hereinafter referred to as "Licensee") and WILKS BROADCASTING LLC, a Delaware limited liability company ("Programmer"). WHEREAS, Licensee is the licensee of radio stations WRNO(FM), licensed to New Orleans, Louisiana and KMEZ(FM), licensed to Belle Chase, Louisiana (collectively, the "Stations"); WHEREAS, an Agreement of Purchase and Sale of Assets, dated as of October 31, 2001 is being entered into simultaneously herewith among Programmer, Licensee and certain other parties (the "APA"; with all capitalized terms used but not defined herein having the meanings set forth in the APA), and Programmer wishes to begin presenting programming on the Stations prior to such time as it acquires the Purchased Assets, and Licensee has agreed to make available to Programmer broadcast time on the Stations for the presentation of such programming consistent with the rules and regulations of the Commission. NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, the parties hereto have agreed and do agree as follows: 1. Facilities. ---------- (a) Licensees agree, beginning at 12:01 a.m. on November 1, 2001 (the "Effective Date"), to make all air time, transmission services and production facilities of and/or for the Stations available exclusively to Programmer and to broadcast, or cause to be broadcast, on the Stations the programming provided by or proposed to be presented by or on behalf of Programmer (the "Programming") which may originate either from Programmer's own studios or from Licensee's studios, all subject to the terms and conditions of this Agreement. The Programming is described in Attachment I hereto . (b) Programmer shall be entitled to locate any and all personnel as it deems appropriate at the offices and facilities of Licensee, and Licensee shall make available to Programmer all office, studio and other space and all programming, telephone and other equipment and facilities of Licensee required or requested by Programmer from time to time to enable it and its personnel to perform all the duties, business and activities contemplated by this Agreement. 2. Payments. Programmer hereby agrees, beginning on the first business -------- day of each calendar month following the Effective Date and during the term hereof, to pay Licensee, subject to such adjustments as shall be provided for in this Agreement, the monthly rate of Fifty Five Thousand U.S. Dollars ($55,000) (the "Monthly Payment") and to reimburse Licensee (an "Expense Reimbursement") for those monthly legitimate and prudent operating expenses of Licensee in operating the Stations as set forth in Attachment II hereof. The Monthly Payment shall be due and payable on the first business day of each month and shall be prorated for any partial month. Programmer shall receive a payment credit with respect to any Programming which Programmer makes available for broadcast during Brokered Hours (as defined in Section 6), but which is preempted or which is not accepted by Licensee. Such credit shall be determined by multiplying the sum of the Monthly Payment plus the monthly Expense Reimbursement for the month in question by the ratio of the number of hours (or fractions thereof) of such Programming preempted or not accepted on a particular Station during such calendar month to the total number of Brokered Hours (or fractions thereof) for such Station in such calendar month. Final payment on account of the Monthly Payment and the Expense Reimbursement for the month in which Closing takes place shall be calculated to include the day of Closing. 3. Term. The term of this Agreement (the "Term") shall commence as of the ---- Effective Date (the "TBA Commencement Date") and shall continue in effect until and shall terminate on the earlier of (i) the closing of the transactions contemplated by the APA, and (ii) the termination of the APA, in accordance with its terms, unless such Term is otherwise sooner terminated as set forth in Section 16 below. 4. Programming Standards. Programmer shall furnish or cause to be --------------------- furnished, and Licensee shall cooperate in all reasonable respects to facilitate the furnishing of, Programming in accordance in all material respects with the Communications Act of 1934, as amended, and the rules and requirements of the Federal Communications Commission (the "FCC or the "Commission"), including, without limitation, the Commission's rules on plugola/payola, lotteries, contests, station identification, minimum operating schedule, political programming and political advertising rates; and the Programming shall include announcements and disclosures (including but not limited to station identification announcements, EAS announcements, and sponsorship disclosures) necessary for each of the Stations to comply with the Commission's rules and requirements. In the event that Licensee determines, based on the exercise of Licensee's good faith reasonable business judgment, that Programmer has failed to comply in any material respect with the standards of the preceding sentence, Licensee may suspend or cancel any such Programming not in compliance. Programmer agrees that it will not change the current programming format of the either of the Stations during the Term. 5. Collection of Accounts Receivable. Licensee hereby assigns to --------------------------------- Programmer, for the purpose of collection only, the accounts receivable of each of the Stations owing to Licensee as of the close of business on the day before the TBA Commencement Date (such accounts receivable being called "Licensee Receivables"). During the Term of this Agreement, Programmer will endeavor to collect such Licensee Receivables, as agent for Licensee and on Licensee's behalf, but in accordance with Programmer's normal collection procedures as in effect from time to time (and without being required to resort to litigation or collection proceedings), and Licensee agrees that during such period of time it shall refrain from taking any action (whether in connection with collection or otherwise) in respect of the Licensee Receivables. Programmer shall have the right and authority to endorse, without recourse, with the name of Licensee, any checks received in respect of any Licensee Receivables. Programmer shall not have the right to compromise, settle or adjust the amounts of any Licensee Receivable -2- without Licensee's prior written consent. As soon as practicable, but in no event later than the 30th day of each calendar month beginning with the end of the first full month after the TBA Commencement Date or the next business day thereafter if the 30th is not a business day, Programmer will furnish Licensee with an accounting of the Licensee Receivables collected during the preceding calendar month, and, on such day Programmer shall remit to Licensee the net amount of all Licensee Receivables collected on Licensee's behalf by Programmer during such calendar month after deducting therefrom any applicable agency, sales and other commissions which shall be paid by Programmer as set forth below. Licensee acknowledges and agrees that all accounts receivable of any of the Stations that are earned from and after the TBA Commencement Date are the sole and exclusive property of Programmer. Programmer shall not be obligated to use any extraordinary efforts, retain counsel or a collection agency to collect any Licensee Receivable. To the extent that any amounts are received by Programmer from an obligor on both a Licensee Receivable and any other Station receivable of Programmer, such amounts, unless specifically allocated by the obligor, shall be allocated to payment of the oldest of such receivables first. Upon the earlier of (i) termination of this Agreement other than due to consummation of the APA, or (ii) 120 days after the Closing Date, Programmer will turn back to Licensee all of the Licensee Receivables of each of the Stations owing to Licensee which have not yet been collected (including all records and documents of each of the Stations relating to such uncollected accounts), and Programmer will thereafter have no further responsibility with respect to the collection of such Licensee Receivables, provided, however, that any funds received by Programmer subsequent to the Collection Period on account of any Licensee Receivables paid or payable to any of Licensee shall be remitted to Licensee within five (5) business days after the receipt of such funds. Within twenty (20) business days after Programmer turns back the Licensee Receivables pursuant to this Section, Programmer will furnish Licensee with a final and up-to-date accounting of the Licensee Receivables. Licensee acknowledges and agrees that Programmer is acting as collection agent hereunder for the benefit of Licensee (but subject to the limitations set forth herein) and that Programmer has accepted such responsibility for the accommodation of Licensee. Licensee shall remain responsible for all agencies, sales and other commissions and related payroll and other taxes and withholdings associated with or arising out of any of the Licensee Receivables and to the extent the same have not been paid by Licensee, during the period Programmer is collecting the Licensee Receivables, Programmer shall deduct the amount of such commissions and taxes from the amount to be remitted to Licensee and pay such amounts in accordance with Licensee's past customary practice. 6. Facilities. ---------- (a) Licensee hereby covenants that each of the Stations shall operate in accordance with the authorizations issued to it by the Commission. Throughout the term of this Agreement, Licensee shall make each of the Stations available to Programmer for broadcast of Programming with its present authorized facilities or substantially similar facilities during Brokered Hours, subject to Licensee's rights to preempt Programming pursuant to Sections 4, 12 or 13 hereof. Programmer shall make available Programming for all Brokered Hours. "Brokered Hours" shall mean up to 168 hours per week, as Programmer shall determine, less up to ten hours in any calendar month as Licensee may deem necessary for maintenance of the facilities of each of the Stations. Licensee shall use best efforts to schedule downtime for maintenance on Sunday morning between the hours of 2 a.m. and 6:00 a.m. and to provide -3- Programmer with at least 48 hours prior notice of downtime for maintenance scheduled for any other hours. (b) To facilitate the production of Programming for each of the Stations, and in furtherance of Programmer's rights under this Agreement, Licensee shall permit Programmer and its employees to utilize substantially all space, equipment and furnishings at each of the Station's studios and offices currently used in conjunction with the operation of any of the Stations and shall permit Programmer to have continual access to all advertising files and related documentation, and all such files and documentation shall be maintained at each of the Stations. Programmer shall conduct itself, and shall cause its employees and agents to conduct themselves, in the course of their respective activities and operations under this Agreement with due care, in the ordinary course of business, and in a manner consistent with the normal and prudent operation of a commercial broadcast radio station of similar size and format. Licensee shall maintain the studios of and transmission facilities for each of the Stations in their present condition and repair and shall permit the same to serve as programming origination facilities for Programmer. Licensee shall maintain the Stations' studios in compliance with the FCC's rules and requirements, including, without limitation, the FCC's main studio rule. During the Term, Programmer shall have access to the studio and other space, equipment and facilities referred to herein 24 hours a day every day of the year. Licensee shall cooperate with Programmer, at Programmer's expense, in making such arrangements as Programmer shall reasonably request to deliver Programming from any remote location to each of the Station's respective transmitter sites. (c) Licensee shall maintain all equipment necessary for broadcasting by each of the Stations in a condition consistent with the current operations of the Stations in compliance in all material respects with the applicable rules, regulations and technical standards of the Commission, and all capital expenditures reasonably required to maintain the current technical quality of each of the Station's signal shall be made in a timely fashion at the expense and in the sole discretion of Licensee. If any of the Stations suffers any loss, reduction or damage of any nature to its signal or any of its transmission facilities which results in the interruption or material reduction of service of such Station or the inability of such Station to operate with currently- authorized facilities and power, Licensee shall use commercially reasonable efforts to effect such repairs as are necessary to restore full-time, full power operation of such Station with their currently-authorized facilities as soon as practicable. 7. Handling of Mail. Programmer shall be responsible for receiving and ---------------- handling all mail, cables or telegrams directed to the Stations and shall promptly furnish to Licensee all such communications (or, as appropriate, copies thereof which are intended for Licensee or relate to Licensee's responsibilities under this Agreement or as a broadcast licensee of the Commission (including, but not limited to, copies of all correspondence received from members of the public with respect to the programming or operations of any of the Stations), and shall furnish to Licensee, unopened, any mail, cables or telegrams addressed to Licensee. Licensee shall furnish promptly to Programmer all mail, cables, or telegrams (or, as appropriate, copies thereof) received by Licensee that is intended for Programmer or relate to Programmer's responsibilities under this Agreement, and shall furnish to Programmer, unopened, any mail, cables or telegrams addressed to Programmer. Licensee shall be solely responsible for maintaining each of the Station's public files. -4- 8. Responsibility for Employees and Expenses. ----------------------------------------- (a) Licensee's Responsibilities. Licensee shall provide and be --------------------------- responsible for each of the Station's personnel necessary for the broadcast transmission of Programmer's Programming and the exercise of the Licensee's rights of oversight and control of each of the Station's operations, which shall consist of two persons who shall be one manager and one non-management staff person ("Licensee's Employees"). Licensee's Employees shall at all times remain in the employ of Licensee and subject to Licensee's control and Licensee shall be responsible for all employee benefits and compensation and employment taxes with respect to such personnel. Subject to Programmer's obligation to make the Expense Reimbursement, and excluding any costs related to the production of Programmer's Programming or as otherwise provided in Section 8(b), Licensee will be responsible for payment in the first instance of all of each Station's expenses necessary to fulfill Licensee's Commission obligations and to transmit the Programming. Without limiting the generality of the foregoing, these costs and expenses to be paid by Licensee in the first instance shall include all costs associated with the maintenance of each of the Station's towers, transmitters and antennas, electrical power at each of the Station's studio and transmitter sites , lighting, heating and cooling at the studio and transmitter sites, maintenance of each of the Station's local public records file, rent for the studio and transmitter sites, and all other expenses associated with maintaining each of the Station's studios. (b) Programmer's Responsibilities. ----------------------------- (i) Offer of Employment. Within ten business days following ------------------- the TBA Commencement Date, Programmer may offer employment, on terms and conditions determined by Programmer, to any active part-time or full-time personnel (other than (x) Licensee's Employees, (y) Walton and Johnson and (z) and such other exceptions as may be agreed to) employed at the Stations ("Active Station Employees") and shall provide Licensee a list of those Active Station Employees to whom an offer will not be made. For purposes of the previous sentence, "active personnel" shall mean all employees of Licensee except those employees who are receiving long-term or short-term disability benefits. Licensee will cooperate with Programmer in its efforts to hire the Active Station Employees to whom offers are so made. Active Station Employees accepting such offers of employment shall be referred to as the "Transferred Employees." Any Active Station Employee who either is not offered employment by Programmer or declines to accept employment with Programmer shall be referred to as a "Non- Transferred Employee." (ii) Employee Benefits. Programmer shall permit each ----------------- Transferred Employee to participate in Programmer's employee welfare benefit plans (as defined in Section 3(1) of ERISA) in the same manner as all other similarly situated employees of Programmer. Programmer agrees that for purposes of all benefit plans (including, but not limited to, "employee benefit plans" as defined in Section 3(3) of ERISA, and all policies and employee fringe benefit programs, including vacation policies) of Programmer in which Transferred Employees may participate, credit shall be given to the Transferred Employees for service previously credited with Licensee prior to the TBA Commencement Date. Programmer agrees that, for purposes of any employee benefit plan that requires deductibles, co-payments, or maximum out of pocket payments, credit will be provided to the Transferred Employees for any deductibles, co-payment or other amounts paid in respect of the plan year in which the TBA -5- Commencement Date occurs. Programmer also agrees, with respect to any employee benefit plan that imposes pre-existing condition exclusions, waiting periods or requires evidence of insurability, to waive such pre-existing condition exclusions or restrictions, any waiting period limitations, or any evidence of insurability requirements for the Transferred Employees, other than any consistent with any of those plans of Licensee theretofore applicable to any of the Transferred Employees. As soon as practicable after the TBA Commencement Date, Programmer shall allow Transferred Employees to participate in Programmer's savings or retirement plan(s) in the same manner as simil arly situated employees of Programmer. (iii) No Third Party Beneficiary. No provisions of this -------------------------- Agreement shall create any third party beneficiary rights of any employee or former employee (including any beneficiary or dependent thereof) of Licensee in respect of continued employment (or resumed employment) with Licensee or Programmer or in respect of any other matter. (iv) Responsibilities. Programmer shall be responsible for the ---------------- salaries, compensation and employment taxes, insurance, employee benefits (including COBRA Coverage), commissions, other sales costs, and related costs for the Transferred Employees and any other personnel used by Programmer in the production of the Programming (including salespeople, traffic personnel, board operators and programming staff). Programmer shall reimburse Licensee for all severance liabilities and obligations, if any (other than COBRA coverage) (i) arising from or related to, the termination of Non-Transferred Employees (other than those set forth on Schedule 8 hereto) by Licensee during the term of this Agreement and (ii) owed by Licensee to any Transferred Employee, but only, in each case under the preceding clauses (i) and (ii), to the extent such severance obligations (x) are consistent with the disclosures in the employment contracts or agreements provided to Programmer under Section 5.8 of the APA and (y) in the case of non-Transferred Employees who do not have an employment contract or agreement specifically identified in Section 5.8 of the APA, do not exceed two (2) weeks of compensation. The Transferred Employees and other personnel utilized by Programmer in the performance of its obligations under this Agreement shall be in the employ of Programmer and subject to Programmer's control. 9. Contracts. Programmer shall act as Licensee's agent in connection with --------- all contracts for the sale of advertising time on the Stations for cash and non- cash consideration and all contracts and other agreements identified in Schedule 5.8 of the APA and Licensee and Programmer shall cooperate to cause Programmer to receive the benefit of such contract or agreement in exchange for the performance by Programmer of all of Licensee's obligations under such contract or agreement (including without limitation the payment to Licensee of all amounts due under the contract or agreement on or after the TBA Commencement Date for services provided by Licensee, which amounts shall be included as part of the Expense Reimbursement). To the extent practicable and upon the receipt of any necessary consent, Licensee shall assign and Programmer shall assume any such contract or agreement (other than those necessary to fulfill Licensee's Commission obligations), and following such assignment and assumption, if an amount was included in the Estimate (as defined in Attachment II) in respect of such contract or agreement the Estimate shall be revised accordingly. 10. Programmer's Insurance. During the Term, Programmer shall maintain ---------------------- Broadcaster's Liability Insurance with coverage of at least One Million Dollars ($1,000,000.00) per occurrence, Commercial General Liability insurance of at least One Million Dollars ($1,000,000.00) -6- per occurrence and Workers Compensation insurance of at least $500,000 per accident, with insurance companies that have a Best rating of A or better. Programmer shall deliver certificates of insurance periodically to Licensee evidencing that such insurance remains in effect and such policies shall name Licensee as an additional insured. 11. Advertising and Programming Revenues. Programmer shall retain all ------------------------------------ revenues from the broadcast or sale of advertising time that is broadcast on any of the Stations during its Programming, and from all other sources of revenues and/or advertising related to any of the Stations, in each case during the Term and may sell such advertising in combination with the sale of advertising on any other broadcasting stations of its choosing. All accounts receivable, claims and entitlements to payment arising from any of the foregoing shall be the sole and exclusive assets and property of Programmer. 12. Operation of the Stations. ------------------------- (a) General. Notwithstanding anything to the contrary in this ------- Agreement, Licensee shall have authority and power over the operation of the Stations during the term of this Agreement. Licensee shall retain control, said control to be reasonably exercised, over the policies, programming and operations of the Stations, including, without limitation, the right to decide whether to accept or reject any Programming or advertisements, the right to preempt any Programming in order to broadcast a program deemed by Licensee to be of greater national, regional, or local interest, and the right to take any other actions for compliance with the laws of the United States or the State of Louisiana or the rules, regulations, and policies of the Commission. Licensee shall at all times be responsible for meeting all of the Commission's requirements with respect to public service programming, for maintaining the political and public inspection files and the station log (if any) of each of the Stations, and for preparation of programs/issues lists. Licensee shall at all times be responsible for compliance with the Commission's main studio rules and policies. Programmer shall, upon request by Licensee, provide Licensee with information with respect to such of Programmer's programs which are responsive to public needs and interest so as to assist Licensee in the preparation of required programming reports, and will provide upon request other information to assist Licensee's preparation of other records, reports and logs required by the Commission or other local, state or federal governmental agencies. (b) Political Advertising. Licensee will oversee and take ultimate --------------------- responsibility with respect to the provision of equal opportunities, lowest unit charge and reasonable access to political candidates, and compliance with the Political Broadcast Rules of the FCC. Programmer shall supply information to assist Licensee, and shall consult and cooperate with Licensee, in complying with the lowest unit charge requirements of federal law. To the extent necessary, Programmer shall release advertising availabilities to Licensee to permit it to comply with the Political Broadcast Rules of the FCC including, but not limited to, Section 315 of the Communications Act of 1934, as amended; provided, however, that revenues received by Licensee as a result of such a - -------- ------- release of advertising time shall be deemed irrevocably assigned to and shall promptly be remitted to Programmer. -7- (c) Responsive Programming. Programmer and Licensee mutually ---------------------- acknowledge their interest in ensuring that each of the Stations serves the needs and interests of the residents of such Station's communities of license and service areas and agree to cooperate in doing so. Licensee may request, and Programmer shall provide, information concerning such of Programmer's Programming that is responsive to community issues so as to assist Licensee in the satisfaction of their public service programming obligations. 13. Special Events. Licensee reserves the right to preempt any of the -------------- broadcasts of Programmer's Programming and to use such preempted time for broadcast of special events deemed by Licensee to be of importance to its community of license. In all such cases, Licensee shall use its diligent efforts to give Programmer reasonable advance notice of its intention to preempt Programmer's Programming; provided however, that any revenues received as a -------- ------- result of such preemption shall be deemed irrevocably assigned to and shall promptly be remitted to Programmer. 14. Indemnification. --------------- (a) Indemnification Rights. Each party will indemnify and hold ---------------------- harmless the other party, and the directors, officers, partners, employees, agents and affiliates of such other party, from and against any and all liability, including without limitation reasonable attorneys' fees arising out of or incident to (i) any breach by such party of a representation, warranty or covenant made herein or such party's actions taken or not taken (when such actions should have been taken) pursuant to the provisions of this Agreement, or (ii) the programming produced or furnished by such party, or in the case of programming furnished or broadcast by Licensee, prior to the TBA Commencement Date provided that Programmer shall have no liability hereunder in respect of Programming broadcast by it, which Programming was originally produced, provided or contracted for by Licensee or any of Licensee's affiliates. Without limiting the generality of the foregoing, each party will indemnify and hold harmless the other party, and the directors, officers, partners, employees, agents and affiliates of such other party, from and against any and all liability for libel, slander, infringement of trademarks, trade names, or program titles, violation of rights of privacy, and infringement of copyrights and proprietary rights resulting from the programming produced or furnished by it hereunder and broadcast on any of the Stations provided that Programmer shall have no liability under this Section in respect of Programming broadcast by it, which Programming was originally produced, provided or contracted for by Licensee or any of Licensee's affiliates. The parties' indemnification obligations hereunder shall survive any termination or expiration of this Agreement. (b) Procedures. The provisions of Section 9.4 of the APA shall apply ---------- with respect to matters covered by this Article 14 as if the indemnifying party under this Agreement were the indemnifying party under said Section 9.4, and as if the indemnified party under this Agreement were the indemnified party under said Section 9.4, and as if such matters covered hereby were covered by said Section 9.4. (c) Any indemnification liability or obligation of Programmer under this Agreement shall reduce dollar-for-dollar the aggregate "liquidated damages" amount set forth in Section 8.4 of the APA. -8- 15. Force Majeure. Any failure or impairment of facilities or any delay or ------------- interruption in broadcasting programs, or failure at any time to furnish facilities in whole or in part, for broadcasting, due to acts of God, strikes, or threats thereof, force majeure, or due to causes beyond the control of any party, shall not constitute a breach of this Agreement, and no party shall be liable to any other party, except to the extent of allowing in each such case an appropriate payment credit to Programmer available to Licensee but not carried during Brokered Hours based upon a pro rata adjustment as specified in Section 2 calculated and based upon the length of time during which the failure or impairment exists or continues. 16. Right to Use the Programming. The right to use the Programming and to ---------------------------- authorize its use in any manner and in any media whatsoever shall be, and remain, vested in Programmer. 17. Payola; EEO. Programmer agrees that it shall not accept, and shall not ----------- knowingly permit any of its employees to accept, any compensation or any in-kind gift or gratuity of any kind whatsoever, regardless of its value or form, including, but not limited to, a commission, discount, bonus, materials, supplies or other merchandise, services or labor, whether or not pursuant to written contracts or agreements between Programmer and merchants or advertisers, unless the payer is identified in the program as having paid for or furnished such consideration in accordance with Commission requirements. Programmer agrees that, annually upon the reasonable request of Licensee, it will execute and provide Licensee (and require its employees and agents associated with production of its Programming to execute and provide Licensee) with an affidavit to that effect in such form as Licensee shall reasonably require. Programmer shall comply with all equal employment opportunity regulations and policies of the Commission to the extent such regulations and policies apply, or shall in the future apply, to the employment practices of Programmer's personnel assigned to duties in connection with the operation of the Stations; and Programmer shall timely provide Licensee with all information that shall be necessary to comply with any reporting obligations of the Commission pursuant to such regulations or policies. 18. Certain Governmental Action. --------------------------- (a) In the event that a federal, state or local governmental authority designates a hearing with respect to the continuation or renewal of any license or authorization held by Licensee for the operation of any of the Stations, or orders the termination of this Agreement and/or orders the curtailment, in any manner material to the relationship between the parties hereto, of the provision of Programming by Programmer hereunder, and/or determines that other similar time brokerage agreements, in whole or in part, are contrary to public or agency policy, at its option, Programmer may seek administrative or judicial appeal of or relief from such order(s) (in which event Licensee shall, at Licensee's expense, cooperate with Programmer in such proceedings), or Programmer may notify Licensee that it will terminate this Agreement pursuant to this Section 18. If the Commission designates the renewal application of any of the Stations for a hearing as a consequence of this Agreement or for any other reason, Programmer shall cooperate and comply with any reasonable request of Licensee to assemble and provide to the Commission information relating to Programmer's performance under this Agreement. -9- (b) If this Agreement is challenged at or by the FCC or at or by the U.S. Department of Justice or the Federal Trade Commission, whether or not in connection with a license renewal application for any of the Stations, Programmer and Licensee, through their respective counsel, shall jointly defend this Agreement and the parties' performance thereunder throughout all such proceedings. If portions of this Agreement do not receive the approval of the FCC staff, to the extent that such approval may be required, then the parties shall use their best efforts to reform this Agreement in such a manner as to maintain the economic benefit anticipated by each party or seek reversal of the staff decision and approval from the FCC on appeal. 19. Termination. ----------- (a) Termination. This Agreement may also be terminated under the ----------- following circumstances: (i) by Programmer, by giving written notice of termination to Licensee, if (A) Programmer is not then in material breach hereof, and (B) Licensee is in material breach of its obligations hereunder, has failed to cure such breach within the Cure Period, and such continuing breach by Licensee has had a material adverse effect on the business or operations of the Stations, taken as a whole; (ii) by Licensee, by giving written notice of termination to Programmer, if (A) Licensee is not then in material breach under this Agreement, and (B) Programmer is in material breach of its obligations hereunder and has failed to cure such breach within the Cure Period and such continuing breach by Programmer has had a material adverse effect on the business or operations of the Stations, taken as a whole; (iii) by mutual consent of the parties in writing; or (iv) by Programmer or Licensee, provided the terminating party has complied with the provisions of Section 18 hereof, by giving written notice of termination to the other party, if: (i) this Agreement is declared invalid or illegal in whole or substantial part by an order or decree of an administrative agency or court of competent jurisdiction and such order or decree has become final and no longer subject to further administrative or judicial review, or (ii) there has been a material change in FCC rules, policies, or precedent that would cause this Agreement to be in violation thereof and such change is in effect and has not been stayed pending an appeal or further administrative review. (b) Failure or Consummation of APA. Notwithstanding any other ------------------------------ provision hereof, this Agreement shall terminate with no further action by Licensee or Programmer upon the termination of the APA in accordance with the terms thereof, or upon the consummation of the transactions contemplated thereby. 20. Post-Termination Matters. ------------------------ (a) Upon any termination of this Agreement, Licensee shall have no further obligation to provide to Programmer any broadcast time or broadcast transmission facilities. Upon any termination, Programmer shall be responsible for all debts and obligations of -10- Programmer to third parties based upon the purchase of air time on the Stations and the use of Licensee's transmission facilities relating to the Stations, including, without limitation, accounts payable; provided, however, that Licensee will assume Trade Agreements to the extent the aggregate value (at current rates for time on the Stations as of the date of such termination or expiration) of unfilled obligations of the Programmer under any Trade Agreements entered into by Programmer on or after the TBA Commencement Date does not exceed the aggregate reasonable fair market value of any consideration yet to be received in exchange for the provision of time on the Stations by more than Seven Thousand Five Hundred Dollars ($7,500.00). Notwithstanding anything herein to the contrary, to the extent that any invoice, bill or statement submitted to Licensee after the termination of this Agreement or any payment made by Programmer prior to the termination of this Agreement relates to expenses incurred in operating the Stations, for periods both before and after the termination of this Agreement, such expenses shall be prorated between Licensee and Programmer in accordance with the principle that Programmer shall be responsible for expenses allocable to the period prior to the termination of this Agreement and Licensee shall be responsible for expenses allocable to the period on and after the termination of this Agreement. Each party agrees to reimburse the other party for expenses paid by the other party to the extent appropriate to implement the proration of expenses pursuant to the preceding sentence. (b) If this Agreement terminates other than as a result of the Closing (as defined in the APA), Programmer shall (i) assign to Licensee and Licensee shall assume all orders and agreements for the sale of advertising time on any of the Stations for cash and all trade, barter and similar agreements for the sale of advertising time on any of the Stations other than for cash and all such orders and agreements for advertising time entered into in the ordinary course of business during the Term and all other contracts and other agreements with respect to the Stations that Programmer has entered into, in the ordinary course of business on customary terms and conditions, involving payments or receipts during the life of such contracts of less than $15,000 in the case of any single contract but not more than $75,000 in the aggregate that are in effect on the date of such termination or expiration (collectively, the "Contracts"); (ii) be responsible for only those obligations under the Contracts in respect of the period commencing on or after the TBA Commencement Date and ending prior to the termination of this Agreement; (iii) be responsible for collecting the accounts receivable arising from Programmer's operation of the Station on or after the Commencement Date and prior to the termination of this Agreement, as to which Licensee shall cooperate with Programmer, to the extent reasonably requested, to assist Programmer in collecting any such accounts receivable; and (iv) cease collecting the Licensee Receivables pursuant to Section 5 and return any remaining Licensee Receivables to Licensee for collection. (c) If this Agreement terminates other than as a result of the Closing (as defined in the APA), beginning on the date of termination of this Agreement, Licensee agrees to offer employment to the Transferred Employees but not to any other employees of Programmer. Licensee shall permit each Transferred Employee who so accepts such offer to participate in Licensee's employee welfare benefit plans (as defined in Section 3(1) of ERISA) in the same manner as all other similarly situated employees of Licensee. Licensee agrees that for purposes of all benefit plans (including, but not limited to, "employee benefit plans" as defined in Section 3(3) of ERISA, and all policies and employee fringe benefit programs, including vacation policies) of Licensee in which Transferred Employees may participate, credit shall be given to -11- the Transferred Employees for service previously credited with Programmer prior to the termination of this Agreement. Licensee agrees that, for purposes of any employee benefit plan that requires deductibles, co-payments, or maximum out of pocket payments, credit will be provided to the Transferred Employees for any deductibles, co-payment or other amounts paid in respect of the plan year in which the termination of this Agreement occurs. Licensee also agrees, with respect to any employee benefit plan that imposes pre-existing condition exclusions, waiting periods or requires evidence of insurability, to waive such pre-existing condition exclusions or restrictions, any waiting period limitations, or any evidence of insurability requirements for the Transferred Employees other than any consistent with those plans of Programmer theretofore applicable. As soon as practicable after the termination of Agreement, Licensee shall allow Transferred Employees to participate in Licensee's savings or retirement plan(s) in the same manner as similarly situated employees of Licensee. (d) Notwithstanding anything in Section 14 to the contrary, no expiration or termination of this Agreement shall terminate the obligation of each party to indemnify the other for claims under Section 14 hereof or limit or impair any party's rights to receive payments due and owing hereunder on or before the date of such termination except as otherwise provided in Section 8.4 of the APA. 21. Certain Understandings. Anything to the contrary contained herein ---------------------- notwithstanding, no termination of this Agreement, in and of itself, for any reason whatsoever shall have any effect on or terminate any right or obligation of Programmer or any right or obligation of Licensee under the APA and shall not provide cause for the termination of the APA. To the extent Licensee shall be entitled to, or Programmer shall pay to Licensee, any amount on account of any damages arising out of any breach or default, or act or omission, of Programmer under or arising out of this Agreement, such amounts shall reduce dollar-for- dollar the aggregate liquidated damages amount set forth in Section 8.4 of the APA. 22. Certifications. Pursuant to Note 2(k)(3) to Section 73.3555 of the FCC's -------------- rules, Licensee, by the signature of its authorized representative to this Agreement, certifies that it maintains ultimate control over the Stations' facilities, including specifically control over station finances, personnel and programming. Programmer, by the signature of its authorized representative to this Agreement, certifies that this Agreement complies with the provisions of Sections 73.3555(a), (c) and (d) of the FCC's rules. 23. Public Announcements. The parties will coordinate and consult with one -------------------- another and obtain the prior approval of the other party, which shall not be unreasonably withheld, before making any press release or other public announcement concerning the transactions contemplated under this Agreement; provided, however, that a party may, without the prior written consent of the other party, issue such press release or make such public statement as may be required by any law, rule, regulation, ordinance, order, judgment or decree or any listing agreement with a national securities exchange to which it or any of its affiliates is a party if it has used all reasonable efforts to consult with the other party and to obtain such party's consent but has been unable to do so in a timely manner. Nothing in this Section shall prevent either party from disclosing information to its accountants, attorneys, lenders, investors or other advisors ("Representatives"), who shall be advised of the confidential nature of such information and such -12- party so disclosing such information shall nevertheless be responsible for any unauthorized disclosure by any of its Representatives. 24. Modification and Waiver. No modification or waiver of any provision of ----------------------- this Agreement shall in any event be effected unless the same shall be in writing and signed by the party adversely affected by the waiver or modification, and then such shall be effective only in the specific instance and for the purpose for which given. 25. No Waiver; Remedies Cumulative. No failure or delay on the part of ------------------------------ Licensee or Programmer in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power. The rights and remedies of Licensee and Programmer herein provided are cumulative and are not exclusive of any right or remedies which it may otherwise have. 26. Constructions. This Agreement shall be construed and enforced in ------------- accordance with the laws of the State of New York, without regard to principles of conflicts of laws, and the obligations of the parties hereto are subject to all federal, state or municipal laws or regulations now or hereafter in force and to the regulations of the Commission and all other government bodies or authorities presently or hereafter to be constituted. 27. Headings. The headings contained in this Agreement are included for -------- convenience only and no such heading shall in any way alter the meaning of any provision. 28. Successors and Assigns. This Agreement shall be binding upon and inure ---------------------- to the benefit of the parties and their respective successors and assigns, including without limitation, any assignee of the Commission license for the Station. 29. Counterpart Signatures. This Agreement may be executed in multiple ---------------------- copies, each of which shall constitute an original. 30. Notices. All notices, demands, and requests required or permitted to be ------- given under the provisions of this Agreement shall be in writing and shall be deemed to have been duly delivered and received (a) on the date of personal delivery or (b) on the date of receipt (as shown on the return receipt) if mailed by registered or certified mail, postage prepaid and return receipt requested, or if sent by Federal Express or similar courier service, with all charges prepaid. All such notices, demands, and requests shall be addressed as follows: If to Programmer: Wilks Broadcasting LLC 9330 Old Southwick Pass Alpharetta, GA 30022 Attn: Jeffrey S. Wilks -13- with a copy to: The Wicks Group of Companies, L.L.C. 405 Park Avenue New York, NY 10022 Fax No.: 212-223-2109 Attn: Craig B. Klosk and Golenbock, Eiseman, Assor, Bell & Peskoe 437 Madison Avenue New York, New York 10022 Attn: Nathan E. Assor, Esq. If to Licensee: Beasley Broadcasting of Nevada, LLC 3033 Riviera Drive, Suite 200 Naples, FL 34103 Attn: B. Caroline Beasley with a copy to: Latham & Watkins 555 11/th/ Street, NW, Suite 1000 Washington, DC 20004 Attn: Joseph D. Sullivan, Esq. or to any other or additional persons and addresses as the parties may from time to time designate in a writing delivered in accordance with this Section 27. Nothing in this Section shall preclude the delivery of notices by appropriate means other than those described above, including facsimile. 31. Entire Agreement. This Agreement embodies the entire agreement between ---------------- the parties and there are no other agreements, representations, warranties, or understandings, oral or written, between them with respect to the subject matter hereof. No alterations, modification or change of this Agreement shall be valid unless by like written instruments. 32. Severability. In the event that any of the provisions contained in this ------------ Agreement is held to be invalid, illegal or unenforceable it shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been contained herein, subject to Programmer's right to terminate pursuant to Section 18 hereof. -14- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Licensee BEASLEY BROADCASTING OF NEVADA, LLC By: /s/ Caroline Beasley ------------------------ Name: Caroline Beasley Title: Manager KJUL LICENSE, LLC By: /s/ Caroline Beasley ------------------------ Name: Caroline Beasley Title: Manager Programmer WILKS BROADCASTING LLC By: /s/ Jamie M. Weston ------------------------ Name: Jamie M. Weston Title: Vice President TIME BROKERAGE AGREEMENT ATTACHMENT I Programmer's Programming will be an entertainment format, which may include news as well as promotions (including on-air giveaways) and contests. Programming may include commercial matter, including that in both program or spot announcement forms, as well as public affairs and public service information. ATTACHMENT II Programmer shall reimburse to Licensee the actual costs incurred by Licensee with respect to the following expenses incurred solely in the actual operation of the Stations attributable to the term of this Agreement, in each case except as otherwise provided below or elsewhere in this Agreement: tower and studio rents, utilities, property taxes with regard to the Stations' property, normal and ordinary building and tower maintenance, normal and ordinary engineering fees incurred by Licensee in the operation of the Stations, casualty and liability insurance premiums with respect to insurance policies currently maintained by the Stations in an amount equal to the current, arms length premiums being currently paid by the Stations therefor, music licensee fees (i.e., ASCAP, BMI and SESAC), software license fees, pro rated FCC annual regulatory fees, compensation and other expenses related thereto associated with Licensee personnel required to be provided pursuant to Section 8(a) hereof, and programming and production costs actually incurred by Licensee in respect of any Programming to be aired after the TBA Commencement Date ("Operating Expenses"). An estimate of such Operating Expenses is attached as Attached II-A hereto (the "Estimate"). Anything to the contrary contained herein or in this Agreement notwithstanding, Programmer shall not be responsible for or be required to reimburse Licensee for any of the following: 1. Licensee's income, franchise and similar taxes. 2. Interest on and principal of loans and/or indebtedness and other fees, charges, costs and expenses relating to loans and/or indebtedness. 3. Legal, accounting and other professional fees and expenses in connection with or arising out of this Agreement and/or the APA and/or the negotiation, administration, interpretation or closing of this Agreement and/or the APA and/or the transactions contemplated hereby and thereby. 4. Any costs, expenses or expenditures in the nature of capital expenditures or improvements, or expenses associated with the maintenance or repair of towers or equipment, other than routine, ordinary and customary maintenance consistent in dollar amount and nature with past practice and experience of the Stations. Programmer shall pay the Estimate (as such Estimate may be adjusted upwards or downwards pursuant to Section 9 or to take account of any foreseeable reduction or increase in the expenses covered thereby) on or prior to the last day of each calendar month. On the 20th day of each month, Licensee will provide Programmer a list of the actual expenses incurred the preceding month, together with copies of the invoices or other backup information as may exist, at which time Programmer either shall receive a credit for any over-payment that may have occurred, or else shall pay any deficit within ten business days of receipt of the list. In the event the TBA Commencement Date is in the middle of a month, Programmer only will be responsible to reimburse Licensee for Operating Expenses relating to the portion of the month during which the term of this Agreement has been in effect. In the event of a bona fide dispute as to any requested reimbursement, Programmer may dispute such reimbursement and may withhold payment to Licensee until such dispute is resolved. SCHEDULE 8 Tom Kennedy Jim Owen EX-99.1 6 dex991.txt PRESS RELEASE [LOGO] BEASLEY BROADCAST GROUP, INC. News Announcement For Immediate Release CONTACT: B. Caroline Beasley Stewart Lewack, Joseph Jaffoni Chief Financial Officer Jaffoni & Collins Incorporated Beasley Broadcast Group, Inc. 212/835-8500 or bbgi@jcir.com 941/263-5000 BEASLEY BROADCAST GROUP TO DIVEST TWO NEW ORLEANS FM STATIONS FOR $23 MILLION - Proceeds to Reduce Debt - NEW ORLEANS, Louisiana and NAPLES, Florida, November 1, 2001 - Beasley Broadcast Group, Inc. (Nasdaq: BBGI), a large- and mid-size market radio broadcaster, today announced it has reached a definitive agreement with Wilks Broadcasting, LLC to sell the broadcaster its two FM radio stations in New Orleans, WRNO-FM and KMEZ-FM, for total consideration of approximately $23 million. Beasley purchased the stations in January 2001 through its $113.5 million acquisition of six stations in Las Vegas and New Orleans from Centennial Broadcasting. Beasley will continue to own WBYU-AM, presently operated in a brokered programming format. Commenting on the agreement, Beasley Chairman and CEO, George Beasley, stated, "Over the long term, Beasley has established a successful record of managing its station portfolio through acquisitions and divestitures. The proceeds of this transaction will reduce borrowings under our revolving credit agreement while enabling us to better focus on those opportunities offering the greatest return to our shareholders. We trust the stations will continue to grow and prosper under the management of Wilks Broadcasting." Completion of the transaction, expected to close late in the first or early in the second quarter of 2002, is subject to FCC approval and other customary closing conditions. -more- Beasley Broadcast Group Divests Stations, 11/1/01 page 2 This news announcement contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "intends", "expects," "expected," "anticipates" or variations of such words and similar expressions are intended to identify such forward-looking statements. Key risks are described in the Company's reports filed with the U.S. Securities and Exchange Commission. Readers should note that these statements may be impacted by several factors, including economic changes, unforeseen media events that would cause the Company to broadcast commercial free for any period of time, and changes in the radio broadcast industry generally and, accordingly, the Company's actual performance and results may vary from those stated herein. These statements do not include the potential impact of any acquisitions or dispositions announced or completed after October 31, 2001. The Company undertakes no obligation to update the information contained herein. Founded in 1961, Beasley Broadcast Group, Inc. is a radio broadcasting company that, upon completion of pending dispositions, owns or operates 42 stations (26 FM and 16 AM) located in eleven large- and mid-size markets in the United States. # # # -----END PRIVACY-ENHANCED MESSAGE-----