-----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, TitlqHHYYlMuN3py+pnCgLDMNYJK9Ok+Oms2OR8kT0hX4ghO0t2x/8lFOWoEMpRQ MuUmzgUEzjdbz+N/IxhgRg== 0001047469-98-000876.txt : 19980114 0001047469-98-000876.hdr.sgml : 19980114 ACCESSION NUMBER: 0001047469-98-000876 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 93 FILED AS OF DATE: 19980113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRILL MEDIA CO LLC CENTRAL INDEX KEY: 0001052567 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 522071822 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177 FILM NUMBER: 98505614 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: 2 WALL STREET CITY: NEW YORK STATE: NY ZIP: 10005 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRILL RADIO INC CENTRAL INDEX KEY: 0000320046 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541148743 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-01 FILM NUMBER: 98505615 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O BO 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: PO BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BMC HOLDINGS LLC CENTRAL INDEX KEY: 0001052572 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 522071824 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-02 FILM NUMBER: 98505616 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: 2 WALL STREET CITY: NEW YORK STATE: NY ZIP: 10005 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRILL MEDIA MANAGEMENT INC CENTRAL INDEX KEY: 0001052659 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541877458 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-03 FILM NUMBER: 98505617 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: 2 WALL STREET CITY: NEW YORK STATE: NY ZIP: 10005 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRILL NEWSPAPER INC CENTRAL INDEX KEY: 0001052674 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541170289 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-04 FILM NUMBER: 98505618 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 2453 CITY: RICHMOND STATE: VA ZIP: 23201 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CADILLAC NEWSPAPER INC CENTRAL INDEX KEY: 0001052676 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541170305 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-05 FILM NUMBER: 98505619 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 2453 CITY: RICHMOND STATE: VA ZIP: 23201 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL MICHIGAN DISTRIBUTION CO INC CENTRAL INDEX KEY: 0001052679 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 382538162 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-06 FILM NUMBER: 98505620 BUSINESS ADDRESS: STREET 2: P.O. BOX 447 CITY: MT. PLEASANT STATE: MI ZIP: 48858 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL MICHIGAN NEWSPAPERS INC CENTRAL INDEX KEY: 0001052681 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541170307 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-07 FILM NUMBER: 98505621 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILL STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL MISSOURI BROADCASTING INC CENTRAL INDEX KEY: 0001052683 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541163979 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-08 FILM NUMBER: 98505622 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CMB II INC CENTRAL INDEX KEY: 0001052685 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 431671356 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-09 FILM NUMBER: 98505623 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CMN ASSOCIATED PUBLICATIONS INC CENTRAL INDEX KEY: 0001052689 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 382438130 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-10 FILM NUMBER: 98505624 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CMN HOLDING INC CENTRAL INDEX KEY: 0001052693 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541170293 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-11 FILM NUMBER: 98505625 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLADWIN NEWSPAPERS INC CENTRAL INDEX KEY: 0001052697 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541170304 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-12 FILM NUMBER: 98505626 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAPH ADS PRINTING INC CENTRAL INDEX KEY: 0001052704 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 382438126 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-13 FILM NUMBER: 98505627 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HURON HOLDINGS LLC CENTRAL INDEX KEY: 0001052707 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541867829 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-14 FILM NUMBER: 98505628 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HURON NEWSPAPERS LLC CENTRAL INDEX KEY: 0001052711 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541867829 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-15 FILM NUMBER: 98505629 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HURON PS LLC CENTRAL INDEX KEY: 0001052714 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541867829 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-16 FILM NUMBER: 98505630 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDLAND BUYERS GUIDE INC CENTRAL INDEX KEY: 0001052716 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541867829 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-17 FILM NUMBER: 98505631 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NB II INC CENTRAL INDEX KEY: 0001052717 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541867829 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-18 FILM NUMBER: 98505632 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCH II LLC CENTRAL INDEX KEY: 0001052721 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541851918 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-19 FILM NUMBER: 98505633 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCR II INC CENTRAL INDEX KEY: 0001052725 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841347311 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-20 FILM NUMBER: 98505634 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCR III LLC CENTRAL INDEX KEY: 0001052726 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841347311 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-21 FILM NUMBER: 98505635 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHERN COLORADO HOLDINGS LLC CENTRAL INDEX KEY: 0001052728 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841347311 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-22 FILM NUMBER: 98505636 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHERN COLORADO RADIO INC CENTRAL INDEX KEY: 0001052730 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841091274 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-23 FILM NUMBER: 98505637 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHLAND BROADCASTING LLC CENTRAL INDEX KEY: 0001052731 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 411862832 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-24 FILM NUMBER: 98505638 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHLAND HOLDINGS LLC CENTRAL INDEX KEY: 0001052732 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541838750 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-25 FILM NUMBER: 98505639 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: READING RADIO INC CENTRAL INDEX KEY: 0001052733 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 541163978 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-26 FILM NUMBER: 98505640 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST JOHNS NEWSPAPERS INC CENTRAL INDEX KEY: 0001052735 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 383299223 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-27 FILM NUMBER: 98505641 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRI STATE BROADCASTING INC CENTRAL INDEX KEY: 0001052736 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 351888093 STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-28 FILM NUMBER: 98505642 BUSINESS ADDRESS: STREET 1: BRILL MEDIA CO STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL MICHIGAN DISTRIBUTION CO LP CENTRAL INDEX KEY: 0001052772 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: VA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-44177-29 FILM NUMBER: 98505643 BUSINESS ADDRESS: STREET 1: MEDIA STREET 2: P.O. BOX 447 CITY: MT. PLEASANT STATE: MI ZIP: 48858 BUSINESS PHONE: 8124236200 MAIL ADDRESS: STREET 1: BRILL MEDIA COMPANY STREET 2: P.O. BOX 3353 CITY: EVANSVILLE STATE: IN ZIP: 47732 S-4 1 FORM S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1997 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ BRILL MEDIA COMPANY, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 52-2071822 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
BRILL MEDIA MANAGEMENT, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1877458 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
BMC HOLDINGS, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 52-2071824 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
BRILL NEWSPAPERS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1170289 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
BRILL RADIO, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1148743 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CADILLAC NEWSPAPERS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 54-1170305 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CENTRAL MICHIGAN DISTRIBUTION CO., INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 38-2438162 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CENTRAL MICHIGAN DISTRIBUTION CO., L.P. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 7398 62-1356763 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CENTRAL MICHIGAN NEWSPAPERS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 54-1170307 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CENTRAL MISSOURI BROADCASTING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 54-1163979 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CMB II, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 43-1671356 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CMN ASSOCIATED PUBLICATIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 38-2438130 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
CMN HOLDING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1170304 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
GLADWIN NEWSPAPERS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 54-1170304 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
GRAPH ADS PRINTING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 38-2438126 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
HURON HOLDINGS, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1867829 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
HURON NEWSPAPERS, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 38-3372402 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
HURON P.S., LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 7398 38-3372410 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
MIDLAND BUYERS GUIDE, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 38-2438164 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NB II, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 41-1803205 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NCH II, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1851918 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NCR II, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 84-1347311 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NCR III, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 54-1851920 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NORTHERN COLORADO HOLDINGS, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1862076 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NORTHERN COLORADO RADIO, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 84-1091274 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NORTHLAND BROADCASTING, LLC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 41-1862832 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
NORTHLAND HOLDINGS, LLC (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 6749 54-1838750 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
READING RADIO, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 54-1163978 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
ST. JOHNS NEWSPAPERS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 2710 38-3299223 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
TRI-STATE BROADCASTING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) VIRGINIA 4830 35-1888093 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
420 N.W. FIFTH STREET, EVANSVILLE, INDIANA 47708 (812) 423-6200 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ALAN R. BRILL PRESIDENT AND CHIEF EXECUTIVE OFFICER BRILL MEDIA MANAGEMENT, INC. 420 N.W. FIFTH STREET, EVANSVILLE, INDIANA 47708 (812) 423-6200 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------------ COPIES TO: THOMPSON & MCMULLAN, P.C. CARTER, LEDYARD & MILBURN 100 Shockoe Slip 2 Wall Street Richmond, Virginia 23219 New York, New York 10005 (804) 649-7545 (212) 732-3200 Attention: Charles W. Laughlin Attention: John K. Whelan
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / ------------------------ CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION BE REGISTERED REGISTERED NOTE OR SHARE(1) PRICE(1) FEE 12% Series B Senior Notes due 2007..................... $ 105,000,000 100% $ 105,000,000 $ 30,975 Series B Appreciation Notes............................ $ 3,000,000 100% $ 3,000,000 $ 885 Guarantee of 12% Series B Senior Notes due 2007(2)..... -- -- -- -- Guarantee of Series B Appreciation Notes due 2007(2)... -- -- -- --
(1) Estimated solely for the purpose of calculating the registration fee. (2) Pursuant to Rule 457(n), no registration fee is required with respect to the Guarantees. ------------------------ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SUBJECT TO COMPLETION, DATED JANUARY 13, 1998 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. PROSPECTUS BRILL MEDIA COMPANY, LLC [LOGO] BRILL MEDIA MANAGEMENT, INC. OFFER TO EXCHANGE 12% SENIOR NOTES DUE 2007 FOR 12% SERIES B SENIOR NOTES DUE 2007 AND APPRECIATION NOTES DUE 2007 FOR SERIES B APPRECIATION NOTES DUE 2007 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED Brill Media Company, LLC, a Virginia limited liability company ("BMC") and Brill Media Management, Inc., a Virginia corporation (collectively with BMC, the "Issuer"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letters of Transmittal (the "Exchange Offer"), to exchange (i) its 12% Series B Senior Notes due 2007 (the "Exchange Notes") for an equal principal amount of its outstanding 12% Senior Notes due 2007 (the "Original Notes" and collectively with the Exchange Notes, the "Notes"), of which an aggregate of $105,000,000 in principal is outstanding as of the date hereof, and (ii) its Series B Appreciation Notes due 2007 (the "Exchange Appreciation Notes") for an equal principal amount of its outstanding Appreciation Notes due 2007 (the "Original Appreciation Notes" and, collectively with the Exchange Appreciation Notes, the "Appreciation Notes"), of which an aggregate of $3,000,000 in principal is outstanding as of the date hereof. The form and the terms of each of the Exchange Notes and the Exchange Appreciation Notes will be the same as the form and terms of each of the Original Notes and the Original Appreciation Notes, respectively, except that (i) each of the Exchange Notes and the Exchange Appreciation Notes will bear a "Series B" designation and will bear different CUSIP Numbers from the Original Notes and the Original Appreciation Notes, (ii) the Exchange Notes and the Exchange Appreciation Notes will have been registered under the Securities Act of 1933, as amended (the "Securities Act"), and, therefore, will not bear legends restricting their transfer, and (iii) holders of the Exchange Notes and the Exchange Appreciation Notes will not be entitled to certain rights of holders of Notes and Appreciation Notes, respectively, under the Registration Rights Agreements (as defined), which rights will terminate as to holders of the Exchange Notes and Exchange Appreciation Notes upon consummation of the Exchange Offer. Exchange Notes will evidence the same debt as the Original Notes and will be entitled to the benefits of the indenture (the "Indenture") dated as of December 30, 1997 governing the Original Notes and the Exchange Notes. Exchange Appreciation Notes will evidence the same debt as the Original Appreciation Notes and will be entitled to the benefits of the indenture (the "Appreciation Note Indenture") dated as of December 30, 1997 governing the Appreciation Notes and the Exchange Appreciation Notes. The Original Notes and the Original Appreciation Notes are sometimes referred to herein collectively as the "Original Securities." The Exchange Notes and the Exchange Appreciation Notes are sometimes referred to herein collectively as the "Exchange Securities." The Original Securities and the Exchange Securities are sometimes referred to herein collectively as the "Securities." Interest on the Exchange Notes will accrue from and include their issuance date. Additionally, interest on the Exchange Notes will accrue from the last interest payment date on which interest was paid on the Original Notes surrendered in exchange therefor or, if no interest has been paid on the Original Notes, from the date of original issuance of such Original Notes to but not including the issuance date of the Exchange Notes. Accordingly, holders who exchange their Original Notes will receive the same interest payment on the next interest payment date (expected to be June 15, 1998) that they would have received had they not accepted the Exchange Offer. The Notes will bear interest at a rate of 7 1/2% per annum from the date of original issue until December 15, 1999 and at a rate of 12% from and after such date until maturity. Interest on the Notes will be payable in cash semi-annually on June 15 and December 15 of each year, commencing June 15, 1998. The Notes will mature on December 15, 2007. Except as described below, the Issuer may not redeem the Notes prior to December 15, 2002. On or after such date, the Issuer may redeem the Notes, in whole or in part, at any time, at the redemption prices set forth herein, together with accrued and unpaid interest, if any, to the date of redemption. In addition, at any time and from time to time on or prior to December 15, 2000, in the event of the sale by BMC of at least $25.0 million of its equity securities in one or more Public Equity Offerings (as defined), the Issuer may, at its option, use the net proceeds of such sale to redeem up to 25% of the aggregate principal amount of the Notes, at a redemption price equal to 112.0% of the Accreted Value (as defined) of the Notes to be redeemed, together with accrued and unpaid interest, if any, to the date of redemption; PROVIDED, HOWEVER, that after any such redemption the aggregate principal of the Notes outstanding must be at least $79.0 million. The Notes will not be subject to any sinking fund requirement. Upon the occurrence of a Change of Control (as defined), the Issuer will be required to make an offer to repurchase the Notes at a price equal to 101% of the Accreted Value in the case of an offer to purchase occurring prior to December 15, 1999, and thereafter at a purchase price equal to 101% of the principal amount thereof, in each case plus accrued and unpaid interest thereon to the date of repurchase. See "Description of Notes - -- Optional Redemption" and "--Change of Control." The Notes will be senior unsecured obligations of the Issuer. The Notes will rank PARI PASSU with all existing and future senior indebtedness of the Issuer and will rank senior in right of payment to any future subordinated indebtedness of the Issuer. The Notes will be unconditionally guaranteed (the "Subsidiary Guarantees"), jointly and severally, by each of the Issuer's subsidiaries on the issue date of the Notes and by each Restricted Subsidiary (as defined) of the Issuer organized or acquired thereafter (collectively the "Subsidiary Guarantors"). The Guarantees will be senior unsecured obligations of the Subsidiary Guarantors and will rank PARI PASSU in right of payment with all other existing and future senior indebtedness of the respective Subsidiary Guarantors and senior in right of payment to all existing and future subordinated indebtedness of the respective Subsidiary Guarantors and may be released upon the occurence of certain events. The Notes and Subsidiary Guarantees will be effectively subordinated in right of payment to any secured debt of the Issuer and the Subsidiary Guarantors to the extent of the assets serving as security therefor. The Indenture permits the Issuer and its Subsidiaries to incur additional indebtedness (including senior indebtedness), subject to certain limitations. As of August 31, 1997, on a pro forma basis after giving effect to the Transactions, the Issuer had no outstanding secured indebtedness to which the Notes would have been effectively subordinated, and the aggregate amount of the Subsidiary Guarantors' outstanding senior secured indebtedness to which the Subsidiary Guarantees would have been effectively subordinated was approximately $4.9 million. See "Description of Notes." Each Appreciation Note will entitle the holder thereof to receive on December 15, 2007 a cash payment of principal and interest in an amount equal to (i) the principal amount thereof plus (ii) the amount by which the Specified Percentage (as defined) of the Value (as defined) of BMC on such date exceeds the principal amount of such Appreciation Note. The Appreciation Notes will be subject to mandatory and optional redemption under certain circumstances. The Appreciation Notes will be senior subordinated obligations of the Issuer. The Appreciation Notes will be subordinated in right of payment to all existing and future Senior Indebtedness (as defined) of the Issuer, including the Notes, and will rank senior in right of payment to any subordinated indebtedness of the Issuer. The Appreciation Notes will be unconditionally guaranteed, jointly and severally, by each of the Subsidiary Guarantors. The Guarantees of the Appreciation Notes will be senior subordinated obligations of the Subsidiary Guarantors and will be subordinated in right of payment to all existing and future Guarantor Senior Indebtedness (as defined) of the respective Subsidiary Guarantor, including the Subsidiaries Guarantees of the Notes. See "Description of the Appreciation Notes." SEE "RISK FACTORS" BEGINNING ON PAGE 22 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER THEIR ORIGINAL SECURITIES IN THE EXCHANGE OFFER. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is , 1998. (CONTINUED FROM FRONT COVER) The Issuer will accept for exchange any and all validly tendered Original Securities not withdrawn prior to 5:00 p.m., New York City time, on , 1998, unless extended by the Issuer in its sole discretion (the "Expiration Date"). Tenders of Original Securities may be withdrawn at any time prior to the Expiration Date. The Exchange Offer is not conditioned upon any minimum aggregate principal amount of Original Notes or any minimum aggregate principal amount of Original Appreciation Notes being tendered for exchange. In the event the Issuer terminates the Exchange Offer and does not accept for exchange any Original Securities, the Issuer will promptly return all previously tendered Original Securities to the holders thereof. The Exchange Offer is subject to certain customary conditions. See "The Exchange Offer--Conditions." The Issuer has agreed to pay all expenses incident to the Exchange Offer. The Issuer will not receive any proceeds from the Exchange Offer. The Original Securities were originally issued and sold on December 30, 1997 in transactions (the "Offering") which were not registered under the Securities Act in reliance upon exemptions from the registration requirements of the Securities Act. Accordingly, the Original Securities may not be reoffered, resold or otherwise pledged, hypothecated or transferred in the United States unless registered under the Securities Act or unless an applicable exemption from the registration requirements of the Securities Act is available. The Exchange Securities are being offered hereunder to satisfy the obligations of the Issuer under the Registration Rights Agreements. See "The Exchange Offer--Purpose and Effect of Exchange Offer." Based on no-action letters issued by the staff of the Securities and Exchange Commission (the "Commission") to third parties, the Issuer believes the Exchange Notes and the Exchange Appreciation Notes issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by any holder thereof (other than any such holder that is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act), without further registration under the Securities Act and without delivery of a prospectus that satisfies the requirements of Section 10 of the Securities Act, provided that such Exchange Securities are acquired in the ordinary course of such holder's business and that such holder does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of such Exchange Securities. Eligible holders wishing to accept the Exchange Offer must represent to the Issuer that such conditions have been met. Each broker-dealer that receives Exchange Securities pursuant to the Exchange Offer in exchange for Securities acquired for its own account as a result of market-making or other trading activities (a "Participating Broker-Dealer") may be a statutory underwriter and must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities. The Letters of Transmittal state that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Securities received in exchange for Original Securities where such Original Securities were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities. The Issuer has agreed that, for a period of 180 days after consummation of the Exchange Offer, it will make this Prospectus available to any Participating Broker-Dealer for use in connection with any such resale. See "Plan of Distribution." Holders of Original Securities whose Original Securities are not tendered and accepted in the Exchange Offer will continue to hold such Original Securities and will be entitled to all the rights and preferences and will be subject to the limitations applicable thereto under the Indenture and the Appreciation Note Indenture, respectively. Following consummation of the Exchange Offer, the holders of Original Securities will continue to be subject to the existing restrictions upon transfer thereof under the Securities Act. There has been no previous public market for the Securities. The Issuer does not intend to list the Exchange Securities on any securities exchange or to seek approval for quotation through any automated quotation system. There can be no assurance that an active market for the Exchange Securities will develop. See "Risk Factors--Lack of Established Trading Market." Moreover, to the extent that Original Securities are tendered and accepted in the Exchange Offer, the trading market for untendered and tendered but unaccepted Original Securities could be adversely affected. THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE ISSUER ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF ORIGINAL SECURITIES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION. CERTAIN OF THE MATTERS DISCUSSED UNDER "PROSPECTUS SUMMARY," "RISK FACTORS," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," "BUSINESS" AND ELSEWHERE IN THIS PROSPECTUS CONTAIN FORWARD-LOOKING STATEMENTS CONCERNING THE ISSUER'S OPERATIONS, ECONOMIC PERFORMANCE AND FINANCIAL CONDITION, INCLUDING, AMONG OTHER THINGS, THE ISSUER'S BUSINESS STRATEGY. THESE STATEMENTS ARE BASED ON THE ISSUER'S EXPECTATIONS AND ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED DUE TO A NUMBER OF FACTORS, INCLUDING THOSE IDENTIFIED UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS. RADIO INDUSTRY DATA Unless otherwise indicated herein, audience ratings and market radio advertising revenues have been obtained from INVESTING IN RADIO, 1997 MARKET REPORT--THIRD EDITION, BIA Publications Inc. ("BIA"). Revenue rankings in the Company's radio markets have been derived by comparing the Company's revenues in each market to the revenues for the Company's competitors (utilizing the estimated revenues for each competing radio station as provided by BIA). Metro rank for the Company's markets have been obtained from ARBITRON, RADIO MARKET REPORT, the Arbitron Company ("Arbitron"). Audience rankings for the Fort Collins/Greeley/Loveland, Colorado market ("Fort Collins") and the Jefferson City/Columbia/Lake of Ozarks, Missouri market ("Jefferson City") have been taken from ARBITRON RADIO CUSTOM SURVEY RADIO AREA REPORT, MAY 1997. No published market revenues or revenue rankings on the Fort Collins and Jefferson City markets are available, and market revenues and revenue ranking in such markets have been estimated by the Company, without the benefit of any independent investigation or confirmation, on the basis of its knowledge of each market and published retail sales statistics. CERTAIN DEFINITIONS Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and its wholly-owned subsidiary, Brill Media Management, Inc., a Virginia corporation ("Media" and, collectively with BMC, the "Issuer"), are the co-issuers of the Notes. Media and BMC, collectively with BMC's direct subsidiary BMC Holdings, LLC, a Virginia limited liability company ("Holdings"), and the direct and indirect subsidiaries of Holdings, are referred to herein as the "Company." Certain management services are provided to the Company by Brill Media Company, L.P., a Virginia limited partnership and an affiliate of the Company ("BMCLP"). Radio station and newspaper affiliates that are managed by the Company pursuant to Managed Affiliates Management Agreements (as defined) are referred to collectively as "Managed Affiliates." See "Business--Structure and Governance," "Certain Transactions" and "Description of Notes--Certain Definitions." The subsidiaries of BMC (the "Subsidiaries") presently include the following entities, all of which are organized under the laws of Virginia: Holdings; Reading Radio, Inc.; Tri-State Broadcasting, Inc.; Northern Colorado Radio, Inc.; NCR II, Inc.; Central Missouri Broadcasting, Inc.; CMB II, Inc.; Northland Broadcasting, LLC; NB II, Inc.; Central Michigan Newspapers, Inc.; Cadillac Newspapers, Inc.; CMN Associated Publications, Inc.; Central Michigan Distribution Co., L.P.; Central Michigan Distribution Co., Inc.; Gladwin Newspapers, Inc.; Graph Ads Printing, Inc.; Midland Buyer's Guide, Inc.; St. Johns Newspapers, Inc.; Huron P.S., LLC; Huron Newspapers, LLC; Huron Holdings, LLC; Northern Colorado Holdings, LLC; NCR III, LLC; NCH II, LLC; Northland Holdings, LLC; CMN Holding, Inc.; Brill Radio Inc.; and Brill Newspapers, Inc. "EBITDA" means operating income before depreciation and amortization expenses. References to "Media Cashflow" refer to EBITDA plus management fees, incentive plan expense, time brokerage agreement fees, acquisition related consulting expense and interest income from loans made by the Company to Managed Affiliates. Management fees payable to BMCLP are subordinated, to the extent provided in the Indenture, to the prior payment of the Issuer's obligations on the Notes. Although Media Cashflow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that these measures are useful to an investor in evaluating the Company because these measures are widely used in the media industry to evaluate a media company's operating performance. However, Media Cashflow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statements prepared in accordance with GAAP as measures of liquidity or profitability. "New Credit Facility" means a new senior secured credit facility which may be entered into by the Company in the aggregate principal amount not to exceed $15.0 million, as permitted by the Indenture. No ii assurances can be given that such New Credit Facility will be extended to the Company by any lender or that it will be made available to the Company on terms acceptable to the Company. The terms local marketing agreement ("LMA"), time brokerage agreement ("Time Brokerage Agreement") and joint sales agreement ("JSA") are referred to in various places in this Prospectus. An LMA or Time Brokerage Agreement refers to an agreement, although it may take various forms, under which one party agrees in consideration of a fee paid to provide, on a cooperative basis, the programming, sales, marketing and similar services for a separately owned radio station located in the same radio market and realize the financial benefit of such activities. A JSA refers to an agreement, similar to an LMA or Time Brokerage Agreement, under which a radio station agrees to provide the sales and marketing services for another station while the owner of such other radio station provides the programming for such other radio station. LMAs, Time Brokerage Agreements and JSAs are more fully described in "Business--Federal Regulation of Radio Broadcasting." The Company generally considers radio "middle markets" to be markets ranked 80 to 200 by Arbitron. The Company considers "middle markets" for purposes of its newspaper operations to be generally comparable to the smaller markets in such range. All references in this Prospectus to "senior" in reference to the Notes or other obligations of the Issuer or a Subsidiary Guarantor means obligations that are not subordinated to other unsecured obligations of the Issuer or such Subsidiary Guarantor but which may be subordinate to secured obligations of the Issuer to the extent of the security therefor. iii PROSPECTUS SUMMARY THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO APPEARING ELSEWHERE HEREIN. INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER "RISK FACTORS" PRIOR TO MAKING A DECISION TO TENDER ANY ORIGINAL SECURITIES IN EXCHANGE FOR EXCHANGE SECURITIES HEREUNDER. THE COMPANY The Company is a diversified media enterprise that acquires, develops, manages, and operates radio stations, newspapers and related businesses in middle markets. The Company presently owns, operates, or manages fifteen radio stations serving five markets located in Pennsylvania, Kentucky/Indiana, Colorado, Minnesota/Wisconsin, and Missouri, including three radio stations located in the Kentucky/Indiana market that are owned by Managed Affiliates (the twelve such stations which are not owned by Managed Affiliates being referred to herein as the "Stations"). The group of Stations and Managed Affiliates' stations operated by the Company in each market holds a first or second ranking in both combined audience ratings and combined revenues, compared to other groups, in such market. In addition, in each of its markets, the Stations and Managed Affiliates' stations individually have at least one of the top two rankings in both audience ratings and revenues. The Company's newspaper businesses (the "Newspapers") operate integrated newspaper publishing, printing and print advertising distribution operations, providing total-market print advertising coverage throughout a seventeen-county area in central Michigan. This operation offers a two-edition daily newspaper, thirteen weekly publications, a web offset printing operation for Newspapers' publications and outside customers, and a private distribution company. The Company, each of its Subsidiaries, BMCLP and the Managed Affiliates are wholly owned directly or indirectly by Alan R. Brill ("Mr. Brill" or the "Stockholder"), who founded the business and began its operations in 1981. For the year ended February 28, 1997, the Company's pro forma combined revenues and Media Cashflow, excluding the Missouri Properties which are under contract to be sold (see "Transactions"), were $27.4 million and $10.4 million, respectively. For the six months ended August 31, 1997, such pro forma combined revenues and Media Cashflow were $15.0 million and $6.1 million, respectively. The financial statements of the Managed Affiliates are not combined with those of the Company. Historically, the Company has focused on media properties located in middle markets, which the Company believes offer greater opportunities than larger markets to build and maintain consistently high market and revenue shares at reasonable costs. The Company believes its markets are generally less competitive than major markets and are characterized by a limited number of direct competitors, local owner/operators that are less sophisticated and have less financial resources, and fewer alternative advertising media. In such markets, the Company is able to target broader demographic groups and to sell its advertising to a wider customer base than in major markets. The Company believes that, relative to larger markets, a higher percentage of revenues in middle markets is derived from local advertising and therefore a correspondingly higher portion of its revenues can be directly generated by its own sales efforts. The Company believes that local advertisers in middle markets often make advertising decisions based primarily on customer relationships and service and advertising results. The Company's primary focus is to provide high-quality customer service with promotional activities that yield results for advertisers and to build and maintain superior local advertiser relationships. The Company's overall operations, including its sales and marketing strategy, long-range planning, and management support services are managed by BMCLP, a limited partnership indirectly owned by Mr. Brill (see "Certain Transactions"). The management support provided by BMCLP has been a key element in the Company's ability to achieve significant increases in Media Cashflow at each of its properties following their acquisition. Each of the Company's properties is managed on a day-to-day basis by an 1 experienced local president/general manager. As of September 30, 1997, the Company had a workforce of approximately 340 full-time and 100 part-time employees, none of whom is unionized. The principal executive offices of the Company are located at 420 N.W. Fifth Street, Evansville, Indiana 47708, and its telephone number is (812) 423-6200. RADIO PROPERTY OVERVIEW In each of its markets, the Company's Stations and the Managed Affiliates' stations as a group hold at least one of the top two rankings in both combined audience ratings and combined revenues. Furthermore, in each of its markets the Company's Stations and the Managed Affiliates' stations individually hold at least one of the top two audience and revenues rankings. Set forth below is a list of the Stations and the Managed Affiliates' stations specifying their broadcasting frequency, Federal Communications Commission ("FCC") class, format, control, market, market rank and group rank by ratings and revenues.
STATION GROUP ARBITRON RANK FCC OWNED/ MARKET -------------------------- STATION FREQUENCY CLASS FORMAT MANAGED MARKET(S) RANK RATINGS REVENUES - ------------- ----------- --------- ----------- ------------ ------------------ ----------- --------- --------------- WIOV-FM 105.1 FM-B Country Owned Lancaster, PA(1) 110 1 1 Reading, PA 130 2 2 WBKR-FM 92.5 FM-C Country Owned Evansville, IN 125(2) 1 1 WKDQ-FM 99.5 FM-C Country Managed(3) and Owensboro/ WSTO-FM 96.1 FM-C Adult Hits Managed(3) Henderson, KY WOMI-AM 1490 AM-C News/Talk Owned WVJS-AM 1420 AM-B News/Talk Managed(3) KTRR-FM 102.5 FM-C2 Adult Hits Managed(4) Fort Collins/ 135 1 1 KUAD-FM 99.1 FM-C1 Country Owned Greeley/ Loveland, CO KKCB-FM 105.1 FM-C1 Country Owned Duluth, MN/ 207 1 1 KLDJ-FM 101.7 FM-C2 Oldies Owned Superior, WI WEBC-AM 560 AM-B News/Talk Owned KATI-FM 94.3 FM-C2 Country Owned(5) Jefferson City/ NR(6) 2 2 KTXY-FM 106.9 FM-C Adult Hits Owned(5) Columbia/ KLIK-AM 950 AM-B Country Owned(5) Lake of the Ozarks, MO
- -------------------------- (1) WIOV-FM serves both Lancaster and Reading. The Company also owns and operates WIOV-AM, an AM-C station in Reading. Ratings and revenues ranks for WIOV-FM include WIOV-AM. (2) The Company estimates that on a combined basis the Evansville/Owensboro/Henderson market would have an Arbitron rank of 125 based on separate rankings of 151 and 255 for Evansville and Owensboro, respectively. (3) WKDQ-FM, WSTO-FM and WVJS-AM are owned by Managed Affiliates. (4) The Company manages KTRR-FM pursuant to a Time Brokerage Agreement pending completion of its acquisition. (5) Missouri Properties are under contract for sale. See "--Transactions." Accordingly, the pro forma financial statements presented herein do not include the operating results of such stations. (6) The Jefferson City/Columbia/Lake of the Ozarks, Missouri market is not ranked by Arbitron. Columbia separately is ranked 237 by Arbitron, and KTXY-FM is the top-rated station by audience ranking in such market. 2 LANCASTER AND READING, PENNSYLVANIA, which the Company estimates combined would have an Arbitron rank of 60, are served by WIOV-FM and WIOV-AM. WIOV-FM programs a Country music format and consistently is one of the region's top rated stations. WIOV-FM is the top-ranked radio station based on combined revenues in the Lancaster market. WIOV-AM serves the Reading market with a News/Talk format. EVANSVILLE, INDIANA, AND OWENSBORO/HENDERSON, KENTUCKY, which the Company estimates combined would have an Arbitron rank of 125, are served by WBKR-FM and WOMI-AM. These stations broadcast to the Tri-State area of southwestern Indiana, southern Illinois, and western Kentucky, which the Company believes is undergoing significant economic expansion. WBKR-FM is the region's most powerful and most listened to radio station. The five stations operated by the Company (including the Managed Affiliates' stations, WKDQ-FM, WSTO-FM and WVJS-AM) rank first in the market in terms of both their combined revenues and their combined ratings, and individually hold three of the top four audience and revenues rankings in the market. FORT COLLINS/GREELEY/LOVELAND, COLORADO, which has recently been designated as a market by Arbitron and is ranked 135, is served by KUAD-FM and KTRR-FM. KUAD-FM is northern Colorado's leading radio station in terms of audience ratings and advertising revenues, and in the seventeen months since the Company began operating it pursuant to a Time Brokerage Agreement, KTRR-FM has established a significant presence in the market. These Stations primarily serve Larimer and Weld counties in northern Colorado, which comprise a distinct market approximately 65 miles north of Denver. The Company believes that radio advertising in the area is significantly underutilized by potential advertisers based on national norms. The Stations focus on the Fort Collins/Greeley/Loveland "triangle," and reach a listener base that the Company believes is well-educated, has significant disposable income, and is served locally by few other radio stations. DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN, which have a combined Arbitron rank of 207, are served by KKCB-FM, KLDJ-FM and WEBC-AM, which the Company believes is the premier combination of radio stations in this market based on revenues and audience ratings. KKCB-FM, which operates a Country format, is the highest-rated station in its market. JEFFERSON CITY/COLUMBIA/LAKE OF THE OZARKS, MISSOURI, is served by KATI-FM, KTXY-FM and KLIK-AM. These stations are currently under contract for sale and pending closing are being operated by the purchaser under the terms of a Time Brokerage Agreement. See "--Transactions." 3 PUBLICATIONS OVERVIEW Set forth below is a list of the Newspaper publications specifying the location and circulation of each.
NEWSPAPER LOCATION CIRCULATION - ------------------------------------------------- ------------------- ----------- MORNING SUN...................................... Mt. Pleasant, MI 12,700 MT. PLEASANT BUYERS GUIDE........................ Mt. Pleasant, MI 28,400 CLARE COUNTY BUYERS GUIDE........................ Clare, MI 13,000 ALMA REMINDER.................................... Alma, MI 20,600 CADILLAC BUYERS GUIDE............................ Cadillac, MI 21,700 CARSON CITY REMINDER............................. Carson City, MI 11,000 EDMORE ADVERTISER................................ Edmore, MI 17,500 HEMLOCK SHOPPERS GUIDE........................... Hemlock, MI 12,500 GLADWIN BUYERS GUIDE............................. Gladwin, MI 16,800 ISABELLA COUNTY HERALD........................... Mt. Pleasant, MI 16,200 MIDLAND BUYERS GUIDE............................. Midland, MI 28,000 ST. JOHNS REMINDER............................... St. Johns, MI 16,200 THE NORTHEASTERN SHOPPER (NORTH EDITION)................................ Tawas City, MI 24,400 THE NORTHEASTERN SHOPPER (SOUTH EDITION)................................ Tawas City, MI 15,600 ----------- Total Circulation 254,600
The Newspapers serve a seventeen county area of small communities in central Michigan, where there are few other newspapers, no local television stations, and few radio stations. The Company has central offices and production facilities in Mt. Pleasant, Michigan and leads the central Michigan market in media billings. The Company's daily newspaper, the MORNING SUN, has a paid subscription base of 12,700 readers and is the only daily newspaper published in Gratiot, Isabella and southern Clare counties. The Company's weekly newspaper and twelve weekly shopping guides are delivered free to more than 240,000 households in the central Michigan area. The Company's multiple products and private delivery system permit advertisers to buy customized advertising coverage for the portion of the local market that best reaches their potential customers. The Company also publishes numerous niche publications such as vacation guides and a monthly business report. The Newspapers have a widely diversified base of advertising and printing customers and during the year ended February 28, 1997 no one customer represented more than 2% of the Company's revenues. STRUCTURE AND GOVERNANCE In anticipation of the Offering, the ownership of the Stations and Newspapers was restructured to preserve certain historical tax benefits while permitting Mr. Brill the flexibility required to continue growing the business through acquisitions. Set forth below is a chart outlining the ownership of the Company and its principal affiliates. Certain intermediate entities have been omitted. 4 [The chart, which is on file with the Issuer, shows that Mr. Brill is the sole ultimate owner of (i) BMCLP, (ii) the Managed Affiliates, (iii) the Subsidiaries (indirectly through BMC and Holdings) and (iv) Media (indirectly through BMC).] The Exchange Securities will be issued jointly by Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and its wholly-owned subsidiary, Brill Media Management, Inc., a Virginia corporation ("Media"; collectively with BMC, the "Issuer"). BMC through Subsidiaries directly and indirectly owns radio and newspaper properties, including those previously identified. The historical financial statements of The Radio and Newspaper Businesses of Alan R. Brill included elsewhere in this Prospectus include the financial position and results of operations of the radio and newspaper Subsidiaries on a combined basis. Each Subsidiary is wholly-owned directly or indirectly by BMC except that Alan R. Brill indirectly owns up to a 2% interest in eight Subsidiaries. The Managed Affiliates are not subsidiaries of the Company, but are managed by the Company pursuant to Managed Affiliates Management Agreements. As of the date of this Prospectus, the Managed Affiliates operate radio stations WKDQ-FM, WSTO-FM and WVJS-AM in Evansville, Indiana and Owensboro/Henderson, Kentucky, which were acquired by Mr. Brill in 1997. While subject to a Managed Affiliate Management Agreement, funds may be advanced from time to time to these and future Managed Affiliates by the Company or its Subsidiaries in the form of unsecured loans subject to certain limitations. See "Description of Notes--Limitations on Affiliate Transactions." Local general managers operate the Stations and Newspapers on a day-to-day basis. Other management services, including benefit plan administration, risk management, finance, tax management, and strategic planning and operations oversight are provided to the Subsidiaries and the affiliates by BMCLP, which is owned indirectly by Mr. Brill. The fees charged by BMCLP are established on a contractual basis and, as set forth more fully under "Certain Transactions," such fees are payable to the extent set forth in the Description of the Notes. BUSINESS STRENGTHS MIDDLE MARKET FOCUS. The Company operates media businesses in middle markets which generally are less competitive than larger markets and are characterized by a limited number of direct competitors, local owner/operators which are less sophisticated and have less financial resources, and fewer alternative media. The Company believes that in its markets the majority of its revenues are directly generated by its own sales efforts. STRONG AND GROWING MARKET SHARE. In each of its radio markets the Company's Stations or the Managed Affiliates' stations hold at least one of the top two rankings in both audience ratings and revenues. The Company believes that it is the leading advertising provider in its newspaper markets. The Company believes the Stations and Newspapers have strong community support and work to build and maintain strong middle market franchises. SUCCESSFUL ACQUISITION HISTORY. Mr. Brill has a history of identifying acquisition opportunities, initiating negotiations to buy such properties and developing creative structures by which to meet the requirements of the sellers of such properties. Mr. Brill and the management team have successfully developed acquired radio stations and newspapers and have improved Media Cashflow at each of the Company's properties following their acquisition. 5 CONSISTENT CASHFLOWS. The Company's Subsidiaries have a history of consistent cashflows. The Company's Subsidiaries generated Media Cashflow margins (on a combined basis) of approximately 24%, 26%, and 30% for the one-year periods ended February 28, 1995, February 29, 1996, and February 28, 1997, respectively, and 37% for the six-month period ended August 31, 1997. The Company believes that its Media Cashflow will continue to be strong and will enable the Company to continue its acquisition strategy. Furthermore, the Company's continuing operations currently require relatively small capital expenditures. EXPERIENCED AND COMMITTED MANAGEMENT TEAM. The Company's senior management team, provided by BMCLP, is highly experienced in the radio and newspaper industries. BMCLP has experienced little management turnover, and BMCLP's four senior operating executives have an average of 22 years each of experience in the media industry and have worked together since 1988. The Company has a decentralized management structure in which general managers make the key local operating decisions for each station or newspaper with support from BMCLP management. STRONG LOCAL ADVERTISER RELATIONSHIPS. Historically, the Company has created and maintained relationships directly with local advertisers in its markets, which enable the Company to respond immediately and creatively to meet customer needs. The Company believes that its marketing approach and customer relationships enable the Stations to generate greater revenues and margins than comparably ranked stations in their markets and enable the Newspapers to increase revenues and margins. To further strengthen its relationships with advertisers, the Company also offers and markets its ability to create customer traffic through on-site events staged at, and broadcast from, an advertiser's business. ACQUISITION STRATEGY The Company seeks to acquire underperforming middle market media businesses whose acquisition costs are low relative to potential revenues and cashflow. The Company focuses on developing significant long-term franchises in middle markets. The Company then seeks to improve revenues and cashflow, using its particular promotional, marketing, sales, programming and editorial approaches. The Company targets businesses that it believes operate in underdeveloped market segments with a low level of competition and a strong economic base, as well as stations with competitive technical facilities and businesses that are located in areas deemed desirable for relocation in terms of personnel recruitment. The Company believes that its acquisition strategy, properly implemented, has a number of specific benefits, including (i) diversification of revenues and cashflow across a broader base of industries, properties and markets, (ii) geographic clustering which has allowed improved cashflow margins through the consolidation of facilities, centralized newsgathering, cross-selling of advertising, elimination of redundant expenses, (iii) improved access to consultants and other industry resources, (iv) greater appeal to qualified industry management talent and (v) efficiencies from economies of scale. OPERATING STRATEGY In order to appeal to advertising customers and maximize the revenues and cashflow of its properties, the Company's strategy is as follows: MARKETING PARTNERSHIPS. The Company believes that advertisers in its markets are attracted and retained through value-added customer services. While the Company seeks and achieves audience ratings and circulation as a means of attracting advertisers, its operations are distinguished by a particular emphasis on soliciting advertisers directly. The Company believes that in many middle markets the 6 decision to advertise on a given radio station or in a given newspaper is driven in large measure by direct customer relationships and the level of customer success with past advertising programs and the marketing and sales effectiveness of the station or newspaper staff. The Company believes that building and solidifying marketing partnerships with advertisers and retaining such customers through effective results and high quality customer service are significant factors in maintaining leading revenue shares in its markets. OWNERSHIP OF STRONG MEDIA GROUPS. In each of its markets, the Company seeks to maintain and enhance its position as a market leader through its ownership of groups of stations or publications. Its ownership of groups of stations and publications allows the Company a variety of sales opportunities and customer demographics. By strategically coordinating customized programming, publishing, promotional, and selling strategies among a group of local stations or newspapers, the Company attempts to reach a wide range of demographic groups that appeal to advertisers. The Company believes that its wide range of advertising options permits it to offer pricing choices to suit customer needs and strengthen advertiser relationships. AGGRESSIVE SALES AND MARKETING. The Company seeks to maximize its share of local advertising revenues in each of its markets by implementing and maintaining strong direct sales and marketing programs. The Company tends to maintain separate sales forces for each of its Stations or Newspapers. The Company's Stations strive to maximize revenues by managing the on-air inventory of advertising time and adjusting prices based on local market conditions. Through its marketing efforts, the Company provides advertisers with an effective means of reaching a targeted demographic group. To further strengthen its relationships with radio advertisers, the Company also offers and markets its ability to create customer traffic through on-site events staged at, and broadcast from, an advertiser's place of business and promotions in which listeners are encouraged to participate by visiting such place of business. EXPERIENCED LOCAL MANAGEMENT. The Company believes that each of its Stations and Newspapers is primarily a local business and that much of its success is the result of the efforts of local management and staff. Accordingly, the Company decentralizes its operations. Each of the Company's local media groups is managed by a team of experienced managers who understand the trends, demographics, and competitive opportunities of the particular market. Local managers are responsible for developing annual operating budgets, and a major portion of their compensation is linked to performance against operating targets. BMCLP approves each station or newspaper group's annual operating budgets and imposes strict financial reporting requirements to track performance and monitor operating trends. The Company seeks and motivates managers who thrive on the challenges presented by such autonomy. Its success in finding and developing such managers has enabled the Company to compete successfully in each of its local markets. CENTRALIZED SUPPORT AND OVERSIGHT. The Company believes that its ability to utilize existing senior management and sales resources of its media groups enhances the growth potential of both acquired start-up and underperforming properties. Additionally, this support reduces the risks associated with undertaking new means of improving performance, such as launching new formats. Furthermore, the Company seeks to achieve substantial cost savings through the consolidation of facilities, management and administrative personnel and human resources, as well as through the reduction of redundant expenses. BMCLP personnel regularly visit the Stations and Newspapers to review performance, assist local management with their programming, editorial, sales, recruiting and training efforts, and to develop and verify overall operating and marketing strategies, including cost management, designed to improve cashflow. These visits enable the Company to remain aware of developments in each Station's and Newspaper's market and to control and monitor costs while providing useful input to each local manager. 7 COMMUNITY INVOLVEMENT. The Company believes that its marketing, sales and promotion efforts create direct relationships with its advertisers and audiences, making its Stations and Newspapers significant participants in the middle markets they serve. Each of the Company's Newspapers and Stations participates in numerous community programs, fund-raisers and activities that benefit a wide variety of organizations and produce revenues for the Company. TRANSACTIONS The Offering, together with the transactions briefly described below, collectively comprise the "Transactions" as referred to in this Prospectus. The Company's Subsidiaries, Central Missouri Broadcasting, Inc. and CMB II, Inc. (collectively the "Missouri Properties") have entered into agreements for the sale of substantially all of the assets of the Missouri Properties for a net cash purchase price of approximately $7.4 million, plus assumed liabilities of $256,000. Pursuant to the terms of a Time Brokerage Agreement ("TBA") which provides for monthly payments of $50,000 to the Missouri Properties, the purchaser is providing operating and management services to the Missouri Properties pending closing of the purchase. Closing of the sale and purchase is expected to occur immediately upon the FCC granting requisite approval for transfer of the broadcast licenses associated with these Stations. Applications for transfer of the broadcast licenses of the Missouri Properties have been filed with the FCC by the purchasers. A local market competitor has objected to the transfer of the licenses and on December 12, 1997, filed with the FCC a Petition to Deny the license transfers and to terminate the Time Brokerage Agreement. No action has been taken on the Petition to Deny by the FCC, and the Company believes that even if the Petition to Deny were granted, the consequences would not be material to the Company. The Company's Subsidiary, NCR II Inc., presently provides management and programming services to radio station KTRR-FM in Loveland, Colorado pursuant to a Time Brokerage Agreement with Onyx Broadcasting, Inc., has executed an option to purchase substantially all of the assets of KTRR-FM for a purchase price of $2.0 million, and will enter into a covenant not to compete with the sellers, with a stated consideration of $500,000, payable over its five year term. It is expected that closing of the purchase of KTRR-FM will occur shortly after execution of a definitive asset purchase agreement for this transaction and required approval for transfer of the broadcast licenses by the FCC. Certain of the Subsidiaries and other affiliates were indebted under the terms of certain senior secured obligations guaranteed by Mr. Brill and payable to AMRESCO Funding Corporation ("Amresco") and Goldman Sachs Credit Partners L.P. ("Goldman Sachs"). These obligations, including sums borrowed after August 31, 1997, a portion of which was used to pay dividends to Mr. Brill, were paid, along with accrued interest thereon, and applicable prepayment premiums, as appropriate, from the proceeds of the Offering, as reflected in the pro forma combined financial statements contained in this Prospectus. Certain of the proceeds of the Offering were used to pay certain related fees and expenses associated therewith. On October 1, 1997 two of the Company's newspaper Subsidiaries acquired the assets of Huron Postal Service, Inc. ("Huron") and Northeastern Printers, Inc. ("Northeastern"), newspapers located on the coast of Lake Huron, Michigan for total consideration of $2.8 million. The Company loaned approximately $2.0 million of the proceeds of the Offering to Managed Affiliates on an unsecured basis at a rate of interest of 12% per annum. Such amounts are in addition to the $14.3 million already loaned by the Company to the Managed Affiliates at August 31, 1997. 8 THE EXCHANGE OFFER CERTAIN CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN HAVE THE MEANINGS GIVEN THEM IN "DESCRIPTION OF NOTES--CERTAIN DEFINITIONS." ISSUER............................ Brill Media Company, LLC and Brill Media Management, Inc., as co-issuers. REGISTRATION RIGHTS AGREEMENT..... The Original Securities were originally sold by the Issuer on December 30, 1997 in transactions exempt from the registration requirements of the Securities Act. The $3,000,000 aggregate principal amount of Original Appreciation Notes and $105,000,000 aggregate principal amount of the Original Notes were sold to NatWest Capital Markets Limited (the "Initial Purchaser") pursuant to a Purchase Agreement dated as of December 22, 1997 by and among the Issuer, the Subsidiary Guarantors and the Initial Purchaser (the "Purchase Agreement"). The Initial Purchaser subsequently sold such Original Securities. The Issuer, the Subsidiary Guarantors and the Initial Purchaser entered into a Notes Registration Rights Agreement dated December 30, 1997 (the "Note Registration Rights Agreement") and an Appreciation Note Registration Rights Agreement dated December 30, 1997 (the "Appreciation Note Registration Rights Agreement" and, together with the Note Registration Rights Agreement, the "Registration Rights Agreements"), which grant the holders of the Original Securities certain exchange and registration rights. The Exchange Offer is intended to satisfy such rights. The holders of the Exchange Securities are not entitled to any exchange or registration rights with respect to the Exchange Securities. See "Notes Exchange Offer and Registration Rights" and "Appreciation Notes Exchange Offer and Registration Rights." THE EXCHANGE OFFER................ The Issuer and the Subsidiary Guarantors are offering to exchange (i) an equal principal amount of Exchange Notes for each such principal amount of Original Notes that are properly tendered and accepted and (ii) an equal principal amount of Exchange Appreciation Notes for each such principal amount of Original Appreciation Notes that are properly tendered and accepted. The Issuer will issue Exchange Securities on or promptly after the Expiration Date. As of the date hereof, there is $105,000,000 aggregate principal amount of Original Notes outstanding and there is $3,000,000 aggregate principal amount of Original Appreciation Notes outstanding. The Exchange Offer is not conditioned upon any minimum aggregate principal amount of Original Notes or any minimum aggregate principal amount of Original Appreciation Notes being tendered for exchange. Based on no-action letters issued by the staff of the Commission to third parties, the Issuer believes the Exchange Notes and the Exchange Appreciation Notes issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by any holder thereof (other than any such
9 holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without further registration under the Securities Act and without delivery of a prospectus that satisfies the requirements of Section 10 of the Securities Act, provided that such Exchange Securities are acquired in the ordinary course of such holder's business and that such holder does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of such Exchange Securities. Each Participating Broker-Dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer in exchange for Original Securities where such Original Securities were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letters of Transmittal state that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by Participating Broker-Dealers in connection with such resales of Exchange Securities. The Issuer has agreed that, for a period of 180 days after consummation of the Exchange Offer, it will make this Prospectus available to any Participating Broker-Dealer for use in connection with any such resale. See "The Exchange Offer." Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the Exchange Securities should not rely on the position of the staff of the Commission communicated in no-action letters and, in the absence of an exception therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Issuer. EXPIRATION DATE................... The Exchange Offer will expire at 5:00 p.m., New York City time, on , 1998, unless the Exchange Offer is extended by the Issuer in its reasonable discretion, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. ACCRUED INTEREST ON THE EXCHANGE NOTES........................... Interest on the Exchange Notes will accrue from and include their issuance date. Additionally, interest on the Exchange Notes will accrue from the last interest payment date on which interest was paid on the Original Notes surrendered in exchange therefor or, if no interest has been paid on the Original Notes, from
10 the date of original issuance of such Original Notes to but not including the issuance date of the Exchange Notes. Accordingly, holders who exchange their Original Notes will receive the same interest payment on the next interest payment date (expected to be June 15, 1998) that they would have received had they not accepted the Exchange Offer. CONDITIONS TO THE EXCHANGE OFFER........................... The Exchange Offer is subject to certain customary conditions. See "The Exchange Offer--Conditions." The Issuer reserves the right to terminate or amend the Exchange Offer at any time prior to the Expiration Date upon the occurrence of any such conditions. PROCEDURES FOR TENDERING ORIGINAL SECURITIES...................... Each participant (a "DTC Participant") in the Depository Trust Company ("DTC") holding Original Securities through DTC must (i) electronically transmit its acceptance to DTC through the DTC Automated Tender Offer Program ("ATOP"), for which the transaction will be eligible, and DTC will then edit and verify the acceptance, execute a book-entry delivery to the Exchange Agent's account at DTC and send an Agent's Message (as defined herein) to the Exchange Agent for its acceptance, or (ii) comply with the guaranteed delivery procedures set forth in this Prospectus and in the Letter of Transmittal. By tendering through ATOP, DTC Participants will expressly acknowledge receipt of the accompanying Letter of Transmittal and agree to be bound by its terms and the Company will be able to enforce such agreement against such DTC participants. See "The Exchange Offer--Procedures for Tendering--Original Securities held through DTC," and "--Guaranteed Delivery Procedures-- Original Securities held through DTC." Each holder of Original Securities wishing to accept the Exchange Offer must complete, sign and date the respective Letter of Transmittal, or a facsimile thereof, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile, together with the Original Securities and any other required documentation to the Exchange Agent at the address set forth herein. A separate Letter of Transmittal is required for the tender of Original Notes and Original Appreciation Notes. Original Securities may be physically delivered, but physical delivery is not required if a confirmation of a book-entry transfer of such Original Securities to the Exchange Agent's account at The Depository Trust Company is delivered in a timely fashion. By executing a Letter of Transmittal, each holder will represent to the Issuer that, among other things, the Exchange Securities acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Securities, whether or not such person is the holder, that neither the holder nor any such other person is engaged in, or intends to engage in, or has an arrange- ment or understanding with any person to participate in, the distribution of such Exchange Securities and that neither the
11 holder nor any such person is an "affiliate," as defined under Rule 405 of the Securities Act, of the Issuer. Each Participating Broker-Dealer that receives Exchange Securities for its own account in exchange for Original Securities where such Original Securities were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "The Exchange Offer--Purpose and Effect of the Exchange Offer" and "Plan of Distribution." SPECIAL PROCEDURES FOR BENEFICIAL OWNER........................... Any beneficial owner whose Original Securities are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing a Letter of Transmittal and delivering its Original Securities, either make appropriate arrangements to register ownership of the Original Securities in such owner's name or obtain a properly completed bond power for both the Original Notes and Original Appreciation Notes from the registered holder. The Transfer of registered ownership may take considerable time and may not be completed prior to the Expiration Date. See "The Exchange Offer--Procedures for Tendering." GUARANTEED DELIVERY PROCEDURES.... DTC Participants holding Original Securities through DTC who wish to cause their Original Securities to be tendered, but who cannot transmit their acceptances through ATOP prior to the Expiration Date, may effect a tender in accordance with the procedures set forth in this Prospectus and in the Letters of Transmittal. See "Exchange Offer--Guaranteed Delivery Procedures." Holders of Original Securities who wish to tender their Original Securities and whose Original Securities are not immediately available or who cannot deliver their Original Securities, the Letters of Transmittal or any other documents required by the Letters of Transmittal to the Exchange Agent prior to the Expiration Date, must tender their Original Securities according to the guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery Procedures." ACCEPTANCE OF THE ORIGINAL SECURITIES AND DELIVERY OF THE EXCHANGE SECURITIES...................... Subject to the satisfaction of the conditions to the Exchange Offer, the Issuer will accept for exchange any and all Original Securities which are properly tendered in the Exchange Offer prior to the Expiration Date. The Exchange Securities issued pursuant to the Exchange Offer will be delivered on the earliest practicable date following the Expiration Date. See "The Exchange Offer--Terms of the Exchange Offer."
12 WITHDRAWAL RIGHTS................. Tenders of Original Securities may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. See "The Exchange Offer--Withdrawal of Tenders." EFFECT ON HOLDERS OF THE SECURITIES...................... Following consummation of the Exchange Offer, holders of the Original Securities eligible to participate in the Exchange Offer but who do not tender their Original Securities will not have further exchange rights and such Original Securities will continue to be subject to certain restrictions on transfer. To the extent that Original Securities are tendered and accepted in the Exchange Offer, the trading market for untendered Original Securities could be adversely affected. CONSEQUENCES OF FAILURE TO EXCHANGE........................ The Original Securities that are not exchanged pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Original Securities may be resold only (i) to the Issuer, (ii) pursuant to Rule 144A or Rule 144 under the Securities Act or pursuant to another exemption under the Securities Act, (iii) outside the United States to a foreign person pursuant to the requirements of Rule 904 under the Securities Act or (iv) pursuant to an effective registration statement under the Securities Act. See "The Exchange Offer--Consequences of Failure to Exchange." SHELF REGISTRATION STATEMENT...... Under certain circumstances, certain holders of Original Securities (including holders who are not permitted to participate in the Exchange Offer or who may not freely resell Exchange Securities received in the Exchange Offer) may require the Issuer to register the Original Securities with a shelf registration statement and use its best efforts to cause it to be declared effective by the Commission. The Company has agreed to maintain the effectiveness of any such shelf registration statement for, under certain circumstances, a maximum of two years, to cover resales of the Original Securities held by any such holders. See "The Exchange Offer--Purpose and Effect of the Exchange Offer." EXCHANGE AGENT.................... The United States Trust Company of New York is serving as the Exchange Agent in connection with the Exchange Offer. See "The Exchange Offer--Exchange Agent." THE EXCHANGE NOTES GENERAL........................... The Exchange Offer applies to $105 million aggregate principal amount of the Original Notes. The form and terms of the Exchange Notes will be the same as the form and terms of the Original Notes except that (i) the Exchange Notes will bear a "Series B" designation and a different CUSIP Number from the Notes, (ii) the Exchange Notes will have been registered under the Securities Act and, therefore, will not bear legends restricting the transfer thereof and (iii) holders of the Exchange Notes will not be entitled to certain rights of holders of Original Notes under the Note Registration Rights Agreement which rights will
13 terminate as to holders of the Exchange Notes upon consummation of the Exchange Offer. The Exchange Notes will evidence the same debt as the Original Notes, will be entitled to the benefits of the Indenture and will be treated as a single class thereunder with the Original Notes. See "Description of Notes." SECURITIES OFFERED................ $105 million principal amount of 12% Series B Senior Notes due 2007 (the "Exchange Notes"). INTEREST RATE..................... The Notes will bear cash interest at a rate of 7 1/2% per annum on their principal amount until December 15, 1999, and at a rate of 12% per annum on their principal amount from and after such date until maturity. MATURITY.......................... December 15, 2007. INTEREST PAYMENT DATES............ June 15 and December 15 of each year, commencing on June 15, 1998. RANKING........................... The Notes are senior unsecured obligations of the Issuer. The Notes rank PARI PASSU in right of payment with all existing and future senior indebtedness of the Issuer and rank senior in right of payment to any subordinated indebtedness of the Issuer. The Notes (and the Subsidiary Guarantees) are effectively subordinated in right of payment to any secured debt of the Issuer and the Subsidiary Guarantors to the extent of the assets serving as security therefor. As of August 31, 1997, on a pro forma basis after giving effect to the Transactions, the Issuer had no outstanding secured indebtedness to which the Notes would have been effectively subordinated, and the aggregate amount of the Subsidiary Guarantors' outstanding senior secured indebtedness to which the Subsidiary Guarantees would have been effectively subordinated was approximately $4.9 million. See "Description of Notes--Ranking" and "--Subordination." GUARANTEES........................ The Notes are unconditionally guaranteed, jointly and severally, by each of the Subsidiary Guarantors. The Subsidiary Guarantees are senior unsecured obligations of the Subsidiary Guarantors and rank PARI PASSU in right of payment with all other existing and future senior indebtedness of the respective Subsidiary Guarantors and senior in right of payment to all existing and future subordinated indebtedness of the respective Subsidiary Guarantors and may be released upon the occurrence of certain events. The Subsidiary Guarantees are effectively subordinated to any secured debt of the Subsidiary Guarantors to the extent of the assets serving as security therefor. See "Description of Notes--Ranking" and "--Subsidiary Guarantees." OPTIONAL REDEMPTION............... Except as described below and under "Change of Control," the Issuer may not redeem the Notes prior to December 15, 2002. On or after such date, the Issuer may redeem the Notes, in whole or in part, at any time at the redemption prices set forth herein, together with accrued and unpaid interest, if any, to the date of redemption. In addition, in the event of the sale by the
14 Issuer prior to December 15, 2000, of its Capital Stock (other than Disqualified Stock) in one or more Public Equity Offerings the net cash proceeds of which are at least $25.0 million in the aggregate, the Issuer may, at its option, use the net cash proceeds of such sale or sales of Capital Stock to redeem up to 25% of the aggregate principal amount of the Notes at a redemption price in the case of a redemption date prior to December 15, 1999, equal to 112% of the Accreted Value (as defined) of the Notes to be redeemed, together with accrued and unpaid interest, if any, to the date of redemption and for any redemption date on or after December 15, 1999, at a redemption price equal to 112% of the principal amount thereof plus accrued interest thereon, if any, to the date of redemption, PROVIDED, HOWEVER that after any such redemption the aggregate principal of the Notes outstanding must equal at least $79 million. See "Description of Notes--Optional Redemption." CHANGE OF CONTROL................. Upon the occurrence of a Change of Control, each holder will have the right to require the Issuer to repurchase all or any part of such holder's Notes, in the case of a repurchase date prior to December 15, 1999, at a purchase price in cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid interest, if any, to the date of repurchase and for any repurchase date on or after December 15, 1999, at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase. See "Description of Notes--Optional Redemption" and "--Change of Control." RESTRICTIVE COVENANTS............. The indenture under which the Original Notes were issued and the Exchange Notes will be issued (the "Indenture") contains certain covenants that, among other things, will limit (i) the incurrence of additional indebtedness by the Company, (ii) distributions and withdrawals of the capital of the Company and the redemption of certain subordinated obligations of the Company, (iii) investments, (iv) sales of assets and subsidiary stock, (v) transactions with affiliates and (vi) consolidations, mergers and transfers of all or substantially all the assets of the Company. The Indenture also contains certain restrictions on distributions by Subsidiaries. However, all of these limitations and prohibitions are subject to a number of important qualifications and exceptions. See "Description of Notes--Certain Covenants." ORIGINAL ISSUE DISCOUNT........... The Notes were considered to be issued with original issue discount ("OID") for United States federal income tax purposes. As a result, a U.S. Holder (defined in "Certain United States Federal Income Tax Consequences") generally will be required to include OID in gross income for United States federal income tax purposes as it accrues, in advance of the receipt of cash attributable to such income. See "Certain United States Federal Income Tax Consequences."
15 THE APPRECIATION NOTES GENERAL........................... The Exchange Offer applies to $3 million aggregate principal amount of the Original Appreciation Notes. The form and terms of the Exchange Appreciation Notes are the same as the form and terms of the Original Appreciation Notes except that (i) the Exchange Appreciation Notes will bear a "Series B" designation and a different CUSIP Number from the Original Appreciation Notes, (ii) the Exchange Appreciation Notes will have been registered under the Securities Act and, therefore, will not bear legends restricting the transfer thereof and (iii) holders of Exchange Appreciation Notes will not be entitled to certain rights of holders of Original Appreciation Notes under the Appreciation Note Registration Rights Agreement which rights will terminate as to holders of the Exchange Appreciation Notes upon consummation of the Exchange Offer. See "Description of the Appreciation Notes." SECURITIES OFFERED................ $3 million principal amount of Series B Appreciation Notes due 2007 (the "Exchange Appreciation Notes"). Each Appreciation Note will entitle the holder thereof to receive on the Maturity Date (as defined) a cash payment of principal and interest in the amount equal to (i) the principal amount thereof plus (ii) the amount by which the Specified Percentage (as defined) of the Value (as defined) of BMC on the Maturity Date exceeds the principal amount of such Appreciation Note. The "Value" of BMC on the Maturity Date means an amount equal to 12 times Media Cashflow (as defined) for the then most recent four fiscal quarters for which financial statements of BMC are available plus the cash and cash equivalents of BMC and its Subsidiaries on the Maturity Date less the aggregate amount of Indebtedness (as defined) of BMC and its Subsidiaries on a consolidated basis outstanding on the Maturity Date. "Specified Percentage" of an Appreciation Note with a principal amount of $28.57 means 0.0000004761904761% (or 5% in the aggregate for all Appreciation Notes). MATURITY DATE..................... December 15, 2007. RANKING........................... The Appreciation Notes are senior subordinated obligations of the Issuer. The Appreciation Notes are subordinated in right of payment to all existing and future Senior Indebtedness (as defined) of the Issuer, including the Notes, and rank senior in right of payment to any subordinated indebtedness of the Issuer. See "Description of Appreciation Notes--Ranking and Subordi- nation." GUARANTEES........................ The Appreciation Notes are unconditionally guaranteed, jointly and severally, by each of the Subsidiary Guarantors. The guarantees of the Appreciation Notes are senior subordinated obligations of the Subsidiary Guarantors and are subordinated in right
16 of payment to all existing and future Guarantor Senior Indebtedness (as defined) of the respective Subsidiary Guarantor, including the Subsidiary Guarantees of the Notes, and senior in right of payment to all existing and future subordinated indebtedness of the respective Subsidiary Guarantor and may be released upon the occurrence of certain events. See "Description of Appreciation Notes--Ranking and Subordination" and "--Subsidiary Guarantees." MANDATORY REDEMPTION AT THE OPTION OF THE HOLDERS UPON THE OCCUR- RENCE OF A SPECIFIED EVENT...... The Appreciation Notes will be redeemable, at the option of the holders, upon the occurrence of (a) an Initial Public Offering (as defined), (b) a Sale of the Company (as defined), or (c) the liquidation of the Issuers in each case at the redemption price (the "Specified Event Redemption Price") equal to (i) in the case of a redemption with respect to an Initial Public Offering, the price at which membership interests in BMC (the "Membership Interests") are sold in such Initial Public Offering (less underwriting discounts and commissions, if any) which represent a percentage interest in BMC equal to the Specified Percentage of the Appreciation Note being redeemed, (ii) in the case of a Sale of the Company covering assets (as defined in clause (i) of the definition thereof) the amount equal to the Specified Percentage of the Appreciation Note being redeemed of the sum of the aggregate fair market value of all consideration received by the Issuer and its Subsidiaries, net of any debt repaid therewith, net of ordinary and customary transaction expenses of the related transfer and the fair market value of BMC as determined after giving effect to such sale, (iii) in the case of a redemption with respect to a Sale of the Company concerning securities (as defined in clause (ii) of the definition thereof), the price at which Membership Interests are sold in such Sale of the Com- pany, or in the transaction which resulted in such Sale of the Company, which represent a percentage interest in BMC equal to the Specified Percentage of the Appreciation Note being redeemed, and (iv) in the case of a redemption with respect to a liquidation of the Issuer, an amount equal to the greater of (i) the fair market value of the distribution received by Membership Interests representing a percentage interest in BMC equal to the Specified Percentage of the Appreciation Note being redeemed in connection with such liquidation and (ii) the Pro Rata Percentage (as defined) of such Appreciation Note of $3.0 million. See "Description of the Appreciation Notes--Mandatory Redemption at the Option of the Holders upon the Occurrence of Certain Events." MANDATORY REDEMPTION AT THE OPTION OF THE HOLDERS ON SPECIFIED DATE............................ In addition, if an Initial Public Offering has not occurred on or before a date set forth below, the holders may require the Issuer to redeem its Appreciation Notes at a redemption price equal to
17 the Pro Rata Percentage of such Appreciation Note of the amount set forth below opposite such date:
REDEMPTION DATE AMOUNT ---------------- --------------- June 30, 2003.. $ 24.0 million June 30, 2004.. $ 20.0 million June 30, 2005.. $ 13.0 million
If a holder so elects the Issuer shall redeem the relevant Appreciation Notes no later than the 90th day after the relevant redemption date. See "Description of the Appreciation Notes-- Mandatory Redemption at the Option of Holders on Specified Dates." OPTIONAL REDEMPTION............... The Issuer may not redeem the Appreciation Notes prior to June 15, 1999. Thereafter, if an Initial Public Offering has not occurred on or before a date set forth below, the Issuer may redeem the Appreciation Notes (in whole but not in part) on any date set forth below at a redemption price equal to the Pro Rata Percentage of each Appreciation Note of the amount the price set forth below opposite such date. See "Description of the Appreciation Notes--Optional Redemption."
REDEMPTION DATE AMOUNT ---------------- ---------------- June 15, 1999.. $ 3.0 million June 15, 2000.. $ 8.3 million June 15, 2001.. $ 12.8 million June 15, 2002.. $ 18.0 million June 15, 2003.. $ 24.0 million June 15, 2004 $ 31.0 million June 15, 2005.. $ 39.0 million June 15, 2006.. $ 48.0 million June 15, 2007.. $ 58.0 million
ORIGINAL ISSUE DISCOUNT........... The Appreciation Notes were considered to be issued with original issue discount ("OID") for United States federal income tax purposes. As a result, a U.S. Holder (defined in "Certain United States Federal Income Tax Consequences") generally will be required to include OID in gross income for United States federal income tax purposes as it accrues, in advance of the receipt of cash attributable to such income. See "Certain United States Federal Income Tax Consequences."
18 PRO FORMA MEDIA CASHFLOW AND OTHER DATA The following pro forma Media Cashflow and Other Data give effect to the Transactions as if they had been completed as of March 1, 1996 for results of operations data or on August 31, 1997 for balance sheet data. The information presented may not be indicative of the actual results had the Transactions occurred on such dates, and there can be no assurance that the Company will be able to achieve such results in the future. The pro forma Media Cashflow and Other Data presented below should be read in conjunction with the information contained in the combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill, "Pro Forma Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."
PRO FORMA -------------------------------- (DOLLARS IN THOUSANDS) -------------------------------- YEAR ENDED SIX MONTHS FEBRUARY 28, ENDED 1997 AUGUST 31, 1997 --------------- --------------- Media Cashflow (a)......................................... $ 10,363 $ 6,056 EBITDA (a)................................................. 5,908 3,575 Net interest expense (b)................................... 12,688 6,347 Net cash interest expense (c).............................. 7,329 3,667 Net debt (d)............................................... 78,743 78,743 Ratio of Media Cashflow to net interest expense............ 0.82x 0.95x Ratio of Media Cashflow to net cash interest expense....... 1.41x 1.65x Ratio of net debt to Media Cashflow........................ 7.60x 6.50x(e)
(a) "EBITDA" is defined as operating income before depreciation and amortization expenses. "Media Cashflow" is defined as EBITDA plus management fees, incentive plan expense, time brokerage agreement fees, acquisition related consulting expense and interest income from loans made by the Company to Managed Affiliates. Management fees payable to BMCLP are subordinated, to the extent provided in the Indenture, to the prior payment of the Issuer's obligations on the Notes. Although Media Cashflow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that these measures are useful to an investor in evaluating the Company because these measures are widely used in the media industry to evaluate a media company's operating performance. However, Media Cashflow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statements prepared in accordance with GAAP as measures of liquidity or profitability. (b) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. Net interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (c) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net cash interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and six months ended August 31, 1997, respectively and also excludes interest accrued at the assumed effective rate of 12.2%, which is in excess of the assumed current pay rate of 7.5% in each of years one and two by $4,960,000 ($2,480,000 per six months) and excludes interest on the Appreciation Notes accreted at 17% totaling $399,000 for the year ended February 28, 1997 ($200,000 for six months). Net cash interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (d) Net debt includes total debt less the incentive plan liability and less cash and cash equivalents, all as of August 31, 1997, as significant portions of the cash and cash equivalents are held for future acquisitions. (e) For purposes of this ratio the Media Cashflow for the six months ended August 31, 1997 has been doubled to estimate an annualized amount. No assurance can be provided that such results will be achieved. 19 SUMMARY COMBINED FINANCIAL DATA The summary combined financial data presented below should be read in conjunction with the combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill and notes thereto included elsewhere in this Prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations." The summary combined financial data (except for the other financial and operating data) of The Radio and Newspaper Businesses of Alan R. Brill (i) as of and for the years ended February 28, 1993 and 1994 have been derived from schedules which primarily include information from the separate audited combined financial statements of The Broadcasting Businesses of Alan R. Brill and the separate audited consolidated financial statements of Central Michigan Newspapers, Inc., (ii) as of and for the years ended February 28, 1995, February 29, 1996 and February 28, 1997 have been derived from the audited combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill and (iii) as of and for the six months ended August 31, 1996 and 1997 have been derived from the unaudited condensed combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill. The summary pro forma data presented below should be read in conjunction with the information contained in the historical financial statements included elsewhere herein and "Pro Forma Financial Information."
HISTORICAL ------------------------------------------------------------ SIX MONTHS FISCAL YEAR ENDED FEBRUARY 28 OR 29 ENDED ------------------------------------------------ AUGUST 31, 1993 1994 1995 1996 1997 1996 -------- -------- -------- -------- -------- ---------- (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS DATA: Revenues: Radio..................... $ 9,764 $ 10,961 $ 12,650 $ 13,096 $ 13,596 $ 6,852 Newspapers................ 10,877 10,499 10,537 12,217 13,440 6,854 -------- -------- -------- -------- -------- ---------- Total revenues........ 20,641 21,460 23,187 25,313 27,036 13,706 Operating expenses: Operating departments..... 16,644 16,352 17,530 18,640 19,043 9,540 Incentive plan............ 25 176 634 1,467 628 316 Other..................... -- -- -- 37 86 (48) Management fees........... 897 1,521 1,679 1,833 1,945 980 Depreciation and amortization............ 1,306 1,277 1,111 1,312 1,395 670 -------- -------- -------- -------- -------- ---------- Total operating expenses.............. 18,872 19,326 20,954 23,289 23,097 11,458 -------- -------- -------- -------- -------- ---------- Operating income............ 1,769 2,134 2,233 2,024 3,939 2,248 Other income (expense): Interest expense, net..... (4,484) (4,645) (5,842) (7,130) (7,432) (3,686) Other, net................ (148) 3,463 (144) (80) 1,007 1,035 -------- -------- -------- -------- -------- ---------- Total other income (expense)........... (4,632) (1,182) (5,986) (7,210) (6,425) (2,651) -------- -------- -------- -------- -------- ---------- Income (loss) before income taxes and extraordinary item...................... (2,863) 952 (3,753) (5,186) (2,486) (403) Income tax provision (benefit)................. 112 168 68 (39) 286 84 -------- -------- -------- -------- -------- ---------- Income (loss) before extraordinary item........ (2,975) 784 (3,821) (5,147) (2,772) (487) Extraordinary item (b)...... -- 245 -- 6,915 -- -- -------- -------- -------- -------- -------- ---------- Net income (loss)........... $ (2,975) $ 1,029 $ (3,821) $ 1,768 $ (2,772) $ (487) -------- -------- -------- -------- -------- ---------- -------- -------- -------- -------- -------- ---------- OTHER FINANCIAL AND OPERATING DATA: Media Cashflow (c).......... $ 3,997 $ 5,108 $ 5,657 $ 6,673 $ 7,993 $ 4,166 EBITDA (c).................. 3,075 3,411 3,344 3,336 5,334 2,918 Capital expenditures excluding acquisitions.... 410 833 974 977 1,269 304 Net interest expense (d).... Net cash interest expense (e)............... Net debt (f)................ Ratio of Media Cashflow to net interest expense...... Ratio of Media Cashflow to net cash interest expense................... Ratio of net debt to Media Cashflow.................. PRO FORMA ------------------------- SIX MONTHS YEAR SIX MONTHS ENDED ENDED ENDED AUGUST 31, FEBRUARY 28, AUGUST 31, 1997 1997 (A) 1997 (A) ---------- ------------ ---------- STATEMENT OF OPERATIONS DATA Revenues: Radio..................... $ 8,005 $ 11,644 $ 6,800 Newspapers................ 7,095 15,771 8,168 ---------- ------------ ---------- Total revenues........ 15,100 27,415 14,968 Operating expenses: Operating departments..... 10,104 19,010 9,891 Incentive plan............ 485 628 485 Other..................... 142 -- -- Management fees........... 1,072 1,869 1,017 Depreciation and amortization............ 749 1,358 744 ---------- ------------ ---------- Total operating expenses.............. 12,552 22,865 12,137 ---------- ------------ ---------- Operating income............ 2,548 4,550 2,831 Other income (expense): Interest expense, net..... (3,981) (12,550) (6,276) Other, net................ (31) (47) (26) ---------- ------------ ---------- Total other income (expense)........... (4,012) (12,597) (6,302) ---------- ------------ ---------- Income (loss) before income taxes and extraordinary item...................... (1,464) (8,048) (3,471) Income tax provision (benefit)................. 78 272 86 ---------- ------------ ---------- Income (loss) before extraordinary item........ (1,542) (8,320) (3,557) Extraordinary item (b)...... -- -- ---------- ------------ ---------- Net income (loss)........... $ (1,542) $ (8,320) $(3,557) ---------- ------------ ---------- ---------- ------------ ---------- OTHER FINANCIAL AND OPERATING DATA: Media Cashflow (c).......... $ 5,560 $ 10,363 $ 6,056 EBITDA (c).................. 3,297 5,908 3,575 Capital expenditures excluding acquisitions.... 408 1,336 411 Net interest expense (d).... 12,688 6,347 Net cash interest expense (e)............... 7,329 3,667 Net debt (f)................ 78,743 78,743 Ratio of Media Cashflow to net interest expense...... 0.82x 0.95x Ratio of Media Cashflow to net cash interest expense................... 1.41x 1.65x Ratio of net debt to Media Cashflow.................. 7.60x 6.50x (g)
- ------------------------------ 20
PRO FORMA HISTORICAL ----------- ------------------------------------------------------------------------------- AS OF AS OF AS OF AS OF FEBRUARY 28 OR 29 AUGUST 31, AUGUST 31, AUGUST 31, ----------------------------------------------------- ----------- ----------- ----------- 1993 1994 1995 1996 1997 1996 1997 1997 (A) --------- --------- --------- --------- --------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS) STATEMENT OF FINANCIAL POSITION DATA: Cash and cash equivalents....... $ 104 $ 202 $ 550 $ 2,075 $ 775 $ 955 $ 351 $ 23,991 Working capital (deficit)....... (3,469) (1,881) (334) 2,398 1,014 1,860 (1,303) 25,511 Intangible assets............... 4,103 5,219 5,099 7,374 7,583 7,631 10,207 17,474 Total assets.................... 16,454 21,938 21,784 26,011 26,442 25,800 42,569 70,251 Total debt including due to affiliates (h)................ 49,796 55,160 58,715 61,636 50,475 50,245 68,046 107,374 Net capital deficiency.......... (37,153) (36,302) (40,123) (38,354) (26,610) (26,944) (31,150) (39,517)(i)
- ------------------------ (a) The pro forma statement of operations and other financial and operating data for the year ended February 28, 1997 and for the six months ended August 31, 1997 give effect to the Transactions as if they occurred March 1, 1996. The pro forma statement of financial position data give effect to the Transactions as if they had occurred on August 31, 1997. See "Pro Forma Financial Information." (b) The extraordinary item in fiscal 1996 reflects an adjustment of accrued interest in the amount of $7.0 million related to subordinated debt for which contingent interest had been accrued at the maximum rate but was reduced at maturity pursuant to terms of an alternative valuation formula, as defined in the agreement. The gain was offset by the write-off of certain previously deferred financing fees of $131,000. (c) "EBITDA" is defined as operating income before depreciation and amortization expenses. "Media Cashflow" is defined as EBITDA plus management fees, incentive plan expense, time brokerage agreement fees, acquisition related consulting expense and interest income from loans made by the Company to Managed Affiliates. Management fees payable to BMCLP are subordinated, to the extent provided in the Indenture, to the prior payment of the Issuer's obligations on the Notes. Although Media Cashflow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that these measures are useful to an investor in evaluating the Company because these measures are widely used in the media industry to evaluate a media company's operating performance. However, Media Cashflow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statements prepared in accordance with GAAP as measures of liquidity or profitability. (d) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. Net interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (e) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net cash interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and six months ended August 31, 1997, respectively and also excludes interest accrued at the assumed effective rate of 12.2%, which is in excess of the assumed current pay rate of 7.5% in each of years one and two by $4,960,000 ($2,480,000 per six months) and excludes interest on the Appreciation Notes accreted at 17% totaling $399,000 for the year ended February 28, 1997 ($200,000 for six months). Net cash interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and six months ended August 31, 1997, respectively. (f) Net debt includes total debt less the incentive plan liability and less cash and cash equivalents, all as of August 31, 1997, as significant portions of the cash and cash equivalents are held for future acquisitions. (g) For purposes of this ratio the Media Cashflow for the six months ended August 31, 1997 has been doubled to estimate an annualized amount. No assurance can be provided that such results will be achieved. (h) Total debt including due to affiliates includes the senior note, obligations under capital leases, unsecured and subordinated obligations, debt due to affiliates and, on a pro forma basis, the Notes and Appreciation Notes. (i) The net capital deficiency as of August 31, 1997 reflects the declaration of a distribution in the amount of $3.0 million which was subsequently paid in cash. The pro forma net capital deficiency as of August 31, 1997 reflects, in part, the subsequent declaration and payment of distributions in the amount of $9.2 million, $5.0 million in cash and $4.2 million for purposes of satisfaction of affiliate notes receivable. 21 RISK FACTORS Investors should carefully examine this entire Prospectus and should give particular attention to the risk factors set forth below in evaluating whether to tender their Original Securities for Exchange Securities in the Exchange Offer. COMPANY STRUCTURE BMC is a holding company with no business operations of its own. Media, a wholly owned Subsidiary of BMC, is BMC's manager and, with BMC, co-issuer of the Securities (collectively, the "Issuer"). BMC has lent the proceeds received by it from the Offering to Holdings in exchange for Holdings' unsecured promissory note (the "Holdings' Note"). BMC's only material assets are the Holdings' Note and its ownership of all membership interests of BMC Holdings, LLC ("Holdings"), a Subsidiary that directly and indirectly owns all equity and membership interests in all of the other Subsidiaries. Accordingly, BMC will be dependent upon the earnings and cashflows of, and dividends and distributions from, its direct and indirect Subsidiaries to pay its expenses, meet its obligations and pay interest and principal on the Securities. There can be no assurance that these Subsidiaries will generate earnings and cashflows sufficient to pay dividends or distribute funds to BMC that will enable it to pay its expenses and meet its obligations to pay interest and principal on the Securities. Subject to applicable restrictions in the Indenture or the proposed New Credit Facility, acting pursuant to a revolving credit agreement (the "Revolving Credit Agreement") entered into by and among Holdings as lender and Holdings' Subsidiaries as borrowers thereunder, from time to time Holdings will lend and relend available funds to such Subsidiaries, in exchange for the Subsidiaries' unsecured promissory note (the "Subsidiaries' Note") payable to Holdings. From time to time Holdings and the Subsidiaries also will lend and relend available funds to the Managed Affiliates in exchange for the Managed Affiliates' unsecured notes. See "Description of Notes." SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE INDEBTEDNESS; NET LOSSES As of August 31, 1997, after giving effect to the Transactions on a pro forma basis, the Company had outstanding approximately $107 million of long term obligations. See "Capitalization." Holdings is a holding company with no business operations of its own, and the Newspapers' and Stations' operations are conducted through the Subsidiaries. The Subsidiaries are not required to make capital or other contributions to BMC or Holdings, and BMC's expected revenues and assets will consist almost entirely of interest, principal, and dividend or other payments or distributions to be received by BMC from the Subsidiaries through their payments to Holdings on the Subsidiaries' Note and Holdings' payments to BMC on the Holdings' Note. Media is a new corporation with negligible assets and no material sources of income and will be only an accommodation maker on the Securities, and BMC will be expected to pay all obligations on the Securities and to reimburse Media for any amounts it may pay on the Securities. BMC's ability to pay interest on the Securities when due and to satisfy its other obligations ultimately depends, therefore, in large part upon the future operating performance of the Subsidiaries, which ability necessarily will be affected by prevailing economic conditions, which in turn will depend upon and be affected by financial, business, market, technological, competitive, and other conditions, developments, pressures, and factors, many of which are and will continue to be beyond their knowledge or control. BMC, Holdings, and the Subsidiaries are and will be highly leveraged, and many of their competitors are believed to operate with much less leverage and to have significantly greater operating and financial flexibility and resources. The Company and its Subsidiaries are organized under the laws of the Commonwealth of Virginia. In addition to restrictions contained in agreements to which they are parties, due to restrictions imposed by applicable law on the payment of dividends or other distributions on capital stock (in the case of corporations) or membership interests (in the case of limited liability companies), a corporation or limited liability company may not make a distribution or dividend, if, after giving effect to such dividend or 22 distribution, the corporation or limited liability company, as applicable, would not be able to pay its debts as they become due in the usual course of business or if the corporation's or limited liability company's total assets would then be less than the sum of its then total liabilities. In making such a determination of the ability of a corporation or limited liability company to make a dividend or distribution, applicable Virginia law permits the board of directors (in the case of a corporation) or the manager (in the case of a limited liability company) to base its determination in part on its determination of a then fair valuation of the entity's assets. There can be no assurance that any such dividends or distributions to BMC or Holdings will be allowed. While net income or loss may not be considered a meaningful measure of performance for media properties, in the past, depreciation, amortization, and interest charges have contributed significantly to periodic net losses suffered by the Subsidiaries, and it is expected that such net losses will continue in the future. On a combined basis, the Company and its predecessors reported a net loss in three of their last five fiscal years. In the fiscal year ended February 28, 1997, the Company and its predecessors reported a net loss of $2.8 million. While the Company expects that the Subsidiaries' cashflow will improve, the Company nonetheless expects that the Subsidiaries will continue to incur substantial net losses. There can be no assurance that the Subsidiaries will not continue to generate further net losses in the future, which ultimately could have a material, adverse effect on the Issuer's ability to pay interest or principal on the Securities when due. Media has nominal assets and no operations, and all representations as to Media's solvency are based upon the assumption that BMC will hold Media harmless from any claims asserted against Media on the Securities. The future of the Company and its Subsidiaries involves a high degree of risk. DEPENDENCE ON SUBSIDIARIES' OPERATING RESULTS; EFFECTIVE SUBORDINATION While Holdings' Subsidiaries are obligated to pay principal and interest on the Subsidiaries' Note, as and to the extent therein provided, Holdings' Subsidiaries are legally distinct from Holdings and the Issuer, and none of the Subsidiaries has or has now undertaken any obligation, direct, indirect, contingent, or otherwise, to pay to holders of the Securities any amounts due thereon or to secure payment thereof, or to make any funds available to the Issuer or Holdings for any such purpose other than as may be required under each Subsidiary's guarantees of the Securities. Additionally, since the Subsidiaries own all operating assets of the Newspapers and Stations, the rights of holders of the Securities effectively will be subordinate and inferior to the rights of the secured creditors of each of the Subsidiaries to the extent of such Subsidiary's assets. Current levels of the Subsidiaries' operating results may not result in dividend, distribution, or debt service payments to BMC or Holdings in amounts sufficient, from that source alone, to meet all of BMC's expenses and debt service requirements on the Securities, and the Subsidiaries may need to achieve future increases in their operating results if BMC is to repay the Securities or its other obligations when due. There can be no assurance that the Subsidiaries can achieve such necessary increases or can sustain historical rates of growth in revenues and operating results. If the Company is unable to service its obligations in the ordinary course, inevitably it will be forced to adopt alternative financial or operating strategies, which may include using its working capital, reducing or delaying capital expenditures, selling assets, restructuring or refinancing obligations, or seeking equity capital. There can be no assurance that the Company can effect any of these strategies on satisfactory terms, if at all. RANKING OF THE SECURITIES AND THE SUBSIDIARY GUARANTEES, ABILITY TO INCUR ADDITIONAL SECURED DEBT; PRIORITY OF LIEN CREDITORS The Notes are senior unsecured obligations of the Issuer and rank junior to all secured indebtedness of the Issuer to the extent of the assets serving as security therefor. As senior unsecured obligations of the 23 Issuer, the Notes rank PARI PASSU in right of payment with all other existing and future senior unsecured indebtedness of the Issuer. Under the terms of the Indenture and the Appreciation Note Indenture, the Company is permitted, upon the satisfaction of certain conditions, to incur secured indebtedness. The rights of holders of the Notes as against the Company's assets will be subordinate and inferior to all existing and future liens or secured indebtedness or other secured obligations of the Company or any Subsidiary, including any secured indebtedness under the proposed New Credit Facility, the rights of judgment or other secured or lien creditors as against the assets of the Company or any Subsidiary, and any prior, secured, or judgment liens against the Company's assets, or any part thereof. In certain circumstances, provisions of applicable secured indebtedness effectively could prohibit or prevent either or both of (a) the Subsidiaries making debt service or other payments to Holdings on the Subsidiaries' Note or (b) Holdings making debt service or other payments to BMC on the Holdings' Note, and, as a result, the Issuer might have insufficient funds available to make required payments due to holders of the Notes. The Subsidiary Guarantors have unconditionally guaranteed the payment of principal and interest on the Notes when due. The Subsidiary Guarantees rank PARI PASSU with all existing and future senior indebtedness of the Issuer and the Subsidiary Guarantors. The Subsidiary Guarantees are unsecured and thus, in effect, would rank junior to any secured indebtedness of the Subsidiary Guarantors. Upon completion of the Transactions, the Subsidiary Guarantors will have approximately $4.9 million in aggregate principal amount of secured indebtedness outstanding. The Indenture permits the Issuer and its Subsidiaries (including the Subsidiary Guarantors) to incur additional secured debt under certain circumstances. Some or all of such additional indebtedness may rank PARI PASSU with the Subsidiary Guarantees, and the holders of such indebtedness may have a claim to assets of a Subsidiary Guarantor superior to that of the holders of the Notes because such additional indebtedness is secured by liens on assets of such Subsidiary Guarantor. Although there are certain limitations on the ability of the Subsidiary Guarantors to secure such debt, the incurrence of such additional debt might adversely affect the Subsidiary Guarantors' ability to meet their obligations under the Subsidiary Guarantees. See "Description of the Notes--Subsidiary Guarantees." Consequently, in the event of dissolution, liquidation or reorganization of, or similar proceeding relating to, any Subsidiary Guarantor, such Subsidiary Guarantor's secured lenders would be entitled to receive payment to the extent of the value of their collateral or in full, whichever is less, prior to any payment in respect of such Subsidiary Guarantee. The Appreciation Notes are unsecured, subordinated obligations of the Issuer and are subordinated in right of payment to all existing and future Senior Indebtedness of the Issuer. Similarly, the Indebtedness evidenced by the Guarantees of the Appreciation Notes by the Subsidiary Guarantors is subordinated to the prior payment in full of all existing and future Guarantor Senior Indebtedness (as defined under "Description of Appreciation Notes"). As of August 31, 1997, after giving effect to the Offering and the use of proceeds therefrom, the Issuer and the Subsidiary Guarantors would have had approximately $99.4 million of Senior Indebtedness outstanding. The Issuer and the Subsidiary Guarantors can also incur additional Senior Indebtedness under the terms of the Appreciation Notes. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to the Issuer and the Subsidiary Guarantors, assets of the Issuer and the Subsidiary Guarantors will be available to pay obligations on the Appreciation Notes only after all Senior Indebtedness has been paid in full, and there can be no assurance that there will be sufficient assets to pay amounts due on all or any of the Appreciation Notes. See "Description of Appreciation Notes--Ranking and Subordination" and "--Subsidiary Guarantees." In the event of bankruptcy, liquidation, dissolution and winding up, or reorganization of the Company, the assets of the Company will be available to pay obligations on the Notes or the Appreciation Notes only after all secured indebtedness of the Company (or effectively any indebtedness of its Subsidiaries) has been paid in full, and there may not be sufficient assets then remaining to pay amounts due on any or all Notes or Appreciation Notes then outstanding. Also, in any bankruptcy proceeding the rights of the holders of the Notes or the Appreciation Notes as against the Company's assets are subject to being equitably subordinated to the rights of other creditors. In like fashion, the rights of BMC on the Holdings' Note and of Holdings on the Subsidiaries' Note effectively will be subordinate and inferior to the rights of all holders 24 of secured indebtedness of the Company. Secured indebtedness may be incurred by the Company from time to time in an aggregate amount up to $15.0 million under the proposed New Credit Facility, subject to certain restrictions, and may be secured by substantially all of the Company's assets. In addition, the Company may incur additional indebtedness in accordance with the terms of the Notes and the Indenture, the proceeds of which indebtedness may or may not benefit the Company's future operating results. See "Description of Notes--Certain Covenants--Limitations on Indebtedness." FRAUDULENT CONVEYANCE The incurrence and servicing by the Issuer of the obligations evidenced by the Notes and the Appreciation Notes, the Issuer's and Holdings' use of the proceeds of the Offering, Holdings' incurrence and servicing of obligations to BMC on Holdings' Note, and the Subsidiaries' incurrence and servicing of obligations to Holdings on the Subsidiaries' Note, each may be subject to review under applicable federal and state fraudulent or voluntary conveyance laws and similar laws and statutes enacted for the protection of creditors, and such laws and statutes may be utilized by a court to subordinate or avoid such obligations, payments, and transfers in favor of other existing or future creditors of the Company. If a court or other tribunal were to find (a) that when any of the Notes, the Appreciation Notes, Holdings' Note, or the Subsidiaries' Note (collectively and individually, the "Obligations"), as the case may be, were entered into or issued, or (b) that when any advance or any payment of principal or interest was made on any of them, that Media, the Company, or any Subsidiary taking such action then was acting (i) with the intent of hindering, delaying, or defrauding such actor's current or future creditors or (ii) that (x) such entity received less than reasonably equivalent value or fair consideration for taking such actions, making any such advance, transfer, or payment, or issuing such indebtedness, or for issuing or paying interest or principal on any of the Obligations, and that (y) Media, the Company or its Subsidiary or Subsidiaries, as then applicable, then either (1) was insolvent or was rendered insolvent by reason of such actions, (2) was engaged, or was about to engage, in a business or transaction for which its assets constituted unreasonably small capital or (3) intended to incur or believed that it would incur debts beyond its ability to pay as such debts matured (as all of the foregoing terms are defined in or interpreted under relevant fraudulent or voluntary conveyance or bankruptcy laws or statutes), such court could, among other things, declare void, voidable, or avoid one or more of such payments, advances, transfers, or indebtednesses, or the Obligations, or any one or more of them, or subordinate, avoid, or postpone the enforcement thereof, in whole or in part, in favor of other creditors. The measure of insolvency for purposes of the foregoing considerations will vary depending upon the laws being applied. Generally, however, any one of Media, the Company or its Subsidiaries would be considered insolvent if, at the relevant time, either (a) the fair market value of its assets was less than the amount required to pay the probable liability on its total existing debts and liabilities (including contingent liabilities) as they became absolute and matured or (b) that it was incurring debt beyond its ability to pay at maturity. As described above, a court could, therefore, declare void, avoid, or subordinate or postpone payment or enforcement of the Obligations, or any of them, to the prior satisfaction of other obligations or other creditors, the satisfaction of which obligations or creditors may be beyond the capacity of the Company. As to these transactions, Media, the Company and the Subsidiaries believe that at all relevant times each was and will be (a) neither insolvent nor rendered insolvent thereby, (b) in possession of sufficient capital to pay its debts as the same mature or become due and to operate its business effectively, and (c) incurring debt within its ability to pay as it matures in the ordinary course. In reaching the foregoing conclusions, the Company has relied upon analyses of financial and other information currently available to it and upon internal projections and estimated values and amounts of assets and liabilities of the Company and its Subsidiaries (including any applicable rights of contribution, or indemnification as 25 between them). There can be no assurance, however, that such conclusions and assumptions are correct or that a court or other tribunal passing on such questions would reach the same results. In addition, the Guarantees of the Notes and the Appreciation Notes by the Subsidiary Guarantors may be subject to review under relevant federal and state fraudulent conveyance and similar statues in a bankruptcy or reorganization case or a lawsuit by or on behalf of creditors of any of the Subsidiary Guarantors. In such a case, the analysis set forth above would generally apply, except that such Guarantees could also be subject to the claim that, since such Guarantees were incurred for the benefit of the Issuer (and only indirectly for the benefit of the Subsidiary Guarantors), the obligations of the Subsidiary Guarantors thereunder were incurred for less than reasonably equivalent value or fair consideration. A court could avoid a Subsidiary Guarantor's obligation under its Guarantees, subordinate such Guarantee to other indebtedness of a Subsidiary Guarantor or take other action detrimental to the holders of the Notes and/or the Appreciation Notes. To the extent any Guarantee of a Subsidiary Guarantor was avoided as a fraudulent conveyance, limited as described above, or held unenforceable for any other reason, holders of the Notes and the Appreciation Notes would, to such extent, cease to have a claim in respect of such Subsidiary Guarantee and, to such such extent, would be creditors solely of the Issuer and any Subsidiary Guarantor whose Guarantee was not avoided, limited or held unenforceable. In such event, the claims of the holders of the Notes and the Appreciation Notes against the issuer of an avoided, limited or unenforceable Guarantee would be subject to the prior payment of all liabilities of such Subsidiary Guarantor. There can be no assurance that, after providing for all prior claims, there would be sufficient assets to satisfy the claims of the holders of Notes and/or the Appreciation Notes. ABILITY TO EXECUTE ACQUISITION STRATEGY Historically, the Company has achieved significant growth through acquisitions. In order for the Company to achieve needed future growth in revenues and earnings and to replace the revenues and earnings of properties that may be sold by one or more of the Subsidiaries from time to time, additional acquisitions may be necessary. Meeting this need for acquisitions will depend upon several factors, including the continued availability of suitable financing and the ability to identify and acquire businesses on a cost-effective basis, as well as the Company's ability effectively to integrate acquired personnel, operations, products, and technologies, to retain and motivate key personnel, and to retain the goodwill and customers of acquired properties. There can be no assurance that the Company can or will successfully acquire and integrate future operations. In connection with future acquisition opportunities, the Company, or one or more of its Subsidiaries, may need to incur additional indebtedness or issue additional equity or debt instruments. There can be no assurance that debt or equity financing for such acquisitions will be available on acceptable terms, or that the Company will be able to identify or consummate any new acquisitions. If and when achieved, new acquisitions may adversely affect near-term operating results due to increased capital requirements, transitional management and operating adjustments, increased interest costs associated with acquisition debt, and other factors. Any future acquisitions may be highly-leveraged, and such acquisitions well may increase the Company's overall leveraged position. Any failure to make necessary acquisitions, or the making of unsuccessful acquisitions, could have a material, adverse effect on the future financial condition and operating results of the Company and each of its Subsidiaries. To date, the Company's principal investments and acquisitions have been confined to acquiring newspaper publishing, printing, and radio broadcasting properties and related businesses as sole owners in middle markets. See "Business." 26 RESTRICTIVE DEBT COVENANTS; PROPOSED NEW CREDIT FACILITY It is expected that the proposed New Credit Facility, if and when put in place, will contain certain restrictive covenants that, among other things, may limit the Company's ability to incur additional indebtedness, create liens, or make investments and capital expenditures. The proposed New Credit Facility also may require that the Company comply with certain financial ratios and tests requiring that the Company achieve certain financial and operating results. The Company's ability to meet such financial ratios and tests may be affected by events beyond its control, and there can be no assurance that such ratios and tests will be met. In the event of such a failure or a default under the proposed New Credit Facility, the lenders thereunder may terminate their lending commitments and may declare any indebtedness then existing under the proposed New Credit Facility to be immediately due and payable, which could result in a default on the Notes. As a result of the priority and security to be afforded to others under the proposed New Credit Facility, to prior liens of secured creditors, and to prior rights of the Subsidiaries' creditors by reason of effective subordination as described above, in such circumstances there can be no assurance that the Issuer then would have sufficient assets remaining and available to pay indebtedness then outstanding under the Securities. Any refinancing of the proposed New Credit Facility is likely to contain similar restrictive covenants. See "Description of Notes--Restrictions on Indebtedness." DEPENDENCE ON KEY PERSONNEL; CONTROL BY MR. BRILL The Company's businesses depend to a significant extent upon the efforts, abilities, and expertise of Mr. Brill, Donald C. TenBarge, Alan L. Beck, and Clifton E. Forrest. The loss of any of these executives of BMCLP potentially would have an adverse effect on the Company. Moreover, Mr. Brill owns and controls the Company, and such control may have the effect of discouraging transactions involving a potential change of control of the Company. Neither BMCLP, the Issuer, Holdings nor any of the Subsidiaries has any long-term employment contract with Mr. Brill or any other executive officer. Mr. Brill has procured key man insurance on his life in the face amount of $5.0 million for the Company's benefit. CHANGE OF CONTROL Upon the occurrence of a Change of Control as defined in the Indenture, each holder of a Note may seek to require the Issuer to repurchase all or a portion of such holder's Notes. If a Change of Control were to occur, there can be no assurance that the Issuer would then have sufficient financial resources (or would be able to arrange financing) to pay the repurchase price for all Notes tendered by holders thereof. Further, the Indenture's provisions may not afford protection to holders of Notes in the event of a highly leveraged transaction, reorganization, debt restructuring, merger, or similar transaction involving the Company that ultimately may adversely affect holders of the Notes, even though such a transaction may not have resulted in a Change of Control as such. In addition, terms of the proposed New Credit Facility may limit the Issuer's ability to purchase any Notes and also may identify certain events that would constitute a Change of Control, as well as certain other events with respect to the Company that would constitute an event of default under any New Credit Facility. Any future credit or other agreements relating to other Indebtedness to which the Company, or any of them, may become a party may contain similar restrictions and provisions. See "Description of Notes." In the event a Change of Control occurs at a time when the Issuer is contractually prohibited from purchasing Notes, the Issuer could seek consent for the Issuer to purchase Notes, or could attempt to refinance any borrowings containing such prohibitions. If the Issuer does not obtain such consent or effect such a refinancing, the Issuer could remain prohibited from purchasing Notes. In such case, the Issuer's failure to purchase tendered Notes would constitute an Event of Default under the Indenture, which may, in turn, constitute a default under the terms of other indebtedness that the Issuer may have entered into from time to time, including secured indebtedness. 27 LACK OF ESTABLISHED TRADING MARKET There has not been any public market for the Original Securities. The Exchange Securities will constitute a new issue of securities with no established trading market. The Issuer does not intend to list the Exchange Securities on any securities exchange or to seek their admission to trading in any automated quotation system. The Initial Purchaser has advised the Issuer that it currently intends to make a market in the Exchange Securities, but it is not obligated to do so and may discontinue such market-making at any time without notice. In addition, such market-making activity will be subject to the limits imposed by the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and may be limited during the Exchange Offer and at certain other times. Accordingly, no assurance can be given that an active public or other market will develop for the Exchange Securities or as to the liquidity of the trading market for the Exchange Securities. If a trading market does not develop or is not maintained, holders of the Exchange Securities may experience difficulty in reselling the Exchange Securities or may be unable to sell them at all. If a market for the Exchange Securities develops, any such market may be discontinued at any time. If a public trading market develops for the Exchange Securities, future trading prices of the Exchange Securities will depend on many factors, including, among other things, prevailing interest rates, the Issuer's operating results and the market for similar securities. Depending on prevailing interest rates, the market for similar securities and other factors, including the financial condition of the Issuer, the Exchange Securities may trade at a discount from their principal amount. FAILURE TO FOLLOW EXCHANGE OFFER PROCEDURES; CONSEQUENCES OF FAILURE TO EXCHANGE Issuance of the Exchange Securities in exchange for the Original Securities pursuant to the Exchange Offer will be made only after a timely receipt by the Issuer of such Original Securities, properly completed and duly executed Letters of Transmittal and all other required documents. Therefore, holders of the Original Securities desiring to tender such Original Securities in exchange for Exchange Securities should allow sufficient time to ensure timely delivery. The Issuer is under no duty to give notification of defects or irregularities with respect to the tenders of Original Securities for exchange. Original Securities that are not tendered or are tendered but not accepted will, following consummation of the Exchange Offer, continue to be subject to the existing restrictions upon transfer thereof and, upon consummation of the Exchange Offer, certain registration rights under the Registration Rights Agreements will terminate. In addition, any holder of Original Securities who tenders in the Exchange Offer for the purpose of participating in a distribution of the Exchange Securities may be deemed to have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transactions. Each holder of the Original Securities (other than certain specified holders) who wishes to exchange the Original Securities for Exchange Securities in the Exchange Offer will be required to represent in the Letters of Transmittal that (i) it is not an affiliate of the Issuer, (ii) the Exchange Securities to be received by it are being acquired in the ordinary course of its business and (iii) at the time of commencement of the Exchange Offer, it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities. Each Participating Broker-Dealer that receives Exchange Securities for its own account in exchange for Original Securities, where such Original Securities were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution." To the extent that Original Securities are tendered and accepted in the Exchange Offer, the trading market for untendered and tendered but unaccepted Original Securities could be adversely affected. See "The Exchange Offer." 28 ORIGINAL ISSUE DISCOUNT The Exchange Securities will be considered to be issued with original issue discount (the difference between the stated redemption price at maturity of a debt instrument and the issue price of such debt instrument) for United States federal income tax purposes. Original issue discount will accrue from the issue date of the Exchange Securities and generally will be includable as interest income in the U.S. Holder's (defined in "Certain United States Federal Income Tax Consequences") gross income for United States federal income tax purposes in advance of the cash payments to which the income is attributable. For a more detailed discussion of the United States federal income tax consequences to the holders of the purchase, ownership and disposition of the Exchange Securities, see "Certain United States Federal Income Tax Consequences." If a bankruptcy case is commenced by or against the Company under the United States Bankruptcy Code (the "Bankruptcy Code") after the issuance of the Exchange Securities, the claim of a holder of any of the Exchange Securities with respect to the principal amount thereof may be limited to an amount equal to the sum of (i) the initial offering price allocable to such debt instrument and (ii) the portion of original issue discount which is not deemed to constitute "unmatured interest" for purposes of the Bankruptcy Code. Any original issue discount that was not amortized as of any such bankruptcy filing would constitute "unmatured interest." GOVERNMENTAL REGULATIONS The radio broadcasting industry is subject to extensive and changing regulation. Among other things, the Communications Act of 1934, as amended (the "Communications Act"), and rules, regulations, and policies of the Federal Communication Commission (the "FCC") require FCC consent to assignments of FCC licenses or transfers of control of FCC licensees. Each of the Stations operates pursuant to one or more licenses issued by the FCC, which expire at different times. Each licensee may apply to renew applicable licenses prior to their expiration. Third parties may challenge these applications or file competing applications by filing petitions with the FCC seeking to deny the renewal application. The FCC must grant the renewal application if it determines that during the preceding license term: (i) the station served the public interest, convenience and necessity; (ii) the licensee has committed no serious violation of the Communications Act or the FCC's rules; and (iii) there have been no other violations of the Act or such rules which taken together would indicate a pattern of abuse. If a substantial and material question of fact concerning a renewal application is raised by the FCC or other interested parties, or if for any reason the FCC cannot determine on the basis of the application and related pleadings that renewal would serve the public interest, convenience and necessity, the FCC will hold an evidentiary hearing on the application. If the FCC denies the renewal application upon conclusion of the hearing, third parties may then file applications for a license to operate those facilities. In determining whether to renew a station license, the FCC may not consider whether the public interest, convenience, and necessity would be better served by the grant of a license to a party other than the renewal applicant. In connection with the Company's proposed sale of the Missouri Properties, a competitor of the purchaser has filed a Petition to Deny the FCC's approval of the requisite transfer of the broadcast licenses of the Missouri Properties. The Company cannot now predict the outcome of such petition with any certainty. See "Certain Transactions." There have been a number of petitions to deny and competing applications filed with respect to broadcast license renewal applications. In the vast majority of cases, the FCC has renewed incumbent operators' station licenses. Such a filing presently is pending against station KUAD-FM located in Windsor, Colorado, which is owned and operated by Northern Colorado Radio, Inc., one of the Subsidiaries, which filing the Company believes is without a significant basis. Although the Company believes that this and the Stations' other licenses will be renewed, there can be no assurance that this will occur. 29 The Company is aware that the U.S. Federal Trade Commission (the "FTC") and the Antitrust Division of the U.S. Department of Justice (the "DOJ"), which evaluate transactions to determine whether those transactions should be challenged under the federal antitrust laws, have been increasingly active recently in their review of radio station acquisitions, particularly where an operator proposes to acquire additional stations in its existing markets. For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino Act (the "HSR Act") and the rules promulgated thereunder require the parties to file Notification and Report Forms with the FTC and the DOJ and to observe specified waiting period requirements before consummating the acquisition. During the initial 30 day period after the filing, the agencies decide which of them will investigate the transaction. If the investigating agency determines that the transaction does not raise significant antitrust issues, then it will either terminate the waiting period or allow it to expire after the initial 30 days. On the other hand, if the agency determines that the transaction requires a more detailed investigation, then prior to or at the conclusion of the initial 30 day period, it will issue a formal request for additional information ("Second Request"). The issuance of a Second Request extends the waiting period until the twentieth calendar day after the date of substantial compliance by all parties to the acquisition. Thereafter, such waiting period may only be extended by court order or with the consent of the parties. In practice, complying with a Second Request can take a significant amount of time. In addition, if the investigating agency raises substantive issues in connection with a proposed transaction, then the parties frequently engage in lengthy discussions or negotiations with the investigating agency concerning possible means of addressing those issues, including but not limited to persuading the agency that the proposed acquisition would not violate the antitrust laws, restructuring the proposed acquisition, divestiture of other assets of one or more parties, or abandonment of the transaction. Such discussions and negotiations can be time consuming, and the parties may agree to delay consummation of the acquisition during their pendency. At any time before or after the consummation of a proposed acquisition, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition or seeking divestiture of the business acquired or other assets of the acquiring company. Acquisitions that are not required to be reported under the HSR Act may be investigated by the FTC or the DOJ under the antitrust laws before or after consummation. In addition, private parties may under certain circumstances bring legal action to challenge an acquisition under the antitrust laws. As part of its increased scrutiny of radio station acquisitions, the DOJ has stated publicly that it believes that LMAs, JSAs and other similar agreements customarily entered into in connection with radio station transfers prior to the expiration of the waiting period under the HSR Act could violate the HSR Act. If the Company should grow in size, whether through acquisitions or otherwise, it will become increasingly vulnerable to scrutiny under various antitrust and similar regulatory laws administered by various federal and state authorities, laws and regulations in which considerations of absolute or relative size or market share may be relevant if not controlling. Such laws and regulations are quite complex and subject to amendment and to frequent variations in interpretation or enforcement. The radio broadcast industry has been subject to increased scrutiny by the Antitrust Division of the DOJ. As a result of such increased scrutiny, the Company could experience delays, increased costs, and compelled changes in connection with future transactions. If it were to be determined that one or more of the Company or its Subsidiaries had violated or were violating one or more of such laws or regulations, in addition to liability for resulting damages, any affected entity could face potential regulatory or court-ordered divestiture of one or more properties. Any such result could have a material, adverse effect upon the Company. See "Business--Federal Regulation of Radio Broadcasting--Federal Antitrust Considerations." 30 CHANGES IN THE RADIO BROADCASTING INDUSTRY The profitability of the Stations is subject to various factors that influence the radio broadcasting industry as a whole. The Stations may be affected by changes in audience taste, priorities of advertisers, new laws and governmental regulations and policies, changes in broadcast technical requirements, proposals to limit the tax deductibility of expenses incurred by advertisers, changes in the willingness of financial institutions and other lenders to finance radio station acquisitions and operations, and the development of competitive technologies. The Company cannot predict which, if any, of these factors might have a significant impact on the radio broadcasting industry in the future, nor can it predict what impact, if any, the occurrence of these events might have on the Company or on the Subsidiaries' operations. ECONOMIC CONDITIONS; SEASONALITY Radio broadcasting is a highly competitive business, and the Stations operate in highly competitive markets. Their financial success in each market depends, to a significant degree, upon audience characteristics and ratings, signal strength, each operator's share of the overall radio sales within its geographic market, the number and economic strength of other stations in the market, the economic health of the market, in particular its retailers, and the popularity and audience ratings of each competitor in the market. Any material adverse change in one or more of these conditions in a particular market ultimately could have a material effect on the Company's resulting revenues and cashflow. There can be no assurance that the Stations will be able to maintain or increase their current audience ratings or revenues. During a general economic recession or downturn, advertising expenditures tend to decline. In addition, because substantial portions of the Stations' or Newspapers' revenues are derived from local advertisers, operating results in individual geographic markets could be adversely affected by short or long-term local or regional economic downturns. See "Business." Seasonal revenue fluctuations also are common in the newspaper and radio broadcasting industries, caused by localized fluctuations in advertising expenditures. Accordingly, the Stations' and Newspapers' quarterly operating results have fluctuated in the past and will fluctuate in the future as a result of various factors, including seasonal demands of retailers and the timing and size of advertising purchases. Generally, in each calendar year the lowest level of advertising revenues occurs in the first quarter and the highest levels occur in the second and fourth quarters. COMPETITION; NEW TECHNOLOGIES; PROPOSED REGULATIONS The Stations and Newspapers compete for audience share and advertising revenues with other newspapers, magazines, direct mail, free shoppers, outdoor advertising, other FM and AM radio stations, television and cable television stations, and other media present within their respective markets. Radio broadcasting and newspaper distribution also are exposed to competition from developing media technologies, such as the delivery of audio programming through cable television or telephone wires, the introduction of digital radio broadcasting, which may provide a medium for the delivery by satellite or terrestrial means of multiple audio programming formats to local and national audiences, the increasing development and use of direct mail advertising, the growth of wireless communications and fiber optic delivery systems, the development of televised shopping programs, the potential for televised "newspapers," and the increasing growth of the internet. The Stations and Newspapers also may encounter competition from future, unforeseen developments in technology that subsequently may be commercialized, and at all times they will face potential, additional competition from new or expanding market entrants. The Company cannot predict what effect, if any, these or other new technologies or competitors may have on the Company. See "Business--Competition." From time to time, the Congress and the FCC have considered, and in the future may consider and adopt, new or revised laws, regulations, and policies regarding a wide variety of matters that, directly or indirectly, could affect the operation, ownership, and profitability of the Stations, result in the loss of 31 audience share and advertising revenues for the Stations, or affect the Company's ability to acquire additional radio stations or to finance such acquisitions. Such matters include: proposals to impose spectrum use or other fees on FCC licensees; the FCC's equal employment opportunity rules and matters relating to political broadcasting; technical and frequency allocation matters; proposals to restrict or prohibit the advertising of beer, wine, and other alcoholic beverages on radio; changes in the FCC's cross-interest, multiple ownership, and cross-ownership policies; changes to broadcast technical requirements; proposals to allow telephone or cable television companies to deliver audio and video programming to the home through existing phone lines; proposals to limit the tax deductibility of advertising expenses by advertisers; and proposals to auction the right to use the radio broadcast spectrum to the highest bidder, instead of granting FCC licenses and subsequent license renewals without such bidding. On April 2, 1997, the FCC awarded two licenses for the provision of satellite digital audio radio services ("DARS"). Under rules adopted for this service, licensees must begin construction of their space stations within one year, begin operating within four years, and be operating their entire system within six years. The Company cannot predict whether the service will be subscription or advertiser supported. Digital technology also may be used in the future by terrestrial radio broadcast stations either on existing or alternate broadcasting frequencies, and the FCC has stated that it will consider making changes to its rules to permit AM and FM radio stations to offer digital sound following industry analysis of technical standards. In addition, the FCC has authorized an additional 100 kHz of bandwidth for the AM band and, on March 17, 1997, adopted an allotment plan for the expanded band that identified the 88 AM radio stations selected to move into the band. At the end of a five-year transition period, those licensees will be required to return to the FCC either the license for their existing AM band station or the license for the expanded AM band station. The Company cannot predict whether any proposed changes will be adopted or what other matters might be considered in the future, nor can it judge in advance what impact, if any, the implementation of any of these proposals or changes might have on the Company. The foregoing brief description does not purport to be comprehensive and reference should be made to the Communications Act, the FCC's rules, and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of radio broadcast stations. COST OF NEWSPRINT Newsprint represents the Newspapers' single largest raw material expense and is one of the Newspapers' most significant operating costs. Newsprint costs are cyclical and vary widely from period to period. For example, newsprint costs increased approximately 40% per metric ton in late 1994 and 1995 on an industry-wide basis. Newsprint costs decreased significantly, however, in the second half of 1996. Future increases in the price of newsprint may have an adverse effect on the Newspapers' operating results. The Newspapers have no effective ability to hedge their exposure to such price fluctuations. POTENTIAL CONFLICTS OF INTEREST BMCLP will provide management services to certain of the Subsidiaries, and Holdings will provide loans to the Subsidiaries. In addition, BMCLP may provide such services to other affiliates, and Holdings or the Subsidiaries are expected to provide loans to the Managed Affiliates. Mr. Brill owns and controls, directly or indirectly, all of such entities, which also may enter into other contractual relationships from time to time. Such relationships may present a conflict between Mr. Brill's interests, as the ultimate owner of all parties to such relationships, and the interest of the holders of the Securities. The Indenture includes certain provisions that are intended to prevent unfair transactions between the Issuer and affiliates. See "Certain Transactions" and "Description of Notes--Certain Covenants--Limitation on Affiliate Transactions." 32 BMCLP, which provides management services, including benefit plan administration, risk management, finance and tax management services and strategic planning and operations oversight, is owned by Mr. Brill, directly or indirectly, and provides similar services to other entities owned by Mr. Brill. The fees charged by BMCLP are established on a contractual basis, as set forth more fully under "Certain Transactions," and are payable to the extent set forth in the "Description of Notes." Any failure by BMCLP (and its management team) to continue providing such services to the Company or the diversion of BMCLP's efforts to other businesses of Mr. Brill could have a material adverse effect upon the Company. In addition, from time to time certain of the Subsidiaries will enter into management agreements (the "Managed Affiliate Management Agreements") with certain affiliates of the Company. Such Managed Affiliates also will issue Managed Affiliate Notes payable to certain of the Subsidiaries, the aggregate amount of which notes will be subject to limitations set forth in the Indenture. See "Description of Notes--Certain Covenants--Limitation on Affiliate Transactions." Any default in payment of one or more of the Managed Affiliate Notes or under any Managed Affiliate Management Agreement could have a material adverse effect on the Company. FORWARD-LOOKING STATEMENTS The forward-looking statements contained in this Prospectus are subject to certain risks and uncertainties. Such statements are based on the Company's and its Subsidiaries' past experience and what they believe to be reasonable assumptions. Past experience does not necessarily accurately foretell future events. Also, such statements are based upon the underlying fundamental assumptions that business, economic, and regulatory conditions over the foreseeable future will remain relatively stable. There can be no assurance that this will occur or that actual results will not differ materially and adversely from those suggested by or inherent in such forward-looking statements as a result of various factors, including, but not limited to: risks associated with acquisitions and expansions of operations, unforeseen inability to obtain or retain competent personnel, intense competition, unaccounted-for variations in national or local markets, unpredictable market or regulatory developments, unforeseen or unaccounted-for economic changes, unexpected management mistakes or failures, unexpected variations in operating results or technological changes, unforeseen cash or capital shortages or requirements, unforeseen and unexpected uninsured torts or breaches of contract, and uncertainties as to the nature and extent of future governmental regulation. Such forward-looking statements are not statements of fact but of the Company's and Issuer's opinions as to future events, opinions held, in their view, with a reasonable degree of certainty based upon assumptions and information then available to them, assumptions that, while considered by the Company to be reasonable, are inherently subject to significant business, economic, competitive, and regulatory uncertainty and contingencies that are subject to change and beyond control of the Company. Such forward-looking statements may prove to have been materially incorrect when made and may not properly have reflected all variables that may turn out to have been material, including unexpected material deviations in assumed general economic trends, events, or components. Inevitably, certain of these expectations will not materialize or will prove to have been materially unfounded, and unanticipated events may materially and adversely affect actual results. The Company's actual results of operations in future years undoubtedly will vary from that inherent in such statements, and such variations may be negative or positive and well may be material. See "Management's Discussion and Analysis of Financial Condition and Results of Operations." It is vital that all forward-looking statements be understood and considered only in context with all other information contained in this Prospectus and that such statements not be considered in isolation or taken out of context. While the Company believes such statements have a reasonable basis, these statements may prove to have been materially incorrect when made and in no way are they, or are they to be taken as, predictions or forecasts of future results. 33 USE OF PROCEEDS The Exchange Offer is intended to satisfy certain of the Issuer's obligations under the Registration Rights Agreements. The Issuer will not receive any cash proceeds from the issuance of the Exchange Securities in the Exchange Offer. The net proceeds to the Issuer from the issuance of $105,000,000 aggregate principal amount of the Original Notes and $3,000,000 aggregate principal amount of the Original Appreciation Notes were approximately $96.8 million. Of these net proceeds $1.6 million was used to pay for acquisitions, approximately $70.3 million was used to repay certain indebtedness of the Issuer, $2.0 million was used to provide loans to Managed Affiliates, approximately $5.5 million was or will be used to pay fees and expenses and the balance will be used for operations and working capital purposes or will be available for acquisitions. 34 CAPITALIZATION The following table sets forth the capitalization of the Company as of August 31, 1997 (a) on a historical basis, and (b) on a pro forma basis to give effect to the Transactions as if the Transactions had been consummated on August 31, 1997. This table should be read in conjunction with the Pro Forma Financial Statements and notes thereto and the separate historical combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill and notes thereto included elsewhere in this Offering Memorandum.
AS OF AUGUST 31, 1997 ----------------------- ACTUAL PRO FORMA ---------- ----------- (DOLLARS IN THOUSANDS) Cash and cash equivalents................................................................. $ 351 $ 23,991 ---------- ----------- ---------- ----------- 12% Senior notes due 2007................................................................. $ -- $ 94,461 Senior notes (a).......................................................................... 59,118 -- Other senior secured obligations.......................................................... 1,344 2,200 Mortgages and purchase money.............................................................. 1,072 1,072 Obligations under capital leases.......................................................... 937 554 Subordinated secured obligations.......................................................... 371 1,071 Appreciation Notes........................................................................ -- 2,349 Unsecured obligations..................................................................... 564 1,027 Incentive plan liability.................................................................. 4,640 4,640 ---------- ----------- Total long-term debt (including current maturities)................................... 68,046 107,374 Capital................................................................................... 7 6 Additional paid in capital................................................................ 1,793 1,793 Accumulated deficit....................................................................... (32,950) (41,316) ---------- ----------- Net capital deficiency (b)............................................................ (31,150) (39,517) ---------- ----------- Total capitalization.................................................................. $ 36,896 $ 67,857 ---------- ----------- ---------- -----------
(a) Interest only payable monthly at the rate of 10% per annum, due September 30, 1999. Additional interest accrues at the rate of 7.5% per annum, due September 30, 1999. (b) The net capital deficiency as of August 31, 1997 reflects the declaration of a distribution in the amount of $3.0 million which was subsequently paid in cash. The pro forma net capital deficiency as of August 31, 1997, reflects, in part, the subsequent declaration and payment of distributions in the amount of $9.2 million, $5.0 million in cash and $4.2 million for purposes of satisfaction of affiliate notes receivable. 35 PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma condensed combined balance sheet of the Company gives effect to the Transactions as if they had occurred on August 31, 1997. The following unaudited condensed combined statements of operations and other data for the year ended February 28, 1997 and the six months ended August 31, 1997 give effect to the Transactions as if they had occurred March 1, 1996. The acquisitions which comprise part of the Transactions will be accounted for using the purchase method of accounting. The total cost of such acquisitions will be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values. The allocation of the respective purchase prices of such acquisitions included in the pro forma financial information is preliminary and is subject to revisions when additional information concerning certain asset valuations is obtained and such revisions could be material. The pro forma adjustments are based on available information and certain assumptions that the Company believes are reasonable under the circumstances. The pro forma financial information should be read in conjunction with the separate historical combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill, and related notes thereto, included elsewhere in this Prospectus. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, and do not purport to be indicative of the results that actually would have been obtained had the Transactions occurred as of the assumed dates and for the periods presented, and are not intended to be a projection of future results or trends. 36 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS AND OTHER DATA YEAR ENDED FEBRUARY 28, 1997
ACQUISITIONS AND DISPOSITIONS-- COMPANY-- HISTORICAL PRO FORMA COMBINED PRO HISTORICAL (A) ADJUSTMENTS FORMA ------------ ------------ ------------ -------------- STATEMENT OF OPERATIONS DATA: Revenues: Broadcasting............................... $ 13,555,820 $(2,151,413) $ -- $ 11,404,407 Newspaper.................................. 13,440,395 2,330,070 -- 15,770,465 Management fees............................ 40,000 -- 200,000(k) 240,000 ------------ ------------ ------------ -------------- Total revenues........................... 27,036,215 178,657 200,000 27,414,872 Operating expenses: Operating departments...................... 19,042,885 317,397 (350,276)(g) 19,010,006 Incentive plan............................. 627,966 -- -- 627,966 Management fees............................ 1,944,699 (192,047) 116,504(e) 1,869,156 Time brokerage agreement fee, net.......... (54,500) 82,500 (28,000)(f) -- Consulting................................. 140,992 (22,992) (118,000)(f) -- Depreciation............................... 1,025,543 (180,082) (26,615)(h) 818,846 Amortization............................... 369,484 (83,929) 253,928(i) 539,483 ------------ ------------ ------------ -------------- Total operating expenses................. 23,097,069 (79,153) (152,459) 22,865,457 ------------ ------------ ------------ -------------- Operating income............................. 3,939,146 257,810 352,459 4,549,415 Other income (expense): Interest--Managed Affiliates............... -- -- 1,957,915(d) 1,957,915 Interest--stockholder and affiliates, net...................................... 246,909 133,937 (380,846)(l) -- Interest--other, net....................... (7,190,504) 961,656 (7,724,607)(b)(c)(j) (13,953,455) Amortization of deferred financing costs... (488,712) 76,348 (142,540)(b)(c) (554,904) Gain on sale of assets, net................ 1,076,181 (1,067,360) -- 8,821 Other, net................................. (68,689) 13,095 -- (55,594) ------------ ------------ ------------ -------------- Total other income (expense)............. (6,424,815) 117,676 (6,290,078) (12,597,217) ------------ ------------ ------------ -------------- Loss before income taxes..................... (2,485,669) 375,486 (5,937,619) (8,047,802) Income tax provision......................... 286,504 (14,300) -- 272,204 ------------ ------------ ------------ -------------- Net loss..................................... $ (2,772,173) $ 389,786 $ (5,937,619) $ (8,320,006) ------------ ------------ ------------ -------------- ------------ ------------ ------------ -------------- OTHER DATA: Media Cashflow (m)........................... $ 10,363,000 EBITDA (m)................................... 5,908,000 Net interest expense (n)..................... 12,688,000 Net cash interest expense (o)................ 7,329,000 Net debt (p)................................. 78,743,000 Ratio of Media Cashflow to net interest expense.................................... 0.82x Ratio of Media Cashflow to net cash interest expense.................................... 1.41x Ratio of net debt to Media Cashflow (p)...... 7.60x Media Cashflow margin........................ 38%
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Statement of Operations 37 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS YEAR ENDED FEBRUARY 28, 1997 (a) To reflect the inclusion of the results of operations of Clinton Distribution, Inc. ("Clinton") (acquisitions closed July, 1996) and Huron Postal Service, Inc. ("Huron") and Northeastern Printers, Inc. ("Northeastern") (acquisitions closed October, 1997) in the period prior to their respective acquisitions and combination with the Company. To reflect the elimination of the results of operations of radio stations KQWB-FM and KQFN-AM located in Fargo, North Dakota and Moorhead, Minnesota (sale closed August, 1996). To reflect the elimination of the results of operations of Central Missouri Broadcasting, Inc. and CMB II, Inc. in the period prior to their respective sales and dissolution with the Company. Applications for transfer of the broadcast licenses of the Missouri Properties have been filed with the FCC by the buyers. A local market competitor has objected to the transfer of the licenses and on December 12, 1997, filed with the FCC a Petition to Deny the license transfers and to terminate the Time Brokerage Agreement. No action has been taken on the Petition to Deny by the FCC and the Company believes that even if the Petition to Deny were granted, the consequences would not be material to the Company. (b) To reflect the elimination of interest expense in the amount of $5,891,548 and deferred financing amortization of $407,460 relating to the existing senior notes. (c) To reflect interest expense of $12,834,872 (at 12.2% assumed effective rate) associated with the Notes and $399,283 (at 17% assumed effective rate) associated with the Appreciation Notes and deferred financing amortization of $550,000. (d) To reflect a $16.3 million loan made during fiscal 1998 and related interest income at the assumed effective rate of 12% of $1,957,915 related to the Managed Affiliates (WSTO-FM, WVJS-AM and WKDQ-FM). (e) To reflect the additional management fee expense calculated at 5% of revenues in the period prior to the acquisition and combination with the Company for Clinton, Huron and Northeastern. (f) To reflect the elimination of time brokerage and consulting expenses recorded in operations for KTRR-FM prior to the acquisition and combination with the Company. (g) To reflect the elimination of operating expenses which represent prior owners' compensation and benefits, terminated benefit plans and cost savings due to "in-house" printing of the publications and performance of certain accounting writeup functions, which were previously outsourced, of Huron and Northeastern prior to acquisition and combination with the Company. These outsourcing contracts are being terminated in conjunction with the acquisition. (h) To reflect depreciation expense for purchase accounting allocations made for the acquisitions based on preliminary allocations of consideration as follows:
KTRR-FM HURON AND NORTHEASTERN ------------------------- ------------------------ ALLOCATED PRO FORMA ALLOCATED PRO FORMA COST DEPRECIATION COST DEPRECIATION ----------- ------------ ---------- ------------ Property and equipment......................................... $ -- $ -- $ 275,000 $ 19,000 ----------- ---------- ----------- ---------- Less depreciation reported..................................... -- 45,615 ------------ ------------ Pro forma adjustment........................................... $ -- $ (26,615) ------------ ------------ ------------ ------------
38 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (CONTINUED) YEAR ENDED FEBRUARY 28, 1997 (i) To reflect amortization expense for purchase accounting allocations made for the acquisitions based on preliminary allocations of consideration as follows:
KTRR-FM HURON AND NORTHEASTERN -------------------------- -------------------------- ALLOCATED PRO FORMA ALLOCATED PRO FORMA COST AMORTIZATION COST AMORTIZATION ------------ ------------ ------------ ------------ FCC licenses and/or goodwill............................. $ 2,000,000 $ 50,000 $ 1,339,037 $ 33,476 Noncompete agreements.................................... 179,850 35,970 672,411 134,482 ------------ ------------ ------------ ------------ $ 2,179,850 85,970 $ 2,011,448 167,958 ------------ ------------ ------------ ------------ Less amortization reported............................... -- -- ------------ ------------ Pro forma adjustment..................................... $ 85,970 $ 167,958 ------------ ------------ ------------ ------------
(j) To reflect interest expense for Huron and Northeastern in the amount of $214,000 and KTRR-FM in the amount of $168,000 related to debt incurred to finance their respective acquisitions. (k) To reflect income from the Managed Affiliates Management Agreements with the Managed Affiliates prior to their respective effective dates of December 1, 1997 for the WSTO-FM and WVJS-AM stations and February 1, 1997 for the WKDQ-FM station. (l) To reflect the elimination of interest income from affiliate notes receivable satisfied through distributions to the Stockholder. (m) "EBITDA" is defined as operating income before depreciation and amortization expenses. "Media Cashflow" is defined as EBITDA plus management fees, incentive plan expense, time brokerage agreement fees, acquisition related consulting expense and interest income from loans made by the Company to Managed Affiliates. Management fees payable to BMCLP are subordinated, to the extent provided in the Indenture, to the prior payment of the Issuer's obligations on the Notes. Although Media Cashflow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that these measures are useful to an investor in evaluating the Company because these measures are widely used in the media industry to evaluate a media company's operating performance. However, Media Cashflow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statements prepared in accordance with GAAP as measures of liquidity or profitability. (n) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. Net interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (o) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net cash interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and six months ended August 31, 1997, respectively and also excludes interest accrued at the assumed effective rate of 12.2%, which is in excess of the assumed current pay rate of 7.5% in each of years one and two by $4,960,000 ($2,480,000 per six months) and excludes interest on the Appreciation Notes accreted at 17% totaling $399,000 for the year ended February 28, 1997 ($200,000 for six months). Net cash interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (p) Net debt includes total debt less the incentive plan liability and less cash and cash equivalents, all as of August 31, 1997, as significant portions of the cash and cash equivalents are held for future acquisitions. 39 UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS AND OTHER DATA SIX MONTHS ENDED AUGUST 31, 1997
ACQUISITIONS AND DISPOSITIONS-- COMPANY-- HISTORICAL PRO FORMA COMBINED HISTORICAL (A) ADJUSTMENTS PRO FORMA ------------ ------------ ------------ -------------- STATEMENT OF OPERATIONS DATA: Revenues: Broadcasting............................... $ 7,884,988 $(1,204,751) $ -- $ 6,680,237 Newspaper.................................. 7,095,069 1,072,985 -- 8,168,054 Management fees............................ 120,000 -- -- 120,000 ------------ ------------ ------------ -------------- Total revenues........................... 15,100,057 (131,766) -- 14,968,291 Operating expenses: Operating departments...................... 10,104,343 (37,429) (175,552)(g) 9,891,362 Incentive plan............................. 485,000 -- -- 485,000 Management fees............................ 1,071,714 (108,000) 53,649(e) 1,017,363 Time brokerage agreement fee, net.......... 24,000 -- (24,000)(f) -- Consulting................................. 117,996 (9,996) (108,000)(f) -- Depreciation............................... 508,312 (86,355) (4,600)(h) 417,357 Amortization............................... 240,715 (41,224) 126,964(i) 326,455 ------------ ------------ ------------ -------------- Total operating expenses................. 12,552,080 (283,004) (131,539) 12,137,537 ------------ ------------ ------------ -------------- Operating income............................. 2,547,977 151,238 131,539 2,830,754 Other income (expense): Interest--Managed Affiliates............... 563,582 -- 415,376(d) 978,958 Interest--stockholder and affiliates, net...................................... 128,078 62,261 (190,339)(k) -- Interest--other, net....................... (4,390,195) 567,340 (3,156,952)(b)(c)(j) (6,979,807) Amortization of deferred financing costs... (282,876) 46,223 (38,347)(b)(c) (275,000) Loss on sale of assets, net................ (8,948) -- -- (8,948) Other, net................................. (21,963) 4,864 -- (17,099) ------------ ------------ ------------ -------------- Total other income (expense)............. (4,012,322) 680,688 (2,970,262) (6,301,896) ------------ ------------ ------------ -------------- Loss before income taxes..................... (1,464,345) 831,926 (2,838,723) (3,471,142) Income tax provision......................... 77,866 7,950 -- 85,816 ------------ ------------ ------------ -------------- Net loss..................................... $ (1,542,211) $ 823,976 $ (2,838,723) $ (3,556,958) ------------ ------------ ------------ -------------- ------------ ------------ ------------ -------------- OTHER DATA: Media Cashflow (l)........................... $ 6,056,000 EBITDA (l)................................... 3,575,000 Net interest expense (m)..................... 6,347,000 Net cash interest expense (n)................ 3,667,000 Net debt (o)................................. 78,743,000 Ratio of Media Cashflow to net interest expense.................................... 0.95x Ratio of Media Cashflow to net cash interest expense.................................... 1.65x Ratio of net debt to Media Cashflow(p)....... 6.50x Media Cashflow margin........................ 40%
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Statement of Operations 40 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1997 (a) To reflect the inclusion of the results of operations of Huron and Northeastern in the period prior to their respective acquisitions and combination with the Company (acquisition closed October, 1997). To reflect the elimination of the results of operations of Central Missouri Broadcasting, Inc. and CMB II, Inc. in the period prior to their sale and dissolution with the Company. Applications for transfer of the broadcast licenses of the Missouri Properties have been filed with the FCC by the buyers. A local market competitor has objected to the transfer of the licenses and on December 12, 1997, filed with the FCC a Petition to Deny the license transfers and to terminate the Time Brokerage Agreements. No action has been taken on the Petition to Deny by the FCC, and the Company believes that, even if the Petition to Deny were granted, the consequences to the Company would not be material. (b) To reflect the elimination of interest expense in the amount of $3,651,126 and deferred financing amortization of $236,653 related to the existing senior notes. (c) To reflect interest expense of $6,417,436 (at 12.2% assumed effective rate) associated with the Notes and $199,642 (at 17% assumed effective rate) associated with the Appreciation Notes and deferred financing amortization of $275,000. (d) To reflect a $16.3 million loan made during fiscal 1998 and additional related interest income at the assumed effective rate of 12% of $415,376 related to the Managed Affiliates (WSTO-FM, WVJS-AM and WKDQ-FM). (e) To reflect the additional management fee expense calculated at 5% of revenues in the period prior to the acquisition and combination with the Company for Huron and Northeastern. (f) To reflect the elimination of time brokerage and consulting expenses recorded in operations for KTRR-FM prior to the acquisition and combination with the Company. (g) To reflect the elimination of operating expenses which represent prior owners' compensation and benefits, terminated benefit plans and cost savings due to "in-house" printing of the publications and performance of certain accounting writeup functions, which were previously outsourced, of Huron and Northeastern prior to acquisition and combination with the Company. These outsourcing contracts are being terminated in conjunction with the acquisition. (h) To reflect depreciation expense for purchase accounting allocations made for the acquisitions based on preliminary allocations of consideration as follows:
KTRR-FM HURON AND NORTHEASTERN ---------------------------- -------------------------- ALLOCATED PRO FORMA ALLOCATED PRO FORMA COST DEPRECIATION COST DEPRECIATION ----------- --------------- ------------ ------------ Property and equipment....................................... $ -- $ -- $ 275,000 $ 9,500 ----- ------------ ----- ------------ Less depreciation reported................................... -- 14,100 ----- ------------ Pro forma adjustment......................................... $ -- $ (4,600) ----- ------------ ----- ------------
41 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (CONTINUED) SIX MONTHS ENDED AUGUST 31, 1997 (i) To reflect amortization expense for purchase accounting allocations made for the acquisitions based on preliminary allocations of consideration as follows:
KTRR-FM HURON AND NORTHEASTERN -------------------------- -------------------------- ALLOCATED PRO FORMA ALLOCATED PRO FORMA COST AMORTIZATION COST AMORTIZATION ------------ ------------ ------------ ------------ FCC licenses and/or goodwill.............................. $ 2,000,000 $ 25,000 $1,339,037 $ 16,738 Noncompete agreements..................................... 179,850 17,985 672,411 67,241 ------------ ------------ ------------ ------------ $ 2,179,850 42,985 $2,011,448 83,979 ------------ ------------ ------------ ------------ Less amortization reported................................ -- -- ------------ ------------ Pro forma adjustment...................................... $ 42,985 $ 83,979 ------------ ------------ ------------ ------------
(j) To reflect interest expense for Huron and Northeastern in the amount of $107,000 and KTRR-FM in the amount of $84,000 related to debt incurred to finance their respective acquisitions. (k) To reflect the elimination of the interest income from affiliate notes receivable satisfied through distributions to the Stockholder. (l) "EBITDA" is defined as operating income before depreciation and amortization expenses. "Media Cashflow" is defined as EBITDA plus management fees, incentive plan expense, time brokerage agreement fees, acquisition related consulting expense and interest income from loans made by the Company to Managed Affiliates. Management fees payable to BMCLP are subordinated, to the extent provided in the Indenture, to the prior payment of the Issuer's obligations on the Notes. Although Media Cashflow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that these measures are useful to an investor in evaluating the Company because these measures are widely used in the media industry to evaluate a media company's operating performance. However, Media Cashflow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statements prepared in accordance with GAAP as measures of liquidity or profitability. (m) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. Net interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (n) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net cash interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and six months ended August 31, 1997, respectively and also excludes interest accrued at the assumed effective rate of 12.2%, which is in excess of the assumed current pay rate of 7.5% in each of years one and two by $4,960,000 ($2,480,000 per six months) and excludes interest on the Appreciation Notes accreted at 17% totaling $399,000 for the year ended February 28, 1997, ($200,000 for six months). Net cash interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. 42 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (CONTINUED) SIX MONTHS ENDED AUGUST 31, 1997 (o) Net debt includes total debt less the incentive plan liability and less cash and cash equivalents, all as of August 31, 1997, as significant portions of the cash and cash equivalents are held for future acquisitions. (p) Net debt for purposes of this ratio includes total debt less the incentive plan liability and less cash and cash equivalents, all as of August 31, 1997, as significant portions of the cash and cash equivalents are held for future acquisitions. For purposes of this ratio the Media Cashflow for the six months ended August 31, 1997 has been doubled to estimate an annualized amount. No assurance can be provided that such results will be achieved. 43 UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF AUGUST 31, 1997
ACQUISITIONS AND COMPANY-- DISPOSITIONS-- PRO FORMA COMBINED HISTORICAL HISTORICAL(A) ADJUSTMENTS PRO FORMA ------------ ------------ ------------ -------------- ASSETS Current assets: Cash and cash equivalents.................. $ 351,057 $ 4,679,196 $18,961,188(b)(c)(d)(e) $ 23,991,441 Accounts receivable, net of allowance for doubtful accounts........................ 4,037,687 (264,269) -- 3,773,418 Inventories................................ 318,638 20,000 -- 338,638 Other current assets....................... 392,588 (82,603) -- 309,985 ------------ ------------ ------------ -------------- Total current assets................... 5,099,970 4,352,324 18,961,188 28,413,482 Notes receivable from Managed Affiliates..... 14,315,962 -- 2,000,000(e) 16,315,962 Property and equipment....................... 16,854,777 (2,335,341) -- 14,519,436 Less accumulated depreciation................ (8,318,276) 1,794,396 -- (6,523,880) ------------ ------------ ------------ -------------- Net property and equipment............. 8,536,501 (540,945) -- 7,995,556 Goodwill and FCC licenses, net............... 5,375,217 2,570,842 -- 7,946,059 Covenants not to compete, net................ 3,190,391 764,105 -- 3,954,496 Other assets, net............................ 1,641,981 (338,772) 4,270,112(b)(c)(d) 5,573,321 Other long term assets....................... 251,956 (200,000) -- 51,956 Due from affiliates.......................... 4,157,453 -- (4,157,453)(f) -- ------------ ------------ ------------ -------------- 14,616,998 2,796,175 112,659 17,525,832 ------------ ------------ ------------ -------------- Total assets................................. $ 42,569,431 $ 6,607,554 $21,073,847 $ 70,250,832 ------------ ------------ ------------ -------------- ------------ ------------ ------------ -------------- LIABILITIES AND NET CAPITAL DEFICIENCY Current liabilities: Short term notes........................... $ 500,000 $ -- $ -- $ 500,000 Due to affiliates.......................... 617,950 (233,695) -- 384,255 Accounts payable........................... 897,985 (38,802) -- 859,183 Other accrued expenses..................... 657,525 (6,863) -- 650,662 Distributions payable...................... 3,000,000 -- (3,000,000)(b) -- Current maturities of long-term obligations.............................. 729,315 (220,958) -- 508,357 ------------ ------------ ------------ -------------- Total current liabilities.............. 6,402,775 (500,318) (3,000,000) 2,902,457 Long-term obligations: Senior notes............................... 59,117,885 -- 35,343,391(b)(c)(d) 94,461,276 Secured seller obligations................. 1,343,987 856,345 -- 2,200,332 Mortgages and purchase money............... 1,072,066 -- -- 1,072,066 Obligations under capital leases........... 936,966 (383,224) -- 553,742 Secured subordinated obligations........... 371,142 700,000 -- 1,071,142 Appreciation Notes......................... -- -- 2,348,724(d) 2,348,724 Unsecured obligations...................... 564,119 462,320 -- 1,026,439 Incentive plan liability................... 4,640,000 -- -- 4,640,000 Less current maturities of long-term obligations.............................. (729,315) 220,958 -- (508,357) ------------ ------------ ------------ -------------- 67,316,850 1,856,399 37,692,115 106,865,364 Capital deficiency: Capital.................................... 6,750 (1,100) -- 5,650 Additional paid-in capital................. 1,792,852 -- -- 1,792,852 Accumulated deficit........................ (32,949,796) 5,252,573 (13,618,268)(b)(c)(f) (41,315,491) ------------ ------------ ------------ -------------- Net capital deficiency................. (31,150,194) 5,251,473 (13,618,268) (39,516,989) ------------ ------------ ------------ -------------- $ 42,569,431 $ 6,607,554 $21,073,847 $ 70,250,832 ------------ ------------ ------------ -------------- ------------ ------------ ------------ --------------
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Balance Sheet 44 NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF AUGUST 31, 1997 (a) To reflect the purchase of assets of KTRR-FM, Huron and Northeastern and the sale of all of the operating assets of Central Missouri Broadcasting, Inc. and CMB II, Inc. Applications for transfer of the broadcast licenses of the Missouri Properties have been filed with the FCC by the buyers. A local market competitor has objected to the transfer of the licenses and on December 12, 1997, filed with the FCC a Petition to Deny the license transfers and to terminate the TBA. No action has been taken on the Petition to Deny by the FCC, and the Company believes that, even if the Petition to Deny were granted, the consequences to the Company would not be material. (b) To reflect additional senior note borrowings subsequent to August 31, 1997 in the amount of $10,295,039 used for the following: deferred financing costs of $430,927; dividends paid to Stockholder of $8,000,000 ($3,000,000 of which was accrued at August 31, 1997) and working capital of $1,864,112. (c) To reflect payment of the senior note in the amount of $69,412,924, related prepayment penalty of $2,800,000 and corresponding write-off of net book value of deferred financing costs of $1,660,815. (d) To reflect proceeds from the Notes and Appreciation Notes of $96,810,000 net of $5,500,000 to be applied towards deferred financing costs. The Appreciation Notes have been valued at an estimated fair value of $2,348,724 based on an assumed 17% discount rate and $3,000,000 payout on the first call date of June 15, 1999. (e) To reflect an additional loan of $2,000,000 to the Managed Affiliates (WSTO-FM, WVJS-AM, and WKDQ-FM). (f) To reflect the elimination of affiliate notes receivable satisfied through distributions to the Stockholder. CASH TRANSACTIONS - ----------------------------------------------------------------------------------- Post August 31, 1997 senior note proceeds............................ $ 1,864,112 (see b) Payment of senior note............................................... (69,412,924) (see c) Payment of senior note--prepayment penalty........................... (2,800,000) (see c) Net proceeds from the Notes and Appreciation Notes................... 91,310,000 (see d) Loans to Managed Affiliates.......................................... (2,000,000) (see e) ------------ $ 18,961,188 ------------ ------------ ACCUMULATED DEFICIT TRANSACTIONS - ---------------------------------------------------------------------------------------------- Dividend to Stockholder.............................................. $ 5,000,000 (see b) Senior note--prepayment penalty...................................... 2,800,000 (see c) Write-off of deferred financing costs................................ 1,660,815 (see c) Distributions to Stockholder to satisfy affiliate notes receivable... 4,157,453 (see f) ------------ $ 13,618,268 ------------ ------------
45 SELECTED COMBINED FINANCIAL DATA The selected combined financial data presented below should be read in conjunction with the combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill and notes thereto included elsewhere in this Prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations." The selected combined financial data (except for the other financial and operating data) of The Radio and Newspaper Businesses of Alan R. Brill (i) as of and for the years ended February 28, 1993 and 1994 have been derived from schedules which primarily include information from the separate audited combined financial statements of The Broadcasting Businesses of Alan R. Brill and the separate audited consolidated financial statements of Central Michigan Newspapers, Inc., (ii) as of and for the years ended February 28, 1995, February 29, 1996 and February 28, 1997 have been derived from the audited combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill and (iii) as of and for the six months ended August 31, 1996 and 1997 have been derived from the unaudited condensed combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill. The selected pro forma data presented below should be read in conjunction with the information contained in the historical financial statements included elsewhere herein and "Pro Forma Financial Information."
HISTORICAL PRO FORMA ------------------------------------------------------------------------------- ------------ SIX MONTHS SIX MONTHS YEAR FISCAL YEAR ENDED FEBRUARY 28 OR 29 ENDED ENDED ENDED ----------------------------------------------------- AUGUST 31, AUGUST 31, FEBRUARY 28, 1993 1994 1995 1996 1997 1996 1997 1997 (A) --------- --------- --------- --------- --------- ----------- ----------- ------------ (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS DATA: Revenues: Radio................... $ 9,764 $ 10,961 $ 12,650 $ 13,096 $ 13,596 $ 6,852 $ 8,005 $ 11,644 Newspapers.............. 10,877 10,499 10,537 12,217 13,440 6,854 7,095 15,771 --------- --------- --------- --------- --------- ----------- ----------- ------------ Total revenues...... 20,641 21,460 23,187 25,313 27,036 13,706 15,100 27,415 Operating expenses: Operating departments... 16,644 16,352 17,530 18,640 19,043 9,540 10,104 19,010 Incentive plan.......... 25 176 634 1,467 628 316 485 628 Other................... -- -- -- 37 86 (48) 142 -- Management fees......... 897 1,521 1,679 1,833 1,945 980 1,072 1,869 Depreciation and amortization.......... 1,306 1,277 1,111 1,312 1,395 670 749 1,358 --------- --------- --------- --------- --------- ----------- ----------- ------------ Total operating expenses.......... 18,872 19,326 20,954 23,289 23,097 11,458 12,552 22,865 --------- --------- --------- --------- --------- ----------- ----------- ------------ Operating income.......... 1,769 2,134 2,233 2,024 3,939 2,248 2,548 4,550 Other income (expense): Interest expense, net..... (4,484) (4,645) (5,842) (7,130) (7,432) (3,686) (3,981) (12,550) Other, net................ (148) 3,463 (144) (80) 1,007 1,035 (31) (47) --------- --------- --------- --------- --------- ----------- ----------- ------------ Total other income (expense)......... (4,632) (1,182) (5,986) (7,210) (6,425) (2,651) (4,012) (12,597) --------- --------- --------- --------- --------- ----------- ----------- ------------ Income (loss) before income taxes and extraordinary item...... (2,863) 952 (3,753) (5,186) (2,486) (403) (1,464) (8,048) Income tax provision (benefit)............... 112 168 68 (39) 286 84 78 272 --------- --------- --------- --------- --------- ----------- ----------- ------------ Income (loss) before extraordinary item...... (2,975) 784 (3,821) (5,147) (2,772) (487) (1,542) (8,320) Extraordinary item (b).... -- 245 -- 6,915 -- -- -- -- --------- --------- --------- --------- --------- ----------- ----------- ------------ Net income (loss)......... $ (2,975) $ 1,029 $ (3,821) $ 1,768 $ (2,772) $ (487) $ (1,542) $ (8,320) --------- --------- --------- --------- --------- ----------- ----------- ------------ --------- --------- --------- --------- --------- ----------- ----------- ------------ OTHER FINANCIAL AND OPERATING DATA: Media Cashflow (c)........ $ 3,997 $ 5,108 $ 5,657 $ 6,673 $ 7,993 $ 4,166 $ 5,560 $ 10,363 EBITDA (c)................ 3,075 3,411 3,344 3,336 5,334 2,918 3,297 5,908 Capital expenditures excluding acquisitions............ 410 833 974 977 1,269 304 408 1,336 Net interest expense (d)..................... 12,688 Net cash interest expense (e)............. 7,329 Net debt (f).............. 78,743 Ratio of Media Cashflow to net interest expense.... 0.82x Ratio of Media Cashflow to net cash interest expense................. 1.41x Ratio of net debt to Media Cashflow (f)............ 7.60x Ratio of earnings to fixed charges (h)............. -- 1.20x -- -- -- -- -- -- SIX MONTHS ENDED AUGUST 31, 1997 (A) ----------- STATEMENT OF OPERATIONS DA Revenues: Radio................... $ 6,800 Newspapers.............. 8,168 ----------- Total revenues...... 14,968 Operating expenses: Operating departments... 9,891 Incentive plan.......... 485 Other................... -- Management fees......... 1,017 Depreciation and amortization.......... 744 ----------- Total operating expenses.......... 12,137 ----------- Operating income.......... 2,831 Other income (expense): Interest expense, net..... (6,276) Other, net................ (26) ----------- Total other income (expense)......... (6,302) ----------- Income (loss) before income taxes and extraordinary item...... (3,471) Income tax provision (benefit)............... 86 ----------- Income (loss) before extraordinary item...... (3,557) Extraordinary item (b).... ----------- Net income (loss)......... $ (3,557) ----------- ----------- OTHER FINANCIAL AND OPERATING DATA: Media Cashflow (c)........ $ 6,056 EBITDA (c)................ 3,575 Capital expenditures excluding acquisitions............ 411 Net interest expense (d)..................... 6,347 Net cash interest expense (e)............. 3,667 Net debt (f).............. 78,743 Ratio of Media Cashflow to net interest expense.... 0.95x Ratio of Media Cashflow to net cash interest expense................. 1.65x Ratio of net debt to Media Cashflow (f)............ 6.50x(g) Ratio of earnings to fixed charges (h)............. --
- ---------------------------------- 46
PRO FORMA ----------- AS OF AS OF AS OF AS OF FEBRUARY 28 OR 29 AUGUST 31, AUGUST 31, AUGUST 31, ----------------------------------------------------- ----------- ----------- ----------- 1993 1994 1995 1996 1997 1996 1997 1997 (A) --------- --------- --------- --------- --------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS) STATEMENT OF FINANCIAL POSITION DATA: Cash and cash equivalents....... $ 104 $ 202 $ 550 $ 2,075 $ 775 $ 955 351 $ 23,991 Working capital (deficit)....... (3,469) (1,881) (334) 2,398 1,014 1,860 (1,303) 25,511 Intangible assets............... 4,103 5,219 5,099 7,374 7,583 7,631 10,207 17,474 Total assets.................... 16,454 21,938 21,784 26,011 26,442 25,800 42,569 70,251 Total debt including due to affiliates (i)................ 49,796 55,160 58,715 61,636 50,475 50,245 68,046 107,374 Net capital deficiency.......... (37,153) (36,302) (40,123) (38,354) (26,610) (26,944) (31,150) (39,517)(j)
- ------------------------ (a) The pro forma statement of operations and other financial and operating data for the year ended February 28, 1997 and for the six months ended August 31, 1997 give effect to the Transactions as if they occurred March 1, 1996. The pro forma statement of financial position data give effect to the Transactions as if they had occurred on August 31, 1997. See "Pro Forma Financial Information." (b) The extraordinary item in fiscal 1996 reflects an adjustment of accrued interest in the amount of $7.0 million related to subordinated debt for which contingent interest had been accrued at the maximum rate but was reduced at maturity pursuant to terms of an alternative valuation formula, as defined in the agreement. The gain was offset by the write-off of certain previously deferred financing fees of $131,000. (c) "EBITDA" is defined as operating income before depreciation and amortization expenses. "Media Cashflow" is defined as EBITDA plus management fees, incentive plan expense, time brokerage agreement fees, acquisition related consulting expense and interest income from loans made by the Company to Managed Affiliates. Management fees payable to BMCLP are subordinated, to the extent provided in the Indenture, to the prior payment of the Issuer's obligations on the Notes. Although Media Cashflow and EBITDA are not measures of performance calculated in accordance with GAAP, management believes that these measures are useful to an investor in evaluating the Company because these measures are widely used in the media industry to evaluate a media company's operating performance. However, Media Cashflow and EBITDA should not be considered in isolation or as substitutes for net income, cash flows from operating activities and other income or cash flow statements prepared in accordance with GAAP as measures of liquidity or profitability. (d) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. Net interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the six months ended August 31, 1997, respectively. (e) Reflects interest expense on the Notes and Appreciation Notes and on other debt and capitalized leases. Net cash interest expense excludes $555,000 and $275,000 in non-cash amortization of deferred financing fees for the year ended February 28, 1997 and six months ended August 31, 1997, respectively and also excludes interest accrued at the assumed effective rate of 12.2%, which is in excess of the assumed current pay rate of 7.5% in each of years one and two by $4,960,000 ($2,480,000 per six months) and excludes interest on the Appreciation Notes accreted at 17% totaling $399,000 for the year ended February 28, 1997 ($200,000 for six months). Net cash interest expense is also net of expected interest income, calculated at 5.5% on excess proceeds from the Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and six months ended August 31, 1997, respectively. (f) Net debt includes total debt less the incentive plan liability and less cash and cash equivalents, all as of August 31, 1997, as significant portions of the cash and cash equivalents are held for future acquisitions. (g) For purposes of this ratio the Media Cashflow for the six months ended August 31, 1997 has been doubled to estimate an annualized amount. No assurance can be provided that such results will be achieved. (h) For purposes of this calculation, earnings are defined as income (loss) before income taxes and extraordinary item and fixed charges. Fixed charges are the sum of (i) interest costs (including the interest portion of operating leases) and (ii) amortization of deferred financing costs. Earnings were inadequate to cover fixed charges by approximately $2,863,000, $3,753,000, $5,186,000, $2,486,000, $403,000, $1,464,000, $8,048,000 and $3,471,000 for the historical fiscal years 1993, 1995, 1996, 1997, the historical six months ended August 31, 1996 and 1997, the pro forma year ended February 28, 1997 and the pro forma six months ended August 31, 1997, respectively. (i) Total debt including due to affiliates includes the senior note, obligations under capital leases, unsecured and subordinated obligations, debt due to affiliates and, on a pro forma basis, the Notes and Appreciation Notes. (j) The net capital deficiency as of August 31, 1997 reflects the declaration of a distribution in the amount of $3.0 million which was subsequently paid in cash. The pro forma net capital deficiency as of August 31, 1997 reflects, in part, the subsequent declaration and payment of distributions in the amount of $9.2 million, $5.0 million in cash and $4.2 million for purposes of satisfaction of affiliate notes receivable. 47 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill and notes thereto included elsewhere in this Prospectus. This Prospectus contains forward-looking statements, including statements regarding, among other items, (i) the realization of the Company's business strategy, (ii) the sufficiency of cashflow to fund the Company's debt service requirements and working capital needs and (iii) anticipated trends in the radio broadcasting and newspaper industries. Forward-looking statements are typically identified by the words "believe," "expect," "anticipate," "intend," "estimate" and similar expressions. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's control. Actual results could differ materially from those contemplated by these forward-looking statements as a result of factors including those described herein. In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this Prospectus will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to update or revise any forward-looking statements. See "Risk Factors." BMC was organized in 1997 to be an Issuer of the Notes and to own numerous companies (C-corporations, S-corporations, limited partnerships and limited liability companies) that were previously owned separately by Mr. Brill. The Subsidiaries include various radio, newspaper and related businesses. The Stations own and operate FM and AM radio stations in Pennsylvania, Colorado, Indiana/Kentucky, Minnesota/Wisconsin, and Missouri. The Newspapers own and operate a daily and numerous weekly publications in Michigan along with printing and advertising distribution businesses. The historical financial statements of The Radio and Newspaper Businesses of Alan R. Brill included elsewhere in this Offering Memorandum include the financial position and results of operations of the Subsidiaries on a combined basis. The Stations' revenues are derived primarily from advertising revenues. In general, each Station receives revenues for advertising sold for placement within the Station's programming. Advertising is sold in time increments and is priced primarily based on a Station's program's popularity within the demographic group an advertiser desires to reach, as well as quality of service provided to the customer, creativity in marketing the client's products and services, the personal relationship between the Station's account executive and the client, and the client's view of the popularity of the Station among its target customer base. In addition, advertising rates are affected by the number of advertisers competing for available time, the size and demographic make-up of the markets served by the Stations and the availability of alternative advertising media in the market area. Rates are highest during the most desirable listening hours, with corresponding reductions during other hours. During the year ended February 28, 1997, over 90% of the Stations' revenues were generated from local advertising, which is sold primarily by a Station's sales staff. The remainder of the advertising revenues represent national advertising and network compensation payments. In addition to any commissions paid to its sales staff, the Stations generally pay commissions to advertising agencies on local and national advertising and to sales representation firms on national advertising. The advertising revenues of a Station generally are highest in the second and fourth calendar quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to and including the holiday season. During the year ended February 28, 1997, no single customer in any of the Stations' markets provided more than 2% of the Company's revenues. 48 In the broadcasting industry, radio stations often utilize trade (or barter) agreements to exchange advertising time for goods or services (such as other media advertising, travel or lodging), in lieu of cash. In order to preserve most of its on-air inventory for cash advertising, the Company generally enters into trade agreements only if the goods or services bartered to the Company will be used in the Company's business. The Company has minimized its use of trade agreements and has sold over 90% of its advertising time for cash for the year ended February 28, 1997. In addition, it is the Company's general policy not to pre-empt advertising spots paid for in cash with advertising spots paid for in trade. Each Station's financial results depend on a number of factors, including the general strength of the local and national economies, population growth, the ability to provide popular programming, local market and regional competition, the relative efficiency of radio broadcasting compared to other advertising media, signal strength and government regulation and policies. The Newspapers' revenues are derived primarily from advertising and subscription revenues and to a lesser extent, from printing revenues. In general, newspaper publications receive revenue for advertising sold to reach readership within its geographical distribution area and its customers' marketing areas. The combined coverage and timing of the numerous weekly publications and the daily publications provide the Newspapers with flexibility and efficiencies to create a competitive advantage in attracting advertisers. As an inducement to its customers, the Newspapers offer advertisers more efficient buys when they purchase ad placement in multiple publications. The Newspapers have a widely diversified customer base, and for the year ended February 28, 1997, no single customer of the Newspapers represented more than 2% of the Company's revenues. The Newspapers' financial results are dependent on a number of factors, particularly those that impact local retail sales, including the general strength of the local and national economies, population growth, local and regional market competition and the perceived relative efficiency of newspapers compared to other advertising media. The following table sets forth the percentage of revenues generated by the Company's Stations and Newspapers.
YEAR ENDED FEBRUARY 28 OR 29, --------------------------------------------------------------- REVENUES 1993 1994 1995 1996 1997 - --------------------------------------------------------- ----- ----- ----- ----- ----- Stations................................................. 47% 51% 55% 52% 50% Newspapers............................................... 53 49 45 48 50 --- --- --- --- --- 100 100 100 100 100 --- --- --- --- --- --- --- --- --- --- SIX MONTHS ENDED REVENUES AUGUST 31, 1997 - --------------------------------------------------------- ------------------- Stations................................................. 53% Newspapers............................................... 47 --- 100 --- ---
The primary operating expenses incurred in the ownership and operation of the Stations include employee salaries and commissions, programming expenses and advertising and promotion expenses. For the Newspapers the primary operating expenses are employee salaries and commissions, newsprint and delivery charges. The Company also incurs and will continue to incur significant depreciation, amortization and interest expense as a result of completed and future acquisitions of radio stations and newspapers and due to existing borrowings and future borrowings, including the Notes and any borrowings under the New Credit Facility. The combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill tend not to be directly comparable from period to period due to the Company's acquisition activity. INCOME TAXES The Company includes "C" corporations, "S" corporations, limited partnerships and limited liability companies. The taxable income or loss for federal and state income tax purposes of the S Corporations, limited partnerships and limited liability companies is passed through to the stockholders, partners and members, respectively. The "C" corporations are in loss carryforward positions at February 28, 1997 for income tax purposes. Accordingly, the Company will not have a statutory rate income tax provision for the entire group due to the tax consequences of the individual companies. 49 RESULTS OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1997 COMPARED TO SIX MONTHS ENDED AUGUST 31, 1996. Revenues for the six months ended August 31, 1997 totaled $15.1 million, a 10.2% increase over $13.7 million for the six months ended August 31, 1996. Of this $1.4 million increase, the Stations contributed $1.2 million and the Newspapers contributed $241,000. The Stations' revenues for the six months ended August 31, 1997 totaled $8.0 million, a 16.8% increase compared to the six months ended August 31, 1996, due to the development of new Stations in Minnesota, Missouri and Colorado, which increased revenues by approximately $820,000 and revenue growth of the existing Stations which increased by $330,000 due to increased demand for advertising at those Stations. Operating expenses for the six months ended August 31, 1997 totaled $12.6 million, an increase of $1.1 million or 9.5% over $11.5 million for the six months ended August 31, 1996, primarily due to increases in operating department expenses, incentive plan expenses, other operating expenses and management fees. Operating department expenses increased $564,000 largely due to the commencement of operations at the newly acquired Stations described above and a newly acquired Newspaper. Incentive plan expenses increased $169,000 in connection with improvements in performance at certain Subsidiaries which increased incentive plan accruals under the performance incentive plan. Other operating expenses increased $190,000 due to consulting and Time Brokerage Agreement payments for a radio station in Colorado partially offset by other operating income in connection with a Time Brokerage Agreement for radio stations in Fargo, North Dakota and Moorhead, Minnesota ("Fargo/Moorhead"), which were sold in August 1996. Management fees increased $92,000 due to increased revenues during the period. Operating income for the six months ended August 31, 1997 totaled approximately $2.5 million, a 13.3% increase over $2.2 million for the six months ended August 31, 1996, primarily due to increased revenues. Interest expense, net for the six months ended August 31, 1997 totaled $4.0 million, an increase of $295,000 or 8.0% over $3.7 million for the six months ended August 31, 1996, due to increased borrowing levels to fund acquisitions and capital expenditures as well as higher effective interest rates during the period. Other income, net for the six months ended August 31, 1996 of $1.0 million includes the $1.1 million gain on the sale of the Fargo/Moorhead stations. YEAR ENDED FEBRUARY 28, 1997 COMPARED TO YEAR ENDED FEBRUARY 29, 1996. Revenues for the year ended February 28, 1997 totaling $27.0 million increased $1.7 million or 6.8% from $25.3 million for the year ended February 29, 1996. The Stations' revenues totaled $13.6 million, an increase of $500,000 or 3.8% from $13.1 million for the prior period, and the Newspapers' revenues totaled $13.4 million, an increase of $1.2 million or 10% from $12.2 million for the prior period. The increase in the Stations' revenues can be attributed primarily to overall revenue growth of $1.4 million or 11.4% in connection with continuing operations which was partially offset by the loss of revenues of $895,000 for stations in Fargo/Moorhead which were sold in 1996. Operating expenses for the year ended February 28, 1997 totaled $23.1 million, a decrease of $192,000 or 0.8% from $23.3 million for the year ended February 29, 1996. This decrease was primarily attributed to a $839,000 decrease in incentive plan expense in connection with a lower rate of operating performance growth at certain Subsidiaries, offset by increased operating department expenses of $403,000 due primarily to additional operating expenses of acquired companies which more than offset the reductions of operating expenses on the other companies including the Fargo/Moorhead stations sold in 1996 and increased management fees of $112,000, resulting from increased revenues. 50 Operating income for the year ended February 28, 1997 totaling $3.9 million increased $1.9 million or 94.6% from $2.0 million for the year ended February 29, 1996. This increase was due primarily to increased operating revenues and decreased charges for incentive plan expense as noted previously. Interest expense, net for the year ended February 28, 1997 totaled $7.4 million, an increase of $302,000 or 4.2% over $7.1 million for the year ended February 29, 1996, due to increased borrowing levels to fund the acquisition of Stations located in Missouri and Minnesota and the acquisition of a Newspaper in Michigan as well as higher effective interest rates during the period. Other income, net for the six months ended August 31, 1996 of $1.0 million includes the $1.1 million gain on the sale of the Fargo/Moorhead stations. The extraordinary item in fiscal 1996 reflects an adjustment of accrued interest in the amount of $7.0 million related to subordinated debt for which contingent interest had been accrued at the maximum rate but was reduced at maturity pursuant to terms of an alternative valuation formula, as defined in the agreement. The gain was partially offset by the write-off of certain previously deferred financing fees of $131,000. YEAR ENDED FEBRUARY 29, 1996 COMPARED TO YEAR ENDED FEBRUARY 28, 1995 Revenues for the year ended February 29, 1996 totaling $25.3 million increased $2.1 million, or 9.2% from $23.2 million for the year ended February 28, 1995. The Stations' revenues increased $446,000 or 3.5% from $12.7 million for the prior period, and the Newspapers' revenues increased $1.7 million, or 15.9% from $10.5 million for the prior period. The net increase in the Stations' revenues was composed primarily of additional revenues from the acquisition of Stations in Missouri and Minnesota. The increase in the Newspapers' revenues resulted primarily from operating growth and price increases passed through to customers due to increased newsprint costs. Operating expenses for the year ended February 29, 1996 totaled $23.3 million, an increase of $2.3 million or 11.1% over $21.0 million for the year ended February 28, 1995 primarily due to increases in operating department expenses, incentive plan expenses and management fees. Operating department expenses for fiscal 1996 increased $1.1 million, or 6.3%, from $17.5 million for fiscal 1995. This increase results primarily from increased newsprint costs, additional operating expenses of three new Stations and increased promotional and other expenses due to a new direct competitor in Duluth, Minnesota. Incentive plan expense for fiscal 1996 increased $833,000 from $634,000 for fiscal 1995, in connection with improvements in the performance at certain Subsidiaries which increased incentive plan accruals under the performance incentive plan. Management fees in fiscal 1996 increased $154,000 or 9.2% from $1.7 million in fiscal 1995 due to a corresponding increase in operating revenues in fiscal 1996. Depreciation and amortization for the year ended February 29, 1996 totaled $1.3 million, a $201,000 increase over $1.1 million for the year ended February 28, 1995 due to the acquisitions of stations in Minnesota and Missouri and increased capital expenditures in fiscal 1995. Operating income for fiscal 1996 totaled $2.0 million, a decrease of $209,000, or 9.4% from $2.2 million in fiscal 1995. This decrease was due primarily to increased charges for incentive plan expense noted above. Interest expense for the year ended February 29, 1996 increased $1.3 million, or 22.1%, over $5.8 million for the year ended February 28, 1995 due to increased borrowings to finance the acquisitions in Missouri and Minnesota and an increase in interest accruals on subordinated debt. The extraordinary item in fiscal 1996 reflects an adjustment of accrued interest in the amount of $7.0 million related to subordinated debt, for which contingent interest had been accrued at the maximum rate but was reduced at maturity pursuant to the terms of an alternative valuation formula, as defined in the agreement. The gain was partially offset by a write-off of certain previously deferred financing fees of $131,000. 51 LIQUIDITY AND CAPITAL RESOURCES The Company's primary liquidity needs are to fund capital expenditures, provide working capital, meet debt service requirements and make acquisitions. The Company's principal sources of liquidity are expected to be cashflow from operations, excess proceeds from borrowings under the Notes and the New Credit Facility, and consummation of the sale of the Missouri Properties. Generally the Company's operating expenses are paid more quickly than its advertising revenues are collected. As a result of this time lag, working capital requirements have increased as the Company has grown and will likely increase further in the future. The sale of the Original Securities resulted in refinancing the Company's indebtedness with Amresco and Goldman Sachs. Because of a reduction in the interest rate, the Company's cash interest requirements will increase only marginally for each of the first two years following the sale of the Securities, even with a substantial increase in the Company's overall debt. Additionally, the added borrowings and completion of the Transactions will result in approximately $23 million of excess cash. In addition to its debt service obligations, the Company will require liquidity for capital expenditures and working capital needs. Capital expenditures in fiscal 1997 totaled approximately $1,269,000 of which approximately $337,000 related to existing Station operations and approximately $932,000 related to existing Newspaper operations. The Newspaper expenditures, which were financed with insurance proceeds, included approximately $500,000 to replace fire damaged property. The Company has budgeted $900,000 for capital expenditures of existing operations in fiscal 1998, approximately $408,000 of which had been expended as of August 31, 1997. Of the budgeted fiscal 1998 expenditures, approximately $450,000 are dedicated to Stations and $450,000 to Newspapers. The Company anticipates that capital expenditures in fiscal 1999 and fiscal 2000 will approximate $600,000 each year for existing properties. The Indenture limits the Company's ability to incur additional indebtedness. In addition to certain other permitted Indebtedness, the Indenture permits the Company to incur Indebtedness under revolving credit facilities. Limitations in the Indenture on the Company's ability to incur additional Indebtedness, together with the highly leveraged nature of the Company, could limit operating activities, including the Company's ability to respond to market conditions, to provide for unanticipated capital investments or to take advantage of business opportunities. However, the Company believes that its significant cash balances will currently enable it to continue significant growth through acquisitions as well as provide ample working capital for contingencies. See "Description of Notes--Certain Covenants." The Company believes that its cash on hand and cashflow from operations will be sufficient to enable the Company to meet all of its cash operating requirements for the next twelve months. SEASONALITY The advertising revenues of the Company generally are lowest in the first calendar quarter and highest in the second and fourth calendar quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to and including the holiday season. INFLATION The Company believes that inflation affects its business no more than it generally affects other similar businesses. 52 BUSINESS THE COMPANY The Company is a diversified media enterprise that acquires, develops, manages, and operates radio stations, newspapers and related businesses in middle markets. The Company presently owns, operates, or manages fifteen radio stations serving five markets located in Pennsylvania, Kentucky/Indiana, Colorado, Minnesota/Wisconsin, and Missouri, including three radio stations located in the Kentucky/Indiana market that are owned by Managed Affiliates. The group of Stations and Managed Affiliates' stations operated by the Company in each market holds a first or second ranking in both combined audience ratings and combined revenues, compared to other groups, in such market. In addition, in each of its markets, the Stations and Managed Affiliates' stations individually have at least one of the top two rankings in both audience ratings and revenues. The Newspapers operate integrated newspaper publishing, printing and print advertising distribution operations, providing total-market print advertising coverage throughout a seventeen-county area in central Michigan. This operation offers a two-edition daily newspaper, thirteen weekly publications, a web offset printing operation for Newspapers' publications and outside customers, and a private distribution company. The Company, each of its Subsidiaries, BMCLP and the Managed Affiliates are wholly owned directly or indirectly by Mr. Brill, who founded the business and began its operations in 1981. For the year ended February 28, 1997, the Company's pro forma combined revenues and Media Cashflow, excluding the Missouri Properties which are under contract to be sold (see "Transactions"), were $27.4 million and $10.4 million, respectively. For the six months ended August 31, 1997, such pro forma combined revenues and Media Cashflow were $15.0 million and $6.1 million, respectively. The financial statements of the Managed Affiliates are not combined with those of the Company. Historically, the Company has focused on media properties located in middle markets, which the Company believes offer greater opportunities than larger markets to build and maintain consistently high market and revenue shares at reasonable costs. The Company believes its markets are generally less competitive than major markets and are characterized by a limited number of direct competitors, local owner/operators that are less sophisticated and have less financial resources, and fewer alternative advertising media. In such markets, the Company is able to target broader demographic groups and to sell its advertising to a wider customer base than in major markets. The Company believes that, relative to larger markets, a higher percentage of revenues in middle markets is derived from local advertising and therefore a correspondingly higher portion of its revenues can be directly generated by its own sales efforts. The Company believes that local advertisers in middle markets often make advertising decisions based primarily on customer relationships and service and advertising results. The Company's primary focus is to provide high-quality customer service with promotional activities that yield results for advertisers and to build and maintain superior local advertiser relationships. The Company's overall operations, including its sales and marketing strategy, long-range planning, and management support services are managed by BMCLP, a limited partnership indirectly owned by Mr. Brill (see "Certain Transactions"). The management support provided by BMCLP has been a key element in the Company's ability to achieve significant increases in Media Cashflow at each of its properties following their acquisition. Each of the Company's properties is managed on a day-to-day basis by an experienced local president/general manager. As of September 30, 1997, the Company had a workforce of approximately 340 full-time and 100 part-time employees, none of whom is unionized. The principal executive offices of the Company are located at 420 N.W. Fifth Street, Evansville, Indiana 47708, and its telephone number is (812) 423-6200. RADIO PROPERTY OVERVIEW In each of its markets, the Company's Stations and the Managed Affiliates' stations as a group hold at least one of the top two rankings in both combined audience ratings and combined revenues. Furthermore, 53 in each of its markets the Company's Stations and the Managed Affiliates' stations individually hold at least one of the top two audience and revenues rankings. Set forth below is a list of the Stations and the Managed Affiliates' stations specifying their broadcasting frequency, FCC class, format, control, market, market rank and group rank by ratings and revenues.
STATION GROUP STATION ARBITRON RANK FCC OWNED/ MARKET -------------------------- FREQUENCY CLASS FORMAT MANAGED MARKET(S) RANK RATINGS REVENUES - ---------------------- --------- ----------- ------------ --------------------- ----------- --------- --------------- - ---------------------- WIOV-FM 105.1 FM-B Country Owned Lancaster, PA(1) 110 1 1 Reading, PA 130 2 2 WBKR-FM 92.5 FM-C Country Owned Evansville, IN 125(2) 1 1 WKDQ-FM 99.5 FM-C Country Managed(3) and Owensboro/ WSTO-FM 96.1 FM-C Adult Hits Managed(3) Henderson, KY WOMI-AM 1490 AM-C News/Talk Owned WVJS-AM 1420 AM-B News/Talk Managed(3) KTRR-FM 102.5 FM-C2 Adult Hits Managed(4) Fort Collins/ 135 1 1 KUAD-FM 99.1 FM-C1 Country Owned Greeley/ Loveland, CO KKCB-FM 105.1 FM-C1 Country Owned Duluth, MN/ 207 1 1 KLDJ-FM 101.7 FM-C2 Oldies Owned Superior, WI WEBC-AM 560 AM-B News/Talk Owned KATI-FM 94.3 FM-C2 Country Owned(5) Jefferson City/ NR(6) 2 2 KTXY-FM 106.9 FM-C Adult Hits Owned(5) Columbia/ KLIK-AM 950 AM-B Country Owned(5) Lake of the Ozarks, MO
- -------------------------- (1) WIOV-FM serves both Lancaster and Reading. The Company also owns and operates WIOV-AM, an AM-C station in Reading. Ratings and revenues ranks for WIOV-FM include WIOV-AM. (2) The Company estimates that on a combined basis the Evansville/Owensboro/Henderson market would have an Arbitron rank of 125 based on separate rankings of 151 and 255 for Evansville and Owensboro, respectively. (3) WKDQ-FM, WSTO-FM and WVJS-AM are owned by Managed Affiliates. (4) The Company manages KTRR-FM pursuant to a Time Brokerage Agreement pending completion of its acquisition. (5) The Missouri Properties are under contract for sale. See "Certain Transactions." Accordingly, the pro forma financial statements presented herein do not include the operating results of such stations. (6) The Jefferson City/Columbia/Lake of the Ozarks, Missouri market is not ranked by Arbitron. Columbia separately is ranked 237 by Arbitron, and KTXY-FM is the top-rated station by audience ranking in such market. LANCASTER AND READING, PENNSYLVANIA, which the Company estimates combined would have an Arbitron rank of 60, are served by WIOV-FM and WIOV-AM. WIOV-FM programs a Country music format and consistently is one of the region's top rated stations. WIOV-FM is the top-ranked radio station based on combined revenues in the Lancaster market. WIOV-AM serves the Reading market with a News/Talk format. EVANSVILLE, INDIANA, AND OWENSBORO/HENDERSON, KENTUCKY, which the Company estimates combined would have an Arbitron rank of 125, are served by WBKR-FM and WOMI-AM. These stations broadcast to the Tri-State area of southwestern Indiana, southern Illinois, and western Kentucky, which the Company believes is undergoing significant economic expansion. WBKR-FM is the region's most powerful and most listened to radio station. The five stations operated by the Company (including the Managed Affiliates' stations, WKDQ-FM, WSTO-FM and WVJS-AM) rank first in the market in terms of both their combined 54 revenues and their combined ratings, and individually hold three of the top four audience and revenues rankings in the market. FORT COLLINS/GREELEY/LOVELAND, COLORADO, which has recently been designated as a market by Arbitron and is ranked 135, is served by KUAD-FM and KTRR-FM. KUAD-FM is northern Colorado's leading radio station in terms of audience ratings and advertising revenues, and in the seventeen months since the Company began operating it pursuant to a Time Brokerage Agreement, KTRR-FM has established a significant presence in the market. These Stations primarily serve Larimer and Weld counties in northern Colorado, which comprise a distinct market approximately 65 miles north of Denver. The Company believes that radio advertising in the area is significantly underutilized by potential advertisers based on national norms. The Stations focus on the Fort Collins/Greeley/Loveland "triangle," and reach a listener base that the Company believes is well-educated, has significant disposable income, and is served locally by few other radio stations. DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN, which have a combined Arbitron rank of 207, are served by KKCB-FM, KLDJ-FM and WEBC-AM, which the Company believes is the premier combination of radio stations in this market based on revenues and audience ratings. KKCB-FM, which operates a Country format, is the highest-rated station in its market. JEFFERSON CITY/COLUMBIA/LAKE OF THE OZARKS, MISSOURI, is served by KATI-FM, KTXY-FM and KLIK-AM. These stations are currently under contract for sale and pending closing are being operated by the purchaser under the terms of a Time Brokerage Agreement. See "--Transactions." PUBLICATIONS OVERVIEW Set forth below is a list of the Newspaper publications specifying the location and circulation of each.
NEWSPAPER LOCATION CIRCULATION - ------------------------------------------------- ------------------- ----------- MORNING SUN...................................... Mt. Pleasant, MI 12,700 MT. PLEASANT BUYERS GUIDE........................ Mt. Pleasant, MI 28,400 CLARE COUNTY BUYERS GUIDE........................ Clare, MI 13,000 ALMA REMINDER.................................... Alma, MI 20,600 CADILLAC BUYERS GUIDE............................ Cadillac, MI 21,700 CARSON CITY REMINDER............................. Carson City, MI 11,000 EDMORE ADVERTISER................................ Edmore, MI 17,500 HEMLOCK SHOPPERS GUIDE........................... Hemlock, MI 12,500 GLADWIN BUYERS GUIDE............................. Gladwin, MI 16,800 ISABELLA COUNTY HERALD........................... Mt. Pleasant, MI 16,200 MIDLAND BUYERS GUIDE............................. Midland, MI 28,000 ST. JOHNS REMINDER............................... St. Johns, MI 16,200 THE NORTHEASTERN SHOPPER (NORTH EDITION)................................ Tawas City, MI 24,400 THE NORTHEASTERN SHOPPER (SOUTH EDITION)................................ Tawas City, MI 15,600 ----------- Total Circulation 254,600
The Newspapers serve a seventeen county area of small communities in central Michigan , where there are few other newspapers, no local television stations, and few radio stations. The Company has central offices and production facilities in Mt. Pleasant, Michigan and leads the central Michigan market in media billings. The Company's daily newspaper, the MORNING SUN, has a paid subscription base of 12,700 readers and is the only daily newspaper published in Gratiot, Isabella and southern Clare counties. The Company's weekly newspaper and twelve weekly shopping guides are delivered free to more than 240,000 households 55 in the central Michigan area. The Company's multiple products and private delivery system permit advertisers to buy customized advertising coverage for the portion of the local market that best reaches their potential customers. The Company also publishes numerous niche publications such as vacation guides and a monthly business report. The Newspapers have a widely diversified base of advertising and printing customers and during the year ended February 28, 1997 no one customer represented more than 2% of the Company's revenues. STRUCTURE AND GOVERNANCE In anticipation of the Offering, the ownership of the Stations and Newspapers was restructured to preserve certain historical tax benefits while permitting Mr. Brill the flexibility required to continue growing the business through acquisitions. Set forth below is a chart outlining the ownership of the Company and its principal affiliates. Certain intermediate entities have been omitted. [The chart, which is on file with the Issuer, shows that Mr. Brill is the sole ultimate owner of (i) BMCLP, (ii) the Managed Affiliates, (iii) the Subsidiaries (indirectly through BMC and Holdings) and (iv) Media (indirectly through BMC).] The Exchange Securities will be issued jointly by the Issuer. BMC through Subsidiaries directly and indirectly owns radio and newspaper properties, including those previously identified. The historical financial statements of The Radio and Newspaper Businesses of Alan R. Brill included elsewhere in this Prospectus include the financial position and results of operations of the radio and newspaper Subsidiaries on a combined basis. The Managed Affiliates are not subsidiaries of the Company, but are managed by the Company pursuant to Managed Affiliates Management Agreements. As of the date of this Prospectus, the Managed Affiliates operate radio stations WKDQ-FM, WSTO-FM and WVJS-AM in Evansville, Indiana and Owensboro/Henderson, Kentucky, which were acquired by Mr. Brill in 1997. While subject to a Managed Affiliate Management Agreement, funds may be advanced from time to time to these and future Managed Affiliates by the Company or its Subsidiaries in the form of unsecured loans subject to certain limitations. See "Description of Notes--Limitations on Affiliate Transactions." Local general managers operate the Stations and Newspapers on a day-to-day basis. Other management services, including benefit plan administration, risk management, finance, tax management, and strategic planning and operations oversight are provided to the Subsidiaries and the affiliates by BMCLP, which is owned indirectly by Mr. Brill. The fees charged by BMCLP are established on a contractual basis and, as set forth more fully under "Certain Transactions," such fees are payable to the extent set forth in the Description of the Notes. A table setting forth the revenues, operating income, identifiable assets, depreciation and amortization expense and capital expenditures of the Company's two business segments is included in Note 11 of the Combined Financial Statements included in this Prospectus. BUSINESS STRENGTHS MIDDLE MARKET FOCUS. The Company operates media businesses in middle markets which generally are less competitive than larger markets and are characterized by a limited number of direct competitors, local owner/operators which are less sophisticated and have less financial resources, and fewer alternative media. The Company believes that in its markets the majority of its revenues are directly generated by its own sales efforts. STRONG AND GROWING MARKET SHARE. In each of its radio markets the Company's Stations or the Managed Affiliates' stations hold at least one of the top two rankings in both audience ratings and revenues. The Company believes that it is the leading advertising provider in its newspaper markets. The 56 Company believes the Stations and Newspapers have strong community support and work to build and maintain strong middle market franchises. SUCCESSFUL ACQUISITION HISTORY. Mr. Brill has a history of identifying acquisition opportunities, initiating negotiations to buy such properties and developing creative structures by which to meet the requirements of the sellers of such properties. Mr. Brill and the management team have successfully developed acquired radio stations and newspapers and have improved Media Cashflow at each of the Company's properties following their acquisition. CONSISTENT CASHFLOWS. The Company's Subsidiaries have a history of consistent cashflows. The Company's Subsidiaries generated Media Cashflow margins (on a combined basis) of approximately 24%, 26%, and 30% for the one-year periods ended February 28, 1995, February 29, 1996, and February 28, 1997, respectively, and 37% for the six-month period ended August 31, 1997. The Company believes that its Media Cashflow will continue to be strong and will enable the Company to continue its acquisition strategy. Furthermore, the Company's continuing operations currently require relatively small capital expenditures. EXPERIENCED AND COMMITTED MANAGEMENT TEAM. The Company's senior management team, provided by BMCLP, is highly experienced in the radio and newspaper industries. BMCLP has experienced little management turnover, and BMCLP's four senior operating executives have an average of 22 years each of experience in the media industry and have worked together since 1988. The Company has a decentralized management structure in which general managers make the key local operating decisions for each station or newspaper with support from BMCLP management. STRONG LOCAL ADVERTISER RELATIONSHIPS. Historically, the Company has created and maintained relationships directly with local advertisers in its markets, which enable the Company to respond immediately and creatively to meet customer needs. The Company believes that its marketing approach and customer relationships enable the Stations to generate greater revenues and margins than comparably ranked stations in their markets and enable the Newspapers to increase revenues and margins. To further strengthen its relationships with advertisers, the Company also offers and markets its ability to create customer traffic through on-site events staged at, and broadcast from, an advertiser's business. ACQUISITION STRATEGY The Company seeks to acquire underperforming middle market media businesses whose acquisition costs are low relative to potential revenues and cashflow. The Company focuses on developing significant long-term franchises in middle markets. The Company then seeks to improve revenues and cashflow, using its particular promotional, marketing, sales, programming and editorial approaches. The Company targets businesses that it believes operate in underdeveloped market segments with a low level of competition and a strong economic base, as well as stations with competitive technical facilities and businesses that are located in areas deemed desirable for relocation in terms of personnel recruitment. The Company believes that its acquisition strategy, properly implemented, has a number of specific benefits, including (i) diversification of revenues and cashflow across a broader base of industries, properties and markets, (ii) geographic clustering which has allowed improved cashflow margins through the consolidation of facilities, centralized newsgathering, cross-selling of advertising, elimination of redundant expenses, (iii) improved access to consultants and other industry resources, (iv) greater appeal to qualified industry management talent and (v) efficiencies from economies of scale. OPERATING STRATEGY In order to appeal to advertising customers and maximize the revenues and cashflow of its properties, the Company's strategy is as follows: 57 MARKETING PARTNERSHIPS. The Company believes that advertisers in its markets are attracted and retained through value-added customer services. While the Company seeks and achieves audience ratings and circulation as a means of attracting advertisers, its operations are distinguished by a particular emphasis on soliciting advertisers directly. The Company believes that in many middle markets the decision to advertise on a given radio station or in a given newspaper is driven in large measure by direct customer relationships and the level of customer success with past advertising programs and the marketing and sales effectiveness of the station or newspaper staff. The Company believes that building and solidifying marketing partnerships with advertisers and retaining such customers through effective results and high quality customer service are significant factors in maintaining leading revenue shares in its markets. OWNERSHIP OF STRONG MEDIA GROUPS. In each of its markets, the Company seeks to maintain and enhance its position as a market leader through its ownership of groups of stations or publications. Its ownership of groups of stations and publications allows the Company a variety of sales opportunities and customer demographics. By strategically coordinating customized programming, publishing, promotional, and selling strategies among a group of local stations or newspapers, the Company attempts to reach a wide range of demographic groups that appeal to advertisers. The Company believes that its wide range of advertising options permits it to offer pricing choices to suit customer needs and strengthen advertiser relationships. AGGRESSIVE SALES AND MARKETING. The Company seeks to maximize its share of local advertising revenues in each of its markets by implementing and maintaining strong direct sales and marketing programs. The Company tends to maintain separate sales forces for each of its Stations or Newspapers. The Company's Stations strive to maximize revenues by managing the on-air inventory of advertising time and adjusting prices based on local market conditions. Through its marketing efforts, the Company provides advertisers with an effective means of reaching a targeted demographic group. To further strengthen its relationships with radio advertisers, the Company also offers and markets its ability to create customer traffic through on-site events staged at, and broadcast from, an advertiser's place of business and promotions in which listeners are encouraged to participate by visiting such place of business. EXPERIENCED LOCAL MANAGEMENT. The Company believes that each of its Stations and Newspapers is primarily a local business and that much of its success is the result of the efforts of local management and staff. Accordingly, the Company decentralizes its operations. Each of the Company's local media groups is managed by a team of experienced managers who understand the trends, demographics, and competitive opportunities of the particular market. Local managers are responsible for developing annual operating budgets, and a major portion of their compensation is linked to performance against operating targets. BMCLP approves each station or newspaper group's annual operating budgets and imposes strict financial reporting requirements to track performance and monitor operating trends. The Company seeks and motivates managers who thrive on the challenges presented by such autonomy. Its success in finding and developing such managers has enabled the Company to compete successfully in each of its local markets. CENTRALIZED SUPPORT AND OVERSIGHT. The Company believes that its ability to utilize existing senior management and sales resources of its media groups enhances the growth potential of both acquired start-up and underperforming properties. Additionally, this support reduces the risks associated with undertaking new means of improving performance, such as launching new formats. Furthermore, the Company seeks to achieve substantial cost savings through the consolidation of facilities, management and administrative personnel and human resources, as well as through the reduction of redundant expenses. BMCLP personnel regularly visit the Stations and Newspapers to review performance, assist local management with their programming, editorial, sales, recruiting and training efforts, and to develop and verify overall operating and marketing strategies, including cost management, designed to improve cashflow. These visits enable the Company to remain aware of developments in each Station's and Newspaper's market and to control and monitor costs while providing useful input to each local manager. 58 COMMUNITY INVOLVEMENT. The Company believes that its marketing, sales and promotion efforts create direct relationships with its advertisers and audiences, making its Stations and Newspapers significant participants in the middle markets they serve. Each of the Company's Newspapers and Stations participates in numerous community programs, fund-raisers and activities that benefit a wide variety of organizations and produce revenues for the Company. RADIO INDUSTRY OVERVIEW Radio stations generate the majority of their revenue from the sale of advertising time to local and national spot advertisers and national network advertisers. Radio serves primarily as a medium for local advertising. During the past decade, local advertising revenue as a percentage of total radio advertising revenue has ranged from approximately 74% to 78%. The growth in total radio advertising revenue tends to be fairly stable and has generally grown at a rate faster than the Gross Domestic Product. Total radio advertising revenue in 1996 of $12.4 billion represented an 8.2% increase over 1995, as reported by the Radio Advertising Bureau ("RAB"). Radio is considered an efficient means of reaching specifically identified demographic groups. Stations are typically classified by their on-air format, such as country, adult contemporary, oldies or news/ talk. A station's format and style of presentation enable it to target certain demographic and geographic groups. By capturing a specific listening audience share of a market's radio audience, with particular concentration in a targeted demographic group, a station is able to market its broadcasting time to advertisers seeking to reach a specific audience. Advertisers and stations utilize data published by audience measuring services, such as Arbitron, to estimate how many people within particular geographic markets and demographic groups listen to specific stations. Stations determine the number of advertisements broadcast hourly that will maximize available revenue dollars without jeopardizing listening levels. Although the number of advertisements broadcast during a given time period may vary, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. A station's local sales staff generates the majority of its local and regional advertising sales through direct solicitations of local advertising agencies and businesses. To generate national advertising sales, a station will engage a firm that specializes in soliciting radio advertising sales on a national level. National sales representatives obtain advertising principally from advertising agencies located outside the station's market and receive commissions based on the revenue from the advertising obtained. According to the RAB'S RADIO MARKETING GUIDE AND FACT BOOK FOR ADVERTISERS, 1997, radio reaches approximately 95% of all Americans over the age of 12 each week. More than one-half of all radio listening is done outside the home, in contrast to other advertising media, and three out of four adults are reached by car radio each week. Industry studies indicate that the average listener spends approximately three hours and 20 minutes per day listening to radio. The highest portion of radio listenership occurs during the morning, particularly between the time a listener wakes up and the time the listener reaches work. This morning "drive time" period reaches more than 80% of people over 12 years of age and, as a result, radio advertising sold during this period commands premium advertising rates. Radio listeners have gradually shifted over the years from AM (amplitude modulation) to FM (frequency modulation) stations. FM reception, as compared to AM, is generally clearer and provides greater tonal range and higher fidelity. FM's listener share is now in excess of 75%, despite the fact that the number of AM and FM commercial stations in the United States is approximately equal. While this description is representative of the radio industry as a whole on a national basis, the Company believes that the description characterizes particularly that portion of the industry that operates in major markets. It believes that the radio business in middle markets differs significantly from that of the major markets. 59 This distinction is characterized by the fewer number of radio stations in smaller markets, the fewer number of advertising alternatives, the greater relevance of any single business (or radio station) to the market's life, the greater proportion of advertising that is sold locally as opposed to national accounts and the much smaller proportion of advertising that is controlled by agencies. For these reasons, in middle markets a radio station has greater flexibility in competitive and sales strategy and has greater control, through its own direct marketing efforts, on its own outcome, as compared to major markets. With fewer competitors in a middle market a station can pursue listeners on a broader basis and serve a broader spectrum of advertisers, be less subject to competitive changes of competitors and, most importantly, deal directly with customers and around agencies if necessary to demonstrate and convince advertisers of the effectiveness of advertising on the station. The station does not have to wait for programming to be successful to draw customers when it can deal with potential clients directly on an effectiveness basis. As a result of ownership deregulation (see "--Federal Regulation of Radio Broadcasting" and "Risk Factors--Governmental Regulation"), middle market owners also can achieve the mass and efficiencies of major market operations through multiple station ownership. Such deregulation has greatly increased opportunities for ownership of stations in middle markets and has greatly increased the liquidity of station trading in the marketplace and, therefore, the liquidity that the financing markets are willing to offer. The Company believes that these factors and distinctions have greatly enhanced the ability of middle market broadcasters to achieve very favorable operating margins with attractive revenue levels on a reasonable cost basis and with fewer disruptions caused by radio competitors and other advertising alternatives. Furthermore, the greater relevance in a middle market of a single radio business offers great opportunities for the radio station to interact directly with its potential customers. NEWSPAPER INDUSTRY OVERVIEW Newspaper publishing is one of the oldest and largest segments of the media industry. Newspapers are an important medium for local advertising. The newspaper industry in the United States is comprised of the following segments: national and major metropolitan dailies; small metropolitan suburban dailies; suburban and community non-dailies; and free circulation "total market coverage" publications and shoppers ("Shoppers"). In many communities, the local newspapers provide a combination of social and economic linkages which make it attractive for readers and advertisers alike. The Company believes that small metropolitan and suburban dailies as well as suburban and community non-dailies and Shoppers are generally effective in addressing the needs of local readers and advertisers under widely varying economic conditions. The Company believes that because small metropolitan and suburban daily newspapers rely on a broad base of local retail and local classified advertising rather than more volatile national and major account advertising, their advertising revenues tend to be relatively stable. In addition, the Company believes such newspapers tend to publish information which is of particular interest to the local reader and which national and major metropolitan newspapers, television and radio generally do not report to the same extent. Most small metropolitan and suburban daily newspapers are the only daily local newspaper in the communities they serve. The Company believes that relatively few daily newspapers have been established in recent years due to the high cost of starting a daily newspaper operation and building a franchise identity. Shoppers provide nearly 100% penetration in their areas of distribution and generally derive revenues solely from advertising. These publications have limited or no news or editorial content. The newspaper industry, as represented by larger markets at one end and smaller markets on the other, is composed of two distinct sub-industries. They differ particularly because of the influences of size, alternative claims on readers' attention, alternative advertising vehicles, alternative newspaper competitors, methods and costs of distribution, labor costs and flexibility, other cost structures, and significance of 60 the product to its readers and customers. In all of these parameters the Company believes that in middle markets, these factors are more favorable to the financial results and stability of a newspaper business. These factors also create a more vital product for the readers in a middle market than newspapers may be in a major market, which typically has numerous and diverse information and entertainment sources. DESCRIPTION OF THE STATIONS AND THEIR MARKETS LANCASTER AND READING, PENNSYLVANIA. The Company owns and operates one FM and one AM radio station serving Lancaster and Reading, Pennsylvania.
STATION PROGRAMMING YEAR STATION CALL LETTERS FORMAT ACQUIRED/LMA - ----------------------------------------------------------------------------- ------------------- --------------- WIOV-FM...................................................................... Country 1984 WIOV-AM...................................................................... News/Talk 1981
Lancaster has an Arbitron rank of 110 and Reading has an Arbitron rank of 130. The Company estimates that combined, Lancaster and Reading would have an Arbitron rank of 60, with an age 12+ metro population of 663,600. Lancaster and Reading had market revenues of approximately $20.0 million in 1996, an increase of approximately 7.0% over 1995. There are 18 stations in the Lancaster and Reading market, but only (by the Company's estimates) two fully competitive FM stations in Reading and 6 fully competitive FM stations in Lancaster. The two stations owned and operated by the Company rank first in Lancaster in audience ratings and revenues and second in Reading in such categories. The licensed location of WIOV-FM in Ephrata, Pennsylvania provides the Station with the unique capability to broadcast with a "city grade" signal into both Lancaster and Reading from its transmitter site. Due to the limited availability of frequencies in the Pennsylvania area, such opportunity is not available to the Company's competitors. Nevertheless, mountains between the two markets hamper the Station's signal in Reading. The Station is now building a booster transmitter to establish a parity signal in the Reading market. WIOV-AM in 1994 took the call letters of its sister FM station to exploit the popularity of the FM station. Also in 1994, WIOV changed its format from Country to News/Talk. WIOV-FM has achieved a high level of recognition by listeners and advertisers in the Lancaster and Reading community through numerous promotional activities, including its sponsorship of an annual free Country music concert, which in 1997 was attended by approximately 55,000 people. The Company believes the Lancaster region represents one of the best middle markets in the country due to the region's strong and vibrant economy, attractive demographics, and desirable competitive environment. EVANSVILLE, INDIANA AND OWENSBORO/HENDERSON, KENTUCKY. The Company owns and operates one FM and one AM radio station and manages two FM radio stations and one AM radio station in the region of southwestern Indiana, western Kentucky and southern Illinois, surrounding Evansville, Indiana and Owensboro, Kentucky (the "Tri-State Region").
STATION PROGRAMMING YEAR STATION CALL LETTERS FORMAT ACQUIRED/LMA - ----------------------------------------------------------------------------- ------------------- --------------- WBKR-FM...................................................................... Country 1993 WSTO-FM...................................................................... Adult Hits 1997 WKDQ-FM...................................................................... Country 1997 WOMI-AM...................................................................... News/Talk 1993 WVJS-AM...................................................................... News/Talk 1997
Evansville has an Arbitron rank of 151 and Owensboro has an Arbitron rank of 255. The Company believes that the Tri-State Region comprises a single economic market, and estimates that the combined 61 Tri-State Region would have an Arbitron rank of 125, with an age 12+ metro population of 310,600. The Tri-State Region had market revenues of approximately $17.1 million in 1996, an approximate 3.6% increase over 1995. There are 33 stations in the Tri-State Region market of which, the Company estimates, 8 to 10 are fully competitive commercial FM stations. The five stations operated by the Company (including the Managed Affiliates WKDQ-FM, WSTO-FM and WVJS-AM) rank first in the market in terms of both combined gross revenues and combined ratings, and individually hold three of the top four ratings ranking in the market. The Company entered the market in 1993 with the purchase of WBKR-FM and WOMI-AM, and more than tripled the Media Cashflow of those Stations by the end of its first full fiscal year of ownership, principally by implementing its aggressive direct sales strategies. In addition, the Company has entered into Managed Affiliate Management Agreements with the Managed Affiliates, and had loaned, as of August 31, 1997, $14.3 million to them. See "Certain Transactions." The Company believes that the Managed Affiliates complement its existing strengths in the Tri-State Region. WBKR-FM ranks first in the Owensboro metro and regional markets and in the Evansville regional market, while such affiliated stations rank first in the Evansville metro market. Management believes that WBKR-FM, WSTO-FM and WKQD-FM have the best technical facilities in the greater Evansville and Owensboro market, providing strong regional signal coverage to the Tri-State Region. FORT COLLINS/GREELEY/LOVELAND, COLORADO. The Company owns and operates one FM radio station and manages one FM radio station in the area of Fort Collins, Greeley and Loveland, Colorado ("Fort Collins/ Greeley/Loveland"), approximately 65 miles north of Denver.
STATION PROGRAMMING YEAR STATION CALL LETTERS FORMAT ACQUIRED/LMA - ------------------------------------------------------------------------------------ ------------ --------------- KUAD-FM............................................................................. Country 1988 KTRR-FM............................................................................. Adult Hits 1996
Fort Collins/Greeley/Loveland has recently been designated an Arbitron market and ranked 135. The Company believes that there are only four fully competitive local commercial FM stations in the market. While market information has not been published for this market, the Company believes that KUAD-FM would be ranked first in the market in ratings and revenues, and that its Stations as a group would be ranked first in ratings and revenues in the market. 62 The Company entered the market in 1988 with the purchase of KUAD-FM, and shortly afterward changed the format of that Station to Country in order to distinguish it from a number of competing stations in the market. The Company found a high level of resistance to the use of radio advertising among potential advertisers in Fort Collins/Greeley/Loveland, which the Company believes resulted from a failure of other radio station operators in the region to develop trust and recognition of the effectiveness of radio among the market's retailers. To address such resistance, the Company has sponsored seminars, educational programs and media consultants for potential advertisers, distributed newsletters to potential advertisers and persistently pursued advertiser relationships. In part because of such customer education efforts, the Company has increased the Media Cashflow of KUAD-FM by more than ten times since its acquisition. The Company began to program KTRR-FM of Loveland, Colorado, in August, 1996 under a Time Brokerage Agreement and has developed it from a "stick" into a significant station in the market. The Company has exercised an option to purchase the assets of KTRR-FM, and expects to close the transaction in the near future (subject to the timely receipt of necessary regulatory approvals). The level of radio advertising revenue in the Fort Collins/Greeley/Loveland market, as a percentage of retail sales, remains significantly below national levels, and the Company believes that significant increases in market radio revenue are possible as it develops the market. The license location of KUAD-FM in Windsor, Colorado, enables the Station to broadcast into all of Fort Collins, Greeley and Loveland without being identified with any one of such communities to the exclusion of the others. DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN. The Company owns and operates two FM radio stations and one AM radio station in Duluth, Minnesota.
STATION PROGRAMMING YEAR STATION CALL LETTERS FORMAT ACQUIRED/LMA - ------------------------------------------------------------------------------------ ------------ --------------- KKCB-FM............................................................................. Country 1984 KLDJ-FM............................................................................. Oldies 1995 WEBC-AM............................................................................. News/Talk 1984
The market of Duluth, Minnesota and Superior, Wisconsin ("Duluth") has an Arbitron rank of 207. Duluth had market revenue of approximately $6.6 million in 1996, an approximate 4.8% increase over 1995. There are 24 stations in the Duluth market, of which, the Company believes, only 8 are fully competitive commercial FM stations. The three stations owned and operated by the Company rank first in the market in terms of their combined ratings and revenues, and KKCB-FM ranks first in the market in ratings and revenues. The Company entered the market in 1984 with the purchase of KKCB-FM and WEBC-AM, and additionally acquired KLDJ in 1995, which it has developed from a "stick." By aggressively implementing its strategies of developing marketing partnerships with advertisers, assembling an experienced local management team and providing centralized support and oversight, the Company has built the Stations into the leading stations in the Duluth market according to revenue share and ratings. JEFFERSON CITY/COLUMBIA/LAKE OF THE OZARKS, MISSOURI. The Company has entered into definitive agreements to sell substantially all of the Missouri Properties (including market-leading KTXY-FM) for a net cash purchase price of $7,419,000, plus $256,000 of assumed liabilities. See "Certain Transactions." 63 THE NEWSPAPER OPERATIONS GENERAL. Central Michigan Newspapers, Inc. and its affiliates ("CMN," or "Newspapers") own and operate an integrated newspaper publishing, printing, and advertising distribution operation in central Michigan. CMN was founded in 1981, and the Company believes that CMN is the leading media company in its central Michigan market. CMN offers a two-edition daily newspaper, thirteen weekly publications, a web offset printing operation for Newspapers' publications and outside customers, and a private distribution company for its products and those of varied customers. Due to the close integration of all its operations and its private distribution system, CMN can provide customized market coverage to its advertisers to efficiently reach any of the more than 240,000 homes in its 120 mile by 140 mile market through its multiple product advertising buys. CMN relies on aggressively selling comprehensive total-market advertising coverage through its multiple publications and seeks to support its products with an aggressive operating strategy which emphasizes quality, consistency, creativity and integrity. The Newspapers operate in an attractive market with very favorable economic conditions and trends and a favorable competitive environment. CMN's superior operating capabilities were demonstrated in February 1994, when a fire destroyed its printing equipment, yet all the publications were printed and delivered on time the next day, even though CMN was forced to use outside printers. Another key to CMN's success is the strength of its distribution system, providing on-time, reliable and independently audited delivery service to more than 240,000 homes in its market place at a fraction of the cost of the U.S. post office. The distribution system includes several hundred well-supervised independent contractor delivery personnel and enables an advertiser to buy any part of the company's distribution area that best serves the advertiser's needs. The economic recession and loss of a major client had a dampening effect on financial results during the early 1990s. Although a major customer representing several million dollars of revenues went out of business, management was able to maintain overall Newspaper revenues and results, delivering increased cash flow in that year and the following year. No single customer of the Newspapers represented more than 2% of the Company's revenues, for the year ended February 28, 1997. Further, its cash flow has steadily increased from its fiscal 1993 low. Recently purchased printing and production equipment as a result of the fire loss has added new production and press capacity and doubled the printing speed of CMN, providing the Newspapers with much greater scheduling and technical flexibility and cost competitiveness. The new equipment has lead to increased printing jobs produced more efficiently for the Newspapers and their customers. DESCRIPTION OF NEWSPAPERS MORNING SUN. The MORNING SUN, published every day except Saturday, is delivered in Gratiot, Isabella and southern Clare counties. The service area has a combined household count of approximately 32,000. The MORNING SUN appears in two editions for each of the area's primary communities, Mt. Pleasant and Alma. According to an audit by Audit Bureau of Circulations, paid circulation is approximately 12,000 daily and 13,000 Sunday. As the area's only local, daily newspaper, the MORNING SUN is the local community's principal medium for news and information. Although approximately 80 percent of its articles, written by staff writers, concern matters of local interest, the Newspaper carries articles from the Associated Press, as well as syndicated features, including Clarence Page, Andy Rooney, and George Will. The MORNING SUN is staffed by 42 employees, including 18 in the editorial department and 14 in the display and classified advertising department. The Newspaper is established in the area and is widely recognized as the source for local news, sports, and coverage of a variety of opinions. It has won numerous awards, including awards from the Associated Press and Michigan Press Association, such as first place for sports coverage and second place for local news reporting and photography, and first place in the overall newspaper awards for the last two years. 64 WEEKLY SHOPPERS AND WEEKLY NEWSPAPER. The Newspapers publish thirteen weekly publications in contiguous markets, including twelve weekly shopping guides ("Shoppers") and a weekly newspaper, the ISABELLA COUNTY HERALD. The Shoppers provide advertisers weekly contact with many households at the lowest possible cost. While the Shoppers contain minimal news content, consumers rely mainly on them for retail information, given the absence of other media. The Shoppers are delivered free to more than 224,000 households in the Newspapers' market area. The ISABELLA COUNTY HERALD offers local news and information and is delivered free to approximately 16,200 households in the Mt. Pleasant area. By pooling together numerous Shoppers in contiguous areas, Newspapers derive economies of scale in printing, publishing, sales, and distribution to benefit both itself and its customers. ST. JOHNS REMINDER. ST. JOHNS REMINDER, published continuously since September 1947, was acquired by the Company in 1996. The ST. JOHNS REMINDER is distributed free each Sunday to 16,200 homes primarily in Clinton County and serves a growing agrarian market near Michigan's state capital, Lansing. Benefitting from an already strong retail business base, the ST. JOHNS REMINDER is positioned to capture the considerable retail growth taking place between Lansing and St. Johns. Significant revenues are expected to come from cross sales to existing advertisers of other Newspapers into St. Johns, because of its proximity to other Company markets and publications. Additionally, St. Johns is included in the Newspapers' classified and telemarketing network, offering its advertisers up to 240,000 Michigan households. NORTHEASTERN SHOPPER (NORTH AND SOUTH EDITION). In October 1997 the Company acquired the NORTHEASTERN SHOPPER, expanding the Newspapers' core market area by 40,000 households to the northeast. Established in 1954, these shopping guides, in separate northern and southern editions, are delivered free each Sunday in the central Michigan counties of Iosco, Ogemaw, Alcona, Arenac, and a portion of Bay County. The NORTHEASTERN SHOPPER serves an area with a flourishing retail market and strong year-round tourism appeal and fits strategically with the Company's other properties in the region. OTHER PUBLICATIONS. The Company also publishes COUNTRY ROADS, a monthly publication focusing on agriculture, and CENTRAL MICHIGAN BUSINESS, a monthly publication which is delivered to area businesses and which reports on activities and events of particular interest to the business community. The Newspapers use state-of-the-art web printing capabilities to perform commercial printing for third parties, typically in press runs of 30,000 to 200,000 copies. Much of this commercial printing is performed for the publications' advertising customers. Other commercial printing customers include other publishers of newspapers and shopping guides, specialty publications such as real estate guides, entertainment publications, and publications of national associations and schools. Examples of third party printing are CENTRAL MICHIGAN UNIVERSITY LIFE, a school newspaper, and AUTO SHOPPER, a weekly classified paper. MARKET OVERVIEW. The Newspapers' market covers an area approximately 120 miles by 140 miles, containing a total population in excess of 700,000 people. The area's relatively low population density makes print the only medium to serve the market efficiently. The Newspapers' market coverage consists of a seventeen-county area in central Michigan with Isabella and Gratiot counties at its core and includes the Michigan counties of Clare, Gladwin, Midland, Saginaw, Montcalm, Mecosta, Osceola, Wexford, Missaukee, Iosco, Clinton, Arenac, Ogemaw, Alcona, and part of Bay. With a population in excess of 100,000, the area of Isabella and Gratiot counties enjoys a thriving economy and a high quality of life. Mt. Pleasant, a city of 25,000 is home to Central Michigan University and its 17,000 students and has enjoyed steady population growth over the past two decades. Alma, a small college community of nearly 10,000 people in Gratiot County, is approximately 20 miles south of Mt. Pleasant. The area is diversified economically and industrially, including major employers in retail trade, agriculture, oil and gas production and field service, diversified manufacturing, tourism, and education. Traditionally, unemployment in the area has been much lower than average for the State of Michigan. 65 CUSTOMER BASE. The Newspapers are well-positioned to prosper in the future, particularly with an improving economy and increasing advertising spending. The customer base is diversified and dispersed with both local and regional businesses, including retail, food, automotive, furniture, lumber companies, and education industries. The Company's reputation for service and quality is evidenced by the long-term and expanding relationships it has with many of its customers, as well as the numerous awards the Newspapers have received. SALES AND PROMOTION. The Newspapers currently employ 43 sales representatives who are responsible for generating display and supplement advertising sales from customers. Each Shopper has at least one salesperson located in the area where the weekly is distributed. Each salesperson seeks to maximize advertising revenues by maintaining a local presence and establishing relationships with area businesses. In addition to a significant promotion budget the Company also participates in over 20 county fairs, the United Way, the Downtown Business Association, and numerous Chambers of Commerce. FACILITIES. As a result of a fire in 1994, the Newspapers had to purchase a full line of new equipment. The printing operation was moved to a temporary facility in Mt. Pleasant that has several truck docks for shipping and receiving and is used to store paper and finished goods. The Newspapers' office in Mt. Pleasant is located in leased space, which houses management, sales, marketing, editorial, composition, accounting, and other administrative functions. The Company believes that major savings can be achieved annually by relocating to a single plant, gaining efficiency in operations, improving communications and interaction among the departments, and saving by elimination of duplicate staffs and supervisory functions, and has identified a prospective facility for such a plant. See "Certain Transactions." EQUIPMENT. The Newspapers have new state-of-the-art press, editorial, classified, composing, and camera equipment. An investment of approximately $3 million was made in 1994 to acquire a new Goss Community press line and new production equipment. The web press doubles the speed at which the Newspapers can print jobs, thereby making the Newspapers much more competitive for contract printing opportunities. This new equipment has resulted in reduced labor requirements and greatly improved efficiency and financial performance. DISTRIBUTION. In addition to delivering its publications, the Newspapers also deliver over 60 million advertising insert pieces per year to residents in central Michigan. Customized delivery to a particular zone can be specifically created for an advertiser to reach as few as 150 households or more than 240,000 households on a given day at less than half the cost charged by the post office. MANAGEMENT AND STAFF. Under the Company's guidance, the Newspapers operate autonomously, with their staff directly responsible for most managerial, operating, and administrative decisions and functions. The Newspapers' activities are organized into approximately sixteen profit centers participating in a fully integrated print marketing operation. Each management team is experienced, capable, and committed to the growth and profitability of the company. In addition to experience gained in growing a highly successful company, most managers have substantial prior experience in the newspaper business. As of September 30, 1997, the Newspapers had 194 full-time employees and 51 part-time employees. This number does not include the several hundred independent contractor delivery personnel that distribute the Newspapers' publications. The Company has not experienced problems in securing qualified labor from the central Michigan area. There are no unions at the Newspapers, and all sales representatives and department heads are under non-competition agreements. The Company believes the salary and benefit structure has been effective in reducing supervisory costs and improving productivity. 66 ADVERTISING SALES Virtually all of the Company's revenue is generated from local, regional and national advertising for its Stations and Newspapers. During the year ended February 28, 1997, approximately 90% of the Company's revenues were generated from the sale of local and regional advertising. Additional revenue is generated from the sale of national advertising, network compensation payments and other miscellaneous transactions. The major categories of the Company's advertisers include retailers, restaurants, fast food, automotive and grocery. Each local sales staff solicits advertising either directly from the local advertiser or indirectly through an advertising agency with emphasis placed on direct contact. In so doing, the Company seeks to address individual advertiser needs and more effectively design an advertising campaign to help the advertiser sell its product. The Company employs personnel in each of its markets to produce advertisements for the customers. National sales are made by a firm specializing in advertising sales on the national level in exchange for a commission from the Company that is based on the Company's gross revenues from the advertising obtained. Regional and local sales, which the Company defines as sales in regions surrounding the Company's markets to companies that advertise in the Company's markets, are generally made by the Company's local sales staff. RADIO STATIONS. The Company's Stations strive to maximize revenue by managing the on-air inventory of advertising time and adjusting prices based on local market conditions and by utilizing the Company's ability, through its marketing efforts, to provide advertisers with an effective means of reaching a targeted demographic group. Each of the Company's stations has a general target level of on-air inventory that it makes available for advertising. This target level of inventory for sale may vary at different times of the day but tends to remain stable over time. Much of the Company's radio advertising pricing is based on demand for its radio stations' on-air inventory and, in general, the Company responds to this demand by varying prices rather than by varying its target inventory level for a particular station. Therefore, most changes in revenue in a mature station are explained by demand-driven pricing changes rather than by changes in the available inventory. The Company believes that radio is one of the most efficient and cost-effective means for advertisers to reach specific demographic groups. Advertising rates charged by radio stations are based primarily on (i) the effectiveness of a station's sales staff, (ii) the station's share of audiences in the demographic groups targeted by advertisers (as measured by ratings surveys estimating the number of listeners tuned to the station at various times), (iii) the number of stations in the market competing for the same demographic groups, (iv) the supply of and demand for radio advertising time and (v) certain qualitative factors. Rates are generally highest during morning and afternoon commuting hours. A station's listenership is reflected in ratings surveys that estimate the number of listeners tuned to the station and the time they spend listening. Each station's ratings may be used by its advertisers and advertising representatives to consider advertising with the station and are used by the Company to chart audience growth, set advertising rates and adjust programming. The radio broadcast industry's principal ratings service is Arbitron, which publishes periodic ratings surveys for significant domestic radio markets. These surveys are the Company's primary source of ratings data. While the Company seeks and achieves ratings as a means of attracting advertisers, its operations are distinguished by a particular emphasis on soliciting advertisers directly. NEWSPAPERS. The Company believes that the combined coverage of the Newspapers is an important competitive advantage in attracting advertisers because it permits them to cover the entire market area or specifically target any part of the market in central Michigan. The Company offers discounts on combination buys and coordination of all orders through one central office. The Newspapers are recognized as the number one medium for advertising throughout central Michigan, and the marketing focus is to generate revenues from each potential advertiser. The Company is focused on raising rates when appropriate, increasing volume, generating new business, and gaining additional market share. Some of the Newspapers have been in existence for over 50 years, with the ALMA REMINDER beginning in 1938, the MT. PLEASANT BUYERS GUIDE in 1946, and ST. JOHN'S REMINDER in 1947. 67 COMPETITION GENERAL. Each of the Company's Stations and Newspapers competes in varying degrees with radio, television, newspapers, direct marketing and other communications and advertising media having local, regional or national audiences. RADIO. The radio broadcasting industry is highly competitive. The success of each of the Company's Stations in its middle markets depends largely upon its direct marketing and sales efforts supported by its audience ratings and its share of the overall advertising revenue within its market. The Company's audience ratings and advertising revenues are subject to change, and any adverse change in a particular market affecting advertising expenditures or in the relative market positions of the stations located in that market could have a material adverse effect on the revenue of the Company's Stations located in that market. There can be no assurance that any one of the Company's Stations will be able to maintain or increase its current audience ratings or advertising revenue market share. The Company's Stations compete for listeners and advertising revenue directly with other radio stations within their respective markets. Radio stations compete for listeners primarily on the basis of program content that appeals to a particular demographic group. By building a strong listener base consisting of a specific demographic group in each of its markets, the Company provides support to its sales and marketing efforts to attract advertisers seeking to reach those listeners. Operators of radio stations must be alert to the possibility of another station changing its format to compete directly for listeners and advertisers. Another station's decision to convert to a format similar to that of one of the Company's radio stations in the same geographic area may result in lower ratings and advertising revenue, increased promotion and other expenses and, consequently, lower broadcast cashflow for the Company, but in middle markets with fewer stations the frequency of such events may be less than in major markets. Factors that are material to a radio station's competitive position include management experience, the effectiveness of its marketing plan and sales force, the Station's local audience rank in its market, transmitter power, assigned frequency, audience characteristics, local program acceptance and the number and characteristics of other radio stations in the market area. The Company attempts to improve its competitive position in each market by constantly building its sales staff, researching its Stations' programming, by implementing advertising campaigns aimed at the demographic groups for which its Stations program and by managing its sales efforts to attract a larger share of advertising dollars. However, the Company competes with some organizations that have greater financial resources than the Company. Recent changes in the FCC's policies and rules permit increased ownership and operation of multiple local radio stations. Management believes that radio stations that operate under common management or elect to take advantage of joint arrangements such as LMAs or JSAs may in certain circumstances have lower operating costs and may be able to offer advertisers more attractive rates and services. Although the Company currently operates multiple stations in each of its markets and intends to pursue the creation of additional multiple station groups, the Company's competitors in certain markets include operators of multiple stations or operators who already have entered into LMAs or JSAs. The Company also competes with other radio station groups to purchase additional stations. Some of these groups are owned or operated by companies that have substantially greater financial and other resources than the Company. Although the radio broadcasting industry is highly competitive, some barriers to entry exist (which can be mitigated to some extent by changing existing radio station formats and upgrading power, among other actions). The operation of a radio broadcast station requires a license from the FCC, and the number of radio stations that can operate in a given market is limited by the availability of FM and AM radio frequencies allotted by the FCC to communities in that market, as well as by the FCC's multiple ownership rules regulating the number of stations that may be owned and controlled by a single entity. The FCC's multiple ownership rules have changed significantly as a result of the Telecommunications Act. For a discussion of FCC regulation and the provisions of the Telecommunications Act, see "--Federal Regulation of Radio Broadcasting." 68 The Company's stations also compete for advertising revenue with other media, including newspapers, broadcast television, cable television, magazines, direct mail, coupons and outdoor advertising. In addition, the radio broadcasting industry is subject to competition from new media technologies that are being developed or introduced, such as the delivery of audio programming by cable television systems, by satellite and by digital audio broadcasting ("DAB"). DAB may deliver by satellite to nationwide and regional audiences, multi-channel, multi-format, digital radio services with sound quality equivalent to compact discs. The delivery of information through the presently unregulated Internet also could create a new form of competition. The radio broadcasting industry historically has grown despite the introduction of new technologies for the delivery of entertainment and information, such as broadcast television, cable television, audio tapes and compact disks. A growing population and greater availability of radios, particularly car and portable radios, have contributed to this growth. There can be no assurance, however, that the development or introduction in the future of any new media technology will not have an adverse effect on the radio broadcasting industry. The FCC has recently authorized a spectrum for the use of a new technology, satellite digital audio radio services ("DARS"), to deliver audio programming. DARS may provide a medium for the delivery by satellite or terrestrial means of multiple new audio programming formats to local and national audiences. It is not known at this time whether this digital technology also may be used in the future by existing radio broadcast stations either on existing or alternate broadcasting frequencies. The Company cannot predict what other matters might be considered in the future by the FCC, nor can it assess in advance what impact, if any, the implementation of any of these proposals or changes might have on its business. See "--Federal Regulation of Radio Broadcasting." NEWSPAPERS. The Company's Newspapers compete primarily with other daily and weekly newspapers, shoppers, shared mail packages and other local advertising media. The Newspapers also compete in varying degrees for advertisers and readers with magazines, radio, broadcast television, directories and other communications media that operate in their markets. The Company believes that its production systems and technologies, which enable it to publish separate editions in narrowly targeted zones, allow it to compete effectively in its markets. FEDERAL REGULATION OF RADIO BROADCASTING GENERAL. The ownership, operation and sale of broadcast stations, including those licensed to the Company, are subject to the jurisdiction of the FCC, which acts under authority derived from the Communications Act. The Communications Act was amended in 1996 by the Telecommunications Act to make changes in several broadcast laws. Among other things, the FCC assigns frequency bands for broadcasting; issues station licenses; determines whether to approve changes in ownership or control of station licensees; regulates equipment used by stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; and has the power to impose penalties for violations of its rules under the Communications Act. The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short" (less than the maximum) license renewal terms or, for particularly egregious violations, the denial of a license renewal application, the revocation of a license or the denial of FCC consent to acquire additional broadcast properties. Reference should be made to the Communications Act, FCC rules and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of broadcast stations. LICENSE GRANT AND RENEWAL. Until recently, radio broadcast licenses were granted for maximum terms of seven years but, acting under the authority of the Telecommunications Act, the FCC recently revised its rules to extend the maximum term for future renewals to eight years. Licenses may be renewed through an application to the FCC. Prior to the Telecommunications Act, during certain periods when a 69 renewal application was pending, competing applicants could file for the radio frequency being used by the renewal applicant. The Telecommunications Act prohibits the FCC from considering such competing applications if the FCC finds that the station has served the public interest, convenience and necessity, that there have been no serious violations by the licensee of the Communications Act or the rules and regulations of the FCC, and that there have been no other violations by the licensee of the Communications Act or the rules and regulations of the FCC that, when taken together, would constitute a pattern of abuse. Petitions to deny license renewals can be filed by interested parties, including members of the public. Such petitions may raise various issues before the FCC. The FCC is required to hold hearings on renewal applications if the FCC is unable to determine that renewal of a license would serve the public interest, convenience and necessity, or if a petition to deny raises a "substantial and material question of fact" as to whether the grant of the renewal application would be prima facie inconsistent with the public interest, convenience and necessity. Also, during certain periods when a renewal application is pending, the transferability of the applicant's license is restricted. Such a petition presently is pending against KUAD-FM, one of the Company's Stations, which broadcasts from Windsor, Colorado. The Company is not currently aware of any facts that would prevent the timely renewal of its licenses to operate any of its other Stations and Managed Affiliates, although there can be no assurance that the Company's licenses will be renewed. The FCC classifies each AM and FM station. An AM station operates on either a clear channel, regional channel or local channel. A clear channel is one on which AM stations are assigned to serve wide areas. Clear channel AM stations are classified as either: Class A stations, which operate on an unlimited time basis and are designated to render primary and secondary service over an extended area; Class B stations, which operate on an unlimited time basis and are designed to render service only over a primary service area; and Class D stations, which operate either during daytime hours only, during limited times only or on an unlimited time basis with low nighttime power. A regional channel is one on which Class B and Class D AM stations may operate and serve primarily a principal center of population and the rural areas contiguous to it. A local channel is one on which AM stations operate on an unlimited time basis and serve primarily a community and the suburban and rural areas immediately contiguous thereto. Class C AM stations operate on a local channel and are designed to render service only over a primary service area that may be reduced as a consequence of interference. The minimum and maximum facilities requirements for an FM station are determined by its class. FM class designations depend upon the geographic zone in which the transmitter of the FM station is located. In general, commercial FM stations are classified as follows, in order of increasing power and antenna height: Class A, B1, B, C3, C2, C1 and C. The parameters for each classification are as follows:
MAXIMUM ANTENNA HEIGHT MAXIMUM (HAAT)* CLASS POWER IN METERS ----- ----------- --------------------------- A 6 kw 100 B1 25 kw 100 B 50 kw 150 C3 25 kw 100 C2 50 kw 150 C1 100 kw 299 C 100 kw 600
- ------------------------ * Height Above Average Terrain 70 The following table sets forth the market, call letters, FCC license classification, HAAT, power and frequency of each of the stations owned, operated or managed by the Company, assuming the consummation of the Pending Transactions, and the date on which each station's FCC license expires.
HAAT EXPIRATION FCC IN POWER IN DATE OF MARKET STATION CLASS METERS KILOWATTS FREQUENCY FCC LICENSE - ------------------------------------- ---------------- --------- ------------- ----------------- ------------- -------------- Lancaster/Reading WIOV-FM B 212 25 105.1 mhz 8/1/98 Pennsylvania WIOV-AM C NA 1 1240 khz 8/1/98 Evansville, Indiana/ WBKR-FM C 320 100 92.5 mhz 8/1/04 Owensboro/Henderson, WOMI-AM C NA 1 1490 khz 8/1/04 Kentucky WVJS-AM B NA 5 1420 khz 8/1/03 WSTO-FM C 303 100 96.1 mhz 8/1/03 WKDQ-FM C 300 100 99.5 mhz 8/1/03 Fort Collins/Greeley/Loveland, KUAD-FM C1 200 100 99.1 mhz 4/1/97* Colorado KTRR-FM C2 150 50 102.5 mhz 8/2/04 Duluth, WEBC-AM B NA 5 560 khz 4/1/05 Minnesota/Superior, KKCB-FM C1 240 100 105.1 mhz 4/1/05 Wisconsin KLDJ-FM C2 251 25 101.7 mhz 4/1/05
- ------------------------ * Renewal application pending OWNERSHIP MATTERS. The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a broadcast licensee without the prior approval of the FCC. In determining whether to assign, transfer, grant or renew a broadcast license, the FCC considers a number of factors pertaining to the licensee, including compliance with various rules limiting common ownership of media properties, the "character" of the licensee and those persons holding "attributable" interests therein, compliance with the Communications Act, including the limitation on alien ownership, as well as compliance with other FCC rules and policies, including equal employment opportunity requirements. Once a station purchase agreement has been signed, an application for FCC consent to assignment of license or transfer of control (depending upon whether the underlying transaction is an asset purchase or stock acquisition) is filed with the FCC. Approximately 10 to 15 days after this filing, the FCC publishes a notice assigning a file number to the application and advising that the application has been "accepted for filing." This notice begins a 30-day statutory waiting period, which provides the opportunity for third parties to file formal petitions to deny the transaction; informal objections may be filed any time prior to grant of an application. The FCC staff will normally review the application in this period and seek further information and amendments to the application if it has questions. Once the 30-day public notice period ends, the FCC's staff will complete its processing, assuming that no formal petitions or informal objections were received and that the application is otherwise consistent with FCC rules. The staff often grants the application by delegated authority approximately 10 days after the public notice period ends. At this point, the parties are legally authorized to close the purchase, although the FCC action is not legally a "final order." If there is a backlog of applications, the 10-day period can extend to 30 days or more. Public notice of the FCC staff grant is usually issued about a week after the grant is made, stating that the grant was effective when the staff made the grant. On the date of this notice, another 30-day period begins, within which time interested parties can file petitions seeking either staff reconsideration or full FCC review of the staff action. During this time the grant can still be modified, set aside or stayed, and is not a "final order." In the absence of a stay, however, the seller and buyer are not prevented from closing, at their own risk, despite the absence of a final order. Also, within 40 days after the public notice of the grant, the full FCC can review and reconsider the staff's grant on its own motion. Thus, during the additional 10 days beyond the 30-day period available to third parties, the grant is still not "final." In the event that review by the full FCC is requested and the FCC subsequently affirms the staff's grant of the 71 application, interested parties may thereafter seek judicial review in the United States Court of Appeals for the District of Columbia Circuit within thirty days of public notice of the full FCC's action. In the event the Court affirms the FCC's action, further judicial review may be sought by seeking rehearing en banc from the Court of Appeals or by certiorari from the United States Supreme Court. In the absence of the submission of a timely request for reconsideration, administrative review or judicial review, the FCC staff's grant of an application becomes final by operation of law. Upon the occurrence of that event, counsel is able to deliver an opinion that the FCC's grant is no longer subject to administrative or judicial review, although such action can nevertheless be set aside in rare circumstances, such as fraud on the agency by a party to the application. The pendency of a license renewal application will alter the aforementioned timetables because the FCC will not issue an unconditional assignment grant if the station's license renewal is pending. The Communications Act and FCC rules also generally restrict the common ownership, operation or control of radio broadcast stations serving the same local market, of a radio broadcast station and a television broadcast station serving the same local market, and of a radio broadcast station and a daily newspaper serving the same local market. Under these "cross-ownership" rules, absent waivers, the Company would not be permitted to acquire any daily newspaper or television broadcast station (other than low power television) in a local market where it then owned any radio broadcast station. The FCC's rules provide for the liberal grant of a waiver of the rule prohibiting common ownership of radio and television stations in the same geographic market in the top 25 television markets if certain conditions are satisfied. The Telecommunications Act extends this waiver policy to stations in the top 50 television markets, although the FCC has not yet implemented this change. In response to the Telecommunications Act, the FCC amended its multiple ownership rules to eliminate the national limits on ownership of AM and FM stations. The FCC's broadcast multiple ownership rules restrict the number of radio stations one person or entity may own, operate or control on a local level. These limits are: (i) in a market with 45 or more commercial radio stations, an entity may own up to eight commercial radio stations, not more than five of which are in the same service (FM or AM); (ii) in a market with between 30 and 44 (inclusive) commercial radio stations, an entity may own up to seven commercial radio stations, not more than four of which are in the same service; (iii) in a market with between 15 and 29 (inclusive) commercial radio stations, an entity may own up to six commercial radio stations, not more than four of which are in the same service; (iv) in a market with 14 or fewer commercial radio stations, an entity may own up to five commercial radio stations, not more than three of which are in the same service, except that an entity may not own more than 50% of the stations in such market. None of these multiple ownership rules requires any change in the Company's current ownership of radio broadcast stations or precludes consummation of the Transactions. However, these rules will limit the number of additional stations which the Company may acquire in the future in its markets. The FCC generally applies its television/radio/newspaper cross-ownership rules and its broadcast multiple ownership rules by considering the "attributable," or cognizable interests held by a person or entity. A person or entity can have an attributable interest in a radio station, television station or daily newspaper by being an officer, director, partner or shareholder of a company that owns that station or newspaper. Whether that interest is cognizable under the FCC's ownership rules is determined by the FCC's attribution rules. If an interest is attributable, the FCC treats the person or entity who holds that interest as the "owner" of the radio station, television station or daily newspaper in question, and therefore subject to the FCC's ownership rules. 72 With respect to a corporation, officers and directors and persons or entities that directly or indirectly can vote 5% or more of the corporation's stock (10% or more of such stock in the case of insurance companies, investment companies, bank trust departments and certain other "passive investors" that hold such stock for investment purposes only) generally are attributed with ownership of whatever radio stations, television stations and daily newspapers the corporation owns. With respect to a partnership, the interest of a general partner is attributable, as is the interest of any limited partner who is "materially involved" in the media-related activities of the partnership. Debt instruments, nonvoting stock, options and warrants for voting stock that have not yet been exercised, limited partnership interests where the limited partner is not "materially involved" in the media-related activities of the partnership, and minority (under 5%) voting stock, generally do not subject their holders to attribution. However, the FCC is currently reviewing its rules on attribution of broadcast interests, and it may modify its criteria. See "--Proposed Changes" below. Since under the doctrine of attributed ownership all of the Company's Stations are deemed to be owned by Alan R. Brill, the FCC multiple ownership rules could serve to limit to some extent the ability of the Company to acquire additional stations in some markets. PROGRAMMING AND OPERATION. The Communications Act requires broadcasters to serve the "public interest." Since 1981, the FCC gradually has relaxed or eliminated many of the more formalized procedures it developed to promote the broadcast of certain types of programming responsive to the needs of a station's community of license. However, licensees continue to be required to present programming that is responsive to community problems, needs and interests and to maintain records demonstrating such responsiveness. Complaints from listeners concerning a station's programming will be considered by the FCC when it evaluates the licensee's renewal application, but such complaints also may be filed and considered at any time. Stations also must pay regulatory and application fees and follow various FCC rules that regulate, among other things, political advertising, the broadcast of obscene or indecent programming, sponsorship identification and technical operations (including limits on radio frequency radiation). In addition, licensees must develop and implement programs designed to promote equal employment opportunities for women and minorities and must submit reports to the FCC on these matters annually and in connection with a renewal application. The broadcast of contests and lotteries is regulated by FCC rules. Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short" (less than the maximum) renewal terms or, for particularly egregious violations, the denial of a license renewal application or the revocation of a license. In 1985, the FCC adopted rules regarding human exposures to levels of radio frequency radiation. These rules require applicants for new broadcast stations, renewals of broadcast licenses or modifications of existing licenses to inform the FCC at the time of filing such applications whether a new or existing broadcast facility would expose people to radio frequency radiation in excess of certain guidelines. More restrictive radiation limits became effective on October 15, 1997. The Company anticipates that such regulations will not have a material effect on its business. LOCAL MARKETING AGREEMENTS. Over the past five years, a number of radio stations, including certain of the Company's stations, have entered into what commonly are referred to as "local marketing agreements" ("LMAs") or "time brokerage agreements." These agreements take various forms. Separately-owned and licensed stations may agree to function cooperatively in terms of programming, advertising sales and other matters, subject to compliance with the antitrust laws and the FCC's rules and policies, including the requirement that the licensee of each station maintain independent control over the programming and other operations of its own station. The FCC has held that such agreements do not violate the Communications Act as long as the licensee of the station that is being substantially programmed by another entity maintains complete responsibility for, and control over, operations of its broadcast station and otherwise 73 ensures compliance with applicable FCC rules and policies and that the entity providing the programming is in compliance with the FCC local ownership rules. A station that brokers substantial time on another station in its market or engages in an LMA with a station in the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC's ownership rules, discussed above. As a result, a broadcast station may not enter into an LMA that allows it to program more than 15% of the broadcast time, on a weekly basis, of another local station that it could not own under the FCC's local multiple ownership rules. FCC rules also prohibit the broadcast licensee from simulcasting more than 25% of its programming on another station in the same broadcast service (i.e., AM-AM or FM-FM) where the two stations serve substantially the same geographic area, whether the licensee owns the stations or owns one and programs the other through an LMA arrangement. Another example of a cooperative agreement between differently owned radio stations in the same market is a joint sales agreement ("JSA"), whereby one station sells advertising time in combination, both on itself and on a station under separate ownership. In the past, the FCC has determined that issues of joint advertising sales should be left to antitrust enforcement. Currently, JSAs are not deemed by the FCC to be attributable for the purpose of its multiple ownership rules. However, the FCC has outstanding a notice of proposed rulemaking, which, if implemented, could require certain radio station operators to terminate any JSA it might have with a radio station with which such operator could not have an LMA. PROPOSED CHANGES. In December, 1994, the FCC initiated a proceeding to solicit comment on whether it should revise its radio and television ownership "attribution" rules by among other proposals (i) raising the basic benchmark for attributing ownership in a corporate licensee from 5% to 10% of the licensee's voting stock, (ii) increasing from 10% to 20% of the licensee's voting stock the attribution benchmark for "passive investors" in corporate licensees, (iii) restricting the availability of the attribution exemption when a single party controls more than 50% of the voting stock; and (iv) considering LMAs, JSAs, debt and non-voting stock interests to be attributable under certain circumstances. No decision has been made by the FCC in these matters. At this time, no determination can be made as to what effect, if any, this proposed rulemaking will have on the Company. EMPLOYEES At September 30, 1997, the Company employed approximately 340 persons full-time and 100 persons part-time. None of such employees is covered by collective bargaining agreements, and the Company considers its relations with its employees to be good. The Company employs several on-air personalities with large loyal audiences in their respective markets. The Company generally enters into employment agreements with these personalities to protect its interests in those relationships that it believes to be valuable. The loss of one of these personalities could result in a short-term loss of audience share, but the Company does not believe that any such loss would have a material adverse effect on the Company's financial condition or results of operations. PROPERTIES AND FACILITIES The types of properties required to support the Stations include offices, studios, transmitter sites and antenna sites. A Station's studios are generally housed with its offices in business districts, while transmitter sites and antenna sites are generally located so as to provide maximum market coverage. After giving effect to the Transactions, the Company will own studio facilities in Ephrata, Pennsylvania; Owensboro, Kentucky; Windsor, Colorado; and Duluth, Minnesota; and own transmitter and antenna sites in Reading, Pennsylvania; Owensboro; and Duluth. The Company leases its remaining studio and office facilities, and leases certain transmitter and antenna sites. The Company does not anticipate any difficulties in renewing any facility leases or in leasing alternative or additional space, if required. The Company owns substantially all of its other equipment, consisting principally of transmitting antennae, transmitters, studio equipment and general office equipment. 74 Substantially all of the Company's properties and equipment may be encumbered and serve as collateral for the Company's obligations hereinafter incurred by the Company under the New Credit Facility. No one property is material to the Company's operations. The Company believes that its properties are generally in good condition and suitable for its operations; however, it continually looks for opportunities to upgrade its properties and intends to upgrade studios, office space, and transmission facilities in certain markets. LEGAL PROCEEDINGS Currently and from time to time the Company is involved in litigation incidental to the conduct of its business, but it is not a party to any lawsuit or proceeding that, in the opinion of the Company, is likely to have a material adverse effect on the Company. MANAGEMENT Directors of the Company's corporate manager, Brill Media Management, Inc. ("Media"), are elected annually by its sole shareholder, Alan R. Brill. Executive officers of Media are elected by, and serve at the pleasure of, Media's board of directors. The following table sets forth certain information with regard to Media's principal executive officers and directors as of the date of this Offering Memorandum:
NAME AGE POSITION - ------------------------------------------------ --- ------------------------------------------------ Alan R. Brill 55 Director, President, Chief Executive Officer and Treasurer Robert M. Leich 54 Director Philip C. Fisher 59 Director Clifton E. Forrest 49 Director, Vice President (Newspapers), and Assistant Secretary Charles W. Laughlin 69 Director Alan L. Beck 46 Vice President (Radio) Donald C. TenBarge 40 Vice President, Controller, Secretary and Assistant Treasurer
Information concerning the experience and affiliations of the directors and executive officers of Media is as set forth below. ALAN R. BRILL, DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER. Mr. Brill founded the Company's predecessor beginning in 1981 and has worked in the media industry for 24 years. Prior to starting the Company, after Peace Corps service in Ecuador, Mr. Brill joined Arthur Young & Co. in New York City where he practiced as a CPA with a diversified clientele. In 1972, he joined a new, publicly-traded real estate investment trust in Atlanta as a senior financial and administrative executive. The trust was involved in short and long-term real estate loans, primarily to proprietary hospitals. In 1973, he was recruited by Worrell Newspapers, Inc., a large, privately-owned newspaper group headquartered in Charlottesville, Virginia, as its chief financial officer and named to the company's Board of Directors. As a senior executive in the company, Mr. Brill was involved in or responsible for all the company's numerous acquisitions and financings, had a role in most significant operating matters and built a small television group for the company. Soon after the founder transferred his ownership interest to his son and withdrew from the business, Mr. Brill left Worrell to form Brill Media Company, Inc. in 1981. Mr. Brill earned a B.A. in economics and mathematics from DePauw University and an M.B.A. from Harvard Business School. Mr. Brill is a Certified Public Accountant. ROBERT M. LEICH, DIRECTOR. Mr. Leich is President of Diversified Healthcare, Inc., successor to Charles Leich & Co., one of the country's largest independent drug distributors. He is a director of Old National 75 Bank, Evansville, Indiana and of the National Wholesale Druggists Association. He has served on the board of numerous civic and business organizations. Mr. Leich graduated from Yale University and received his M.B.A. degree from Indiana University at Bloomington. PHILIP C. FISHER, DIRECTOR. Dr. Fisher is Dean of Business, University of Southern Indiana and has published extensively on the case study method for entrepreneurial businesses. He has held numerous civic and business posts, including the board of the Evansville Chamber of Commerce and the executive committee of the Indiana Council for Economic Education. He received his undergraduate degree from Wayne State College, an M.B.A. from the University of South Dakota, and a Ph.D. from the Graduate School of Business of Stanford University. CLIFTON E. FORREST, DIRECTOR, VICE PRESIDENT (NEWSPAPERS) AND ASSISTANT SECRETARY. Mr. Forrest joined the Company's predecessors in 1981 as publisher of CMN. In 1987, he moved to Evansville to become a senior officer of BMCLP. His responsibilities consist of managing the publishing, printing and distribution areas and overseeing employee benefit plans, risk management programs, personnel issues, and certain other matters. Mr. Forrest has 33 years of industry experience including 10 years at Worrell Newspapers, Inc. where he served in various roles publishing daily and weekly newspapers in five different states. Mr. Forrest earned a B.A. degree with an emphasis in journalism, marketing, advertising and industrial sociology from Wichita State University. CHARLES W. LAUGHLIN, DIRECTOR. Mr. Laughlin is a lawyer and presently of counsel to Thompson & McMullan, P.C., a law firm in Richmond, Virginia. Mr. Laughlin received his undergraduate degree from the College of William & Mary and his J.D. from the University of Virginia. After completing a clerkship with the United States Court of Appeals for the Fourth Circuit, he has practiced law in Richmond, Virginia since 1956 and has served as counsel to the Company since its inception. ALAN L. BECK, VICE PRESIDENT (RADIO). Mr. Beck joined the Company's predecessor in 1985 as President/General Manager of the Pennsylvania Stations. After two years, he moved to the BMCLP where he became Vice President-Radio Group Operations. Currently, his major responsibilities include supervising the Stations and promotional companies through the general managers, and acting as a resource for other operations. Mr. Beck has 22 years of experience in all facets of the radio and television industries. Mr. Beck earned a B.A. degree in marketing from Southern Illinois University. DONALD C. TENBARGE, VICE PRESIDENT, CONTROLLER, SECRETARY AND ASSISTANT TREASURER. Mr. TenBarge joined BMCLP in 1988. He is responsible for the financial management and reporting of all operations and companies. In addition to managing the information systems, Mr. TenBarge also participates in financing activities and acquisitions. Prior to joining BMCLP, Mr. TenBarge was a manager in a regional CPA firm where he spent nine years engaged in many aspects of audit, tax, systems, and financial planning. Mr. TenBarge earned a B.S. in Accounting from the University of Evansville and is a Certified Public Accountant. To the full extent permitted by applicable Virginia law, Media is obligated to indemnify its officers and directors for liabilities and expenses incurred by them because of their status as officers or directors of Media. EXECUTIVE COMPENSATION During fiscal 1995, fiscal 1996 and fiscal 1997, fees to BMCLP were approximately $1.7 million, $1.8 million and $1.9 million, respectively, for services provided to the Company pursuant to Administrative Management Agreements. See "Certain Transactions." The Company has entered into performance incentive plan agreements (the "Plans") with Clifton E. Forrest with respect to the Newspapers business and Alan L. Beck with respect to the Stations' business (the "Executives") in their capacities as officers of Company affiliates. The Plans accumulate increments annually based on certain defined performance criteria. As of February 28, 1997, vested interests of the 76 Executives in the Plans totaled $1,785,000 for Mr. Forrest, and $1,700,000 for Mr. Beck. Payments under the Plans will commence only upon fulfillment of certain contingencies, including the Executive's death, disability, retirement, or employment termination and can be paid, at each affiliate's option, in amounts not to exceed quarterly payments of 2.5% of the Executive's vested amount. A Company affiliate also maintains a defined contribution profit sharing plan to which all Company employees may make voluntary contributions. In the year ended February 28, 1997, Thompson & McMullan, P.C. (to which Mr. Laughlin is of counsel) received approximately $170,000 in fees from the Company. CERTAIN TRANSACTIONS Alan R. Brill directly or indirectly owns and controls the Issuer, the Company and each of the Company's Subsidiaries, Managed Affiliates and other affiliates. Brill Media Company, L.P. ("BMCLP"), an affiliate, is a limited partnership whose limited partners are Alan R. Brill and Northwest Radio, Inc., an affiliate owned by Mr. Brill. The general partner of BMCLP is Brill Media Company, Inc., also an affiliate of the Company. Since their organization or acquisition, each Subsidiary or affiliate owner of a Newspaper or Station has paid management fees to BMCLP pursuant to management agreements (the "Administrative Management Agreements"). Acting pursuant to such Administrative Management Agreements, BMCLP is responsible for and provides to the Stations and Newspapers long-range strategic planning, management support and oversight, establishment of primary policies and procedures, resource allocation, accounting and auditing, regulatory and legal compliance and support, license renewals and the evaluation of potential acquisitions. In addition, executives of BMCLP visit the Company's Stations and Newspapers on a frequent basis to review performance, to assist local management with programming, production, sales, and recruiting efforts, to develop, implement, and verify overall Station and Newspaper operating and marketing strategies, and, most importantly, to remain aware of developments in each market. The executives of BMCLP are the same persons that are executives of BMC (see "Management"), for which they presently receive no compensation from the Issuer or the Company. None of these executives has any interest in such Administrative Management Agreements, except for Alan R. Brill's indirect interest as owner of BMCLP, as indicated. Pursuant to such Administrative Management Agreements, BMCLP earns an annual fee, paid monthly, equal to ten percent of each Station's net cash revenues and five percent of each of the Newspapers' net cash revenues. Non-operating Subsidiaries and affiliates pay a nominal flat fee for any such service received. For the Company's year ended February 28, 1997, the aggregate amount of such Administrative Management Agreement fees charged to Subsidiaries was approximately $1.9 million. As and to the extent provided in the Indenture, the future payment of such fees will be subordinate to the prior payment of the Company's obligations on the Notes. See "Description of Notes--Certain Covenants--Limitations on Restricted Payments." Pursuant to reimbursement agreements, from time to time third-party services or products (such as insurance coverage) may be provided to one or more of the Company, its Subsidiaries, or their affiliates, in which case such costs are reimbursed on a ratable basis to the provider, which may be BMCLP, the Company, or another Subsidiary or affiliate. Pursuant to Managed Affiliate Management Agreements from time to time one or more of the Subsidiaries may provide management services to a Managed Affiliate on an agreed fee basis for services rendered. Such fees generally consist of a nominal fixed fee plus a variable additional fee based upon the Managed Affiliate's performance. One of the Company's Subsidiaries, Tri-State Broadcasting, Inc. ("Tri-State") has entered into such Managed Affiliate Management Agreements (the "Tri-State Agreements") with two Managed Affiliates, TSB III, LLC, the owner and operator of radio stations WSTO-FM and WVJS-AM licensed to Owensboro, Kentucky and TSB IV, LLC, the owner and operator of radio station 77 WKDQ-FM, licensed to Henderson, Kentucky, each an entity wholly owned by Mr. Brill. Pursuant to the Tri-State Agreements, Tri-State will receive from each of the Managed Affiliates a monthly fee of $10,000 and an additional annual fee based upon such Managed Affiliate's financial performance. As of August 31, 1997, Holdings or other Subsidiaries, directly or indirectly, have loaned approximately $14.3 million in the aggregate to the Managed Affiliates. It is anticipated that similar relationships may be initiated with other affiliates in the future. Prior to August 31, 1997, the Company declared a distribution of $3.0 million in cash, which thereafter was paid to Mr. Brill. Subsequently, the Company declared and paid a distribution of $5.0 million in cash to Mr. Brill and $4.2 million for purposes of satisfaction of affiliate notes receivable and owing from Mr. Brill. See "Capitalization." Pursuant to Member Management Agreements, Huron Management, Inc., an affiliate owned and controlled by Mr. Brill, acts as member-manager of two of the Company's Subsidiaries, Huron P.S., LLC, and Huron Newspapers, LLC. Nominal charges are made by the management company for this management oversight and for the costs associated therewith. In a like arrangement, Northland Management, Inc., an affiliate controlled by Mr. Brill, is manager on a fee basis to another Subsidiary, Northland Broadcasting, LLC. On a temporary basis, at a present cost of approximately $70,000 per year, a Subsidiary, Central Michigan Newspapers, Inc. ("CMN"), presently leases space from the current owner of a facility that will be owned by CMR Investments, L.P. ("CMR") a limited partnership affiliate of the Company (in which BMCLP's and the Company's executives, Mr. Brill, Clifton E. Forrest, and Alan L. Beck each has an interest as a limited partner) after closing of the purchase of such property by CMR. CMN has advanced to CMR the sum of $500,000 (a portion of the insurance proceeds resulting from a fire loss at CMN's prior production facilities) for CMN's share of the "build out" costs of new quarters that CMN will lease from CMR and will occupy after CMR has acquired and renovated the property. After renovation is complete, CMR and CMN will effect the long-term lease for occupancy of the improved property for use as the Newspapers' main office and production facility, all at a cost no greater than that required for comparable space elsewhere in that market, if available, and CMN will be relieved of its present several facility commitments. DRI, LLC, an affiliate owned indirectly by Mr. Brill, recently acquired title to a building in Duluth, Minnesota (the "Duluth Building"). It is anticipated that DRI, LLC will enter into a lease on market rental terms with the Subsidiaries Northland Broadcasting, LLC and NBII, Inc. for use of a portion of the Duluth Building as a studio facility for the Duluth, Minnesota/Superior Wisconsin Stations. From time to time various Company Subsidiaries and affiliates have entered into loan transactions between themselves, which transactions are duly recorded in the appropriate Company books and records and the annual effects of which are fully reflected in the Company's financial statements. The Missouri Properties have entered into agreements for the sale of substantially all of the assets of the Missouri Properties for a net cash purchase price of approximately $7.4 million, plus assumed liabilities of $256,000. Pursuant to the terms of a Time Brokerage Agreement which provides for monthly payments of $50,000 to the Missouri Properties, the purchaser is operating and managing the Missouri Properties pending closing of the purchase. Closing of the sale and purchase is expected to occur immediately upon the FCC granting requisite approval for transfer of the broadcast licenses associated with these Stations. Applications for transfer of broadcast licenses of the Missouri Properties have been filed with the FCC by the purchasers. A local market competitor has objected to the transfer of the licenses and on December 12, 1997, filed with the FCC a Petition to Deny the license transfers and to terminate the Time Brokerage Agreement. No action has been taken on the Petition to Deny by the FCC, and the Company believes that even if the Petition to Deny were granted, the consequences would not be material to the Company. 78 The Company's Subsidiary, NCR II Inc., presently manages and programs radio station KTRR-FM in Loveland, Colorado pursuant to a Time Brokerage Agreement with Onyx Broadcasting, Inc., has executed an option to purchase substantially all of the assets of KTRR-FM for a purchase price of $2.0 million, and will enter into a covenant not to compete with the sellers, with a stated consideration of $500,000, payable over its five year term. It is expected that closing of the purchase of KTRR-FM will occur shortly after execution of a definitive asset purchase agreement for this transaction and required approval for transfer of the broadcast licenses by the FCC. Certain of the Subsidiaries and other affiliates were indebted under the terms of certain senior secured obligations guaranteed by Mr. Brill and payable to AMRESCO Funding Corporation ("Amresco") and Goldman Sachs Credit Partners L.P. ("Goldman Sachs"). These obligations, including sums borrowed after August 31, 1997, a portion of which was used to pay dividends to Mr. Brill, were paid, along with accrued interest thereon, and applicable prepayment premiums, as appropriate, from the proceeds of the Offering, as reflected in the pro forma combined financial statements contained in this Prospectus. Certain of the proceeds of the Offering were used to pay certain related fees and expenses associated therewith. On October 1, 1997 two of the Company's newspaper Subsidiaries acquired the assets of Huron and Northeastern, newspapers located on the coast of Lake Huron, Michigan, for a total consideration of $2.8 million. The Company loaned approximately $2.0 million of the proceeds of the Offering to Managed Affiliates on an unsecured basis at a rate of interest of 12% per annum. Such amounts are in addition to the $14.3 million already loaned by the Company to the Managed Affiliates at August 31, 1997. 79 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER The Original Securities were originally sold by the Issuer on December 30, 1997 in transactions exempt from the registration requirements of the Securities Act. The $3,000,000 aggregate principal amount of the Original Appreciation Notes and $105,000,000 aggregate principal amount of the Original Notes were sold to the Initial Purchaser pursuant to the Purchase Agreement. The Initial Purchaser subsequently resold such Securities. The Issuer, the Subsidiary Guarantors, and the Initial Purchaser entered into the Registration Rights Agreements pursuant to which the Issuer and the Subsidiary Guarantors agreed, for the benefit of the holders, that they would, at their own expense, (i) file within 60 days after December 30, 1997, the original issue date of the Securities (the "Issue Date"), one or more registration statements (the "Exchange Offer Registration Statement") with the Commission with respect to the Exchange Offer for the Exchange Securities and (ii) use their reasonable best efforts to cause the Exchange Offer Registration Statement to be declared effective by the Commission under the Securities Act within 150 days after the Issue Date and (iii) use their reasonable best efforts to cause such Exchange Offer Registration Statement to remain effective until the closing of the Exhange Offer and (iv) use their reasonable best efforts to consummate the Exchange Offer no later than 180 days after the Issue Date. Upon the Exchange Offer Registration Statement being declared effective, the Issuer will commence the Exchange Offer. The Issuer will keep the Exchange Offer open for not less than 20 business days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to the holders of the Securities. For each Original Note surrendered pursuant to the Exchange Offer, the holder who surrendered such Original Note will receive an Exchange Note having a principal amount equal to that of the surrendered Original Note. Interest on each Exchange Note will accrue from the last date on which interest was paid on the Original Note surrendered in exchange therefor or, if no interest has been paid on such Original Note, from the Issue Date. For each Original Appreciation Note surrendered pursuant to the Exchange Offer, the holder who surrendered such Original Appreciation Note will receive an Exchange Appreciation Note having a principal amount equal to that of the surrendered Original Appreciation Note. Under existing interpretations of the staff to the Commission contained in several no-action letters to third parties, the Exchange Securities would generally be freely transferable by holders thereof other than Affiliates of the Issuer after the Exchange Offer without further registration under the Securities Act only if (i) the Exchange Securities were acquired in the ordinary course of business of such holder or such other person, (ii) neither such holder nor such other person is engaging in or intends to engage in a distribution of the Exchange Securities and (iii) neither such holder nor such other person has an arrangement or understanding with any person to participate in the distribution of the Exchange Securities. However, any purchaser of Securities who is an Affiliate of the Issuer or who intends to participate in the Exchange Offer for the purpose of distribution of the Exchange Securities (i) will not be able to rely on the position of the staff of the Commission, (ii) will not be able to tender its Securities in the Exchange Offer and (iii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Securities, unless such sale or transfer is made pursuant to an exemption from such requirements. Each holder of the Original Securities that wishes to exchange such Original Securities for Exchange Securities in the Exchange Offer will be required to represent in the Letters of Transmittal that (i) the Exchange Securities are to be acquired by the holder or the person receiving such Exchange Securities, whether or not such person is the holder, in the ordinary course of business, (ii) the holder or any such other person (other than a broker-dealer referred to in the next sentence) is not engaging, and does not intend to engage, in the distribution of the Exchange Securities, (iii) the holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the Exchange Securities, (iv) neither the holder nor any such other person is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act and (v) the holder or any such other person acknowledges that if such holder or other person participates in the Exchange Offer for the purpose of distributing the 80 Exchange Securities it must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Securities and cannot rely on those no-action letters. As indicated above, in connection with any resales of Exchange Securities, any broker-dealer (a "Participating Broker-Dealer") that acquired the Original Securities for its own account as a result of market-making or other trading activities must deliver a prospectus meeting the requirements of the Securities Act. Based on existing interpretations of the staff of the Commission, the Company believes that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to the Exchange Securities (other than a resale of an unsold allotment from the original sale of the Securities) with this Prospectus. Under the Registration Rights Agreements, the Issuer is required to make this Prospectus available to Participating Broker-Dealers and other persons, if any, with similar prospectus delivery requirements, for a period of 180 days after consummation of the Exchange Offer for use in connection with the resale of Exchange Securities. See "Plan of Distribution." In the event that (i) applicable law or interpretations of the staff of the Commission do not permit the Company to effect such an Exchange Offer, (ii) for any other reason the Exchange Offer is not consummated within 180 days after the Issue Date, (iii) under certain circumstances upon the request of the Inital Purchaser or (iv) any holder of Original Securities (other than the Initial Purchaser) is not eligible to participate in the Exchange Offer, the Issuer will, at its expense, (a) as promptly as reasonably practicable file a registration statement (the "Shelf Registration Statement") relating to the offer and sale of the then outstanding Original Securities, (b) use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act by the 180th day after the Issue Date (or promptly in the event of a request by the Initial Purchaser pursuant to clause (iii) above) and (c) use its reasonable best efforts to keep the Shelf Registration Statement effective until the earlier of two years from the Issue Date (or one year from the date the Shelf Registration Statement is declared effective if such Shelf Registration Statement is filed upon the request of the Initial Purchaser pursuant to clause (iii) above) or such shorter period which will terminate when all of the Original Securities become eligible for resale pursuant to Rule 144 under the Securities Act without volume restriction (the "Effectiveness Period"). TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this Prospectus and in the Letters of Transmittal, the Issuer will accept any and all Original Securities validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The Issuer will issue an equal principal amount of Exchange Notes in exchange for such principal amount of outstanding Original Notes accepted in the Exchange Offer and an equal principal amount of Exchange Appreciation Notes in exchange for such principal amount of outstanding Original Appreciation Notes accepted in the Exchange Offer. Holders may tender some or all of their Original Securities pursuant to the Exchange Offer. Notes may be tendered only in integral multiples of $1,000; provided, however, that a holder holding any Original Note in a denomination of other than an integral multiple of $1,000 may tender the principal amount of such Original Note that is not an integral multiple of $1,000 in addition to tendering, in integral multiples of $1,000, the remaining principal amount, if any, of such Original Note. The form and terms of the Exchange Notes are the same as the form and terms of the Original Notes and the form and terms of the Exchange Appreciation Notes are the same as the form and terms of the Original Appreciation Notes except that (i) the Exchange Notes and the Exchange Appreciation Notes will bear a "Series B" designation and different CUSIP Numbers from the Securities, (ii) the Exchange Notes and the Exchange Appreciation Notes will have been registered under the Securities Act and hence will not bear legends restricting the transfer thereof and (iii) the holders of the Exchange Notes and the Exchange Appreciation Notes will not be entitled to certain rights of holders of Notes and Appreciation Notes under the Registration Rights Agreements, which rights will terminate as to holders of the Exchange Securities when the Exchange Offer is consummated. The Exchange Notes will evidence the same debt as 81 the Original Notes and will be entitled to the benefits of the Notes Indenture. The Exchange Appreciation Notes will evidence the same debt as the Original Appreciation Notes and will be entitled to the benefits of the Appreciation Notes Indenture. As of the date of this Prospectus, $105,000,000 aggregate principal amount of Original Notes are outstanding and $3,000,000 aggregate principal amount of Original Appreciation Notes are outstanding. The Issuer has fixed the close of business on , 1998 as the date for purposes of determining the persons to whom this Prospectus and the Letters of Transmittal will be mailed initially. The Issuer shall be deemed to have accepted validly tendered Original Securities when, as and if the Issuer has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purpose of receiving the Exchange Securities from the Issuer. If any tendered Original Securities are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, the certificates for any such unaccepted Original Securities will be returned, without expense, to the tendering holder thereof as promptly as practicable after the Expiration Date. Holders who tender Original Securities in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letters of Transmittal, transfer taxes with respect to the exchange of Original Securities pursuant to the Exchange Offer. The Issuer will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the Exchange Offer. See "--Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean 5:00 p.m., New York City time, on , 1998, unless the Issuer, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. In order to extend the Exchange Offer, the Issuer will notify the Exchange Agent of any extension by written notice and will mail to the registered holders an announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. The Issuer reserves the right, in its sole discretion, (i) to delay accepting any Original Securities, to extend the Exchange Offer or to terminate the Exchange Offer if any of the conditions set forth below under "--Conditions" shall not have been satisfied, by giving written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by written notice thereof to the registered holders. INTEREST ON THE EXCHANGE SECURITIES Interest on each Exchange Note will accrue from the last date on which interest was paid on the Original Note surrendered in exchange therefor or, if no interest has been paid on such Original Note, from the Issue Date. Holders whose Original Notes are accepted for exchange will be deemed to have waived the right to receive interest accrued on such Original Notes. Accordingly, holders who exchange their Original Notes will receive the same interest payment on the next interest payment date (expected to be June 15, 1998) that they would have received had they not accepted the Exchange Offer. Interest on the Exchange Notes is payable semi-annually on each June 15 and December 15 commencing on June 15, 1998. 82 PROCEDURES FOR TENDERING Only a holder of Original Securities may tender such Original Securities in the Exchange Offer. To tender in the Exchange Offer, a holder must complete, sign and date the appropriate Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal and mail or otherwise deliver such Letter of Transmittal, or such facsimile, together with the Original Securities and any other required documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. A separate Letter of Transmittal is required for the tender of Original Notes and for the tender of Original Appreciation Notes. To be tendered effectively, the Original Securities, Letters of Transmittal and other required documents must be completed and received by the Registrar at the address set forth below under "--Exchange Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. Delivery of the Original Securities may be made by book-entry transfer in accordance with the procedures described below. Confirmation of such book-entry transfer must be received by the Exchange Agent prior to the Expiration Date. Notwithstanding the foregoing, DTC Participants tendering through ATOP will be deemed to have made valid delivery where the Exchange Agent receives an Agent's Message (defined below) prior to the Expiration Date. By executing a Letter of Transmittal, each holder will make to the Issuer the representations set forth above in the second paragraph under the heading "--Purpose and Effect of the Exchange Offer." The tender by a holder and the acceptance thereof by the Issuer will constitute the agreement between such holder and the Issuer in accordance with the terms and subject to the conditions set forth herein and in the Letters of Transmittal. THE METHOD OF DELIVERY OF ORIGINAL SECURITIES AND THE LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR SECURITIES SHOULD BE SENT TO THE ISSUER. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. ORIGINAL SECURITIES HELD THROUGH DTC. Each beneficial owner holding Original Securities through a DTC Participant must instruct such DTC Participant to cause its Original Securities to be tendered in accordance with the procedures set forth in this Prospectus. Pursuant to an authorization given by DTC to the DTC Participants, each DTC Participant holding Original Securities through DTC must (i) electronically transmit its acceptance through ATOP, and DTC will then edit and verify the acceptance, execute a book-entry delivery to the Exchange Agent's account at DTC and send an Agent's Message to the Exchange Agent for its acceptance, or (ii) comply with the guaranteed delivery procedures set forth below and in the Notice of Guaranteed Delivery. See "--Guaranteed Delivery Procedures." The Exchange Agent will (promptly after the date of this Prospectus) establish accounts at DTC for purposes of the Exchange Offer with respect to Original Securities held through DTC, and any financial institution that is a DTC Participant may make book-entry delivery of interests in Original Securities into the Exchange Agent's account through ATOP. However, although delivery of interests in the Original Securities may be effected through book-entry transfer into the Exchange Agent's account through ATOP, an Agent's Message in connection with such book-entry transfer, and any other required documents, must be, in any case, transmitted to and received by the Exchange Agent at its address set forth under "--Exchange Agent," or the guaranteed delivery procedures set forth below must be complied with, in each case, prior to the Expiration Date. Delivery of documents to DTC does not constitute delivery to the 83 Exchange Agent. The confirmation of a book-entry transfer into the Exchange Agent's account at DTC as described above is referred to herein as a "Book-Entry Confirmation." The term "Agent's Message" means a message transmitted by DTC to, and received by, the Exchange Agent and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from each DTC Participant tendering through ATOP that such DTC Participants have received a Letter of Transmittal and agree to be bound by the terms of the Letter of Transmittal and that the Issuer may enforce such agreement against such DTC Participants. Cede & Co., as the Holder of the global certificates representing the Original Notes and the Original Appreciation Notes (each a "Global Security," or together, the "Global Securities"), will tender a portion of each of the Global Securities equal to the aggregate principal amount due at the stated maturity or number of shares for which instructions to tender are given by DTC Participants. ORIGINAL SECURITIES HELD BY HOLDERS. Any beneficial owner whose Original Securities are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the Letters of Transmittal. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined) unless the Original Securities tendered pursuant thereto are tendered (i) by a registered holder who has not completed the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of the Medallion System (an "Eligible Institution"). If a Letter of Transmittal is signed by a person other than the registered holder of any Original Securities listed therein, such Original Securities must be endorsed or accompanied by a properly completed bond power for both the Original Notes and Original Appreciation Notes, signed by such registered holder as such registered holder's name appears on such Original Securities with the signature thereon guaranteed by an Eligible Institution. If a Letter of Transmittal or any Original Securities or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and evidence satisfactory to the Issuer of their authority to so act must be submitted with the Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tendered Original Securities and withdrawal of tendered Original Securities will be determined by the Issuer in its sole discretion, which determination will be final and binding. The Issuer reserves the absolute right to reject any and all Original Securities not properly tendered or any Original Securities the Issuer's acceptance of which would, in the opinion of counsel for the Issuer, be unlawful. The Issuer also reserves the right in its sole discretion to waive any defects, irregularities or conditions of tender as to particular Original Securities. The Issuer's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letters of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Original Securities must be cured within such time as the Issuer shall determine. Although the Issuer intends to notify holders of defects or irregularities with respect to tenders of Original Securities, neither the Issuer, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Original Securities will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Original Securities received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the 84 tendering holders, unless otherwise provided in the Letters of Transmittal, as soon as practicable following the Expiration Date. GUARANTEED DELIVERY PROCEDURES ORIGINAL SECURITIES HELD THROUGH DTC. DTC Participants holding Original Securities through DTC who wish to cause their Original Securities to be tendered, but who cannot transmit their acceptances through ATOP prior to the Expiration Date, may cause a tender to be effected if: (a) guaranteed delivery is made by or through an Eligible Institution; (b) prior to 5:00 p.m., New York City time on the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by mail, hand delivery, facsimile transmission or overnight courier) substantially in the form provided by the Company herewith; and (c) Book-Entry Confirmation and an Agent's Message in connection therewith (as described above) are received by the Exchange Agent within three NYSE trading days after the date of the execution of the Notice of Guaranteed Delivery. ORIGINAL SECURITIES HELD BY HOLDERS. Holders who wish to tender their Original Securities and (i) whose Original Securities are not immediately available, (ii) who cannot deliver their Original Securities, the Letters of Transmittal or any other required documents to the Exchange Agent or (iii) who cannot complete the procedures for book-entry transfer, prior to the Expiration Date, may effect a tender if: (a) the tender is made through an Eligible Institution; (b) prior to the Expiration Date, the Registrar receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder, the certificate number(s) of such Original Securities and the principal amount of Original Notes and/or principal amount of Original Appreciation Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the Expiration Date, the Letters of Transmittal (or facsimiles thereof) together with the certificate(s) representing the Original Securities, and any other documents required by the Letters of Transmittal will be deposited by the Eligible Institution with the Registrar; and (c) such properly completed and executed Letters of Transmittal (or facsimiles thereof), as well as the certificate(s) representing all tendered Original Securities in proper form for transfer, and all other documents required by the Letters of Transmittal are received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their Original Securities according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of Original Securities may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To withdraw a tender of Original Securities in the Exchange Offer, a letter or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal by a DTC Participant must contain the name and number of the DTC Participant, the principal amount due at the stated maturity of Original Appreciation Notes to which such withdrawal relates and the signature of the DTC 85 Participant. Any such notice of withdrawal by a Holder of Original Securities must (i) specify the name of the person having deposited the Original Securities to be withdrawn (the "Depositor"), (ii) identify the Original Securities to be withdrawn (including the certificate number(s) and principal amount of Original Notes and/ or principal amount of Original Appreciation Notes) (iii) be signed by the holder in the same manner as the original signature on the Letters of Transmittal by which such Original Securities were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Exchange Agent with respect to the Original Notes and the Original Appreciation Notes register the transfer of such Original Securities into the name of the person withdrawing the tender and (iv) specify the name in which any such Original Securities are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Issuer, whose determination shall be final and binding on all parties. Any Original Securities so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer, and no Exchange Securities will be issued with respect thereto unless the Original Securities so withdrawn are validly retendered. Any Original Securities which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Original Securities may be retendered by following one of the procedures described above under "--Procedures for Tendering" at any time prior to the Expiration Date. CONDITIONS Notwithstanding any other term of the Exchange Offer, the Issuer shall not be required to accept for exchange, or exchange Exchange Securities for, any Original Securities, and may terminate or amend the Exchange Offer as provided herein before the acceptance of such Original Securities, if the Exchange Offer, or the making of any exchange by a holder of Original Securities, violates applicable law or any applicable interpretation of the staff of the Commission. EXCHANGE AGENT The United States Trust Company of New York has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letters of Transmittal and requests for Notice of Guaranteed Delivery should be directed to the Exchange Agent addressed as follows: For Information by Telephone: 1-800-548-6565 By Registered or Certified Mail: By Hand Before 4:30 p.m.: United States Trust Company of New York United States Trust Company of New York P.O. Box 843 Cooper Station 111 Broadway New York, New York 10276 New York, New York 10006 Attention: Corporate Trust Services Attention: Lower Level Corporate Trust Window By Overnight Courier and By Facsimile Transmission: By Hand After 4:30 p.m.: (212) 780-0592 United States Trust Company of New York Attention: Customer Service 770 Broadway, 13th Floor New York, New York 10003 Confirm by Telephone to: (800) 548-6565
Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand, or by overnight delivery service. 86 Delivery to an address or transmission of instructions via facsimile other than as set forth above will not constitute a valid delivery. The United States Trust Company of New York also acts as Trustee under the Note Indenture and as Appreciation Note Indenture and as Registrar and Paying Agent with regard to the Notes and the Appreciation Notes. FEES AND EXPENSES The expenses of soliciting tenders will be borne by the Issuer.The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by officers and regular employees of the Issuer and its affiliates. The Issuer has not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to brokers, dealers or others soliciting acceptances of the Exchange Offer. The Issuer, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. The cash expenses to be incurred in connection with the Exchange Offer will be paid by the Issuer. Such expenses include fees and expenses of the Exchange Agent, Trustee, Registrar and Paying Agent, accounting and legal fees and printing costs, among others. ACCOUNTING TREATMENT The Exchange Notes and the Exchange Appreciation Notes will be recorded at the same carrying value as the Original Notes and the Original Appreciation Notes as reflected in the Issuer's accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized by the Issuer. The expenses of the Exchange Offer will be amortized over the term of the Securities. CONSEQUENCES OF FAILURE TO EXCHANGE Original Securities that are not exchanged for Exchange Securities pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Original Securities may be resold only (i) to the Issuer (upon redemption thereof or otherwise), (ii) so long as the Securities are eligible for resale pursuant to Rule 144A under the Securities Act, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, (iii) in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel reasonably acceptable to the Issuer), (iv) outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act or (v) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. RESALE OF THE EXCHANGE SECURITIES With respect to resales of Exchange Securities, based on no-action letters issued by the staff of the Commission to third parties, the Issuer believes that a holder or other person who receives Exchange Securities, whether or not such person is the holder (other than a person who is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act), who receives Exchange Securities in exchange for Original Securities in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the Exchange Securities, will be allowed to resell the Exchange Notes and Exchange Appreciation Notes to the public without further registration under the Securities Act and without delivering to the purchasers of the Exchange Securities a prospectus that satisfies the requirements of Section 10 of the Securities Act. 87 However, if any holder acquires Exchange Securities in the Exchange Offer for the purpose of distributing or participating in a distribution of Exchange Securities, such holder cannot rely on the position of the staff of the Commission enunciated in such no-action letters, and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, unless an exemption from registration is otherwise available. Further, each Participating Broker-Dealer that receives Exchange Securities for its own account in exchange for Original Securities where such Original Securities were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities, may be a statutory underwriter and must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letters of Transmittal state that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. As contemplated by these no-action letters and the Registration Rights Agreements, each holder accepting the Exchange Offer is required to represent to the Issuer in the Letter of Transmittal that (i) the Exchange Securities are to be acquired by the holder or the person receiving such Exchange Securities, whether or not such person is the holder, in the ordinary course of business, (ii) the holder or any such other person (other than a broker-dealer referred to in the next sentence) is not engaging, and does not intend to engage, in the distribution of the Exchange Securities, (iii) the holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the Exchange Securities, (iv) neither the holder nor any such other person is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act and (v) the holder or any such other person acknowledges that if such holder or other person participates in the Exchange Offer for the purpose of distributing the Exchange Securities it must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Securities and cannot rely on those no-action letters. As indicated above, each Participating Broker-Dealer that receives Exchange Securities for its own account in exchange for Original Securities must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. For a description of the procedures for such resales by Participating Broker-Dealers, see "Plan of Distribution." The Issuer, will, in the event of the filing of the Shelf Registration Statement, provide to each holder of the Original Notes copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the Original Notes. A holder of Original Notes that sells its Original Notes pursuant to the Shelf Registration Statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver such prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a holder (including certain indemnification rights and obligations thereunder). If the Issuer and the Subsidiary Guarantors fail to comply with the above provisions or if such registration statements fail to become effective, then, as the sole liquidated damages for such failure by the Issuer and the Subsidiary Guarantors, additional interest (the "Additional Interest") shall become payable with respect to the Securities as follows: (i) if the Exchange Offer Registration Statement or Shelf Registration Statement is not declared effective within 150 days following the Issue Date, Additional Interest shall accrue on the Notes over and above the stated interest, and Appreciation Notes Additional Interest shall accrue on $3,000,000, in each case at a rate of 0.50% per annum for the first 120 days commencing on the 151st day after the Issue Date, such Additional Interest rate and Appreciation Notes Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; or (ii) if (A) the Issuer has not exchanged all Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to 180 days after the Issue Date or (B) the Exchange Offer 88 Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the second anniversary of the Issue Date (unless all the Securities have been sold thereunder) then Additional Interest shall accrue on the Notes over and above the stated interest, and Appreciation Notes Additional Interest shall accrue on $3,000,000, in each case at a rate of 0.50% per annum for the first 30 days commencing on (x) the 181st day after the Issue Date with respect to the Notes or Appreciation Notes, as the case may be, validly tendered and not exchanged by the Issuer, in the case of (A) above, or (y) the day the Exchange Offer Registration ceases to be effective or usable for its intended purpose in the case of (B) above, or (z) the day such Shelf Registration Statement ceases to be effective in the case of (C) above, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; PROVIDED HOWEVER, that in no event may the rate of interest for any Additional Interest on the Notes or Appreciation Notes Additional Interest on the Appreciation Notes exceed, in the aggregate, 1.5% per annum; and PROVIDED FURTHER, that (1) upon the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of (i) above), or (2) upon the exchange of Exchange Offer Notes for all Notes tendered (in the case of clause (ii)(A) above), or upon the effectiveness of the Exchange Offer Registration Statement which had ceased to remain effective in the case of clause (ii)(B) above, or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (ii)(C) above), Additional Interest on the Notes as a result of such clause or the relevant subclause thereof, as the case may be, shall cease to accrue. Any amounts of Additional Interest due pursuant to clauses (i) or (ii) above will be payable and will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Notes multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360. The foregoing summary of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, all the provisions of the Registration Rights Agreement, a copy of which will be made available upon request to the Issuer. 89 DESCRIPTION OF NOTES GENERAL The Original Notes were issued, and the Exchange Notes are to be issued, under an indenture, dated as of December 30, 1997 (the "Indenture"), between the Issuer and United States Trust Company of New York, as trustee (the "Trustee"), a copy of which is available upon request to the Issuer. The following is a summary of certain provisions of the Indenture and the Notes and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture (including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended) and the Notes. The definition of certain capitalized terms used in the following summary are set forth below under "Certain Definitions". Principal of, premium, if any, and interest on the Notes will be payable, and the Notes may be exchanged or transferred, at the office or agency of the Issuer in the Borough of Manhattan, The City of New York (which initially shall be the corporate trust office of the Trustee in New York, New York), except that, at the option of the Issuer, payment of interest may be made by check mailed to the address of the holders of the Notes as such address appears in the Note Register. Initially, the Trustee will act as Paying Agent and Registrar for the Notes. The Notes may be presented for registration of transfer and exchange at the offices of the Registrar, which initially will be the Trustee's corporate trust office. The Issuer may change any Paying Agent and Registrar without notice to holders of the Notes. The Notes will be issued only in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000. No service charge will be made for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith. TERMS OF NOTES The Notes are limited to $105.0 million in aggregate principal amount and will mature on December 15, 2007. The Notes will bear cash interest at a rate of 7 1/2% per annum from the date of original issuance until December 15, 1999, and at a rate of 12% per annum from and including December 15, 1999 until maturity. Interest on each Note will be payable semiannually on June 15 and December 15 of each year (each an "Interest Payment Date"), commencing on June 15, 1998, to holders of record at the close of business on the June 1st or December 1st immediately preceding the Interest Payment Date. In addition, prior to December 15, 1999, original issue discount will accrete on the Notes such that the yield to maturity will be 12% per annum, compounded on the basis of semi-annual compounding. The interest rate on the Notes is subject to increase under certain circumstances. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Any Original Notes that remain outstanding after consummation of the Exchange Offer and any Exchange Notes issued in connection with the Exchange Offer will be treated as a single class of securities under the Note Indenture. The Notes will not be entitled to the benefit of any mandatory sinking fund. OPTIONAL REDEMPTION Except as set forth below, the Notes will not be redeemable at the option of the Issuer prior to December 15, 2002. On and after such date, the Notes will be redeemable, at the Issuer's option, in whole or in part, at any time upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at the following redemption prices (expressed in percentages of principal amount), if redeemed during the 12-month period commencing on December 15th of the years 90 set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date):
REDEMPTION PERIOD PRICE - --------------------------------------------------------------------------------- ----------- 2002............................................................................. 106.00% 2003............................................................................. 104.00% 2004............................................................................. 102.00% 2005 and thereafter.............................................................. 100.00%
OPTIONAL REDEMPTION UPON EQUITY OFFERING. In addition, in the event of the sale by the Issuer prior to December 15, 2000 of its Capital Stock (other than Disqualified Stock) in one or more Public Equity Offerings the Net Cash Proceeds of which are at least $25.0 million in the aggregate, the Issuer may, at its option, use the Net Cash Proceeds of such sale or sales of Capital Stock to redeem up to 25% of the aggregate principal amount of the Notes at a redemption price in the case of a redemption date prior to December 15, 1999, equal to 112.0% of the Accreted Value thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) and for any redemption date on or after December 15, 1999, at a redemption price equal to 112.0% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date); PROVIDED, HOWEVER, that after any such redemption the aggregate principal amount of the Notes outstanding must equal at least $79.0 million. In order to effect the foregoing redemption with the proceeds of any such sale of Capital Stock, the Issuer shall make such redemption not more than 90 days after the consummation of any such sale or sales of Capital Stock. SELECTION. In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee on a PRO RATA basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate; PROVIDED, HOWEVER, that if a partial redemption is made with proceeds of a sale of Capital Stock, selection of the Notes or portion thereof for redemption shall be made by the Trustee only on a PRO RATA basis, unless such method is otherwise prohibited. Notes may be redeemed in part in multiples of $1,000 principal amount only. Notice of redemption will be sent, by first class mail, postage prepaid, at least 30 but not more than 60 days (unless a shorter period is acceptable to the Trustee) prior to the date fixed for redemption to each holder whose Notes are to be redeemed at the last address for such holder then shown on the registry books. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original Note. On and after any redemption date, interest will cease to accrue on the Notes or part thereof called for redemption as long as the Issuer has deposited with the Paying Agent funds in satisfaction of the redemption price pursuant to the Indenture. RANKING The Notes will be senior unsecured obligations of the Issuer. The Notes will rank PARI PASSU in right of payment with all existing and future senior unsecured indebtedness of the Issuer and will rank senior in right of payment to any subordinated indebtedness of the Issuer (including the Appreciation Notes). The Notes and the Subsidiary Guarantees will be effectively subordinated in right of payment to secured debt of the Issuer and the Subsidiary Guarantors to the extent of the assets serving as security therefor. As of August 31, 1997 on a pro forma basis, after giving effect to the Transactions, the Issuer had no outstanding secured indebtedness to which the Notes would have been effectively subordinated, and the aggregate amount of the Subsidiary Guarantors' outstanding senior secured indebtedness to which the Subsidiary Guarantees would have been effectively subordinated was approximately $4.9 million. 91 SUBSIDIARY GUARANTEES Each Subsidiary Guarantor unconditionally guarantees, jointly and severally, to each holder and the Trustee, on a senior basis, the full and prompt payment of principal of and interest on the Notes, and of all other obligations of the Issuer under the Indenture. The obligations of each Subsidiary Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under the Indenture, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to a contribution from each other Subsidiary Guarantor in a PRO RATA amount based on the Adjusted Net Assets of each Subsidiary Guarantor. Each Subsidiary Guarantor may consolidate with or merge into or sell its assets to the Issuer or another Subsidiary Guarantor without limitation. Upon the sale or disposition of a Subsidiary Guarantor (or all or substantially all of its assets) to a Person which is not a Subsidiary Guarantor, which sale or disposition is otherwise in compliance with the Indenture (including the covenant described under "Certain Covenants--Limitations on Sales of Assets and Subsidiary Stock"), such Subsidiary Guarantor shall be deemed released from all its obligations under the Indenture and its Subsidiary Guarantee and such Subsidiary Guarantee shall terminate; PROVIDED, HOWEVER, that any such termination shall occur only to the extent that all obligations of such Subsidiary Guarantor under all of its Subsidiary Guarantors of, and under all of its pledges of assets or other security interests which secure any other Indebtedness of the Issuer shall also terminate upon such release, sale or transfer. Subsequent to the Issue Date, separate financial information for the Subsidiary Guarantors will not be provided except to the extent required by Regulation S-X under the Securities Act. CHANGE OF CONTROL Upon the occurrence of a Change of Control, each holder will have the right to require the Issuer to purchase all or any part of such holder's Notes, in the case of a repurchase date prior to December 15, 1999, at a purchase price in cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) and for any repurchase date on or after December 15, 1999, at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) (such applicable purchase price being here in after referred to as the "Change of Control Purchase Price"). Within 30 days following any Change of Control, unless the Issuer has mailed a redemption notice with respect to all the outstanding Notes in connection with such Change of Control, the Issuer shall mail a notice to each holder with a copy to the Trustee stating: (1) that a Change of Control has occurred and that such holder has the right to require the Issuer to repurchase such holder's Notes at a purchase price in cash equal to the Change of Control Purchase Price; (2) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and (3) the procedures determined by the Issuer, consistent with the Indenture, that a holder must follow in order to have its Notes repurchased. The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict 92 with provisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof. The definition of "Change of Control" includes, among other transactions, a disposition of all or substantially all of the property and assets of the Issuer and its Subsidiaries. With respect to the disposition of property or assets, the phrase "all or substantially all" as used in the Indenture varies according to the facts and circumstances of the subject transaction, has no clearly established meaning under New York law (which is the law which governs the Indenture) and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the property or assets of a Person, and therefore it may be unclear as to whether a Change of Control has occurred and whether the Issuer is required to make an offer to repurchase the Notes as described above. There can be no assurance that the Issuer will have sufficient funds available at the time of any Change of Control to make any debt payment (including repurchases of Notes) required under the Indenture upon a Change of Control (as well as may be required pursuant to other securities of the Issuer which might be outstanding at the time). The above provisions requiring the Issuer to repurchase the Notes pursuant to a Change of Control will, unless consents are obtained, require the Issuer to repay all indebtedness then outstanding which by its terms would prohibit such Note repurchase, either prior to or concurrently with such Note repurchase. CERTAIN COVENANTS The Indenture contains certain covenants including, among others, the following: LIMITATION ON INDEBTEDNESS. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, Incur any Indebtedness; PROVIDED, HOWEVER, that: (i) the Issuer and its Restricted Subsidiaries may Incur Indebtedness which is expressly subordinated to the Notes and the Subsidiary Guarantees if no Default or Event of Default shall have occurred and be continuing at the time of such Incurrence or would occur as a consequence of such Incurrence and the Consolidated Leverage Ratio would not be greater than 7.00 to 1.00 and (ii) the Issuer and its Restricted Subsidiaries may Incur unsecured Indebtedness ranking on a parity with the Notes if no Default or Event of Default shall have occurred and be continuing at the time of such Incurrence or would occur as a consequence of such Incurrence and the Consolidated Senior Leverage Ratio would not be greater than 6.50 to 1.00, PROVIDED, HOWEVER, that as provided in the definition of Permitted Liens Indebtedness Incurred pursuant to this clause (ii) may be secured by a Lien if at the time of such Incurrence the Consolidated Senior Secured Leverage Ratio would not be greater than 3.00 to 1.00. (b) Notwithstanding the foregoing paragraph (a), the Issuer and its Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness Incurred which does not exceed $15.0 million at any time outstanding, less the aggregate principal amount thereof permanently repaid with the net proceeds of Asset Dispositions; (ii) Indebtedness of the Issuer owing to and held by any Wholly-Owned Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Issuer or any Wholly-Owned Subsidiary; PROVIDED, HOWEVER, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or any Wholly-Owned Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the issuer thereof; 93 (iii) Indebtedness represented by (A) the Notes and the Subsidiary Guarantees, (B) the Appreciation Notes and the Guarantees thereof, (C) Existing Indebtedness and (D) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (iii) (other than clause (B)) or Incurred pursuant to paragraph (a) above. (iv) (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on which such Restricted Subsidiary was acquired , directly or indirectly, by the Issuer (other than Indebtedness Incurred in anticipation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary or was otherwise acquired by the Issuer); PROVIDED, HOWEVER, that at the time such Restricted Subsidiary is acquired by the Issuer, the Issuer would have been able to Incur $1.00 of additional Indebtedness pursuant to clause (ii) of paragraph (a) above after giving effect to the Incurrence of such Indebtedness pursuant to this clause (iv) and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (iv); (v) Indebtedness (A) in respect of performance bonds, bankers' acceptances and surety or appeal bonds provided by the Issuer or any of its Restricted Subsidiaries to their customers in the ordinary course of their business, (B) in respect of performance bonds or similar obligations of the Issuer or any of its Restricted Subsidiaries for or in connection with pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations and (C) arising from Guarantees to suppliers, lessors, licensees, contractors, franchises or customers of obligations (other than Indebtedness) incurred in the ordinary course of business; (vi) Indebtedness under Currency Agreements and Interest Rate Agreements; PROVIDED, HOWEVER, that such Currency Agreements and Interest Rate Agreements are entered into for BONA FIDE hedging purposes of the Issuer or its Restricted Subsidiaries (as determined in good faith by the Board of Directors of the Issuer) and correspond in terms of notional amount, duration, currencies and interest rates as applicable, to Indebtedness of the Issuer or its Restricted Subsidiaries Incurred without violation of the Indenture or to business transactions of the Issuer or its Restricted Subsidiaries on customary terms entered into in the ordinary course of business; (vii) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Issuer or any of its Restricted Subsidiaries pursuant to such agreements, in each case Incurred in connection with the disposition of any business assets or Restricted Subsidiary of the Issuer or (other than Guarantees of Indebtedness or other obligations incurred by any Person acquiring all or any portion of such business assets or Restricted Subsidiary of the Issuer for the purpose of financing such acquisition) in a principal amount not to exceed the gross proceeds actually received by the Issuer or any of its Restricted Subsidiaries in connection with such disposition; PROVIDED, HOWEVER, that the principal amount of any Indebtedness Incurred pursuant to this clause (vii) when taken together with all Indebtedness Incurred pursuant to this clause (vii) and then outstanding, shall not exceed $1.0 million; (viii) Indebtedness consisting of (A) Guarantees by the Issuer (so long as the Issuer could have Incurred such Indebtedness directly without violation of the Indenture) and (B) Guarantees by a Restricted Subsidiary of Indebtedness Incurred by the Issuer without violation of the Indenture (so long as such Restricted Subsidiary could have Incurred such Indebtedness directly without violation of the Indenture); (ix) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument issued by the Issuer or any of its Subsidiaries drawn against insufficient 94 funds in the ordinary course of business in an amount not to exceed $250,000 at any time, PROVIDED, HOWEVER that such Indebtedness is extinguished within two business days of its incurrence; and (x) Indebtedness (other than Indebtedness described in clauses (i)-(ix)) in a principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (x) and then outstanding, will not exceed $5.0 million (it being understood that any Indebtedness Incurred under this clause (x) shall cease to be deemed Incurred or outstanding for purposes of this clause (x) (but shall be deemed to be Incurred for purposes of paragraph (a)) from and after the first date on which the Issuer or its Restricted Subsidiaries could have Incurred such Indebtedness under the foregoing paragraph (a) without reliance upon this clause (x)). (c) Notwithstanding the foregoing, neither the Issuer nor any Restricted Subsidiary shall Incur any Indebtedness under paragraph (b) above if the proceeds thereof are used, directly or indirectly, to refinance any Subordinated Obligations of the Issuer or a Restricted Subsidiary unless such Indebtedness shall be subordinated to the Notes to at least the same extent as such Subordinated Obligations. (d) Notwithstanding the foregoing, no Restricted Subsidiary shall incur any Indebtedness under clause (i) of paragraph (a) if such Indebtedness is sold pursuant to Rule 144A under the Securities Act or a public offering registered under the Securities Act. (e) The Issuer will not permit any Unrestricted Subsidiary to Incur any Indebtedness other than Non-Recourse Debt. (f) For purposes of determining any particular amount of Indebtedness under the "Limitation on Indebtedness" covenant, Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with the "Limitation on Indebtedness" covenant, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in the above clauses, the Issuer, in its sole discretion, shall classify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses. LIMITATION ON RESTRICTED PAYMENTS. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries, directly or indirectly, to (i) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) except (A) dividends or distributions payable in its Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock and (B) dividends or distributions payable to the Issuer or a Restricted Subsidiary of the Issuer which holds any equity interest in the paying Restricted Subsidiary (and if the Restricted Subsidiary paying the dividend or making the distribution is not a Wholly-Owned Subsidiary, to its other holders of Capital Stock on a PRO RATA basis), (ii) purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Issuer held by Persons other than a Wholly-Owned Subsidiary of the Issuer or any Capital Stock of a Restricted Subsidiary of the Issuer held by any Affiliate of the Issuer, other than a Wholly-Owned Subsidiary (in either case, other than in exchange for its Capital Stock (other than Disqualified Stock)), (iii) purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations (other than the purchase, repurchase or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition), (iv) make any Investment (other than a Permitted Investment) in any Person, (v) make any payment under any Performance Compensation Agreement or (vi) make any payment to Alan R. Brill (including under a Performance Compensation Agreement or in his capacity as an employee of the Issuer or any Subsidiary) except for reimbursement for advances or other out-of-pocket costs and expenses incurred in the ordinary course of business (any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement, Investment or payment as described in preceding clauses (i) through (vi) being referred to as a "Restricted 95 Payment"); if at the time the Issuer or such Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and be continuing (or would result therefrom); or (2) the Issuer is not able to incur an additional $1.00 of Indebtedness pursuant to paragraph (a) (ii) under "--Limitation on Indebtedness"; or (3) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date would exceed the sum of (A) 50% of (x) the Consolidated Net Income accrued during the period (treated as one accounting period) from the first day of the fiscal quarter beginning on or after the Issue Date to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment as to which financial results are available (but in no event ending more than 135 days prior to the date of such Restricted Payment) (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit) less (y) the aggregate amount of Restricted Payments made pursuant to clause (v) of paragraph (b); (B) the aggregate Net Cash Proceeds received by the Issuer from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date (other than net proceeds received from an issuance or sale of such Capital Stock to (x) a Subsidiary of the Issuer, (y) an employee stock ownership plan or similar trust or (z) management employees of the Issuer or any Subsidiary of the Issuer (other than sales of Capital Stock (other than Disqualified Stock) to management employees of the Issuer pursuant to BONA FIDE employee stock option plans of the Issuer); PROVIDED, HOWEVER, that the value of any non-cash net proceeds shall be as determined by the Board of Directors in good faith, except that in the event the value of any non-cash net proceeds shall be $1.0 million or more, the value shall be as determined in writing by an independent investment banking firm of nationally recognized standing; (C) the amount by which Indebtedness of the Issuer is reduced on the Issuer's balance sheet upon the conversion or exchange (other than by a Restricted Subsidiary of the Issuer) subsequent to the Issue Date of any Indebtedness of the Issuer convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Issuer (less the amount of any cash, or other property, distributed by the Issuer upon such conversion or exchange); and (D) the amount equal to the net reduction in Investments (other than Permitted Investments) made after the Issue Date by the Issuer or any of its Restricted Subsidiaries in any Person resulting from (i) repurchases or redemptions of such Investments by such Person, proceeds realized upon the sale of such Investment to an unaffiliated purchaser, repayments of loans or advances or other transfers of assets by such Person to the Issuer or any Restricted Subsidiary of the Issuer or (ii) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of "Investment") not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously included in the calculation of the amount of Restricted Payments; PROVIDED, HOWEVER, that no amount shall be included under this clause (D) to the extent it is already included in Consolidated Net Income. (b) The provisions of paragraph (a) shall not prohibit: (i) any purchase or redemption of Capital Stock or Subordinated Obligations (including, without limitation, the Appreciation Notes) of the Issuer made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Issuer (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary, an employee stock ownership plan or similar trust for management employees of the Issuer or any Subsidiary of the Issuer); PROVIDED, HOWEVER, that (A) such purchase or redemption shall be excluded in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a) and (B) the Net Cash Proceeds from such sale shall be excluded in the calculation of the amount of aggregate Net Cash Proceeds from clause (3) (B) of paragraph (a); (ii) any purchase or redemption of Subordinated Obligations of the Issuer made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of the Issuer in compliance with the "Limitation on Indebtedness" covenant; PROVIDED, HOWEVER, that such purchase or redemption shall be excluded in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a); (iii) any purchase or redemption of Subordinated Obligations from Net Available Cash to the extent permitted under "-- Limitation on Sales of Assets and Subsidiary Stock" below; PROVIDED, HOWEVER, that such purchase or redemption shall be excluded in the calculation of the aggregate amount of Restricted Payments for 96 purposes of clause (3) of paragraph (a); (iv) dividends paid within 60 days after the date of declaration if at such date of declaration such dividend would have complied with this provision; PROVIDED, HOWEVER, that such dividend shall be included in the calculation of the amount of Restricted Payments for purposes of clause (3) of paragraph (a); (v) for so long as the Issuer is not treated for tax purposes as a corporation or an association taxable as a corporation or other entity that is subject to an entity level tax for income tax purposes, distributions to each Member, as soon as practicable after the end of each calendar quarter, of an amount reasonably determined to be necessary to permit such Member to pay any federal, state or local income taxes imposed on such Member's allocable share of income from the Issuer; PROVIDED, HOWEVER, that in no event shall any distribution to a Member exceed the Tax Allowance Amount for such Member in respect of such quarter and the Issuer shall cause the Accountants to deliver to the Trustee a certificate setting forth the determination of each Member's Tax Allowance Amount within 60 days of the end of each fiscal year; (vi) payments under the Performance Compensation Agreements (other than any Performance Compensation Agreement with Alan R. Brill) not exceeding in the aggregate $500,000 in any fiscal year PROVIDED, HOWEVER, that any such payment pursuant to this clause (vi) shall be included in the calculation of the aggregate amount of Restricted Payments for purposes of clause 3 of paragraph (a); and (vii) payments in respect of the redemption of the Appreciation Notes under the Appreciation Note Indenture, PROVIDED, HOWEVER, that the Issuer is able to Incur an additional $1.00 of Subordinated Indebtedness pursuant to (a) (i) under "--Limitation on Indebtedness", and PROVIDED, FURTHER, that such payments shall be included in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a); and PROVIDED, FURTHER, that in the case of clauses (i), (ii), (iii) and (vii) and clause (vi) with respect to Performance Compensation Agreements entered into after the Issue Date, no Event of Default shall have occurred or be continuing at the time of such payment or as a result thereof. (c) For purposes of determining compliance with the foregoing covenant, Restricted Payments may be made with cash or non-cash assets, PROVIDED, HOWEVER, that any Restricted Payment made other than in cash shall be valued at the fair market value (determined, subject to the additional requirements of the immediately succeeding proviso, in good faith by the Board of Directors) of the assets so utilized in making such Restricted Payment, PROVIDED, FURTHER, that (i) in the case of any Restricted Payment made with Capital Stock or Indebtedness, such Restricted Payment shall be deemed to be made in an amount equal to the greater of the fair market value thereof and the liquidation preference (if any) or principal amount of the Capital Stock or Indebtedness, as the case may be, so utilized, and (ii) in the case of any Restricted Payment in an aggregate amount in excess of $1.0 million, a written opinion as to the fairness of the valuation thereof (as determined by the Issuer) for purposes of determining compliance with the "Limitation on Restricted Payments" covenant in the Indenture shall be issued by an independent investment banking firm of national standing. (d) Not later than the date of making any Restricted Payment or Permitted Investment described in clause (xii) of the definition thereof, the Issuer shall deliver to the Trustee an Officer's Certificate stating that such Restricted Payment or Permitted Investment, as the case may be, complies with the Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Issuer's latest available quarterly financial statements and a copy of any required investment banker's opinion. LIMITATION ON LIENS. The Issuer will not and will not permit any Restricted Subsidiary to, directly or indirectly, create or permit to exist any Liens except for Permitted Liens. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES. The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any such Restricted Subsidiary to (i) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligation owed to the Issuer or another Restricted Subsidiary, (ii) make any loans or advances to the Issuer or another Restricted Subsidiary or (iii) transfer any of its property or assets to the Issuer or another Restricted Subsidiary, except: (a) any encumbrance or restriction pursuant to an agreement in effect at or entered 97 into on the Issue Date; (b) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by the Issuer and outstanding on such date (other than Indebtedness Incurred in anticipation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of the Issuer or was acquired by the Issuer); (c) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement evidencing Indebtedness Incurred without violation of the Indenture or effecting a refinancing of Indebtedness issued pursuant to an agreement referred to in clauses (a) or (b) or this clause (c) or contained in any amendment to an agreement referred to in clauses (a) or (b) or this clause (c); PROVIDED, HOWEVER, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any of such agreement, refinancing agreement or amendment, taken as a whole, are no less favorable to the holders of the Notes in any material respect, as determined in good faith by the Board of Directors of the Issuer, than encumbrances and restrictions with respect to such Restricted Subsidiary contained in agreements in effect at, or entered into on, the Issue Date; (d) in the case of clause (iii), any encumbrance or restriction (A) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset, (B) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Issuer or any Restricted Subsidiary not otherwise prohibited by the Indenture, (C) that is included in a licensing agreement to the extent such restrictions limit the transfer of the property subject to such licensing agreement or (D) arising or agreed to in the ordinary course of business and that does not, individually or in the aggregate, detract from the value of property or assets of the Issuer or any of its Restricted Subsidiaries in any manner material to the Issuer or any such Restricted Subsidiary; (e) in the case of clause (iii) above, restrictions contained in security agreements, mortgages or similar documents securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements; (f) in the case of clause (iii) above, any instrument governing or evidencing Indebtedness of a Person acquired by the Issuer or any Restricted Subsidiary of the Issuer at the time of such acquisition, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired; PROVIDED, HOWEVER, that such Indebtedness is not incurred in connection with or in contemplation of such acquisition; (g) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and (h) encumbrances or restrictions arising or existing by reason of applicable law. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless (i) the Issuer or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the fair market value, as determined in good faith by the Issuer's Board of Directors (including as to the value of all non-cash consideration), of the shares and assets subject to such Asset Disposition, (ii) at least 80% of the consideration thereof received by the Issuer or such Restricted Subsidiary is in the form of cash or Cash Equivalents other than in the case where the Issuer or a Restricted Subsidiary is exchanging all or substantially all of the assets of one or more broadcast stations operated by the Issuer or such Restricted Subsidiary, as the case may be, (including by way of the transfer of Capital Stock) for all or substantially all of the assets (including by way of the transfer of Capital Stock) constituting one or more broadcast stations operated by another Person (an "Asset Swap"), PROVIDED, HOWEVER, that at least 80% of the consideration, if any, received by the Issuer and its Restricted Subsidiaries in such Asset Swap, other than the stock and assets of broadcast station(s), is in the form of cash or Cash Equivalents and (iii) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Issuer (or such Restricted Subsidiary, as the case may be) (A) FIRST, to the extent the Issuer or any Restricted Subsidiary elects (or is required by the terms of any Senior Secured Indebtedness), (x) to prepay, repay or purchase senior 98 secured indebtedness in each case owing to a Person other than the Issuer or any of its Subsidiaries or (y) to the investment in or acquisition of Additional Assets within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; (B) SECOND, within 365 days from the receipt of such Net Available Cash, to the extent of the balance of such Net Available Cash after application in accordance with clause (A), to make an offer to purchase Notes, at 100% of Accreted Value thereof if such purchase date occurs prior to December 15, 1999, and at 100% of the principal amount thereof if such purchase date occurs on or after December 15, 1999, in each case plus accrued and unpaid interest, if any, thereon; (C) THIRD, within 90 days after the later of the application of Net Available Cash in accordance with clauses (A) and (B) and the date that is 365 days from the receipt of such Net Available Cash, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to prepay, repay or repurchase Indebtedness (other than Preferred Stock) of a Wholly-Owned Subsidiary (in each case other than Indebtedness owed to the Issuer or a Subsidiary); and (D) FOURTH, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), to (w) the investment in or acquisition of Additional Assets, (x) the making of Temporary Cash Investments, (y) the prepayment, repayment or purchase of Indebtedness of the Issuer (other than Indebtedness owing to any Subsidiary of the Issuer) or Indebtedness of any Subsidiary (other than Indebtedness owed to the Issuer or any of its Subsidiaries) or (z) any other purpose otherwise permitted under the Indenture, in each case within the later of 45 days after the application of Net Available Cash in accordance with clauses (A), (B) and (C) or the date that is 365 days from the receipt of such Net Available Cash; PROVIDED, HOWEVER, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (A), (B), (C) or (D) above, the Issuer or such Restricted Subsidiary shall retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions, the Issuer and its Restricted Subsidiaries shall not be required to apply any Net Available Cash in accordance herewith except to the extent that the aggregate Net Available Cash from all Asset Dispositions which are not applied in accordance with this covenant at any time exceeds $10.0 million. The Issuer shall not be required to make an offer for Notes pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in clause (A)) is less than $10.0 million for any particular Asset Disposition (which lesser amounts shall be carried forward for purposes of determining whether an offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). Notwithstanding the foregoing, the Issuer will not be required to comply with the terms of this covenant to the extent such Asset Disposition consists of a sale of the Missouri Properties; PROVIDED, HOWEVER, that if the Net Available Cash from such Asset Disposition exceeds $7.5 million, the Issuer will be required to apply the amount of such excess in accordance with the provision of this covenant. For the purposes of this covenant, the following will be deemed to be cash: (x) the assumption by the transferee of Senior Secured Indebtedness of the Issuer, or Senior Secured Indebtedness of any Restricted Subsidiary of the Issuer and the release of the Issuer or such Restricted Subsidiary from all liability on such Senior Secured Indebtedness in connection with such Asset Disposition (in which case the Issuer shall, without further action, be deemed to have applied such assumed Indebtedness in accordance with clause (A) of the preceding paragraph) and (y) securities received by the Issuer or any Restricted Subsidiary of the Issuer from the transferee that are promptly (and in any event within 60 days) converted by the Issuer or such Restricted Subsidiary into cash. (b) In the event of an Asset Disposition that requires the purchase of Notes pursuant to clause (a) (iii) (B), the Issuer will be required to purchase Notes tendered pursuant to an offer by the Issuer for the Notes at a purchase price of 101% of the Accreted Value thereof or 101% of the principal amount thereof, as applicable under clause (a)(iii)(B), and in each case plus accrued and unpaid interest, if any, to the purchase date in accordance with the procedures (including prorating in the event of oversubscription) set forth in the Indenture. If the aggregate purchase price of the Notes tendered pursuant to the offer is less than the Net Available Cash allotted to the purchase of the Notes, the Issuer will apply the remaining Net Available Cash in accordance with clauses (a) (iii) (C) or (D) above. 99 (c) The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to the Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue thereof. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with or for the benefit of any Affiliate of the Issuer, other than a Wholly-Owned Subsidiary (an "Affiliate Transaction") unless: (i) the terms of such Affiliate Transaction are no less favorable to the Issuer or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time of such transaction in arm's length dealings with a Person who is not such an Affiliate; (ii) in the event such Affiliate Transaction involves an aggregate amount in excess of $200,000, the terms of such transaction have been approved by a majority of the members of the Board of Directors of the Issuer and by a majority of the disinterested members of such Board, if any (and such majority or majorities, as the case may be, determines that such Affiliate Transaction satisfies the criteria in (i) above); and (iii) in the event such Affiliate Transaction involves an aggregate amount in excess of $1.0 million, the Issuer has received a written opinion from an independent investment banking firm of nationally recognized standing that such Affiliate Transaction is fair to the Issuer or such Restricted Subsidiary, as the case may be, from a financial point of view. (b) The foregoing paragraph (a) shall not apply to (i) any Restricted Payment permitted to be made pursuant to the covenant described under "--Limitation on Restricted Payments," (ii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, or any stock options and stock ownership plans for the benefit of employees, officers and directors, consultants and advisors approved by the Board of Directors of the Issuer, (iii) loans or advances to employees in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries in aggregate amount outstanding not to exceed $250,000 to any employee or $1.0 million in the aggregate at any time, (iv) any transaction between Wholly-Owned Subsidiaries, (v) indemnification agreements with, and the payment of fees and indemnities to, directors, officers and employees of the Issuer and the Issuer's Restricted Subsidiaries and indemnification agreements with, or for the benefit of, officers and employees of BMCLP to the extent related to the performance of management services for the Issuer or any of its Subsidiaries, in each case in the ordinary course of business, (vi) transactions pursuant to agreements in existence on the Issue Date (other than with BMCLP) which are (x) described in this Offering Memorandum or (y) otherwise, in the aggregate, immaterial to the Issuer and its Restricted Subsidiaries taken as a whole, (vii) any employment, non-competition or confidentiality agreements entered into by the Issuer or any of its Restricted Subsidiaries with its employees in the ordinary course of business, (viii) the issuance of Capital Stock of the Issuer (other than Disqualified Stock); (ix) the acquisition of Managed Affiliate Notes provided that the aggregate principal amount thereof (including the Managed Affiliate Notes outstanding on the Issue Date) does not exceed $20 million at any time outstanding ; (x) the Managed Affiliate Management Agreements; and (xi) provided that no Default or Event of Default shall have occurred and be continuing, payments to BMCLP for services rendered to the Issuer and the Restricted Subsidiaries under the Administrative Management Agreements not to exceed in any fiscal year in the aggregate the remainder of (A) the lesser of (1) the greater of $2 million or 15% of Media Cashflow for such fiscal year or (2) $5 million over (B) the payments to BMCLP under management agreements between BMCLP and Managed Affiliates in such fiscal year provided that the obligations to make such payments to BMCLP under the Administrative Management Agreements constitute Subordinated Obligations and the terms of such subordination are no less favorable to the holders of senior indebtedness (including the Notes) than the terms set forth in the Administrative Management Agreements between the Issuer and BMCLP on the Issue Date. 100 LIMITATION ON ISSUANCES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES. The Issuer shall not permit any of its Restricted Subsidiaries to issue any Capital Stock to any Person (other than to the Issuer or a Wholly-Owned Subsidiary of the Issuer) or permit any Person (other than the Issuer or a Wholly-Owned Subsidiary of the Issuer) to own any Capital Stock of a Restricted Subsidiary of the Issuer, if in either case as a result thereof such Restricted Subsidiary would no longer be a Restricted Subsidiary of the Issuer; PROVIDED, HOWEVER, that this provision shall not prohibit (x) the Issuer or any of its Restricted Subsidiaries from selling, leasing or otherwise disposing of all of the Capital Stock of any Restricted Subsidiary or (y) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with the Indenture. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into, Guarantee or otherwise become liable with respect to any Sale/Leaseback Transaction with respect to any property or assets unless (i) the Issuer or such Restricted Subsidiary, as the case may be, would be entitled, pursuant to the Indenture, to Incur Indebtedness secured by a Permitted Lien on such property or assets in an amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction, (ii) the net cash proceeds from such Sale/Leaseback Transaction are at least equal to the fair market value of the property or assets subject to such Sale/Leaseback Transaction (such fair market value determined, in the event such property or assets have a fair market value in excess of $1.0 million, no more than 30 days prior to the effective date of such Sale/Leaseback Transaction, by the Board of Directors of the Issuer as evidenced by a resolution of such Board) and (iii) the net cash proceeds of such Sale/Leaseback Transaction are applied in accordance with the provisions described under "--Limitation on Sales of Assets and Subsidiary Stock." SEC REPORTS. The Issuer will file with the Trustee and provide to the holders of the Notes, within 15 days after it files them with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) which the Issuer files with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. In the event that the Issuer is not required to file such reports with the Commission pursuant to the Exchange Act, the Issuer will nevertheless deliver such Exchange Act information to the holders of the Notes within 15 days after it would have been required to file it with the Commission. LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES. The Issuer may designate any Subsidiary of the Issuer (other than a Subsidiary of the Issuer which owns Capital Stock of a Restricted Subsidiary) as an "Unrestricted Subsidiary" under the Indenture (a "Designation") only if: (a) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and (b) the Issuer would be permitted under the Indenture to make an Investment in Unrestricted Subsidiaries at the time of Designation (assuming the effectiveness of such Designation) in an amount (the "Designation Amount") equal to the sum of (i) fair market value of the Capital Stock of such Subsidiary owned by the Issuer and the Restricted Subsidiaries on such date and (ii) the aggregate amount of other Investments of the Issuer and the Restricted Subsidiaries in such Subsidiary on such date; and (c) except in the case of a newly formed or a newly acquired Subsidiary, the Issuer would be permitted to incur $1.00 of additional Indebtedness pursuant to clause (a)(ii) of the covenant described under "--Limitation on Indebtedness" at the time of Designation (assuming the effectiveness of such Designation). In the event of any such Designation, the Issuer shall be deemed to have made an Investment constituting a Restricted Payment pursuant to the covenant described under "--Limitation on Restricted Payments" for all purposes of the Indenture (including, without limitation, the definition of Permitted Investment) in the Designation Amount. The Indenture will further provide that the Issuer shall not, and 101 shall not permit any Restricted Subsidiary to, at any time (x) provide direct or indirect credit support for or a guarantee of any Indebtedness of any Unrestricted Subsidiary (including of any undertaking, agreement or instrument evidencing such Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly liable for any Indebtedness which provides that the holder thereof may (upon notice, lapse of time or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity upon the occurrence of a default with respect to any Indebtedness of any Unrestricted Subsidiary (including any right to take enforcement action against such Unrestricted Subsidiary), except, in the case of clause (x) or (y), to the extent permitted under the covenant described under "--Limitation on Restricted Payments." The Issuer may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then constitute a Restricted Subsidiary, if: (a) no Default shall have occurred and be continuing at the time of and after giving effect to such Revocation; and (b) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if Incurred at such time, have been permitted to be Incurred for all purposes of the Indenture. All Designations and Revocations must be evidenced by Board Resolutions of the Issuer delivered to the Trustee certifying compliance with the foregoing provisions. FUTURE NOTE GUARANTORS. The Issuer will cause each newly organized or acquired Restricted Subsidiary to execute and deliver to the Trustee a Subsidiary Guarantee. LIMITATION ON BUSINESS. The Issuer will not and will not permit any of its Restricted Subsidiaries to directly or indirectly engage in any business other than a Permitted Business. MERGER AND CONSOLIDATION. The Issuer shall not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Issuer) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer under the Notes and the Indenture; (ii) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; (iii) immediately after giving effect to such transaction, the Successor Company (A) shall have a Consolidated Net Worth equal or greater to the Consolidated Net Worth of the Issuer immediately prior to such transaction and (B) shall be able to incur at least an additional $1.00 of Indebtedness pursuant to paragraph (a)(ii) of the covenant described under "Limitation on Indebtedness"; (iv) the Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture; and (v) there has been delivered to the Trustee an Opinion of Counsel to the effect that holders of Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such consolidation, merger, conveyance, transfer or lease and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such consolidation, merger, conveyance, transfer or lease had not occurred. The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Indenture, but, in the case of a lease of all or substantially all its assets, the Issuer will not be released from the obligation to pay the principal of and interest on the Notes. 102 Notwithstanding the foregoing clauses (ii) and (iii), any Restricted Subsidiary of the Issuer may consolidate with, merge into or transfer all or part of its properties and assets to the Issuer or any other Restricted Subsidiary. EVENTS OF DEFAULT Each of the following constitutes an Event of Default under the Indenture: (i) a default in any payment of interest on any Note when due, continued for 30 days, (ii) a default in the payment of principal or premium of any Note when due at its Stated Maturity, upon optional or mandatory redemption, upon required repurchase, upon declaration or otherwise, (iii) the failure by the Issuer to comply with its obligations under the "--Mergers and Consolidations" covenant described under "--Certain Covenants" above or the failure to make or consummate an offer to purchase the Notes in accordance with the "-- Change of Control" or "--Limitations on Sale of Assets and Subsidiary Stock" covenants described under "--Certain Covenants" above, (iv) the failure by the Issuer to comply for 30 days after notice with any of its obligations under the covenants described under "--Certain Covenants" above, other than "Merger and Consolidation," (v) the failure by the Issuer to comply for 60 days after notice with its other agreements contained in the Indenture, (vi) Indebtedness of the Issuer or any Restricted Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $1.0 million and such default shall not have been cured after a 10-day period, (vii) certain events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary (the "bankruptcy provisions"), (viii) any judgment or decree for the payment of money in excess of $1.0 million (to the extent not covered by insurance) is rendered against the Issuer or a Significant Subsidiary and such judgment or decree shall remain undischarged or unstayed for a period of 60 days after such judgment becomes final and non-appealable (the "judgment default provision") or (ix) any Subsidiary Guarantee by a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirms its obligations under the Indenture or its Subsidiary Guarantee and such Default continues for 10 days. However, a default under clause (iv) or (v) will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of all outstanding series of Notes, voting as a single class, notify the Issuer of the default and the Issuer does not cure such default within the time specified in clause (iv) or (v) after receipt of such notice. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of all outstanding series of Notes, voting as a single class, by notice to the Issuer may declare to be immediately due and payable, (i) in the case of a declaration that occurs prior to December 15, 1999, the Accreted Value of all the Notes then outstanding plus accrued interest on the Notes to the date of acceleration, and (ii) in the case of a declaration that occurs on or after December 15, 1999, the entire principal amount of all the Notes then outstanding plus accrued interest to the date of acceleration. Upon such a declaration, such principal and premium and accrued and unpaid interest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer occurs, the principal of and premium and accrued and unpaid interest on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of all outstanding series of Notes, voting as a single class, may rescind any such acceleration with respect to the Notes and its consequences. 103 Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such holder has previously given the Trustee notice that an Event of Default is continuing, (ii) holders of at least 25% in principal amount of all outstanding series of Notes, voting as a single class, have requested the Trustee to pursue the remedy, (iii) such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the holders of a majority in principal amount of all series of outstanding Notes, acting as a single class, have not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of all outstanding series of Notes, voting as a single class, are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Notes. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. The Indenture provides that if a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each holder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, the Trustee may withhold notice if and so long as its board of directors, a committee of its board of directors or a committee of its Trust officers in good faith determines that withholding notice is in the interests of the Noteholders. In addition, the Issuer is required to deliver to the Trustee, within 90 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Issuer also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events which would constitute certain Defaults. AMENDMENTS AND WAIVERS Subject to certain exceptions, the Indenture may be amended with the consent of the holders of a majority in principal amount of all outstanding series of Notes, voting as a single class, then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of all outstanding series of Notes, voting as a single class. However, without the consent of each holder of an outstanding Note affected, no amendment may, among other things, (i) reduce the amount of Notes whose holders must consent to an amendment, (ii) reduce the stated rate of or extend the stated time for payment of interest on any Note, (iii) reduce the principal of or extend the Stated Maturity of any Note, (iv) reduce the premium payable upon the redemption or repurchase of any Note or change the time at which any Note may be redeemed as described under "--Optional Redemption" above, (v) make any note payable in money other than that stated in the Note, (vi) impair the right of any holder to receive payment of principal of and interest on such holder's Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's Notes or (vii) make any change in the amendment provisions which require each holder's consent or in the waiver provisions. Without the consent of any holder, the Issuer and the Trustee may amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor corporation, partnership, trust or limited liability company of the obligations of the Issuer under the Indenture (provided that there has been delivered to the Trustee an Opinion of Counsel to the effect that holders of 104 Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such assumption and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such assumption had not occurred), to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163 (f) (2) (B) of the Code), to the Notes, to secure the Notes, to add to the covenants of the Issuer for the benefit of the holders or to surrender any right or power conferred upon the Issuer, to make any change that does not adversely affect the rights of any holder or to comply with any requirement of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act. The consent of the holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After an amendment under the Indenture becomes effective, the Issuer is required to mail to the holders a notice briefly describing such amendment. However, the failure to give such notice to all the holders or any defect therein, will not impair or affect the validity of the amendment. DEFEASANCE The Issuer at any time may terminate all its obligations under the Notes and the Indenture ("legal defeasance"), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes. The Issuer at any time may terminate its obligations under covenants described under "--Certain Covenants" (other than "Merger and Consolidation"), the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under "--Events of Default" above and the limitations contained in clauses (iii) and (iv) under "--Certain Covenants--Merger and Consolidation" above ("covenant defeasance"). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in clause (iv), (vi), (vii) (with respect only to Significant Subsidiaries), (viii) or (ix) under "--Events of Default" above or because of the failure of the Issuer to comply with clause (iii) or (iv) under "--Certain Covenants--Merger and Consolidation" above. In order to exercise either defeasance option, the Issuer must irrevocably deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law). SATISFACTION AND DISCHARGE OF THE INDENTURE The Indenture will cease to be of further effect (except as otherwise expressly provided for in the Indenture) when either (i) all outstanding Notes have been delivered (other than lost, stolen or destroyed Notes which have been replaced) to the Trustee for cancellation or (ii) all outstanding Notes have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to the 105 terms of the Indenture and the Issuer has irrevocably deposited with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Notes, including interest thereon (other than lost, stolen, mutilated or destroyed Notes which have been replaced), and, in either case, the Issuer has paid all other sums payable under the Indenture. The Trustee is required to acknowledge satisfaction and discharge of the Indenture on demand of the Issuer accompanied by an Officer's Certificate and an Opinion of Counsel at the cost and expense of the Issuer. TRANSFER AND EXCHANGE Upon any transfer of a Note, the registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and to pay any taxes and fees required by law or permitted by the Indenture. The registrar is not required to transfer or exchange any Notes selected for redemption nor is the registrar required to transfer or exchange any Notes for a period of 15 days before a selection of Notes to be redeemed. The registered holder of a Note may be treated as the owner of it for all purposes. CONCERNING THE TRUSTEE United States Trust Company of New York is the Trustee under the Indenture and has been appointed by the Issuer as Registrar and Paying Agent with regard to the Notes. The Trustee's current address is 114 West 47th Street, New York, New York. The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim, as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined) it must eliminate such conflict or resign. The holders of a majority in aggregate principal amount of the then outstanding Notes issued under the Indenture will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee. The Indenture provides that in case an Event of Default shall occur (which shall not be cured) the Trustee will be required, in the exercise of its power, to use the degree of care that a prudent man in the conduct of his own affairs would use. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any of the holders of the Notes issued thereunder unless they shall have offered to the Trustee security and indemnity satisfactory to it. GOVERNING LAW The Indenture provides that it and the Notes will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. CERTAIN DEFINITIONS "Accountants" means Ernst & Young LLP or such other nationally recognized firm of independent certified public accountants that is reasonably acceptable to the Trustee. "Accreted Value" means, as of any date, with respect to each $1,000 principal amount at maturity of Notes: (A) if such date is prior to December 15, 1999, the sum of (1) the initial offering price of such Notes and (2) the portion of the original issue discount for such Notes (which for this purpose shall be deemed to be the excess of the principal amount over such initial offering price) which shall be amortized with respect to such Notes to but not including such date, such original issue discount to be so amortized at a rate, which together with cash interest paid on the Notes, represents a yield to maturity of 12% per annum using semiannual compounding of such rate on each June 15 and December 15, commencing June 15, 1998 (the 106 "Semi-Annual Accrual Date") from the Issue Date but not including the date of determination (the following table indicates the Accreted Value at the semiannual compounding dates of the Notes:
SEMI-ANNUAL ACCRETED ACCRUAL DATE VALUE - ------------------------------------------------------------------------------- ------------- June 15, 1998.................................................................. $ 939.82 December 15, 1998.............................................................. $ 958.71 June 15, 1999.................................................................. $ 978.73 December 15, 1999.............................................................. $ 1,000.00
and (B) if such date occurs on or after December 15, 1999, $1,000. At any time prior to December 15, 1999 and between two Semi-Annual Accrual Dates, the Accreted Value will be the sum of (1) the Accreted Value for the Semi-Annual Accrual Date immediately preceding the date of determination, and (2) the Proportionate Share (as defined below). The "Proportionate Share" is an amount equal to the product of (i) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Date times (ii) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the date of such determination, using a 360-day year of twelve 30-day months, and the denominator of which is 180. "Additional Assets" means (i) any property or assets (other than Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Issuer or a Restricted Subsidiary of the Issuer; (iii) Capital Stock constituting a minority interest in any person that at such time is a Restricted Subsidiary of the Issuer; or (iv) Permitted Investments of the type and in the amounts described in clause (viii) of the definition thereof; provided, however, that, in the case of clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a Permitted Business. "Adjusted Net Assets" of a Subsidiary Guarantor at any date means the lesser of the amount by which (x) the fair value of the property of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, the probable liability of such Subsidiary Guarantor with respect to its contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the present fair salable value of the assets of such Subsidiary Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Subsidiary Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date and after giving effect to any collection from any Subsidiary by such Subsidiary Guarantor in respect of the obligations of such Subsidiary under the Subsidiary Guarantee), excluding debt in respect of the Subsidiary Guarantee, as they become absolute and matured. "Affiliate" of any specified person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Appreciation Notes" means the Appreciation Notes due 2007. "Appreciation Note Indenture" means the Indenture, dated as of the Issue Date, between the Issuer and the United States Trust Company of New York relating to the Appreciation Notes as in effect on the Issue Date and without giving effect to any modification or amendment thereto made after the Issue Date. 107 "Asset Acquisition" means (i) an investment by the Issuer or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be merged into or consolidated with the Issuer or any of its Restricted Subsidiaries or (ii) an acquisition by the Issuer or any of its Restricted Subsidiaries of the property and assets of any Person other than the Issuer or any of its Restricted Subsidiaries that constitute substantially all of a division or line of business of such Person. "Asset Disposition" means any sale, lease, transfer, issuance or other disposition (or series of related sales, leases, transfers, issuances or dispositions that are part of a common plan) of shares of Capital Stock of (or any other equity interests in) a Restricted Subsidiary (other than directors' qualifying shares) or of any other property or other assets (each referred to for the purposes of this definition as a "disposition") by the Issuer or any of its Restricted Subsidiaries (including any disposition by means of a merger, consolidation or similar transaction) other than (i) a disposition by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) a disposition of inventory in the ordinary course of business, (iii) a disposition of obsolete or worn out equipment or equipment that is no longer useful in the conduct of the business of the Issuer and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business, (iv) dispositions of property for net proceeds which, when taken collectively with the net proceeds of any other such dispositions under this clause (iv) that were consummated since the beginning of the calendar year in which such disposition is consummated, do not exceed $1.0 million, and (v) transactions permitted under "--Certain Covenants-- Merger and Consolidation" above. Notwithstanding anything to the contrary contained above, a Restricted Payment made in compliance with the "Limitation on Restricted Payments" covenant shall not constitute an Asset Disposition except for purposes of determinations of the Consolidated Leverage Ratio. "Average Life" means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing (i) the sum of the product of the numbers of years (rounded upwards to the nearest month) from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption multiplied by the amount of such payment by (ii) the sum of all such payments. "Board of Directors" means, as to the Issuer (i) so long as BMC or any successor to BMC is a limited liability company or partnership, the board of directors of Brill Media Management, Inc. which is the manager of BMC and (ii) at any other time the Board of Directors of the Issuer. "Capital Stock" of any Person means any and all shares, membership and other interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligations" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof, (iii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500 million, (iv) repurchase obligations for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by Moody's or S&P and in each case maturing within one year after the date of acquisition, (iv) investment funds investing 95% of their assets in securities of the types 108 described in clauses (i)-(v) above, (vii) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P and (viii) Indebtedness or preferred stock issued by Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's. "Change of Control" means, (i) any sale, lease, exchange or other transfer (collectively, a "Transfer") (in one transaction or a series of related transactions) of all or substantially all of the assets of the Issuer or the Issuer and its Restricted Subsidiaries on a consolidated basis or (ii) a majority of the Board of Directors of the Issuer or of any direct or indirect holding company thereof shall consist of Persons who are not Continuing Directors of the Issuer; or (iii) the acquisition by any Person or Group (other than Alan R. Brill or any Related Brill Party) of the power, directly or indirectly, to vote or direct the voting of securities having more than 35% of the ordinary voting power for the election of directors of the Issuer, or any direct or indirect holding company thereof; PROVIDED, HOWEVER that no Change of Control shall be deemed to occur pursuant to this clause (iii), so long as Alan R. Brill and the Related Brill Parties collectively own an amount of securities representing the power, directly or indirectly, to vote or direct the voting of securities having more than 50% of the ordinary voting power for the election of directors of the Issuer or of any direct or indirect holding company thereof. "Consolidated EBITDA" means, for any period an amount equal to Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (i) the provision for taxes for such period based on income or profits and any provision for taxes utilized in computing net loss, (ii) Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization expense (including the amortization of debt issuance costs), (v) all other non-cash items reducing Consolidated Net Income for such period (excluding any non-cash item to the extent it represents an accrual of or reserve for cash disbursements for any subsequent period prior to the Stated Maturity of the Notes or amortization of a pre-paid cash expense that was paid in a prior period), minus (b) all non-cash items increasing Consolidated Net Income for such period, in each case for the Issuer and its Restricted Subsidiaries for such period determined in accordance with GAAP, PROVIDED, HOWEVER, that, for purposes of calculating Consolidated EBITDA during any fiscal quarter, cash income from a particular Investment (other than a Managed Affiliate Note) of such Person shall be included only (x) if cash income has been received by such Person with respect to such Investment during each of the previous four fiscal quarters, or (y) if the cash income derived from such Investment is attributable to Temporary Cash Investments. "Consolidated Interest Expense" means, for any period, the total interest expense of the Issuer and its Restricted Subsidiaries determined in accordance with GAAP, PLUS, to the extent not included in such interest expense (i) interest expense attributable to Capitalized Lease Obligations, (ii) capitalized interest, (iii) non-cash interest expense, (iv) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (v) interest actually paid by the Issuer or any such Restricted Subsidiary under any Guarantee of Indebtedness or other obligation of any other Person, (vi) net payments (whether positive or negative) pursuant to Interest Rate Agreements, (vii) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Issuer) in connection with Indebtedness Incurred by such plan or trust and (viii) cash and Disqualified Stock dividends in respect of all Preferred Stock of Subsidiaries and Disqualified Stock of the Issuer held by Persons other than the Issuer or a Wholly-Owned Subsidiary and less (a) to the extent included in such interest expense, the amortization of capitalized debt issuance costs and (b) interest income. Notwithstanding the foregoing, the Consolidated Interest Expense with respect to any Restricted Subsidiary of the Issuer, that was not a Wholly-Owned Subsidiary, shall be included only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income. "Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of (i) the aggregate amount of Indebtedness of the Issuer and its Restricted Subsidiaries on a consolidated basis outstanding on such Transaction Date (other than Indebtedness under the Appreciation Notes) less the cash and Cash 109 Equivalents held by the Issuer and its Restricted Subsidiaries on a consolidated basis on such Transaction Date to (ii) the amount of Media Cashflow for the then most recent four fiscal quarters for which financial statements of the Issuer have been filed with the Commission or provided to the Trustee pursuant to the "SEC Reports" covenant described in the Indenture (such four fiscal quarter period being the "Four Quarter Period"); PROVIDED, HOWEVER that, in making the foregoing calculation, (A) PRO FORMA effect shall be given to any Indebtedness to be Incurred or repaid on the Transaction Date; (B) PRO FORMA effect shall be given to Asset Dispositions and Asset Acquisitions (including giving PRO FORMA effect to the application of proceeds of any Asset Disposition) that occur from the beginning of the Four Quarter Period through and including the Transaction Date (the "Reference Period"), as if they had occurred and such proceeds had been applied on the first day of such Reference Period; and (C) PRO FORMA effect shall be given to asset dispositions and asset acquisitions (including giving PRO FORMA effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into the Issuer or any Restricted Subsidiary during such Reference Period and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset disposition or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period; PROVIDED, FURTHER that to the extent that clause (B) or (C) of this sentence requires that PRO FORMA effect be given to an Asset Acquisition or Asset Disposition, such PRO FORMA calculation shall be based upon the four full fiscal quarters immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed of for which financial information is available. "Consolidated Net Income" means, for any period, the consolidated net income (loss) of the Issuer and its consolidated Restricted Subsidiaries determined in accordance with GAAP; PROVIDED, HOWEVER, that there shall not be included in such Consolidated Net Income: (i) any net income (loss) of any person acquired by the Issuer or any of its Restricted Subsidiaries in a pooling of interests transaction for any period prior to the date of such acquisition, (ii) any net income of any Restricted Subsidiary of the Issuer if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Issuer (other than restrictions in effect on the Issue Date with respect to a Restricted Subsidiary of the Issuer and other than restrictions that are created or exist in compliance with the "Limitation on Restrictions on Distributions from Restricted Subsidiaries" covenant), (iii) any gain or loss realized upon the sale or other disposition of any assets of the Issuer or its consolidated Restricted Subsidiaries (including pursuant to any Sale/ Leaseback Transaction) which are not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person, (iv) any extraordinary gain or loss, (v) the cumulative effect of a change in accounting principles, (vi) the net income of any Person, other than a Restricted Subsidiary, except to the extent of the lesser of (A) cash dividends or distributions actually paid to the Issuer or any of its Restricted Subsidiaries by such Person and (B) the net income of such Person (but in no event less than zero), and the net loss of such Person (other than an Unrestricted Subsidiary) shall be included only to the extent of the aggregate Investment of the Issuer or any of its Restricted Subsidiaries in such Person and (vii) any non-cash expenses attributable to grants or exercises of employee stock options. Notwithstanding the foregoing, for the purpose of the covenant described under "--Certain Covenants--Limitation on Restricted Payments" only, (x) there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Issuer or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a) (3) (D) thereof and (y) there shall be added to Consolidated Net Income the amount of any accruals under the Performance Compensation Agreements to the extent deducted in determining such Consolidated Net Income. "Consolidated Net Worth" means the total of the amounts shown on the balance sheet of the Issuer and its consolidated Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the end of the most recent fiscal quarter of the Issuer ending prior to the taking of any action for the 110 purpose of which the determination is being made and for which financial statements are available (but in no event ending more than 135 days prior to the taking of such action), as (i) the par or stated value of all outstanding Capital Stock of the Issuer plus (ii) paid in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock. "Consolidated Senior Leverage Ratio" means, on any Transaction Date, the Consolidated Leverage Ratio on such Transaction Date; PROVIDED, HOWEVER, that the reference to "Indebtedness" in clause (i) of the definition of Consolidated Leverage Ratio shall be deemed to be a reference to "Senior Indebtedness." "Consolidated Senior Secured Leverage Ratio" means, on any Transaction Date, the Consolidated Leverage Ratio on such Transaction Date; PROVIDED, HOWEVER, that the reference to "Indebtedness" in clause (i) of the definition of Consolidated Leverage Ratio shall be deemed to be a reference to "Senior Secured Indebtedness." "Consolidated Unrestricted Subsidiary Advance Leverage Ratio" means, on any Transaction Date, the Consolidated Leverage Ratio on such Transaction Date; PROVIDED, HOWEVER, that clause (i) of the definition of Consolidated Leverage Ratio shall be deemed to be a reference to "Unrestricted Subsidiary Advances." "Continuing Director" of any Person means, as of the date of determination, any Person who (i) was a member of the Board of Directors of such Person on the date of the Indenture or (ii) was nominated for election or elected to the Board of Directors of such Person with the affirmative vote of a majority of the Continuing Directors of such Person who were members of such Board of Directors at the time of such nomination or election. "Currency Agreement" means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement as to which such Person is a party or a beneficiary. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Disqualified Stock" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event (other than an event which would constitute a Change of Control), (i) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the final Stated Maturity of the Notes, or (ii) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (a) debt securities or (b) any Capital Stock referred to in (i) above, in each case at any time prior to the final Stated Maturity of the Notes. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, or any successor statute or statutes thereto. "Existing Indebtedness" means Indebtedness of the Issuer or its Restricted Subsidiaries in existence on the Issue Date, plus interest accrued thereon, after application of the net proceeds of the Notes as described in this Offering Memorandum. "fair market value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of the Issuer acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Issuer delivered to the Trustee. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the date of the Indenture, including those set forth in the opinions and pronouncements of the 111 Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in the Indenture shall be computed in conformity with GAAP. "Group" means any "group" for purposes of Section 13(d) of the Exchange Act. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Incur" means issue, assume, guarantee, incur or otherwise become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary. "Indebtedness" means, with respect to any Person on any date of determination (without duplication), (i) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money, (ii) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto) (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i), (ii) and (v) ) entered into in the ordinary course of business of such Person to the extent that such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third business day following receipt by such Person of a demand for reimbursement following payment on the letter of credit), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except (x) trade payables and accrued expenses (including accrued management fees under the Administrative Managment Agreements) incurred in the ordinary course of business and (y) contingent or "earnout" payment obligations in respect of any Permitted Business acquired by the Issuer or any Restricted Subsidiary), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, (v) all Capitalized Lease Obligations and all Attributable Indebtedness of such Person, (vi) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, (vii) all Indebtedness of other Persons to the extent Guaranteed by such Person, (viii) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Restricted Subsidiary of the Issuer, any Preferred Stock of such Restricted Subsidiary to the extent such obligation arises on or before the final Stated Maturity of the Notes (but excluding, in each case, accrued dividends) with the amount of Indebtedness represented by such Disqualified Stock or Preferred Stock, as the case may be, being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price; PROVIDED, HOWEVER, that, for purposes hereof the "maximum fixed repurchase price" of any Disqualified Stock or Preferred Stock, as the case may be, which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock, as the case may be, as if such Disqualified Stock or Preferred Stock, as the case may be, were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based on the fair market value of such Disqualified Stock or Preferred Stock, as the case may be, such fair market 112 value shall be determined in good faith by the Board of Directors of the Issuer and (ix) to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements. Unless specifically set forth above, the amount of Indebtedness of any Person at any date shall be the outstanding principal amount of all unconditional obligations as described above, as such amount would be reflected on a balance sheet prepared in accordance with GAAP, and the maximum liability of such Person, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations described above at such date. Notwithstanding the foregoing, Indebtedness shall not include any accrued obligations under Performance Compensation Agreements. "Interest Rate Agreement" means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary. "Investment" in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts payable on the balance sheet of such Person) or other extension of credit (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. For purposes of the "Limitation on Restricted Payments" covenant, (i) "Investment" shall include the portion (proportionate to the Issuer's equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary of the Issuer at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Issuer's "Investment" in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time that such Subsidiary is so redesignated a Restricted Subsidiary; and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors and evidenced by a resolution of such Board of Directors certified in an Officers' Certificate to the Trustee. "Issue Date" means the date on which the Notes are originally issued. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Managed Affiliate", solely for purposes of this Description of Notes, means a Person at least 90% of the Capital Stock of which is owned, directly or indirectly, by Alan R. Brill; PROVIDED HOWEVER, that (i) such Person is engaged solely in a Permitted Business, (ii) such Person is a party to a Managed Affiliate Management Agreement and (iii) except in the case of TSB III, LLC and TSB IV, LLC the business of such Person is acquired by Alan R. Brill, directly or indirectly, after the Issue Date. "Managed Affiliate Notes" mean any promissory notes of a Managed Affiliate, issued to the Issuer or a Restricted Subsidiary, each of which promissory notes shall (i) mature on a day no later than the third anniversary of the date of issuance thereof, (ii) become immediately due and payable upon (w) the default by such Managed Affiliate under the Managed Affiliate Management Agreement to which it is party or (x) the issuer thereunder ceasing to constitute a Managed Affiliate or (y) the acceleration of the Notes or (z) on the bankruptcy, insolvency or reorganization of the Issuer and (iii) bear interest payable in cash no less often than semi-annually at a rate per annum no less than the rate of interest payable on the Notes. Each Managed Affiliate Note shall provide that the payment of any management fee by the relevant Managed 113 Affiliate pursuant to any management agreement (other than a Managed Affiliate Management Agreement) with an Affiliate of the Issuer or such Managed Affiliate shall be subordinated to the obligations of the relevant Managed Affiliate under such Managed Affiliate Note to the same extent as the obligations of the Issuer and the Subsidiary Guarantors under the Administrative Management Agreements are subordinated to the obligations of such persons under the Notes and the Subsidiary Guarantees. "Managed Affiliate Management Agreement" means any agreement between a Restricted Subsidiary, on the one hand, and a Managed Affiliate, on the other hand, providing for the payment by such Managed Affiliate to one or more Restricted Subsidiaries of a cash management fee payable at least semi annually equal to a specified percentage of the excess cash flow of such Managed Affiliate as defined in such agreement. "Media Cashflow" for any period means for any Person an amount equal to Consolidated EBITDA for such period plus interest income received in respect of the Managed Affiliate Notes during such period and the following to the extent deducted in calculating such Consolidated EBITDA (i) management fees charged by BMCLP under the Administrative Management Agreements, (ii) expenses accruing under Performance Compensation Agreements , (iii) consulting fees payable in connection with acquisitions and (iv) fees paid under Time Brokerage Agreements. "Member" means any Person who holds a membership interest in the Issuer. "Missouri Properties" means the radio stations KLIK-AM, KTXY-FM and KATI-FM serving Jefferson City, MO. "Net Available Cash" from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets subject to such Asset Disposition) therefrom in each case net of (i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition, (ii) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition or by applicable law, be repaid out of the proceeds from such Asset Disposition, (iii) all distributions and other payments required to be made to any Person owning a beneficial interest in assets subject to sale or minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition, (iv) the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by the Issuer or any Restricted Subsidiary of the Issuer after such Asset Disposition, PROVIDED, HOWEVER, that upon any reduction in such reserves (other than to the extent resulting from payments of the respective reserved liabilities), Net Available Cash shall be increased by the amount of such reduction to reserves, and (v) any portion of the purchase price from an Asset Disposition placed in escrow (whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Disposition or otherwise in connection with such Asset Disposition); PROVIDED, HOWEVER, that upon the termination of such escrow, Net Available Cash shall be increased by any portion of funds therein released to the Issuer or any Restricted Subsidiary. 114 "Net Cash Proceeds," with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees or expenses actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale. "Non-Recourse Debt" means Indebtedness (i) as to which neither the Issuer nor any Restricted Subsidiary (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor, general partner or otherwise) and (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Issuer or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity. "Officer" means the Chairman of the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer or the Secretary of the Issuer. "Officer's Certificate" means a certificate signed by two Officers of the Issuer at least one of whom shall be the principal executive, financial or accounting officer of the Issuer. "Opinion of Counsel" means a written opinion, in form and substance acceptable to the Trustee, from legal counsel who is acceptable to the Trustee. "Paying Agent" means United States Trust Company of New York. "Performance Compensation Agreement" means any agreements between the Issuer or any Restricted Subsidiary and any executive officer of such Subsidiary pursuant to which such Subsidiary provides deferred compensation to such officer by crediting amounts (as determined under a formula set forth in such agreement) to an identified account for the benefit of such executive officer. Future Performance Compensation Agreements shall provide that no payment shall be required to be made by the Issuer or any Restricted Subsidiary thereunder if such payment is not permitted under the Indenture and that the Issuer's and the Restricted Subsidiary's obligations to make payments thereunder shall be subordinated to (i) the obligations of the Issuer and the Subsidiary Guarantors under the Notes and the Subsidiary Guarantees and (ii) the obligations of the Issuer and the Subsidiary Guarantors under the Appreciation Notes and the Guarantees thereof. "Permitted Business" means any business which is the same as or related, ancillary or complementary to any of the businesses of the Issuer and its Restricted Subsidiaries on the date of the Indenture, as reasonably determined by the Issuer's Board of Directors. "Permitted Investment" means an Investment by the Issuer or any of its Restricted Subsidiaries in (i) a Wholly-Owned Subsidiary of the Issuer; PROVIDED, HOWEVER, that the primary business of such Wholly-Owned Subsidiary is a Permitted Business; (ii) another Person if as a result of such Investment such other Person becomes a Wholly-Owned Subsidiary of the Issuer or is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Issuer or a Wholly-Owned Subsidiary of the Issuer; PROVIDED, HOWEVER, that in each case such Person's primary business is a Permitted Business; (iii) Temporary Cash Investments; (iv) receivables owing to the Issuer or any of its Restricted Subsidiaries, created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (v) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (vi) loans and advances to employees made in the ordinary course of business consistent with past practices of the Issuer or such Restricted Subsidiary in an aggregate amount outstanding at any one time not to exceed $250,000 to any one employee or $1.0 million in the aggregate; (vii) stock, obligations or securities received in settlement of debts created in the ordinary course of 115 business and owing to the Issuer or any of its Restricted Subsidiaries or in satisfaction of judgments or claims; (viii) a Person engaged in a Permitted Business or a loan or advance by the Issuer the proceeds of which are used solely to make an investment in a Person engaged in a Permitted Business or a Guarantee by the Issuer of Indebtedness of any Person in which such Investment has been made PROVIDED, HOWEVER, that no Permitted Investments may be made pursuant to this clause (viii) to the extent the amount thereof would, when taken together with all other Permitted Investments made pursuant to this clause (viii), exceed $5.0 million in the aggregate (plus, to the extent not previously reinvested, any return of capital realized on Permitted Investments made pursuant to this clause (viii), or any release or other cancellation of any Guarantee constituting such Permitted Investment); (ix) Persons to the extent such Investment is received by the Issuer or any Restricted Subsidiary as consideration for asset dispositions effected in compliance with the covenant described under "Certain Covenants--Limitations on Sales of Assets and Subsidiary Stock"; (x) prepayments and other credits to suppliers made in the ordinary course of business consistent with the past practices of the Issuer and its Restricted Subsidiaries, (xi) the Managed Affiliate Note; PROVIDED, HOWEVER, that the aggregate principal amount thereof (including any Managed Affiliate Notes outstanding on the Issue Date) does not exceed $20 million at any time outstanding, (xii) loans to Unrestricted Subsidiaries; PROVIDED, HOWEVER, that (1) no Default or Event of Default shall have occurred and be continuing at the time of the Incurrence thereof by the relevant Unrestricted Subsidiary or would occur as a consequence thereof and the Consolidated Unrestricted Subsidiary Advance Leverage Ratio would not be greater than 2.00 to 1.00, (2) such advances are senior to all other Indebtedness of the relevant Unrestricted Subsidiary other than Capitalized Lease Obligations, mortgage financing or purchase money obligations outstanding on the date on which such Unrestricted Subsidiary was acquired, directly or indirectly, by the Issuer or the date such Subsidiary was designated an Unrestricted Subsidiary (other than Indebtedness Incurred in anticipation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Unrestricted Subsidiary became a Subsidiary or was otherwise acquired by the Issuer or was designated as an Unrestricted Subsidiary) and (3) such Unrestricted Subsidiary is engaged primarily in a Permitted Business; and (xiii) Investments in connection with pledges, deposits, payments or performance bonds made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations. "Permitted Liens" means: (i) pledges or deposits by the Issuer or any Restricted Subsidiary under workmen's compensation laws, unemployment insurance laws, other types of social security benefits or similar legislation, or good faith deposits in connection with bids, tenders or contracts (other than for the payment of Indebtedness) or leases to which the Issuer or any Restricted Subsidiary is a party, or deposits to secure public or statutory obligations or deposits of cash or United States government bonds to secure surety or appeal bonds to which the Issuer or any Restricted Subsidiary is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred by the Issuer or any Restricted Subsidiary in the ordinary course of business consistent with past practice; (ii) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens, in each case for sums not yet due from the Issuer or any Restricted Subsidiary or being contested in good faith by appropriate proceedings by the Issuer or any Restricted Subsidiary, as the case may be, or other Liens arising out of judgments or awards against the Issuer or any Restricted Subsidiary with respect to which the Issuer or such Restricted Subsidiary, as the case may be, will then be prosecuting an appeal or other proceedings for review; (iii) Liens for property taxes or other taxes, assessments or governmental charges of the Issuer or any Restricted Subsidiary not yet due or payable or subject to penalties for nonpayment or which are being contested by the Issuer or such Restricted Subsidiary, as the case may be, in good faith by appropriate proceedings; (iv) Liens in favor of issuers of performance bonds and surety bonds issued pursuant to clause (b)(v) under "--Certain Covenants--Limitation on Indebtedness"; (v) survey exceptions, encumbrances, easements or, reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes or zoning or other restrictions as to the use of real property of the Issuer or any Restricted Subsidiary incidental to the ordinary course of conduct of the business of 116 the Issuer or such Restricted Subsidiary or as to the ownership of properties of the Issuer or any Restricted subsidiary, which, in either case, were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of the Issuer or any Restricted subsidiary; (vi) Liens to secure Indebtedness permitted under clause (b)(i) under "--Certain Covenants--Limitation on Indebtedness"; (vii) Liens outstanding immediately after the Issue Date as set forth on Schedule II to the Indenture (and not otherwise permitted by clause (vi)); (viii) Liens on property, assets or shares of stock of any Restricted Subsidiary at the time such Restricted Subsidiary became a Subsidiary of the Issuer; PROVIDED, HOWEVER, that (A) if any such Lien has been Incurred in anticipation of such transaction, such property, assets or shares of stock subject to such Lien will have a fair market value at the date of the acquisition thereof not in excess of the lesser of (1) the aggregate purchase price paid or owed by the Issuer in connection with the acquisition of such Restricted Subsidiary and (2) the fair market value of all property and assets of such Restricted Subsidiary and (B) any such Lien will not extend to any other assets owned by the Issuer or any Restricted Subsidiary; (ix) Liens on property or assets at the time the Issuer or any Restricted Subsidiary acquired such assets, including any acquisition by means of a merger or consolidation with or into the Issuer or such Restricted Subsidiary; PROVIDED, HOWEVER, that (A) if any such Lien is Incurred in anticipation of such transaction, such property or assets subject to such Lien will have a fair market value at the date of the acquisition thereof not in excess of the lesser of the aggregate purchase price paid or owed by the Issuer or such Restricted Subsidiary in connection with the acquisition thereof and of any other property and assets acquired simultaneously therewith and (2) the fair market value of all such property and assets acquired by the Issuer or such Restricted Subsidiary and (B) any such Lien will not extend to any other property or assets owned by the Issuer or any Restricted Subsidiary; (x) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or a Wholly Owned Subsidiary; (xi) Liens to secure any extension, renewal, refinancing, replacement or refunding (or successive extensions, renewals, refinancings, replacements or refundings), in whole or in part, of any Indebtedness secured by Liens referred to in any of clauses (vii), (viii) and (ix); PROVIDED, HOWEVER, that any such Lien will be limited to all or part of the same property or assets that secured the original Lien (plus improvements on such property) and the aggregate principal amount of Indebtedness that is secured by such Lien will not be increased to an amount greater than the sum of (A) the outstanding principal amount, or, if greater, the committed amount, of the Indebtedness described under clauses (vii), (viii) and (ix) at the time the original Lien became a Permitted Lien under the Indenture and (B) an amount necessary to pay any premiums, fees and other expenses Incurred by the Issuer in connection with such refinancing, refunding, extension, renewal or replacement; (xii) Liens on property or assets of the Issuer securing Interest Rate Agreements and Currency Agreements, permitted under "--Certain Covenants--Limitation on Indebtedness", so long as the related Indebtedness is secured by a Lien on the same property securing the relevant Interest Rate Agreement or Currency Agreement; (xiii) Liens on property or assets of the Issuer or any Restricted Subsidiary securing Indebtedness under Sale/Leaseback Transactions permitted under "--Certain Covenants--Limitation on Sale/Leaseback Transactions"; PROVIDED, HOWEVER, that (A) the amount of Indebtedness Incurred in any specific case does not, at the time such Indebtedness is Incurred, exceed the lesser of the cost or fair market value of the property or asset subject to such Sale/Leaseback Transaction, (B) such Lien will attach to such property or asset upon commencement of such Sale/Leaseback Transaction and (C) no property or asset of the Issuer or any Restricted Subsidiary (other than the property subject to such Sale/Leaseback Transaction) are subject to any Lien securing such Indebtedness; and (ix) Liens securing Indebtedness permitted to be secured pursuant to the proviso to clause (ii) of paragraph (a) under "-- Certain Covenants--Limitation on Indebtedness." "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock," as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the 117 distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. "Public Equity Offering," means underwritten public offerings or quotations or placements of Capital Stock of the Issuer (other than Disqualified Stock) which has been registered with the Commission under the Securities Act. "Refinancing Indebtedness" means Indebtedness that refunds, refinances, replaces, renews, repays or extends (including pursuant to any defeasance or discharge mechanism) (collectively, "refinances," and "refinanced" shall have a correlative meaning) any Indebtedness existing on the date of the Indenture or Incurred in compliance with the Indenture (including Indebtedness of the Issuer that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that (i) the Refinancing Indebtedness has a Stated Maturity no earlier than the earlier of (A) the first anniversary of the Stated Maturity of the Notes and (B) Stated Maturity of the Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the lesser of (A) the Average Life of the Notes and (B) the Average Life of the Indebtedness being refinanced; and (iii) the Refinancing Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to (or 101% of, in the case of a refinancing of the Notes in connection with a Change of Control) or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus the amount of any premium required to be paid in connection therewith and reasonable fees and expenses therewith); PROVIDED, HOWEVER, that if the Indebtedness being refinanced is Existing Indebtedness which was a purchase money obligation, mortgage or Capital Lease the Refinancing Indebtedness is an aggregate principal amount that is equal to or less than the lesser of the original principal amount of such Existing Indebtedness and the fair market value (determined on the date of such Refinancing Indebtedness is Incurred) of the personal property securing such Existing Indebtedness or the personal property of similar nature and quality replacing such personal property; PROVIDED, FURTHER, that Refinancing Indebtedness shall not include Indebtedness of a Subsidiary which refinances Indebtedness of the Issuer. "Related Brill Party" means (A) the spouse or immediate family member of Alan R. Brill or (B) any trust, corporation, partnership or other entity, the beneficiaries, shareholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of Alan R. Brill and/or such other Persons referred to in the immediately preceding clause (A). "Restricted Subsidiary" means any Subsidiary of the Issuer other than an Unrestricted Subsidiary. "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or a Subsidiary leases it from such Person. "Senior Indebtedness" means all Indebtedness of the Issuer and its Restricted Subsidiaries other than Subordinated Obligations. "Senior Secured Indebtedness" means Indebtedness of the Issuer and its Restricted Subsidiaries which is secured by a Lien; PROVIDED, HOWEVER, that for purposes of the Consolidated Senior Secured Leverage Ratio the full amount of Senior Secured Indebtedness permitted to be outstanding under clause (i) of paragraph (b) under "--Certain Covenants--Limitation on Indebtedness" shall be deemed to be outstanding. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. 118 "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision. "Subordinated Obligation" means any Indebtedness of the Issuer or a Restricted Subsidiary (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the Notes and the Subsidiary Guarantees pursuant to a written agreement. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary shall refer to a Subsidiary of the Issuer. "Subsidiary Guarantee" means the Guarantee of the Notes by a Subsidiary Guarantor. "Subsidiary Guarantor" means each Subsidiary of the Issuer on the Issue Date and each newly organized or acquired Restricted Subsidiary. "Tax Allowance Amount" means, with respect to any Member, for any calendar quarter, (i) forty percent (40%) of the excess of (a) the estimated taxable income allocable to such Member arising from its ownership of an interest in the Issuer for the fiscal year through such calendar quarter over (b) any losses of the Issuer for prior fiscal years and such fiscal year that are allocable to such Member that were not previously utilized in the calculation of Tax Allowance Amounts for any period minus (ii) prior distributions of Tax Allowance Amounts for such fiscal year, all as determined by the Accountants in good faith. The amount so determined by the Accountants shall be the Tax Allowance Amount for such period and shall be final and binding on all Members. "Temporary Cash Investments" means any of the following: (i) any Investment in direct obligations of the United States of America or any agency thereof or obligations Guaranteed by the United States of America or any agency thereof, (ii) Investments in time deposit accounts, certificates of deposit and money market deposits maturing within 365 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital surplus and undivided profits aggregating in excess of $250 million (or the foreign currency equivalent thereof) and whose long-term debt, or whose parent holding company's long-term debt, is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act), (iii) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (i) above entered into with a bank meeting the qualifications described in clause (ii) above, (iv) Investments in commercial paper, maturing not more than 365 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Issuer) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of "P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings Group, (v) Investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by Standard & Poor's Ratings Group or "A" by Moody's Investors Service, Inc. and (vi) Investments in mutual funds whose investment guidelines restrict such funds' investments to those satisfying the provisions of clauses (i) through (v) above. 119 "Transaction Date" means, with respect to the Incurrence of any Indebtedness by the Issuer or any of its Subsidiaries, the date such Indebtedness is to be Incurred. "Unrestricted Subsidiary" means (i) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any Restricted Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED, HOWEVER, that each Subsidiary to be so designated and each of its Subsidiaries has not at the time of such designation, and does not thereafter create, Incur, issue, assume, guarantee or otherwise becomes liable with respect to any Indebtedness other than Non-Recourse Debt and either (A) the Subsidiary to be so designated has total consolidated assets of $10,000 or less or (B) if such Subsidiary has consolidated assets greater than $10,000, then such designation would be permitted under "--Certain Covenants--Limitation on Restricted Payments." The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary subject to the limitations contained in "--Certain Covenants--Limitation on Designations of Unrestricted Subsidiaries." "Unrestricted Subsidiary Advance" means loans made by the Issuer and its Restricted Subsidiaries to Unrestricted Subsidiaries. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option. "Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Issuer, at least 95% of the Capital Stock of which (other than directors' qualifying shares) is owned by the Issuer or another Wholly-Owned Subsidiary. 120 DESCRIPTION OF APPRECIATION NOTES GENERAL The Original Appreciation Notes were issued, and the Exchange Appreciation Notes are to be issued, under an indenture, dated as of December 30, 1997 (the "Appreciation Note Indenture"), between the Issuer and United States Trust Company of New York, as trustee (the "Trustee"), a copy of which is available upon request to the Issuer. The following is a summary of certain provisions of the Appreciation Note Indenture and the Appreciation Notes and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Appreciation Note Indenture (including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended) and the Appreciation Notes. The definition of certain capitalized terms used in the following summary are set forth below under "Certain Definitions". Principal of, and interest and premium, if any, on the Appreciation Notes will be payable, and the Appreciation Notes may be exchanged or transferred, at the office or agency of the Issuer in the Borough of Manhattan, The City of New York (which initially shall be the corporate trust office of the Trustee in New York, New York). Initially, the Trustee will act as Paying Agent and Registrar for the Appreciation Notes. The Appreciation Notes may be presented for registration of transfer and exchange at the offices of the Registrar, which initially will be the Trustee's corporate trust office. The Issuer may change any Paying Agent and Registrar without notice to holders of the Appreciation Notes. The Appreciation Notes will be issued only in fully registered form, without coupons, in denominations of any integral multiple of approximately $28.57. No service charge will be made for any registration of transfer or exchange of Appreciation Notes, but the Issuer may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith. TERMS OF APPRECIATION NOTES The Appreciation Notes will mature on December 15, 2007 (the "Maturity Date"). Each Appreciation Note will entitle the holder thereof to receive on the Maturity Date a cash payment of principal and interest in the amount equal to (i) the principal amount thereof plus (ii) the amount by which the Specified Percentage (as defined) of the Value (as defined) of BMC on the Maturity Date exceeds the principal amount of such Appreciation Note. "Specified Percentage" of an Appreciation Note with a principal amount of $28.57 means .0000004761904761% (or 5% in the aggregate for all Appreciation Notes). The "Value" of BMC on the Maturity Date means an amount equal to 12 times Media Cashflow for the then most recent four fiscal quarters for which financial statements of BMC are available plus the cash and Cash Equivalents of BMC and its Subsidiaries on the Maturity Date less the aggregate amount of Indebtedness (as defined) of BMC and its Subsidiaries on a consolidated basis outstanding on the Maturity Date. Any Original Appreciation Notes that remain outstanding after consummation of the Exchange Offer and any Exchange Appreciation Notes issued in connection with the Exchange Offer will be treated as a single class of securities under the Appreciation Note Indenture. The Appreciation Notes will not be entitled to the benefit of any mandatory sinking fund. OPTIONAL REDEMPTION Except as set forth below, the Appreciation Notes will not be redeemable at the option of the Issuer prior to June 15, 1999. Thereafter, if an Initial Public Offering has not occurred on or before a date set forth below, the Appreciation Notes will be redeemable, at the Issuer's option, in whole but not in part, on such date upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price equal to the Pro Rata Percentage of each Appreciation 121 Note of the amount set forth below opposite such redemption date (which amount, in each case, represents payment in full of all prinicipal and interest on the Appreciation Notes):
DATE AMOUNT - ----------------------------------------------------------------------------- --------------- June 15, 1999................................................................ $ 3.0 million June 15, 2000................................................................ $ 8.3 million June 15, 2001................................................................ $ 12.8 million June 15, 2002................................................................ $ 18.0 million June 15, 2003................................................................ $ 24.0 million June 15, 2004................................................................ $ 31.0 million June 15, 2005................................................................ $ 39.0 million June 15, 2006................................................................ $ 48.0 million June 15, 2007................................................................ $ 58.0 million
"Pro Rata Percentage" of an Appreciation Note means the Specified Percentage of such Appreciation Note divided by 5%. MANDATORY REDEMPTION AT THE OPTION OF THE HOLDERS UPON THE OCCURRENCE OF CERTAIN EVENTS Upon the occurrence of an Initial Public Offering, a Sale of the Company or the liquidation of the Issuer (each such event, a "Specified Event"), each holder will have the right to require the Issuer to redeem all or any part of such holder's Appreciation Notes at the relevant Specified Event Purchase Price (as defined below) (which amount, in each case, represents payment in full of all principal and interest on the Appreciation Notes). Within 30 days following any Specified Event, unless the Issuer has mailed a redemption notice with respect to all the outstanding Appreciation Notes in connection with such Specified Event, the Issuer shall mail a notice to each holder with a copy to the Trustee stating: (1) that a Specified Event has occurred and that such holder has the right to require the Issuer to redeem such holder's Appreciation Notes at a purchase price in cash equal to the relevant Specified Event Purchase Price; (2) the redemption date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and (3) the procedures determined by the Issuer, consistent with the Appreciation Note Indenture, that a holder must follow in order to have its Appreciation Notes redeemed. The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the redemption of Appreciation Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of the Appreciation Note Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Appreciation Note Indenture by virtue thereof. The definition of "Sale of Company" includes, among other transactions, a disposition of all or substantially all of the property and assets of the Issuer and its Subsidiaries. With respect to the disposition of property or assets, the phrase "all or substantially all" as used in the Appreciation Note Indenture varies according to the facts and circumstances of the subject transaction, has no clearly established meaning under New York law (which is the law which governs the Appreciation Note Indenture) and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the property or assets of a Person, and therefore it may be unclear as to whether a Sale of the Company has occurred and whether the Issuer is required to make an offer to redeem the Appreciation Notes as described above. 122 MANDATORY REDEMPTION AT THE OPTION OF THE HOLDERS ON SPECIFIED DATES In addition, if an Initial Public Offering has not occurred on or before a date set forth below, the holders may require the Issuer to redeem its Appreciation Notes, in whole or in part, on such date at a redemption price equal to the Pro Rata Percentage of such Appreciation Note of the amount set forth below opposite such date (which amount, in each case, represents payment in full of all principal and interest thereon):
DATE AMOUNT - ----------------------------------------------------------------------------- --------------- June 30, 2003................................................................ $ 24.0 million June 30, 2004................................................................ $ 20.0 million June 30, 2005................................................................ $ 13.0 million
A holder may exercise its rights to require the redemption of the Appreciation Notes held by such holder by mailing a notice to the Trustee on or before a date as set forth above stating that such holder is demanding that the Issuer redeem the Appreciation Notes and the portion of the Appreciation Notes to be redeemed. Upon receipt of such notice the Issuer shall redeem the Appreciation Notes for which such notice has been received by no later than the 90th day following the relevant date. There can be no assurance that the Issuer shall have sufficient funds available at the time of any mandatory redemption of the Appreciation Notes to make any debt payment (including repurchases of Appreciation Notes) required under the Appreciation Note Indenture (as well as may be required pursuant to the other securities of the Issuer which might be outstanding at the time). The exercise by the holders of their right to require the Issuer to redeem the Appreciation Notes could cause a default under Senior Indebtedness of the Issuer and its Subsidiaries. RANKING AND SUBORDINATION The payment of the principal on the Appreciation Notes is subordinated in right of payment, as set forth in the Appreciation Note Indenture, to the payment when due of all existing and future Senior Indebtedness of the Issuer, including the Notes. As of August 31, 1997, on a pro forma basis after giving effect to the Offering and the Transaction, the outstanding Senior Indebtedness and Guarantor Senior Indebtedness of the Issuer and the Subsidiary Guarantors to which the Appreciation Notes and the Guarantees thereof would have been subordinated would have been $99.358 million. The Appreciation Note Indenture does not contain any limitation on the amount of additional Indebtedness that the Issuer may incur. The Issuer may not pay the Appreciation Notes and may not otherwise purchase, redeem or otherwise retire any Appreciation Note (collectively, "pay the Appreciation Notes") if (i) any Designated Senior Indebtedness is not paid when due or (ii) any other default on Designated Senior Indebtedness occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash. However, the Issuer may pay the Appreciation Note without regard to the foregoing if the Issuer and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) of the immediately preceding sentence has occurred and is continuing. By reason of such subordination provisions contained in the Appreciation Note Indenture, in the event of insolvency, creditors who are holders of Senior Indebtedness (including holders of the Notes) may recover more, ratably, than the holders of the Appreciation Notes, and creditors who are not holders of Senior Indebtedness (including holders of the Appreciation Notes) may recover less, ratably, than holders of Senior Indebtedness. 123 SUBSIDIARY GUARANTEES Each Subsidiary Guarantor unconditionally guarantees, jointly and severally, to each holder and the Trustee, on a subordinated basis, the full and prompt payment of principal of and interest on the Appreciation Notes, and of all other obligations of the Issuer under the Appreciation Note Indenture. The Indebtedness evidenced by each Guarantee of the Appreciation Notes will be subordinated to Guarantor Senior Indebtedness on substantially the same basis as the Appreciation Notes are subordinated to Senior Indebtedness. The Appreciation Note Indenture does not contain any limitations on the amount of additional Indebtedness that the Issuer's Subsidiaries may incur. The obligations of each Subsidiary Guarantor under its Guarantee of the Appreciation Notes are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under the Appreciation Note Indenture, result in the obligations of such Subsidiary Guarantor under its Guarantee of the Appreciation Notes not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Subsidiary Guarantor that makes a payment or distribution under a Guarantee of the Appreciation Notes shall be entitled to a contribution from each other Subsidiary Guarantor in a PRO RATA amount based on the Adjusted Net Assets of each Subsidiary Guarantor. Each Subsidiary Guarantor may consolidate with or merge into or sell its assets to the Issuer or another Subsidiary Guarantor without limitation. Upon the sale or disposition of a Subsidiary Guarantor (or all or substantially all of its assets) to a Person which is not a Subsidiary Guarantor, such Subsidiary Guarantor shall be deemed released from all its obligations under the Appreciation Note Indenture and its Guarantee of the Appreciation Notes and such Guarantee shall terminate; PROVIDED, HOWEVER, that any such termination shall occur only to the extent that all obligations of such Subsidiary Guarantor under all of its Guarantees of, and under all of its pledges of assets or other security interests which secure any other Indebtedness of the Issuer shall also terminate upon such release, sale or transfer. Subsequent to the Issue Date, separate financial information for the Subsidiary Guarantors will not be provided except to the extent required by Regulation S-X under the Securities Act. CERTAIN COVENANTS The Appreciation Note Indenture contains certain covenants including, among others, the following: MERGER AND CONSOLIDATION. The Issuer shall not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Issuer) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer under the Appreciation Notes and the Appreciation Note Indenture; (ii) immediately after giving effect to such transaction, the Successor Company shall have a Consolidated Net Worth equal or greater to the Consolidated Net Worth of the Issuer immediately prior to such transaction; (iii) the Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Appreciation Note Indenture; and (iv) there has been delivered to the Trustee an Opinion of Counsel to the effect that holders of Appreciation Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such consolidation, merger, conveyance, transfer or lease and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such consolidation, merger, conveyance, transfer or lease had not occurred. 124 The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Appreciation Note Indenture, but, in the case of a lease of all or substantially all its assets, the Issuer will not be released from the obligation to pay the principal of and interest on the Appreciation Notes. AMENDMENTS AND WAIVERS Subject to certain exceptions, the Appreciation Note Indenture may be amended with the consent of the holders of a majority in principal amount of all outstanding series of Appreciation Notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of all outstanding series of Appreciation Notes. However, without the consent of each holder of an outstanding Appreciation Note affected, no amendment may, among other things, (i) reduce the amount of Appreciation Notes whose holders must consent to an amendment, (ii) reduce the stated rate of or extend the stated time for payment of interest on any Appreciation Note, (iii) reduce the principal of or extend the Stated Maturity of any Appreciation Note, (iv) reduce the premium payable upon the redemption or repurchase of any Appreciation Note or change the time at which any Appreciation Note may be redeemed as described above, (v) make any Appreciation Note payable in money other than that stated in the Appreciation Note, (vi) impair the right of any holder to receive payment of principal of and interest on such holder's Appreciation Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's Appreciation Notes or (vii) make any change in the amendment provisions which require each holder's consent or in the waiver provisions. Without the consent of any holder, the Issuer and the Trustee may amend the Appreciation Note Indenture to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor corporation, partnership, trust or limited liability company of the obligations of the Issuer under the Appreciation Note Indenture (provided that there has been delivered to the Trustee an Opinion of Counsel to the effect that holders of Appreciation Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such assumption and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such assumption had not occurred), to provide for uncertificated Appreciation Notes in addition to or in place of certificated Appreciation Notes (provided that the uncertificated Appreciation Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Appreciation Notes are described in Section 163 (f) (2) (B) of the Code), to the Appreciation Notes, to secure the Appreciation Notes, to add to the covenants of the Issuer for the benefit of the holders or to surrender any right or power conferred upon the Issuer, to make any change that does not adversely affect the rights of any holder or to comply with any requirement of the Commission in connection with the qualification of the Appreciation Note Indenture under the Trust Indenture Act. The consent of the holders is not necessary under the Appreciation Note Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After an amendment under the Appreciation Note Indenture becomes effective, the Issuer is required to mail to the holders a notice briefly describing such amendment. However, the failure to give such notice to all the holders or any defect therein, will not impair or affect the validity of the amendment. SATISFACTION AND DISCHARGE OF THE APPRECIATION NOTE INDENTURE The Appreciation Note Indenture will cease to be of further effect (except as otherwise expressly provided for in the Appreciation Note Indenture) when either (i) all outstanding Appreciation Notes have been delivered (other than lost, stolen or destroyed Appreciation Notes which have been replaced) to the Trustee for cancellation or (ii) all outstanding Appreciation Notes have become due and payable, whether 125 at maturity or as a result of the mailing of a notice of redemption pursuant to the terms of the Appreciation Note Indenture and the Issuer has irrevocably deposited with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Appreciation Notes, including interest thereon (other than lost, stolen, mutilated or destroyed Appreciation Notes which have been replaced), and, in either case, the Issuer has paid all other sums payable under the Appreciation Note Indenture. The Trustee is required to acknowledge satisfaction and discharge of the Appreciation Note Indenture on demand of the Issuer accompanied by an Officer's Certificate and an Opinion of Counsel at the cost and expense of the Issuer. TRANSFER AND EXCHANGE Upon any transfer of an Appreciation Note, the registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and to pay any taxes and fees required by law or permitted by the Appreciation Note Indenture. The registrar is not required to transfer or exchange any Appreciation Notes selected for redemption nor is the registrar required to transfer or exchange any Appreciation Notes for a period of 15 days before a selection of Appreciation Notes to be redeemed. The registered holder of an Appreciation Note may be treated as the owner of it for all purposes. CONCERNING THE TRUSTEE United States Trust Company of New York is to be the Trustee under the Appreciation Note Indenture and has been appointed by the Issuer as Registrar and Paying Agent with regard to the Appreciation Notes. The Trustee's current address is 114 West 47th Street, New York, New York. The Appreciation Note Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim, as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined) it must eliminate such conflict or resign. The holders of a majority in aggregate principal amount of the then outstanding Appreciation Notes issued under the Appreciation Note Indenture will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee. The Appreciation Note Indenture provides that in case a default shall occur (which shall not be cured) the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs would use. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Appreciation Note Indenture at the request of any of the holders of the Appreciation Notes issued thereunder unless they shall have offered to the Trustee security and indemnity satisfactory to it. GOVERNING LAW The Appreciation Note Indenture provides that it and the Appreciation Notes will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. CERTAIN DEFINITIONS "Board of Directors" means, as to the Issuer (i) so long as BMC or any successor to BMC is a limited liability company or partnership, the board of directors of Brill Media Management, Inc. which is the manager of BMC and (ii) at any other time the Board of Directors of the Issuer. 126 "Capital Stock" of any Person means any and all shares, membership and other interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligations" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof, (iii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500 million, (iv) repurchase obligations for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by Moody's or S&P and in each case maturing within one year after the date of acquisition, (vi) investment funds investing 95% of their assets in securities of the types described in clauses (i)-(v) above, (vii) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P and (viii) Indebtedness or preferred stock issued by Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's. "Consolidated EBITDA" means, for any period an amount equal to Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (i) the provision for taxes for such period based on income or profits and any provision for taxes utilized in computing net loss, (ii) Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization expense (including the amortization of debt issuance costs), (v) all other non-cash items reducing Consolidated Net Income for such period (excluding any non-cash item to the extent it represents an accrual of or reserve for cash disbursements for any subsequent period prior to the Stated Maturity of the Appreciation Notes or amortization of a pre-paid cash expense that was paid in a prior period), minus (b) all non-cash items increasing Consolidated Net Income for such period, in each case for the Issuer and its Subsidiaries for such period determined in accordance with GAAP. "Consolidated Interest Expense" means, for any period, the total interest expense of the Issuer and its Subsidiaries determined in accordance with GAAP, PLUS, to the extent not included in such interest expense (i) interest expense attributable to Capitalized Lease Obligations, (ii) capitalized interest, (iii) non-cash interest expense, (iv) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (v) interest actually paid by the Issuer or any such Subsidiary under any Guarantee of Indebtedness or other obligation of any other Person, (vi) net payments (whether positive or negative) pursuant to Interest Rate Agreements and (vii) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Issuer) in connection with Indebtedness incurred by such plan or trust and less (a) to the extent included in such interest expense, the amortization of capitalized debt issuance costs and (b) interest income. "Consolidated Net Income" means, for any period, the consolidated net income (loss) of the Issuer and its consolidated Subsidiaries determined in accordance with GAAP. "Consolidated Net Worth" means the total of the amounts shown on the balance sheet of the Issuer and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the 127 end of the most recent fiscal quarter of the Issuer ending prior to the taking of any action for the purpose of which the determination is being made and for which financial statements are available (but in no event ending more than 135 days prior to the taking of such action), as (i) the par or stated value of all outstanding Capital Stock of the Issuer plus (ii) paid in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock. "Designated Senior Indebtedness" means any Senior Indebtedness in the case of the Issuer, or Guarantor Senior Indebtedness in the case of a Subsidiary Guarantor which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof, are committed to lend up to, at least $5 million and is specifically designated by the Issuer or such Subsidiary Guarantor in the instrument evidencing or governing such Senior Indebtedness or Guarantor Senior Indebtedness as "Designated Senior Indebtedness" for purposes of the Appreciation Note Indenture; PROVIDED, HOWEVER, that the Indebtedness of the Company under the Notes, and the Subsidiary Guarantee of each Subsidiary Guarantor under its Subsidiary Guarantee, shall always constitute Designated Senior Indebtedness. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, or any successor statute or statutes thereto. "fair market value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of the Issuer acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Issuer delivered to the Trustee. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the date of the Appreciation Note Indenture, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All computations based on GAAP contained in the Indenture shall be computed in conformity with GAAP. "Group" means any "group" for purposes of Section 13(d) of the Exchange Act. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Guarantor Senior Indebtedness" means, with respect to a Subsidiary Guarantor, whether outstanding on the Issue Date or thereafter issued, all Guarantees by such Subsidiary Guarantor of Senior Indebtedness of the Issuer and all other Indebtedness of such Subsidiary Guarantor, including interest and fees thereon, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is expressly provided that the obligations of such Subsidiary Guarantor in respect of such Indebtedness are not superior in right of payment to the obligations of such Subsidiary Guarantor under the Guarantee of the Appreciation Notes; PROVIDED, HOWEVER, that Guarantor Senior Indebtedness shall not include (1) any obligations of such Subsidiary Guarantor to the Issuer or any other Subsidiary of the Issuer 128 or (2) any Indebtedness, Guarantee or obligation of such Subsidiary Guarantor that is expressly subordinate or junior in right of payment to any other Indebtedness, Guarantee or obligation of such Subsidiary Guarantor, including any Guarantor Subordinated Indebtedness of such Subsidiary Guarantor. "Guarantor Subordinated Indebtedness" means, with respect to a Subsidiary Guarantor, the obligations of such Subsidiary Guarantor under the Guarantee of the Appreciation Notes and any other Indebtedness of such Subsidiary Guarantor that specifically provides that such Indebtedness is to rank PARI PASSU in right of payment with the obligations of such Subsidiary Guarantor under the Guarantee of the Appreciation Notes. "Incur" means issue, assume, guarantee, incur or otherwise become liable for. "Indebtedness" means, with respect to any Person on any date of determination (without duplication), (i) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money, (ii) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto) (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i), (ii) and (v) ) entered into in the ordinary course of business of such Person to the extent that such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third business day following receipt by such Person of a demand for reimbursement following payment on the letter of credit), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except (x) trade payables and accrued expenses (including accrued management fees under the Administrative Managment Agreements) incurred in the ordinary course of business and (y) contingent or "earnout" payment obligations in respect of any business acquired by the Issuer or any Restricted Subsidiary), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, (v) all Capitalized Lease Obligations and all Attributable Indebtedness of such Person, (vi) all Indebtedness of other Persons secured by a lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, (vii) all Indebtedness of other Persons to the extent Guaranteed by such Person, (viii) the amount of all obligations of such Person with respect to the redemption, repayment or other and (viii) to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements. "Interest Rate Agreement" means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary. "Initial Public Offering" means an offering or offerings of Capital Stock of the Issuer under one or more effective registration statements under the Securities Act such that, after giving effect thereto, such offerings result in aggregate cash proceeds being received by the Issuer and the persons selling such Capital Stock of at least $25 million before deduction of underwriter's discounts and other expenses, as a result of such Capital Stock is listed or admitted to trading on a national securities exchange or quoted by NASDAQ. "Issue Date" means the date on which the Appreciation Notes are originally issued. "Managed Affiliate," solely for purposes of this Description of Appreciation Notes, means a Person at least 90% of the Capital Stock of which is owned, directly or indirectly, by Alan R. Brill. "Managed Affiliate Notes" mean any promissory notes of a Managed Affiliate, issued to the Issuer or a Subsidiary. 129 "Media Cashflow" for any period means for any Person an amount equal to Consolidated EBITDA for such period plus interest income received in respect of the Managed Affiliate Notes during such period and the following to the extent deducted in calculating such Consolidated EBITDA (i) management fees charged by BMCLP under the Administrative Management Agreements, (ii) expenses accruing under Performance Compensation Agreements , (iii) consulting fees payable in connection with acquisitions and (iv) fees paid under Time Brokerage Agreements. "Officer" means the Chairman of the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer or the Secretary of the Issuer. "Officer's Certificate" means a certificate signed by two Officers of the Issuer at least one of whom shall be the principal executive, financial or accounting officer of the Issuer. "Opinion of Counsel" means a written opinion, in form and substance acceptable to the Trustee, from legal counsel who is acceptable to the Trustee. "Paying Agent" means United States Trust Company of New York. "Performance Compensation Agreement" means any agreements between the Issuer or any Restricted Subsidiary and any executive officer of such Subsidiary pursuant to which such Subsidiary provides deferred compensation to such officer by crediting amounts (as determined under a formula set forth in such agreement) to an identified account for the benefit of such executive officer. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Related Brill Party" means (A) the spouse or immediate family member of Alan R. Brill or (B) any trust, corporation, partnership or other entity, the beneficiaries, shareholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of Alan R. Brill and/or such other Persons referred to in the immediately preceding clause (A). "Representative" means the trustee, agent or representative (if any) for an issue of Senior Indebtedness. "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby the Issuer or a Subsidiary transfers such property to a Person and the Issuer or a Subsidiary leases it from such Person. "Sale of the Company" means (i) any sale, lease, exchange or other transfer (in one transaction or in a series of transactions) of all or substantially all of the assets of the Issuer or the Issuer and its Subsidiaries on a consolidated basis or (ii) the acquisition by any Person or Group (other than Alan R. Brill or any Related Brill Party) of the power, directly or indirectly, to vote or direct the voting of securities having more than 50% of the ordinary voting power for the election of directors of the Issuer, or any direct or indirect holding company thereof. "Senior Indebtedness" in the case of the Appreciation Notes means, whether outstanding on the Issue Date or thereafter issued, all obligations under the Notes and all other Indebtedness of the Issuer, including interest and fees thereon, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that the obligations in respect of such Indebtedness are not superior in right of payment to the Appreciation Notes; PROVIDED, HOWEVER, that Senior Indebtedness will not include any obligation of the Issuer to any Subsidiary or any Subordinated Obligations. "Specified Event Purchase Price" means for an Appreciation Note a redemption price equal to (i) in the case of a redemption with respect to an Initial Public Offering, the price at which Membership Interests are sold in such Initial Public Offering (less underwriting discounts and commissions, if any), 130 which represent a percentage interest in BMC equal to the Specified Percentage of such Appreciation Note, (ii) in the case of a Sale of the Company as defined in clause (i) of the definition thereof, the amount equal to the Specified Percentage of such Appreciation Note of the sum of the aggregate fair market value of all consideration received by the Issuer and its Subsidiaries, net of any debt repaid therewith, net of ordinary and customary transaction expenses of the related transfer and the fair market value of the Issuer as determined after giving effect to such sale, and (iii) in the case of a redemption with respect to Sale of the Company defined in clause (ii) of the definition thereof, the price at which Membership Interests are sold in such Sale of the Company or in the transaction which resulted in such Sale of the Company, which represent a percentage interest in BMC equal to the Specified Percentage of such Appreciation Notes, and (iv) in the case of a redemption with respect to a liquidation of the Company, an amount equal to the fair market value of the distribution received by Membership Interests in an amount equal to the Specified Percentage of such Appreciation Note in connection with such liquidation. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision. "Subordinated Obligations" means, with respect to the Issuer or any Subsidiary Guarantor, any Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be (whether outstanding on the Issue Date or thereafter incurred) which is expressly subordinate or junior in right of payment to the Appreciation Notes or such Subsidiary Guarantor's Guarantee of the Appreciation Notes, as the case may be, in each case pursuant to a written agreement. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary shall refer to a Subsidiary of the Issuer. 131 CERTAIN FEDERAL INCOME TAX CONSIDERATIONS The following summary describes the material United States federal income tax consequences of the ownership and disposition of the Securities. This summary is based on the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), administrative pronouncements, judicial decisions and existing and proposed United States Treasury Regulations, changes to any of which subsequent to the date of this Prospectus may affect the tax consequences described herein (possibly retroactively). This summary discusses only Securities held as capital assets within the meaning of Section 1221 of the Code. It does not discuss all of the tax consequences that may be relevant to a holder in light of its particular circumstances or to holders subject to special rules such as certain financial institutions, insurance companies, tax-exempt organizations, dealers or traders in securities or currencies, holders who hold Securities as a position in a "straddle" or as part of a "hedging," "conversion" or "integrated" transaction, holders whose functional currency is other than the U.S. dollar or holders that are not U.S. Holders (as defined below). Persons considering the Exchange Offer should consult their own tax advisors with regard to the application of the United States federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. As used herein, the term "U.S. Holder" means a holder of a Note or Appreciation Note, as the case may be, that for United States federal income tax purposes is (i) a citizen or resident of the United States, (ii) a corporation or partnership created or organized in or under the laws of the United States or of any State thereof (including the District of Columbia), (iii) an estate the income of which is subject to United States federal income taxation regardless of its source or (iv) a trust if (A) a U.S. court is able to exercise primary supervision over the trust's administration and (B) one or more United States persons have the authority to control all of the trust's substantial decisions. Notwithstanding the preceding sentence, to the extent provided in United States Treasury Regulations, certain trusts in existence on August 20, 1996, and treated as United States persons prior to such dates, that elect to continue to be treated as United States persons also will be U.S. Holders. ALLOCATION OF THE ISSUE PRICE BETWEEN A NOTE AND AN APPRECIATION NOTE The Original Notes and Original Appreciation Notes initially were issued together as units (the "Units"). The "issue price" of a Unit for United States federal income tax purposes was $922. the Company intends to treat $899.63 of the issue price of a Unit as allocable to the Note (which amount the Company will therefore treat as its "issue price" for United States federal income tax purposes) and $22.37 as allocable to the Appreciation Note (which amount the Company will therefore treat as its "issue price" for United States federal income tax purposes). The Company intends to file information returns with the Internal Revenue Service (the "IRS") based on such allocation. The Company's allocation of the issue price is binding on a U.S. Holder for United States federal income tax purposes unless the holder discloses the use of a different allocation in its United States federal income tax return for the year in which the Unit was acquired. However, the Company's allocation is not binding on the IRS, and there can be no assurance that the IRS will not challenge such allocation. EXCHANGE OFFER The exchange of Original Securities for Exchange Securities by a U.S. Holder pursuant to the Exchange Offer should not constitute a taxable exchange for United States federal income tax purposes. A U.S. Holder should not recognize gain or loss upon the receipt of an Exchange Security pursuant to the Exchange Offer and should be required to continue to include interest on the Exchange Security in gross income for United States federal income tax purposes in the manner and to the extent described below. A U.S. Holder's holding period for an Exchange should include the holding period for the original note exchanged pursuant to the Exchange Offer and such holder's adjusted basis in an Exchange Security should be the same as such holder's adjusted basis in such Original Security. 132 ORIGINAL ISSUE DISCOUNT BMC agrees, and each holder of an Appreciation Note by acceptance of an Appreciation Note will agree, to treat the Appreciation Notes as indebtedness for all United States federal income tax purposes and the following discussion assumes that the classification of the Appreciation Notes as indebtedness will be respected for United States federal income tax purposes. See "--Potential Classification as Membership Interests." Solely for purposes of the rules regarding original issue discount ("OID"), as such term is defined in the Internal Revenue Code of 1986, as amended, and the U.S. Treasury Regulations issued thereunder, the Notes and the Appreciation Notes will likely be aggregated and treated as a single debt instrument (the "Aggregated Note"). For all other purposes under the Code, the Notes and the Appreciation Notes will be treated as separate instruments. The Aggregated Note will be considered to be issued with OID. As a result, a U.S. Holder generally will be required to include in gross income (as interest) the sum of the "daily portions" of OID on such Aggregated Note calculated under a constant yield method for all days during the taxable year that the U.S. Holder owns such Note. In addition, a U.S. Holder will be required to include "qualified stated interest" (defined below) on such Aggregated Note in gross income (as interest) under such U.S. Holder's regular method of tax accounting. The amount of OID on the Aggregated Note allocable to an accrual period generally is determined by multiplying the "adjusted issue price" (as defined below) of such Note at the beginning of the accrual period by the yield to maturity of such Note (adjusting the yield to take into account the length of the particular accrual period) and subtracting from that product the amount payable as qualified stated interest during such accrual period. Generally, an accrual period is any period elected by a U.S. Holder, provided that each accrual period is no longer than one year and that each interest payment date is the first or last day of the accrual period. The "adjusted issue price" of the Aggregated Note at the beginning of any accrual period will be the sum of its issue price and the amount of OID allocable to all prior accrual periods, reduced by the amount of all payments other than qualified stated interest payments made with respect to such Note in all prior accrual periods. The "issue price" of the Aggregated Note for this purpose generally is the first price at which a substantial amount of the Units are sold to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). "Qualified stated interest" generally is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at a single fixed rate during the entire term of the debt instrument. The "stated redemption price at maturity" of the Aggregated Note will be the sum of all payments provided for under such Note other than qualified stated interest payments. Accordingly, a U.S. Holder will be required to include in gross income (as interest), in the manner set forth above, (i) qualified stated interest payments on the Aggregated Note and (ii) OID accruing on such Note. Stated interest on the Aggregated Note should be treated as qualified stated interest for United States federal income tax purposes to the extent of 7.5% per annum on the Note ("QSI"). The total amount of OID on the Aggregated Note will equal the total of (i) the amount by which the issue price of the Note is less than the principal amount thereof and (ii) the amount by which stated interest payments payable under the Aggregated Note exceed QSI. BMC believes that it is significantly more likely than not that the call option on the Appreciation Notes will be exercised on June 15, 1999. Accordingly, the yield to maturity of the Aggregated Note will be determined as if such option were exercised on such date, thus ignoring possible payments in excess of $3 million. If such call is not exercised, solely for purposes of the OID rules, the Appreciation Notes would be treated as retired and then reissued on such date at the adjusted issue price thereof and the amount of OID on the Aggregated Note would increase substantially. Moreover, due to the interaction of the put and call provisions, if an Appreciation Note remains outstanding after June 15, 2002, a deemed disposition of such Note could occur for U.S. federal income tax purposes. 133 A U.S. Holder's tax basis in a Note will be increased by the amount of any OID included in the U.S. Holder's gross income with respect to such Note under the rules discussed above and decreased by the amount of any payment with respect to such Note other than qualified stated interest payments. While each U.S. Holder will be required to accrue OID income under a constant yield method, as described above, a U.S. Holder may also elect to include in gross income all income that accrues on the Aggregated Note (including stated interest and OID) under a constant yield method. It is possible that the Internal Revenue Service (the "IRS") could assert that the Additional Interest which BMC would be obligated to pay if the Exchange Offer Registration Statement is not filed or declared effective within the time periods set forth herein (or certain other actions are not taken) (as described above under "Exchange Offer and Registration Rights") are "contingent payments" for United States federal income tax purposes. If so treated, the Aggregated Note would be treated as a contingent payment debt instrument and certain adverse United States federal income tax consequences could result. However, the United States Treasury Regulations issued by the IRS regarding debt instruments that provide for one or more contingent payments provide that, for purposes of determining whether a debt instrument is a contingent payment debt instrument, remote or incidental contingencies are ignored. BMC believes that the possibility of the payment of Additional Interest is remote and, accordingly, does not intend to treat the Aggregated Note as a contingent payment debt instrument. BMC does not intend to treat the possibility of an optional or provisional redemption or repurchase of the Notes or the Appreciation Notes as giving rise to any additional accrual of OID or recognition of ordinary income upon redemption, sale of exchange. SALE, EXCHANGE OR RETIREMENT Subject to the discussion of the Exchange Offer below, upon the sale, exchange or retirement of a Note or an Appreciation Note (other than a redemption of an Appreciation Note by BMC), a U.S. Holder would recognize gain or loss, if any, equal to the difference between the amount realized on the sale, exchange or retirement and the holder's adjusted tax basis in such Note. Gain or loss recognized on the sale, exchange or retirement of such a Note will generally be capital gain or loss. In the case of a noncorporate U.S. Holder, the maximum marginal United States federal income tax rate applicable to such gain will be lower than the maximum marginal United States federal income tax rate applicable to ordinary income if such U.S. Holder's holding period for such Notes exceeds one year and will be further reduced if such Notes were held for more than 18 months. The use of capital losses by a U.S. Holder may be limited. POTENTIAL CLASSIFICATION AS EQUITY INTERESTS As indicated above, the IRS may assert that an Appreciation Note represents an equity interest in BMC. In such case, a U.S. Holder of an Appreciation Note would be required to include in gross income such U.S. Holder's distributive share of income, gain, loss or deduction of BMC. Any amount so included in such U.S. Holder's gross income will increase its adjusted tax basis in its equity interest and any amount distributed to such U.S. Holder will reduce its adjusted tax basis. Alternatively, payments under an Appreciation Note may be treated as a "guaranteed payment" within the meaning of Section 707(c) of the Code. A member receiving a "guaranteed payment" must include in gross income as ordinary income the amount of such payment. U.S. Holders should consult their tax advisors regarding the complex rules addressing United States federal income taxation regarding interests in a partnership. Holders of Appreciation Notes that are tax-exempt entities should note that if the Appreciation Notes are treated as an equity interest in BMC for United States federal income tax purposes that, as holders of a membership interest, they may be subject to United States federal income tax on their distributive share of BMC's income due to the application of Section 512 of the Code. 134 BACKUP WITHHOLDING AND INFORMATION REPORTING A 31% backup withholding tax and information reporting requirements apply to certain payments of principal of, and premium, if any, and interest on, a security and to the proceeds of the sale or redemption of an obligation, to certain non-corporate U.S. Holders. Backup withholding will apply only if a U.S. Holder (other than an exempt recipient, such as a corporation) (i) fails to furnish its Taxpayer Identification Number ("TIN") which, in the case of an individual, would be his or her Social Security number, (ii) furnishes an incorrect TIN, (iii) is notified by the IRS that is has failed to properly report payments of interest and dividends or (iv) under certain circumstances, fails to certify, under penalty of perjury, that it has furnished a correct TIN and has not been notified by the IRS that it is subject to backup withholding. The amounts withheld under the backup withholding rules are not an additional tax and may be refunded, or credited against the U.S. Holder's United States federal income tax liability provided that the required information is furnished to the IRS. THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. HOLDERS OF ORIGINAL SECURITIES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO SPECIFIC CONSEQUENCES TO SUCH PURCHASER OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SECURITIES INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS. PLAN OF DISTRIBUTION Each Participating Broker-Dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Securities received in exchange for Original Securities where such Original Securities were acquired as a result of market-making activities or other trading activities. The Issuer has agreed that, for a period of 180 days after consummation of the Exchange Offer, it will make this Prospectus, as amended or supplemented, available to any Participating Broker-Dealer for use in connection with any such resale. In addition, for a period of 90 days after the date of this Prospectus, all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus. The Issuer will not receive any proceeds from any sales of Exchange Securities by Participating Broker-Dealers. Exchange Securities received by Participating Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the- counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Participating Broker-Dealer and/or the purchasers of any such Exchange Securities. Any Participating Broker-Dealer that resells the Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act, and any profit on any such resale of Exchange Securities and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letters of Transmittal state that, by acknowledging that it will deliver and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the Expiration Date, the Issuer will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Participating Broker-Dealer that requests such documents in the Letters of Transmittal. 135 BOOK-ENTRY; DELIVERY AND FORM The Original Securities were each issued in part as single, permanent global certificates in definitive, fully registered form (the "Original Global Securities") and in part in registered certificated form ("Certificated Securities"). Except for Exchange Securities issued to Non-Global Purchasers (as defined below), the Exchange Securities will each initially be issued in the form of one or more global certificates (collectively, the "Exchange Global Securities"). The Original Global Securities were deposited on the date of the closing of the Offering, and the Exchange Global Securities will be deposited on the date of closing of the Exchange Offer with, or on behalf of, the Depository and registered in the name of a nominee of DTC. Securities (i) originally purchased by or transferred to foreign purchasers or Accredited Investors who are not QIBs or (ii) held by QIBs who elect to take physical delivery of their certificates instead of holding their interest through Global Securities (and which are thus ineligible to trade through DTC) (collectively referred to herein as the "Non-Global Purchasers") will be issued as Certificated Securities. Upon the transfer to a QIB of any Certificated Security initially issued to a Non-Global Purchaser, such Certificated Security will, unless the transferee requests otherwise or such Global Security has previously been exchanged in whole for Certificated Securities, be exchanged for an interest in such Global Security. "Global Securities" means the Original Global Securities or the Exchange Global Securities, as the case may be. THE GLOBAL SECURITIES The Company expects that pursuant to procedures established by DTC (i) upon the issuance of the Global Securities, DTC or its custodian will credit, on its internal system, the principal amount of Notes or Appreciation Notes, as the case may be, of the individual beneficial interest represented by such Global Security to the respective accounts for persons who have accounts with DTC and (ii) ownership of beneficial interests in the Global Securities will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of persons who have accounts with DTC ("Participants")) and the records of Participants (with respect to interests of persons other than Participants). Ownership of beneficial interests in the Global Securities will be limited to Participants or persons who hold interests through Participants. QIBs may hold their interests in the Global Securities directly through DTC, if they are Participants in such system, or indirectly through organizations which are Participants in such system. So long as DTC or its nominee is the registered owner or holder of any of the Global Securities, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Note or Appreciation Note represented by the applicable Global Security for all purposes under the Indenture or Appreciation Note Indenture, as the case may be. No beneficial owner of an interest in the Global Securities will be able to transfer that interest except in accordance with DTC's procedures, in addition to those provided for under the Indenture or Appreciation Note Indenture, as the case may be. Payments on the Global Securities will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the Company, the Trustee or the Transfer Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest. The Company expects that DTC or its nominee, upon receipt of any payment in respect of a Global Security, will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the applicable Global Security as shown on the records of DTC or its nominee. The Company also expects that payments by Participants to owners of beneficial interests in the Global Securities held through such Participants will be governed by standing instructions and customary practice, 136 as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such Participants. Transfers between Participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in clearinghouse funds. If a holder requires physical delivery of a Certificated Security for any reason, including to sell such Security to persons in states which require physical delivery of Certificated Securities, or to pledge such securities, such holder must transfer its interest in the applicable Global Security in accordance with the normal procedures of DTC. DTC has advised the Company that it will take any action permitted to be taken by a holder of Securities (including the presentation of the Securities for exchange as described below) only at the direction of one or more Participants to whose account the DTC interests in the Global Securities are credited and only in respect of such portion of the Securities as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Indenture, DTC will exchange the Global Securities representing Notes for Certificated Securities, which it will distribute to its Participants. DTC has advised the Company as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its Participants and facilitate the clearance and settlement of securities transactions between Participants through electronic book-entry changes in accounts of its Participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Securities among Participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Initial Purchaser or any other person will have any responsibility for the performance by DTC or its Participants or indirect participants of their respective obligations under the rules and procedures governing their operations. CERTIFICATED SECURITIES If DTC is at any time unwilling or unable to continue as depositary for the Global Securities and a successor depositary is not appointed by the Company within 90 days, Certificated Securities will be issued in exchange for the Global Securities. LEGAL MATTERS Certain legal matters with respect to the Exchange Notes and the Exchange Appreciation Notes offered hereby, including federal income tax consequences, will be passed upon for the Issuer by Carter, Ledyard & Milburn, New York, New York. As to matters of Virginia law, Carter, Ledyard & Milburn will rely upon the opinion of Thompson & McMullan, P.C., Richmond, Virginia. EXPERTS The combined financial statements of The Radio and Newspaper Businesses of Alan R. Brill at February 28, 1997 and February 29, 1996, and for each of the three years in the period ended February 28, 1997, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 137 AVAILABLE INFORMATION The Issuer has filed with the Commission a Registration Statement on Form S-4 (together with all amendments and exhibits thereto, the "Registration Statement") under the Securities Act with respect to the Exchange Securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, and to which reference is hereby made. Statements contained in this Prospectus as to the contents of any contract, agreement or any other document referred to are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the Registration Statement, reference is made to such exhibit to the Registration Statement for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. The Registration Statement can be inspected and copied at the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices at Seven World Trade Center, Suite 1300, New York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of the Registration Statement can be obtained from the Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20459, at prescribed rates. The Issuer is filing the Registration Statement with the Commission electronically. The Commission maintains a web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of that Web site is http://www.sec.gov. The Issuer intends, and is required by the terms of the Indenture and the Appreciation Note Indenture to furnish the holders of the Exchange Notes and Exchange Appreciation Notes, respectively, with annual reports containing consolidated financial statements audited by its independent certified public accountants and with quarterly reports containing unaudited condensed consolidated financial statements for each of the first three quarters of each fiscal year. 138 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL INDEX OF FINANCIAL STATEMENTS
PAGE ----- THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL CONDENSED COMBINED FINANCIAL STATEMENTS--AUGUST 31, 1996 AND 1997 (UNAUDITED) Condensed Combined Statements of Financial Position........................................................ F-2 Condensed Combined Statements of Operations................................................................ F-3 Condensed Combined Statement of Stockholder's and Members' Deficiency...................................... F-4 Condensed Combined Statements of Cash Flows................................................................ F-5 Notes to Condensed Combined Financial Statements........................................................... F-6 COMBINED FINANCIAL STATEMENTS--FEBRUARY 28, 1995, FEBRUARY 29, 1996 AND FEBRUARY 28, 1997 Report of Independent Auditors............................................................................. F-7 Combined Statements of Financial Position.................................................................. F-8 Combined Statements of Operations.......................................................................... F-9 Combined Statements of Stockholder's and Members' Deficiency............................................... F-10 Combined Statements of Cash Flows.......................................................................... F-11 Notes to Combined Financial Statements..................................................................... F-12
F-1 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL CONDENSED COMBINED STATEMENTS OF FINANCIAL POSITION
FEBRUARY 28, AUGUST 31, 1997 1997 ---------------- -------------- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents (including $100,000 deposit at August 31, 1997).... $ 775,363 $ 351,057 Accounts receivable, net..................................................... 3,165,668 4,037,687 Inventories.................................................................. 323,483 318,638 Other current assets......................................................... 208,598 392,588 ---------------- -------------- Total current assets........................................................... 4,473,112 5,099,970 Notes receivable from managed affiliates....................................... 412,007 14,315,962 Property and equipment......................................................... 16,398,115 16,854,777 Less: Accumulated depreciation................................................. 7,831,300 8,318,276 ---------------- -------------- Net property and equipment..................................................... 8,566,815 8,536,501 Goodwill and FCC licenses, net................................................. 5,407,598 5,375,217 Covenants not to compete, net.................................................. 284,414 3,190,391 Other assets, net.............................................................. 1,891,090 1,641,981 Other.......................................................................... 271,553 251,956 ---------------- -------------- 7,854,655 10,459,545 Due from affiliates............................................................ 5,135,648 4,157,453 ---------------- -------------- $ 26,442,237 $ 42,569,431 ---------------- -------------- ---------------- -------------- LIABILITIES AND NET CAPITAL DEFICIENCY Current liabilities: Short-term note.............................................................. $ 500,000 $ 500,000 Notes payable to stockholder and affiliates.................................. 378,637 617,950 Accounts payable............................................................. 701,826 897,985 Accrued expenses............................................................. 996,319 657,525 Distributions payable........................................................ -- 3,000,000 Current maturities of long-term obligations.................................. 882,439 729,315 ---------------- -------------- Total current liabilities...................................................... 3,459,221 6,402,775 Long-term obligations.......................................................... 49,592,989 67,316,850 Capital deficiency: Capital...................................................................... 4,960 6,750 Additional paid-in capital................................................... 15,984,309 1,792,852 Accumulated deficit.......................................................... (42,599,242) (32,949,796) ---------------- -------------- Net capital deficiency......................................................... (26,609,973) (31,150,194) ---------------- -------------- $ 26,442,237 $ 42,569,431 ---------------- -------------- ---------------- --------------
See accompanying note. F-2 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL CONDENSED COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED AUGUST 31 ---------------------------- 1996 1997 ------------- ------------- Revenues........................................................................... $ 13,706,763 $ 15,100,057 Operating expenses: Operating departments............................................................ 9,539,845 10,104,343 Incentive plan................................................................... 316,500 485,000 Management fees.................................................................. 979,792 1,071,714 Time brokerage agreement fee, net................................................ (78,500) 24,000 Consulting....................................................................... 30,665 117,996 Depreciation..................................................................... 494,038 508,312 Amortization..................................................................... 176,049 240,715 ------------- ------------- 11,458,389 12,552,080 ------------- ------------- Operating income................................................................... 2,248,374 2,547,977 Other income (expense): Interest--managed affiliates..................................................... -- 563,582 Interest--stockholder and affiliates, net........................................ 53,975 128,078 Interest--other, net............................................................. (3,396,210) (4,390,195) Amortization of deferred financing costs......................................... (343,993) (282,876) Gain (loss) on sale of assets, net............................................... 1,066,215 (8,948) Other, net....................................................................... (30,969) (21,963) ------------- ------------- (2,650,982) (4,012,322) ------------- ------------- Loss before income taxes........................................................... (402,608) (1,464,345) Income tax provision............................................................... 84,000 77,866 ------------- ------------- Net loss........................................................................... $ (486,608) $ (1,542,211) ------------- ------------- ------------- -------------
See accompanying note. F-3 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL CONDENSED COMBINED STATEMENT OF STOCKHOLDER'S AND MEMBERS' DEFICIENCY (UNAUDITED) SIX MONTHS ENDED AUGUST 31, 1997
ADDITIONAL NET PAID-IN ACCUMULATED CAPITAL CAPITAL CAPITAL DEFICIT DEFICIENCY --------- -------------- -------------- -------------- Balance at February 28, 1997........................... $ 4,960 $ 15,984,309 $ (42,599,242) $ (26,609,973) Capital contributions.................................. 1,990 -- -- 1,990 Net loss............................................... -- -- (1,542,211) (1,542,211) Liquidation of subsidiaries............................ (200) (14,191,457) 14,191,657 -- Dividends.............................................. -- -- (3,000,000) (3,000,000) --------- -------------- -------------- -------------- Balance at August 31, 1997............................. $ 6,750 $ 1,792,852 $ (32,949,796) $ (31,150,194) --------- -------------- -------------- -------------- --------- -------------- -------------- --------------
See accompanying note. F-4 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL CONDENSED COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED AUGUST 31 ---------------------------- 1996 1997 ------------- ------------- OPERATING ACTIVITIES Net loss............................................................................ $ (486,608) $ (1,542,211) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization.................................................... 1,014,080 1,031,903 Management fees accrual.......................................................... (820,647) 471,197 Affiliate interest accrual....................................................... (61,285) (128,079) Additional interest accrual...................................................... 721,109 1,122,611 Incentive plan accrual........................................................... 316,500 485,000 (Gain) loss on sale of assets, net............................................... (1,066,215) 8,948 Changes in operating assets and liabilities: Accounts receivable............................................................. (505,307) (872,019) Other current assets............................................................ 72,320 (178,155) Accounts payable................................................................ (192,695) 196,159 Other accrued expenses.......................................................... (400,560) (338,795) ------------- ------------- Net cash provided by (used in) operating activities................................. (1,409,308) 256,559 INVESTING ACTIVITIES Purchase of property and equipment.................................................. (304,005) (408,373) Purchase of newspaper, net of cash acquired......................................... (17,222) -- Proceeds from sale of radio station................................................. 1,917,544 -- Proceeds from sale of assets........................................................ 12,190 30,915 Payment for non-competition agreement............................................... -- (3,000,000) Increase in other assets............................................................ (438,853) (37,676) Loans to managed affiliates......................................................... -- (13,903,955) ------------- ------------- Net cash provided by (used in) investing activities................................. 1,169,654 (17,319,089) FINANCING ACTIVITIES Increase (decrease) in amounts due to stockholder and affiliates.................... (293,586) 867,862 Increase in deferred financing costs................................................ (181,041) (85,266) Principal payments on long-term obligations......................................... (482,117) (349,437) Proceeds from long-term borrowings.................................................. 76,504 16,203,075 Capital contributions............................................................... 200 1,990 ------------- ------------- Net cash provided by (used in) financing activities................................. (880,040) 16,638,224 ------------- ------------- Net decrease in cash and cash equivalents........................................... (1,119,694) (424,306) Cash and cash equivalents at beginning of period.................................... 2,074,739 775,363 ------------- ------------- Cash and cash equivalents at end of period.......................................... $ 955,045 $ 351,057 ------------- ------------- ------------- ------------- Supplemental disclosures of cash flow information: Interest paid..................................................................... $ 3,261,776 $ 3,695,734 Income taxes paid................................................................. 91,000 70,000
See accompanying note. F-5 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTE TO CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying condensed combined financial statements as of August 31, 1996 and 1997 and for the periods then ended are unaudited. These statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. These statements should be read in conjunction with the Company's audited combined financial statements for the year ended February 28, 1997, and the notes therein included elsewhere herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company's management, the condensed combined financial statements for the unaudited interim periods presented include all adjustments of a normal recurring nature necessary to fairly present the results of such interim periods and the financial position as of the end of said periods. Results for such interim periods are not necessarily indicative of the results for the respective entire years. F-6 REPORT OF INDEPENDENT AUDITORS Alan R. Brill We have audited the accompanying combined statements of financial position of The Radio and Newspaper Businesses of Alan R. Brill as of February 28, 1997 and February 29, 1996, and the related combined statements of operations, stockholder's and members' deficiency, and cash flows for each of the three years in the period ended February 28, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of The Radio and Newspaper Businesses of Alan R. Brill at February 28, 1997 and February 29, 1996, and the combined results of their operations and their cash flows for each of the three years in the period ended February 28, 1997, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Chicago, Illinois November 14, 1997, except for Note 2 as to which the date is December 12, 1997 and Note 10 and Note 12, as to which the date is December 30, 1997 F-7 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL COMBINED STATEMENTS OF FINANCIAL POSITION
FEBRUARY 29 FEBRUARY 28 1996 1997 ------------- ------------- ASSETS Current assets: Cash and cash equivalents........................................................ $ 2,074,739 $ 775,363 Accounts receivable, net of allowance for doubtful accounts of 1996-- $184,902 and 1997--$112,192............................................................. 2,967,540 3,165,668 Inventories...................................................................... 443,678 323,483 Other current assets............................................................. 193,249 208,598 ------------- ------------- Total current assets............................................................... 5,679,206 4,473,112 Notes receivable from managed affiliates........................................... -- 412,007 Property and equipment............................................................. 17,991,335 16,398,115 Less: Accumulated depreciation..................................................... 9,177,746 7,831,300 ------------- ------------- Net property and equipment......................................................... 8,813,589 8,566,815 Goodwill and FCC licenses, net of accumulated amortization of 1996-- $1,619,481 and 1997--$1,779,785................................................................. 5,298,744 5,407,598 Covenants not to compete, net of accumulated amortization of 1996-- $147,714 and 1997--$236,706................................................................... 247,575 284,414 Other assets, net of accumulated amortization of 1996--$831,843 and 1997--$1,250,740................................................................. 1,827,844 1,891,090 Other.............................................................................. 37,032 271,553 ------------- ------------- 7,411,195 7,854,655 Due from affiliates................................................................ 4,106,551 5,135,648 ------------- ------------- $ 26,010,541 $ 26,442,237 ------------- ------------- ------------- ------------- LIABILITIES AND NET CAPITAL DEFICIENCY Current liabilities: Short-term note.................................................................. $ 500,000 $ 500,000 Notes payable to stockholder..................................................... 209,000 378,637 Accounts payable................................................................. 1,122,273 701,826 Accrued payroll and related expenses............................................. 397,362 399,131 Accrued interest................................................................. 327,853 372,394 Other accrued expenses........................................................... 172,516 224,794 Current maturities of long-term obligations...................................... 552,358 882,439 ------------- ------------- Total current liabilities.......................................................... 3,281,362 3,459,221 Long-term obligations: Senior notes..................................................................... 42,253,160 44,502,075 Obligations under capital leases................................................. 906,905 971,966 Unsecured and subordinated obligations........................................... 915,555 846,387 Incentive plan liability......................................................... 3,527,034 4,155,000 Less:Current maturities of long-term obligations................................. (552,358) (882,439) ------------- ------------- 47,050,296 49,592,989 Due to affiliates.................................................................. 14,033,350 -- Capital deficiency: Capital.......................................................................... 3,750 4,960 Additional paid-in capital....................................................... 948,852 15,984,309 Accumulated deficit.............................................................. (39,307,069) (42,599,242) ------------- ------------- Net capital deficiency............................................................. (38,354,467) (26,609,973) ------------- ------------- $ 26,010,541 $ 26,442,237 ------------- ------------- ------------- -------------
See accompanying notes. F-8 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED ---------------------------------------------- FEBRUARY 28 FEBRUARY 29 FEBRUARY 28 1995 1996 1997 -------------- -------------- -------------- Revenues......................................................... $ 23,186,957 $ 25,312,931 $ 27,036,215 Operating expenses: Operating departments.......................................... 17,530,406 18,639,701 19,042,885 Incentive plan................................................. 633,688 1,467,034 627,966 Management fees................................................ 1,678,771 1,832,703 1,944,699 Time brokerage agreement fee, net.............................. -- -- (54,500) Consulting..................................................... -- 37,493 140,992 Depreciation................................................... 896,885 995,414 1,025,543 Amortization................................................... 214,223 316,558 369,484 -------------- -------------- -------------- 20,953,973 23,288,903 23,097,069 -------------- -------------- -------------- Operating income................................................. 2,232,984 2,024,028 3,939,146 Other income (expense): Interest--stockholder and affiliates, net...................... (348,399) (293,956) 246,909 Interest--other, net........................................... (5,287,211) (6,338,941) (7,190,504) Amortization of deferred financing costs....................... (205,851) (497,198) (488,712) Gain (loss) on sale of assets, net............................. (55,783) 3,780 1,076,181 Other, net..................................................... (88,419) (84,067) (68,689) -------------- -------------- -------------- (5,985,663) (7,210,382) (6,424,815) -------------- -------------- -------------- Loss before income taxes and extraordinary item.................. (3,752,679) (5,186,354) (2,485,669) Income tax provision (benefit)................................... 68,324 (38,869) 286,504 -------------- -------------- -------------- Loss before extraordinary item................................... (3,821,003) (5,147,485) (2,772,173) Extraordinary item............................................... -- 6,915,435 -- -------------- -------------- -------------- Net income (loss)................................................ $ (3,821,003) $ 1,767,950 $ (2,772,173) -------------- -------------- -------------- -------------- -------------- --------------
See accompanying notes. F-9 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL COMBINED STATEMENTS OF STOCKHOLDER'S AND MEMBERS' DEFICIENCY YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
ADDITIONAL NET PAID-IN ACCUMULATED CAPITAL CAPITAL CAPITAL DEFICIT DEFICIENCY --------- ------------- -------------- -------------- Balance at February 28, 1994............................ $ 3,550 $ 948,852 $ (37,254,016) $ (36,301,614) Capital contribution.................................... 100 -- -- 100 Net loss................................................ -- -- (3,821,003) (3,821,003) --------- ------------- -------------- -------------- Balance at February 28, 1995............................ 3,650 948,852 (41,075,019) (40,122,517) Capital contribution.................................... 100 -- -- 100 Net income.............................................. -- -- 1,767,950 1,767,950 --------- ------------- -------------- -------------- Balance at February 29, 1996............................ 3,750 948,852 (39,307,069) (38,354,467) Capital contributions................................... 1,210 15,035,457 -- 15,036,667 Net loss................................................ -- -- (2,772,173) (2,772,173) Dividends............................................... -- -- (520,000) (520,000) --------- ------------- -------------- -------------- Balance at February 28, 1997............................ $ 4,960 $ 15,984,309 $ (42,599,242) $ (26,609,973) --------- ------------- -------------- -------------- --------- ------------- -------------- --------------
See accompanying notes. F-10 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL COMBINED STATEMENTS OF CASH FLOWS
YEAR ENDED ------------------------------------- FEBRUARY 28 FEBRUARY 29 FEBRUARY 28 1995 1996 1997 ----------- ----------- ----------- OPERATING ACTIVITIES Net income (loss)......................................................... ($3,821,003) $ 1,767,950 ($2,772,173) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization........................................... 1,111,108 1,311,972 1,395,027 Amortization of deferred financing costs................................ 205,851 313,481 488,712 Management fees accrual................................................. 590,851 293,806 (620,451) Affiliate interest accrual.............................................. 599,216 463,594 1,842 Additional interest accrual............................................. 1,864,997 2,215,159 1,817,674 Incentive plan accrual.................................................. 633,688 1,467,034 627,966 (Gain) loss on sale of assets, net...................................... 55,783 (3,780) (1,076,181) Extraordinary item...................................................... -- (6,915,435) -- Changes in operating assets and liabilities: Accounts receivable................................................... (190,587) (251,820) (135,593) Other current assets.................................................. (260,546) (192,561) 109,418 Accounts payable...................................................... 304,899 (480,039) (440,686) Other accrued expenses................................................ (174,393) 47,805 91,521 ----------- ----------- ----------- Net cash provided by (used in) operating activities....................... 919,864 37,166 (512,924) INVESTING ACTIVITIES Change in restricted cash................................................. 1,157,955 -- -- Insurance proceeds on destroyed assets.................................... 2,674,326 -- 244,293 Purchase of replacement assets............................................ (2,654,623) -- -- Purchase of property and equipment........................................ (973,805) (976,938) (1,268,847) Purchase of newspaper, net of cash acquired............................... -- -- (17,222) Purchase of radio stations................................................ -- (55,000) -- Proceeds from sale of radio station....................................... -- -- 1,917,544 Proceeds from sale of assets.............................................. 25,096 13,280 44,003 Loans to managed affiliates............................................... -- -- (408,401) Increase in other assets.................................................. (349,225) (147,904) (452,554) ----------- ----------- ----------- Net cash provided by (used in) investing activities....................... (120,276) (1,166,562) 58,816 FINANCING ACTIVITIES Increase (decrease) in amounts due to stockholder and affiliates.......... (592,216) 32,254 (79,309) Increase in deferred financing costs...................................... -- (1,616,923) (491,168) Principal payments on long-term obligations............................... (1,038,824) (36,241,465) (742,698) Proceeds from long-term borrowings........................................ 1,179,247 40,479,877 142,697 Capital contributions..................................................... 100 100 845,210 Dividends................................................................. -- -- (520,000) ----------- ----------- ----------- Net cash provided by (used in) financing activities....................... (451,693) 2,653,843 (845,268) ----------- ----------- ----------- Net increase (decrease) in cash and cash equivalents...................... 347,895 1,524,447 (1,299,376) Cash and cash equivalents at beginning of year............................ 202,397 550,292 2,074,739 ----------- ----------- ----------- Cash and cash equivalents at end of year.................................. $ 550,292 $ 2,074,739 $ 775,363 ----------- ----------- ----------- ----------- ----------- ----------- Supplemental disclosures of cash flow information: Interest paid........................................................... $4,099,643 $ 4,161,993 $6,116,898 Income taxes paid: Federal............................................................... -- 646 80,000 State................................................................. 68,085 117,485 136,046
See accompanying notes. F-11 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 1. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The combined financial statements include the accounts of the following radio and newspaper businesses (collectively referred to herein as the Company) which are owned directly or indirectly by Alan R. Brill (Stockholder). The radio businesses (collectively referred to herein as Radio) include: Brill Radio, Inc. (BRI) and its subsidiary, Reading Radio, Inc. (RRI); Northland Broadcasting, Inc. (NBI); Northland Broadcasting, LLC (NBL); Northland Holdings, LLC (NHL); NB II, Inc. (NB2); Fargo-Moorhead Radio, Inc. (FMR); Central Missouri Broadcasting, Inc. (CMB); CMB II, Inc. (CB2); Northern Colorado Radio, Inc. (NCR); NCR II, Inc. (NR2); and Tri-State Broadcasting, Inc. (TSB). The newspaper businesses (collectively referred to herein as News) include St. Johns Newspapers, Inc. (SJN); Brill Newspapers, Inc. (BNI) and its subsidiaries, which include CMN Holdings, Inc. (CMNH), Central Michigan Distribution Co., L.P. (CMDLP), and Central Michigan Newspapers, Inc. (CMN) and its subsidiaries which include Cadillac Newspapers, Inc.; CMN Associated Publications, Inc.; Gladwin Newspapers, Inc.; Midland Buyer's Guide, Inc.; Central Michigan Distribution Co., Inc.; and Graph Ads Printing, Inc. News publishes one daily newspaper with circulation of approximately 12,000 and eleven separate weekly publications with circulation exceeding 185,000. All significant intercompany balances and transactions have been eliminated in combination. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. INVENTORIES Inventories, consisting primarily of newsprint, are stated at the lower of cost (first in, first out) or market. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is provided under the straight-line method over the estimated useful lives of the various assets as follows: 10 to 40 Buildings and improvements................................... years 10 to 40 Leasehold improvements....................................... years Towers and antennae.......................................... 20 years Machinery and equipment...................................... 3 to 12 years Broadcast equipment.......................................... 3 to 13 years Furniture and fixtures....................................... 3 to 10 years
INTANGIBLE ASSETS Goodwill and FCC licenses are being amortized as required by generally accepted accounting principles. Amortization is calculated on the straight-line basis over a period of 40 years. Covenants not to compete are being amortized on the straight-line basis over the agreements' terms of three to five years. F-12 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred financing costs and favorable leasehold rights are being amortized on the straight-line basis over the terms of the underlying debt (36 to 44 months) or leases (3-20 years). LONG-LIVED ASSETS Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," requires, among other things, that companies consider whether indicators of impairment of long-lived assets held for use are present, that if such indicators are present the companies determine whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amounts, and if so, the companies recognize an impairment loss based on the excess of the carrying amount of the assets over their fair value. Accordingly, the Company evaluated the ongoing value of its property and equipment and other long-lived assets as of February 28, 1997. From this evaluation, the Company determined that there were no indications of impairment and as such, no impairment loss has been recognized for the year ended February 28, 1997. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. ADVERTISING Advertising costs are expensed as incurred and totaled $783,879, $801,356, and $838,534 for the years ended February 28, 1995, February 29, 1996, and February 28, 1997, respectively. REVENUE RECOGNITION The Company recognizes advertising revenue when an ad is aired by Radio or printed by News. Radio also receives fees under time brokerage agreements, which are recognized based on a stated amount per month. RECLASSIFICATIONS Certain amounts in the 1995 and 1996 financial statements have been reclassified to conform to the 1997 presentation. 2. DESCRIPTION OF THE COMPANY, ACQUISITIONS AND DISPOSITIONS The businesses of the Company are operating entities affiliated with Brill Media Company, L.P. (BMCLP), a group executive management operation which provides supervisory activities and certain corporate-wide services to the operating units. The management operation is compensated on a fee basis by the operating units under standard contractual arrangements. The Company was organized by the Stockholder in 1980 to own and operate media properties including radio stations, television stations, F-13 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 2. DESCRIPTION OF THE COMPANY, ACQUISITIONS AND DISPOSITIONS (CONTINUED) newspapers and related businesses, with a medium-market emphasis. The Company is structured with each operating unit self-contained in its own entity with respect to its assets, operations, and management. On May 1, 1995, CB2, a newly formed corporation owned by the Stockholder, acquired radio station KZMO-FM located in California, Missouri. CB2 paid cash of $25,000 and entered into note payable agreements with the seller of $250,000 and $149,500. CB2 also entered into a covenant not to compete agreement with the previous owner for $300,000, discounted at 11% to $165,290 for financial statement purposes -- see Note 7. The acquisition was accounted for as a purchase. Assets acquired include goodwill, FCC license, and tower lease of $50,000, $274,500, and $100,000, respectively. The financial statements include the results of operations of CB2 from May 1, 1995. On November 1, 1995, NB2, a newly formed corporation owned by the Stockholder, acquired radio station KLXK-FM located in Duluth, Minnesota. NB2 paid cash of $30,000 and entered into a note payable with the seller of $670,000. The acquisition was accounted for as a purchase. Assets acquired include goodwill, FCC license, and equipment of $50,000, $550,000, and $100,000, respectively. The financial statements include the results of operations of NB2 from November 1, 1995. On July 9, 1996, SJN, a newly formed corporation owned by the Stockholder, acquired the common stock of Clinton Distribution, Inc. (Clinton), which owned and operated the St. Johns Reminder, a weekly newspaper located in St. Johns, Michigan. SJN paid cash of $50,000 and entered into a note payable with the seller of $340,704. SJN also entered into a covenant not to compete with the Seller for $200,000, discounted at 12% to $127,430 for financial statement purposes -- see Note 7. On July 31, 1996, Clinton was merged into SJN under a tax-free liquidation. The acquisition of Clinton was accounted for as a purchase. The financial statements include the results of operations of Clinton/SJN from July 9, 1996. Pro forma combined operating results reflecting these acquisitions as if they had occurred at the beginning of the respective periods would not have been materially different from reported amounts. In February, 1996, FMR entered into a contract to sell all operating assets of its radio stations KQWB-FM and KQFN-AM located in Fargo, North Dakota, and Moorhead, Minnesota, for $2,000,000 in cash. The pretax gain was approximately $1,065,000, net of related expenses. FMR further contracted to lease the programming of the radio stations to the buyer under a time brokerage agreement (TBA) beginning March 1, 1996, for $15,000 per month, until transfer of the FCC license on August 13, 1996. Accordingly, no broadcast revenue or operating expense is recorded for FMR subsequent to February 29, 1996. On June 27, 1996, NR2, a newly formed corporation owned by the Stockholder executed a TBA effective August 5, 1996, to operate radio station KTRR-FM located in Loveland, Colorado. The financial statements include the results of operations of NR2 from August 5, 1996. The TBA also gives the Company an option to purchase KTRR-FM. In connection with this option, NR2 made a nonrefundable deposit of $200,000 to the owner of KTRR-FM. In May 1997, NR2 exercised its option to purchase KTRR-FM for $2,000,000. The purchase price includes the $200,000 already on deposit, $550,000 in cash payable at closing, and a note payable to the seller in the amount of $1,250,000. NR2 will also enter into a five-year, $500,000 covenant not to compete. The purchase is pending various approvals. F-14 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 2. DESCRIPTION OF THE COMPANY, ACQUISITIONS AND DISPOSITIONS (CONTINUED) On July 25, 1997 the Company paid $3,000,000 for a non-competition agreement among the Company, one of the managed affiliates (see Note 10) and the seller of the related radio stations. On October 1, 1997, Huron P.S., LLC (HPL) and Huron Newspapers, LLC (HNL), newly formed limited liability companies owned principally by the Stockholder, entered into contracts to purchase the assets of Huron Postal Service, Inc., which owned and operated a 40,000-household distribution system for advertising supplements, newspapers, and shopping guides located in Tawas City, Michigan, and Northeastern Printers, Inc., which owned and operated two editions of the Northeastern Shopper, distributed to 40,000 households located in Tawas City, Michigan (collectively, Tawas) for $1,600,000. HPL and HNL paid combined cash of $900,000 at closing and entered into notes payable with the seller totaling $700,000. The notes bear interest at 10% and are due in October 2004. HPL and HNL also entered into six-year covenants not to compete, totaling $1,200,000. On October 24, 1997, CMB and CB2 entered into contracts to sell the operating assets of radio stations KTXY-FM and KLIK-AM located in Jefferson City, Missouri, and radio station KATI-FM located in California, Missouri, (the Missouri Properties) for a net cash price of $7,419,000, plus assumed liabilities of $256,000. The expected pretax gain will be approximately $5 million, net of related expenses. CMB and CB2 further contracted to lease the programming of the combined radio stations to the buyer under a TBA beginning November 1, 1997, for $50,000 per month, until transfer of the FCC licenses is complete. Accordingly, no broadcast revenue or operating expenses will be recorded for CMB or CB2 subsequent to October 31, 1997. The gain will be recognized upon transfer of the FCC licenses. Applications for transfer of the broadcast licenses of the Missouri Properties have been filed with the FCC by the buyers. A local market competitor has objected to the transfer of the licenses and on December 12, 1997, filed with the FCC a Petition to Deny the license transfers and to terminate the TBA. No action has been taken on the Petition to Deny by the FCC, and the Company believes that, even if the Petition to Deny were granted, the consequences to the Company would not be material. 3. PROPERTY AND EQUIPMENT Property and equipment consists of the following at February 29, 1996 and February 28, 1997:
1996 1997 ------------- ------------- Land............................................................................... $ 748,255 $ 646,647 Buildings and improvements......................................................... 2,564,698 1,604,922 Leasehold improvements............................................................. 846,826 989,586 Towers and antennae................................................................ 1,939,158 1,962,264 Machinery and equipment............................................................ 3,771,769 4,162,151 Broadcast equipment................................................................ 4,968,828 4,106,725 Furniture and fixtures............................................................. 2,907,508 2,425,820 Construction in progress........................................................... 244,293 500,000 ------------- ------------- $ 17,991,335 $ 16,398,115 ------------- ------------- ------------- -------------
F-15 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 3. PROPERTY AND EQUIPMENT (CONTINUED) Property and equipment includes the following assets under capital leases at February 28, 1997: Buildings and improvements...................................................... $ 828,337 Towers and antennae............................................................. 1,050,000 Machinery and equipment......................................................... 277,661 Broadcast equipment............................................................. 212,168 Furniture and fixtures.......................................................... 180,559 --------- $2,548,725 --------- ---------
4. INCOME TAXES The Company accounts for income taxes using the liability method. Under the liability method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. NCR, TSB, CB2, NB2, NR2, and SJN are "S" corporations whose taxable income or loss for federal and state income tax purposes is passed through to the Stockholder. NBL and NHL are limited liability companies whose taxable income or loss for federal and state income tax purposes is passed through to their members. CMDLP is a limited partnership whose taxable income or loss for federal and state income tax purposes is passed through to its partners. BRI, RRI, NBI, FMR, CMB, BNI, CMNH, and CMN are "C" corporations. RRI is included in the consolidated income tax return of BRI. CMNH and CMN are included in the consolidated income tax return of BNI. NBI and FMR are included in the consolidated income tax return of their parent. The Company calculates its current and deferred income tax provisions for NBI and FMR on a separate return basis (i.e., as if the corporations had not been included in the consolidated income tax return of their parent). At February 28, 1997, the "C" corporations noted above had net operating loss carryforwards of approximately $13 million for federal income tax purposes which expire in fiscal years 1998 through 2012. F-16 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 4. INCOME TAXES (CONTINUED) As a result of net operating loss carryforwards and temporary differences, the Company has net deferred tax assets and has established a valuation allowance at February 29, 1996 and February 28, 1997, as follows:
1996 1997 -------------- ------------- Gross deferred tax assets: Incentive plan expense........................................................... $ 1,448,043 $ 1,685,877 Net operating loss carryforwards................................................. 9,720,061 5,281,599 Other............................................................................ 281,472 313,814 -------------- ------------- 11,449,576 7,281,290 Gross deferred tax liabilities: Deferred gain on replacement assets.............................................. (1,154,401) (1,154,401) Other............................................................................ (255,113) (104,786) -------------- ------------- (1,409,514) (1,259,187) -------------- ------------- Net deferred tax asset............................................................. 10,040,062 6,022,103 Valuation allowance................................................................ (10,040,062) (6,022,103) -------------- ------------- Net deferred tax asset recognized in the balance sheet............................. $ -- $ -- -------------- ------------- -------------- -------------
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The provision (benefit) for income taxes for the "C" corporations differs from the amount of income tax benefit computed by applying the United States federal income tax rate to loss before income taxes and extraordinary item. A reconciliation of the differences is as follows:
YEAR ENDED ------------------------------------------- FEBRUARY 28 FEBRUARY 29 FEBRUARY 28 1995 1996 1997 ------------- ------------- ------------- "C" corporations income tax benefit at statutory federal tax rate.... $ (1,366,137) $ (1,838,365) $ (870,606) Increase (decrease) resulting from: State income taxes, net of federal benefit......................... (195,989) (350,071) (17,343) Change in valuation allowance...................................... 1,607,220 2,162,782 1,024,242 Other, net......................................................... 23,230 (13,215) 150,211 ------------- ------------- ------------- Income tax provision (benefit)....................................... $ 68,324 $ (38,869) $ 286,504 ------------- ------------- ------------- ------------- ------------- -------------
F-17 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 5. OTHER ASSETS Other assets consist of the following at February 29, 1996 and February 28, 1997:
1996 1997 ------------ ------------ Deferred financing costs.............................................................. $ 1,614,046 $ 2,105,218 Broadcasting contracts................................................................ 120,000 -- Favorable leasehold rights............................................................ 434,728 384,728 Other................................................................................. 490,913 651,884 ------------ ------------ 2,659,687 3,141,830 Less:Accumulated amortization......................................................... 831,843 1,250,740 ------------ ------------ $ 1,827,844 $ 1,891,090 ------------ ------------ ------------ ------------
6. SHORT-TERM NOTE Short-term note at February 29, 1996 and February 28, 1997, consists of the following:
1996 1997 ---------- ---------- Note payable, interest payable annually at 6.85%.......................................... $ 500,000 $ 500,000
F-18 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 7. LONG-TERM OBLIGATIONS Senior notes payable at February 29, 1996 and February 28, 1997, consist of the following:
1996 1997 ------------- ------------- Senior note, interest only payable monthly at 12%, due September 30, 1999. Includes additional interest accrued at 5.5%, payable September 30, 1999.................. $ 40,000,000 $ 41,824,718 Mortgage note, payable in monthly installments of $7,645, including interest at 8% through September 1, 1997, then interest adjusted to prime lending rate plus 2%, due September 1, 2001............................................................ 723,500 688,367 Mortgage note, interest at 11%..................................................... 113,683 -- Senior note, payable in monthly installments of $3,033 including interest at 8%, due May 1, 2005.................................................................. 237,369 219,307 Senior note, payable in monthly installments of $3,850, including interest at bank prime lending rate plus 1%, due February 28, 2002................................ 197,690 168,870 Senior note, payable in monthly installments of $9,074, including interest at 9%, due October 31, 2005............................................................. 670,000 653,622 Senior note, interest only payable monthly at 8% until July 9, 1997, thereafter payable in monthly installments of $4,436, including interest, due July 9, 2006............................................................................. -- 340,010 Senior secured noncompetition agreement, payable in quarterly installments of $6,250, including imputed interest at 12%, due July 1, 2004...................... -- 122,503 Other.............................................................................. 310,918 484,678 ------------- ------------- $ 42,253,160 $ 44,502,075 ------------- ------------- ------------- -------------
The bank prime lending rate at February 28, 1997, was 8.25%. In February 1996, the Company and two managed affiliates under common control (collectively referred to herein as the Borrowers) jointly entered into a senior note agreement which provided $40 million of borrowings. In September 1996, the senior note was extended to September 1999. The note bears interest at 12%, payable monthly. Beginning May 1996, additional interest accrues at 5.5% and is payable in September 1999. At February 28, 1997, $1,824,718 of additional interest was accrued by the Company. On September 30, 1996, the Company entered into a $16 million line of credit to provide acquisition financing. The line has the same terms as the $41,824,718 senior note described above. In May 1997 and July 1997, the Company borrowed against the $16 million line of credit. On September 30, 1997, the Company refinanced its outstanding senior note with its existing lender and received additional financing of $14 million. The refinanced senior note bears interest at 10%, payable monthly. Additional interest accrues at 7.5%. Principal and additional interest are payable in September 1999. The Company is required to pay a 4% penalty in the event of prepayment of the outstanding senior note. The Borrowers are jointly and individually responsible for the full amount of the senior note. Accordingly, the Company has recorded the entire amount of the senior note in the accompanying statement of financial position and has recorded notes receivable from managed affiliates for the managed F-19 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 7. LONG-TERM OBLIGATIONS (CONTINUED) affiliates' portion of the borrowings under the agreement. The note restricts the Borrowers from the following: (a) sale or disposition of a subsidiary or significant assets other than in the normal course of business; (b) incurring additional indebtedness in excess of limitations; (c) payment of management fees, dividends, and payments to affiliates in excess of certain limitations and; (d) making aggregate capital expenditures or aggregate lease payments in excess of annual limitations. The note also requires attaining minimum cumulative operating cash flows, as defined. The common stock, membership interest, and assets of each operating entity and ARB Finance-One, Inc. (an affiliate) are pledged as security for the senior note. In addition, the Company's Stockholder has personally guaranteed the senior note. Obligations under capital leases relate to certain operating facilities and equipment. The future minimum lease payments and the present value of capital lease payments are as follows:
FISCAL YEAR AMOUNT - -------------------------------------------------------------------------------- ------------ 1998............................................................................ $ 394,202 1999............................................................................ 322,483 2000............................................................................ 259,862 2001............................................................................ 144,391 2002............................................................................ 62,979 ------------ Total minimum obligations....................................................... 1,183,917 Less: Interest.................................................................. 211,951 ------------ Present value of future minimum lease payments.................................. $ 971,966 ------------ ------------
During fiscal 1997, the Company entered into new capital leases totaling approximately $347,000. The present value of obligations under capital leases at February 28, 1997, includes $606,884 in amounts due to affiliates of the Company. Unsecured and subordinated obligations at February 29, 1996 and February 28, 1997, consist of the following:
1996 1997 ---------- ---------- Subordinated notes, payable in monthly installments including interest at 9%, due November 3, 2000................................................................................. $ 458,131 $ 401,448 Unsecured noncompetition agreement, payable in monthly installments of $1,666 through May 1, 2000, then beginning June 1, 2000, payable in monthly installments of $3,333, including imputed interest at 11%, due May 1, 2005...................................... 163,881 161,814 Unsecured note, payable in monthly installments of $3,790, including interest at 8%, due October 1, 2004......................................................................... 200,717 170,192 Other..................................................................................... 92,826 112,933 ---------- ---------- $ 915,555 $ 846,387 ---------- ---------- ---------- ----------
In conjunction with the $40 million senior note refinancing in February 1996, the Company paid $3,250,000 to a subordinated note holder. This payment reflected the original principal only, and $7,046,813 of contingent interest which had been accrued at the maximum rate was reduced at maturity pursuant to the terms of an alternative valuation formula, as defined in the agreement. The Company also F-20 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 7. LONG-TERM OBLIGATIONS (CONTINUED) wrote off certain previously deferred financing costs at the time of the refinancing totaling $131,378. The net gain of $6,915,435 related to these transactions has been reflected as an extraordinary item in the accompanying 1996 statement of operations. The Company has performance incentive plans with certain executives. Such plans accumulate value based on certain defined performance factors. The executives were vested to the extent of $3,527,034, and $4,155,000 as of February 29, 1996 and February 28, 1997, respectively, which was recorded as a long-term obligation. Payments under the terms of the plans would commence only upon the death, disability, retirement, or termination of employment of an executive, and can be made at the discretion of the Company in amounts and on terms no less favorable to the executive than quarterly payments of 2.5% of the vested amount. Aggregate maturities of long-term obligations during the next five years are as follows:
OBLIGATIONS UNSECURED UNDER AND SENIOR CAPITAL SUBORDINATED FISCAL YEAR NOTES LEASES OBLIGATIONS TOTAL - -------------------------------------------------------- ------------- ----------- ------------ ------------- 1998.................................................... $ 531,531 $ 279,576 $ 71,332 $ 882,439 1999.................................................... 349,219 246,617 74,310 670,146 2000.................................................... 41,363,333 220,314 81,290 41,664,937 2001.................................................... 285,949 125,329 220,481 631,759 2002.................................................... 246,736 53,655 98,697 399,088
8. COMMITMENTS The Company leases certain land, buildings, and equipment. Rent expense for fiscal years 1995, 1996, and 1997 was $119,998, $210,998, and $247,328, respectively. Future minimum lease payments under operating leases that have initial or remaining noncancelable terms in excess of one year as of February 28, 1997, are as follows:
FISCAL YEAR AMOUNT - ---------------------------------------------------------------------------------- ---------- 1998.............................................................................. $ 181,388 1999.............................................................................. 127,789 2000.............................................................................. 40,477 2001.............................................................................. 16,093 2002.............................................................................. 8,792 ---------- Total minimum payments required................................................... $ 374,539 ---------- ----------
F-21 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 9. CAPITAL The authorized and issued common stock and membership interest of the individual companies included in the combined financial statements consists of the following at February 28, 1997:
NUMBER OF SHARES -------------------------- ADDITIONAL ISSUED AND PAID-IN AUTHORIZED OUTSTANDING AMOUNT CAPITAL ----------- ------------- --------- ------------- Northland Broadcasting, Inc.: Common, $1 par value......................................... 1,000 100 $ 100 $ 5,653,505 Northland Broadcasting, LLC: Membership interest.......................................... N/A N/A 10 -- Northland Holdings, LLC: Membership interest.......................................... N/A N/A 1,000 -- NB II, Inc.: Common, $1 par value......................................... 1,000 100 100 63,000 Fargo-Moorhead Radio, Inc.: Common, $1 par value......................................... 1,000 100 100 8,537,952 Central Missouri Broadcasting, Inc.: Common, $1 par value......................................... 1,000 1,000 1,000 -- CMB II, Inc.: Common, $1 par value......................................... 1,000 100 100 -- Northern Colorado Radio, Inc.: Common, $1 par value......................................... 1,000 100 100 1,064,500 NCR II, Inc.: Common, $1 par value......................................... 5,000 100 100 16,000 St. Johns Newspapers, Inc.: Common, $1 par value......................................... 5,000 100 100 -- Tri-State Broadcasting, Inc.: Common, $1 par value......................................... 5,000 100 100 40,000 Brill Radio, Inc.: Common, $1 par value......................................... 1,000 1,000 1,000 -- Brill Newspapers, Inc.: Class A common stock, $1 par value, voting................... 1,000 1,000 1,000 -- Class B common stock, $1 par value, nonvoting................ 2,000 150 150 609,352 --------- ------------- $ 4,960 $ 15,984,309 --------- ------------- --------- -------------
CMB II, Inc. was organized during the year ended February 28, 1995; NB II, Inc. was organized during the year ended February 29, 1996, Northland Broadcasting, LLC, Northland Holdings, LLC, NCR II, Inc., and St. Johns Newspapers, Inc. were organized during the year ended February 28, 1997. During the year ended February 28, 1997, the Company received capital contributions of $15,036,667 (Northland Broadcasting, LLC--$10, Northland Holdings, LLC--$1,000, NBII, Inc.--$63,000, Northern Colorado Radio, Inc.--$725,000, NRII, Inc.--$16,100, Tri-State Broadcasting, Inc.--$40,000, St. Johns Newspapers, Inc.--$100, Northland Broadcasting, Inc.--$5,653,505, and Fargo-Moorhead Radio, Inc.-- $8,537,952), primarily from BMCLP, of which $14,191,457 were outstanding affiliate receivables owed to F-22 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 9. CAPITAL (CONTINUED) BMCLP and were offset by affiliate payables to Media. During 1997, Brill Newspapers, Inc. paid dividends of $520,000. There were no other changes to capital for each of the three years in the period ended February 28, 1997. 10. TRANSACTIONS WITH AFFILIATES BMCLP provides certain administrative services to the Company for which it receives a management fee based on a percentage of revenue. The Company incurred management fees to BMCLP in fiscal years 1995, 1996, and 1997 of approximately $1,679,000, $1,833,000, and $1,945,000, respectively. The Company has operating management agreements and loans with managed affiliates who operate radio stations in the same markets as the Company. In accordance with the operating management agreements, the managed affiliates pay management fees based on a fixed amount plus a variable fee based on performance, as defined. The Company earned $40,000 in management fees from these managed affiliates for the year ended February 28, 1997, which is included in due from affiliates in the accompanying statement of financial position. At February 28, 1997, notes receivable from these managed affiliates include notes totaling $408,401 plus additional accrued interest of $3,606. The notes receivable bear interest at 12%, payable monthly. Additional interest accrues at 5.5%. Principal and additional interest are payable in September 1999. In connection with the borrowings under the $16 million line of credit subsequent to February 28, 1997--see Note 7, the Company made additional loans to managed affiliates totaling $13,903,955. In connection with the Company's refinancing of its outstanding senior note on September 30, 1997--see Note 7, the Company refinanced the outstanding notes receivable from managed affiliates. The refinanced notes receivable from managed affiliates bear interest at 10%, payable monthly. Additional interest accrues at 7.5%. Principal and additional interest are payable in September 1999. Through December 1997, the Company made additional loans to managed affiliates totaling $2 million. On December 30, 1997, the Company refinanced notes receivable from managed affiliates totaling approximately $16.3 million. The refinanced notes receivable from managed affiliates bear interest at 12%, payable semi-annually, and are due January 1, 2001. At February 29, 1996 and February 28, 1997, notes payable to stockholder include notes payable of $206,000 and $374,779, respectively, plus accrued interest of $3,000 and $3,858, respectively. At February 28, 1997, notes totaling $74,779 bear interest at 12% and notes totaling $300,000 bear interest at prime plus 1%. Notes payable to stockholder are subordinated to the notes payable to the respective senior lenders. At February 29, 1996 and February 28, 1997, due from affiliates includes notes receivable from stockholder totaling $4,106,551 and $3,966,194, respectively, plus accrued interest of $84,244 at February 28, 1997. The notes receivable bear interest at 5.5% and are due at various dates through 2001. At February 28, 1997, due from affiliates also includes $1,886,909 of affiliate notes receivable plus accrued interest of $28,840, accrued management fees payable of $144,153, and operating payables due to affiliates of $726,386. F-23 THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997 10. TRANSACTIONS WITH AFFILIATES (CONTINUED) At February 29, 1996, due to affiliates includes accrued management fees payable of $2,972,870, various notes payable of $8,821,031 plus accrued interest on these notes totaling $4,923,144, affiliate notes receivable of $1,888,909 plus accrued interest on these notes of $115,541, and operating receivables due from affiliates of $679,245. 11. BUSINESS SEGMENTS The Company has been engaged in two principal businesses: operation of AM and FM radio stations (Radio) and publication of daily and weekly newspapers and shoppers (News). Information for the years ended February 28, 1995, February 29, 1996, and February 28, 1997, regarding the Company's major business segments is presented in the following table:
RADIO NEWS TOTAL ------------- ------------- ------------- Revenues: 1995.............................................................. $ 12,649,594 $ 10,537,363 $ 23,186,957 1996.............................................................. 13,095,663 12,217,268 25,312,931 1997.............................................................. 13,595,820 13,440,395 27,036,215 Operating income: 1995.............................................................. 999,703 1,233,281 2,232,984 1996.............................................................. 883,897 1,140,131 2,024,028 1997.............................................................. 1,897,712 2,041,434 3,939,146 Identifiable assets: 1995.............................................................. 11,195,756 10,588,032 21,783,788 1996.............................................................. 14,499,338 11,511,203 26,010,541 1997.............................................................. 11,074,545 15,367,692 26,442,237 Depreciation and amortization expense: 1995.............................................................. 751,407 359,701 1,111,108 1996.............................................................. 807,917 504,055 1,311,972 1997.............................................................. 917,438 477,589 1,395,027 Capital expenditures: 1995.............................................................. 276,427 697,378 973,805 1996.............................................................. 819,440 157,498 976,938 1997.............................................................. 336,952 931,895 1,268,847
12. SUBSEQUENT EVENT Effective December 30, 1997, the radio and newspaper businesses were contributed, at historical cost, to a newly formed limited liability company, BMC Holdings, LLC, which is a wholly-owned subsidiary of Brill Media Company, LLC (BMC). BMC is indirectly owned by the Stockholder. F-24 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE. ------------------------ TABLE OF CONTENTS
PAGE ----- Prospectus Summary.................... 1 Risk Factors.......................... 22 Use of Proceeds....................... 34 Capitalization........................ 35 Pro Forma Financial Information....... 36 Selected Combined Financial Data...... 46 Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 48 Business.............................. 53 Legal Proceedings..................... 75 Management............................ 75 Executive Compensation................ 76 Certain Transactions.................. 77 The Exchange Offer.................... 80 Description of Notes.................. 90 Description of Appreciation Notes..... 121 Certain Federal Income Tax Considerations...................... 132 Plan of Distribution.................. 135 Book-Entry; Delivery and Form......... 136 Legal Matters......................... 137 Experts............................... 137 Available Information................. 138 Index of Financial Statements......... F-1
[LOGO] BRILL MEDIA COMPANY, LLC BRILL MEDIA MANAGEMENT, INC. OFFER TO EXCHANGE 12% SENIOR NOTES DUE 2007 FOR 12% SERIES B SENIOR NOTES DUE 2007 AND APPRECIATION NOTES DUE 2007 FOR SERIES B APPRECIATION NOTES DUE 2007 ------------------------ PROSPECTUS --------------------- , 1998 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 13.1-697 of the Virginia Stock Corporation Act (the "SCA") empowers a corporation to indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (i) he conducted himself in good faith; and (ii) he believed: (a) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (b) in all other cases, that his conduct was at least not opposed to its best interests; and (iii) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. The termination of a proceeding by judgment, order, settlement or conviction is not, of itself, determinative that the director did not act in good faith and believed that his conduct was not in the corporation's best interests or that his conduct was opposed to the corporation's best interests, or with respect to any criminal proceeding, that he had reasonable cause to believe his conduct was unlawful. A corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation or in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. Indemnification with respect to a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. Section 13.1-698 of the SCA also requires a corporation, unless limited by its articles of incorporation, to indemnify a director who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding. Section 13.1-699 of the SCA provides that a corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (i) the director furnishes the corporation a written statement of his good faith belief that he has met the standard of conduct described in SCA Section 13.1-697 above; (ii) the director furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and (iii) a determination is made that the facts then known to those making the determination would not preclude indemnification under this article. The undertaking required in clause (ii) above shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment. Furthermore, determinations and authorizations of payments under this Section 13.1-699 shall be made in the manner specified in SCA Section 13.1-701 below. Section 13.1-700.1 provides that an individual who is made a party to a proceeding because he is or was a director of a corporation may apply to a court for an order directing the corporation to make advances or reimbursement for expenses or to provide indemnification. Such application may be made to the court conducting the proceeding or to another court of competent jurisdiction. The court shall order the corporation to make advances and/or reimbursement for expenses or to provide indemnification if it determines that the director is entitled to such advances, reimbursement or indemnification and shall also order the corporation to pay the director's reasonable expenses incurred to obtain the order. With respect to a proceeding by or in the right of the corporation, the court may (i) order indemnification of the director to the extent of his reasonable expenses if it determines that, considering all the relevant circumstances, the director is entitled to indemnification even though he was adjudged liable II-1 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (CONTINUED) to the corporation and (ii) also order the corporation to pay the director's reasonable expenses incurred to obtain the order of indemnification. Neither (i) the failure of the corporation, including its board of directors, its independent legal counsel and its shareholders, to have made an independent determination prior to the commencement of any action permitted by this section that the applying director is entitled to receive advances and/or reimbursement nor (ii) the determination by the corporation, including its board of directors, its independent legal counsel and its shareholders, that the applying director is not entitled to receive advances and/or reimbursement or indemnification shall create a presumption to that effect or otherwise of itself be a defense to that director's application for advances for expenses, reimbursement or indemnification. Section 13.1-701 of the SCA provides that a corporation may not indemnify a director unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has conducted himself in good faith and he believed: (a) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (b) in all other cases, that his conduct was at least not opposed to its best interests; and in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. Such determination shall be made: (i) by the board of directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding; (ii) if a quorum cannot be obtained under paragraph 1 of this subsection, by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding; (iii) by special legal counsel: (a) selected by the board of directors or its committee in the manner prescribed in paragraph 1 or 2 of this subsection; or (b) if a quorum of the board of directors cannot be obtained under paragraph 1 of this subsection and a committee cannot be designated under paragraph 2 of this subsection, selected by majority vote of the full board of directors, in which selection directors who are parties may participate; or (iv) by the shareholders, but shares owned by or voted under the control of directors who are the time parties to the proceeding may not be voted on the determination. Authorization of indemnification and evaluation as to reasonable-ness of expenses shall be made in the same manner as the determination that indemnification is permissible except that if the determination is made by special legal counsel, authorization or indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under clause (a) and (b) above to select counsel. Section 13.01-702 of the SCA provides that unless limited by a corporation's articles of incorporation, (i) an officer of the corporation is entitled to mandatory indemnification under Section 13.1-698, and is entitled to apply for court-ordered indemnification under Section 13.1-700, in each case to the same extent as a director; and (ii) the corporation may indemnify and advance expenses under this article to an officer, employee, or agent of the corporation to the same extent as to a director. Section 13.1-703 of the SCA provides that a corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify him against the same liability under Section 13.1-697 or Section 13.1-698 above. Section 13.1-704 of the SCA provides that any corporation shall have power to make any further indemnity, including indemnity with respect to a proceeding by or in the right of the corporation, and to II-2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (CONTINUED) make additional provision for advances and reimbursement of expenses, to any director, officer, employee or agent that may be authorized by the articles of incorporation or any bylaw made by the shareholders or any resolution adopted, before or after the event, by the shareholders, except an indemnity against (i) his willful misconduct, or (ii) a knowing violation of the criminal law. Unless the articles of incorporation, or any such bylaw or resolution expressly provide otherwise, any determination as to the right to any further indemnity shall be made in accordance with Section13.1-701B. Each such indemnity may continue as to a person who has ceased to have the capacity referred to above and may inure to the benefit of the heirs, executors and administrators of such a person. Article X of the Bylaws of Brill Media Management, Inc. provides as follows: Any person (the "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (the "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of NOLO CONTENDERE or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. II-3 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 22. UNDERTAKINGS. The Registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the "Commission") pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities act, each such post-effective amendment shall be deemed to be a registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of other securities being registered which remain unsold at the termination of the offering. (4) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. (5) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act, BRILL MEDIA COMPANY, LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. BRILL MEDIA COMPANY, LLC By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-5 Pursuant to the requirements of the Securities Act, BRILL MEDIA MANAGEMENT, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. BRILL MEDIA MANAGEMENT, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-6 Pursuant to the requirements of the Securities Act, BMC HOLDINGS, LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. BMC HOLDINGS, LLC By: BRILL MEDIA COMPANY, LLC, Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-7 Pursuant to the requirements of the Securities Act, READING RADIO, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. READING RADIO, INC., By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer ------------------------------------------ (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-8 Pursuant to the requirements of the Securities Act, TRI-STATE BROADCASTING, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. TRI-STATE BROADCASTING, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-9 Pursuant to the requirements of the Securities Act, NORTHERN COLORADO RADIO, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NORTHERN COLORADO RADIO, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-10 Pursuant to the requirements of the Securities Act, NCR II, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NCR II, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-11 Pursuant to the requirements of the Securities Act, CENTRAL MISSOURI BROADCASTING, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CENTRAL MISSOURI BROADCASTING, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-12 Pursuant to the requirements of the Securities Act, CMB II, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CMB II, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-13 Pursuant to the requirements of the Securities Act, NORTHLAND BROADCASTING, LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NORTHLAND BROADCASTING, LLC By: NORTHLAND HOLDINGS, LLC, Manager By: BMC HOLDINGS, LLC, Manager By: BRILL MEDIA COMPANY, LLC, Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-14 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-15 Pursuant to the requirements of the Securities Act, NB II, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NB II, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-16 Pursuant to the requirements of the Securities Act, CENTRAL MICHIGAN NEWSPAPERS, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CENTRAL MICHIGAN NEWSPAPERS, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-17 Pursuant to the requirements of the Securities Act, CADILLAC NEWSPAPERS, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CADILLAC NEWSPAPERS, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-18 Pursuant to the requirements of the Securities Act, CMN ASSOCIATED PUBLICATIONS, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CMN ASSOCIATED PUBLICATIONS, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-19 Pursuant to the requirements of the Securities Act, CENTRAL MICHIGAN DISTRIBUTION CO., L.P. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evanville, in the State of Indiana, on January 12, 1998. CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. General Partner By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-20 Pursuant to the requirements of the Securities Act, CENTRAL MICHIGAN DISTRIBUTION CO., INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CENTRAL MICHIGAN DISTRIBUTION CO., INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-21 Pursuant to the requirements of the Securities Act, GLADWIN NEWSPAPERS, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. GLADWIN NEWSPAPERS, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-22 Pursuant to the requirements of the Securities Act, GRAPH ADS PRINTING, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. GRAPH ADS PRINTING, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-23 Pursuant to the requirements of the Securities Act, MIDLAND BUYERS GUIDE, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. MIDLAND BUYERS GUIDE, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-24 Pursuant to the requirements of the Securities Act, ST. JOHNS NEWSPAPERS, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. ST. JOHNS NEWSPAPERS, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-25 Pursuant to the requirements of the Securities Act, HURON P.S. LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. HURON P.S., LLC By: HURON HOLDINGS, LLC Manager By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-26 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-27 Pursuant to the requirements of the Securities Act, HURON NEWSPAPERS, LLC has dulycaused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. HURON NEWSPAPERS, LLC By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-28 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-29 Pursuant to the requirements of the Securities Act, HURON HOLDINGS, LLC has dulycaused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. HURON HOLDINGS, LLC By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-30 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-31 Pursuant to the requirements of the Securities Act, NORTHERN COLORADO HOLDINGS, LLC has dulycaused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-32 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-33 Pursuant to the requirements of the Securities Act, NCR III, LLC has dulycaused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NCR III, LLC By: NCH II, LLC Manager By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-34 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-35 Pursuant to the requirements of the Securities Act, NCH II, LLC has dulycaused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NCH II, LLC By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-36 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-37 Pursuant to the requirements of the Securities Act, NORTHLAND HOLDINGS, LLC has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. NORTHLAND HOLDINGS, LLC By: BMC HOLDINGS, LLC Manager By: BRILL MEDIA COMPANY, LLC Manager By: BRILL MEDIA MANAGEMENT, INC., Manager By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. II-38 Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and ------------------------------------------ Treasurer (Principal Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant ------------------------------------------ Treasurer (Principal Financial and Accounting Officer) Donald C. TenBarge By /s/ ROBERT M. LEICH Director ------------------------------------------ Robert M. Leich By /s/ PHILIP C. FISHER Director ------------------------------------------ Philip C. Fisher By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary ------------------------------------------ Clifton E. Forrest By /s/ CHARLES W. LAUGHLIN Director ------------------------------------------ Charles W. Laughlin
II-39 Pursuant to the requirements of the Securities Act, CMN HOLDING, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. CMN HOLDING, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-40 Pursuant to the requirements of the Securities Act, BRILL RADIO, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. BRILL RADIO, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-41 Pursuant to the requirements of the Securities Act, BRILL NEWSPAPERS, INC. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Evansville, in the State of Indiana, on January 12, 1998. BRILL NEWSPAPERS, INC. By /s/ ALAN R. BRILL ------------------------------------------ Alan R. Brill DIRECTOR, VICE PRESIDENT AND TREASURER POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Alan R. Brill his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and the foregoing Power of Attorney has been signed by the following persons in the capacities indicated on January 12, 1998.
SIGNATURE TITLE - ----------------------------------------------------------------- ------------------------------------------------------ By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal ------------------------------------------ Executive Officer) Alan R. Brill By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and ------------------------------------------ Accounting Officer) Donald C. TenBarge
II-42 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - -------------- -------------------------------------------------------------------------------------------------- 3(i)(a) Articles of Organization of Brill Media Company, LLC* 3(i)(b) Articles of Incorporation of Brill Media Management, Inc.* 3(i)(c) Articles of Organization of BMC Holdings, LLC* 3(i)(d) Articles of Incorporation of Reading Radio, Inc.* 3(i)(e) Articles of Incorporation of Tri-State Broadcasting, Inc.* 3(i)(f) Articles of Incorporation of Northern Colorado Radio, Inc.* 3(i)(g) Articles of Incorporation of NCR II, Inc.* 3(i)(h) Articles of Incorporation of Central Missouri Broadcasting, Inc.* 3(i)(i) Articles of Incorporation of CMB II, Inc.* 3(i)(j) Articles of Organization of Northland Broadcasting, LLC* 3(i)(k) Articles of Incorporation of NB II, Inc.* 3(i)(l) Articles of Incorporation of Central Michigan Newspapers, Inc.* 3(i)(m) Articles of Incorporation of Cadillac Newspapers, Inc.* 3(i)(n) Articles of Incorporation of CMN Associated Publications, Inc.* 3(i)(o) Articles of Limited Partnership of Central Michigan Distribution Co., L.P.* 3(i)(p) Articles of Incorporation of Central Michigan Distribution Co., Inc.* 3(i)(q) Articles of Incorporation of Gladwin Newspapers, Inc.* 3(i)(r) Articles of Incorporation of Graph Ads Printing, Inc.* 3(i)(s) Articles of Incorporation of Midland Buyers Guide, Inc.* 3(i)(t) Articles of Incorporation of St. Johns Newspapers, Inc.* 3(i)(u) Articles of Organization of Huron P.S., LLC* 3(i)(v) Articles of Organization of Huron Newspapers, LLC* 3(i)(w) Articles of Organization of Huron Holdings, LLC* 3(i)(x) Articles of Organization of Northern Colorado Holdings, LLC* 3(i)(y) Articles of Organization of NCR III, LLC* 3(i)(z) Articles of Organization of NCH II, LLC* 3(i)(aa) Articles of Organization of Northland Holdings, LLC* 3(i)(bb) Articles of Incorporation of CMN Holding, Inc.* 3(i)(cc) Articles of Incorporation of Brill Radio, Inc.* 3(i)(dd) Articles of Incorporation of Brill Newspapers, Inc.* 3(ii)(a) Operating Agreement of Brill Media Company, LLC* 3(ii)(b) By-laws of Brill Media Management, Inc.* 3(ii)(c) Operating Agreement of BMC Holdings, LLC*
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - -------------- -------------------------------------------------------------------------------------------------- 3(ii)(d) By-laws of Reading Radio, Inc.* 3(ii)(e) By-laws of Tri-State Broadcasting, Inc.* 3(ii)(f) By-laws of Northern Colorado Radio, Inc.* 3(ii)(g) By-laws of NCR II, Inc.* 3(ii)(h) By-laws of Central Missouri Broadcasting, Inc.* 3(ii)(i) By-laws of CMB II, Inc.* 3(ii)(j) Operating Agreement of Northland Broadcasting, LLC* 3(ii)(k) By-laws of NB II, Inc.* 3(ii)(l) By-laws of Central Michigan Newspapers, Inc.* 3(ii)(m) By-laws of Cadillac Newspapers, Inc.* 3(ii)(n) By-laws of CMN Associated Publications, Inc.* 3(ii)(o) Partnership Agreement of Central Michigan Distribution Co., L.P.* 3(ii)(p) By-laws of Central Michigan Distribution Co., Inc.* 3(ii)(q) By-laws of Gladwin Newspapers, Inc.* 3(ii)(r) By-laws of Graph Ads Printing, Inc.* 3(ii)(s) By-laws of Midland Buyers Guide, Inc.* 3(ii)(t) By-laws of St. Johns Newspapers, Inc.* 3(ii)(u) Operating Agreement of Huron P.S., LLC* 3(ii)(v) Operating Agreement of Huron Newspapers, LLC* 3(ii)(w) Operating Agreement of Huron Holdings, LLC* 3(ii)(x) Operating Agreement of Northern Colorado Holdings, LLC* 3(ii)(y) Operating Agreement of NCR III, LLC* 3(ii)(z) Operating Agreement of NCH II, LLC* 3(ii)(aa) Operating Agreement of Northland Holdings, LLC* 3(ii)(bb) By-laws of CMN Holding, Inc.* 3(ii)(cc) By-laws of Brill Radio, Inc.* 3(ii)(dd) By-laws of Brill Newspapers, Inc.* 4.1 Indenture dated as of December 30, 1997 among Brill Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein, and United States Trust Company of New York, as Trustee, with the forms of 12% Senior Notes due 2007 and Series B 12% Senior Notes due 2007 included therein* 4.2 Indenture dated as of December 30, 1997 among Brill Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein, and United States Trust Company of New York, as Trustee, with the forms of Appreciation Notes due 2007 and Series B Appreciation Notes due 2007 included therein* 5.1 Opinion of Carter, Ledyard & Milburn including consent* 5.2 Opinion of Thompson & McMullan, P.C. including consent*
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - -------------- -------------------------------------------------------------------------------------------------- 8 Opinion of Carter, Ledyard & Milburn regarding certain Federal income tax matters, including consent* 10.1(a) Performance Incentive Plan Agreement dated November 26, 1985 between Central Michigan Newspapers, Inc. and Clifton E. Forrest* 10.1(b) Performance Incentive Plan Agreement dated November 26, 1985 between WIOV, Inc. and Alan L. Beck* 10.2 Managed Affiliates Subordination Agreement dated December 30, 1997 among Brill Media Company, L.P. and certain Subsidiaries 10.3 Management Agreements dated December 30, 1987 between various subsidiaries of Brill Media Company, LLC and Brill Media Company, L.P.* 10.4(a) Managed Affiliate Management Agreement dated December 30, 1997 between Tri-State Broadcasting, Inc. and TSB III, LLC* 10.4(b) Managed Affiliate Management Agreement dated December 30, 1997 between Tri-State Broadcasting, Inc. and TSB IV, LLC* 10.5(a) Managed Affiliate Promissory Note dated December 30, 1997 of TSB III, LLC in favor of Tri-State Broadcasting, Inc.* 10.5(b) Managed Affiliate Promissory Note dated December 30, 1997 of TSB IV, LLC in favor of Tri-State Broadcasting, Inc.* 10.6(a) Asset Purchase Agreement dated October 24, 1997 between CMBH, Inc. and MVP Radio, Inc.* 10.6(b) Asset Purchase Agreement dated October 24, 1997 between Central Missouri Broadcasting, Inc. and Zimmer Radio of Mid-Missouri, Inc.* 10.7 Amended and Restated Credit Agreement dated as of September 30, 1997 by and among the Borrowers named therein, Amresco Funding Corporation and Goldman Sachs Credit Partners L.P.** 10.8(a) Time Brokerage Agreement dated November 1, 1997 between CMB II, Inc. and MVP Radio, Inc.* 10.8(b) Time Brokerage Agreement dated November 1, 1997 between Central Missouri Broadcasting, Inc. and Zimmer Radio of Mid-Missouri, Inc.* 10.8(c) Time Brokerage Agreement dated June 27, 1996 between NCR II, Inc. and Onyx, Inc.* 10.9 Purchase Agreement dated December 22, 1997 by and among Brill Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein, and NatWest Capital Markets Limited* 10.10(a) Registration Rights Agreement dated as of December 30, 1997 by and among Brill Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein, and NatWest Capital Markets Limited* 10.10(b) Appreciation Notes Registration Rights Agreement dated as of December 30, 1997 by and among Brill Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein, and NatWest Capital Markets Limited* 10.11(a) Revolving Credit Agreement dated December 30, 1997 between various Subsidiary Guarantors and BMC Holdings, LLC* 10.11(b) Revolving Credit Note dated December 30, 1997 between various Subsidiary Guarantors and BMC Holdings, LLC*
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - -------------- -------------------------------------------------------------------------------------------------- 10.11(c) Promissory Note dated December 30, 1997 between BMC Holdings, LLC and Brill Media Company, LLC* 12.1 Ratio of Earnings to Fixed Charges* 21 Subsidiaries of Brill Media Company, LLC* 23.1 Consent of Carter, Ledyard & Milburn (included in its opinions to be filed as Exhibits 5.1 and 8)* 23.2 Consent of Ernst & Young LLP* 23.3 Consent of Thompson & McMullan, P.C. (included in its opinion to be filed as Exhibit 5.2) 24 Power of Attorney (included on signature page) 25.1 Statement of Eligibility on Form T-1 of Trustee (Series B 12% Senior Notes Due 2007)* 25.2 Statement of Eligibility on Form T-1 of Trustee (Series B Appreciation Notes Due 2007)* 27 Financial Data Schedule* 99.1 Form of Letter of Transmittal to Tender for Exchange 12% Senior Notes due 2007* 99.2 Form of Letter of Transmittal to Tender for Exchange Appreciation Notes due 2007* 99.3 Form of Exchange Agency Agreement among Brill Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein and United States Trust Company of New York, as Exchange Agent**
- ------------------------ * Filed herewith ** To be filed by amendment EX-3.(I)(A) 2 EXHIBIT 3(I)(A) EX-3.(i)(a) ARTICLES OF ORGANIZATION OF BRILL MEDIA COMPANY, LLC The undersigned sets forth the following as the Articles of Organization of BRILL MEDIA COMPANY, LLC, a Virginia limited liability company (the "Company"): 1. NAME. The name of the Company shall be "Brill Media Company, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the Company shall have a term of fifty (50) years from the date of its organization. Witness the following signature of the undersigned member of the Company who is the person forming the Company. ----------------------------- Organizer EX-3.(I)(B) 3 EXHIBIT 3(I)(B) EX-3.(i)(b) ARTICLES OF INCORPORATION OF BRILL MEDIA MANAGEMENT, INC. 1. The name of the corporation is "Brill Media Management, Inc." 2. The number of shares that the corporation is authorized to issue is 5,000 shares of common stock. 3. The post office address of the corporation's initial registered office is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of Richmond, Virginia, and the name of the corporation's initial registered agent at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. Brill Media Management, Inc. Date: By: ---------- -------------------------------- Charles W. Laughlin, Incorporator EX-3.(I)(C) 4 EXHIBIT 3(I)(C) EX-3.(i)(c) ARTICLES OF ORGANIZATION OF BMC HOLDINGS, LLC The undersigned sets forth the following as the Articles of Organization of BMC HOLDING, LLC, a Virginia limited liability company (the "Company"): 1. NAME. The name of the Company shall be "BMC Holdings, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the Company shall have a term of fifty (50) years from the date of its organization. Witness the following signature of the undersigned member of the Company who is the person forming the Company. ----------------------------- Organizer EX-3.(I)(D) 5 EXHIBIT 3(I)(D) EX-3.(i)(d) ARTICLES OF INCORPORATION OF READING RADIO, INC. FIRST: Name. The corporation's name is Reading Radio, Inc. SECOND: Purpose. The corporation's purposes shall be to transact any or all lawful business, not required to be stated in the articles of incorporation, for which corporations may be incorporated, and the corporation shall have all powers not prohibited by law or required to be stated in the articles of incorporation. THIRD: Capital Stock. The aggregate number of shares which the corporation shall have the authority to issue is 1,000 shares of common stock, each such share to have a par value of $1.00. FOURTH: Stated Capital. The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: Registered Office and Agent. The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: Board of Directors. The number of directors shall not be less than the minimum number prescribed law and shall be fixed by the by-laws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the first board of directors shall consist of one director whose name and address is: Name Address ---- ------- Alan R. Brill 1162 Woodberry Road Charlottesville, VA 22901 SEVENTH: Indemnity. The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the corporation, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: February 3, 1981 ------------------------------- Charles W. Laughlin Incorporator ARTICLES OF MERGER of WIOV, INC. into READING RADIO, INC. 1. The plan of merger ("Plan of Merger") pursuant to which WIOV, Inc., a Virginia corporation ("WIOV"), will merge into Reading Radio, Inc., a Virginia corporation (the "Surviving Corporation"), which will be the surviving corporation, is attached hereto and made a part hereof as Exhibit A. 2. The Plan of Merger was duly adopted by the unanimous consent of all directors and all shareholders of WIOV and of the surviving corporation. READING RADIO, INC., a Virginia corporation By: ------------------------------- Alan R. Brill, Vice President PLAN OF MERGER 1. This is the plan of merger pursuant to which WIOV, INC., a Virginia corporation, (the "Merging Corporation") shall be merged into READING RADIO, INC., a Virginia corporation, (the "surviving corporation"). 2. Effective as of date of issuance of a certificate of merger by the State Corporation Commission of Virginia (the "Effective Date"): (a) the Merging Corporation shall be merged into the surviving corporation (b) the name of the Surviving Corporation shall continue to be Reading Radio, Inc.; (c) each then outstanding share of capital stock of the Merging corporation shall thereupon be converted into and become ten (10) shares of the capital stock of the surviving Corporation, fully paid and nonassessable; each shareholder of a share or shares of the outstanding capital stock of the Merging Corporation upon surrender of the certificate representing such share or shares shall be entitled to receive a certificate for the full number of shares of capital stock of the Surviving corporation into which the capital stock so surrendered shall have been converted, and until such surrender and cancellation shall have been accomplished each outstanding certificate representing issued and outstanding shares of the capital stock of the Merging Corporation shall be deemed for all corporate purposes to evidence the ownership of the number of shares of the capital stock of the Surviving Corporation into which, such shares of the Merging Corporation were converted as herein provided; (d) the Third Article of the articles of incorporation of the surviving Corporation shall be and is hereby amended to read in full as follows: THIRD: Capital Stock. The aggregate number of shares which the corporation shall have authority to issue is 2,000 shares of common stock, each said share to have a par value of $1.00. 3. The board of directors of each corporation a party hereto may amend this plan of merger at any time prior to issuance of the certificate of merger as and to the extent permitted by Section 13.1-718 of the Code of Virginia. EX-3.(I)(E) 6 EXHIBIT 3(I)(E) EX-3.(i)(e) ARTICLES OF INCORPORATION OF TRI-STATE BROADCASTING, INC. 1. The name of the corporation is "Tri-State Broadcasting, Inc." 2. The number of shares that the corporation is authorized to issue is 5,000 shares of common stock. 3. The address of the corporation's initial registered office is 100 Shockoe Slip, Third Floor, Richmond, Virginia 23219, located in the City of Richmond, Virginia, and the name of the corporation's initial registered agent at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. Tri-State Broadcasting, Inc. March 25, 1993 ---------------------------------- Alison V. Fauls, Incorporator EX-3.(I)(F) 7 EXHIBIT 3(I)(F) EX-3.(i)(f) ARTICLES OF INCORPORATION OF NORTHERN COLORADO RADIO, INC. 1. The name of the corporation is "Northern Colorado Radio, Inc." 2. The corporation is authorized to issue 1,000 shares of common stock at a par value of $1.00. 3. The post office address of the corporation's initial registered office is 100 Shockoe Slip, Third Floor, Richmond, Virginia 23219, in the City of Richmond, Virginia, and its initial registered agent at that office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. June 21, 1988 Northern Colorado Radio, Inc. By: ------------------------------- Charles W. Laughlin, Incorporator EX-3.(I)(G) 8 EXHIBIT 3(I)(G) EX-3.(i)(g) ARTICLES OF INCORPORATION OF NCR II, INC. 1. The name of the corporation is "NCR II, Inc." 2. The number of shares that the corporation is authorized to issue is 5,000 shares of common stock. 3. The post office address of the corporation's initial registered office is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of Richmond, Virginia, and the name of the corporation's initial registered agent at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. May 14, 1996 NCR II, INC. By: -------------------------------- Alison V. Fauls, Incorporator EX-3.(I)(H) 9 EXHIBIT 3(I)(H) EX-3.(i)(h) ARTICLES OF INCORPORATION of CENTRAL MISSOURI RADIO, INC. FIRST: Name. The corporation's name is "Central Missouri Radio, INC". SECOND: Purpose. The corporation's purposes shall be to transact any or all lawful business, not required to be stated in the articles of incorporation, for which corporations may be incorporated, and the corporation shall have all powers not prohibited by law or required to be stated in the articles of incorporation. THIRD: Capital Stock. The aggregate number of shares which the corporation shall have the authority to issue is 1,000 shares of common stock, each such share to have a par value of $1.00. FOURTH: Stated Capital. The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: Registered Office and Agent. The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: Board of Directors. The number of directors shall not be less than the minimum number prescribed law and shall be fixed by the by-laws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the first board of directors shall consist of one director whose name and address is: Name Address ---- ------- Alan R. Brill 1162 Woodberry Road Charlottesville, VA 22901 SEVENTH: Indemnity. The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the corporation, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the corporation and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: November 21, 1980 -------------------------------- Douglas R. Maxwell, Incorporator Articles of Amendment Of The Articles of Incorporation Of CENTRAL MISSOURI RADIO. INC By a consent in writing setting forth the resolution, signed by all of the directors of the corporation before the resolution was submitted to a vote of the stockholders, the board of directors of Central Missouri Radio, Inc. adopted a resolution finding that the following proposed amendment of the articles of incorporation of Central Missouri Radio Inc. was in the best interests of the corporation and directing that it be submitted to a vote of the stockholders: "RESOLVED, that the articles of incorporation of Central Missouri Radio, Inc. be and they hereby are amended by striking therefrom Article First in its entirety and by substituting in lieu thereof the following: FIRST: Name. The corporation's name is "Central Missouri Broadcasting. Inc." 2. Said proposed amendment was adopted by all the stockholders by a consent in writing which set forth said proposed amendment and which was signed by all the stockholders entitled to vote thereon. 3. The number of shares of stock of the corporation outstanding on the record date, the number of shares entitled to vote on the proposed amendment and the number of shares voted for and against the amendment were as follows, there being no shares entitled to vote as a class or series thereon: A. Shares outstanding 1,000 B. Shares entitled to Vote 1,000 C. Shares voted: FOR, 1,000, AGAINST, 0. EXECUTED this 3rd day of February, 1981 in the name of the corporation by its President and Secretary. CENTRAL MISSOURI RADIO, INC. ----------------------------- Alan R. Brill, President ----------------------------- Alan R. Brill Secretary EX-3.(I)(I) 10 EXHIBIT 3(I)(I) EX-3.(i)(i) ARTICLES OF INCORPORATION OF CMB II, INC. 1. The name of the corporation is "CMB II, Inc." 2. The number of shares that the corporation is authorized to issue is 5,000 shares of common stock. 3. The post office address of the corporation's initial registered office is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of Richmond, Virginia, and the name of the corporation's initial registered agent at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. February 3, 1994 CMB II, INC. By: -------------------------------- Alison V. Fauls, Incorporator EX-3.(I)(J) 11 EXHIBIT 3(I)(J) EX-3.(i)(j) ARTICLES OF ORGANIZATION OF NORTHLAND BROADCASTING, LLC The undersigned sets forth the following as the Articles of Organization of NORTHLAND BROADCASTING, LLC (the "Company"), a Virginia limited liability company: 1. NAME. The name of the Company shall be "Northland Broadcasting, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 2nd day of January, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(K) 12 EXHIBIT 3(I)(K) EX-3.(i)(k) ARTICLES OF INCORPORATION OF NB II, INC. 1. The name of the corporation is "NB II, Inc." 2. The number of shares that the corporation is authorized to issue is 5,000 shares of common stock. 3. The post office address of the corporation's initial registered office is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of Richmond, Virginia, and the name of the corporation's initial registered agent at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. February 9, 1995 NB II, INC. By: -------------------------------- Alison V. Fauls, Incorporator EX-3.(I)(L) 13 EXHIBIT 3(I)(L) EX-3.(i)(l) ARTICLES OF INCORPORATION OF CENTRAL MICHIGAN NEWSPAPERS, INC. FIRST: The name of the corporation is Central Michigan Newspapers, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 2,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall not be less than the minimum number prescribed law and shall be fixed by the by-laws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the initial board of directors shall consist of one director whose name and address is: Name Address ---- ------- Gloria S. Tiller 8418 Freestone Avenue Richmond, VA 23229 SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: April 24, 1981 ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(M) 14 EXHIBIT 3(I)(M) EX-3.(i)(m) ARTICLES OF INCORPORATION OF CADILLAC NEWSPAPERS, INC. FIRST: The name of the corporation is Cadillac Newspapers, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 2,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall not be less than the minimum number prescribed law and shall be fixed by the by-laws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the initial board of directors shall consist of one director whose name and address is: Name Address ---- ------- Bonnie P. Brill 1162 Woodberry Road Charlottesville, VA 22901 SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: April 23, 1981 ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(N) 15 EXHIBIT 3(I)(N) EX-3.(i)(n) ARTICLES OF INCORPORATION OF CMN ASSOCIATED PUBLICATIONS, INC. FIRST: The name of the corporation is CMN Associated Publications, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 1,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall be fixed by the by-laws of the corporation. In the absence of a bylaw fixing the number it shall be one. The initial director shall be Alan R. Brill, whose address is 7417 East Olive Street, Evansville, Indiana 47715. SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Given under by hand this 17th day of December, 1982. ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(O) 16 EXHIBIT 3(I)(O) EX-3.(i)(o) Certificate of Limited Partnership of CENTRAL MICHIGAN DISTRIBUTION CO., L.P. 1. The name of the limited partnership ("Partnership")is "Central Michigan Distribution Co., L.P." 2. The post office address of the office at which the records required to be maintained by the Partnership are kept is P.O. Box 447, 215 North Main Street, in the City of Mount Pleasant (County of Isabella), Michigan 48858. 3. The name of the initial registered agent of the Partnership is Charles W. Laughlin, who is a resident of Virginia member of the Virginia State Bar, and the business and post office address of the Partnership's registered agent is 100 Shockoe Slip, Richmond, Virginia 23219, located in the City of Richmond. 4. The name and post office address of each general partner of the Partnership is: Central Michigan P.0. Box 447 Distribution Co., Inc. 215 North Main Street Mount Pleasant, MI 48858 5. The latest date upon which the Partnership is to be dissolved and its affairs wound up is February 28, 2090. Central Michigan. Distribution Co., Inc., the General Partner of Central Michigan Distribution Co. L.P. by: -------------------------------- Alison V. Fauls, Assistant Secretary of Central Michigan Distribution Co., Inc. STATE OF VIRGINIA CITY OF RICHMOND, to-wit:\ The foregoing instrument was acknowledged before me on this the 13th day of January, 1989, by Alison V. Fauls as Assistant Secretary of Central Michigan Distribution Co., Inc., General Partner of Central Michigan Distribution Co., L.P., in the City of Richmond, State of Virginia. ----------------------------- Notary Public My Commission expires: EX-3.(I)(P) 17 EXHIBIT 3(I)(P) EX-3.(i)(p) ARTICLES OF INCORPORATION OF CENTRAL MICHIGAN DISTRIBUTION CO., INC. FIRST: The name of the corporation is Central Michigan Distribution Co., Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 1,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall be fixed by the by-laws of the corporation. In the absence of a bylaw fixing the number it shall be one. The initial director shall be Alan R. Brill, whose address is 7417 East Olive Street, Evansville, Indiana 47715. SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Given under by hand this 17th day of December, 1982. ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(Q) 18 EXHIBIT 3(I)(Q) EX-3.(i)(q) ARTICLES OF INCORPORATION OF GLADWIN NEWSPAPERS, INC. FIRST: The name of the corporation is Gladwin Newspapers, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 2,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall not be less than the minimum number prescribed law and shall be fixed by the by-laws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the initial board of directors shall consist of one director whose name and address is: Name Address ---- ------- Bonnie P. Brill 1162 Woodberry Road Charlottesville, VA 22901 SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: April 23, 1981 ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(R) 19 EXHIBIT 3(I)(R) EX-3.(i)(r) ARTICLES OF INCORPORATION OF GRAPH ADS PRINTING, INC. FIRST: The name of the corporation is Graph Ads Printing, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 1,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall be fixed by the by-laws of the corporation. In the absence of a bylaw fixing the number it shall be one. The initial director shall be Alan R. Brill, whose address is 7417 East Olive Street, Evansville, Indiana 47715. SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Given under by hand this 17th day of December, 1982. ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(S) 20 EXHIBIT 3(I)(S) EX-3.(i)(s) ARTICLES OF INCORPORATION OF MIDLAND BUYER'S GUIDE, INC. FIRST: The name of the corporation is Midland Buyer's Guide, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 1,000 shares of Class A common stock, each such share to have a par value of $1.00. No holder of shares of common stock or any other securities of the corporation shall be entitled to the preemptive right to subscribe to additional shares of common stock, to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall be fixed in the by-laws of the corporation. In the absence of a bylaw fixing the number it shall be one. The initial director shall be Alan R. Brill, whose address is 7417 East Olive Street, Evansville, Indiana 47715. SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Given under by hand this 21st day of December, 1982. ------------------------------- Douglas R. Maxwell Incorporator EX-3.(I)(T) 21 EXHIBIT 3(I)(T) EX-3.(i)(t) ARTICLES OF INCORPORATION OF ST. JOHNS NEWSPAPERS, INC. 1. The name of the corporation is "St. Johns Newspapers, Inc." 2. The number of shares that the corporation is authorized to issue is 5,000 shares of common stock. 3. The post office address of the corporation's initial registered office is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of Richmond, Virginia, and the name of the corporation's initial registered agent at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia and a member of the Virginia State Bar. June 6, 1996 ST. JOHNS NEWSPAPERS, INC. By: -------------------------------- Alison V. Fauls, Incorporator ARTICLES OF MERGER OF CLINTON DISTRIBUTION, INC. INTO ST. JOHNS NEWSPAPERS, INC. 1. The plan of merger ("Plan of Merger") pursuant to which Clinton Distribution, Inc., a corporation organized under the laws of the State of Michigan ("Clinton"), will merge into St. Johns Newspapers, Inc., a corporation organized under the laws of the Commonwealth of Virginia (the "Surviving Corporation"), which will be the surviving corporation, is attached hereto and made a part hereof as Exhibit A. 2. The Plan of Merger was duly adopted by the unanimous consent of all of the directors of Clinton and the Surviving Corporation. 3. In accordance with Section 13.1-719.A of the Code of Virginia (1950), as amended, shareholder approval was not required by Clinton or the Surviving Corporation because the Surviving Corporation owns one hundred percent (100%) of the outstanding shares of all of the stock of Clinton, and the Surviving Corporation waives the mailing requirement. ST. JOHNS NEWSPAPERS, INC., a Virginia corporation By: -------------------------------- Alan R. Brill, President EXHIBIT A PLAN OF MERGER 1. This is the plan of merger pursuant to which CLINTON DISTRIBUTION, INC., a corporation organized under the laws of the State of Michigan (the "Merging Corporation"), shall be merged into ST. JOHNS NEWSPAPERS, INC., a corporation organized under the laws of the Commonwealth of Virginia (the "Surviving Corporation"). 2. The Surviving Corporation owns all of the outstanding stock of the Merging Corporation. 3. Effective as of date of issuance of a certificate of merger by the State Corporation Commission of Virginia (the "Effective Date"): (a) the Merging Corporation shall be merged into the Surviving Corporation; (b) the name of the Surviving Corporation shall continue to be St. Johns Newspapers, Inc.; and (c) each then outstanding share of capital stock of the Merging Corporation shall be cancelled. Each shareholder of the Merging Corporation shall upon the Effective Date surrender each certificate representing a share or shares of the Merging Corporation to the Secretary of the Surviving Corporation, and until such surrender and cancellation shall have been accomplished, each outstanding certificate representing issued and outstanding shares of the capital stock of the Merging Corporation shall be deemed for all corporate purposes to be null and void and of no force and effect. EX-3.(I)(U) 22 EXHIBIT 3(I)(U) EX-3.(i)(u) ARTICLES OF ORGANIZATION OF HURON P.S., LLC The undersigned sets forth the following as the Articles of Organization of Huron P.S., LLC (the "Company"), a Virginia limited liability company: 1. NAME. The name of the Company shall be "Huron P.S., LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 4th day of September, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(V) 23 EXHIBIT 3(I)(V) EX-3.(i)(v) ARTICLES OF ORGANIZATION OF HURON NEWSPAPERS, LLC The undersigned sets forth the following as the Articles of Organization of Huron Newspapers, LLC (the "Company"), a Virginia limited liability company: 1. NAME. The name of the Company shall be "Huron Newspapers, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 4th day of September, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(W) 24 EXHIBIT 3(I)(W) EX-3.(i)(w) ARTICLES OF ORGANIZATION OF HURON HOLDINGS, LLC The undersigned sets forth the following as the Articles of Organization of Huron Holdings, LLC (the "Company"), a Virginia limited liability company: 1. NAME. The name of the Company shall be "Huron Holdings, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 4th day of September, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(X) 25 EXHIBIT 3(I)(X) EX-3.(i)(x) ARTICLES OF ORGANIZATION OF NORTHERN COLORADO HOLDINGS, LLC The undersigned sets forth the following as the Articles of Organization of NORTHERN COLORADO HOLDINGS, LLC, a Virginia limited liability company (the "Company"): 1. NAME. The name of the Company shall be "Northern Colorado Holdings, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 8th day of May, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(Y) 26 EXHIBIT 3(I)(Y) EX-3.(i)(y) ARTICLES OF ORGANIZATION OF NCR III, LLC The undersigned sets forth the following as the Articles of Organization of NCR III, LLC (the "Company"), a Virginia limited liability company: 1. NAME. The name of the Company shall be "NCR III, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 22nd day of May, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(Z) 27 EXHIBIT 3(I)(Z) EX-3.(i)(z) ARTICLES OF ORGANIZATION OF NCH II, LLC The undersigned sets forth the following as the Articles of Organization of NCH II, LLC (the "Company"), a Virginia limited liability company: 1. NAME. The name of the Company shall be "NCH II, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this 22nd day of May, 1997. ----------------------------- Alison V. Fauls, Organizer EX-3.(I)(AA) 28 EXHIBIT 3(I)(AA) EX-3.(i)(aa) ARTICLES OF ORGANIZATION OF NORTHLAND HOLDINGS, LLC The undersigned sets forth the following as the Articles of Organization of NORTHLAND HOLDINGS, LLC, a Virginia limited liability company (the "Company"): 1. NAME. The name of the Company shall be "Northland Holdings, LLC". 2. REGISTERED AGENT AND ADDRESS. The initial registered office of the Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the City of Richmond, Virginia, and the name of the initial registered agent of the Company at the foregoing address is Charles W. Laughlin, an individual who is a resident of the Commonwealth of Virginia and a member of the Virginia State Bar. 3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville, Indiana. 4. DURATION. Unless sooner terminated by operation of law or otherwise, the latest date on which the Company shall be dissolved, its existence terminated, and its affairs wound up is fifty (50) years from the date of issuance of the Company's Certificate of Organization by the State Corporation Commission of Virginia. Witness the following signature this ____ day of February, 1997. ----------------------------- Lee N. Kump, Organizer EX-3.(I)(BB) 29 EXHIBIT 3(I)(BB) EX-3.(i)(bb) ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF CMN HOLDING, INC. 1. By a written consent in lieu of a special meeting setting forth a resolution, signed by all of the directors of the corporation before the resolution was submitted to & vote of the sole stockholder entitled to vote thereon, the directors adopted a resolution finding that the following proposed amendments of the Articles Incorporation of CMN Holding, Inc. were in the best interests of the corporation and directing that they be submitted to a vote of the sole stockholder entitled to vote thereon: That the Articles of Incorporation be amended by striking therefrom Paragraph 1.1 of THIRD, Division A, Section 1 in its entirety and by substituting in lieu thereof the following: 1.1. Senior Preferred. The holders of shares of the Senior Preferred shall be entitled to receive, when and as declared by the board of directors out of funds legally available for such purpose, dividends in lawful money of the United States of America at the rate of $12.00 per share per annum prior to July 1, 1984 and at the rate of $17.00 per share per annum on and after July 1, 1984, payable quarterly on the last business day of February, May, August and November in each year, commencing November 30, 1981, in equal installments. To the extent not then inconsistent with law or contrary to the then provisions of the Virginia Stock Corporation Act, the foregoing dividends shall be declared by the board of directors of the corporation, and when declared shall so paid to the then holders of the Senior Preferred. As to each issued and outstanding share of the Senior Preferred such dividends shall accumulate if not paid whether or not declared, from and after the date of the original issue of such share. So long as any share of the Senior Preferred is outstanding, no sums shall be applied to the payment of any dividend or the making of any other distribution in respect of the Convertible Preferred or of any other class of stock ranking junior to the Senior Preferred in respect of dividends or of the amounts payable upon any voluntary liquidation, dissolution, or winding up of the corporation (other than a distribution payable in stock ranking junior to the Senior Preferred, with cash adjustments for fractional shares), unless a full dividend on each of the then outstanding shares of Senior Preferred, for all quarterly dividend periods and for the then current quarterly dividend period, shall theretofore have been paid at the applicable dividend rate set forth above. Holders of the Senior Preferred shall be entitled to no participation rights in any other dividend declared and paid by the Corporation. * * * That the Articles of Incorporation be amended by striking therefrom Paragraph 1.2 of Article THIRD, Division A, Section 1 in its entirety and by substituting in lieu thereof the following: 1.2. Convertible Preferred. The holders of shares of the Convertible Preferred shall be entitled to receive, when and as declared by the board of directors out of funds legally available for such purpose, dividends in lawful money of the United States of America at the rate of $10.00 per share per annum, payable quarterly on the last business day of February, May, August and November in each year, commencing November 30, 1981 in equal installments. To the extent not then inconsistent with law or contrary to the then provisions of the Virginia Stock Corporation Act, the foregoing dividends shall be declared by the board of directors of the corporation, and when declared shall be paid to the then holders of the Convertible Preferred. As to each issued and outstanding share of the Convertible Preferred such dividends shall accumulate if not paid, whether or not declared, from and after the date of the original issue of such share. So long as any share of the Convertible Preferred is outstanding, no sums shall be applied to the payment of any dividend or the making of any other distribution in respect of any class of stock ranking junior to the Convertible Preferred in respect of dividends or of the amounts payable upon any voluntary liquidation, dissolution, or winding up of the Corporation (other than a distribution payable in stock ranking junior to the Convertible Preferred, with cash adjustment for any fractional shares), unless a full dividend on each of the then outstanding shares of the Convertible Preferred, for all quarterly dividend periods and for the then current quarterly dividend period, shall theretofore have been paid at the rate set forth above. Holders of the Convertible Preferred shall be entitled to no participation rights in any other dividend declared and paid by the Corporation. 2. Said proposed amendments were adopted by the sole stockholder entitled to vote thereon by a written consent in lieu of a special meeting which set forth said proposed amendments and which was signed by said sole stockholder. 3. The number of shares of each class of stock of the corporation outstanding on the record date, the number of shares entitled to vote on each proposed amendment and the number of shares voted for and against each proposed amendment were as follows: A. Shares outstanding, all classes: Class Shares Outstanding ----- ------------------ Senior Cumulative Preferred Stock 5,000 Junior Convertible Preferred Stock 1,000 Class A Common Stock 1,000 Class B Common Stock 0 B. Shares entitled to vote: Amendment No. 1: 1,000 shares of Class A Common Amendment No. 2: 1,000 shares of Class A Common C. Shares voted: Amendment No. 1: FOR - 1,000 AGAINST: 0 Amendment No. 2: FOR - 1,000 AGAINST: 0 Executed in the name of the corporation by its President and its Secretary who declare under penalties of perjury that the facts stated herein are true. Dated: July 20, 1981 CMN HOLDING, INC. By ---------------------------- Alan R. Brill, President By ---------------------------- Bonnie P. Brill, Secretary ARTICLES OF INCORPORATION of CMN HOLDING, INC. FIRST: Name. The corporation's name is "CMN Holding, Inc. SECOND: Purpose. The corporation's purposes shall be to transact any or all lawful business, not required to be stated in the articles of incorporation, for which corporations may be incorporated, and the corporation shall have all powers not prohibited by law or required to be stated in the articles of incorporation. THIRD: Capital Stock. The corporation is authorized to issue four classes of stock. The aggregate number of shares which the corporation shall have the authority to issue, the maximum number of shares of each class that the corporation is authorized to issue, and the par value of each share of each class are as follows: The aggregate number of shares which the corporation shall have the authority to issue is 8,000, divided as follows: Name of Class Number of Shares Par Value ------------- ---------------- --------- Senior Cumulative Preferred Stock 5,000 $1.00 Junior Convertible Preferred Stock 1,000 1.00 Class A Common Stock 1,000 1.00 Class B Common Stock 1,000 1.00 A description of the designations, preferences, limitations, voting rights and relative rights in respect of the shares of each class is as follows: As used in these Articles, (a) the term "Preferred Stock" shall refer to both the Senior Cumulative Preferred Stock, $1.00 par value (the "Senior Preferred") and the Junior Convertible Preferred Stock, $1.00 par value (the "Convertible Preferred"); and (b) the term "Common Stock" shall refer to both the Class A Common Stock, $1 .00 par value (the "Class A Common") and the Class B Common Stock, $1.00 par value (the "Class B Common"). Certain other terms used in this Article 3 are defined elsewhere herein. A. PREFERRED STOCK 1. Dividends. 1.1. Senior Preferred. The holders of shares of the Senior Preferred shall be entitled to receive, when and as declared by the board of directors out of funds legally available for such purpose, dividends in lawful money of the United States of America at the rate of $12.00 per share per annum prior to July 1, 1984 and at the rate of $17.00 per share per annum on and after July 1, 1984, payable semi-annually on the last business day of May and November in each year, commencing November 30, 1981, in equal installments. To the extent not then inconsistent with law or contrary to the then provisions of the Virginia Stock Corporation Act, the foregoing dividends shall be declared by the board of directors of the corporation, and when declared shall be paid to the then holders of the Senior Preferred. As to each issued and outstanding share of the Senior Preferred such dividends shall accumulate if not paid, whether or not declared, from and after the date of original issue of such share. So long as any share of the Senior Preferred is outstanding, no sums shall be applied to the payment of any dividend or the making of any other distribution in respect of the Convertible Preferred or of any other class of stock ranking junior to the Senior Preferred in respect of dividends or of the amounts payable upon any voluntary liquidation, dissolution, or winding. up of the corporation (other than a distribution payable in stock ranking junior to the Senior Preferred, with cash adjustments for fractional shares), unless a full dividend on each of the then outstanding shares of Senior Preferred, for all semi-annual dividend periods and for the then current semi-annual dividend period, shall theretofore have been paid at the applicable dividend rate set forth above. Holders of the Senior Preferred shall be entitled to no participation rights in any other dividend declared and paid by the Corporation. 1.2. Convertible Preferred. The holders of shares of the Convertible Preferred shall be entitled to receive, when and as declared by the board of directors out of funds legally available for such purpose, dividends in lawful money of the United States of America at the rate of $10.00 per share per annum, payable semi-annually on the last business day of May and November in each year, commencing November 30, 1981 in equal installments. To the extent not then inconsistent with law or contrary to the then provisions of the Virginia Stock Corporation Act, the foregoing dividends shall be declared by the board of directors of the corporation, and when declared shall be paid to the then holders of the Convertible Preferred. As to each issued and outstanding share of the Convertible Preferred such dividends shall accumulate if not paid, whether or not declared, from and after the date of original issue of such share. So long as any share of the Convertible Preferred is outstanding, no sums shall be applied to the payment of any dividend or the making of any other distribution in respect of any class of stock ranking junior to the Convertible Preferred in respect of dividends or of the amounts payable upon any voluntary liquidation, dissolution, or winding up of the Corporation (other than a distribution payable in stock ranking junior to the Convertible Preferred, with cash adjustment for any fractional shares), unless a full dividend on each of the then outstanding shares of the Convertible Preferred, for all semi-annual dividend periods and for the then current semi-annual dividend period shall theretofore have been paid at the rate set forth above. Holders of the Convertible Preferred shall be entitled to no participation rights in any other dividend declared and paid by the Corporation. 2. Redemption. 2.1. Redemption of Senior Preferred. The Senior Preferred shall be redeemable in whole at any time or in part from time to time upon resolution of the corporation's board of directors upon payment out of funds legally available therefor in lawful money of the United States of America in respect of each share redeemed of the sum of $100.00 plus an amount equal to all dividends accumulated but unpaid on each such redeemed share to the date fixed for redemption ("Senior Preferred Redemption Price"). Not less than 30 days' prior written notice shall be given by certified mail, postage prepaid, to each holder of record of the shares of Senior Preferred to be redeemed, at his post office address as shown in the records of the corporation. Said notice e shall specify the redemption price and the place at which and the date, which date shall not be a legal holiday in The Commonwealth of Massachusetts or The Commonwealth of Virginia, on which the shares called for redemption will be redeemed. 2.2. Redemption of Convertible Preferred. The Convertible Preferred shall be redeemable in whole at any time or in part from time to time upon resolution of the corporation's board of directors upon payment out of funds legally available therefor in lawful money of the United States of America in respect of each share redeemed (a) of the sum of $3,500.00 for the period through April 30, 1985, increasing by $250.00 on the last day of each succeeding period of three consecutive calendar months thereafter, or (b) after May 30, 1984 the greater of (i) such value described in (a), or (ii) .00050 times an amount equal to the then appraised value of corporation reduced by $100.00 per share for each share of Senior Preferred then outstanding (for an aggregate redemption price if all 1,000 shares of the Convertible Preferred is then issued and outstanding of .50 times such reduced appraised value) such appraised value to be determined on a consolidated basis for corporation and its subsidiaries, as at the end of the then most recent financial reporting quarter for the corporation at the time of any such redemption, plus, in either case, an amount equal to all dividends accumulated but unpaid on each such redeemed share to the date fixed for redemption, which greater price and any such accumulated but unpaid dividends shall be the redemption price ("Convertible Preferred Redemption Price"). Not less than 30 days' prior written notice shall be given by certified mail, postage prepaid, to each holder of record of the shares of Convertible Preferred to be redeemed, at his post office address as shown in the records of the corporation. Said notice shall specify the redemption, price and the place at which and the date, which date shall not be a legal holiday in The Commonwealth of Massachusetts or The Commonwealth of Virginia, on which the shares called for redemption will be redeemed. 2.3. Notice of Redemption. If written notice of redemption of Preferred Stock shall have been duly given and a sum sufficient for such redemption shall have been deposited with a bank or trust company with irrevocable instructions and authority to pay the Senior Preferred Redemption Price or the Convertible Preferred Redemption Price, as the case may be, to the then holders of shares of Preferred Stock so called for redemption upon surrender of certificates therefor, then, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, on and after the date which is the later of the date of mailing such notice of redemption or deposit of the Senior Preferred Redemption Price or the Convertible Preferred Redemption Price, as the case may be, the shares so called for redemption shall no longer be deemed outstanding, any dividends then payable thereon shall cease to accumulate, and all rights (including without limitation, with respect to the Convertible Preferred the right to convert into shares of Class B Common pursuant to Section 5 hereof) with respect to the shares so called for redemption shall forthwith cease and determine, excepting only the right of the holders thereof to receive the amount payable upon redemption thereof, without interest. 2.4. Manner of Redemption. Subject to the provisions hereof, the board of directors shall have authority to prescribe the manner in which the Preferred Stock shall be redeemed from time to time; provided, however, that in the case of the redemption of only a part of the outstanding shares of either the Senior Preferred or Convertible Preferred, there shall be so redeemed from each registered holder thereof in whole shares, as nearly as practicable to the nearest share, the proportion of all of the shares of such class to be redeemed which the number of shares held of record by such holder bears to the total number of shares of such class at the time outstanding. 2.5. Interest; Escheat. From time to time any bank or trust company holding any funds deposited for redemption of any shares of Preferred Stock shall pay to the corporation any interest accrued on such deposited funds; any funds so deposited and unclaimed at the end of the period of time prescribed by ss. 55-210.6 of the Code of Virginia, or any successor provision, as from time to time amended, shall be disposed of in accordance with the then existing laws of the Commonwealth of Virginia, and each holder of a share of Preferred Stock so called for redemption who shall not have received the applicable redemption price therefor prior to such disposition shall have only such rights as are accorded such a stockholder under the then existing laws of the Commonwealth of Virginia. 2.6. Redeemed, Converted, or Otherwise Acquired Shares to be Retired. Any shares of the Preferred Stock redeemed pursuant to this Section 2 or of the Convertible Preferred surrendered for conversion pursuant to Section 5 of this Subdivision A or otherwise acquired by the corporation in any manner whatsoever shall be permanently retired and shall not under any circumstances be reissued, and the corporation shall from time to time take such appropriate corporate action as may be necessary to reduce the authorized Preferred Stock accordingly. 3. Voting Rights of Preferred Stock. Except as voting rights may be expressly conferred upon any such shares by the laws of the Commonwealth of Virginia as in effect at the time, the holders of shares of Preferred Stock shall have no right to vote on any matter. 4. Voluntary Liquidation. Upon any voluntary dissolution, liquidation, or winding up of the corporation, after provision for payment and discharge of (or making adequate provision for) all known debts, obligations, and liabilities of the corporation, (a) the holders of the shares of the Senior Preferred shall be entitled, before any distribution or payment is made upon any shares of the Convertible Preferred or the Common Stock, to be paid in cash for each such share an amount equal to the Senior Preferred Redemption Price (the "Senior Preferred Liquidation Price") and (b) the holders of the shares of the Convertible Preferred shall be entitled, before any distribution or payment is made upon the Common Stock, to be paid in case for each such share then issued and outstanding an amount equal :0 the Convertible Preferred Redemption Price ("Convertible Preferred Liquidation Price"), such amounts being hereinafter sometime. referred to as "Liquidation Payments." If upon any voluntary liquidation, dissolution, or winding up, after payment and discharge of, or making adequate provision for, all known debts, obligations, and liabilities of the corporation, the corporation's then assets shall be insufficient to permit payment to said holders of the Senior Preferred Liquidation Price, then all of the assets of the corporation then remaining shall be distributed ratably among the then holders of the shares of Senior Preferred. If upon such voluntary liquidation, dissolution, or winding up, the assets to be distributed among the then holders of the shares of Convertible Preferred, after any permitted payment of the Senior Preferred Liquidation Price to the then holders of shares of Senior Preferred, shall be insufficient to permit payment to said holders of shares of Convertible Preferred of the Convertible Preferred Liquidation Price, then all of the assets of the corporation then remaining shall be distributed ratably among the holders of the shares of Convertible Preferred Written notice of such voluntary liquidation, dissolution, or winding up, stating a payment date, the amount of the Liquidation Payments and the place where said sums shall be payable and, in the case of the Convertible Preferred, containing a statement of or reference to the conversion right set forth in Section 5 of this Subdivision A, shall be given by certified mail, postage prepaid, not less than 30 days prior to the payment date stated therein, to the holders of record of the Preferred Stock, such notice to be addressed to each holder at his post office address as shown by the records of the corporation. Neither consolidation nor merger of the corporation into or with any other corporation or corporations, nor any other corporation's merger into the corporation, nor the sale or transfer by the corporation of all or any part of its assets, nor the reduction of the capital stock of the corporation, shall be deemed to be a liquidation, dissolution or winding up of the corporation within the meaning of any of the provisions of this Section 4. 5. Conversion of Convertible Preferred into Common Stock. Subject to the terms and conditions of this Section 5, the holder of any share of Convertible Preferred shall have the right at any time (except as otherwise may be restricted by a written agreement executed by the corporation and the holder of any share of Convertible Preferred upon issuance of such share, and except that upon any liquidation of the corporation, such right to convert shall terminate at the close of business on the last business day before the payment date specified in the notice given pursuant to Section 4 of this Subdivision A), at his option, to convert all or a portion of the shares of Convertible Preferred held by him into the same number of shares of Class B Common. Such right of conversion shall be exercised by the holder thereof by giving written notice to the corporation that such holder elects to convert a stated number of shares of the Convertible Preferred into shares of Class B Common Stock on the date specified in such notice ("Conversion Date") and by surrender of the certificate or certificates for the Convertible Preferred so to be converted to the corporation, at the principal office of the corporation in Charlottesville, Virginia (or at such other office as the corporation may designate by written notice, given by certified mail, postage prepaid, to all holders of Convertible Preferred) at any time during its usual business hours on or before the Conversion Date, duly endorsed or assigned to the corporation (if requested by it), together with a statement of the name or names (with addresses) of the person or persons to whom the certificates for Class B Common shall be issued upon conversion. Promptly after receipt of the written notice from said holder referred to above and surrender of the certificate or certificates for the share or shares of Convertible Preferred to be converted, the corporation shall issue and mail, or cause to be issued and mailed, to said holder at the then address for such stockholder appearing on the corporation's records, registered in such name or names as such holder may direct, a certificate or certificates for then number of full shares of Class B Common issuable upon the conversion of such share or shares. To the extent permitted by law, such conversion shall be deemed to have been effected as of the close of business on the Conversion Date, and at such time the rights of the holder of such share or shares as such holder shall cease, and the person or persons in whose name or names any certificate or certificates for shares of Class B Common shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares of Class B Common represented thereby. B. COMMON STOCK 1. Dividend and Other Rights. The dividend and other rights of a holder of one share of Class A Common shall be identical to the dividend and other rights of a holder of one share of Class R Common, except as provided herein with respect to voting. No purchase or other retirement by the corporation, directly or indirectly through a Subsidiary or otherwise of any share of Class A Common, nor any distribution on or payment in respect of any share of Class A Common, nor any other benefit or preference of any sort whatsoever relating to any share of Class A Common shall be made or accorded unless made or accorded ratably among all holders of Common Stock in proportion to the number of shares of Common Stock owned by each. 2. Voting Rights. The two classes of Common Stock shall vote as a single class at all stockholders' meetings unless otherwise provided by law or by these Articles of Incorporation. Every holder of record of shares of Class A Common shall have the right, at every stockholders' meeting, to one vote for every share of Class A Common standing in his name on the books of the corporation. Every holder of record of Class B Common shall have the right, at every stockholders' meeting, to such number of votes as would cause the aggregate vote possessed by all holders of Class B Common to equal 10% of the aggregate vote possessed by all holders of the Common Stock. 3. Reservation. The corporation will at all times reserve and keep available all of its authorized but unissued shares of Class B Common, solely for the purpose of issue upon the conversion of the shares of the Convertible Preferred as herein provided. The corporation covenants that all shares of the Class B Common which shall be so issuable shall, when issued, be duly and validly issued, fully paid, and nonassessable. The issuance of certificates for Class B Common upon such conversion as hereinabove set forth shall be made without charge to the holders of such Class B Common for any issuance tax in respect thereof, provided that the corporation shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the holder of shares converted. C. CERTAIN OTHER PROVISIONS 1. Preemptive Rights. No holder of any share of Preferred Stock or Common Stock shall have any preemptive right to subscribe for additional shares of any class of capital stock or to receive warrants or rights for the purchase of shares of any class of stock or to receive securities convertible into shares of any class of stock. 2. Dissolution; Liquidation. Upon any involuntary dissolution of the corporation, after provision for payment and discharge of (or making adequate provision for) all known debts, obligations, and liabilities of the corporation, the then remaining net assets of the corporation shall be distributed ratably among the then holders of any then issued and outstanding shares of Preferred Stock in proportion to the number of shares of Preferred Stock then owned by each. If upon such involuntary dissolution no share of Preferred Stock is then issued and outstanding, the remaining net assets of the corporation shall be distributed ratably among the then holders of shares of the corporation's Common Stock in proportion to the number of shares of Common Stock then owned by each. Upon any involuntary dissolution no share of Preferred Stock shall be entitled to any preferential payment, Liquidation Payment, or any prior right in the assets of the corporation. FOURTH: Stated Capital. The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: Transfer of Shares. Transfer of any share of the capital stock of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation, and on surrender for cancellation of the certificate for such share. The person in whose name any share of capital stock of the corporation stands on the books of the corporation shall be deemed by the corporation to be the owner of such share for all purposes. SIXTH: Registered Office and Agent. The post office address of the initial registered agent is 1200 Mutual Building, in the City of Richmond, Virginia, and the initial registered agent at that address is Charles W. Laughlin who is a resident of the State of Virginia and a member of the Virginia State Bar. SEVENTH: Board of Directors. The number of directors shall not be less than the minimum number prescribed by law and, except for the initial board of directors, shall be fixed by the bylaws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the initial board of directors shall consist of one director whose name and address is: Name: Address: ----- -------- Alan R. Brill 1162 Woodberry Road Charlottesville, VA 22901 EIGHTH: Indemnity. The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the corporation, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office, or in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations are reasonable. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to refer any such determination to independent legal counsel must act with reasonable promptness when indemnification is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or former director officer of the corporation and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: May 21, 1981 -------------------------------- Douglas R. Maxwell, Incorporator EX-3.(I)(CC) 30 EXHIBIT 3(I)(CC) EX-3.(i)(cc) ARTICLES OF INCORPORATION of BRILL RADIO, INC. FIRST: Name. The corporation's name is "BRILL RADIO, INC". SECOND: Purpose. The corporation's purposes shall be to transact any or all lawful business, not required to be stated in the articles of incorporation, for which corporations may be incorporated, and the corporation shall have all powers not prohibited by law or required to be stated in the articles of incorporation. THIRD: Capital Stock. The aggregate number of shares which the corporation shall have the authority to issue is 1,000 shares of common stock, each such share to have a par value of $1.00. FOURTH: Stated Capital. The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: Registered Office and Agent. The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: Board of Directors. The number of directors shall not be less than the minimum number prescribed law and shall be fixed by the by-laws of the corporation. Initially all shares of the corporation will be owned of record by one stockholder, and the first board of directors shall consist of one director whose name and address is: Name Address ---- ------- Alan R. Brill 1162 Woodberry Road Charlottesville, VA 22901 SEVENTH: Indemnity. The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the corporation, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: August 12, 1980 -------------------------------- Douglas R. Maxwell, Incorporator EX-3.(I)(DD) 31 EXHIBIT 3(I)(DD) EX-3.(i)(dd) ARTICLES OF INCORPORATION OF BRILL NEWSPAPERS, INC. FIRST: The name of the corporation is Brill Newspapers, Inc. SECOND: The corporation is organized for the purpose of transacting any or all lawful business, not required to be specifically stated herein, for which corporations may be incorporated under Virginia law. THIRD: The corporation shall have the authority to issue up to 1,000 shares of Class A common stock of the par value of $1.00 each and up to 150 shares of Class B common stock of the par value of $1.00 each. Shares of Class A common stock and Class B common stock shall be alike in all respects, provided that holders of Class B com-mon stock shall have no right to vote with respect to such stock except as may be required under Virginia law. No holder of shares of either class of common stock or any other securities of the corrporation shall be entitled to the pre-emptive right to subscribe to additional shares of either class of common stock to warrants or rights for the purchase of such shares or to securities convertible into such shares. FOURTH: The stated capital of the corporation may be reduced in any manner provided by law without the assent of the stockholders of the corporation. FIFTH: The post office address of the initial registered office is 1200 Mutual Building, in the City of Richmond, and the initial registered agent at that address is Charles W. Laughlin, who is a resident of the State of Virginia and a member of the Virginia State Bar. SIXTH: The number of directors shall not be less than the minimum number prescribed by law and shall be fixed by the by-laws of the corporation. The initial board of directors shall consist of the following directors whose names and addresses are: NAME ADDRESS ---- ------- Alan R. Brill 1162 Woodberry Road Charlottesville, Va. 22901 Bonnie P. Brill 1162 Woodberry Road Charlottesville, Va. 22901 Charles W. Laughlin 6609 Three Chopt Road Richmond, Va .23226 SEVENTH: The corporation shall indemnify each director and officer against liabilities (including judgments and fines and reasonable attorney's fees, costs and expenses and reasonable amounts paid in settlement) incurred by him in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (any of which is hereinafter referred to as a "proceeding") to which he may be made a party by reason of his being or having been a director or officer of the cor-poration, except in relation to any proceeding in which he has been adjudged liable because of willful misconduct, bad faith or gross negligence involved in the conduct of his office or, in relation to any criminal proceeding, in which he had reasonable cause to believe his conduct was unlawful (any of which behavior is hereinafter referred to as "misfeasance"), provided, however, that even if he is guilty of misfeasance he shall be entitled to such indemnification as shall be finally ordered by a court. In the event of the disposition of any proceeding in which no determination of misfeasance has been made, such indemnity shall be conditioned upon a prior determination that the director or officer acted in good faith and without misfeasance, and that such payments or obligations arc reasonable. Such determination shall be made (i) by-the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding, (ii) by independent legal counsel in a written opinion if such a quorum is not obtainable, or, even if obtainable, if a majority of disinterested directors so directs, or (iii) by the shareholders. Directors eligible to make any such determination or to -refer any such determination to independent legal counsel must act with reasonable promptness when indemnificaiton is sought by any director or officer. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of such proceeding, if authorized in the manner set forth in the preceding paragraph, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to indemnification. Every reference herein to director or officer shall include every director or officer or former director or officer of the cor-poration and every person who may have served at the request of the corporation or one of its subsidiaries as a director or officer or in a similar capacity of another corporation (stock or non-stock), partnership. joint venture, trust or other enterprise and, in all such cases, the heirs, executors, and administrators of such officer or director. The corporation may further indemnify each officer and director in any other manner permitted by law, and shall so indemnify them if directed to do so by the stockholders. Dated: May 5, 1981 ------------------------------- Douglas R. Maxwell Incorporator Articles of Amendment of The Articles of Incorporation of BRILL NEWSPAPERS INC. 1. In lieu of a special meeting by a written consent setting forth the resolution and signed by all directors of the corporation before the resolution was submitted to a vote of the stockholders entitled to vote thereon, the directors of Brill Newspapers, Inc. adopted a resolution finding that the following proposed amendment of the Articles of Incorporation of BRILL NEWSPAPERS, INC. was in the best interests of the corporation and directing that it be submitted to a vote of the corporation's stockholders entitled to vote thereon: That Section 2.2(n) ("Redemption of Convertible Preferred") of Subdivision A of Article "Third" of the Articles of Incorporation be amended by changing "January 31, 1990" appearing in the first sentence thereof to read: "January 31, 1993". 2. The proposed amendment was adopted by the stockholders entitled to vote thereon by a written consent in lieu of a special meeting, which consent set forth the proposed amendment and was signed by all such stockholders. 3. The number of shares of each class of stock of the corporation outstanding on the record date, the number of shares entitled to vote on the proposed amendment, and the number of shares voted for and against the proposed amendment were as follows: A. Shares outstanding all classes: Class Shares Outstanding ----- ------------------ Class A Common Stock 1,000 Class B Common Stock 150 B. Shares entitled to vote: 1,000 shares of Class A Common 150 shares of Class B Common C. Shares voted: FOR - 1,000 shares of Class A Common - 150 shares of Class B Common AGAINST - 0 Executed in the name of the corporation by its President and its Secretary who declare under penalties of perjury that the facts stated herein are true. Dated: January 26, 1982 BRILL NEWSPAPERS, INC. BY ------------------------ Alan R. Brill, President --------------------------- Bonnie P. Brill, Secretary Articles of Amendment of the Articles of Incorporation of BRILL NEWSPAPERS, INC. 1. In lieu of a special meeting, by a written consent setting forth the resolution and signed by all directors of the corporation, before the resolution was submitted to a vote of the stockholders entitled to vote thereon, the directors of Brill Newspapers, Inc adopted a resolution finding that the following pro\-posed amendment of the Articles of Incorporation of Brill Newspapers Inc. was in the best interests of the corporation and directing that it be submitted to a vote of the corporation's stockholders entitled to vote thereon: That Section 2 ("Involuntary Dissolution") of Subdivision C of Article "Third" of the Articles of Incorporation be amended to read as follows: 2. Involuntary Dissolution. Upon any involuntary dissolution of the corporation, after provision for payment and discharge of (or making adequate provision for) all known debts, obligations, and liabilities of the corporation, there shall be no "amount payable" (within the meaning of Section 13.1-62 of the Code of Virginia) out of the corporation's net assets to the then holder of any share of the corporation's Preferred Stock or Common Stock, and the then remaining assets of the corporation shall be distributed ratably among the then holders of any then issued and outstanding shares of Preferred Stock in proportion to the number of shares of Preferred Stock then owned by each and the holders of shares of Common Stock shall have no right to any part of such remaining assets. If upon such involuntary dissolution no share of Preferred Stock is then issued and outstanding, the remaining assets of the corporation shall be distributed ratably among the then holders of shares of the corporation's Common Stock in proportion to the number of shares of Common Stock then owned by each. 2. The proposed amendment was adopted by the stockholders entitled to vote thereon by a written consent in lieu of a special meeting, which consent set forth the proposed amendments and was signed by all such stockholders. 3. The number of shares of each class of stock of the corporation outstanding on the record date, the number of shares entitled to vote on the proposed amendment, and the number of shares voted for and against the proposed amendment were as follows: A. Shares outstanding, all classes: Class Shares Outstanding ----- ------------------ Class A Common Stock 1,000 Class B Common Stock 150 B. Shares entitled to vote: 1,000 shares of Class A Common 150 shares of Class B Common C. Shares voted: FOR - 1,000 shares of Class A Common - 150 shares of Class B Common AGAINST - 0 Executed in the name of the corporation by its President and its Secretary who declare under penalties of perjury that the facts stated herein are true. Dated: January 27, 1982 BRILL NEWSPAPERS, INC. BY ----------------------------- Alan R. Brill, President -------------------------------- Bonnie P. Brill, Secretary Articles of Amendment of the Articles of Incorporation of BRILL NEWSPAPERS, INC. 1. In lieu of a special meeting, by a written consent setting forth the resolution and signed by all directors of the corporation before the resolution was submitted to a vote of the stockholders entitled to vote thereon, the directors of Brill Newspapers, Inc. adopted a resolution finding that the following proposed amendment of the Articles of Incorporation of Brill Newspapers Inc. was in the best interests of the corporation and directing that it be submitted to a vote of the corporation's stockholders entitled to vote thereon: That Subsection 2.2 ("Redemption of Convertible Preferred") of Section 2 of Subdivision A of Article "Third of the Articles of Incorporation be amended to read as follows: 2.2. Redemption of Convertible Preferred. (m) During any time when the corporation is contractually obligated then to purchase or redeem any share of the Convertible Preferred, or (n) during and after such time after January 31, 1993 as the Senior Preferred is or has been redeemed or repurchased in whole by the corporation the Convertible Preferred shall be redeemable in whole at any time or in part from time to time upon resolution of the corporation's board of directors upon payment out of funds legally available to the corporation therefor in lawful money of the United States of America in respect of each share of the Convertible Preferred then redeemed of the redemption price per share determined as follows: first (a) there shall be determined a sum equal to a percentage [which percentage shall be the greater of (p) 18.5% or (q) that percentage determined by dividing the number of shares of the corporation's Common Stock into which the then outstanding shares of the corporation's Convertible Preferred would then be convertible (regardless of whether such Convertible Preferred is in fact then convertible by the total number of all shares, of the corporation's Common Stock of all classes then outstanding and which would then be outstanding if all shares of Convertible Preferred were then converted (regardless of whether such Convertible Preferred then in fact convertible] of the higher of (x) the then fair market value of corporation, determined by an appraiser selected by corporation and (y) a value determined by (i) multiplying a sum representing the corporation's earnings as determined from its financial statement, on a consolidated basis with all of its then subsidiaries, for the corporation's then most recently concluded full fiscal year, without deduction for interest expense, taxes, non cash expense items, or non-recurring extraordinary expenses, but reduced by any contribution to corporation's cash flow theretofore arising from properties divested by the corporation during such fiscal year, by it and (ii) deducting from such product all of corporation's then liabilities (including as a liability all then out standing shares of the Senior Preferred) in excess of the corporation's then current assets, in each case as reflected in and determinable from corporation's financial statements, on a consolidated basis with all of its then subsidiaries, for such fiscal year, then (b) the sum determined pursuant to (a) shall be divided by the higher of (i) the number of shares Of Convertible Preferred then outstanding or (ii) twenty-one (21) and then (c) the result of (b) shall have added to it an amount equal to the sum of all accumulated but unpaid quarterly dividends with respect to such share of Convertible Preferred then being redeemed, as of the Redemption Date. The sum so achieved shall be the "Convertible Preferred Redemption Price" as to each such share. 2. The proposed amendment was adopted by the stockholders entitled to vote thereon by a written consent in lieu of a special meeting, which consent set forth the proposed amendment and was signed by all such stockholders. 3. The number of shares of stock of the corporation outstanding on the record date, the number of shares entitled to vote on the proposed amendment, the number of shares voted for and against such amendment, the number of shares of each class or series entitled to vote as a class and the number of shares of each such class or series voted for or against such amendment were as follows: A. Shares outstanding all classes: Class Shares Outstanding ----- ------------------ Class A Common Stock 1,000 Class B Common Stock 150 Senior Cumulative Preferred Stock 70 Convertible Preferred Stock 21 B. Shares entitled to Vote, all classes: 1,000 shares of Class A Common 150 shares of Class B Common 70 shares of Senior Cumulative Preferred 21 shares of Convertible Preferred C. Shares, classes, voted: FOR - 1,241 AGAINST - 0 D. Shares entitled to vote and voted as a class: Number Voted Voted Class or Series Outstanding For Against --------------- ----------- --- ------- Class A Common 1,000 1,000 0 Class B Common 150 150 0 Senior Cumulative Preferred 70 70 0 Convertible Preferred 21 21 0 Executed in the name of the corporation by its President and its Secretary who declare under penalties of perjury that the facts stated herein are true. Dated: June 21, 1982 BRILL NEWSPAPERS, INC. By: --------------------------- Alan R. Brill, President By: ---------------------------- Bonnie P. Brill, Secretary Articles of Amendment of the Articles of Incorporation of BRILL NEWSPAPERS, INC. 1. In lieu of a special meeting, by a written consent setting forth the resolution and signed by all directors of the corporation, before the resolution was submitted to a vote of the stockholders entitled to vote thereon the directors of Brill Newspapers, Inc. adopted a resolution finding that the following proposed amendment of the Articles of Incorporation of Brill Newspapers, Inc. was in the best interests of the corporation and directing that it be submitted to a vote of the corporation's stockholders entitled to vote thereon: That the Articles of Incorporation be amended by striking therefrom Article "THIRD" in its entirety and substituting in lieu thereof the following: "THIRD: Capital Stock. The corporation is authorized to issue four classes of stock. The aggregate number of shares which the corporation shall have authority to issue, the maximum number of shares of each class which the corporation is authorized to issue, and the par value of each share of each class are as follows: The aggregate number of shares which the corporation shall have authority to issue is 3,270, divided as follows: Name of Class Number of Shares Par Value ------------- ---------------- --------- Senior Cumulative Preferred Stock 70 $1.00 Convertible Preferred Stock 200 1.00 Class A Common Stock 1,000 1.00 Class B Common Stock 2,000 1.00 A description of the designations, preferences, limitations, voting rights, and relative rights in respect of the shares of each class is as follows: As used in these Articles the term "Common Stock" shall refer to both the Class A Common Stock, $1.00 par value (the "Class A Common") and the Class B Common Stock, $1.00 par value (the "Class B Common"), and the term "Preferred" shall refer to both the Senior Cumulative Preferred Stock (the "Senior Preferred") and the Convertible Preferred Stock (the "Convertible Preferred"). A. PREFERRED STOCK 1. Dividends. 1.1 Senior Preferred. The holders of shares of the Senior Preferred shall be entitled to receive, when and as declared by the board of directors and paid, out of funds legally available for such purpose in accordance with the laws of the Commonwealth of Virginia, dividends in lawful money of the United States of America at the rate of $1,200.00 per share per annum, playable, when declared and paid, quarterly on the last business day of April (beginning April, 1982), July, October, and January of each year in equal quarterly installments of $300.00 each. As to each issued and outstanding share of the Senior Preferred such dividends shall accumulate if not paid, whether or not declared. 1.2 Convertible Preferred. The holders of shares of the Convertible Preferred shall be entitled to receive, when and as declared by the board of directors out of funds legally available for such purpose in accordance with the laws of the Commonwealth of Virginia, dividends in lawful money of the United States of America at the rate of $.12 (US) per share per annum, payable quarterly on the last business day of March, June, September, and December of each year in equal installments. As to each issued and outstanding share of the Convertible Preferred such dividends shall accumulate if not paid, whether or not declared. 1.3 Preference. So long as any share of the Preferred is outstanding, no dividend in respect of any Common Stock or other class of stock ranking junior to the Preferred in respect of dividends or of the amounts payable upon any voluntary liquidation, dissolution, or winding up of the corporation shall be paid unless and until a full dividend on each of the then outstanding shares of Preferred, for the applicable annual dividend period, and any and all then accumulated but unpaid dividends with respect to the Preferred, shall theretofore have been paid at the dividend rates set forth above. Holders of the Preferred shall be entitled to no participation rights. 2. Redemption. 2.1 Redemption of Senior Preferred. The Senior Preferred shall be redeemable in whole at any time or in part from time to time upon resolution of the corporation's board of directors upon payment out of funds legally available to the corporation therefor in lawful money of the United States of America in respect of each share of Senior Preferred redeemed of $10,000.00 plus an amount equal to the sum of (i) all accumulated but unpaid quarterly dividends with respect to such share of Senior Preferred as of the Redemption Date, and (ii) any interest accrued thereon as, and to the extent, provided in Section 1.1. ("Senior Preferred Redemption Price"). 2.2. Redemption of Convertible Preferred. (m) During any time when the corporation is contractually obligated then to purchase or redeem any share of the Convertible Preferred, during and after such time after January 31, 1990 as the Senior Preferred is or has been redeemed or repurchased in whole by the corporation, the Convertible Preferred shall be redeemable in whole at any time or in part from time to time upon resolution of the corporation's board of directors upon payment out of funds legally available to the corporation therefor in lawful money of the United States of America in respect of each share of the Convertible Preferred then redeemed of the redemption price per share determined as follows: (a) first there shall be determined a sum equal to a percentage [which percentage shall be determined by dividing the number of shares of the corporation's Common Stock into which the then outstanding shares of the corporation's Convertible Preferred would then be convertible (regardless of whether such Convertible Preferred is in fact then convertible) by the total number of all shares of the corporation's Common Stock of all classes then outstanding and which would then be outstanding if all shares of Convertible Preferred were then converted (regardless of whether such Convertible Preferred is then in fact convertible)I of the higher of (x) the then fair market of corporation, determined by an appraiser selected by corporation and (y) a value determined by (i) multiplying a sum representing the corporation's earnings as determined from its financial statement, on a consolidated basis with all of its then subsidiaries, for the corporation's then most recently concluded full fiscal year, without deduction for interest expense, taxes, non-cash expense items, or non-recurring extraordinary expenses, but reduced by any contribution to corporation's cash flow theretofore arising from properties divested by the corporation during such fiscal year, by and (ii) deducting from such product all of corporation's then liabilities (including as a liability all then outstanding shares of the Senior Preferred) in excess of the corporation's then current assets, in each case as reflected in and determinable from corporation's financial statements, on a consolidated basis with all of its then subsidiaries, for such fiscal year, then (b) the sum determined pursuant to (a) shall be multiplied by a fraction equal to (i) the number of shares of Convertible Preferred then outstanding divided by (ii) the higher of (x) the number of shares of convertible Preferred then outstanding, or (y) twenty-one (21); then (c) the product determined by (b) shall be divided by the number of shares of Convertible Preferred then issued and outstanding; and (d) the result of (c) shall have added to it an amount equal to the sum of all accumulated but unpaid quarterly dividends with respect to such share of Convertible Preferred then being redeemed, as of the Redemption Date; and the sum so achieved shall be the "Convertible Preferred Redemption Price" as to each such share. 2.3. Notice. Not less than 30 days' prior written notice ("Notice of Redemption") shall be given by certified mail, postage prepaid, to each holder of record of the shares of Preferred to be redeemed, at the holder's post office address as shown in the records of the corporation. Said notice shall specify the amount of the redemption price and the place at which and the date, which date shall not be a legal holiday in the Commonwealth of Virginia, on which the shares called for redemption will be redeemed ("Redemption Date"). 2.4 Notice of Redemption. If Notice of Redemption shall have been duly given and a sum sufficient for such redemption shall have been deposited with a bank or trust company with irrevocable instructions and authority to pay the applicable redemption price to the then holders of shares of Preferred so called for redemption upon surrender of certificates therefor, then, notwithstanding that any certificate for shares so called for redemption shall not have been surrendered for cancellation, on and after the later of the date of mailing of the Notice of Redemption or such deposit of the applicable redemption price, the shares so called for redemption shall no longer be deemed outstanding, and all rights with respect to the shares so called for redemption shall forthwith cease and determine (excepting only the right of the holders thereof to receive the amount payable upon redemption thereof, without interest thereon); provided, however, that the right to convert any shares of Convertible Preferred called for redemption into shares of Class B Common as provided by Section 5. of Subdivision A hereof shall continue until the Redemption Date. 2.5. Manner of Redemption. Subject to the provisions hereof, the board of directors shall have authority to prescribe the manner in which the Preferred shall be redeemed from time to time; provided, however, that in the case of the redemption of only a part of the outstanding shares of the Preferred, there shall be redeemed from each registered holder thereof in whole shares, as nearly as practicable to the nearest share, the proportion of all of the shares of such class to be redeemed which the number of shares held of record by such holder bears to the total number of shares of such class at the time outstanding. 2.6 Interest; Escheat. From time to time any bank or trust company holding any funds deposited for redemption of any shares of Preferred shall pay to the corporation any interest accrued on such deposited funds; any funds so deposited and unclaimed at the end of the period of time prescribed by ss. 55-210.6 of the Code of Virginia, or any successor provision, as from time to time amended, shall be disposed of in accordance with the then existing laws of the Commonwealth of Virginia, and each holder of a share of Preferred so called for redemption who shall not have received the applicable redemption price therefor prior to such disposition shall have only such rights as are accorded such a stockholder under the then existing laws of the Commonwealth of Virginia. 2.7. Redeemed, Converted, or Otherwise Acquired Shares to be Retired. Any shares of Preferred redeemed pursuant to this Section 2. or surrendered for conversion pursuant to Section 5. of this Subdivision A, or otherwise acquired by the corporation in any manner whatsoever, shall be permanently retired and shall not under any circumstances be reissued, and the corporation shall from time to time take such appropriate corporate action as may be necessary to reduce the authorized Preferred accordingly. 3. Voting Rights of Preferred. Except as voting rights may be expressly conferred upon any such shares by the laws of the Commonwealth of Virginia as in effect at the time, the holders of shares of Preferred shall have no right to vote on any matter. 4. Voluntary Dissolution, Liquidation, etc. Upon any voluntary dissolution, liquidation, or winding up of the corporation, after provision for payment and discharge of (or making adequate provision for) all known debts, obligations, and liabilities of the corporation, the then holders of the shares of the Preferred shall be entitled, before any distribution or payment is made upon any shares of the Common Stock, to be paid in cash for each such share an amount equal to the redemption price applicable to such share (the "Preferred Liquidation Price"). If upon any voluntary liquidation, dissolution, or winding up, after payment and discharge of, or making adequate provision for, all known debts, obligations, and on liabilities of the corporation, the corporation's then assets shall be insufficient to permit payment to said holders of the Preferred Liquidation Price, then all of the assets of the corporation then remaining shall be distributed ratably among the then holders of the shares of Preferred. Written notice of such voluntary liquidation, dissolution, or winding up, stating a payment date, the amount of the Preferred Liquidation Price, the place where said sums shall be payable, and containing a statement of or reference to the conversion right set forth in Section 5. of this Subdivision A, shall be given by certified mail, postage prepaid, not less than 30 days prior to the payment date stated therein, to the holders of record of the Preferred, such notice to be addressed to each holder at his post office address as shown by the records of the corporation. Neither consolidation nor merger of the corporation into or with any other corporation or corporations, nor any other corporation's merger into the corporation, nor the sale or transfer by the corporation of all or any part of its assets, nor the reduction of the capital stock of the corporation, shall be deemed to be a liquidation, dissolution, or winding up of the corporation within the meaning of any provision of these Articles. 5. Conversion. 5.1 Conversion of the Convertible Preferred into Class B Common. Subject to the terms and conditions of this Section 5. and of Section 2.2., the holder of any share of Convertible Preferred then outstanding, shall have the right during any period (a) after the giving of a Notice of Redemption and until the Redemption Date as established by such notice, as to shares of the Convertible Preferred called for redemption by such notice, (b) when Alan R. Brill owns less than a majority of the voting common stock of this corporation, as to shares of Convertible Preferred, or (c) during any period when more than thirty holders are record owners of shares of the corporation's Class A Common Stock, the periods described in (a)-(c) hereinafter being severally and collectively referred to as the "Conversion Period". Upon compliance with provisions of this Section 5,9 each eligible share of Convertible Preferred then outstanding which is properly delivered for conversion during a Conversion Period shall be then converted into 12.48 shares of Class B Common. Such right of conversion may be exercised during a Conversion Period, and only during a Conversion Period, by the holder of a share or shares of Convertible Preferred then eligible for conversion by (i) giving written notice to the corporation that such holder elects to convert a stated number of shares of the Convertible Preferred into shares of Class B Common on the date specified in such notice ("Conversion Date"). which date shall not be less than twenty (20) days after the date of such written notice, and (ii) by delivering and surrendering the certificate or certificates for the Convertible Preferred so to be converted to the corporation, at the office of the corporation at 1200 Mutual Building, Richmond, Virginia 23219, Attention: Charles W. Laughlin, Esquire, (or at such other office as the corporation may designate by written notice, given by certified mail, postage prepaid, to all holders of Convertible Preferred) at any time during its usual business hours on or before the Conversion Date, duly endorsed or assigned to the corporation, or in blank, together with a statement of the name or names (with addresses) of the person or persons to whom the certificates for Class B Common shall be issued upon conversion. On or before the Conversion Date, upon receipt of the written notice referred to above and surrender of the certificate or certificates for the share or shares of Convertible Preferred to be converted, the corporation shall issue and mail, or cause to be issued and mailed, to the holder giving such notice at the then address for such stockholder appearing on the corporation's records, registered in such name or names as such holder shall have directed in said notice, a certificate or certificates for the number of full shares of Class B Common issuable upon conversion of such Convertible Preferred share or shares and a check or other order for the amount of any cash payable in respect of any fractional share of Class B Common. 5.2 Antidilution. The conversion rate provided in Section 5.1 above shall only be adjusted as follows: (a) If the corporation shall issue s additional shares of Common Stock (other than shares of Class B Common Stock issued upon conversion of shares of Convertible Preferred) or securities convertible into shares of Common Stock (except for shares of Convertible Preferred issued upon the exercise of warrants therefor), or shall pay a dividend in shares of Common Stock (or in securities convertible into Common Stock) the conversion rate applicable to the Convertible Preferred shall be proportionately increased (so that the ratio of (u) the number of shares of Class B Common into which all the outstanding Convertible Preferred Stock is convertible (regardless of whether such securities are then convertible), to (v) the total number of shares of all Common Stock outstanding, and which would then be outstanding if all securities convertible into shares of Common Stock had been converted (regardless of whether such securities were then convertible), remains the same], effective immediately before the opening of business on the next full business day after the record date fixed for determination of the stockholders entitled to such dividend; and (b) If the corporation shall split up the outstanding shares of either class of its Common Stock into a greater number of shares or if it shall combine the outstanding shares of either class into a smaller number, the conversion rate applicable to the Convertible Preferred shall be proportionately (based on the ratio described above) increased in the case of a split or decreased in the case of a combination, effective immediately before the opening of business on the full business day next following the day such action becomes effective. Upon (i) any reclassification or change in the outstanding shares of Common Stock (other than a stock dividend or a Split-up or combination of shares), or (ii) any consolidation or merger to which the corporation is a party (except a merger in which the corporation is the surviving corporation and which does not result in any reclassification of or change in any class of the outstanding Common Stock other than a split-up or combination of shares). or (iii) any sale or conveyance to another corporation of all or substantially all of the property of the corporation for securities of another corporation, effective provision shall be made by the corporation (or by the successor or purchasing corporation) so that holders of Convertible Preferred then outstanding shall thereafter have the right to convert such shares into the kind and amount of stock and other securities and property receivable upon such reclassification, change, consolidation, merger, sale, or conveyance by a holder of the number of shares of Class B Common into which such shares of Preferred Stock might have been converted immediately prior thereto. The provisions of this subparagraph shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales, or conveyances. Any provision that shall be made for the purposes specified in this subparagraph which shall have been approved by a resolution or resolutions of the Board of Directors of the corporation, and which, in the opinion of independent certified public accountants selected by the corporation, are fair and equitable, shall be binding and conclusive upon all holders of shares of the Convertible Preferred then outstanding. 5.3 Fractional Share. The corporation shall not issue any fractional share of Class B Common upon conversion of any share or shares of Convertible preferred but shall pay for any such fractional share in cash based on the fair value of one share of Class B Common as of the date of conversion as then determined by the Board of Directors. B. COMMON STOCK 1. Dividends, Voting, and Other Rights. The dividend and other rights of a holder of one share of Class A Common shall be identical to the dividend and other rights of a holder of one share of Class B Common, except that holders of the Class B Common shall have no right to vote except as may be required under Virginia law. 2. Reservation. Hereafter the corporation will at all times reserve and keep available such shares of its Class B Common as are authorized but unissued as of the effective date of this amendment, solely for the purpose of issue upon conversion of the shares of the Convertible Preferred as herein provided. The corporation covenants that all shares of the Class B Common which shall be so issuable shall, when issued, be duly and validly issued, fully paid, and nonassessable. The Issuance of certificates for Class B Common upon such conversion as hereinabove set forth shall be made without charge to the holders of such Class B Common for any issuance tax in respect thereof, provided that the corporation shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the holder of shares converted. C. CERTAIN OTHER PROVISIONS 1. Preemptive Rights. No holder of any share of Preferred Stock or Common Stock shall have any preemptive right to subscribe for additional shares of any class of capital stock or to receive warrants or rights for the purchase of shares of any class of stock or to receive securities convertible into shares of any class of stock. 2. Involuntary Dissolution. Upon any involuntary dissolution of the corporation, after provision for payment and discharge of (or making adequate provision for) all known debts, obligations, and liabilities of the corporation, there shall be no " amount payable" (within the meaning of Section 13.1-62 of the Code of Virginia) out of the corporation's net assets to the then holder of any share of the corporation's Preferred Stock or Common Stock, and the then remaining assets of the corporation shall be distributed ratably among the then holders of any then issued and outstanding shares of Common Stock and Preferred Stock in pro-portion to the number of shares of Common Stock and Preferred Stock then owned by each. If upon such involuntary dissolution no share of Preferred Stock is then issued and outstanding, the remaining assets of the corporation shall be distributed ratably among the then holders of shares of the corporation's Common Stock In proportion to the number of shares of Common Stock then owned by each. 2. The proposed amendment was adopted by the stockholders entitled to vote thereon of a written consent in lieu of a special meeting, which consent set forth the proposed amendments and was signed by all such stockholders. 3. The number of shares of each class of stock of the corporation outstanding on the record date, the number of shares entitled to vote on the proposed amendment, and the number of shares voted for and against the proposed amendment were as follows: A. Shares outstanding, all classes: Class Shares Outstanding ----- ------------------ Class A Common Stock 1,000 Class B Common Stock 150 B. Shares entitled to vote: 1,000 shares of Class A Common 150 shares of Class B Common C. Shares voted: FOR - 1,000 shares of Class A Common 150 shares of Class B Common AGAINST - 0 Executed in the name of the corporation by its President and its Secretary who declare under penalties of perjury that the facts stated herein are true. Dated: January 20, 1982 BRILL NEWSPAPERS, INC. BY ---------------------------- Alan R. Brill, President ------------------------------ Bonnie P Brill, Secretary EX-3.(II)(A) 32 EXHIBIT 3(II)(A) EX-3.(ii)(a) OPERATING AGREEMENT of BRILL MEDIA COMPANY, LLC This is the Operating Agreement of Brill Media Company, LLC, a Virginia limited liability company (the "Company"), made as of this 19th day of November, 1997, by and between BH ONE, LLC, a Virginia limited liability company, and BH TWO, LLC, a Virginia limited liability company, who hereby become the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"] and agree to form a limited liability company upon the following terms and conditions. 1. Name. The name of the Company is Brill Media Company, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Manager (hereinafter designated) may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located, and at which the records required to be maintained by the Act (hereinafter defined) are to be kept, shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or such other place or places as the Manager may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of each Member's capital contribution is as set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. 2 (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior, written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. The Members shall have no right to control or manage, nor shall they, as Members, take any part in the control or management of the Company's business, but each may exercise any other rights and powers of a Member under this agreement. Any Member, or any employee or affiliate thereof, also may be an employee, officer, or director of the Manager. Unless expressly specified to the contrary at the time of such act, all actions taken with respect to the Company by any of such persons while acting for the Manager shall be deemed to have been taken solely in their capacity as employees, officers, or directors of the Manager and not as Members. 5. Transfer of Interests. Other than with the prior, written consent of all then Members pursuant to Section 4, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or 3 management of the Company. Without such prior, written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. As to the Company, any such Transfer shall be effective only if in a writing executed by both the transferor and transferee in a form acceptable to the Company as evidenced by the Company's prior written acknowledgment thereof. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 7. Voting Rights of Members. In voting by the Members, each Member shall be entitled to cast the number of votes indicated for such Member on Exhibit A. 8. Manager. The Company's business shall be managed by a manager (the "Manager"), which initially shall be Brill Media Management, Inc., a Virginia corporation, whose address is 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708. If the Manager also is a Member it shall have all the rights of any other Member and also shall direct and manage the operation of the Company's business, devoting so much of its time thereto as it deems appropriate. From time to time, the Manager may delegate prescribed functions to any employee, person, or agent and may contract with other person(s) to assist in management of the Company's affairs, including any Member or any officer, agent, employee, or affiliate of a Member. The Manager may submit its resignation as Manager at any time, but such resignation shall become effective only when the Manager's successor shall have been selected and duly qualified to serve. Any successor Manager shall be selected only by a majority vote of the then Members. 9. Management. The Manager shall have the sole and 4 exclusive right to manage the Company and to make all decisions regarding the Company's business, including the right, power, and authority to do in the name of, and acting solely on behalf of and for, the Company all lawful things that the Company might do that in the Manager's sole good faith business judgment of the best interests of the Company are necessary, proper, convenient, or desirable to carry out the purposes of the Company, including, but not limited to, the right, power, and authority at any time or from time to time acting in the name of, on behalf of, and for the Company to do for the Company each or any one or more of the following: (a) to own, acquire by lease or purchase, develop, maintain, improve, grant options with respect to, sell, convey, finance, assign, mortgage, or lease real estate and/or personal property and to cause to have constructed improvements upon any real estate necessary, convenient, or incidental to the accomplishment of the Company's purposes; (b) to execute on behalf of the Company any and all agreements, contracts, documents, certifications, and instruments necessary, proper, or convenient in connection with the development, management, maintenance, and operation of the Company or of any properties or other assets in which the Company has an interest, including without limitation, necessary easements to public or quasi-public bodies or public utilities; (c) to borrow money and issue evidences of the Company's indebtedness in furtherance of any or all of the Company's purposes, and to secure the repayment thereof by deed of trust, mortgage, security interest, pledge, or other lien or encumbrance on the Company's properties or assets; (d) to prepay in whole or in part, negotiate, refinance, recast, increase, renew, modify, amend, or extend any secured or other indebtedness (or the evidence thereof) for or on behalf of the Company or affecting Company properties or assets and in connection therewith to execute any extensions, renewals, amendments, or modifications of any evidences of indebtedness secured by deeds of trust, mortgages, security interests, pledges, or other encumbrances covering such properties or assets; (e) to enter into any kind of contract or activity and to cause the Company to perform and carry out activities or contracts of any kind necessary to, or in connection with, or incidental to the accomplishment of the Company's purposes, so long as those activities and contracts may lawfully be carried on 5 or performed by a limited liability company under then applicable laws, rules, and regulations; (f) to lend money to the Company, as a creditor of the Company and not as an additional capital contribution to the Company, or to borrow money from the Company; provided that the terms of any such loan or loans, including the terms and interest rate thereof, shall be at least as favorable to the Company as those then available to the Company on the same type of loan if made to or received from a disinterested third party; and (g) to institute, conduct, defend, or prosecute any litigation, arbitration, or ADR proceeding on behalf of the Company (and to employ attorneys and experts in connection therewith), including the filing of all appropriate pleadings or petitions in any proceeding in bankruptcy. 10. Execution of Documents, etc. The Manager may execute and deliver any document or instrument for, by, or on behalf of the Company, including any deed, deed of trust, note, or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument purporting to convey or encumber, in whole or in part, any or all of the property or assets of the Company, or any receipt or compromise or settlement agreement with respect to the Company's accounts receivable or claims; no other signature shall be required for any such document or instrument to be valid, binding, and enforceable against the Company in accordance with its terms, and all persons may rely thereon and shall be exonerated from any and all liability if they deal with the Company and the Manager on the basis of any document or instrument executed by the Manager for and on behalf of the Company. Any person dealing with the Company, its Manager, or its Members may rely upon a certificate signed by the Manager as to: (a) the then identity of the Members or of the Manager; (b) the performance of any act by the Company, its Members, or the Manager; (c) any act or failure to act by the Company or (d) any other matter whatsoever involving the Company, the Manager, or any Member. All actions taken by the Manager on behalf of the Company from the date of its organization to the date of this agreement are hereby ratified and confirmed. 11. Certain Actions, Taxes. On the Company's behalf, the Manager may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. The Manager shall cause the Company's federal, state, and local tax returns to be prepared and timely filed as and when required and shall promptly notify the Members of any proposed 6 audit or adjustments of any Company tax return. Until a successor is chosen by the Members, the Manager shall be the designated "tax matters partner" for the Company, and the Manager shall select the Company's independent auditor and shall determine the method of accounting upon which the Company's books are maintained. 12. Manager's Compensation, Expenses. The Manager may contract with the Company for its services and may receive such compensation as may be agreed upon from time to time for the value of its services rendered to the Company as Manager. The Manager also shall be entitled to have the Company pay or reimburse all expenses reasonably incurred by the Manager in connection with its management of the Company's affairs. 13. Authority of the Manager and Members to Engage in Other Businesses. The Manager, any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Manager, Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 14. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not a Member or affiliate. 15. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) Profits and Losses. As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses and any then distributions of the Company's cash or other assets shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as 7 reflected in the Company's records. (b) Maintenance of Books. The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) Annual Reports. The Manager shall send to all Members an annual report, containing a balance sheet, income statement, and statement of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 16. Exculpation. Except by reason of acts or omissions of the Member or the Manager found by a court of competent jurisdiction upon entry of a final judgment to have been due to such Member's or the Manager's bad faith, fraud, willful misconduct, or knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, neither the Manager nor any Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or any Member, for any losses, claims, damages, or liabilities arising from or based on (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on any Member or on the Manager by this agreement; (ii) the performance by any Member or the Manager of, or the omission to perform, any act on advice of legal counsel, accountants, or other professional consultants to the Company; or (iii) the negligence, dishonesty, or bad faith of any employee, officer, or agent of the Company selected, engaged, or consulted in good faith by any Member or by the Manager. 17. Exoneration. No Member, Manager, or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise solely by reason of being such Member, Manager, or agent of the Company. 18. Indemnification and Advances. (a) As and to the full extent permitted by law and by ss. 13.1-1009 of the Act, the Company intends to and shall, indemnify, defend and hold each Member (including by the use of such term for purposes of this Section, the Manager in its capacity as such and, if the Manager also is a Member, also 8 separately in its capacity as a Member) harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend, and hold the Company's and each such Member's respective affiliates, agents, employees, advisors, consultants, or independent contractors, (hereinafter, collectively, "Agents"; singly, an "Agent") harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost, or expense, including reasonable attorneys' fees, arising from any demands, claims, or suits against each or any Member, the Manager, the Company, or any Agent, arising from or relating to the capacity, actions, or omissions of the Company, or of any Member, or of the Manager, or of an Agent, or arising from or relating to activities undertaken on behalf of the Company in the ordinary course of the Company's business, including, without limitation, any demands, claims, or lawsuits initiated by a Member, unless the acts or omissions of any Member, the Manager, the Company, or any Agent seeking indemnification are found by a court of competent jurisdiction upon entry of a final judgment to have been the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person or entity seeking indemnification, or to have violated any lesser standard of conduct that under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit, or proceeding by judgment, order, settlement, plea of nolo contendere (or its equivalent), or conviction shall not, of itself, create a presumption that a Member, the Manager, the Company, or any Agent shall not be entitled to indemnification hereunder or that such Member, the Manager, or the Company, or such Agent did not act in good faith and in a manner that each reasonably believed to be in or not opposed to the best interests of the Company. (b) Upon approval by a majority vote of the Members, any person entitled to receive indemnity hereunder shall be entitled to receive advances from the Company to cover the costs (including all attorneys' and experts' fees) of defending any claim or action against them subject to indemnity hereunder; provided, however, that any such advances shall be repaid to the Company (with interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law) if such recipient of an advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards set forth above in (a) as standards that preclude indemnification hereunder. All rights of indemnity hereunder shall survive dissolution of the Company or the death, resignation, expulsion, incompetency, dissolution, liquidation, or bankruptcy of any Member or any Agent, and shall 9 inure to the benefit of their heirs, personal representatives, successors, and assigns. (c) If the indemnification provisions of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. (d) The right of indemnification hereby provided for shall not be exclusive of or affect any other rights that a Member, the Manager, or any Agent otherwise may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Notwithstanding anything contained herein to the contrary, any amount of indemnity payable hereunder shall be payable only out of and to the extent of the Company's then assets, including any insurance proceeds then available to the Company for such purposes. No Member shall be liable for the payment of any indemnity amount payable hereunder, nor to make any capital contribution to the Company, nor to return any capital distribution made to it by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment under this Section. 19. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 20. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way 10 define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is determined to be illegal, invalid, or unenforceable for any reason whatsoever, such illegality, invalidity, or unenforceability shall not affect the validity of the remaining terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the successors, heirs, and assigns (including an assignee of all or part of an interest in the Company) of the respective parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that its interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that it is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. 11 (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 21. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 22. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 12 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed by their duly authorized officers as of the day, month, and year first above written. Member: BH ONE, LLC, a Virginia limited liability company By: ------------------------------- Alan R. Brill, Member Member: BH TWO, LLC, a Virginia limited liability company By: ------------------------------- Alan R. Brill, Member 13 EXHIBIT A (1) (2) (3) (4) Number Capital Name Interest of Votes Contribution - ---- -------- -------- ------------ BH ONE, LLC 50% 50 $500.00 BH TWO, LLC 50% 50 $500.00 This is Exhibit A to the Operating Agreement of Brill Media Company, LLC as of the 19th day of November, 1997. Member: BH ONE, LLC, a Virginia limited liability company By: ------------------------------ Alan R. Brill, Member Member: BH TWO, LLC, a Virginia limited liability company By: ------------------------------ Alan R. Brill, Member 14 EX-3.(II)(B) 33 EXHIBIT 3(II)(B) EX-3.(ii)(b) Exhibit A BYLAWS OF Brill Media Management, Inc. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determi nation it shall be the calendar year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided in Article IV, Section 8) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second (2nd) Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If the aforesaid date shall fall on a legal holiday, the annual shareholders' meeting shall be held on the next following business day, and if for any other reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Article IV, Section 3, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia (1950), as amended (the "Code")) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders' meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president, the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code, shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special sharehold ers' meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstand ing shares at any given time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describ ing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.1-657D of the Code nonvoting share- 3 holders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A share holder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorpo ration, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corpo ration for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meeting the share holder objects to holding the meeting or to transacting business at the meeting, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is present ed. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and 4 affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term, and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be one (1). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under the conditions described in Sections 4 and 5 of this Article V, the board of directors shall be elected annually at the annual share-holders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held the number of votes cast to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office consti tute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then direc tors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may 5 be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI - MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings, Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Common wealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days or telegraphed or telefaxed at least two (2) days prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a 6 board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of direc tors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or partici pation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the begin ning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS 7 Section 1. Election, Removal, and Duties - Promptly after its election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appoint ment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corpora tion owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president or a vice president and by its secretary or an assistant secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assign ment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. 8 Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate, a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "pro ceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obliga tion) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A direc tor shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or convic tion, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on 9 behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or direc tor of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occur ring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liabili ty to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws may be made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made, by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia, those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or secretary of this corporation, either in person or by proxy. 10 Each use of a masculine pronoun herein shall be read to include both the feminine and neuter pronouns as applicable. Adopted by the Shareholders; As of ________________________ 11 EX-3.(II)(C) 34 EXHIBIT 3(II)(C) EX-3.(ii)(c) Amended Operating Agreement AMENDED OPERATING AGREEMENT of BMC HOLDINGS, LLC This is the Amended Operating Agreement of BMC Holdings, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by Brill Media Company, LLC, a Virginia limited liability company, the Company's member [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is BMC Holdings, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's 2 share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 19th day of November, 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Brill Media Company, LLC By: Brill Media Management, Inc. Its Manager By: --------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Brill Media Company, LLC $1,000.00 This is Exhibit A to the Amended Operating Agreement of BMC Holdings, LLC as of the 10th day of December, 1997. Member: Brill Media Company, LLC, By: Brill Media Management, Inc. Manager By: --------------------------- a duly authorized officer 13 BMC HOLDINGS, LLC CERTIFICATE REGISTER
=========================================================================================== Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - ------------------------------------------------------------------------------------------- Brill Media Company, 1 LLC 1,000 12/22/97 - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- ===========================================================================================
14 EX-3.(II)(D) 35 EXHIBIT 3(II)(D) EX-3.(ii)(d) Exhibit A BYLAWS OF READING RADIO, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: September 4, 1987 EX-3.(II)(E) 36 EXHIBIT 3(II)(E) EX-3.(ii)(e) Exhibit A BYLAWS OF TRI-STATE BROADCASTING, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or the secretary of this corporation, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: March 27, 1993 EX-3.(II)(F) 37 EXHIBIT 3(II)(F) EX-3.(ii)(f) Exhibit A BYLAWS OF NORTHERN COLORADO RADIO, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Any shareholder desiring to transfer (by sale, gift, pledge, hypothecation, or otherwise) or to have the corporation register a transfer of any share or shares of the corporation ("Transferor") shall first notify the corporation's president in writing setting forth in such reasonable detail as the corporation may require the terms ("Terms") upon which such transfer is proposed, including, without limitation, the number of each class of shares proposed to be transferred ("Offered Shares"), the identity of the proposed transferee ("Transferee"), the price per share proposed to be paid or received for the Offered Shares, and the terms of payment and shall attach, as a part thereof, a complete copy of each agreement applicable to such proposed transfer (collectively, "Notice") . For the period of thirty (30) consecutive calendar days ("Option Period") next following the corporation's receipt of Notice, the corporation shall have the right, but shall not be obligated, to acquire all, but not less than all, of the Offered Shares upon the Terms set forth in the Notice. If during the Option Period the corporation shall not have notified the Transferor in writing of its decision to acquire all of the Offered Shares upon the Terms specified in the Notice, then for the period of fourteen (14) consecutive calendar days next following expiration of the Option Period the Transferor may transfer all, but not less than all, of the Offered Shares to the Transferee upon the Terms specified in the Notice, and the corporation will register such transfer upon satisfactory proof that such transfer was made within such period upon such Terms . Upon expiration of the fourteen (14) day period, the Offered Shares may not thereafter be transferred by the Transferor except upon a new Notice. The corporation shall be obligated to transfer or to register a transfer of its only upon compliance with the provisions of this Section. Each certificate issued or to be issued for any share or shares of the corporation shall bear a legend on its front or back conspicuously noting the existence of this restriction on transferability. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or secretary of this corporation, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: July 1, 1988 EX-3.(II)(G) 38 EXHIBIT 3(II)(G) EX-3.(ii)(g) BYLAWS OF NCR II, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determi nation it shall be the calendar year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided in Article IV, Section 8) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second (2nd) Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If the aforesaid date shall fall on a legal holiday, the annual shareholders' meeting shall be held on the next following business day, and if for any other reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Article IV, Section 3, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia (1950), as amended (the "Code")) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders' meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president, the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code, shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special sharehold ers' meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the 2 act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstand ing shares at any given time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describ ing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.1-657D of the Code nonvoting share holders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect 3 of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A share holder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorpo ration, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corpo ration for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meeting the share holder objects to holding the meeting or to transacting business at the meeting, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is present ed. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term, and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be one (1). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A 4 director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under the conditions described in Sections 4 and 5 of this Article V, the board of directors shall be elected annually at the annual share-holders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held the number of votes cast to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office consti tute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then direc tors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI - MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings, Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. 5 Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Common wealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days or telegraphed or telefaxed at least two (2) days prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of direc tors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held 6 meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or partici pation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the begin ning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after its election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appoint ment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the 7 faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corpora tion owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assign ment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate, a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "pro ceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obliga tion) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation 8 of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A direc tor shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or convic tion, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or direc tor of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occur ring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liabili ty to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws may be made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made, by the shareholders, and the shareholders may 9 provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia, those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or secretary of this corporation, either in person or by proxy. Each use of a masculine pronoun herein shall be read to include both the feminine and neuter pronouns as applicable. Adopted by the Shareholders; As of May 16, 1996 10 EX-3.(II)(H) 39 EXHIBIT 3(II)(H) EX-3.(ii)(h) Exhibit A BYLAWS OF CENTRAL MISSOURI BROADCASTING, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(I) 40 EXHIBIT 3(II)(I) EX-3.(ii)(i) BYLAWS OF CMB II, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determi nation it shall be the calendar year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided in Article IV, Section 8) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second (2nd) Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If the aforesaid date shall fall on a legal holiday, the annual shareholders' meeting shall be held on the next following business day, and if for any other reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Article IV, Section 3, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia (1950), as amended (the "Code")) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders' meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president, the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code, shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special sharehold ers' meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the 2 act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstand ing shares at any given time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describ ing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.1-657D of the Code nonvoting share holders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect 3 of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A share holder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorpo ration, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corpo ration for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meeting the share holder objects to holding the meeting or to transacting business at the meeting, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is present ed. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term, and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be one (1). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A 4 director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under the conditions described in Sections 4 and 5 of this Article V, the board of directors shall be elected annually at the annual share-holders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held the number of votes cast to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office consti tute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then direc tors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI - MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings, Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. 5 Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Common wealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days or telegraphed or telefaxed at least two (2) days prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of direc tors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held 6 meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or partici pation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the begin ning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after its election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appoint ment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the 7 faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corpora tion owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assign ment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate, a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "pro ceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obliga tion) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation 8 of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A direc tor shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or convic tion, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or direc tor of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occur ring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liabili ty to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws may be made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made, by the shareholders, and the shareholders may 9 provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia, those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or secretary of this corporation, either in person or by proxy. Each use of a masculine pronoun herein shall be read to include both the feminine and neuter pronouns as applicable. Adopted by the Shareholders; February 7, 1994 10 EX-3.(II)(J) 41 EXHIBIT 3(II)(J) EX-3.(ii)(j) AMENDED OPERATING AGREEMENT of NORTHLAND BROADCASTING, LLC This is the Amended Operating Agreement of Northland Broadcasting, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by Northland Holdings, LLC, a Virginia limited liability company, and Northland Management, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is Northland Broadcasting, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as 2 rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 24th day of February 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Northland Holdings, LLC, By: Northland Management, Inc. Manager By: --------------------------- a duly authorized officer Member: Northland Management, Inc. By: --------------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Northland Holdings, LLC $990.00 Northland Management, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of Northland Broadcasting, LLC as of the 10th day of December, 1997. Member: Northland Holdings, LLC, By: Northland Management, Inc. Manager By: /s/ Alan R. Brill --------------------------- a duly authorized officer Member: Northland Management, Inc. By: /s/ Alan R. Brill --------------------------------- a duly authorized officer 13 NORTHLAND BROADCASTING, LLC CERTIFICATE REGISTER
========================================================================================== Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - ------------------------------------------------------------------------------------------ Northland Holdings, 1 LLC 990 12/22/297 - ------------------------------------------------------------------------------------------ 2 Northland Management 10 12/22/97 - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ ==========================================================================================
14 EX-3.(II)(K) 42 EXHIBIT 3(II)(K) EX-3.(ii)(k) BYLAWS OF NB II, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determi nation it shall be the calendar year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided in Article IV, Section 8) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second (2nd) Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If the aforesaid date shall fall on a legal holiday, the annual shareholders' meeting shall be held on the next following business day, and if for any other reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Article IV, Section 3, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia (1950), as amended (the "Code")) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders' meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president, the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code, shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special sharehold ers' meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the 2 act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstand ing shares at any given time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describ ing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.1-657D of the Code nonvoting share holders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect 3 of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A share holder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorpo ration, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corpo ration for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meeting the share holder objects to holding the meeting or to transacting business at the meeting, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is present ed. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term, and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be one (1). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A 4 director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under the conditions described in Sections 4 and 5 of this Article V, the board of directors shall be elected annually at the annual share-holders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held the number of votes cast to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office consti tute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then direc tors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI - MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings, Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. 5 Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Common wealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days or telegraphed or telefaxed at least two (2) days prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of direc tors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held 6 meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or partici pation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the begin ning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after its election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appoint ment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the 7 faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corpora tion owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assign ment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate, a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "pro ceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obliga tion) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation 8 of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A direc tor shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or convic tion, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or direc tor of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occur ring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liabili ty to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws may be made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made, by the shareholders, and the shareholders may 9 provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia, those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or secretary of this corporation, either in person or by proxy. Each use of a masculine pronoun herein shall be read to include both the feminine and neuter pronouns as applicable. Adopted by the Shareholders; As of February 14, 1995 10 EX-3.(II)(L) 43 EXHIBIT 3(II)(L) EX-3.(ii)(l) Exhibit A BYLAWS OF CENTRAL MICHIGAN NEWSPAPERS, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(M) 44 EXHIBIT 3(II)(M) EX-3.(ii)(m) Exhibit A BYLAWS OF CADILLAC NEWSPAPERS, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(N) 45 EXHIBIT 3(II)(N) EX-3.(ii)(n) Exhibit A BYLAWS OF CMN ASSOCIATED PUBLICATIONS, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(O) 46 EXHIBIT 3(II)(O) EX-3.(ii)(o) LIMITED PARTNERSHIP AGREEMENT This agreement ("Agreement") is entered into as of January 1, 1989, by and between CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia corporation (the "General Partner", or a "Partner"), and BRILL NEWSPAPERS, INC., a Virginia corporation, c/o Charles W. Laughlin, Esquire, 100 Shockoe Slip, Richmond, Virginia 23219, (the Limited Partner", or a "Partner", and collectively with the General Partner, the "Partners"). 1. Formation; Certificate. The parties hereto agree to form a partnership, which shall be named "Central Michigan Distribution Co., L.P." (the "Limited Partnership"), and the Partners are hereby admitted to the Limited Partnership. A certificate of limited partnership (as in effect from time to time, the "Certificate") initially Containing the form and substance of Exhibit A attached hereto shall be filed with the State Corporation Commission of Virginia, and the General Partner shall not be required to deliver or mail a copy of the Certificate, or of any certificate of amendment or cancellation thereof, or of any restated certificate of limited partnership, to any Limited Partner. 2. Specified Office. The Limited Partnership shall continuously maintain a specified office (the "Specified Office"), which initially shall be at 215 North Main Street, Mount Pleasant, Michigan 48858, the present address of the General Partner. At all times the Limited Partnership shall keep at the Specified Office those records required to be kept there by ss.50-73.8 of the Virginia Revised Uniform Limited Partnership Act (the "Act"), and such records shall be subject to inspection and copying at the reasonable request, and at the expense, of any Partner during ordinary business hours. 3. Powers. The Limited Partnership shall do business only under the name stated in the Certificate and will conduct only such business activities as the General Partner shall determine. The Limited Partner shall have no vote on any matter and shall not participate in or in the control of the business of the Limited Partnership, which control shall be vested exclusively in the General Partner. The General Partner shall have full and exclusive authority to act for and bind the Limited Partnership in all partnership matters under applicable laws. 4. Initial Contributions. A statement of the amount of cash and a description and statement of the agreed value of any other property contributed to the Limited Partnership by each Partner as its initial capital contribution, receipt of which by the Limited Partnership is hereby acknowledged, is and shall remain on file with the Limited Partnership at the Specified Office. No interest shall accrue or be paid on the amount of such contributions. 5. Additional Contributions. As of the date hereof, no Partner has agreed to make any additional contribution to the Limited Partnership. A Limited Partner shall be obligated to contribute additional cash or property to or to perform services for the Limited Partnership only as and to the extent expressly set out in an enforceable agreement in writing, if any, hereafter entered into and executed by that Limited Partner and the Limited Partnership, and no other contribution to the Limited Partnership shall or may be required of any Limited Partner. 6. Interim Distributions. No Partner shall have any right to receive and the Limited Partnership shall not make any interim distributions to the Partners except in distributive shares determined in accordance with the allocations set forth in Paragraph 7 and the provisions of this Agreement, and any such distribution shall be made only as and when determined by the General Partner. In no event shall the Limited Partnership make or shall a Partner receive a distribution from the Limited Partnership if, after giving effect to such distribution, the then liabilities of the Limited Partnership, other than any liabilities to the Partners on account of their interests in the Partnership, exceed the then fair value of the Limited Partnership's assets. 7. Allocations; Capital Accounts. Subject to the remaining provisions of this paragraph, the Limited Partnership's income, gains, losses, deductions, or credits (and any items thereof) for the period shall be allocated among the Partners annually as of the close of business on the last day of each fiscal year of the Limited Partnership, as follows: General Partner 3% Limited Partner 97% Total 100% For each Partner the Limited Partnership shall establish, determine, and maintain a separate account (the "Capital Account") consisting initially of such Partner's capital contribution and reflecting all interests of the Partner in the Limited Partnership, which Capital Account shall be determined and maintained throughout the full term of the Limited Partnership as required by and in accordance with ss.1.704-1(b)(2)(iv) of the Treasury Regulations (as in effect from time to time, the "Regulations"). Any items of income, gain, loss, deduction, or credit shall first be allocated so that each Partner is allocated such items of the Limited Partnership only to the extent that such Partner receives a corresponding economic benefit or bears a corresponding economic burden. No loss shall be allocated to any Partner, however, if such allocation would cause or increase a deficit balance in such Partner's Capital Account, after making reductions in such Partner's Capital Account as required by ss.1.704-1(b)(2)(ii)(d)(3) et seq. of the Regulations. If such reductions unexpectedly cause or increase a deficit balance in a Partner's Capital Account such Partner's Capital Account shall be allocated items of income and gain in an amount and manner sufficient to eliminate such deficit as quickly as possible. Any funds to be distributed to the Partners upon a liquidation of the Limited Partnership or a Partner's interest therein shall be distributed only in accordance with the positive Capital Account balances of the Partners as then determined in accordance with the Regulations after allocating all gains or losses from the sale, exchange, or abandonment of the Limited Partnership's properties, and it is agreed that no Partner shall be liable to the Limited Partnership to restore any deficit balance that may exist in its Capital Account upon liquidation. If the Limited Partnership at any time incurs nonrecourse debt, the provisions of ss.1.704-1(b)(4)(iv) of the Regulations shall control in determining allocations of loss, deduction, or other partnership items, and a minimum gain charge-back shall be made in accordance with the Regulations. 8. Withdrawal. The General Partner agrees that it will not withdraw from the Limited Partnership. It is agreed that the Limited Partner may withdraw from the Limited Partnership at any time upon not less than five (5) days written notice given to the General Partner. Upon its withdrawal the Limited Partner shall be entitled to receive from the Limited Partner-ship the fair value of its then interest in the Limited Partnership as of the date of its withdrawal based upon its right to share in distributions from the Limited Partnership. Such liquidating distribution may be made in kind, in whole or in part, as determined by the General Partner. 9. Additional Partners. No new or additional partner shall be admitted to the Limited Partnership except upon the prior written agreement of all Partners hereafter entered into. 10. Transferability. No Partner may assign, encumber, pledge, sell, mortgage, hypothecate, or otherwise transfer any rights or interest hereunder or in the Limited Partnership, in whole or in part, whether voluntarily or by operation of law, and no assignee or other transferee of any such rights or interest shall thereby become or obtain any right or interest as a partner of the Limited Partnership, or otherwise. 11. Disability of a Partner. If any Partner is adjudicated a bankrupt, dissolved, liquidated, or otherwise terminated such action shall be considered a withdrawal of the Partner from the Limited Partnership. 12. Partition. Each Partner hereby waives any and all rights to a partition of any or all of the property of the Limited Partnership. 13. Dissolution and Winding Up. Unless sooner terminated by law the Limited Partnership shall be terminated and dissolved and its affairs wound up upon the first to occur of: (a) February 28, 2090; (b) the written consent of all Partners; (c) express written notice of such termination, dissolution, and winding up received by the General Partner from the Limited Partner; (d) the withdrawal of any Partner, unless, within ninety (90) days after a withdrawal of the General Partner, the then remaining Partner(s) agree(s) in writing to continue the business of the Limited Partnership and to the appointment of one or more additional General Partners if necessary or desired, or (e) entry of a decree of judicial dissolution under ss.50-73.50. of the Act. Upon dissolution and winding up the Limited Partnership's assets shall be distributed as required by the Act and this Agreement. 14. Amendment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns and may be amended only by a written agreement executed by all parties hereto. IN WITNESS WHEREOF, the Partners have executed this Agreement on the day, month, and year first above written. General Partner Central Michigan Distribution Co. Inc. by /s/ Bonnie P. Brill -------------------------------- a duly authorized officer Limited Partner Brill Newspapers, Inc. by ------------------------- a duly authorized officer EXHIBIT A Certificate of Limited Partnership of CENTRAL MICHIGAN DISTRIBUTION CO., L.P. 1. The name of the limited partnership ("Partnership")is "Central Michigan Distribution Co., L.P." 2. The post office address of the office at which the records required to be maintained by the Partnership are kept is P.0. Box 447, 215 North Main Street, in the City of Mount Pleasant (County of Isabella), Michigan 48858. 3. The name of the initial registered agent of the Partnership is Charles W. Laughlin, who is a resident of Virginia member of the Virginia State Bar, and the business and post office address of the Partnership's registered agent is 100 Shockoe Slip, Richmond, Virginia 23219, located in the City of Richmond. 4. The name and post office address of each general partner of the Partnership is: Central Michigan P.0. Box 447 Distribution Co., Inc. 215 North Main Street Mount Pleasant, MI 48858 5. The latest date upon which the Partnership is to be dissolved and its affairs wound up is February 28, 2090. Central Michigan. Distribution Co., Inc., the General Partner of Central Michigan Distribution Co. L.P. by: ---------------------------------- (officer) of Central Michigan Distribution Co., Inc. STATE OF VIRGINIA CITY OF RICHMOND, to-wit:\ The foregoing instrument was acknowledged before me on this the ____ day of _____ ____, by _______________________ as ________________ of ____________________________________________. ----------------------------- Notary Public My Commission expires: EX-3.(II)(P) 47 EXHIBIT 3(II)(P) EX-3.(ii)(p) Exhibit A BYLAWS OF CENTRAL MICHIGAN DISTRIBUTION CO., INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(Q) 48 EXHIBIT 3(II)(Q) EX-3.(ii)(q) Exhibit A BYLAWS OF GLADWIN NEWSPAPERS, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(R) 49 EXHIBIT 3(II)(R) EX-3.(ii)(r) Exhibit A BYLAWS OF GRAPH ADS PRINTING, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(S) 50 EXHIBIT 3(II)(S) EX-3.(ii)(s) Exhibit A BYLAWS OF MIDLAND BUYER'S GUIDE, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(T) 51 EXHIBIT 3(II)(T) EX-3.(ii)(t) Exhibit A BYLAWS OF ST. JOHNS NEWSPAPERS, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determi nation it shall be the calendar year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided in Article IV, Section 8) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second (2nd) Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If the aforesaid date shall fall on a legal holiday, the annual shareholders' meeting shall be held on the next following business day, and if for any other reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Article IV, Section 3, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia (1950), as amended (the "Code")) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders' meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president, the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code, shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special sharehold ers' meeting is adjourned to a different date, time, or place, notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstand ing shares at any given time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describ ing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.1-657D of the Code nonvoting share- 3 holders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A share holder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorpo ration, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corpo ration for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meeting the share holder objects to holding the meeting or to transacting business at the meeting, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is present ed. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and 4 affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term, and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be one (1). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under the conditions described in Sections 4 and 5 of this Article V, the board of directors shall be elected annually at the annual share-holders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held the number of votes cast to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office consti tute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then direc tors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may 5 be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI - MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings, Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Common wealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days or telegraphed or telefaxed at least two (2) days prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a 6 board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of direc tors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or partici pation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the begin ning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS 7 Section 1. Election, Removal, and Duties - Promptly after its election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appoint ment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corpora tion owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assign ment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. 8 Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate, a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "pro ceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obliga tion) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A direc tor shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or convic tion, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on 9 behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or direc tor of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occur ring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liabili ty to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws may be made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made, by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia, those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by the president or secretary of this corporation, either in person or by proxy. 10 Each use of a masculine pronoun herein shall be read to include both the feminine and neuter pronouns as applicable. Adopted by the Shareholders; As of June 10, 1996 11 EX-3.(II)(U) 52 EXHIBIT 3(II)(U) EX-3.(ii)(u) AMENDED OPERATING AGREEMENT of HURON P.S., LLC This is the Amended Operating Agreement of Huron P.S., LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by Huron Holdings, LLC, a Virginia limited liability company, and Huron Management, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is Huron P.S., LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's 2 share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 15th day of September 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Huron Holdings, LLC, By: Huron Management, Inc. Manager By: /s/ Alan R. Brill ---------------------------- a duly authorized officer Member: Huron Management, Inc. By: /s/ Alan R. Brill ---------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Huron Holdings, LLC $990.00 Huron Management, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of Huron P.S., LLC as of the 10th day of December, 1997. Member: Huron Holdings, LLC, By: Huron Management, Inc. Manager By: /s/ Alan R. Brill ---------------------------- a duly authorized officer Member: Huron Management, Inc. By: /s/ Alan R. Brill ---------------------------- a duly authorized officer 13 HURON P.S., LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 Huron Holdings, LLC 990 12/22/97 - -------------------------------------------------------------------------------- Huron Management, 2 Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(V) 53 EXHIBIT 3(II)(V) EX-3.(ii)(v) AMENDED OPERATING AGREEMENT of HURON NEWSPAPERS, LLC This is the Amended Operating Agreement of Huron Newspapers, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by Huron Holdings, LLC, a Virginia limited liability company, and Huron Management, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is Huron Newspapers, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as 2 rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 15th day of September 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Huron Holdings, LLC, By: Huron Management, Inc. Manager By:___________________________ a duly authorized officer Member: Huron Management, Inc. By:_________________________________ a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Huron Holdings, LLC $990.00 Huron Management, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of Huron Newspapers, LLC as of the 10th day of December, 1997. Member: Huron Holdings, LLC, By: Huron Management, Inc. Manager By: /s/ Alan R. Brill ---------------------------- a duly authorized officer Member: Huron Management, Inc. By: /s/ Alan R. Brill ---------------------------- a duly authorized officer 13 HURON NEWSPAPERS, LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 Huron Holdings, LLC 990 12/22/97 - -------------------------------------------------------------------------------- Huron Management, 2 Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(W) 54 EXHIBIT 3(II)(W) EX-3.(ii)(w) AMENDED OPERATING AGREEMENT of HURON HOLDINGS, LLC This is the Amended Operating Agreement of Huron Holdings, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by and among Brill Media Holdings, LLC, a Virginia limited liability company, and Huron Management, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is Huron Holdings, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as 2 rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 15th day of September 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Brill Media Holdings, LLC By: Brill Media Holdings, Inc. Manager By: /s/ Alan R. Brill ------------------------- a duly authorized officer Member: Huron Management, Inc. By: /s/ Alan R. Brill -------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Brill Media Holdings, LLC $990.00 Huron Management, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of Huron Holdings, LLC as of the 10th day of December, 1997. Member: Brill Media Holdings, LLC By: Brill Media Holdings, Inc. Manager By: /s/ Alan R. Brill -------------------------- a duly authorized officer Member: Huron Management, Inc. By: /s/ Alan R. Brill --------------------------- a duly authorized officer 13 HURON HOLDINGS, LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 BMC Holdings, LLC 990 12/22/97 - -------------------------------------------------------------------------------- 2 Huron Management, Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(X) 55 EXHIBIT 3(II)(X) EX-3.(ii)(x) AMENDED OPERATING AGREEMENT of NORTHERN COLORADO HOLDINGS, LLC This is the Amended Operating Agreement of Northland Holdings, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by and among BMC Holdings, LLC, a Virginia limited liability company, and Northern Colorado Management, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is Northern Colorado Holdings, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as 2 rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 24th day of February 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: BMC Holdings, LLC By: Brill Media Company, LLC Manager By: /s/ Alan R. Brill ------------------------- a duly authorized officer Member: Northern Colorado Management, Inc. By: /s/ Alan R. Brill ---------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ BMC Holdings, LLC $990.00 Northern Colorado Management, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of Northern Colorado Holdings, LLC as of the 10th day of December, 1997. Member: BMC Holdings, LLC By: Brill Media Company, LLC Manager By: /s/ Alan R. Brill -------------------------- a duly authorized officer Member: Northern Colorado Management, Inc., a Virginia corporation By: /s/ Alan R. Brill --------------------------- a duly authorized officer 13 NORTHERN COLORADO HOLDINGS, LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 BMC Holdings, LLC 990 12/22/97 - -------------------------------------------------------------------------------- Northern Colorado 2 Management, Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(Y) 56 EXHIBIT 3(II)(Y) EX-3.(ii)(y) AMENDED OPERATING AGREEMENT of NCR III, LLC This is the Amended Operating Agreement of NCR III, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by and among NCH II, LLC, a Virginia limited liability company, and NCR II, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is NCR III, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's 2 share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 23rd day of May 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: NCH II, LLC By: NCR II, Inc. Manager By:___________________________ a duly authorized officer Member: NCR II, Inc. By:________________________________ a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ NCH II, LLC $990.00 NCR II, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of NCR III, LLC as of the 10th day of December, 1997. Member: NCH II, LLC By: NCR II, Inc. Manager By: /s/ Alan R. Brill --------------------------- a duly authorized officer Member: NCR II, Inc. By: /s/ Alan R. Brill -------------------------------- a duly authorized officer 13 NCR III, LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 NCH II, LLC 990 12/22/97 - -------------------------------------------------------------------------------- 2 NCR II, Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(Z) 57 EXHIBIT 3(II)(Z) EX-3.(ii)(z) AMENDED OPERATING AGREEMENT of NCH II, LLC This is the Amended Operating Agreement of NCH II, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by and among Brill Media Holdings, LLC, a Virginia limited liability company, and NCR II, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is NCH II, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as rapidly as is possible, from time to time such Member's 2 share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 23rd day of May 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Brill Media Holdings, LLC By: Brill Media Holdings, Inc. Manager By: /s/ Alan R. Brill ------------------------- a duly authorized officer Member: NCR II, Inc. By: /s/ Alan R. Brill ------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Brill Media Holdings, LLC $990.00 NCR II, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of NCH II, LLC as of the 10th day of December, 1997. Member: Brill Media Holdings, LLC By: Brill Media Holdings, Inc. Manager By: /s/ Alan R. Brill ------------------------- a duly authorized officer Member: NCR II, Inc. By: /s/ Alan R. Brill ------------------------- a duly authorized officer 13 NCH II, LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 BMC Holdings, LLC 990 12/22/97 - -------------------------------------------------------------------------------- 2 NCR II, Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(AA) 58 EXHIBIT 3(II)(AA) EX-3.(ii)(aa) AMENDED OPERATING AGREEMENT of NORTHLAND HOLDINGS, LLC This is the Amended Operating Agreement of Northland Holdings, LLC, a Virginia limited liability company (the "Company"), entered into as of this 10th day of December, 1997, by and among Brill Media Holdings, LLC, a Virginia limited liability company, and Northland Management, Inc., a Virginia corporation, the Company's members [each (and each other person or entity while hereafter admitted as a Member) a "Member", and collectively with each other Member, the "Members"]. 1. Name. The name of the Company is Northland Holdings, LLC. The business of the Company may be conducted under such trade or fictitious name or names as the Members may select from time to time. 2. Principal Office. The Company's principal office, where the Company's principal executive offices are located and at which the records required to be maintained by the Act (hereinafter defined) are to be kept shall be located at 420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other place or places as the Members may determine from time to time. 3. Capital Accounts. (a) Capital Contributions. The amount of the Members' capital contributions (to be made simultaneously with their execution of this agreement) are set forth on Exhibit A; such Members shall not be required to lend or make any additional capital contribution. (b) Capital Accounts; Allocations. A separate capital account (singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be established and maintained for each Member. As of any date, the amount of a Member's Capital Account shall be adjusted and any allocations of the Company's income, gain, loss, deductions, or credits (or items thereof) shall be determined and made as hereinafter provided and in accordance with the Company's records and, to the extent consistent herewith, applicable provisions of the Virginia Limited Liability Company Act as it may be amended or superseded from time to time (the "Act"): (i) Each Member's Capital Account (a) shall be increased by (i) the cash amount or agreed fair market value of all contributions hereafter made by such Member to the Company, (ii) any net income allocated (but not distributed) to such Member pursuant to this Section 3, and any items in the nature of income or gain that are specially allocated (but not distributed) to such Member, and (iii) the amount of any Company liabilities assumed by such Member or secured by any property of the Company distributed to such Member, and (b) shall be decreased by (i) the cash amount or agreed fair market value of all actual or deemed distributions of cash or property made to such Member pursuant to this agreement, (ii) any net loss allocated to such Member pursuant to this Section 3, and any items in the nature of expenses or losses that are specially allocated to such Member, and (iii) the amount of any liabilities of such Member assumed or secured by the Company. In determining the amount of any such liabilities, there shall be taken into account the provisions of ss. 752(c), and any other applicable provisions, of the Internal Revenue Code as amended from time to time (the "Code") and any applicable regulations (the "Regulations"; singly, a "Regulation") thereunder. (ii) In accordance with Regulation ss. 1.704, at appropriate times, the Capital Accounts of all Members and the carrying values of all Company properties shall be adjusted upwards or downwards to reflect any unrealized gain or loss attributable to each Company property, as if such unrealized gain or loss had been recognized upon an actual sale of each such property at such time and had been allocated to the Members pursuant to this Section 3. Similarly, in accordance with such Regulation, immediately prior to the distribution in kind of any Company property to a Member (including pursuant to a liquidation of the Company) the Capital Accounts of the Members shall be adjusted to reflect any unrealized gain or loss attributable to such property as if such unrealized gain or loss had been recognized upon an actual sale of such property at such time and had been allocated to the Members pursuant to this Section 3. Such unrealized gain or loss shall be determined using such methods of valuation as the Members in their sole discretion deem appropriate. (iii) For purposes of this agreement, net income, gross income and net loss shall be computed in the same manner as determined for federal income tax purposes, with the modifications set forth in Regulation ss. 1.704. (iv) Should any Member's adjusted capital account balance become negative as a result of any adjustment, allocation, or distribution, thereafter, acting as 2 rapidly as is possible, from time to time such Member's share of the Company's income and gain, if any, shall be separately allocated to such Member's Capital Account until such time as such Member's Capital Account deficit is eliminated. 3 (v) Non-recourse deductions shall be allocated in a manner that is reasonably consistent with other allocations of items of income, gain, or loss attributable to the property securing the non-recourse liabilities. In the first year in which the Company has non-recourse deductions or makes distributions attributable to an increase in minimum gain as defined in the Regulations, this agreement shall be deemed to include a "minimum gain chargeback" in accordance with the Regulations. 4. Members. No person or entity shall be or become a Member of the Company unless named as a Member herein or hereafter admitted as a Member of the Company with the prior written consent of all then Members. The time of admission of any such new Member shall begin when such Member's status is first reflected in writing in the Company's records, and not before. Any Member may resign, but (unless the Members agree otherwise in writing) any such resignation shall first become effective thirty (30) calendar days after the Company shall have received written notice thereof, and not before. 5. Transfer of Interests. Other than with the prior, written consent of all Members, an assignee or other transferee of an interest in the Company (by operation of law or otherwise) shall not thereby become a Member of the Company nor thereby acquire any proprietary right in nor right to become a Member or to participate in the affairs or management of the Company. Any attempted assignment or other transfer of a Member's rights in violation of this agreement shall be void. Without such prior written consent, by any written assignment, pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a Member may assign and transfer to and entitle the assignee or transferee to receive only (as and to the extent expressly so assigned or transferred) any share of the profits or losses or asset distributions of the Company that the assignor or transferor Member thereafter otherwise would have been or become entitled to hereunder, and nothing more. 6. Ceasing to be a Member. Upon any Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy, such person or entity shall cease to be a Member. Any payment made to a Member's successor in interest, personal representative, executor, or administrator shall acquit the Company of any and all liability to such Member and to any such person as may be interested in any such payment by reason of such Member's death, expulsion, resignation, dissolution, incompetency, or bankruptcy. 4 7. Certificate; Membership; Voting Rights of Members; Transfer. Each Member shall be entitled to a membership certificate (the "Certificate") evidencing such Member's interest in the Company and the number of votes entitled to be cast by such Member in voting by the Members, which Certificate shall be in such form and contain such substance as may be agreed upon by the Members or required by law. The Company shall maintain a Certificate register (the "Certificate Register") recording ownership of all Certificates then outstanding and the number of votes entitled to be cast by each Member in voting by the Members, which register, at all times, shall be conclusive evidence of each Member's interest in the Company and voting rights. Any transfer of a Member's interest in the Company, in whole or in part, other than a Transfer of an interest in a Member's share of the Company's profits or losses or assets on distribution as provided for in Section 5, shall become effective only upon (i) surrender of each Certificate representing the Member's interest then being transferred accompanied by a written assignment applicable thereto, all in form and substance satisfactory to the Company, and duly executed by the transferor, and (ii) recordation of such transfer on the Company's Certificate Register. 8. Management. The Company's business is to be managed by the Members, who shall have the exclusive right to manage the Company in their capacity as Members. The Members shall, however, have the authority from time to time to delegate specific day-to-day management functions to one or more of such persons, employees, agents, or consultants (including any affiliate of a Member) as they unanimously shall select at any time, or from time to time. Any instrument or agreement may be executed and delivered on behalf of the Company by a Member or by the Company's agent or delegate as expressly designated in writing by the Members for such purpose, including any deed or deed of trust purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, any note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument, and no other signature shall be required for any such instrument, conveyance, or agreement to be valid, binding and enforceable against the Company in accordance with its terms. 9. Compensation and Reimbursement of Members. Members may receive compensation for the reasonable value of any services rendered in managing the Company, and the Company shall pay, or reimburse all expenses reasonably incurred by any Member in connection with managing the Company. 5 10. Certain Actions, Taxes. On the Company's behalf, the Members may make any election permitted by Section 754 of the Code with respect to adjustments to basis of the Company's property. 11. Authority of the Members to Engage in Other Businesses. Any Member, or any affiliate of a Member may engage in and/or possess an interest in other business ventures of any nature and description, independently or with others, including but not limited to the ownership, financing, leasing, operation, management, and development of businesses that may compete with the Company; and neither the Company nor the Members shall have any right by virtue of this agreement in or to any other venture or to any income or profits derived therefrom. No Member, or any affiliate of any Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and each of them shall have the right to take for its own account (individually or otherwise) or to recommend to others any such particular investment opportunity. 12. Authority of Persons to Deal with the Company. The Company may, but shall not be required to, transact business with, borrow money from, or lend money to any Member, or any affiliate thereof, and such person or entity shall, subject to applicable law, have the same rights and obligations with respect thereto as would a person who was not such a Member or affiliate. 13. Profits and Losses, Distributions, Books, Records, Reports, etc. (a) As and to the extent permitted and not prohibited by the Act, and as determined by a majority vote of the Members, the Company's profits and losses (and any then distributions of the Company's cash or other assets) shall be allocated and distributed among the Members at least annually in proportion to their then Capital Accounts as reflected in the Company's records. (b) The Company shall maintain and keep at its principal office described in Section 2 complete and accurate books of account as required pursuant to the Act. Each Member shall have access thereto at all reasonable times and the right to inspect and copy such books and records either directly or through a person designated by such Member. (c) The Company shall send to all Members an annual report, containing a balance sheet, income statement, and statement 6 of changes in financial position, and all information necessary for each Member to prepare its federal income tax return. 14. Exculpation. Except by reason of acts or omissions of the Member found by a court of competent jurisdiction upon entry of a final judgment to be due to bad faith, fraud, willful misconduct or a knowing violation of the criminal law, in any proceeding brought by or in the right of the Company or by or on behalf of any Member, no Member shall be liable, responsible, or accountable in damages or otherwise to the Company or to any Member, or to any successor, assignee or transferee of the Company or of any Member, for any losses, claims, damages or liabilities arising from (i) any act performed, or the omission to perform any act, within the scope of the authority conferred on the Member by this agreement, (ii) the performance by the Member of, or the omission to perform, any acts on advice of legal counsel, accountants or other professional consultants to the Company; or (iii) the negligence, dishonesty or bad faith of any consultant, employee, or agent of the Company selected or engaged by the Member in good faith. 15. Exoneration. No Member or agent of the Company, jointly or severally, shall be liable or have any obligation for any liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being such Member or agent of the Company. 16. Indemnification and Advances. (a) To the full extent permitted by law, the Company shall indemnify, defend and hold each Member harmless from and against, and may, with the approval of a majority vote of the Members, indemnify, defend and hold the Company's and the Member's respective affiliates, agents, employees, advisors, consultants and other independent contractors, harmless from and against, any loss, liability, damage, fine, judgment, penalty, attachment, cost or expense, including reasonable attorneys' fees, arising from any demands, claims or lawsuits against the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors, in or as a result of or relating to its capacity, actions or omissions as Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company, or arising from or relating to the business or activities undertaken on behalf of the Company, including, without limitation, any demands, claims or lawsuits initiated by a Member; provided that the acts or omissions of the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor seeking indemnification are not found by a court of competent jurisdiction 7 upon entry of a final judgment to be the result of bad faith, fraud, willful misconduct, or a knowing violation of the criminal law by the person seeking indemnification, or to have violated such a lesser standard of conduct as under applicable law affirmatively prevents indemnification hereunder. The termination of any action, suit or proceeding by judgment, order, settlement, plea of nolo contendere or its equivalent, or conviction shall not, of itself, create a presumption that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall not be entitled to indemnification hereunder or that the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors did not act in good faith and in a manner that it or they reasonably believed to be in or not opposed to the best interests of the Company. (b) Subject to the limitations herein, a Member shall be entitled to receive, upon application therefor, and the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors shall be entitled to receive, with the approval of a majority vote of the Members, advances from the Company to cover the costs of defending any claim or action against them relating to their acts or omissions as a Member, or as an affiliate, agent, employee, advisor, consultant or other independent contractor of the Company or a Member or otherwise relating to the Company; provided, however, that such advances shall be repaid to the Company (with Interest thereon at an annual rate equal to the prime rate in effect from time to time as reflected in The Wall Street Journal but not to exceed the maximum permitted by applicable law), if the Member or the Company's or the Member's affiliate, agent, employee, advisor, consultant or other independent contractor that receives such advance is found by a court of competent jurisdiction upon entry of a final judgment to have violated any of the standards that preclude indemnification hereunder. All rights of the Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors to indemnification as herein provided shall survive the dissolution of the Company and the death, resignation, expulsion, incompetency, dissolution, liquidation or Bankruptcy of the Member or any such other person, and shall inure to the benefit of their heirs, personal representatives, successors and assigns. (c) In the event the indemnification obligation of this Section shall be deemed unenforceable to any extent by a court of competent jurisdiction, such unenforceable portion shall be modified or stricken so as to give effect to this Section to the fullest extent permitted by law. 8 (d) The right of indemnification hereby provided shall not be exclusive of or affect any other rights that the Member or any of its affiliates may have. Nothing contained in this Section shall limit any lawful right to indemnification existing independently of this Section. (e) Any amount that a Member or the Company's or the Member's respective affiliates, agents, employees, advisors, consultants or other independent contractors is entitled to receive hereunder shall be paid only out of and to the extent of the Company's then assets, including any insurance proceeds available to the Company for such purposes. No Member shall be liable for the payment of any amount that a Member or an affiliate, agent, employee, advisor, consultant, or other independent contractor of the Company or the Member is entitled to receive hereunder, nor to make any capital contribution to the Company, or return any capital distribution made to such person or entity by the Company, nor to restore any negative capital account balance of that Member in order to enable the Company to make any payment hereunder. 17. Dissolution. The Company shall be dissolved upon the earliest to occur of (i) the Members' unanimous written consent, (ii) entry of a decree of judicial dissolution under the Act, or (iii) the date set forth in the Articles of Organization. The death, expulsion, resignation, dissolution, incompetency, or bankruptcy of a Member or any other event that terminates the continued membership of a Member shall not cause a dissolution of the Company, because the remaining Members hereby unanimously consent to continue the business of the Company upon the happening of such event. Upon any dissolution, the Company's business shall be wound up, its liabilities satisfied, and any balance, less reasonable reserves, shall be distributed to the Members in accordance with their positive capital accounts. 18. Miscellaneous Provisions. (a) Governing Law. This agreement and the rights and liabilities of the parties shall be determined in accordance with the laws of the Commonwealth of Virginia. (b) Captions. Captions contained in this agreement are inserted only as a matter of convenience and in no way define, limit, extend, or describe the scope or intent of this agreement or any Section or provision hereof. (c) Construction. Whenever the context may require, each pronoun used herein shall include the corresponding masculine, 9 feminine, or neuter forms, and the singular form of each noun or pronoun shall include the plural, and vice versa. (d) Severability. Every provision of this agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the terms or provisions of this agreement. (e) Successors. Subject to the limitations on transferability contained herein, each and all of the terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the personal representatives, successors, heirs, and assigns (including an assignee of all or part of any interest in the Company) of the parties hereto. (f) Execution and Counterparts. This agreement and any amendment hereto may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one agreement. In addition, this agreement may be executed through the use of counterpart signature pages. The signature of any party on any counterpart agreement or counterpart signature page shall be deemed to be a signature to, and may be appended to, one document. (g) Third Party Beneficiary. No provision of this agreement is intended to be for the benefit of any creditor or other person to which any debt, liability, or obligation is owed by (or that otherwise has any claim against) the Company or any Member, and no creditor or other person shall obtain any right under any of the foregoing provisions, nor shall any such person solely by reason of any of the foregoing provisions make any claim in respect of any debt, liability, or obligation (or otherwise) against the Company or any Member. (h) Investment Representation. By executing this agreement, each Member represents and warrants that such Member's interest in the Company is being acquired by it for its own account for investment and not with a view to resale or distribution thereof and that the Member is fully aware that each other Member and the Company are relying upon the truth and accuracy of this representation and warranty. (i) Entire Agreement. This agreement constitutes the sole operating agreement among the Members, and supersedes and cancels any prior agreements, representations, warranties, or communications, whether oral or written, among the Members relating to the affairs of the Company and the conduct of the Company's 10 business. No amendment or modification of this agreement shall be effective unless approved in writing as provided herein. 19. Notices; Consents, etc. Any notice, consent, election, approval, payment, demand, or communication required or permitted to be given by this agreement shall be in writing and shall be deemed to have been sufficiently given or served for all purposes only when delivered personally to or actually received by the party or an officer of the entity to which directed or ten (10) days after having been sent by registered or certified mail, postage and charges prepaid, addressed to the address for the notified party contained in the Company's records. Any Member may change its address for purposes of this agreement by giving the Company and each other Member notice of such change, in the manner set forth above. 20. Amendment. This agreement may be amended at any time upon a unanimous vote of the Members, but such amendment shall be effective only when reduced to writing and signed by all Members. 21. This Amendment. The Operating Agreement of the Company previously entered into as of the 24th day of February 1997 is hereby amended in its entirety to read as above, effective as of the date of this agreement. 11 IN WITNESS WHEREOF, the undersigned have caused this agreement to be executed as of the day, month, and year first above written. Member: Brill Media Holdings, LLC By: Brill Media Holdings, Inc. Manager By: /s/ Alan R. Brill ---------------------------- a duly authorized officer Member: Northland Management, Inc. By: /s/ Alan R. Brill ---------------------------- a duly authorized officer 12 EXHIBIT A Capital Name Contribution - ---- ------------ Brill Media Holdings, LLC $990.00 Northland Management, Inc. $ 10.00 This is Exhibit A to the Amended Operating Agreement of Northland Holdings, LLC as of the 10th day of December, 1997. Member: Brill Media Holdings, LLC By: Brill Media Holdings, Inc. Manager By: /s/ Alan R. Brill ---------------------------- a duly authorized officer Member: Northland Management, Inc., a Virginia corporation By: /s/ Alan R. Brill ---------------------------- a duly authorized officer 13 NORTHLAND HOLDINGS, LLC CERTIFICATE REGISTER ================================================================================ Certi- Number ficate Shares/ Date Transfer To Whom Number Owner Votes Issued Date Transferred - -------------------------------------------------------------------------------- 1 BMC Holdings, LLC 990 12/22/97 - -------------------------------------------------------------------------------- Northland 2 Management, Inc. 10 12/22/97 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 14 EX-3.(II)(BB) 59 EXHIBIT 3(II)(BB) EX-3.(ii)(bb) Exhibit A BYLAWS OF CMN HOLDING, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(CC) 60 EXHIBIT 3(II)(CC) EX-3.(ii)(cc) Exhibit A BYLAWS OF BRILL RADIO, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-3.(II)(DD) 61 EXHIBIT 3(II)(DD) EX-3.(ii)(dd) Exhibit A BYLAWS OF BRILL NEWSPAPERS, INC. ARTICLE I - CORPORATE SEAL The corporation need not have a seal. Should the secretary of the corporation determine that a seal is desirable, the seal of the corporation shall be circular and shall have inscribed thereon, within and around the circumference, the corporation's name, and in the center shall be the word "SEAL". ARTICLE II - FISCAL YEAR The fiscal year of the corporation shall be determined by the board of directors, but in the absence of such a determination it shall be the twelve months ending at midnight on the last day of February in each year. ARTICLE III - RECORD DATE Unless the board of directors shall have fixed some other future date as the record date, the record date for determining the corporation's shareholders entitled to a distribution or to a share dividend shall be the date and time the board of directors authorizes the distribution or share dividend. The record date for any other determination of the corporation's shareholders (except for actions taken by consent as hereinafter provided for by Section 8. of Article IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the thirtieth (30th) day prior to the date of the meeting or action then requiring a determination of shareholders. A determination of shareholders entitled to notice of and to vote at a shareholders' meeting shall be effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. ARTICLE IV - SHAREHOLDERS' MEETINGS Section 1. Place of Meetings - Each shareholders' meeting shall be held at such place, in or out of the Commonwealth of Virginia, as may be provided in the meeting notice. Section 2. Annual Meeting - The corporation shall hold the annual shareholders' meeting on the second Tuesday in February of each year commencing at 10:00 o'clock a.m. local time at the meeting place. If for any reason the annual shareholders' meeting shall not be held on such day, it may be called in accordance with the provisions of Section 3. of this Article IV, and a meeting called and held with this as a purpose shall be specifically designated as the annual meeting. Section 3. Special Meetings - The corporation shall hold a special shareholders' meeting on call of the chairman of the board of directors, the president, the board of directors, or (upon due execution and delivery of one or more written demands as required by and in compliance with Section 13.1-655 of the Code of Virginia) the holders of not less than twenty percent (20%) of all votes entitled to be cast on any issue proposed to be considered at the special meeting. Only business within the purpose or purposes described in the required meeting notice may be conducted at a special shareholders' meeting. Section 4. Notice of Meeting - For each shareholders meeting, not less than ten (10) nor more than sixty (60) days before the meeting date (except as a different time is specified in the second paragraph of this Section or by Virginia law), written notice stating the date, time, and place of the meeting and, in case of a special shareholders' meeting, the purpose or purposes for which the meeting is called, shall be given to each shareholder entitled to vote at such meeting either personally or by mail by or at the direction of the president the secretary, or the persons calling the meeting. If mailed, each such notice shall be deemed to have been given when deposited in the United States mail addressed to a shareholder at such shareholder's address as it appears on the share transfer records of the corporation, with postage thereon prepaid. Notice of a shareholders' meeting to act on an amendment of the articles of incorporation, on a plan of merger or share exchange, or on dissolution of the corporation, or to authorize a proposed sale of assets pursuant to Section 13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the form and manner provided above for a special meeting but not less than twenty-five (25) nor more than sixty (60) days before the meeting date. Section 5. Adjournment - If an annual or special shareholders' meeting is adjourned to a different date, time, or place notice need not be given if the new date, time, and place are announced at the meeting before adjournment. Section 6. Quorum - Shareholders may take action on a matter at a shareholders' meeting only if a quorum exists with respect to that matter. A majority of the votes entitled to be cast by the shareholders in any voting group shall constitute a quorum as to each matter considered by such voting group at each shareholders' meeting. Once a share is represented for any purpose at a shareholders' meeting, it is deemed present for quorum purposes for the remainder of that meeting and for any adjournment of that meeting unless a new record date is set for that adjourned meeting pursuant to Article III. If a quorum exists the affirmative vote of a majority of the votes cast within a voting group on the matter being voted upon shall be the act of the voting group, unless the affirmative vote of a greater number is required by law or by the articles of incorporation, and except that in any election of directors those receiving a plurality of the votes cast by the shares entitled to vote in the election shall be elected, though not receiving a majority. Less than a quorum may adjourn a meeting. Section 7. Voting - Except as may otherwise be provided in the articles of incorporation or by Section 13.1-662 of the Code, each outstanding share of the corporation, regardless of class, is entitled to one vote on each matter to be voted on at a shareholders' meeting. As and to the extent provided by Section 13.1-662 of the Code, treasury shares and redeemable shares (after a notice of redemption has been mailed and a deposit made as provided in such section) shall not vote and shall not be outstanding shares. Shares of the corporation held by another corporation, domestic or foreign, shall not be entitled to vote at any meeting and shall not be counted in determining the total number of outstanding shares at any given. time entitled to vote if a majority of the shares entitled to vote for the election of directors of the other corporation is owned, directly or indirectly, by this corporation. A shareholder entitled to vote may vote his shares in person or by a proxy and may appoint. .such a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his attorney-in-fact, and filing the appointment form with the secretary of the corporation. Any proxy may be revoked as permitted by law and, unless sooner revoked, shall be valid for eleven (11) months from the date the appointment form is received by the secretary of the corporation, unless a longer period is expressly provided for in the appointment form. Section 8. Shareholders' Action Without a Meeting - Any action required or permitted to be taken at a shareholders' meeting may be taken without such a meeting, without notice to voting shareholders, and without action by the board of directors if the action is taken by all shareholders entitled to vote thereon and is evidenced by one or more written consents describing the action taken, at least one such approving consent to have been signed by each shareholder entitled to vote on the action, and delivered to the secretary of the corporation for inclusion in the minutes or for filing with the corporate records. As and when required by Section 13.l-657D of the Code nonvoting shareholders shall be given at least ten (10) days written notice of any proposed action before the action is taken by unanimous consent of the voting shareholders. Any action taken by such unanimous written consent shall be effective according to its terms when a signed consent for each shareholder entitled to vote thereon is in the possession of the corporation, unless such consents all specify the same effective date and each specifies the date of execution by each executing shareholder, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote of voting shareholders at a duly called and held shareholders' meeting and may be described as such in any document filed with the State Corporation Commission. A shareholder may withdraw a consent theretofore delivered to the corporation only by delivering to the corporation a written notice of withdrawal as to such consent prior to the time that all other like consents are in possession of the corporation. Unless otherwise required by law, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs a consent as to such action. Section 9. Waiver of Notice - Any other provision of these bylaws notwithstanding, a shareholder may waive any notice required by these bylaws, the corporation's articles of incorporation, or any law by signing a written waiver of such notice (whether such waiver is executed before or after the date and time of the event that is the subject of such required notice) and delivering such signed waiver to the secretary of the corporation for inclusion in the minutes or filing with the corporate records. A shareholder who attends a shareholders' meeting (i) waives all objections to lack of notice or defective notice of that meeting, unless at the beginning of the meetings the shareholder objects to holding the meeting or to transacting business at the meetings, and (ii) waives all objection to consideration at that meeting of a particular matter that is not within the purpose or purposes described in the meeting notice, unless that shareholder objects to considering the matter when it is presented. Section 10. Minutes - The corporation shall keep as a permanent record minutes of all meetings of its shareholders and a record of all actions taken by its shareholders without a meeting. ARTICLE V - BOARD OF DIRECTORS Section 1. General Powers - All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, its board of directors, subject to any limitation set forth in its articles of incorporation. Section 2. Number, Term. and Qualification - Until such time as this bylaw shall be amended to specify or fix a different number, the number of directors of the corporation shall be three (3). The term of each director shall expire at the next annual shareholders' meeting following his election, but despite the expiration of a director's term, he shall continue to serve until his successor is duly elected and qualifies or until there, is a decrease in the number of directors. A decrease in the number of directors shall not shorten an incumbent director's term. A director need not be a resident of the Commonwealth of Virginia or a shareholder of the corporation. Section 3. Election of Board of Directors - Except under conditions provided for in Sections 4. and 5. of this Article V, the board of directors shall be elected annually at the annual shareholders' meeting. Section 4. Removal - Any director may be removed, with or without cause, if at a shareholders' meeting duly called and held with this as a stated purpose the number of votes voted to remove him constitutes a majority of the votes then entitled to be cast and counted together in an election of such director at a shareholders' meeting. Notice of such a meeting must state that the purpose, or a purpose, of the meeting is removal of the director. If any director is so removed, a new director may be elected in his place at the same shareholders' meeting. Section 5. Resignation - A director may resign at any time by delivering written notice thereof to the board of directors, its chairman, the corporation's president, or the corporation's secretary. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which case the board of directors may fill the pending vacancy before the effective date, but a successor so elected shall not take office until the effective date. Section 6. Vacancies - Any vacancy occurring in the board of directors (including a vacancy resulting from an increase in the number of directors) may be filled by a vote of the board of directors (and if the directors then remaining in office constitute fewer than a quorum the board of directors may fill the vacancy by the affirmative vote of a majority of the then directors) unless the vacant office was held by a director elected by a voting group of shareholders, in which event such vacancy may be filled only by the affirmative vote of a majority of the shareholders in such voting group. Section 7. Compensation - The board of directors may compensate each director for his service as such and may provide for the payment of all expenses incurred by each director in attending meetings of the board of directors. ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS Section 1. Meetings; Minutes - Regular meetings of the board of directors shall be held annually (immediately following each annual shareholders' meeting) to elect officers and to carry on such other business as may properly come before such meeting and immediately following each special shareholders' meeting to carry on such business as may properly come before such meeting. Any such regular meeting of the board of directors shall be held at the place where the immediately preceding shareholders' meeting was held. Special meetings of the board of directors may be called by any member of the board of directors. Any meeting of the board of directors may be held in or out of the Commonwealth of Virginia. The corporation shall keep as a permanent record minutes of all meetings of the board of directors, a record of all actions taken by the board of directors without a meeting, and a record of all actions taken on behalf of the corporation by each committee of the board of directors. Section 2. Method of Meeting - Any or all directors may participate in any regular or special meeting of the board of directors by, or may conduct the meeting through the use of, any means of communication by which all participating directors may simultaneously hear each other during the meeting. Section 3. Notice - No notice need be given of any regular meeting of the board of directors. Notice of each special meeting of the board of directors stating the date, time, and place of the meeting shall be mailed to each director at least three (3) days (or telegraphed at least two (2) days) prior to the date of the meeting. Unless otherwise required by these bylaws, the notice need not describe the purpose of a special meeting of the board of directors. Section 4. Quorum - A majority of the number of directors fixed herein, or one director if that is the number of directors fixed herein, shall constitute the quorum for each meeting of the board of directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present at a board of directors' meeting, or of the sole director if the corporation shall have but one director, shall be the act of the board of directors unless the vote of a greater number of directors is required by the articles of incorporation. Section 5. Action Without a Meeting - Any action required or permitted to be taken at a meeting of the board of directors may be taken without such a meeting and without notice if the action is taken by all members of the board of directors and is evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the corporate minutes or filed with the corporate records reflecting the action taken. Any action taken by such unanimous, written consent shall be effective when the last director of the board of directors signs an approving consent, unless such consents all specify the same effective date and each specifies the date of execution by each executing director, in which event the action taken shall be effective as of the effective date so specified. Such unanimous consent shall have the effect of a unanimous vote at a duly called and held meeting of the board of directors and may be described as such in any document. Section 6. Waiver of Notice - Any other provision of these bylaws notwithstanding, whenever any notice is required to be given to a director, a waiver thereof in writing signed by the director entitled to such notice, whether executed before or after the time stated therein, and filed with the corporate minutes or records shall be equivalent to the giving of such notice to such director. A director's attendance at or participation in a board of directors' meeting waives any required notice to him of the meeting unless that director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and thereafter does not vote for or assent to action taken at the meeting. ARTICLE VII - COMMITTEES From time to time the board of directors may create one or more committees (comprised only of members of the board of directors) that may exercise powers of the board of directors as and to the extent provided in the creating resolution, except as may be limited by Section 13.1-689 of the Code. ARTICLE VIII - OFFICERS Section 1. Election, Removal, and Duties - Promptly after election in each year the board of directors shall appoint a president (who need not be a director) and a secretary. From time to time the board of directors may appoint such other officers as it may deem proper, as evidenced by their appointment. A duly appointed officer may appoint or remove (at any time and with or without cause) one or more assistant officers for his office. Any officer may simultaneously hold more than one office in the corporation. Each officer shall be appointed for a term continuing, unless sooner terminated, until the date of the next ensuing annual meeting of the board of directors and until his successor is appointed; provided, however, that any officer may resign, and any officer may be removed by the board of directors, in each case, at any time, and with or without cause, and such officer's then term shall terminate effective with the date of such resignation or removal. Each vacancy among the officers shall be filled by the board of directors. Each officer of the corporation shall have such authority and shall perform such duties as generally pertain to his office, as well as such other authority and duties as may be prescribed for such officer from time to time by the board of directors. Section 2. Bonds - The board of directors may require that each officer, agent, or employee of the corporation give bond to the corporation, with sufficient surety, conditioned on the faithful performance of the duties of his office or position and upon compliance with such other conditions as may from time to time be imposed by the board of directors. ARTICLE IX - SHARE CERTIFICATES; RECORDS Section 1. Form - Each shareholder shall be entitled to a share certificate evidencing the share or shares in the corporation owned by such shareholder, which certificate shall be in such form as may be required by law and shall be approved by the board of directors and signed by the corporation's president and secretary. Section 2. Transfers - A transfer of any share or shares of the corporation may be made only upon registration of the share transfer in the share transfer records of the corporation, and then only upon surrender of each certificate for each share then being transferred accompanied by a satisfactory written assignment applicable thereto duly executed by the then shareholder thereof or by such shareholder's duly authorized attorney-in-fact. Section 3. Replacements - In case of the loss, mutilation, or destruction of a share certificate a duplicate certificate may be issued upon such terms not in conflict with law as the board of directors may prescribe. Section 4. Records - The corporation or its agent shall maintain a record of the corporation's shareholders in the manner required by law, and the corporation's share transfer records shall constitute conclusive proof of the ownership of the then issued and outstanding shares of the corporation at any given time. ARTICLE X - INDEMNITY Section 1. Indemnity - Any person (hereinafter in this Article, "indemnitee") who, because he is or was an officer or director of the corporation, is, was, or is. threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or appeal whether civil, criminal, administrative, or investigative and whether formal or informal (hereinafter "proceeding") (including any proceeding by or in the right of the corporation) shall be indemnified by the corporation against all liability (including the obligation to pay all or any part of a judgment, decree, settlement, penalty, fine or other such obligation) and reasonable expenses (including counsel fees, expert witness fees, and costs of investigation, litigation, and appeal, as well as any amounts expended in asserting any counterclaim or claim for indemnification from others) incurred in or as a result of the proceeding except such liability and expenses as are incurred because of his willful misconduct or a knowing violation of the criminal law. The corporation shall pay for or reimburse the reasonable expenses incurred by any indemnitee in advance of final disposition of any proceeding upon receipt of an unsecured undertaking from him to repay the sums if ultimately it is determined that he is not entitled to indemnification. A director shall be so indemnified without the necessity of any further determination or authorization, but in the case of an officer, the determination that indemnification is permissible and an evaluation as to the reasonableness of expenses in a specific case shall be made as authorized from time to time by general or specific actions of the board of directors. The termination of a proceeding by a judgment, decree, order, settlement, or conviction, or upon a plea of nolo contendre or its equivalent shall not of itself create a presumption that an indemnitee acted in such a manner as to make him ineligible for indemnification. Section 2. Limitation - In any proceeding brought by a shareholder in the right of the corporation or brought by or on behalf of shareholders of the corporation, the aggregate amount of all damages that may be assessed against an officer or director of the corporation arising out of any single transaction, occurrence, or course of conduct shall be limited to one dollar. This bylaw is adopted by the shareholders as a limitation on the liability of the corporation's officers and directors, and this limitation shall not apply if the officer or director engaged in willful misconduct or a knowing violation of the criminal law or of any state securities law. Section 3. Application - This Article shall be applicable in and to all proceedings commenced after its adoption even though arising, in whole or in part, from conduct, actions, or events occurring or taken before its adoption. No amendment, modification, or repeal of this Article shall diminish the rights provided hereby with respect to any claim, issue, or matter in any then pending or subsequent proceeding that is based in any material respect on any alleged action or failure to act occurring prior to such amendment, modification, or repeal. Reference herein to any director or officer shall include a former director or officer who has ceased to have the capacity of director or officer, as the case may be, and his heirs, executors, and administrators. The corporation may purchase and maintain insurance to indemnify it against all or any part of the liability to indemnify assumed by it in accordance with this Article. ARTICLE XI - AMENDMENTS Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed and new bylaws maybe made by the board of directors or the shareholders at any time. Each bylaw made by the board of directors, however, may be amended or repealed, and a new bylaw made by the shareholders, and the shareholders may provide that any bylaw made by them shall not be amended or repealed by the board of directors, which proviso shall control. Section 2. Legislative Amendment - If any portion of these bylaws is subsequently rendered invalid by an Act of the General Assembly of Virginia those portions hereof that are not affected by such legislation shall remain in full force and effect until and unless amended or repealed in accordance with the terms hereof. ARTICLE XII - MISCELLANEOUS Shares in another corporation held in the name of this corporation may be voted only by Alan R. Brill, either in person or by proxy. Each use of a masculine pronoun herein shall be read as if both a masculine and feminine pronoun had been used in the alternative. Adopted by the Shareholders: December 30, 1987 EX-4.1 62 EXHIBIT 4.1 EXECUTION COPY _______________________________________________________________________________ _________________________________ BRILL MEDIA COMPANY, LLC., and BRILL MEDIA MANAGEMENT, INC. as Issuers, and The SUBSIDIARY GUARANTORS named herein and UNITED STATES TRUST COMPANY OF NEW YORK as Trustee $105,000,000 12% SENIOR NOTES DUE 2007, SERIES A 12% SENIOR NOTES DUE 2007, SERIES B _________________________________ ____________________ INDENTURE Dated as of December 30, 1997 ____________________ _______________________________________________________________________________ CROSS-REFERENCE TABLE* Trust Indenture Act Section Indenture Section 310(a)(1)........................................... 7.10 (a)(2)........................................... 7.10 (a)(3)........................................... N.A. (a)(4)........................................... N.A. (a)(5)........................................... 7.10 (b).............................................. 7.10 (c).............................................. N.A. 311(a).............................................. 7.11 (b).............................................. 7.11 (c).............................................. N.A. 312(a).............................................. 2.05 (b).............................................. 11.03 (c).............................................. 11.03 313(a).............................................. 7.06 (b)(1)........................................... 7.06 (b)(2)........................................... 7.06 (c).............................................. 7.06 (d).............................................. 7.06 314(a).............................................. 4.04 (b).............................................. N.A. (c)(1)........................................... 11.05 (c)(2)........................................... 11.05 (c)(3)........................................... N.A. (d).............................................. N.A. (e).............................................. 11.05 (f).............................................. N.A. 315(a).............................................. 7.01 (b).............................................. 7.05 (c).............................................. 7.01 (d).............................................. 6.05;7.01 (e).............................................. 6.11 316(a).............................................. 1.01 (a)(1)(A)........................................ 6.02 (a)(1)(B)........................................ 6.04 (a)(2)........................................... N.A. (b).............................................. 6.07 (c).............................................. 2.19 317(a)(1)........................................... 6.08 (a)(2)........................................... 6.09 (b).............................................. 2.04 318(a).............................................. 11.01 (b).............................................. N.A. (c).............................................. 11.01 _______________________ *This Cross-Reference Table is not part of the Indenture. N.A. means not applicable. (2) TABLE OF CONTENTS Page ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . 1 SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 1.02. OTHER DEFINITIONS. . . . . . . . . . . . . . . . . . . . 26 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . . 27 SECTION 1.04. RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . 28 ARTICLE 2 THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 28 SECTION 2.01. FORM AND DATING. . . . . . . . . . . . . . . . . . . . . 28 SECTION 2.02. EXECUTION AND AUTHENTICATION . . . . . . . . . . . . . . 29 SECTION 2.03. REGISTRAR AND PAYING AGENT . . . . . . . . . . . . . . . 30 SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. . . . . . . . . . . 30 SECTION 2.05. SECURITYHOLDER LISTS . . . . . . . . . . . . . . . . . . 31 SECTION 2.06. TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . 31 SECTION 2.07. REPLACEMENT SECURITIES . . . . . . . . . . . . . . . . . 32 SECTION 2.08. OUTSTANDING SECURITIES . . . . . . . . . . . . . . . . . 32 SECTION 2.09. TREASURY SECURITIES. . . . . . . . . . . . . . . . . . . 33 SECTION 2.10. TEMPORARY SECURITIES . . . . . . . . . . . . . . . . . . 33 SECTION 2.11. CANCELLATION . . . . . . . . . . . . . . . . . . . . . . 33 SECTION 2.12. DEFAULTED INTEREST . . . . . . . . . . . . . . . . . . . 34 SECTION 2.13. CUSIP NUMBER . . . . . . . . . . . . . . . . . . . . . . 34 SECTION 2.14. DEPOSIT OF MONEYS. . . . . . . . . . . . . . . . . . . . 34 SECTION 2.15. RESTRICTIVE LEGENDS. . . . . . . . . . . . . . . . . . . 34 SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY . . . . . . . . . . . . . . . . . . . . . . . . 37 SECTION 2.17. SPECIAL TRANSFER PROVISIONS. . . . . . . . . . . . . . . 38 SECTION 2.18. PERSONS DEEMED OWNERS. . . . . . . . . . . . . . . . . . 40 SECTION 2.19. ALLOCATION OF PURCHASE PRICE . . . . . . . . . . . . . . 41 ARTICLE 3 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 SECTION 3.01. NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . . . 41 SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED . . . . . . . . . 41 SECTION 3.03. NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . 42 SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . . . 43 SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . 43 SECTION 3.06. SECURITIES REDEEMED IN PART. . . . . . . . . . . . . . . 44 SECTION 3.07. OPTIONAL REDEMPTION. . . . . . . . . . . . . . . . . . . 44 SECTION 3.08. MANDATORY REDEMPTION . . . . . . . . . . . . . . . . . . 45 SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. . . . . . . . . . . . . . . . . . . . . 45 ARTICLE 4 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 SECTION 4.01. PAYMENT OF SECURITIES. . . . . . . . . . . . . . . . . . 47 SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . 48 SECTION 4.03. SEC REPORTS. . . . . . . . . . . . . . . . . . . . . . . 48 SECTION 4.04. COMPLIANCE CERTIFICATES. . . . . . . . . . . . . . . . . 49 SECTION 4.05. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 50 SECTION 4.06. STAY, EXTENSION AND USURY LAWS . . . . . . . . . . . . . 51 SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS. . . . . . . . . . . . 51 SECTION 4.08. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES.. . . . . . . . . . . . . . . . . . . . . . 55 SECTION 4.09. LIMITATION ON INDEBTEDNESS . . . . . . . . . . . . . . . 57 SECTION 4.10. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK . . . 60 SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS . . . . . . . . . . 63 SECTION 4.12. LIMITATION ON LIENS. . . . . . . . . . . . . . . . . . . 64 SECTION 4.13. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . 65 SECTION 4.14. CHANGE OF CONTROL. . . . . . . . . . . . . . . . . . . . 65 SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES . . . . . . . . . . . . 66 SECTION 4.16. LIMITATION ON SALE/LEASEBACK TRANSACTION. . . . . . . . . . . . . . . . . . . . . . . 67 SECTION 4.17. LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . 67 SECTION 4.18. FUTURE NOTE GUARANTORS . . . . . . . . . . . . . . . . . 68 SECTION 4.19. LIMITATION ON BUSINESS . . . . . . . . . . . . . . . . . 69 SECTION 4.20. FURTHER INSTRUMENTS AND ACTS . . . . . . . . . . . . . . 69 ARTICLE 5 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS. . . . . . . . . . . . . . . . . . . . 69 SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. . . . . . . . . . . . 70 ARTICLE 6 DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . 70 SECTION 6.01. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . 70 SECTION 6.02. ACCELERATION . . . . . . . . . . . . . . . . . . . . . . 73 SECTION 6.03. OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . 73 SECTION 6.04. WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . 74 SECTION 6.05. CONTROL BY MAJORITY. . . . . . . . . . . . . . . . . . . 74 SECTION 6.06. LIMITATION ON SUITS. . . . . . . . . . . . . . . . . . . 74 SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT . . . . . . 75 (ii) SECTION 6.08. COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . . . . 75 SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . . . 75 SECTION 6.10. PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . 76 SECTION 6.11. UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . . 77 ARTICLE 7 TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 SECTION 7.01. DUTIES OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 77 SECTION 7.02. RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 79 SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . . . 80 SECTION 7.04. TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . . . 80 SECTION 7.05. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . 80 SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS. . . . . . . . . . 80 SECTION 7.07. COMPENSATION AND INDEMNITY . . . . . . . . . . . . . . . 81 SECTION 7.08. REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . . . 82 SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.. . . . . . . . . . . . 83 SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. . . . . . . . . . . . . . 83 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS. . . . . . . . . . . . . . . . . . . 84 ARTICLE 8 DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . 84 SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE . . . . 84 SECTION 8.02. CONDITIONS TO DEFEASANCE . . . . . . . . . . . . . . . . 85 SECTION 8.03. APPLICATION OF TRUST MONEY . . . . . . . . . . . . . . . 87 SECTION 8.04. REPAYMENT TO THE ISSUERS . . . . . . . . . . . . . . . . 87 SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS . . . . . . . . . . 88 SECTION 8.06. REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . 88 ARTICLE 9 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS . . . . . . . . . . . 88 SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS. . . . . . . . . . . . . 90 SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. . . . . . . . . . . 92 SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. . . . . . . . . . . . 92 SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. . . . . . . . . . 92 SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. . . . . . . . . . . . . 93 ARTICLE 10 SUBSIDIARY GUARANTEE OF SECURITIES. . . . . . . . . . . . . . 93 SECTION 10.01. SUBSIDIARY GUARANTEE . . . . . . . . . . . . . . . . . . 93 SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE . . . . . 95 SECTION 10.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . 95 SECTION 10.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY . . . . . 96 (iii) SECTION 10.05. CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 97 SECTION 10.06. RELEASE. . . . . . . . . . . . . . . . . . . . . . . . . 97 SECTION 10.07. ADDITIONAL SUBSIDIARY GUARANTORS . . . . . . . . . . . . 97 SECTION 10.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. . . . . . . . . . . 98 SECTION 10.09. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . 99 SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . 99 ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 99 SECTION 11.01. TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . 99 SECTION 11.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 100 SECTION 11.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER SECURITYHOLDERS . . . . . . . . . . . . . . . 101 SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 101 SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . . . . 101 SECTION 11.06. RULES BY TRUSTEE AND AGENTS. . . . . . . . . . . . . . . 102 SECTION 11.07. LEGAL HOLIDAYS . . . . . . . . . . . . . . . . . . . . . 102 SECTION 11.08. NO RECOURSE AGAINST OTHERS . . . . . . . . . . . . . . . 102 SECTION 11.09. DUPLICATE ORIGINALS. . . . . . . . . . . . . . . . . . . 103 SECTION 11.10. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 103 SECTION 11.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . . . . 103 SECTION 11.12. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . 103 SECTION 11.13. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . 103 SECTION 11.14. COUNTERPART ORIGINALS. . . . . . . . . . . . . . . . . . 103 SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC.. . . . . . . . . . . . 104 EXHIBIT A - FORM OF INITIAL SECURITY WITH SUBSIDIARY GUARANTEE EXHIBIT B - FORM OF EXCHANGE SECURITY WITH SUBSIDIARY GUARANTEE EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO NON-QIB ACCREDITED INVESTORS EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATIONS (iv) SCHEDULE I - SUBSIDIARY GUARANTORS SCHEDULE II - EXISTING INDEBTEDNESS (v) INDENTURE, dated as of December 30, 1997, among Brill Media Company, LLC, a Virginia limited liability company ("BMC"), Brill Media Management, Inc., a Virginia corporation ("Media" and, collectively with BMC, the "Issuers"), the subsidiary guarantors listed on Schedule I attached hereto as Subsidiary Guarantors (as defined) of the Issuers' obligations hereunder, and United States Trust Company of New York, a banking corporation organized and existing under the laws of the State of New York, as Trustee (the "Trustee"). The Issuers have duly authorized the creation of an issue of 12% Senior Notes due 2007, Series A (the "Initial Securities") and 12% Senior Notes due 2007, Series B (the "Exchange Securities") and, to provide therefor, the Issuers and the Subsidiary Guarantors have duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities (as defined), when duly issued and executed by the Issuers, and authenticated and delivered hereunder, the valid obligations of the Issuers and the Subsidiary Guarantors, and to make this Indenture a valid and binding agreement of the Issuers and the Subsidiary Guarantors, have been done. The Issuers, the Subsidiary Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the Securities: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. DEFINITIONS. "Accountants" means Ernst & Young LLP or such other nationally recognized firm of independent certified public accountants that is reasonably acceptable to the Trustee. "Accreted Value" means, as of any date, with respect to each $1,000 principal amount at maturity of Securities: (A) if such date is prior to December 15, 1999, the sum of (1) the initial offering price of such Securities and (2) the portion of the original issue discount for such Securities (which for this purpose shall be deemed to be the excess of the principal amount over such initial offering price), which shall be amortized with respect to the Securities to but not including such date, such original issue discount to be so amortized at a rate which, together with cash interest paid on the Securities, represents a yield to maturity of 12% per annum using semiannual compounding of such rate on each June 15 and December 15, commencing June 15, 1998 (the "Semi-Annual Accrual Date"), from the Issue Date to but not including the date of determination. The following table indicates the Accreted Value with respect to each $1,000 principal amount at maturity of Securities at the semiannual compounding dates of the Securities: Semi-Annual Accrual Date Accreted Value - ----------------- --------------- June 15, 1998............................ $ 939.82 December 15, 1998........................ $ 958.71 June 15, 1998............................ $ 978.73 December 15, 1999........................ $1,000.00 and (B) if such date occurs on or after December 15, 1999, $1,000. At any time prior to December 15, 1999 and between two Semi-Annual Accrual Dates, the Accreted Value will be the sum of (1) the Accreted Value for the Semi-Annual Accrual Date immediately preceding the date of determination, and (2) the Proportionate Share (as defined below). The "Proportionate Share" is an amount equal to the product of (i) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Date times (ii) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the date of such determination, using a 360-day year of twelve 30-day months, and the denominator of which is 180. "Additional Assets" means (i) any property or assets (other than Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by either of the Issuers or a Restricted Subsidiary of either of the Issuers; (iii) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary of either of the Issuers; or (iv) Permitted Investments of the type and in the amounts described in clause (viii) of the definition thereof; provided, however, that, in the case of clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a Permitted Business. "Administrative Management Agreement" means any management agreements between either of the Issuers or any of the Subsidiary Guarantors and BMCLP, pursuant to which BMCLP provides management services to such Issuer or such Subsidiary Guarantors. "Adjusted Net Assets" of a Subsidiary Guarantor at any date means the lesser of the amount by which (x) the fair value of the property of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, the probable liability of such Subsidiary Guarantor with respect to its contingent liabilities (after giving effect 2 to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the present fair salable value of the assets of such Subsidiary Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Subsidiary Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date and after giving effect to any collection from any Subsidiary by such Subsidiary Guarantor in respect of the obligations of such Subsidiary under the Subsidiary Guarantee), excluding debt in respect of the Subsidiary Guarantee, as they become absolute and matured. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar, Paying Agent or co-registrar. "Appreciation Notes" means the Appreciation Notes due 2007 of the Issuers. "Appreciation Notes Indenture" means the Indenture, dated as of the Issue Date, between the Issuers and the United States Trust Company of New York relating to the Appreciation Notes as in effect on the Issue Date and without giving effect to any modification or amendment thereto made after the Issue Date. "Asset Acquisition" means (i) an investment by either of the Issuers or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be merged into or consolidated with such Issuer or any of its Restricted Subsidiaries or (ii) an acquisition by either of the Issuer or any of its Restricted Subsidiaries of the property and assets of any Person other than either of the Issuers or any of their Restricted Subsidiaries that constitute substantially all of a division or line of business of such Person. "Asset Disposition" means any sale, lease, transfer, issuance or other disposition (or series of related sales, leases, transfers, issuances or dispositions that are part of a common plan) of shares of Capital Stock of (or any other equity interests in) a Restricted Subsidiary (other than directors' qualifying shares) or of any other property or other assets (each referred to for the purposes of this definition as a "disposition") by either 3 of the Issuers or any of their Restricted Subsidiaries (including any disposition by means of a merger, consolidation or similar transaction) other than (i) a disposition by a Restricted Subsidiary to either of the Issuers or by either of the Issuers or a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) a disposition of inventory in the ordinary course of business, (iii) a disposition of obsolete or worn out equipment or equipment that is no longer useful in the conduct of the business of either of the Issuers and their Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business, (iv) dispositions of property for net proceeds which, when taken collectively with the net proceeds of any other such dispositions under this clause (iv) that were consummated since the beginning of the calendar year in which such disposition is consummated, do not exceed $1.0 million, and (v) transactions permitted under Section 5.01. Notwithstanding anything to the contrary contained above, a Restricted Payment made in compliance with Section 4.07 shall not constitute an Asset Disposition except for purposes of determinations of the Consolidated Leverage Ratio. "Attributable Indebtedness" in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Securities, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). "Average Life" means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing (i) the sum of the product of the numbers of years (rounded upwards to the nearest month) from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption multiplied by the amount of such payment by (ii) the sum of all such payments. "Bankruptcy Code" means Title 11, U.S. Code or any similar Federal, state or foreign law for the relief of debtors. "BMC" has the meaning set forth in the preamble to this Indenture until a successor replaces such Person in accordance with Article 5 hereof and thereafter means such successor. "BMCLP" means Brill Media Company, L.P, a Virginia limited partnership, and its successors. "Board of Directors" means as to BMC (i) so long as BMC or any successor to BMC is a limited liability company or a partnership, the board of directors of Media, which is the manager of BMC and (ii) at any other time, the board of directors of BMC, and as to Media, the board of directors of Media. 4 "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person (or, in the case of BMC so long as it is a limited liability company or a partnership, of Brill Media Management, Inc., which is the manager of BMC) to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means a day that is not a Legal Holiday. "Capital Stock" of any Person means any and all shares, membership and other interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligation" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof, (iii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500 million, (iv) repurchase obligations for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by Moody's or S&P and in each case maturing within one year after the date of acquisition, (vi) investment funds investing 95% of their assets in securities of the types described in clauses (i)-(v) above, (vii) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable either Moody's or S&P and (viii) Indebtedness or Preferred Stock issued by Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's. "Change of Control" means, (i) any sale, lease, exchange or other transfer (collectively, a "Transfer") (in one transaction or a series of related transactions) of all or 5 substantially all of the assets of either of the Issuers or either of the Issuers and their Restricted Subsidiaries on a consolidated basis or (ii) a majority of the Board of Directors of either of the Issuers or of any direct or indirect holding company thereof shall consist of Persons who are not Continuing Directors of such Issuer; or (iii) the acquisition by any Person or Group (other than Alan R. Brill or any Related Brill Party) of the power, directly or indirectly, to vote or direct the voting of securities having more than 35% of the ordinary voting power for the election of directors of either of the Issuers, or any direct or indirect holding company thereof; provided, however, that no Change of Control shall be deemed to occur pursuant to this clause (iii), so long as Alan R. Brill and the Related Brill Parties collectively own an amount of securities representing the power, directly or indirectly, to vote or direct the voting of securities having more than 50% of the ordinary voting power for the election of directors of such Issuer or of any direct or indirect holding company thereof. "Commission" means the U.S. Securities and Exchange Commission or its successor. "Consolidated EBITDA" means, for any period an amount equal to Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (i) the provision for taxes for such period based on income or profits and any provision for taxes utilized in computing net loss, (ii) Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization expense (including the amortization of debt issuance costs), (v) all other non-cash items reducing Consolidated Net Income for such period (excluding any non-cash item to the extent it represents an accrual of or reserve for cash disbursements for any subsequent period prior to the Stated Maturity of the Securities or amortization of a pre-paid cash expense that was paid in a prior period), minus (b) all non-cash items increasing Consolidated Net Income for such period, in each case on a consolidated basis for the Issuers and their respective Restricted Subsidiaries for such period determined in accordance with GAAP, provided, however, that, for purposes of calculating Consolidated EBITDA during any fiscal quarter, cash income from a particular Investment (other than a Managed Affiliate Note) of such Person shall be included only (x) if cash income has been received by such Person with respect to such Investment during each of the previous four fiscal quarters, or (y) if the cash income derived from such Investment is attributable to Temporary Cash Investments. "Consolidated Interest Expense" means, for any period, the total interest expense of the Issuers and their respective Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP, plus, to the extent not included in such interest expense, (i) interest expense attributable to Capitalized Lease Obligations, (ii) capitalized interest, (iii) non-cash interest expense, (iv) commissions, discounts and 6 other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (v) interest actually paid by either Issuer or any such Restricted Subsidiary under any Guarantee of Indebtedness or other obligation of any other Person, (vi) net payments (whether positive or negative) pursuant to Interest Rate Agreements, (vii) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than an Issuer) in connection with Indebtedness Incurred by such plan or trust and (viii) cash and Disqualified Stock dividends in respect of all Preferred Stock of Subsidiaries and Disqualified Stock of an Issuer held by Persons other than an Issuer or a Wholly-Owned Subsidiary and less (a) to the extent included in such interest expense, the amortization of capitalized debt issuance costs and (b) interest income. Notwithstanding the foregoing, the Consolidated Interest Expense with respect to any Restricted Subsidiary of an Issuer, that was not a Wholly-Owned Subsidiary, shall be included only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income. "Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of (i) the aggregate amount of Indebtedness of the Issuers and their Restricted Subsidiaries on a consolidated basis outstanding on such Transaction Date (other than Indebtedness under the Appreciation Notes) less the cash and Cash Equivalents held by the Issuers and their respective Restricted Subsidiaries on a consolidated basis on such Transaction Date to (ii) the amount of Media Cashflow for the then most recent four fiscal quarters for which financial statements of the Issuers have been filed with the Commission or provided to the Trustee pursuant to Section 4.03 (such four fiscal quarter period being the "Four Quarter Period"); provided, however, that, in making the foregoing calculation, (A) pro forma effect shall be given to any Indebtedness to be Incurred or repaid on the Transaction Date; (B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions (including giving pro forma effect to the application of proceeds of any Asset Disposition) that occur from the beginning of the Four Quarter Period through and including the Transaction Date (the "Reference Period"), as if they had occurred and such proceeds had been applied on the first day of such Reference Period; and (C) pro forma effect shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into an Issuer or any Restricted Subsidiary during such Reference Period and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset disposition or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period; provided, further, that to the extent that clause (B) or (C) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based 7 upon the four full fiscal quarters immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed of for which financial information is available. "Consolidated Net Income" means, for any period, the consolidated net income (loss) of the Issuers and their respective consolidated Restricted Subsidiaries determined in accordance with GAAP; provided, however, that there shall not be included in such Consolidated Net Income: (i) any net income (loss) of any Person acquired by an Issuer or any of its Restricted Subsidiaries in a pooling of interests transaction for any period prior to the date of such acquisition, (ii) any net income of any Restricted Subsidiary of an Issuer if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to an Issuer (other than restrictions in effect on the Issue Date with respect to a Restricted Subsidiary of such Issuer and other than restrictions that are created or exist in compliance with Section 4.08), (iii) any gain or loss realized upon the sale or other disposition of any assets of an Issuer or its consolidated Restricted Subsidiaries (including pursuant to any Sale Leaseback Transaction) which are not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any Capital Stock of any Person, (iv) any extraordinary gain or loss, (v) the cumulative effect of a change in accounting principles, (vi) the net income of any Person, other than a Restricted Subsidiary, except to the extent of the lesser of (A) cash dividends or distributions actually paid to an Issuer or any of its Restricted Subsidiaries by such Person and (B) the net income of such Person (but in no event less than zero), and the net loss of such Person (other than an Unrestricted Subsidiary) shall be included only to the extent of the aggregate Investment of an Issuer or any of its Restricted Subsidiaries in such Person and (vii) any non-cash expenses attributable to grants or exercises of employee stock options. Notwithstanding the foregoing, for the purpose of Section 4.07 only, (x) there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Issuer or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a) (3) (D) thereof and (y) there shall be added to Consolidated Net Income the amount of any accruals under the Performance Compensation Agreements to the extent deducted in determining such Consolidated Net Income. "Consolidated Net Worth" means the total of the amounts shown on the balance sheets of the Issuers and their consolidated Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the end of the most recent fiscal quarter of the Issuers ending prior to the taking of any action for the purpose of which the determination is being made and for which financial statements are available (but in no 8 event ending more than 135 days prior to the taking of such action), as (i) the par or stated value of all outstanding Capital Stock of an Issuer plus (ii) paid in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock. "Consolidated Senior Leverage Ratio" means, on any Transaction Date, the Consolidated Leverage Ratio on such Transaction Date; provided, however, that the reference to "Indebtedness" in clause (i) of the definition of Consolidated Leverage Ratio shall be deemed to be a reference to "Senior Indebtedness." "Consolidated Senior Secured Leverage Ratio" means, on any Transaction Date, the Consolidated Leverage Ratio on such Transaction Date; provided, however, that the reference to "Indebtedness" in clause (i) of the definition of Consolidated Leverage Ratio shall be deemed to be a reference to "Senior Secured Indebtedness." "Consolidated Unrestricted Subsidiary Advance Leverage Ratio" means, on any Transaction Date, the Consolidated Leverage Ratio on such Transaction Date; provided, however, that clause (i) of the definition of Consolidated Leverage Ratio shall be deemed to be a reference to "Unrestricted Subsidiary Advances." "Continuing Director" of any Person means, as of the date of determination, any Person who (i) was a member of the Board of Directors of such Person on the date of this Indenture or (ii) was nominated for election or elected to the Board of Directors of such Person with the affirmative vote of a majority of the Continuing Directors of such Person who were members of such Board of Directors at the time of such nomination or election. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 11.02 or such other address as to which the Trustee may give notice to the Issuers. "Currency Agreement" means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement as to which such Person is a party or a beneficiary. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Depository" means The Depository Trust Company, its nominees and successors. 9 "Disqualified Stock" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event (other than an event which would constitute a Change of Control), (i) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the final Stated Maturity of the Securities, or (ii) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (a) debt securities or (b) any Capital Stock referred to in (i) above, in each case at any time prior to the final Stated Maturity of the Securities. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder or any successor statute or statutes thereto. "Exchange Offer" means the registration by the Issuers and the Subsidiary Guarantors under the Securities Act pursuant to a registration statement of the offer by the Issuers and the Subsidiary Guarantors to each Securityholder of the Initial Securities to exchange all the Initial Securities held by such Securityholder for the Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Initial Securities held by such Securityholder, all in accordance with the terms and conditions of the Registration Rights Agreement. "Exchange Securities" has the meaning set forth in the preamble to this Indenture. "Existing Indebtedness" means Indebtedness of either of the Issuers or their respective Restricted Subsidiaries in existence on the Issue Date, plus interest accrued thereon, after application of the net proceeds of the Securities as described in the Offering Memorandum. "fair market value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of BMC acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of BMC delivered to the Trustee. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the date of this Indenture, including those set forth in the 10 opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP. "Group" means any "group" for purposes of Section 13(d) of the Exchange Act. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Incur" means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary. "Indebtedness" means, with respect to any Person on any date of determination (without duplication), (i) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money, (ii) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto) (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i), (ii) and (v)) entered into in the ordinary course of business of such Person to the extent that such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except (x) trade payables and accrued expenses (including accrued 11 management fees under the Administrative Management Agreements) incurred in the ordinary course of business and (y) contingent or "earnout" payment obligations in respect of any Permitted Business acquired by an Issuer or any Restricted Subsidiary), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, (v) all Capitalized Lease Obligations and all Attributable Indebtedness of such Person, (vi) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, (vii) all Indebtedness of other Persons to the extent Guaranteed by such Person, (viii) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Restricted Subsidiary of an Issuer, any Preferred Stock of such Restricted Subsidiary to the extent such obligation arises on or before the final Stated Maturity of the Securities (but excluding, in each case, accrued dividends) with the amount of Indebtedness represented by such Disqualified Stock or Preferred Stock, as the case may be, being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price; provided, however, that, for purposes hereof the "maximum fixed repurchase price" of any Disqualified Stock or Preferred Stock, as the case may be, which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock, as the case may be, as if such Disqualified Stock or Preferred Stock, as the case may be, were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based on the fair market value of such Disqualified Stock or Preferred Stock, as the case may be, such fair market value shall be determined in good faith by the Board of Directors of BMC and (ix) to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements. Unless specifically set forth above, the amount of Indebtedness of any Person at any date shall be the outstanding principal amount of all unconditional obligations as described above, as such amount would be reflected on a balance sheet prepared in accordance with GAAP, and the maximum liability of such Person, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations described above at such date. Notwithstanding the foregoing, Indebtedness shall not include any accrued obligations under Performance Compensation Agreements. "Indenture" means this Indenture, as amended or supplemented from time to time. "Initial Purchaser" means NatWest Capital Markets Limited. "Initial Securities" has the meaning set forth in the preamble to this Indenture. 12 "Institutional Accredited Investor" means an institution that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities. "Interest Rate Agreement" means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary. "Interest Record Date" means the record dates specified in the Securities, whether or not a Legal Holiday. "Investment" in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts payable on the balance sheet of such Person) or other extension of credit (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. For purposes of Section 4.07, (i) "Investment" shall include the portion (proportionate to an Issuer's equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary of such Issuer at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, such Issuer shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (x) such Issuer's "Investment" in such Subsidiary at the time of such redesignation less (y) the portion (proportionate to such Issuer's equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time that such Subsidiary is so redesignated a Restricted Subsidiary; and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of BMC and evidenced by a Board Resolution delivered to the Trustee. "Issue Date" means the date on which the Initial Securities are originally issued. 13 "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Managed Affiliate" means a Person at least 90% of the Capital Stock of which is owned, directly or indirectly, by Alan R. Brill; provided, however, that (i) such Person is engaged solely in a Permitted Business, (ii) such Person is a party to a Managed Affiliate Management Agreement and (iii) except in the case of TSB III, LLC and TSB IV, LLC, the business of such Person is acquired by Alan R. Brill, directly or indirectly, after the Issue Date. "Managed Affiliate Note" means any promissory notes of a Managed Affiliate, issued to an Issuer or a Restricted Subsidiary, each of which promissory notes shall (i) mature on a day no later than the third anniversary of the date of issuance thereof, (ii) become immediately due and payable upon (w) the default by such Managed Affiliate under the Managed Affiliate Management Agreement to which it is party or (x) the issuer thereunder ceasing to constitute a Managed Affiliate or (y) the acceleration of the Securities or (z) the bankruptcy, insolvency or reorganization of an Issuer and (iii) bear interest payable in cash no less often than semi-annually at a rate per annum no less than the rate of interest payable on the Securities. Each Managed Affiliate Note shall provide that the payment of any management fee by the relevant Manager Affiliate pursuant to any management agreement (other than a Managed Affiliate Management Agreement) with an Affiliate of an Issuer or such Managed Affiliate, shall be subordinated to the obligations of the relevant Managed Affiliate under such Managed Affiliate Note to the same extent as the obligations of the Issuers and the Subsidiary Guarantors under the Administrative Management Agreements are subordinated to the obligations of such Persons under the Securities and the Subsidiary Guarantees. "Managed Affiliate Management Agreement" means any agreement between a Restricted Subsidiary, on the one hand, and a Managed Affiliate, on the other hand, providing for the payment by such Managed Affiliate to one or more Restricted Subsidiaries of a cash management fee payable at least semi annually equal to a specified percentage of the excess cash flow of such Managed Affiliate as defined in such agreement. "Maturity Date" means December 15, 2007. "Media" has the meaning set forth in the preamble to this Indenture until a Successor replaces such Person in accordance with Article 5 hereof and thereafter means such Successor. 14 "Media Cashflow" for any period means for any Person an amount equal to Consolidated EBITDA for such period plus interest income received in respect of the Managed Affiliate Notes during such period and the following to the extent deducted in calculating such Consolidated EBITDA (i) management fees charged by BMCLP under the Administrative Management Agreements, (ii) expenses accruing under Performance Compensation Agreements , (iii) consulting fees payable in connection with acquisitions and (iv) fees paid under time brokerage agreements. "Member" means any Person who holds a membership interest in BMC. "Missouri Properties" means the radio stations KLIK-AM, KTXY-FM and KATI-FM serving Jefferson City, MO. "Moody's" means Moody's Investors Service, Inc., or its successors. "Net Available Cash" from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets subject to such Asset Disposition) therefrom in each case net of (i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition, (ii) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition or by applicable law, be repaid out of the proceeds from such Asset Disposition, (iii) all distributions and other payments required to be made to any Person owning a beneficial interest in assets subject to sale or minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition, (iv) the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by an Issuer or any Restricted Subsidiary of an Issuer after such Asset Disposition, provided, however, that upon any reduction in such reserves (other than to the extent resulting from payments of the respective reserved liabilities), Net Available Cash shall be increased by the amount of such reduction to reserves, and (v) any portion of the purchase price from an Asset Disposition placed in escrow (whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Disposition or otherwise in connection with such Asset Disposition); provided, however, that upon the 15 termination of such escrow, Net Available Cash shall be increased by any portion of funds therein released to an Issuer or any Restricted Subsidiary. "Net Cash Proceeds," with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees or expenses actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale. "Non-Recourse Debt" means Indebtedness (i) as to which neither an Issuer nor any Restricted Subsidiary (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor, general partner or otherwise) and (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of an Issuer or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity. "Non-U.S. Person" means a Person who is not a U.S. person, as defined in Regulation S of the Securities Act. "Obligations" means any principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Offering Memorandum" means the Offering Memorandum dated December 23, 1997, pursuant to which the Initial Securities were offered, and any supplements thereto. "Officer" means the Chairman of the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer or the Secretary of an Issuer (or, in the case of BMC, so long as it is a limited liability company or as partnership, of Brill Media Management, Inc., which is the manager of BMC). "Officers' Certificate" means a certificate signed by two Officers of an Issuer at least one of whom shall be the principal executive, financial or accounting officer of such Issuer. 16 "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee, and which complies, if applicable, with the provisions of Section 11.04 hereof. The counsel may be an employee of or counsel to an Issuer or the Trustee. "Performance Compensation Agreement" means any agreements between an Issuer or any Restricted Subsidiary and any executive officer of such Subsidiary pursuant to which such Subsidiary provides deferred compensation to such officer by crediting amounts (as determined under a formula set forth in such agreement) to an identified account for the benefit of such executive officer. Performance Compensation Agreements entered into after the Issue Date shall provide that no payment shall be required to be made by an Issuer or any Restricted Subsidiary thereunder if such payment is not permitted under this Indenture and that the Issuers' and the Restricted Subsidiaries' obligations to make payments thereunder shall be subordinated to (i) the obligations of the Issuers and the Subsidiary Guarantors under the Securities and the Subsidiary Guarantees and (ii) the obligations of the Issuers and the Subsidiary Guarantors under the Appreciation Notes and the Guarantees thereof. "Permitted Business" means any business which is the same as or related, ancillary or complementary to any of the businesses of the Issuers and their Restricted Subsidiaries on the date of this Indenture, as reasonably determined by the Board of Directors of BMC. "Permitted Investment" means an Investment by an Issuer or any of its Restricted Subsidiaries in (i) a Wholly-Owned Subsidiary of such Issuer; provided, however, that the primary business of such Wholly-Owned Subsidiary is a Permitted Business; (ii) another Person if as a result of such Investment such other Person becomes a Wholly-Owned Subsidiary of such Issuer or is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, such Issuer or a Wholly-Owned Subsidiary of such Issuer; provided, however, that in each case such Person's primary business is a Permitted Business; (iii) Temporary Cash Investments; (iv) receivables owing to such Issuer or any of its Restricted Subsidiaries, created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (v) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (vi) loans and advances to employees made in the ordinary course of business consistent with past practices of such Issuer or such Restricted Subsidiary in an aggregate amount outstanding at any one time not to exceed $250,000 to any one employee or $1.0 million in the aggregate; (vii) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to such Issuer or any of its Restricted Subsidiaries or in satisfaction of judgments or claims; (viii) 17 a Person engaged in a Permitted Business or a loan or advance by such Issuer the proceeds of which are used solely to make an investment in a Person engaged in a Permitted Business or a Guarantee by such Issuer of Indebtedness of any Person in which such Investment has been made provided, however, that no Permitted Investments may be made pursuant to this clause (viii) to the extent the amount thereof would, when taken together with all other Permitted Investments made pursuant to this clause (viii), exceed $5.0 million in the aggregate (plus, to the extent not previously reinvested, any return of capital realized on Permitted Investments made pursuant to this clause (viii), or any release or other cancellation of any Guarantee constituting such Permitted Investment); (ix) Persons to the extent such Investment is received by such Issuer or any Restricted Subsidiary as consideration for asset dispositions effected in compliance with Section 4.10; (x) prepayments and other credits to suppliers made in the ordinary course of business consistent with the past practices of such Issuer and its Restricted Subsidiaries, (xi) the Managed Affiliate Notes; provided, however, that the aggregate principal amount thereof (including any Managed Affiliate Notes outstanding on the Issue Date) does not exceed $20 million at any time outstanding, (xii) loans to Unrestricted Subsidiaries; provided, however, that (1) no Default or Event of Default shall have occurred and be continuing at the time of the Incurrence thereof by the relevant Unrestricted Subsidiary or would occur as a consequence thereof and the Consolidated Unrestricted Subsidiary Advance Leverage Ratio would not be greater than 2.00 to 1.00, (2) such advances are senior to all other Indebtedness of the relevant Unrestricted Subsidiary other than Capitalized Lease Obligations, mortgage financing or purchase money obligations outstanding on the date on which such Unrestricted Subsidiary was acquired, directly or indirectly, by such Issuer or the date such Subsidiary was designated an Unrestricted Subsidiary (other than Indebtedness Incurred in anticipation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Unrestricted Subsidiary became a Subsidiary or was otherwise acquired by such Issuer or was designated as an Unrestricted Subsidiary) and (3) such Unrestricted Subsidiary is engaged primarily in a Permitted Business; and (xiii) Investments in connection with pledges, deposits, payments or performance bonds made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations. "Permitted Liens" means: (i) pledges or deposits by an Issuer or any Restricted Subsidiary under workmen's compensation laws, unemployment insurance laws, other types of social security benefits or similar legislation, or good faith deposits in connection with bids, tenders or contracts (other than for the payment of Indebtedness) or leases to which an Issuer or any Restricted Subsidiary is a party, or deposits to secure public or statutory obligations or deposits of cash or United States government bonds to secure 18 surety or appeal bonds to which an Issuer or any Restricted Subsidiary is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred by an Issuer or any Restricted Subsidiary in the ordinary course of business consistent with past practice; (ii) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens, in each case for sums not yet due from an Issuer or any Restricted Subsidiary or being contested in good faith by appropriate proceedings by an Issuer or any Restricted Subsidiary, as the case may be, or other Liens arising out of judgments or awards against an Issuer or any Restricted Subsidiary with respect to which such Issuer or such Restricted Subsidiary, as the case may be, will then be prosecuting an appeal or other proceedings for review; (iii) Liens for property taxes or other taxes, assessments or governmental charges of an Issuer or any Restricted Subsidiary not yet due or payable or subject to penalties for nonpayment or which are being contested by such Issuer or such Restricted Subsidiary, as the case may be, in good faith by appropriate proceedings; (iv) Liens in favor of issuers of performance bonds and surety bonds issued pursuant to clause (b)(v) of Section 4.09; (v) survey exceptions, encumbrances, easements or, reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes or zoning or other restrictions as to the use of real property of an Issuer or any Restricted Subsidiary incidental to the ordinary course of conduct of the business of such Issuer or such Restricted Subsidiary or as to the ownership of properties of such Issuer or any Restricted Subsidiary, which, in either case, were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Issuer or any Restricted Subsidiary; (vi) Liens to secure Indebtedness permitted under clause (b)(i) of Section 4.09; (vii) Liens outstanding immediately after the Issue Date as set forth on Schedule II to this Indenture (and not otherwise permitted by clause (vi)); (viii) Liens on property, assets or shares of stock of any Restricted Subsidiary at the time such Restricted Subsidiary became a Subsidiary of an Issuer; provided, however, that (A) if any such Lien has been Incurred in anticipation of such transaction, such property, assets or shares of stock subject to such Lien will have a fair market value at the date of the acquisition thereof not in excess of the lesser of (1) the aggregate purchase price paid or owed by such Issuer in connection with the acquisition of such Restricted Subsidiary and (2) the fair market value of all property and assets of such Restricted Subsidiary and (B) any such Lien will not extend to any other assets owned by such Issuer or any Restricted Subsidiary; (ix) Liens on property or assets at the time an Issuer or any Restricted Subsidiary acquired such assets, including any acquisition by means of a merger or consolidation with or into such Issuer or such Restricted Subsidiary; provided, however, that (A) if any such Lien is Incurred in anticipation of such transaction, such property or assets subject to such Lien will have a fair market value at the date of the acquisition thereof not in excess of the lesser of the aggregate purchase price paid or owed by such Issuer or such Restricted Subsidiary in connection with the acquisition thereof and 19 of any other property and assets acquired simultaneously therewith and (2) the fair market value of all such property and assets acquired by such Issuer or such Restricted Subsidiary and (B) any such Lien will not extend to any other property or assets owned by such Issuer or any Restricted Subsidiary; (x) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to an Issuer or a Wholly Owned Subsidiary; (xi) Liens to secure any extension, renewal, refinancing, replacement or refunding (or successive extensions, renewals, refinancings, replacements or refundings), in whole or in part, of any Indebtedness secured by Liens referred to in any of clauses (vii), (viii) and (ix); provided, however, that any such Lien will be limited to all or part of the same property or assets that secured the original Lien (plus improvements on such property) and the aggregate principal amount of Indebtedness that is secured by such Lien will not be increased to an amount greater than the sum of (A) the outstanding principal amount, or, if greater, the committed amount, of the Indebtedness described under clauses (vii), (viii) and (ix) at the time the original Lien became a Permitted Lien under this Indenture and (B) an amount necessary to pay any premiums, fees and other expenses Incurred by such Issuer in connection with such refinancing, refunding, extension, renewal or replacement; (xii) Liens on property or assets of an Issuer securing Interest Rate Agreements and Currency Agreements permitted under Section 4.09, so long as the related Indebtedness is secured by a Lien on the same property securing the relevant Interest Rate Agreement or Currency Agreement; (xiii) Liens on property or assets of an Issuer or any Restricted Subsidiary securing Indebtedness under Sale/Leaseback Transactions permitted under Section 4.16; provided, however, that (A) the amount of Indebtedness Incurred in any specific case does not, at the time such Indebtedness is Incurred, exceed the lesser of the cost or fair market value of the property or asset subject to such Sale/Leaseback Transaction, (B) such Lien will attach to such property or asset upon commencement of such Sale/Leaseback Transaction and (C) no property or asset of such Issuer or any Restricted Subsidiary (other than the property subject to such Sale/Leaseback Transaction) are subject to any Lien securing such Indebtedness; and (xiv) Liens securing Indebtedness permitted to be secured pursuant to the proviso to clause (ii) of paragraph (a) of Section 4.09. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. 20 "Public Equity Offering" means underwritten public offerings or quotations or placements of Capital Stock of an Issuer (other than Disqualified Stock) which has been registered with the Commission under the Securities Act. "Qualified Institutional Buyer" or "QIB" shall have the meaning specified in Rule 144A under the Securities Act. "Refinancing Indebtedness" means Indebtedness that refunds, refinances, replaces, renews, repays or extends (including pursuant to any defeasance or discharge mechanism) (collectively, "refinances," and "refinanced" shall have a correlative meaning) any Indebtedness existing on the date of this Indenture or Incurred in compliance with this Indenture (including Indebtedness of an Issuer that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided, however; that (i) the Refinancing Indebtedness has a Stated Maturity no earlier than the earlier of (A) the first anniversary of the Stated Maturity of the Securities and (B) Stated Maturity of the Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the lesser of (A) the Average Life of the Securities and (B) the Average Life of the Indebtedness being refinanced, and (iii) the Refinancing Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to (or 101% of, in the case of a refinancing of the Securities in connection with a Change of Control) or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus the amount of any premium required to be paid in connection therewith and reasonable fees and expenses therewith); provided, however, that if the Indebtedness being refinanced is Existing Indebtedness which was a purchase money obligation, mortgage or Capital Lease, the Refinancing Indebtedness is an aggregate principal amount that is equal to or less than the lesser of the original principal amount of such Existing Indebtedness and the fair market value (determined on the date of such Refinancing Indebtedness is Incurred) of the personal property securing such Existing Indebtedness or the personal property of similar nature and quality replacing such personal property; provided, further, that Refinancing Indebtedness shall not include Indebtedness of a Subsidiary which refinances Indebtedness of an Issuer. "Registration Rights Agreement" means the Registration Rights Agreement dated December 30, 1997 among the Issuers, the Subsidiary Guarantors and the Initial Purchaser for the benefit of themselves and the Securityholders, as the same may be amended or modified from time to time in accordance with the terms thereof. 21 "Related Brill Party" means (A) the spouse or immediate family member of Alan R. Brill or (B) any trust, corporation, partnership or other entity, the beneficiaries, shareholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of Alan R. Brill and/or such other Persons referred to in the immediately preceding clause (A). "Responsible Officer" when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee (or any successor group of the Trustee) with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Investment" means any Investment other than a Permitted Investment. "Restricted Security" has the meaning assigned to such term in Rule 144(a)(3) under the Securities Act. "Restricted Subsidiary" means any Subsidiary of the Issuer other than an Unrestricted Subsidiary. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc, or its successors. "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby an Issuer or a Restricted Subsidiary transfers such property to a Person and such Issuer or a Subsidiary of such Issuer leases it from such Person. "Securities" means the Initial Securities and the Exchange Securities treated as a single class of securities, as amended or supplemented from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Securityholder" or "Holder" means a registered holder of one or more Securities. 22 "Senior Indebtedness" means all Indebtedness of an Issuer and its Restricted Subsidiaries other than Subordinated Obligations. "Senior Secured Indebtedness" means Indebtedness of an Issuer and its Restricted Subsidiaries which is secured by a Lien; provided, however, that for purposes of the Consolidated Senior Secured Leverage Ratio, the full amount of Senior Secured Indebtedness permitted to be outstanding under clause (i) of paragraph (b) of Section 4.09 shall be deemed to be outstanding. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of an Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision. "Subordinated Obligation" means any Indebtedness of an Issuer or a Restricted Subsidiary (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the Securities and the Subsidiary Guarantees pursuant to a written agreement. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary shall refer to a Subsidiary of an Issuer. "Subsidiary Guarantee" means the Guarantee of the Securities by a Subsidiary Guarantor. "Subsidiary Guarantor" means each Subsidiary of an Issuer on the Issue Date and each newly organized or acquired Restricted Subsidiary that executes and delivers a supplemental indenture pursuant to Section 10.07. "Tax Allowance Amount" means, with respect to any Member, for any calendar quarter, (i) forty percent (40%) of the excess of (a) the estimated taxable income 23 allocable to such Member arising from its ownership of an interest in BMC for the fiscal year through such calendar quarter over (b) any losses of BMC for prior fiscal years and such fiscal year that are allocable to such Member that were not previously utilized in the calculation of Tax Allowance Amounts for any period minus (ii) prior distributions of Tax Allowance Amounts for such fiscal year, all as determined by the Accountants in good faith. The amount so determined by the Accountants shall be the Tax Allowance Amount for such period and shall be final and binding on all Members. "Temporary Cash Investments" means any of the following: (i) any Investment in direct obligations of the United States of America or any agency thereof or obligations Guaranteed by the United States of America or any agency thereof, (ii) Investments in time deposit accounts, certificates of deposit and money market deposits maturing within 365 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital surplus and undivided profits aggregating in excess of $250 million (or the foreign currency equivalent thereof) and whose long-term debt, or whose parent holding company's long-term debt, is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act), (iii) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (i) above entered into with a bank meeting the qualifications described in clause (ii) above, (iv) Investments in commercial paper, maturing not more than 365 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Issuer) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P, (v) Investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's and (vi) Investments in mutual funds whose investment guidelines restrict such funds' investments to those satisfying the provisions of clauses (i) through (v) above. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA, except as provided in Section 9.03 hereof; provided, however, that, in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. 24 "Transaction Date" means, with respect to the Incurrence of any Indebtedness by an Issuer or any of its Subsidiaries, the date such Indebtedness is to be Incurred. "Trustee" means United States Trust Company of New York, a banking corporation organized and existing under the laws of the State of New York, until a successor replaces it in accordance with Article 7 and thereafter means the successor serving hereunder. "Unrestricted Subsidiary" means (i) any Subsidiary of an Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Issuer in the manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of an Issuer may designate any Subsidiary of such Issuer (including any newly acquired or newly formed Subsidiary of such Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, an Issuer or any Restricted Subsidiary of an Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that each Subsidiary to be so designated and each of its Subsidiaries has not at the time of such designation, and does not thereafter create, Incur, issue, assume, Guarantee or otherwise becomes liable with respect to any Indebtedness other than Non-Recourse Debt and either (A) the Subsidiary to be so designated has total consolidated assets of $10,000 or less or (B) if such Subsidiary has consolidated assets greater than $10,000, then such designation would be permitted under Section 4.07. The Board of Directors of an Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary subject to the limitations contained in Section 4.17. "Unrestricted Subsidiary Advance" means loans made by an Issuer and its Restricted Subsidiaries to Unrestricted Subsidiaries. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option. "Wholly-Owned Subsidiary" means a Restricted Subsidiary of an Issuer, at least 95% of the Capital Stock of which (other than directors' qualifying shares) is owned by such Issuer or another Wholly-Owned Subsidiary. 25 SECTION 1.02. OTHER DEFINITIONS. Defined in Term Section "actual knowledge". . . . . . . . . . . . . . . . . . . . . . . . . . .7.02 "Affiliate Transaction" . . . . . . . . . . . . . . . . . . . . . . . .4.11 "Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.16 "Asset Disposition Offer" . . . . . . . . . . . . . . . . . . . . . . .3.09 "Asset Swap". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.10 "Bankruptcy Law". . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 "Change of Control Purchase Price". . . . . . . . . . . . . . . . . . .4.14 "covenant defeasance option". . . . . . . . . . . . . . . . . . . . . .8.01 "Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 "Declaration" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.02 "Default Amount". . . . . . . . . . . . . . . . . . . . . . . . . . . .6.02 "Designation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17 "Designated Amount" . . . . . . . . . . . . . . . . . . . . . . . . . .4.17 "Event of Default". . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 "Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . .4.10 "Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . . 10.05 "Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.01 "Guaranteed Obligations". . . . . . . . . . . . . . . . . . . . . . . 10.01 "judgment default provision". . . . . . . . . . . . . . . . . . . . . .6.01 "legal defeasance option" . . . . . . . . . . . . . . . . . . . . . . .8.01 "Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07 "Notice of Default" . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 "Offer Amount". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09 "Offer Period". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09 "Offshore Physical Securities". . . . . . . . . . . . . . . . . . . . .2.01 "Paying Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.03 "Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01 "Physical Securities" . . . . . . . . . . . . . . . . . . . . . . . . .2.01 "Private Placement Legend". . . . . . . . . . . . . . . . . . . . . . .2.15 "Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09 "Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.03 "Restricted Payment". . . . . . . . . . . . . . . . . . . . . . . . . .4.07 "Revocation". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17 "Successor Company" . . . . . . . . . . . . . . . . . . . . . . . . . .5.01 "U.S. Physical Securities". . . . . . . . . . . . . . . . . . . . . . .2.01 26 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Securities and the Subsidiary Guarantees; "indenture security holder" means a Securityholder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; "obligor" on the Securities means the Issuer, the Guarantors and any successor obligor upon the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) "or" is not exclusive; (iv) words in the singular include the plural, and in the plural include the singular; and (v) provisions apply to successive events and transactions. 27 ARTICLE 2 THE SECURITIES SECTION 2.01. FORM AND DATING. The Initial Securities, the notation thereon relating to the Subsidiary Guarantees and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit A hereto. The Exchange Securities, the notation thereon relating to the Subsidiary Guarantees and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit B hereto. The Securities may have notations, legends or endorsements required by law, stock exchange rule or Depository rule or usage. The Issuers, the Subsidiary Guarantors and the Trustee shall approve the form of the Securities and any notation, legend or endorsement on them. Each Security shall be dated the date of its authentication. The terms and provisions contained in the forms of the Securities and the Subsidiary Guarantees, annexed hereto as Exhibits A and B, shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Issuers, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Securities offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global notes in registered form, in substantially the form set forth in Exhibit A (the "Global Note"), deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided. Securities offered and sold in offshore transactions in reliance on Regulation S shall be issued in the form of permanent certificated Securities in registered form in substantially the form set forth in Exhibit A (the "Offshore Physical Securities"). Securities offered and sold in reliance on any other exemption from registration under the Securities Act other than as described in the preceding paragraph shall be issued, and Securities offered and sold in reliance on Rule 144A may be issued, in the form of permanent certificated Securities in registered form, in substantially the form set forth in Exhibit A (the "U.S. Physical Securities"). The Offshore Physical Securities and the U.S. Physical Securities are sometimes collectively herein referred to as the "Physical Securities". 28 SECTION 2.02. EXECUTION AND AUTHENTICATION. (a) Two Officers of each Issuer (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall sign the Securities for such Issuer by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. Each Subsidiary Guarantor shall execute a Subsidiary Guarantee in the manner set forth in Section 10.02. (b) A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature of the Trustee shall be conclusive evidence that the Security has been authenticated under this Indenture. (c) The Trustee shall authenticate (i) Initial Securities for original issue in the aggregate principal amount not to exceed $105,000,000, and (ii) Exchange Securities from time to time for issue only in exchange for a like principal amount of Initial Securities, in each case upon receipt of a written order of the Issuers. (d) The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Issuers or an Affiliate. SECTION 2.03. REGISTRAR AND PAYING AGENT. (a) The Issuers shall maintain an office or agency (which shall be located in the Borough of Manhattan in the City of New York, State of New York) where (i) Securities may be presented for registration of transfer or for exchange ("Registrar"), (ii) Securities may be presented for payment ("Paying Agent") and (iii) notices and demands to or upon the Issuers in respect of the Securities and this Indenture may be served. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Issuers may appoint one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Issuers may change any Paying Agent, Registrar or co-registrar without prior notice to any Securityholder. The Issuers shall notify the Trustee and the Trustee shall notify the Securityholders of the name and address of any Agent not a party to this Indenture. If the Issuers fail to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. An Issuer or any 29 Subsidiary Guarantor may act as Paying Agent, Registrar or co-registrar. The Issuers shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate the provisions of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuers shall notify the Trustee of the name and address of any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, or fail to give the foregoing notice, the Trustee shall act as such, and shall be entitled to appropriate compensation in accordance with Section 7.07 hereof. (b) The Issuers initially appoint the Trustee as Registrar, Paying Agent and agent for service of notices and demands in connection with the Securities. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Issuers, the Subsidiary Guarantors or any other obligor on the Securities shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of the Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, and interest on the Securities, and shall notify the Trustee of any Default by the Issuers, any of the Subsidiary Guarantors or any other obligor on the Securities in making any such payment. While any such Default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuers, the Subsidiary Guarantors or any other obligor on the Securities at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary Guarantor) shall have no further liability for the money delivered to the Trustee. If an Issuer, any Subsidiary Guarantor or any other obligor on the Securities acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders all money held by it as Paying Agent. SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuers, the Subsidiary Guarantors or any other obligor on the Securities shall furnish to the Trustee at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders, including the aggregate principal amount of the Securities held by each thereof, and the Issuers, the Subsidiary Guarantors or any other obligor on the Securities shall otherwise comply with TIA Section 312(a). 30 SECTION 2.06. TRANSFER AND EXCHANGE. (a) Where Securities are presented to the Registrar or a co-registrar with a request to register the transfer thereof or exchange them for an equal principal amount of Securities of other denominations, the Registrar shall, subject to Section 2.17, register the transfer or make the exchange if its requirements for such transactions are met; provided, however, that any Security presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar and the Trustee duly executed by the Securityholder thereof or his attorney duly authorized in writing. To permit registrations of transfer and exchanges, the Issuers shall issue and the Trustee shall authenticate Securities at the Registrar's request. (b) The Issuers shall not be required (i) to issue, to register the transfer of or to exchange Securities during a period beginning at the opening of business on a Business Day 15 days before the day of any selection of Securities for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part or (iii) to register the transfer or exchange of a Security between the Interest Record Date and the next succeeding Interest Payment Date. (c) No service charge shall be made for any registration of a transfer or exchange (except as otherwise expressly permitted herein), but the Issuers may require payment by the Securityholder of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.10, 3.06 or 9.05 hereof). (d) Any Holder of the Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Global Note shall be required to be reflected in a book entry. SECTION 2.07. REPLACEMENT SECURITIES. (a) If any mutilated Security is surrendered to the Trustee, or the Issuers and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, the 31 Issuers shall issue and the Trustee, upon receipt by it of the written order of the Issuers signed by two Officers of each of the Issuers, shall authenticate a replacement Security if the Trustee's requirements for replacements of Securities are met. If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Subsidiary Guarantors, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Security is replaced. The Issuers and the Trustee may charge a Securityholder for reasonable out-of-pocket expenses in replacing a Security. (b) Every replacement Security is an obligation of each of the Issuers and each of the Subsidiary Guarantors. SECTION 2.08. OUTSTANDING SECURITIES. (a) The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those cancelled by the Issuers or by the Trustee, those delivered to the Trustee for cancellation and those described in this Section as not outstanding. (b) If a Security is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. (c) If the principal amount of any Security is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. (d) Subject to Section 2.09 hereof, a Security does not cease to be outstanding because an Issuer or an Affiliate of an Issuer or a Subsidiary Guarantor holds the Security. SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by an Issuer, a Subsidiary Guarantor, or any of their respective Affiliates shall be considered as though not outstanding, except that for purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Responsible Officer knows to be so owned shall be so considered. SECTION 2.10. TEMPORARY SECURITIES. 32 Until definitive Securities are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Issuers, the Subsidiary Guarantors and the Trustee consider appropriate for temporary Securities. Without unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of the written order of the Issuers signed by two Officers of each of the Issuers, shall authenticate definitive Securities in exchange for temporary Securities. Until such exchange, temporary Securities shall be entitled to the same rights, benefits and privileges as definitive Securities. SECTION 2.11. CANCELLATION. The Issuers at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Securities, if not already cancelled, surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Securities (subject to the record retention requirement of the Exchange Act), and deliver certification of their destruction to the Issuers, unless by a written order, signed by two Officers of each of the Issuers, the Issuers shall direct that cancelled Securities be returned to them. The Issuers may not issue new Securities to replace Securities that they have redeemed or paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Issuers default in a payment of interest on the Securities, they shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Securityholders on a subsequent special record date, which date shall be at the earliest practicable date but in all events at least five Business Days prior to the payment date, in each case at the rate provided in the Securities and in Section 4.01 hereof. The Issuers shall, with the consent of the Trustee, fix or cause to be fixed each such special record date and payment date. At least 15 days before the special record date, the Issuers (or the Trustee, in the name of and at the expense of the Issuers) shall mail to Securityholders a notice that states the special record date, the related payment date and the amount of such interest to be paid. SECTION 2.13. CUSIP NUMBER. The Issuers in issuing the Securities may use a "CUSIP" number, and if so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a 33 convenience to Securityholders; provided, however, that no representation shall be deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities, and that reliance may be placed only on the other identification numbers printed on the Securities. The Issuers shall promptly notify the Trustee of any change in the CUSIP number. SECTION 2.14. DEPOSIT OF MONEYS. Prior to 11:00 a.m. New York City time on each Interest Payment Date and Maturity Date, the Issuers shall deposit with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date or Maturity Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Securityholders on such Interest Payment Date or Maturity Date, as the case may be. SECTION 2.15. RESTRICTIVE LEGENDS. Each Global Note and Physical Security that constitutes a Restricted Security shall bear the following legend (the "Private Placement Legend") unless otherwise agreed by the Issuers and the Securityholder thereof: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO 34 SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO AN ISSUER THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS HEREOF THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING AS DESCRIBED IN CLAUSE (1)(B) ABOVE FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT BE PERMITTED TO TRANSFER THIS NOTE TO AN INSTITUTIONAL ACCREDITED INVESTOR. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING PURSUANT TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE 35 ISSUERS HEREOF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS. Each Global Note shall also bear the following legend on the face thereof: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY 36 CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY. (a) The Global Note initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Section 2.15. Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Note, and the Depository may be treated by the Issuers, the Trustee and any agent of an Issuer or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of an Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security. (b) Transfers of the Global Note shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Interest of beneficial owners in the Global Note may be transferred or exchanged for Physical Securities in accordance with the rules and procedures of the Depository and the provisions of Section 2.17. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in the Global Note if (i) the Depository notifies the Issuers that it is unwilling or unable to continue as Depository for the Global Note and a successor depository is not appointed by the Issuer within 90 days of such notice or (ii) an Event of Default has occurred and is continuing and the Registrar has received a written request from the Depository or the Trustee to issue Physical Securities. 37 (c) In connection with any registration of transfer or exchange of a portion of the beneficial interest in the Global Note to beneficial owners pursuant to paragraph (b) above, the Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the beneficial interest in the Global Note to be transferred, and the Issuers shall execute, and the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and amount. (d) In connection with the registration of transfer of the entire Global Note to beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the Global Note, an equal aggregate principal amount of Physical Securities of authorized denominations. (e) Any Physical Security constituting a Restricted Security delivered in exchange for an interest in the Global Note pursuant to paragraph (b) or (c) above shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.17, bear the legend regarding transfer restrictions applicable to the Physical Securities set forth in Section 2.15. (f) The Holder of the Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Securityholder is entitled to take under this Indenture or the Securities. SECTION 2.17. SPECIAL TRANSFER PROVISIONS. (a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person: (i) the Registrar shall register the transfer of any Security constituting a Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after December 30, 1999 or (y) (1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S.Persons), the proposed transferee has delivered 38 to the Registrar a certificate substantially in the form of Exhibit C hereto or (2) in the case of a transfer to a Non-U.S. Person, the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit D hereto; and (ii) if the proposed transferor is an Agent Member holding a beneficial interest in the Global Note, upon receipt by the Registrar of (x) the certificate, if any, required by paragraph (i) above and (y) instructions given in accordance with the Depository's and the Registrar's procedures, (a) the Registrar shall reflect on its books and records the date and (if the transfer does not involve a transfer of outstanding Physical Securities) a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and (b) the Issuer shall execute and the Trustee shall authenticate and deliver one or more Physical Securities of like tenor and amount. (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons): (i) the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or has otherwise advised the Issuer and the Registrar in writing, that the sale has been effected in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Issuers and the Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that any such account is a QIB within the meaning of Rule 144A, and it is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; and 39 (ii) if the proposed transferee is an Agent Member and the Securities to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Note, upon receipt by the Registrar of instructions given in accordance with the Depository's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note in an amount equal to principal amount of the Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred. (c) Private Placement Legend. Upon the registration of the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the registration of the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar shall deliver only Securities that bear the Private Placement Legend unless (i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17 exists or (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Issuers and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (d) General. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall retain for at least two years copies of all letters, notices and other written communications received pursuant to Section 2.16 or this Section 2.17. The Issuers shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. SECTION 2.18. PERSONS DEEMED OWNERS. Prior to due presentment of a Security for registration of transfer and subject to Section 2.12, the Issuers, the Trustee, any Paying Agent, any Registrar and any co-registrar shall treat the Person in whose name any Security shall be registered upon the register of Securities kept by the Registrar as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of the ownership or other writing thereon made by anyone other than the Issuers, any Registrar or any co- 40 registrar) for the purpose of receiving payments of principal of or interest on such Security and for all other purposes; and none of the Issuers, the Trustee, any Paying Agent, any Registrar or any co-registrar shall be affected by any notice to the contrary. SECTION 2.19. ALLOCATION OF PURCHASE PRICE. Based on their estimate of the relative fair market values of the Securities and the Appreciation Notes, the Issuers agree that of the initial purchase price of $922.0 for each $1,000 of principal amount of Securities, the Issuers agree that they shall treat for U.S. federal income tax purposes $899.63 of such initial purchase price as allocable to the Securities and $22.37 as allocable to the Appreciation Notes. ARTICLE 3 REDEMPTION SECTION 3.01. NOTICES TO TRUSTEE. (a) If the Issuers elect to redeem Securities pursuant to the optional redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee, at least 45 days (unless a shorter period is acceptable to the Trustee) but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Securities to be redeemed and (iv) the redemption price. (b) If the Issuers are required to make an offer to purchase Securities pursuant to the provisions of Sections 3.09 or 4.14 hereof, they shall furnish to the Trustee at least 30 days but not more than 60 days before a purchase date an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the offer to purchase shall occur, (ii) the proposed purchase date, (iii) the maximum principal amount of Securities to be purchased , (iv) the purchase price and (v) further setting forth a statement to the effect that (a) an Issuer or one of its Subsidiaries has effected an Asset Disposition and the conditions set forth in Section 4.10 have been satisfied or (b) a Change of Control has occurred and the conditions set forth in Section 4.14 have been satisfied, as applicable. SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. 41 (a) If less than all of the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed among the Securityholders on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate (and in such manner as complies with applicable legal and stock exchange requirements, if any); provided, however, that if a partial redemption is made with the proceeds of a Public Equity Offering, selection of the Securities or portion thereof for redemption shall be made by the Trustee only on a pro rata basis to the extent practicable, unless such method is otherwise prohibited. In the event of partial redemption by lot, the particular Securities to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Securities not previously called for redemption. (b) The Trustee shall promptly notify the Issuers in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed. Securities may be redeemed in part in multiples of $1,000 principal amount only. Except as provided in the preceding sentence, provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. SECTION 3.03. NOTICE OF REDEMPTION. (a) At least 30 days before a redemption date, the Issuers shall mail a notice of redemption by first class mail, postage prepaid to each Holder whose Securities are to be redeemed at the last address for such Holder then shown on the registry books. The notice shall identify the Securities to be redeemed and shall state: (i) the redemption date; (ii) the redemption price; (iii) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion shall be issued; (iv) the name and address of the Paying Agent; 42 (v) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (vi) that, unless the Issuers default in making such redemption payment, interest on Securities called for redemption ceases to accrue on and after the redemption date; (vii) the paragraph of the Securities and/or Section of this Indenture pursuant to which the Securities called for redemption are being redeemed; and (viii) if fewer than all the Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption. (b) At the Issuers' request, the Trustee shall give the notice of redemption in the Issuers' names and at the Issuers' expense; provided, however, that the Issuers shall have delivered to the Trustee at least 45 days (unless a shorter period is acceptable to the Trustee) prior to the proposed redemption date an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Securities called for redemption become due and payable on the redemption date at the redemption price plus accrued and unpaid interest, if any. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. (a) Prior to 11:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Securities to be redeemed. 43 (b) On and after the redemption date, interest ceases to accrue on the Securities or the portions of Securities called for redemption. If a Security is redeemed on or after an Interest Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the Person in whose name such Security was registered at the close of business on such record date. If any Security called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid and, to the extent lawful, on any interest not paid on such unpaid principal, in each case at the rate provided in the Securities and in Section 4.01 hereof. SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Issuers shall issue and the Trustee shall authenticate for the Securityholder at the expense of the Issuers a new Security equal in principal amount to the unredeemed portion of the Security surrendered. SECTION 3.07. OPTIONAL REDEMPTION. (a) Except as provided in Section 3.07(b), the Securities will not be redeemable at the option of the Issuers prior to December 15, 2002. On and after such date, the Securities will be redeemable, at the Issuers' option, in whole or in part, at the following redemption prices (expressed in percentages of principal amount), if redeemed during the 12-month period commencing on December 15th of the years set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date): Redemption Period Price ------ ---------- 2002........................ 106.00% 2003........................ 104.00% 2004........................ 102.00% 2005 and thereafter......... 100.000% (b) In the event of the sale by either Issuer prior to December 15, 2000 of its Capital Stock (other than Disqualified Stock) in one or more Public Equity Offerings the Net Cash Proceeds of which are at least $25.0 million in the aggregate, the Issuers may, at their option, use the Net Cash Proceeds of such sale or sales of Capital Stock to redeem up to 25% of the aggregate principal amount of the Securities at a redemption price in the 44 case of a redemption date prior to December 15, 1999, equal to 112.0% of the Accreted Value thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date) and for any redemption date on or after December 15, 1999, at a redemption price equal to 112.0% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date); provided, however, that after any such redemption the aggregate principal amount of the Securities outstanding must equal at least $79.0 million. In order to effect the foregoing redemption with the proceeds of any such sale of Capital Stock, the Issuers shall make such redemption not more than 90 days after the consummation of any such sale or sales of Capital Stock. SECTION 3.08. MANDATORY REDEMPTION. The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Securities. SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. (a) In the event that, pursuant to Section 4.10 hereof, the Issuers shall commence an offer to all Securityholders to purchase Securities (an "Asset Disposition Offer"), they shall follow the procedures specified below: (i) The Asset Disposition Offer shall remain open for a period of 30 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Issuers shall purchase the principal amount of Securities required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Securities tendered in response to the Asset Disposition Offer. (ii) If the Purchase Date is on or after a Interest Record Date and on or before the related Interest Payment Date, any accrued interest shall be paid to the Person under whose name a Security is registered at the close of business on such Interest Record Date, and no additional interest shall be payable to Holders who tender Securities pursuant to the Asset Disposition Offer. 45 (iii) Upon the commencement of any Asset Disposition Offer, the Issuers shall send, by first class mail, a notice to each Securityholder, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Asset Disposition Offer. The notice, which shall govern the terms of the Asset Disposition Offer, shall state: (1) that the Asset Disposition Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Disposition Offer shall remain open; (2) the Offer Amount, the purchase price and the Purchase Date; (3) that any Security not tendered or accepted for payment shall continue to accrue interest; (4) that any Security accepted for payment pursuant to the Asset Disposition Offer shall cease to accrue interest after the Purchase Date; (5) that Holders electing to have a Security purchased pursuant to any Asset Disposition Offer shall be required to surrender the Security, with the form entitled "Option of Securityholder to Elect Purchase" on the reverse of the Security completed, to the Issuers, a depositary, if appointed by the Issuers, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (6) that Holders shall be entitled to withdraw their election if the Issuers, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have the Security purchased; (7) that, if the aggregate principal amount of Securities surrendered by Holders exceeds the Offer Amount, the Issuers shall select the Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Issuers so that only Securities in denominations of $1,000, or integral multiples thereof, shall be purchased); and 46 (8) that Holders whose Securities were purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered. (iv) On or before the Purchase Date, the Issuers shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Securities or portions thereof tendered pursuant to the Asset Disposition Offer or, if less than the Offer Amount has been tendered, all Securities or portions thereof tendered, and deliver to the Trustee an Officers' Certificate stating that such Securities or portions thereof were accepted for payment by the Issuers in accordance with the terms of this Section 3.09. The Issuers, depositary or Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Security tendered by such Holder and accepted by the Issuers for purchase, and the Issuers shall promptly issue a new Security, and the Trustee shall authenticate and mail or deliver such new Security to such Holder equal in principal amount to any unpurchased portion of the Security surrendered. Any Security not so accepted shall be promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers shall publicly announce the results of the Asset Disposition Offer on the Purchase Date. (b) Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF SECURITIES. (a) The Issuers shall pay the principal of, premium, if any, and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than an Issuer or a Subsidiary Guarantor, holds as of 11:00 a.m. New York City time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. Such Paying Agent shall return to the Issuers, no later than five days following the date of 47 payment, any money (including accrued interest paid by the Issuers) that exceeds such amount of principal, premium, if any, and interest paid on the Securities. (b) The Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 2% per annum in excess of the then applicable interest rate on the Securities to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. (a) The Issuers shall maintain in the Borough of Manhattan, in the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuers in respect of the Securities and this Indenture may be served. The Issuers shall give prior written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. (b) The Issuers may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuers of their obligation to maintain an office or agency in the Borough of Manhattan, in the City of New York for such purposes. The Issuers shall give prior written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. (c) The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 2.03. SECTION 4.03. SEC REPORTS. (a) Upon consummation of the Exchange Offer and the issuance of the Exchange Securities, each Issuer and each Subsidiary Guarantor (at its own expense) shall file with 48 the Commission and shall furnish to the Trustee and each Securityholder within 15 days after it files them with the Commission copies of the quarterly and annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) to be filed pursuant to Section 13 or 15(d) of the Exchange Act (without regard to whether either of the Issuers is subject to the requirements of such Section 13 or 15(d) of the Exchange Act). Notwithstanding the foregoing, in the event that the Issuers are not required to file such reports with the Commission pursuant to the Exchange Act, the Issuers will nevertheless deliver such Exchange Act information to the Holders of the Securities within 15 days after it would have been required to file it with the Commission. Upon qualification of this Indenture under the TIA, the Issuers and each of the Subsidiary Guarantors shall also comply with the provisions of TIA Section 314(a). (b) At the Issuers' expense, each Issuer and each of the Subsidiary Guarantors, as applicable, shall cause an annual report if furnished by it to stockholders generally and each quarterly or other financial report if furnished by it to stockholders generally to be filed with the Trustee and mailed to the Securityholders at their addresses appearing in the register of Securities maintained by the Registrar at the time of such mailing or furnishing to stockholders. (c) Each Issuer and each of the Subsidiary Guarantors shall provide to any Securityholder any information reasonably requested by such Securityholder concerning the Issuers and the Subsidiary Guarantors (including financial statements) necessary in order to permit such Securityholder to sell or transfer Securities in compliance with Rule 144A under the Securities Act. SECTION 4.04. COMPLIANCE CERTIFICATES. (a) Each of the Issuers and each Subsidiary Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate signed by its principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of such Issuer and its Subsidiaries or such Subsidiary Guarantor and its Subsidiaries, as the case may be, during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether each has kept, observed, performed and fulfilled its Obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge each has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default 49 shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto). (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03 above shall be accompanied by a written statement of (x) the Issuers' independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that either Issuer has violated any provisions of Article 4, 5 or 6 of this Indenture insofar as they relate to accounting matters or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation and (y) if any Restricted Subsidiary's or Subsidiary Guarantor's financial statements are not prepared on a consolidated basis with the applicable Issuer's, such Restricted Subsidiary's or Subsidiary Guarantor's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that any of the Restricted Subsidiaries or Subsidiary Guarantors is in Default under this Indenture or, if any such Default has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) Each Issuer and each of the Subsidiary Guarantors shall, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of (i) any Default or Event of Default or (ii) any event of default under any other mortgage, indenture or instrument to which either Issuer or a Restricted Subsidiary is a party, an Officers' Certificate specifying such Default, Event of Default or event of default and what action such Issuer or such Subsidiary Guarantor, as the case may be, is taking or proposes to take with respect thereto. (d) Each Issuer and each of the Subsidiary Guarantors shall also comply with TIA Section 314(a)(4). 50 SECTION 4.05. TAXES. Each Issuer and each of the Subsidiary Guarantors shall pay, and shall cause each of their respective Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings. SECTION 4.06. STAY, EXTENSION AND USURY LAWS. Each of the Issuers and the Subsidiary Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture (including, but not limited to, the payment of the principal of or interest on the Securities); and each Issuer and each Subsidiary Guarantor (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS. (a) The Issuers shall not, and shall not permit any of their Restricted Subsidiaries, directly or indirectly, to (i) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving an Issuer or any of its Restricted Subsidiaries) except (A) dividends or distributions payable in its Capital Stock (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock and (B) dividends or distributions payable to an Issuer or a Restricted Subsidiary of an Issuer which holds any equity interest in the paying Restricted Subsidiary (and if the Restricted Subsidiary paying the dividend or making the distribution is not a Wholly-Owned Subsidiary, to its other holders of Capital Stock on a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire for value any Capital Stock of an Issuer held by Persons other than a Wholly-Owned Subsidiary of an Issuer or any Capital Stock of a Restricted Subsidiary of an Issuer held by any Affiliate of such Issuer, other than a Wholly-Owned Subsidiary (in either case, other than in exchange for its Capital Stock (other than Disqualified Stock)), (iii) purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations (other than the purchase, repurchase or other acquisition of Subordinated Obligations purchased in 51 anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition), (iv) make any Investment (other than a Permitted Investment) in any Person, (v) make any payment under any Performance Compensation Agreement or (vi) make any payment to Alan R. Brill (including under a Performance Compensation Agreement or in his capacity as an employee of the Issuer or any Subsidiary) except for reimbursement for advances or other out-of-pocket costs and expenses incurred in the ordinary course of business (any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement, Investment or payment as described in preceding clauses (i) through (vi) being referred to as a "Restricted Payment"); if at the time the Issuer or such Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and be continuing (or would result therefrom); or (2) the Issuers are not able to incur an additional $1.00 of Indebtedness pursuant to paragraph (a) (ii) of Section 4.09; or (3) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date would exceed the sum of (A) 50% of (x) the Consolidated Net Income accrued during the period (treated as one accounting period) from the first day of the fiscal quarter beginning on or after the Issue Date to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment as to which financial results are available (but in no event ending more than 135 days prior to the date of such Restricted Payment) (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit) less (y) the aggregate amount of Restricted Payments made pursuant to clause (v) of paragraph (b); (B) the aggregate Net Cash Proceeds received by the Issuer from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date (other than net proceeds received from an issuance or sale of such Capital Stock to (x) a Subsidiary of an Issuer, (y) an employee stock ownership plan or similar trust or (z) management employees of an Issuer or any Subsidiary of an Issuer (other than sales of Capital Stock (other than Disqualified Stock) to management employees of an Issuer pursuant to bona fide employee stock option plans of such Issuer); provided, however, that the value of any non-cash net proceeds shall be as determined by the Board of Directors of such Issuer in good faith, except that in the event the value of any non-cash net proceeds shall be $1.0 million or more, the value shall be as determined in writing by an independent investment banking firm of nationally recognized standing; (C) the amount by which Indebtedness of an Issuer is reduced 52 on such Issuer's balance sheet upon the conversion or exchange (other than by a Restricted Subsidiary of such Issuer) subsequent to the Issue Date of any Indebtedness of such Issuer convertible or exchangeable for Capital Stock (other than Disqualified Stock) of such Issuer (less the amount of any cash, or other property, distributed by such Issuer upon such conversion or exchange); and (D) the amount equal to the net reduction in Investments (other than Permitted Investments) made after the Issue Date by an Issuer or any of its Restricted Subsidiaries in any Person resulting from (i) repurchases or redemptions of such Investments by such Person, proceeds realized upon the sale of such Investment to an unaffiliated purchaser, repayments of loans or advances or other transfers of assets by such Person to the Issuer or any Restricted Subsidiary of an Issuer or (ii) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of "Investment") not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously included in the calculation of the amount of Restricted Payments; provided, however, that no amount shall be included under this clause (D) to the extent it is already included in Consolidated Net Income. (b) The provisions of paragraph (a) shall not prohibit: (i) any purchase or redemption of Capital Stock or Subordinated Obligations (including, without limitation, the Appreciation Notes) of the Issuers made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Issuers (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary, an employee stock ownership plan or similar trust or management employees of the Issuers or any Subsidiary of the Issuers); provided, however, that (A) such purchase or redemption shall be excluded in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a) and (B) the Net Cash Proceeds from such sale shall be excluded in the calculation of the amount of aggregate Net Cash Proceeds from clause (3) (B) of paragraph (a); (ii) any purchase or redemption of Subordinated Obligations of the Issuers made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of the Issuers in compliance with the Section 4.09; provided, however, that such purchase or redemption shall be excluded in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a); 53 (iii) any purchase or redemption of Subordinated Obligations from Net Available Cash to the extent permitted under Section 4.10 below; provided, however, that such purchase or redemption shall be excluded in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a); (iv) dividends paid within 60 days after the date of declaration if at such date of declaration such dividend would have complied with this provision; provided, however, that such dividend shall be included in the calculation of the amount of Restricted Payments for purposes of clause (3) of paragraph (a); (v) for so long as BMC is not treated for tax purposes as a corporation or an association taxable as a corporation or other entity that is subject to an entity level tax for income tax purposes, distributions to each Member, as soon as practicable after the end of each calendar quarter, of an amount reasonably determined to be necessary to permit such Member to pay any federal, state or local income taxes imposed on such Member's allocable share of income from BMC; provided, however, that in no event shall any distribution to a Member exceed the Tax Allowance Amount for such Member in respect of such quarter and BMC shall cause the Accountants to deliver to the Trustee a certificate setting forth the determination of each Member's Tax Allowance Amount within 60 days of the end of each fiscal year; (vi) payments under the Performance Compensation Agreements (other than any Performance Compensation Agreement with Alan R. Brill) not exceeding in the aggregate $500,000 in any fiscal year provided, however, that any such payment pursuant to this clause (vi) shall be included in the calculation of the aggregate amount of Restricted Payments for purposes of clause 3 of paragraph (a) and; (vii) payments in respect of the redemption of the Appreciation Notes under the Appreciation Note Indenture, provided, however, that the Issuers are able to incur an additional $1.00 of Subordinated Indebtedness pursuant to clause (i) of paragraph (a) under Section 4.09, and provided, further, that such payments shall be included in the calculation of the aggregate amount of Restricted Payments for purposes of clause (3) of paragraph (a); 54 and provided, further, that in the case of clauses (i), (ii), (iii) and (vii) and clause (vi) with respect to Performance Compensation Agreements entered into after the Issue Date, no Default or Event of Default shall have occurred or be continuing at the time of such payment or as a result thereof. (c) For purposes of determining compliance with this Section 4.07, Restricted Payments may be made with cash or non-cash assets, provided, however, that any Restricted Payment made other than in cash shall be valued at the fair market value (determined, subject to the additional requirements of the immediately succeeding proviso, in good faith by the Board of Directors) of the assets so utilized in making such Restricted Payment, provided, further, that (i) in the case of any Restricted Payment made with Capital Stock or Indebtedness, such Restricted Payment shall be deemed to be made in an amount equal to the greater of the fair market value thereof and the liquidation preference (if any) or principal amount of the Capital Stock or Indebtedness, as the case may be, so utilized, and (ii) in the case of any Restricted Payment in an aggregate amount in excess of $1.0 million, a written opinion as to the fairness of the valuation thereof (as determined by the Issuers) for purposes of determining compliance with this Section 4.07 shall be issued by an independent investment banking firm of national standing. (d) Not later than the date of making any Restricted Payment or Permitted Investment described in clause (xii) of the definition thereof, the applicable Issuer shall deliver to the Trustee an Officer's Certificate stating that such Restricted Payment or Permitted Investment, as the case may be, complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Issuers' latest available quarterly consolidated financial statements and a copy of any required investment banker's opinion. SECTION 4.08. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES. The Issuers shall not, and shall not permit any of their Restricted Subsidiaries to, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any such Restricted Subsidiary to: (i) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligation owed to an Issuer or another Restricted Subsidiary; (ii) make any loans or advances to an Issuer or another Restricted Subsidiary or 55 (iii) transfer any of its property or assets to an Issuer or another Restricted Subsidiary, except: (a) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date; (b) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by an Issuer and outstanding on such date (other than Indebtedness Incurred in anticipation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of an Issuer or was acquired by an Issuer); (c) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement evidencing Indebtedness Incurred without violation of this Indenture or effecting a refinancing of Indebtedness issued pursuant to an agreement referred to in clauses (a) or (b) or this clause (c) or contained in any amendment to an agreement referred to in clauses (a) or (b) or this clause (c); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any of such agreement, refinancing agreement or amendment, taken as a whole, are no less favorable to the holders of the Securities in any material respect, as determined in good faith by the Board of Directors of the Issuers, than encumbrances and restrictions with respect to such Restricted Subsidiary contained in agreements in effect at, or entered into on, the Issue Date; (d) in the case of clause (iii) of this Section 4.08, any encumbrance or restriction (A) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset, (B) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of an Issuer or any Restricted Subsidiary not otherwise prohibited by this Indenture, (C) that is included in a licensing agreement to the extent such restrictions limit the transfer of the property subject to such licensing agreement or (D) arising or agreed to in the ordinary course of business and that does not, individually or in the aggregate, 56 detract from the value of property or assets of an Issuer or any of its Restricted Subsidiaries in any manner material to an Issuer or any such Restricted Subsidiary; (e) in the case of clause (iii) of this Section 4.08, restrictions contained in security agreements, mortgages or similar documents securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements; (f) in the case of clause (iii) of this Section 4.08, any instrument governing or evidencing Indebtedness of a Person acquired by an Issuer or any Restricted Subsidiary of an Issuer at the time of such acquisition, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired; provided, however, that such Indebtedness is not incurred in connection with or in contemplation of such acquisition; (g) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; and (h) encumbrances or restrictions arising or existing by reason of applicable law. SECTION 4.09. LIMITATION ON INDEBTEDNESS. (a) The Issuers shall not, and shall not permit any of their Restricted Subsidiaries to, Incur any Indebtedness; provided, however, that: (i) the Issuers and their Restricted Subsidiaries may Incur Indebtedness which is expressly subordinated to the Securities and the Subsidiary Guarantees if no Default or Event of Default shall have occurred and be continuing at the time of such Incurrence or would occur as a consequence of such Incurrence and the Consolidated Leverage Ratio would not be greater than 7.00 to 1.00 and (ii) the Issuers and their Restricted Subsidiaries may Incur unsecured Indebtedness ranking on a parity with the Securities if no Default or Event of Default shall have occurred and be continuing at the time of such Incurrence or would occur as a consequence of such Incurrence and the Consolidated Senior Leverage Ratio would not be greater than 6.50 to 1.00, provided, however, that as provided in the definition of Permitted Liens Indebtedness Incurred pursuant to this clause (ii) may be secured by a Lien if at the time of such 57 Incurrence the Consolidated Senior Secured Leverage Ratio would not be greater than 3.00 to 1.00. (b) Notwithstanding the foregoing paragraph (a), the Issuers and their Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness Incurred which does not exceed $15.0 million at any time outstanding, less the aggregate principal amount thereof permanently repaid with the net proceeds of Asset Dispositions; (ii) Indebtedness of an Issuer owing to and held by any Wholly-Owned Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by an Issuer or any Wholly-Owned Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness (except to an Issuer or any Wholly-Owned Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by an issuer thereof; (iii) Indebtedness represented by (A) the Securities and the Subsidiary Guarantees, (B) the Appreciation Notes and the Guarantees thereof, (C) Existing Indebtedness and (D) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (iii) (other than clause B) or Incurred pursuant to paragraph (a) above; (iv) (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on which such Restricted Subsidiary was acquired, directly or indirectly, by an Issuer (other than Indebtedness Incurred in anticipation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary or was otherwise acquired by an Issuer); provided, however, that at the time such Restricted Subsidiary is acquired by an Issuer, such Issuer would have been able to Incur $1.00 of additional Indebtedness pursuant to clause (ii) of paragraph (a) above after giving effect to the Incurrence of such Indebtedness pursuant to this clause (iv) and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (iv); (v) Indebtedness (A) in respect of performance bonds, bankers' acceptances and surety or appeal bonds provided by the Issuers or any of their 58 Restricted Subsidiaries to their customers in the ordinary course of their business, (B) in respect of performance bonds or similar obligations of the Issuers or any of their Restricted Subsidiaries for or in connection with pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations and (C) arising from Guarantees to suppliers, lessors, licensees, contractors, franchises or customers of obligations (other than Indebtedness) incurred in the ordinary course of business; (vi) Indebtedness under Currency Agreements and Interest Rate Agreements; provided, however, that such Currency Agreements and Interest Rate Agreements are entered into for bona fide hedging purposes of an Issuer or its Restricted Subsidiaries (as determined in good faith by the Board of Directors of BMC) and correspond in terms of notional amount, duration, currencies and interest rates as applicable, to Indebtedness of such Issuer or its Restricted Subsidiaries Incurred without violation of this Indenture or to business transactions of the Issuers or their Restricted Subsidiaries on customary terms entered into in the ordinary course of business; (vii) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Issuers or any of their Restricted Subsidiaries pursuant to such agreements, in each case Incurred in connection with the disposition of any business assets or Restricted Subsidiary of the Issuers or (other than Guarantees of Indebtedness or other obligations incurred by any Person acquiring all or any portion of such business assets or Restricted Subsidiary of the Issuers for the purpose of financing such acquisition) in a principal amount not to exceed the gross proceeds actually received by the Issuers or any of their Restricted Subsidiaries in connection with such disposition; provided, however, that the principal amount of any Indebtedness Incurred pursuant to this clause (vii) when taken together with all Indebtedness Incurred pursuant to this clause (vii) and then outstanding, shall not exceed $1.0 million; (viii) Indebtedness consisting of (A) Guarantees by an Issuer (so long as such Issuer could have Incurred such Indebtedness directly without violation of this Indenture) and (B) Guarantees by a Restricted Subsidiary of Indebtedness Incurred by an Issuer without violation of this Indenture (so long as such Restricted Subsidiary could have Incurred such Indebtedness directly without violation of this Indenture); 59 (ix) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument issued by an Issuer or any of its Subsidiaries drawn against insufficient funds in the ordinary course of business in an amount not to exceed $250,000 at any time, provided, however, that such Indebtedness is extinguished within two business days of its incurrence; and (x) Indebtedness (other than Indebtedness described in clauses (i) - (ix)) in a principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (x) and then outstanding, will not exceed $5.0 million (it being understood that any Indebtedness Incurred under this clause (x) shall cease to be deemed Incurred or outstanding for purposes of this clause (x) (but shall be deemed to be Incurred for purposes of paragraph (a)) from and after the first date on which an Issuer or its Restricted Subsidiaries could have Incurred such Indebtedness under the foregoing paragraph (a) without reliance upon this clause (x)). (c) Notwithstanding the foregoing, neither the Issuers nor any Restricted Subsidiary shall Incur any Indebtedness under paragraph (b) of this Section 4.09 if the proceeds thereof are used, directly or indirectly, to refinance any Subordinated Obligations of an Issuer or a Restricted Subsidiary unless such Indebtedness shall be subordinated to the Securities to at least the same extent as such Subordinated Obligations. (d) Notwithstanding the foregoing, no Restricted Subsidiary shall incur any Indebtedness under clause (i) of paragraph (a) of this Section 4.09 if such Indebtedness is sold pursuant to Rule 144A of the Securities Act or a public offering registered under the Securities Act. (e) The Issuers will not permit any Unrestricted Subsidiary to Incur any Indebtedness other than Non-Recourse Debt. (f) For purposes of determining any particular amount of Indebtedness under this Section 4.09, Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in the above clauses, the Issuers, in their sole discretion, shall classify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses. SECTION 4.10. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. 60 (a) The Issuers shall not, and shall not permit any of their Restricted Subsidiaries to, make any Asset Disposition unless: (i) an Issuer or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the fair market value, as determined in good faith by BMC's Board of Directors (including as to the value of all noncash consideration), of the shares and assets subject to such Asset Disposition; (ii) at least 80% of the consideration thereof received by the Issuers or such Restricted Subsidiary is in the form of cash or Cash Equivalents other than in the case where an Issuer or a Restricted Subsidiary is exchanging all or substantially all of the assets of one or more broadcast stations operated by an Issuer or such Restricted Subsidiary, as the case may be, (including by way of the transfer of Capital Stock), for all or substantially all of the assets (including by way of the transfer of Capital Stock) constituting one or more broadcast stations operated by another Person (an "Asset Swap"), provided, however, that at least 80% of the consideration, if any, received by the Issuers and their Restricted Subsidiaries in such Asset Swap, other than the stock and assets of broadcast station(s), is in the form of cash or Cash Equivalents; and (iii) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Issuers (or such Restricted Subsidiary, as the case may be) (A) first, to the extent an Issuer or any Restricted Subsidiary elects (or is required by the terms of any Senior Secured Indebtedness), (x) to prepay, repay or purchase Senior Secured Indebtedness in each case owing to a Person other than the Issuers or any of their Subsidiaries or (y) to the investment in or acquisition of Additional Assets within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; (B) second, within 365 days from the receipt of such Net Available Cash, to the extent of the balance of such Net Available Cash after application in accordance with clause (A), to make an offer to purchase Securities, at 100% of Accreted Value thereof if such purchase date occurs prior to December 15, 1999, and at 100% of the principal amount thereof if such purchase date occurs on or after December 15, 1999, in each case plus accrued and unpaid interest, if any, thereon; (C) third, within 90 days after the later of the application of Net Available Cash in accordance with clauses (A) and (B) and the date that is 365 days from the receipt of such Net Available Cash, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B), to prepay, repay or repurchase Indebtedness (other than Preferred Stock) of a Wholly-Owned Subsidiary (in each case other than 61 Indebtedness owed to an Issuer or a Subsidiary); and (D) fourth, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), to (w) the investment in or acquisition of Additional Assets, (x) the making of Temporary Cash Investments, (y) the prepayment, repayment or purchase of Indebtedness of an Issuer (other than Indebtedness owing to any Subsidiary of an Issuer) or Indebtedness of any Subsidiary (other than Indebtedness owed to an Issuer or any of its Subsidiaries) or (z) any other purpose otherwise permitted under this Indenture, in each case within the later of 45 days after the application of Net Available Cash in accordance with clauses (A), (B) and (C) or the date that is 365 days from the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (A), (B), (C) or (D) above, the applicable Issuer or such Restricted Subsidiary shall retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions, the Issuers and their Restricted Subsidiaries shall not be required to apply any Net Available Cash in accordance herewith except to the extent that the aggregate Net Available Cash from all Asset Dispositions which are not applied in accordance with this covenant at any time exceeds $10.0 million. The Issuers shall not be required to make an offer for Securities pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in clause (A)) is less than $10.0 million for any particular Asset Disposition (which lesser amounts shall be carried forward for purposes of determining whether an offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). Notwithstanding the foregoing, the Issuers will not be required to comply with the terms of this Section 4.10 to the extent such Asset Disposition consists of a sale of the Missouri Properties; provided, however, that if the Net Available Cash from such Asset Disposition exceeds $7.5 million, the Issuers will be required to apply the amount of such excess in accordance with the provision of this Section 4.10. For the purposes of this Section 4.10, the following will be deemed to be cash: (x) the assumption by the transferee of Senior Secured Indebtedness of an Issuer, or Senior Secured Indebtedness of any Restricted Subsidiary of an Issuer and the release of such Issuer or such Restricted Subsidiary from all liability on such senior indebtedness in connection with such Asset Disposition (in which case the Issuers shall, without further action, be deemed to have applied such assumed Indebtedness in accordance with clause (A) of the preceding paragraph) and (y) securities received by an Issuer or any Restricted Subsidiary of an Issuer from the transferee that are promptly (and in any event within 60 days) converted by such Issuer or such Restricted Subsidiary into cash. 62 (b) In the event of an Asset Disposition that requires the purchase of Securities pursuant to clause (a)(iii)(B), the Issuers will be required to purchase Securities tendered pursuant to an offer by the Issuers for the Securities at a purchase price of 101% of the Accreted Value thereof or 101% of the principal amount thereof, as applicable, under clause (a)(iii)(B), and in each case plus accrued and unpaid interest, if any, to the purchase date in accordance with the procedures (including prorating in the event of oversubscription) set forth in this Indenture. If the aggregate purchase price of the Securities tendered pursuant to the offer is less than the Net Available Cash allotted to the purchase of the Securities, the Issuers will apply the remaining Net Available Cash in accordance with clauses (a) (iii) (C) or (D) above. (c) The Issuers will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue thereof. SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Issuers shall not, and shall not permit any of their Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with or for the benefit of any Affiliate of an Issuer, other than a Wholly-Owned Subsidiary (an "Affiliate Transaction") unless: (i) the terms of such Affiliate Transaction are no less favorable to such Issuer or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time of such transaction in arm's length dealings with a Person who is not such an Affiliate; (ii) in the event such Affiliate Transaction involves an aggregate amount in excess of $200,000, the terms of such transaction have been approved by a majority of the members of the Board of Directors of such Issuer and by a majority of the disinterested members of such Board, if any (and such majority or majorities, as the case may be, determines that such Affiliate Transaction satisfies the criteria in (i) above); and (iii) in the event such Affiliate Transaction involves an aggregate amount in excess of $1.0 million, the Issuers have received a written opinion from an independent investment banking firm of nationally recognized standing that such Affiliate Transaction is fair to such Issuer or such Restricted Subsidiary, as the case may be, from a financial point of view. 63 (b) The foregoing paragraph (a) shall not apply to (i) any Restricted Payment permitted to be made pursuant to Section 4.07, (ii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, or any stock options and stock ownership plans for the benefit of employees, officers and directors, consultants and advisors approved by the Board of Directors of the applicable Issuer, (iii) loans or advances to employees in the ordinary course of business of the Issuers or any of their Restricted Subsidiaries in aggregate amount outstanding not to exceed $250,000 to any employee or $1.0 million in the aggregate at any time, (iv) any transaction between Wholly-Owned Subsidiaries, (v) indemnification agreements with, and the payment of fees and indemnities to, directors, officers and employees of each of the Issuers and the Issuers' Restricted Subsidiaries and indemnification agreements with, or for the benefit of, officers and employees of BMCLP to the extent related to the performance of management services for the Issuers or any of their Subsidiaries, in each case in the ordinary course of business, (vi) transactions pursuant to agreements in existence on the Issue Date (other than with BMCLP) which are (x) described in the Offering Memorandum or (y) otherwise, in the aggregate, immaterial to the Issuers and their Restricted Subsidiaries taken as a whole, (vii) any employment, noncompetition or confidentiality agreements entered into by the Issuers or any of their Restricted Subsidiaries with its employees in the ordinary course of business, (viii) the issuance of Capital Stock of an Issuer (other than Disqualified Stock), (ix) the acquisition of Managed Affiliate Notes provided that the aggregate principal amount thereof (including the Managed Affiliate Notes outstanding on the Issue Date) does not exceed $20 million at any time outstanding; (x) the Managed Affiliate Management Agreements, and (xi) provided that no Default or Event of Default shall have occurred and be continuing, payments to BMCLP for services rendered to the Issuers and the Restricted Subsidiaries under the Administrative Management Agreements not to exceed in any fiscal year in the aggregate the remainder of (A) the lesser of (1) the greater of $2 million or 15% of Media Cashflow for such fiscal year or (2) $5 million over (B) the payments to BMCLP under management agreements between BMCLP and Managed Affiliates in such fiscal year provided that the obligations to make such payments to BMCLP under the Administrative Management Agreements constitute Subordinated Obligations and the terms of such subordination are no less favorable to the holders of senior indebtedness (including the Securities) than the terms set forth in the Administrative Management Agreements between the Issuers and BMCLP on the Issue Date. SECTION 4.12. LIMITATION ON LIENS. The Issuers shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Liens except for Permitted Liens. 64 SECTION 4.13. CORPORATE EXISTENCE. Subject to Article 5 hereof, each Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate, partnership or other existence, and the corporate, partnership or other existence of each Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Subsidiary and the rights (charter and statutory), licenses and franchises of the Issuers and their Subsidiaries; provided, however, that the Issuers shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary, if the Board of Directors of the applicable Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuers and their Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Securityholders. SECTION 4.14. CHANGE OF CONTROL. (a) Upon the occurrence of a Change of Control, each Securityholder will have the right to require the Issuers to purchase all or any part of such Securityholder's Securities, in the case of a repurchase date prior to December 15, 1999, at a purchase price in cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Securityholders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date) and for any repurchase date on or after December 15, 1999, at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Security holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date) (such applicable purchase price being hereinafter referred to as the "Change of Control Purchase Price"). (b) Within 30 days following any Change of Control, unless the Issuers have mailed a redemption notice with respect to all the outstanding Securities in connection with such Change of Control, the Issuers shall mail a notice to each Securityholder with a copy to the Trustee stating: (i) that a Change of Control has occurred and that such Securityholder has the right to require the Issuers to repurchase such Securityholder's Securities at a purchase price in cash equal to the Change of Control Purchase Price; (ii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and 65 (iii) the procedures determined by the Issuers, consistent with this Indenture, that a Securityholder must follow in order to have its Securities repurchased. (c) Securityholders electing to have a Security repurchased will be required to surrender the Security, with the form entitled "Option of Securityholder to Elect Purchase" on the reverse of the Security completed, to the Issuers at the address specified in the notice at least 10 Business Days prior to the repurchase date. Securityholders will be entitled to withdraw their election if the Trustee or the Issuers receive not later than three Business Days prior to the repurchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the Securityholder, the principal amount of the Security which was delivered for repurchase by the Securityholder and a statement that such Securityholder is withdrawing his election to have such Security purchased. (d) On the repurchase date, all Securities repurchased by the Issuers under this Section 4.14 shall be delivered by the Trustee for cancellation, and the Issuers shall pay the repurchase price plus accrued and unpaid interest, if any, to the Securityholders entitled thereto. (e) The Issuers shall to the extent applicable comply with any tender offer rules under the Exchange Act which may then be applicable, including Rule 14e-1, in connection with any offer required to be made by the Issuers to repurchase the Securities as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relative to the Issuers' obligation to make an offer to repurchase the Securities as a result of a Change of Control, the Issuers shall comply with the applicable securities laws and regulations and will not be deemed to have breached their obligations under such provisions of this Indenture by virtue thereof. SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES. The Issuers shall not permit any of their Restricted Subsidiaries to issue any Capital Stock to any Person (other than to an Issuer or a Wholly-Owned Subsidiary of an Issuer) or permit any Person (other than an Issuer or a Wholly-Owned Subsidiary of an Issuer) to own any Capital Stock of a Restricted Subsidiary of an Issuer, if in either case as a result thereof such Restricted Subsidiary would no longer be a Restricted Subsidiary of an Issuer; provided, however, that this provision shall not prohibit (x) the Issuers or any of their Restricted Subsidiaries from selling, leasing or otherwise disposing of 100% of the Capital Stock of any Restricted Subsidiary in accordance with Section 4.10 and Section 66 5.01 hereof or (y) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this Indenture. SECTION 4.16. LIMITATION ON SALE/LEASEBACK TRANSACTION. The Issuers shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into, Guarantee or otherwise become liable with respect to any Sale/Leaseback Transaction with respect to any property or assets unless (i) the Issuers or such Restricted Subsidiary, as the case may be, would be entitled, pursuant to this Indenture, to Incur Indebtedness secured by a Permitted Lien on such property or assets in an amount equal to the Attributable Indebtedness with respect to such Sale/Leaseback Transaction, (ii) the net cash proceeds from such Sale/Leaseback Transaction are at least equal to the fair market value of the property or assets subject to such Sale/Leaseback Transaction (such fair market value determined, in the event such property or assets have a fair market value in excess of $1.0 million, no more than 30 days prior to the effective date of such Sale/Leaseback Transaction, by the Board of Directors of BMC as evidenced by a resolution of such Board) and (iii) the net cash proceeds of such Sale/Leaseback Transaction are applied in accordance with the provisions described under Section 4.10. SECTION 4.17. LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES. (a) The Issuers may designate any Subsidiary of an Issuer (other than a Subsidiary of an Issuer which owns Capital Stock of a Restricted Subsidiary) as an "Unrestricted Subsidiary" under this Indenture (a "Designation") only if: (i) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and (ii) the Issuers would be permitted under this Indenture to make an Investment in Unrestricted Subsidiaries at the time of Designation (assuming the effectiveness of such Designation) in an amount (the "Designation Amount") equal to the sum of (x) fair market value of the Capital Stock of such Subsidiary owned by the Issuers and the Restricted Subsidiaries on such date and (y) the aggregate amount of other Investments of the Issuers and the Restricted Subsidiaries in such Subsidiary on such date; and (iii) except in the case of a newly formed or a newly acquired Subsidiary, the Issuers would be permitted to incur $1.00 of additional Indebtedness pursuant 67 to paragraph (a)(ii) of Section 4.09 at the time of Designation (assuming the effectiveness of such Designation). (b) In the event of any such Designation, the Issuers shall be deemed to have made an Investment constituting a Restricted Payment pursuant to Section 4.07 for all purposes of this Indenture (including, without limitation, the definition of Permitted Investment) in the Designation Amount. (c) The Issuers shall not, and shall not permit any Restricted Subsidiary to, at any time (x) provide direct or indirect credit support for or a guarantee of any Indebtedness of any Unrestricted Subsidiary (including of any undertaking, agreement or instrument evidencing such Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly liable for any Indebtedness which provides that the holder thereof may (upon notice, lapse of time or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity upon the occurrence of a default with respect to any Indebtedness of any Unrestricted Subsidiary (including any right to take enforcement action against such Unrestricted Subsidiary), except, in the case of clause (x) or (y), to the extent permitted under Section 4.07. (d) The Issuers may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then constitute a Restricted Subsidiary, if: (i) no Default shall have occurred and be continuing at the time of and after giving effect to such Revocation; and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if Incurred at such time, have been permitted to be Incurred for all purposes of this Indenture. All Designations and Revocations must be evidenced by Board Resolutions of the Issuers delivered to the Trustee certifying compliance with the foregoing provisions. SECTION 4.18. FUTURE NOTE GUARANTORS. The Issuers shall cause each newly organized or acquired Restricted Subsidiary to execute and deliver to the Trustee pursuant to Section 10.07 (a) a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of this Indenture as a Subsidiary Guarantor and (b) a Subsidiary Guarantee. 68 SECTION 4.19. LIMITATION ON BUSINESS The Issuers shall not, and shall not permit any of their Restricted Subsidiaries to, engage substantially in any business other than a Permitted Business. SECTION 4.20. FURTHER INSTRUMENTS AND ACTS. The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Issuers, except as otherwise set forth herein, but the Trustee may require of the Issuers full information and advice as to the performance of the covenants, conditions and agreements contained herein, and upon request of the Trustee, the Issuers will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture. ARTICLE 5 SUCCESSORS SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS. No Issuer shall consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not an Issuer) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Issuer under the Securities and this Indenture; (ii) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; 69 (iii) immediately after giving effect to such transaction, the Successor Company (A) shall have a Consolidated Net Worth equal or greater to the Consolidated Net Worth of the applicable Issuer immediately prior to such transaction and (B) shall be able to incur at least an additional $1.00 of Indebtedness pursuant to paragraph (a)(ii) of Section 4.09; and (iv) such Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and (v) there has been delivered to the Trustee an Opinion of Counsel to the effect that holders of Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such consolidation, merger, conveyance, transfer or lease and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such consolidation, merger, conveyance, transfer or lease had not occurred. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the applicable Issuer under this Indenture, but, in the case of a lease of all or substantially all its assets, the applicable Issuer will not be released from the obligation to pay the principal of and interest on the Securities. Notwithstanding clauses (ii) and (iii), of Section 5.01, any Restricted Subsidiary of an Issuer may consolidate with, merge into or transfer all or part of its properties and assets to the applicable Issuer. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. (a) An "Event of Default" occurs if: 70 (i) there is a default in any payment of interest on any Security when due, continued for 30 days; (ii) there is a default in the payment of principal of any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) there is a failure by an Issuer to comply with its obligations under Section 5.01, Section 4.14 or Section 4.10; (iv) there is failure by an Issuer to comply for 30 days after notice with any of its obligations under Section 4.01, 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 or 4.19 hereof (in each case, other than a failure to purchase Securities which shall constitute an Event of Default under clause (ii) above); (v) the failure by an Issuer to comply for 60 days after notice with its other agreements contained in this Indenture; (vi) Indebtedness of an Issuer or any Restricted Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $1.0 million and such default shall not have been cured after a 10-day period; (vii) any judgment or decree for the payment of money in excess of $1.0 million (to the extent not covered by insurance) is rendered against an Issuer or a Significant Subsidiary and such judgment or decree shall remain undischarged or unstayed for a period of 60 days after such judgment becomes final and nonappealable (the "judgment default provision"); (viii) any Subsidiary Guarantee by a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or any Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirms its obligations under this Indenture or its Subsidiary Guarantee and such Default continues for 10 days; (ix) an Issuer or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law: 71 (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, (E) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it, or (F) takes any corporate action to authorize or effect any of the foregoing; or (x) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against an Issuer or any of its Significant Subsidiaries in an involuntary case, (B) appoints a Custodian of an Issuer or any of its Significant Subsidiaries or for all or substantially all of the property of an Issuer or any of its Significant Subsidiaries, or (C) orders the liquidation of an Issuer or any of its Significant Subsidiaries, and the order or decree remains unstayed and in effect for 60 consecutive days. (b) The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. (c) A Default under clause (iv) or (v) of Section 6.01(a) hereof is not an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Securities notifies the Issuers or such Subsidiary Guarantor, as the case may be, of the Default and the Issuers or such Subsidiary Guarantor, as the case may be, does 72 not cure such Default within the time specified in such clause (iv) or (v) after receipt of the notice. SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of Default specified in clause (ix) or (x) of Section 6.01(a) with respect to an Issuer or any Subsidiary Guarantor) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the then outstanding Securities by notice to the Issuers, may declare (a "Declaration") (i) in the case of a Declaration that occurs prior to December 15, 1999, the Accreted Value of all the Securities then outstanding plus accrued interest on the Securities to the date of acceleration, and (ii) in the case of a Declaration that occurs on or after December 15, 1999, the entire principal amount of all the Securities then outstanding plus accrued interest to the date of acceleration (the "Default Amount"). Upon any such Declaration, the Default Amount shall be due and payable immediately. If an Event of Default specified in clause (ix) or (x) of Section 6.01(a) occurs with respect to an Issuer or any of the Subsidiary Guarantors, the Default Amount shall ipso facto become and be immediately due and payable without any Declaration or other act on the part of the Trustee or any Securityholder. The Holders of a majority in aggregate principal amount of the then outstanding Securities by written notice to the Trustee may rescind any Declaration if all Events of Default then continuing (other than any Events of Default with respect to the nonpayment of principal of or interest on any Security which has become due solely as a result of such Declaration) have been cured, and may waive any Default other than a Default with respect to a covenant or provision that cannot be modified or amended without the consent of each Securityholder pursuant to Section 9.02 hereof. SECTION 6.03. OTHER REMEDIES. (a) If an Event of Default occurs and is continuing, the Trustee and the Securityholders may pursue any available remedy to collect the payment of principal, premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. 73 SECTION 6.04. WAIVER OF PAST DEFAULTS. Securityholders of not less than a majority in aggregate principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences, except a continuing Default or Event of Default in the payment of the principal, premium, if any, or interest on any Security (other than principal, premium (if any) or interest which has become due solely as a result of a Declaration) or a Default or Event of Default that cannot be modified or amended without the consent of the Holder of each outstanding Security affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05. CONTROL BY MAJORITY. Securityholders of a majority in principal amount of the Securities then outstanding voting as a single class may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Securityholders or that may involve the Trustee in personal liability. SECTION 6.06. LIMITATION ON SUITS. (a) A Securityholder may pursue a remedy with respect to this Indenture or the Securities only if: (i) the Securityholder has previously given to the Trustee written notice of a continuing Event of Default; (ii) the Holders of at least 25% in principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy; (iii) such Securityholder or Securityholders offer, and, if requested, provide, to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense; 74 (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of security or indemnity; and (v) during such 60-day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee, in the reasonable opinion of such Trustee, a direction inconsistent with the request. (b) A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Securityholder to receive payment of principal, premium, if any, and interest on the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Securityholder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(a)(i) or (ii) or an acceleration pursuant to Section 6.02 occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against an Issuer or any Subsidiary Guarantor or any other obligor on the Securities for the whole amount of principal, premium, if any, and accrued interest remaining unpaid on the Securities and interest on overdue principal, premium, if any, and, to the extent lawful, interest on overdue installments of interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including any advances made by the Trustee and the reasonable compensation, expenses and disbursements of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof) and the Securityholders allowed in any judicial proceedings relative to the Issuers or any Subsidiary Guarantor (or any other obligor on the Securities), 75 its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Securityholder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Securityholders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Securityholder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding. SECTION 6.10. PRIORITIES. (a) If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: (i) First: to the Trustee, its agents and attorneys for amounts due under Section 7.07, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; (ii) Second: if the Securityholders are forced to proceed against the Issuer directly without the Trustee, to the Securityholders for their collection costs; (iii) Third: to the Securityholders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, premium, if any, and interest, respectively; and 76 (iv) Fourth: to the Issuers or, to the extent the Trustee collects any amount pursuant to Article 10 hereof from any Subsidiary Guarantor, to such Subsidiary Guarantor, or to such party as a court of competent jurisdiction shall direct. (b) The Trustee may fix a record date and payment date for any payment to Securityholders. SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Securityholder pursuant to Section 6.06 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 7 TRUSTEE SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances and in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee undertakes to perform only those duties as are specifically set forth in this Indenture and the duties of the Trustee shall be determined solely by the express provisions of this Indenture, the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 77 (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the same to determine whether or not they conform to the requirements of this Indenture. (c) Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers. Assets held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 78 SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document unless the Trustee has reason to believe such fact or matter is not true. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers or any Subsidiary Guarantor shall be sufficient if signed by an Officer of an Issuer or any Subsidiary Guarantor. (f) The permissive rights of the Trustee to do certain things enumerated in this Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than its negligence or wilful default with respect to such permissive rights. (g) Except for an Event of Default under 6.01(a)(i) (other than with respect to Additional Interest) or (ii) hereof, the Trustee shall not be deemed to have notice of any Default or Event of Default unless (i) specifically notified in writing of such event by an Issuer or the Securityholders of not less than 25% in aggregate principal amount of Securities outstanding or (ii) a Responsible Officer of the Trustee has actual knowledge of such Default or Event of Default; as used herein, the term "actual knowledge" means the actual fact or statement of knowing, without any duty to make any investigation with regard thereto. 79 SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuers, any Subsidiary Guarantor or any Affiliate of an Issuer or any Subsidiary Guarantor with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11 hereof. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Securities or the Subsidiary Guarantees, it shall not be accountable for the Issuers' use of the proceeds from the Securities or any money paid to an Issuer or upon the direction of an Issuer under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Securities or the Subsidiary Guarantees or any other document in connection with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication. SECTION 7.05. NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default in any payment of principal or interest on any Security, the Trustee may withhold the notice if a committee of its officers in good faith determines that withholding the notice is in the interest of the Securityholders. In addition, each Issuer is required to deliver to the Trustee, within 90 days after the end of each fiscal year of such Issuer, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Issuers shall also deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events which would constitute a Default or an Event of Default. SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS. (a) Within 60 days after each June 15 beginning with the June 15 following the date of this Indenture, the Trustee shall mail to the Securityholders a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) 80 has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b), (c) and (d). (b) A copy of each report at the time of its mailing to the Securityholders shall be filed with the Commission and each stock exchange, if any, on which the Securities are listed. The Issuers shall promptly notify the Trustee if and when the Securities are listed on any stock exchange. SECTION 7.07. COMPENSATION AND INDEMNITY. (a) Each of the Issuers and the each of the Subsidiary Guarantors, jointly and severally, shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. Each of the Issuers and each of the Subsidiary Guarantors, jointly and severally, shall reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. (b) Each of the Issuers and each of the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder, except as set forth below in subparagraph (d). The Trustee shall notify the Issuers and each of the Subsidiary Guarantors promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuers or any Subsidiary Guarantor shall not relieve the Issuers or any of the Subsidiary Guarantors of their Obligations hereunder. The Trustee may have separate counsel and each of the Issuers and each of the Subsidiary Guarantors, jointly and severally, shall pay the reasonable fees and expenses of such counsel. Neither the Issuers nor any Subsidiary Guarantor need pay for any settlement made without its consent, which consent shall not be unreasonably withheld. (c) The obligations of each of the Issuers and each of the Subsidiary Guarantors under this Section 7.07 shall survive the resignation or removal of the Trustee and the satisfaction and discharge or termination of this Indenture. (d) Notwithstanding subparagraphs (a) or (b) above, neither the Issuers nor any Subsidiary Guarantor need reimburse any expense or indemnify against any loss 81 or liability incurred by the Trustee through its own negligence, bad faith or willful misconduct. (e) To secure the Issuers' and each of the Subsidiary Guarantor's payment obligations in this Section, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, and interest on particular Securities. Such Lien shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. (f) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(ix) or (x) hereof occurs, the expenses and the compensation for such services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.08. REPLACEMENT OF TRUSTEE. (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. (b) The Trustee may resign at any time and be discharged from the trust hereby created by so notifying the Issuers. The Securityholders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the Trustee and the Issuers. The Issuers may remove the Trustee if: (i) the Trustee fails to comply with Section 7.10 hereof; (ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (iii) a Custodian, receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall notify each Securityholder of such event and promptly appoint a successor Trustee. Within one year after the successor Trustee takes 82 office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers. (d) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to each Securityholder. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers' and each of the Subsidiary Guarantor's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. (e) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, any of the Subsidiary Guarantors or the Securityholders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) If the Trustee after written request by any Securityholder who has been a Securityholder for at least six months fails to comply with Section 7.10, such Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to another corporation, the resulting, surviving or transferee corporation without any further act shall, if such resulting, surviving or transferee corporation is otherwise eligible hereunder, be the successor Trustee; provided, however, that such corporation shall be otherwise qualified and eligible under this Article Seven. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. 83 (a) There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or the District of Columbia authorized under such laws to exercise corporate trustee power, shall be subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority and shall have a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition. (b) This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall comply with TIA Section 310(b). The provisions of TIA Section 310 shall also apply to the Issuers and each of the Subsidiary Guarantors, as obligor of the Securities. SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. The provisions of TIA Section 311 shall apply to the Issuers and each of the Subsidiary Guarantors as obligor on the Securities. ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a) When (i) the Issuers deliver to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.07 hereof) canceled or for cancellation or (ii) all outstanding Securities have become due and payable whether at maturity or as a result of a Notice of Redemption and the Issuers irrevocably deposit with the Trustee funds sufficient to pay at maturity or redemption all outstanding Securities, including interest thereon (other than Securities replaced pursuant to Section 2.07 hereof), and if in either case the Issuers pay all other sums payable hereunder by the Issuers, then this Indenture shall, subject to Sections 8.01(e) and 8.06 hereof, cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Issuers 84 accompanied by an Officers' Certificate and an Opinion of Counsel and at the cost and expense of the Issuers. (b) Subject to Sections 8.01(e), 8.02 and 8.06 hereof, the Issuers at any time may terminate (i) all of their obligations under the Securities and this Indenture ("legal defeasance option") or (ii) all obligations under Sections 3.09, 4.04(a), (b) and (c), 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.19 or 5.01(iii) and 5.01(iv) and the operation of Sections 6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi) and 6.01(a)(vii) (as well as 6.01(a)(ix) and 6.01(a)(x) hereof but only with respect to Significant Subsidiaries) ("covenant defeasance option"). The Issuers may exercise their legal defeasance option notwithstanding the prior exercise of their covenant defeasance option. (c) If the Issuers exercise their legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default. If the Issuers exercise their covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified in Section 6.01(a)(iv), 6.01(a)(vi), 6.01(a)(vii) or 6.01(a)(viii) (or 6.01(a)(ix) and 6.01(a)(x) but only with respect to Significant Subsidiaries which are Subsidiary Guarantors), or because of the failure of the Issuers or the Subsidiary Guarantors to comply with Sections 5.01(iii) or 5.01(iv). (d) Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate. (e) Notwithstanding clauses (a) and (b) above, the Issuers' obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.01(d), 8.04, 8.05 and 8.06 hereof and the obligations of each Subsidiary Guarantor under Article 10 in respect thereof shall survive until the Securities have been paid in full. Thereafter, the Issuers' obligations in Sections 7.07, 8.04 and 8.05 hereof and the obligations of Subsidiary Guarantors under Article 10 in respect thereof shall survive. SECTION 8.02. CONDITIONS TO DEFEASANCE. (a) The Issuers may exercise their legal defeasance option or their covenant defeasance option only if: (i) the Issuers irrevocably deposit in trust with the Trustee money or U.S. Government Obligations in amounts (including interest, but without consideration of any reinvestment of such interest) and maturities sufficient, but in the case of the 85 legal defeasance option only, not more than such amounts (as certified by a nationally recognized firm of independent public accountants), to pay and discharge at their Stated Maturity (or such earlier redemption date as the Issuers shall have specified to the Trustee) the principal of, premium, if any, and interest on all outstanding Securities to maturity or redemption, as the case may be, and to pay all of the sums payable by them hereunder; provided, that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal, premium, if any, and interest with respect to the Securities; (ii) in the case of the legal defeasance option only, 123 days pass after the deposit is made and during the 123 day period no Event of Default specified in Section 6.01(ix) or (x) hereof with respect to an Issuer or any Subsidiary Guarantor occurs which is continuing at the end of the period; (iii) no Default or Event of Default has occurred and is continuing on the date of such deposit and after giving effect thereto; (iv) the deposit does not constitute a default under any other agreement binding on an Issuer; (v) the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940, as amended; (vi) in the case of the legal defeasance option, the Issuers deliver to the Trustee an Opinion of Counsel stating that (x) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (vii) in the case of the covenant defeasance option, the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same 86 amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (viii) the Issuers deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities as contemplated by this Article 8 have been complied with. (b) In order to have money available on a payment date to pay principal, premium, if any, or interest on the Securities, the U.S. Government Obligations deposited pursuant to preceding clause (a) shall be payable as to principal or interest at least one Business Day before such payment date in such amounts as shall provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option. (c) Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article 3 hereof. SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal, premium, if any, and interest on the Securities. SECTION 8.04. REPAYMENT TO THE ISSUERS. (a) The Trustee and the Paying Agent shall promptly pay to the Issuers upon written request any excess money or securities held by them at any time; provided, however, that the Trustee shall not pay any such excess to the Issuers unless the amount remaining on deposit with the Trustee, after giving effect to such transfer are sufficient to pay principal, premium, if any, and interest on the outstanding Securities, which amount shall be certified by independent public accountants. (b) The Trustee and the Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal, premium, if any, or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Issuers shall have either caused notice of such payment to be mailed to each Securityholder entitled thereto no less than 30 days prior to 87 such repayment or within such period shall have published such notice in a financial newspaper of widespread circulation published in the City of New York. After payment to the Issuers, Securityholders entitled to the money must look to the Issuers and the Subsidiary Guarantors for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Issuers and the Subsidiary Guarantors, jointly and severally, shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers' and each of the Guarantor's Obligations under this Indenture and the Securities and the Subsidiary Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that if an Issuer or any Subsidiary Guarantor has made any payment of principal of, premium, if any, or interest on any Securities because of the reinstatement of its Obligations, such Issuer or any of the Subsidiary Guarantors, as the case may be, shall be subrogated to the rights of the Securityholders to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE 9 AMENDMENTS SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS. 88 (a) Notwithstanding Section 9.02 of this Indenture, the Issuers, when authorized by Board Resolutions, and the Trustee may amend or supplement this Indenture or the Securities without the consent of any Securityholder: (i) to cure any ambiguity, omission, defect or inconsistency or to provide for the assumption by a successor corporation, partnership trust or limited liability company of the obligation of an Issuer under this Indenture; provided, that such amendment or supplement does not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect the rights of any Securityholder in any respect; (ii) to comply with Article 5 hereof; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code of 1986, as amended, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Internal Revenue Code of 1986, as amended; (iv) to add Guarantees with respect to the Securities; (v) to add to the covenants of the Issuers or the Subsidiary Guarantors for the benefit of the Securityholders or to surrender any right or power herein conferred upon the Issuer or the Subsidiary Guarantors; (vi) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the TIA; (vii) to make any change that does not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect the rights of any Securityholder in any respect; or (viii) to evidence or provide for a replacement Trustee under Section 7.08 hereof; provided, that the Issuers have delivered to the Trustee an Opinion of Counsel stating that any such amendment or supplement complies with the provisions of this Section 9.01. 89 (b) Upon the request of the Issuers and the Subsidiary Guarantors accompanied by Board Resolutions of their respective Boards of Directors or board of managers, as the case may be, authorizing the execution of any such supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Issuers and the Subsidiary Guarantors in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into such supplemental indenture which affects its own rights, duties or immunities under this Indenture or otherwise. (c) After an amendment or supplement under this Section 9.01 becomes effective, the Issuers shall mail to all Securityholders a notice briefly describing such amendment or supplement. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section. SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS. (a) The Issuers, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture or the Securities with the written consent of the Securityholders of not less than a majority in aggregate principal amount of the Securities, voting as a single class, then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) and any existing Default and its consequences (including, without limitation, an acceleration of the Securities) or compliance with any provision of this Indenture or the Securities may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities (including consents obtained in connection with a tender offer or exchange offer for the Securities). Furthermore, subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) may waive compliance in a particular instance by the Issuers with any provision of this Indenture or the Securities. However, without the consent of each Securityholder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Securities held by a non-consenting Holder): (i) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver; 90 (ii) reduce the rate of or extend the time for payment of any interest on any Security; (iii) reduce the principal of or extend the Stated Maturity of any Security or alter the redemption or repurchase provisions (including without limitation Sections 3.07, 3.09, 4.11 and 4.14 hereof) with respect thereto; (iv) reduce the premium payable upon the redemption or repurchase of any Security or change the time at which any Security may be redeemed in accordance with Section 3.07; (v) make any Security payable in money other than that stated in the Security; (vi) make any change in Section 6.04 or 6.07 hereof or in this Section 9.02(a); or (vii) waive a Default or Event of Default in the payment of principal of premium, if any, or interest on, or redemption payment with respect to, any or Security (excluding any principal or interest due solely as a result of the occurrence of a Declaration); (viii) impair the right of any Holder to receive payment of principal of and interest on such Holder's Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's Securities. (b) Upon the request of the Issuer and the Subsidiary Guarantors accompanied by Board Resolutions of their respective Boards of Directors or board of managers, as the case may be, authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Securityholders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Issuers and the Subsidiary Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. 91 (c) It shall not be necessary for the consent of the Securityholders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. (d) After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuers shall mail to all Securityholders a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver. SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or supplement to this Indenture or the Securities shall comply with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. (a) Until an amendment, supplement or waiver becomes effective, a consent to it by a Securityholder is a continuing consent by the Securityholder and every subsequent Securityholder or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Securityholder or subsequent Securityholder may revoke the consent as to its Security if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder. (b) The Issuers may fix a record date for determining which Securityholders must consent to such amendment, supplement or waiver. If the Issuers fix a record date, the record date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Securityholders furnished to the Trustee prior to such solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the Issuers shall designate. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. (a) Securities authenticated and delivered after the execution of any supplemental indenture may bear a notation in form approved by the Trustee as to any matter provided for in such amendment, supplement or waiver on any Security thereafter authenticated. The 92 Issuers in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment, supplement or waiver. (b) Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver. SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amendment, waiver or supplemental indenture authorized pursuant to this Article 9 if the amendment, waiver or supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, waiver or supplemental indenture, the Trustee shall be entitled to receive and, subject to Section 7.01, shall be fully protected in relying upon, in addition to the documents required by Section 11.04, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment, waiver or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Issuers in accordance with its terms. ARTICLE 10 SUBSIDIARY GUARANTEE OF SECURITIES SECTION 10.01. SUBSIDIARY GUARANTEE (a) Each Subsidiary Guarantor hereby jointly and severally irrevocably and unconditionally guarantees, as a primary obligor and not a surety, to each Securityholder of a Security now or hereafter authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Securities or the Obligations of the Issuers hereunder or thereunder, (i) the due and punctual payment of the principal, premium, if any, interest (including post-petition interest in any proceeding under any Bankruptcy Law whether or not an allowed claim in such proceeding) on overdue principal, premium, if any, and interest, if lawful on such Security, and (ii) all other monetary Obligations payable by the Issuers under this Indenture (including under Section 7.07 hereof) and the Securities (all of the foregoing being hereinafter collectively called the "Guaranteed Obligations"), when and as the same shall become due and payable, whether by acceleration thereof, call for redemption or otherwise (including amounts that would become due but for the operation 93 of the automatic stay under Section 362(a) of the Bankruptcy Code), in accordance with the terms of any such Security and of this Indenture, subject, however, in the case of (i) and (ii) above, to the limitations set forth in Section 10.04 hereof. Each Subsidiary Guarantor hereby agrees that its Obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any failure to enforce the provisions of any such Security or this Indenture, any waiver, modification or indulgence granted to the Issuers with respect thereto, the recovery of any judgment against an Issuer, any action to enforce the same, by the Securityholders or the Trustee, the recovery of any judgment against the Issuer, any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, filing of claims with a court in the event of a merger or bankruptcy of an Issuer, any right to require a proceeding first against the Issuers, the benefit of discussion, protest or notice with respect to any such Security or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Subsidiary Guarantee shall not be discharged as to any such Security except by payment in full of the principal thereof, premium, if any, and all accrued interest thereon. (b) Each Subsidiary Guarantor further agrees that this Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Securityholder or the Trustee to any Security held for payment of the Guaranteed Obligations. (c) Each Subsidiary Guarantor agrees that it shall not be entitled to, and hereby irrevocably waives, any right of subrogation in relation to the Securityholders or the Trustee in respect of any Guaranteed Obligations. Each Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor, on the one hand, and the Securityholders and the Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations may be accelerated as provided in Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (y) in the event of any Declaration of acceleration of such Guaranteed Obligations as provided in Article 6 hereof, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Subsidiary Guarantor for the purpose of this Article 10. (d) Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Securityholder in enforcing any rights under this Article 10. 94 (e) The Subsidiary Guarantee set forth in this Article 10 shall not be valid or become obligatory for any purpose with respect to a Security until the certificate of authentication on such Security shall have been signed by or on behalf of the Trustee. SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE. (a) To evidence each Subsidiary Guarantor's Subsidiary Guarantee set forth in this Article 10, each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee shall be placed on each Security authenticated and delivered by the Trustee. (b) This Indenture shall be executed on behalf of each Subsidiary Guarantor, and an Officer of each Subsidiary Guarantor shall sign the notation of the Subsidiary Guarantee on the Securities by manual or facsimile signature. If an Officer whose signature is on this Indenture or the notation of the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Security on which the Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless. Each Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of the Subsidiary Guarantee. (c) The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of each Subsidiary Guarantor. SECTION 10.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC. Upon failure of payment when due of any Guaranteed Obligation for whatever reason, each Subsidiary Guarantor will be obligated to pay the same immediately. Each Subsidiary Guarantor hereby agrees that its obligations hereunder shall be continuing, absolute and unconditional, irrespective of: the recovery of any judgment against an Issuer or any Subsidiary Guarantor; any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of an Issuer under this Indenture or any Security, by operation of law or otherwise; any modification or amendment of or supplement to this Indenture or any Security; any change in the corporate existence, structure or ownership of an Issuer, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting an Issuer or its assets or any resulting release or discharge of any obligation of an Issuer contained in this Indenture or any Security; the existence of any claim, set-off or other rights which any Subsidiary Guarantor may have at any time against an Issuer, the Trustee, any Securityholder or any other Person, whether in connection herewith or any 95 unrelated transactions; provided, that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; any invalidity or unenforceability relating to or against an Issuer for any reason of this Indenture or any Security, or any provision of applicable law or regulation purporting to prohibit the payment by an Issuer of the principal, premium, if any, or interest on any Security or any other Guaranteed Obligation; or any other act or omission to act or delay of any kind by an Issuer, the Trustee, any Securityholder or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Subsidiary Guarantors' obligations hereunder. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuers, protest, notice and all demand whatsoever and covenants that this Subsidiary Guarantee will not be discharged except by the complete performance of the obligations contained in the Securities, this Indenture and in this Article 10. Each Subsidiary Guarantor's obligations hereunder shall remain in full force and effect until this Indenture shall have terminated and the principal of and interest on the Securities and all other Guaranteed Obligations shall have been paid in full. If at any time any payment of the principal of or interest on any Security or any other payment in respect of any Guaranteed Obligation is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of an Issuer or otherwise, each Subsidiary Guarantor's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time, and this Article 10, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder to be subrogated to the rights of the payee against the Issuers with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Issuers in respect thereof. SECTION 10.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY. Each Subsidiary Guarantor and by its acceptance hereof each Securityholder hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, Federal and state fraudulent conveyance laws or other legal principles. To effectuate the foregoing intention, the Securityholders and each Guarantor hereby irrevocably agree that the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other 96 Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to Section 10.05 hereof, result in the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee not constituting such fraudulent transfer or conveyance under federal or state law. SECTION 10.05. CONTRIBUTION. In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a "Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from all other Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Issuers' obligations with respect to the Securities or any other Subsidiary Guarantor's obligations with respect to the Subsidiary Guarantee. SECTION 10.06. RELEASE. Upon the sale or disposition of all of the equity interests of a Subsidiary Guarantor to an entity which is not an Issuer or a Subsidiary of an Issuer, which is otherwise in compliance with this Indenture, such Subsidiary Guarantor shall be deemed released from all its obligations under this Indenture without any further action required on the part of the Trustee or any Securityholder and the Subsidiary Guarantee of such Subsidiary Guarantor shall terminate; provided, however, that any such termination shall occur if and only to the extent that all Obligations of each Subsidiary Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure, Indebtedness of an Issuer and the other Subsidiary Guarantors shall also terminate upon such release, sale or transfer; provided further, that without limiting the foregoing, any proceeds received by an Issuer or any Subsidiary of an Issuer from such transaction shall be applied as provided in Section 4.10 and Section 3.09. The Trustee shall deliver an appropriate instrument evidencing such release upon receipt of a request by the Issuers accompanied by an Officers' Certificate certifying as to the compliance with this Section 10.06. Any Subsidiary Guarantor not so released remains liable for the full amount of principal, premium, if any, and interest on the Securities as provided in this Article 10. SECTION 10.07. ADDITIONAL SUBSIDIARY GUARANTORS. Any Person that was not a Subsidiary Guarantor on the date of this Indenture may become a Subsidiary Guarantor by executing and delivering to the Trustee (a) a supplemental indenture in substantially the form and substance satisfactory to the Trustee, 97 which subjects such Person to the provisions (including, without limitation, the representations and warranties in this Article 10) of this Indenture as a Subsidiary Guarantor and (b) an Opinion of Counsel complying with Section 9.06 and to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning creditors' rights and equitable principles as may be acceptable to the Trustee in its discretion). The Subsidiary Guarantee of each Person described in this Section 10.07 shall apply to all Securities theretofore executed and delivered, notwithstanding any failure of such Securities to contain a notation of such Subsidiary Guarantee thereon. SECTION 10.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. (a) Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Subsidiary Guarantor with or into an Issuer or another Subsidiary Guarantor that is a Wholly-Owned Subsidiary of an Issuer or shall prevent any sale or conveyance of the property of a Subsidiary Guarantor as an entirety or substantially as an entirety, to an Issuer or another Subsidiary Guarantor that is a Wholly-Owned Subsidiary of an Issuer. Upon any such consolidation, merger, sale or conveyance, the Subsidiary Guarantee given by such Subsidiary Guarantor shall no longer have any force or effect. (b) Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Subsidiary Guarantor with or into a corporation or corporations other than an Issuer or another Subsidiary Guarantor (whether or not affiliated with the Subsidiary Guarantor), or successive consolidations or mergers in which a Subsidiary Guarantor or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of the property of a Subsidiary Guarantor as an entirety or substantially as an entirety, to a corporation other than an Issuer or another Subsidiary Guarantor (whether or not affiliated with the Subsidiary Guarantor); provided, however, that, subject to Sections 10.06 and 10.08(a), (x) (i) immediately after such transaction, and giving effect thereto, no Default or Event of Default shall have occurred as a result of such transaction and be continuing, or (ii) such transaction does not violate any covenants set forth in this Indenture, and (y) (i) the respective transaction is treated as an Asset Disposition for purposes of Section 4.10 and Section 3.09 hereof or (ii) if the surviving corporation is not the Subsidiary Guarantor, each Subsidiary Guarantor hereby covenants and agrees that, upon any such consolidation, merger, sale or conveyance, the Subsidiary Guarantee set forth in this Article 10, and the due and punctual performance and 98 observance of all of the covenants and conditions of this Indenture to be performed by such Subsidiary Guarantor, shall be expressly assumed (in the event that the Subsidiary Guarantor is not the surviving corporation in the merger), by supplemental indenture satisfactory in form to the Trustee of the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Subsidiary Guarantor, such successor corporation shall succeed to, and be substituted for, the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor. SECTION 10.09. SUCCESSORS AND ASSIGNS. This Article 10 shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Securityholders and, in the event of any transfer or assignment of rights by any Securityholder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY LAWS. Each Subsidiary Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive each such Subsidiary Guarantor from performing its Subsidiary Guarantee as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) each such Subsidiary Guarantor hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 11 MISCELLANEOUS SECTION 11.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. Until such time as this Indenture becomes qualified under the TIA, 99 the Issuers, the Subsidiary Guarantors and the Trustee shall be deemed subject to and governed by the TIA as if this Indenture were so qualified on the date hereof. SECTION 11.02. NOTICES. (a) Any notice or communication by the Issuers, any Subsidiary Guarantor or the Trustee to the other is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested), confirmed facsimile transmission or overnight air courier guaranteeing next day delivery, to the other's address: If to the Issuers or any of the Subsidiary Guarantors: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47708 Attention: Alan R. Brill If to the Trustee: United States Trust Company of New York 114 West 47th Street New York, NY 10036 Attention: Corporate Trust Administration Facsimile Number: (212) 852-1625 (b) The Issuers or the Trustee, by notice to the other, may designate additional or different addresses for subsequent notices or communications. (c) All notices and communications (other than those sent to Securityholders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if by facsimile transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. (d) Any notice or communication to a Securityholder shall be mailed by first class mail, postage prepaid, to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 100 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. (e) If a notice or communication is mailed to any Person in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. (f) If the Issuers mail a notice or communication to Securityholders, they shall mail a copy to the Trustee and each Agent at the same time. SECTION 11.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER SECURITYHOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Issuers, the Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Issuers and/or any of the Subsidiary Guarantors to the Trustee to take any action under this Indenture, the Issuers and/or any of the Subsidiary Guarantors, as the case may be, shall furnish to the Trustee: (i) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied (except with regard to an authentication order pursuant to Section 2.02(c) hereof, which shall require a certificate of two Officers); and (ii) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 101 SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall include: (i) a statement that the person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied. SECTION 11.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Securityholders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 11.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in New York City, or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. SECTION 11.08. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, agent, manager, stockholder or partner of an Issuer or its predecessors shall have any liability for any Obligations of an Issuer under the Securities or this Indenture or for any claim based on, 102 in respect of, or by reason of such Obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. This waiver and release are part of the consideration for issuance of the Securities. SECTION 11.09. DUPLICATE ORIGINALS. The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture. SECTION 11.10. GOVERNING LAW. This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. SECTION 11.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of any of the Subsidiary Guarantors, an Issuer or their respective Subsidiaries. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 11.12. SUCCESSORS. All agreements of the Issuers and the Subsidiary Guarantors in this Indenture and the Securities shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 11.13. SEVERABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 11.14. COUNTERPART ORIGINALS. This Indenture may be executed in any number of counterparts, each of which so executed shall be an original, but all of them together represent the same agreement. 103 SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 104 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above. SIGNATURES BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By_______________________ Name: Alan R. Brill Title:President BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By_______________________ Name: Alan R. Brill Title: President BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:_______________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President TRI-STATE BROADCASTING, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:_______________________ Name: Alan R. Brill Title: Vice President NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation its Manager By:_______________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:_______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: Vice President HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_______________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_______________________ Name: Alan R. Brill Title: President HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_______________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By: _______________________ Alan R. Brill, President NCR III, LLC, a Virginia Limited Liability Company By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation, its Manager By:_______________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_______________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_______________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:_______________________ Name: Alan R. Brill Title: President UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:_______________________ Name: Title: SCHEDULE 1 SUBSIDIARY GUARANTORS 1. BMC Holdings, LLC 2. Reading Radio, Inc. 3. Tri-State Broadcasting, Inc. 4. Northern Colorado Radio, Inc. 5. NCR II, Inc. 6. Central Missouri Broadcasting, Inc. 7. CMB II, Inc. 8. Northland Broadcasting, LLC 9. NB II, Inc. 10. Central Michigan Newspapers, Inc. 11. Cadillac Newspapers, Inc. 12. CMN Associated Publications, Inc. 13. Central Michigan Distribution Co., L.P. 14. Central Michigan Distribution Co., Inc. 15. Gladwin Newspapers, Inc. 16. Graph Ads Printing, Inc. 17. Midland Buyer's Guide, Inc. 18. St. Johns Newspapers, Inc. 19. Huron Holdings, LLC 20. Northern Colorado Holdings, LLC 21. NCR III, LLC 22. NCH II, LLC 23. Northland Holdings, LLC 24. CMN Holding, Inc. 25. Brill Radio Inc. 26. Brill Newspapers, Inc. 27. Huron P.S., LLC 28. Huron Newspapers, LLC SCHEDULE 2 LIENS/CAPITAL LEASES
MONTHLY BALANCE AS OF COMPANY LENDER DESCRIPTION PERMITTED LIENS PAYMENT 8-31-97 - ------------------ ------------------- -------------- -------------------- ---------- --------- CMB II............ Jefferson Bank PMF Equipment $ 3,850 $153,593 CMB II............ Town & Country Seller Financing 1st Lien Note/Stock 3,033 209,721 Communications Pledge CMB II............ Jefferson Bank Promissory Note Unsecured 3,155 141,614 CMBI.............. Ford Motor CL 94 Ford 447 3,881 Credit CMBI.............. Tower Company, CL FM Tower/ 12,500 370,545 Inc. Transmitter CMNI.............. Ford Motor CL 94 Ford Van 447 4,571 Credit CMNI.............. Ryder CL 98 Navistar Truck 2,410 104,200 and Stoughton Trailer CMNI.............. PX Investment CMN Building Mar 00 3,850 59,901 CMNI.............. FirstBank PMF Imagesetter 3,713 62,055 CMNI.............. Heller CL Inserting Machine 2,513 16,923 NB II............. Al Quarnstrom CL Equipment Lease 655 9,640 NB II............. QB Broadcasting, Seller Financing 1st Lien Note/Stock 9,074 628,118 Inc. Pledge NB, LLC........... Citicorp CL Broadcast 1,199 34,381 Equipment NB, LLC........... Colonial Pacific CL Computer 562 15,036 Equipment NB, LLC........... Republic Leasing CL Broadcast 584 14,973 Equipment NCRI.............. Philip Brewer Noncompete Subordinated 3,984 185,571 Agreement 2nd/Stock Pledge
1 EXHIBIT A THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL EXHIBIT A Page 2 ACCEPTABLE TO THE ISSUERS HEREOF THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT AN INITIAL INVESTOR PURCHASING AS DESCRIBED IN CLAUSE (1)(B) ABOVE FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT BE PERMITTED TO TRANSFER THIS NOTE TO AN INSTITUTIONAL ACCREDITED INVESTOR. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING PURSUANT TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUERS HEREOF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" EXHIBIT A Page 3 AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.(*) UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.(*) UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS - ---------------- (*) To be included in Restricted Securities only. (*) To be included in the Global Note only. EXHIBIT A Page 4 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.*/ THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET.SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE DATE OF THIS SECURITY IS DECEMBER 30, 1997. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF BRILL MEDIA COMPANY, LLC AT 812-423-6200 OR AT THE ADDRESS SET FORTH ON THE REVERSE OF THIS SECURITY. EXHIBIT A Page 5 CUSIP No: (Front of Security) No. $__________ BRILL MEDIA COMPANY, LLC BRILL MEDIA MANAGEMENT, INC. 12% Senior Notes due 2007, Series A BRILL MEDIA COMPANY, LLC, a Virginia limited liability company, and BRILL MEDIA MANAGEMENT, INC., a Virginia corporation, jointly and severally, promise to pay to ____________________________________, or its registered assigns, the principal sum of $____________ [For Global Notes add: , as such amount may be increased or decreased on the records of the Trustee,] on December 15, 2007. Interest Payment Dates: June 15 and December 15, commencing June 15, 1998. Interest Record Dates: June 1 and December 1 (whether or not a Business Day). Additional provisions of this Security are set forth on the other side of this Security. Dated: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _____________________________ Name: Alan R. Brill Title: President By: _____________________________ Name: Title: EXHIBIT A Page 6 BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By: _____________________________ Name: Alan R. Brill Title: President By: _____________________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:_________________________________ Authorized Officer EXHIBIT A Page 7 (Reverse of Security) 12% SENIOR NOTE DUE 2007, Series A Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. Interest. Brill Media Company LLC, a Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a Virginia corporation (together with BMC, the "Issuers"), jointly and severally, promise to pay interest on the principal amount of this Security at the rate and in the manner specified below. The Issuers shall pay, in cash, interest on the principal amount of this Security at the rate per annum of 7 1/2% per annum from the date of original issuance until December 15, 1999, and at a rate of 12% per annum from and including December 15, 1999 until maturity. The Issuers will pay interest semiannually in arrears on June 15 and December 15 of each year (each an "Interest Payment Date"), commencing June 15, 1998, or if any such day is not a Business Day on the next succeeding Business Day. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest shall accrue from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of the original issuance of the Securities. To the extent lawful, the Issuers shall pay interest on overdue principal at the rate of 2% per annum in excess of the then applicable interest rate on the Securities; they shall pay interest on overdue installments of interest (without regard to any applicable grace periods) at the same rate to the extent lawful. The rate of interest payable on this Security shall be subject to the assessment of additional interest (the "Additional Interest") as follows: (i) if neither the Exchange Offer Registration Statement (as defined below) nor the Shelf Registration Statement (as defined below) is filed within 60 days following the Issue Date (the "Filing Date"), Additional Interest shall accrue on the Initial Securities over and above the stated interest at a rate of 0.50% per annum for the first 60 days commencing on the 61st day after the Filing Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; (ii) if neither the Exchange Offer Registration Statement nor the Shelf Registration Statement is declared effective within 150 days following the Filing Date, Additional Interest shall accrue on the Initial Securities over and above the stated interest at a rate of 0.50% per annum for the first 120 days commencing on the 151st day after the Filing Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; or EXHIBIT A Page 8 (iii) if (A) the Issuers and the Subsidiary Guarantors have not exchanged all Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to 180 days after the Filing Date or (B) the Exchange Offer Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the second anniversary of the Issue Date (unless all the Securities have been sold thereunder), then Additional Interest shall accrue on the Initial Securities over and above the stated interest at a rate of 0.50% per annum for the first 30 days commencing on (x) the 181st day after the Filing Date with respect to the Securities validly tendered and not exchanged by the Issuers, in the case of (A) above, or (y) the day the Exchange Offer Registration Statement ceases to be effective or usable for its intended purpose in the case of (B) above, or (z) the day such Shelf Registration Statement ceases to be effective in the case of (C) above, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; provided, however, that the Additional Interest rate on the Securities may not exceed in the aggregate 1.5% per annum in any event; and provided further, that (1) upon the filing of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of (ii) above), or (3) upon the exchange of Exchange Securities for all Securities tendered (in the case of clause (iii)(A) above), or upon the effectiveness of the Exchange Offer Registration Statement which had ceased to remain effective (in the case of clause (iii)(B) above), or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iii)(C) above), Additional Interest on the Initial Securities as a result of such clause or the relevant subclause thereof, as the case may be, shall cease to accrue. "Exchange Offer" shall mean the exchange offer by the Issuers of Initial Securities for Exchange Securities pursuant to Section 2(a) of the Registration Rights Agreement. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Offering Memorandum or prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Interest Record Date" shall have the meaning provided on the front of this Security. EXHIBIT A Page 9 "Shelf Registration Statement" shall mean a "shelf" registration statement of the Issuers and the Subsidiary Guarantors pursuant to the provisions of the Registration Rights Agreement which covers all of the Registrable Notes (as defined therein) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Offering Memorandum contained therein, all exhibits thereto and all material incorporated by reference therein. 2. Method of Payment. The Issuers shall pay interest on this Security (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the Interest Record Date immediately preceding the Interest Payment Date, even if such Securities are cancelled after such Interest Record Date and on or before such Interest Payment Date. Securityholders must surrender Securities to a Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S. Legal Tender"). However, the Issuers may pay principal, premium, if any, and interest by its check payable in such U.S. Legal Tender. The Issuers may deliver any such interest payment to the Paying Agent or to a Securityholder at the Securityholder's registered address. 3. Paying Agent and Registrar. Initially, the Trustee will act as Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-registrar without prior notice to any Securityholder. The Issuers or any Subsidiary Guarantor may act in any such capacity. 4. Indenture. The Issuers issued the Securities under an Indenture, dated as of December 30, 1997 (the "Indenture"), among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the TIA as in effect on the date the Indenture is qualified, except as the Indenture otherwise provides. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Securities. The Securities are senior Obligations of the Issuers limited to $105,000,000 in aggregate principal amount. 5.(a) Optional Redemption. Except as indicated in the next succeeding paragraph, Securities will not be redeemable at the option of the Issuers prior to December 15, 2002. On and after such date, the Securities will be redeemable, at the Issuers' option, in whole or in part, at any time upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each Holder's registered address, at the following redemption prices (expressed in percentages of principal amount), if EXHIBIT A Page 10 redeemed during the 12-month period commencing on December 15th of the years set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date): Period Redemption Price 2002................................ 106.00% 2003................................ 104.00% 2004................................ 102.00% 2005 and thereafter................. 100.00% (b) Optional Redemption Upon Public Equity Offerings. In the event of the sale by an Issuer prior to December 15, 2000 of its Capital Stock (other than Disqualified Stock) in one or more Public Equity Offerings the Net Cash Proceeds of which are at least $25.0 million in the aggregate, the Issuers may, at their option, use the Net Cash Proceeds of such sale or sales of Capital Stock to redeem up to 25% of the aggregate principal amount of the aggregate principal amount of the Securities at a redemption price, in the case of a redemption date prior to December 15, 1999, equal to 112.0% of the Accreted Value thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) and for any redemption date on or after December 15, 1999, at a redemption price equal to 112.0% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date); provided, however, that after any such redemption the aggregate principal amount of the Securities outstanding must equal at least $79.0 million. In order to effect the foregoing redemption with the proceeds of any such sale of Capital Stock, the Issuers shall make such redemption not more than 90 days after the consummation of any such sale or sales of Capital Stock. 6. Mandatory Redemption. The Securities are not subject to mandatory redemption or sinking fund payments. 7. Repurchase at Option of Securityholder. (a) If there is a Change of Control, each Holder of Securities will have the right to require the Issuers to repurchase all or any part of such Holder's Securities, in the case of a repurchase date prior to December 15, 1999, at a purchase price in cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Securityholders of record on the relevant record date to receive interest due EXHIBIT A Page 11 on the relevant Interest Payment Date) and for any repurchase date on or after December 15, 1999, at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Securityholders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) (such applicable purchase price being hereinafter referred to as the "Change of Control Purchase Price"). Within 30 days following any Change of Control, the Issuers will mail a notice to each Securityholder stating (i) that a Change of Control has occurred and that such Securityholder has the right to require the Issuers to repurchase all or any part of such Securityholder's Securities at a repurchase price in cash equal to the Change of Control Purchase Price (subject to the right of Holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date); (ii) the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization after giving effect to such Change of Control); (iii) the repurchase date (which will be no earlier then 30 days nor later than 60 days from the date such notice is mailed); and (iv) the procedures, determined by the Issuers consistent with the Indenture, that a Securityholder must follow in order to have its Securities repurchased. Securityholders that are subject to an offer to repurchase may elect to have such Securities repurchased by completing the form entitled "Option of Securityholder to Elect Purchase" appearing below. (b) If an Issuer or a Subsidiary consummates any Asset Disposition, and when the aggregate amount of Net Available Cash from such an Asset Disposition exceeds $10 million (except as otherwise set forth in Section 4.10 of the Indenture), the Issuers shall be required to offer to purchase the maximum principal amount of Securities, that is in an integral multiple of $1,000, that may be purchased out of the Net Available Cash at 100% of the Accreted Value thereof if such purchase date occurs prior to December 15, 1999, and at 100% of the principal amount thereof if such purchase date occurs on or after December 15, 1999, in each case plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer in accordance with the procedures set forth in the Indenture. If the aggregate principal amount of Securities surrendered by Holders thereof exceeds the amount of Net Available Cash, the Securities to be redeemed shall be selected on a pro rata basis to the extent practicable. Securityholders that are the subject of an offer to purchase will receive an Asset Disposition Offer from the Issuers prior to any related purchase date and may elect to have such Securities purchased by completing the form entitled "Option of Securityholder to Elect Purchase" appearing below. 8. Notice of Redemption. Notice of redemption shall be mailed at least 30 days before the redemption date to each Holder whose Securities are to be redeemed at its registered address. Securities may be redeemed in part but only in whole multiples of $1,000, unless all of the Securities held by a Securityholder are to be redeemed. On and after the redemption date, interest ceases to accrue on Securities or portions of them called for redemption. EXHIBIT A Page 12 9. Registration Rights. Pursuant to the Registration Rights Agreement, and subject to certain terms and conditions stated therein, the Issuers will be obligated to consummate an Exchange Offer pursuant to which the Holders of the Initial Securities shall have the right to exchange this Security for Exchange Securities, which have been registered under the Securities Act, in like principal amount and having terms identical in all material respects to the Initial Securities except that the Exchange Notes (i) shall contain no restrictive legend thereon and (ii) shall not be entitled to any further registration rights hereunder or to any Additional Interest. 10. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Securityholder among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities during a period beginning at the opening of business on a Business Day 15 days before the day of any selection of Securities to be redeemed and ending at the close of business on the day of selection or during the period between an Interest Record Date and the corresponding Interest Payment Date. 11. Persons Deemed Owners. Prior to due presentment to the Trustee for registration of the transfer of this Security, the Trustee, any Agent and the Issuers shall treat the Person in whose name this Security is registered as its absolute owner for the purpose of receiving payment of principal of, premium, if any, and interest on this Security and for all other purposes whatsoever, whether or not this Security is overdue, and neither the Trustee, any Agent nor the Issuers shall be affected by notice to the contrary. The registered Securityholder shall be treated as its owner for all purposes. 12. Amendments and Waivers. Subject to certain exceptions provided in the Indenture, the Issuers and the Trustee may amend or supplement the Indenture or the Securities with the consent of the Holders of a majority in principal amount of the then outstanding Securities, and, among other things, any existing Default or Event of Default (except a payment default) may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities. Under certain conditions, without the consent of any Securityholder, the Issuers and the Trustee may amend the Indenture or the Securities may be amended to, among other things, cure any ambiguity, defect or inconsistency, to comply with the requirements of the Commission in order to effect or maintain qualification of the Indenture under the TIA or to make any change that does not adversely affect the rights of any Securityholder. EXHIBIT A Page 13 13. Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities may declare the unpaid principal of, and any accrued and unpaid interest on, all the Securities to be due and payable immediately; provided, that in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to an Issuer or any Subsidiary Guarantor, all outstanding Securities shall become due and payable immediately without further action or notice. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Issuers and each Subsidiary Guarantor must furnish an annual compliance certificate to the Trustee. 14. Trustee Dealings with the Issuers. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers, the Subsidiary Guarantors or any Affiliate of the Issuers or the Subsidiary Guarantors, and may otherwise deal with the Issuers, the Subsidiary Guarantors and their respective Affiliates as if it were not the Trustee. 15. Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Issuers and their Restricted Subsidiaries to, among other things, incur additional Indebtedness, make payments in respect of its Capital Stock or certain Indebtedness, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Subsidiaries, merge or consolidate with any other Person, sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions provided for in the Indenture. The Issuers and each Subsidiary Guarantor must annually report to the Trustee on compliance with such limitations. 16. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly and severally irrevocably and unconditionally guaranteed the payment of principal, premium, if any, and interest (including interest on overdue principal and overdue interest, if lawful) on the Securities; provided, however, each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to a EXHIBIT A Page 14 contribution from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. 18. Defeasance. Subject to certain conditions provided for in the Indenture, the Issuers at any time may terminate some or all of their obligations under the Securities and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the Securities to redemption or maturity, as the case may be. 19. Governing Law. The Laws of the State of New York shall govern this Security and the Indenture, without regard to principles of conflict of laws. 20. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 21. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Issuers will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Request may be made to: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47708 Attn: Alan R. Brill EXHIBIT A Page 15 FORM OF NOTATION ON SECURITY RELATING TO SUBSIDIARY GUARANTEE SUBSIDIARY GUARANTEE The Subsidiary Guarantors (as defined in the Indenture (the "Indenture") referred to in the Security upon which this notation is endorsed and each hereinafter referred to as a "Subsidiary Guarantor," which term includes any successor Person under the Indenture) (i) have jointly and severally irrevocably and unconditionally guaranteed as a primary obligor and not a surety (such guarantee by each Subsidiary Guarantor being referred to herein as the "Subsidiary Guarantee"), (a) the due and punctual payment of the principal, premium, if any, and interest on the Securities, whether at Stated Maturity or interest payment date, by acceleration, call for redemption or otherwise, (b) the due and punctual payment of interest on the overdue principal of and interest, if any, on the Securities, to the extent lawful, (c) the due and punctual performance of all other monetary Obligations of the Issuers under the Indenture and the Securities to the Securityholders or the Trustee, all in accordance with the terms set forth in Article 10 of the Indenture and (d) in case of any extension of time of payment or renewal of any Securities or any such Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity by acceleration or otherwise and (ii) have agreed to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Securityholder in enforcing any rights under this Subsidiary Guarantee. The Obligations of each Subsidiary Guarantor to the Securityholders of Securities and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee. No stockholder, officer, director or incorporator, as such, past, present or future of any Subsidiary Guarantor shall have any liability under this Subsidiary Guarantee by reason of his or its status as such stockholder, officer, director or incorporator. This is a continuing Subsidiary Guarantee and, except as otherwise expressly provided for in Section 10.06 of the Indenture, shall remain in full force and effect and shall be binding upon the Subsidiary Guarantor and its successors and assigns until full and final payment of all of the Issuers' Obligations under the Securities and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Securityholders and, in the event of any transfer or assignment of rights by any Securityholder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to EXHIBIT A Page 16 the terms and conditions hereof. This is a Subsidiary Guarantee of payment and not of collectability. This Subsidiary Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Security upon which this Subsidiary Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE. Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. Subsidiary Guarantors: BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:___________________________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 17 TRI-STATE BROADCASTING, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President NORTHERN COLORADO RADIO, a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:___________________________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 18 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:___________________________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 19 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:___________________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 20 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: Vice President HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager EXHIBIT A Page 21 By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:___________________________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:___________________________________ Name: Alan R. Brill Title: President EXHIBIT A Page 22 HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:___________________________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:___________________________________ Alan R. Brill, President NCR III, LLC, a Virginia Limited Liability Company EXHIBIT A Page 23 By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:___________________________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager EXHIBIT A Page 24 By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:___________________________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:___________________________________ Name: Alan R. Brill Title: President EXHIBIT A Page 25 EXHIBIT A Page 26 ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to - ------------------------------------------------------------------ (Insert assignee's soc. sec. or tax I.D. no.) - ------------------------------------------------------------------ - ------------------------------------------------------------------ - ------------------------------------------------------------------ - ------------------------------------------------------------------ - ------------------------------------------------------------------ (Print or type assignee's name, address and zip code) and irrevocably appoint ------------------------------------------- EXHIBIT A Page 27 agent to transfer this Security on the books of the Issuers. The agent may substitute another to act for him. Date:__________________ Your Signature:_______________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: - ------------------------------ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EXHIBIT A Page 28 In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) December 30, 1999, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that this Security is being transferred: Check One --------- (1) ___ to an Issuer or a Subsidiary thereof; or (2) ___ pursuant to and in compliance with Rule 144A under the Securities Act; or (3) ___ to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or (4) ___ outside the United States to a "foreign person" in compliance with Rule 904 of Regulation S under the Securities Act; or (5) ___ pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or (6) ___ pursuant to an effective registration statement under the Securities Act; or (7) ___ pursuant to another available exemption from the registration requirements of the Securities Act. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Securityholder thereof; provided that if box (3), (4), (5) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Securities, in its sole discretion, such legal opinions, certifications (including an investment letter in the case of box (3) or (4)) and other information as the Trustee or an Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this EXHIBIT A Page 29 Security in the name of any Person other than the Securityholder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.17 of the Indenture shall have been satisfied. Dated:________________ Signed: _________________________________________ (Sign exactly as name appears on the other side of this Security) Signature Guarantee:_______________________________________________________ - ------------------------------- (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated:_________________________ _________________________________________ NOTICE: To be executed by an executive officer EXHIBIT A Page 30 OPTION OF SECURITYHOLDER TO ELECT PURCHASE If you want to elect to have all or any part of this Security purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture check the appropriate box: / / Section 4.10 / / Section 4.14 If you want to have only part of the Security purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $__________________________________ Date: ______________________________ Your Signature:___________________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: - --------------------------------- (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EXHIBIT B UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(*) TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.(*) _____________________________ (*) To be included in the Global Note only. EXHIBIT B Page 2 THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED ON DECEMBER 31, 1997 WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET.SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF BRILL MEDIA COMPANY, LLC AT 812-423-6200 OR AT THE ADDRESS SET FORTH ON THE REVERSE OF THIS SECURITY. EXHIBIT B Page 3 CUSIP No: (Front of Security) No. 1 $___________ BRILL MEDIA COMPANY, LLC BRILL MEDIA MANAGEMENT, INC. 12% Senior Note dues 2007, Series B BRILL MEDIA COMPANY, LLC, a Virginia limited liability company and BRILL MEDIA MANAGEMENT, INC., a Virginia corporation, jointly and severally, promise to pay to ________________________________________, or its registered assigns, the principal sum of $____________, [For Global Exchange Notes add:, as such amount may be increased or decreased on the records of the Trustee,] on December 15, 2007. Interest Payment Dates: June 15 and December 15, commencing June 15, 1998. Interest Record Dates: June 1 and December 1 (whether or not a Business Day). Additional provisions of this Security are set forth on the other side of this Security. Dated: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _____________________________ Name: Alan R. Brill Title: President By: _____________________________ Name: Title: EXHIBIT B Page 4 BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By: _____________________________ Name: Alan R. Brill Title: President By: _____________________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:_____________________________ Authorized Officer EXHIBIT B Page 5 (Reverse of Security) 12% SENIOR NOTE DUE 2007, SERIES B Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. Interest. Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and Brill Media Management Inc., a Virginia corporation (together with BMC, the "Issuers"), jointly and severally, promise to pay interest on the principal amount of this Security at the rate and in the manner specified below. The Issuers shall pay, in cash, interest on the principal amount of this Security at the rate per annum of 7 1/2% per annum from the date of original issuance until December 15, 1999, and at a rate of 12% per annum from and including December 15, 1999 until maturity. The Issuers will pay interest semiannually in arrears on June 15 and December 15 of each year (each an "Interest Payment Date"), commencing June 15, 1998, or if any such day is not a Business Day on the next succeeding Business Day. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest shall accrue from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of the original issuance of the Securities. To the extent lawful, the Issuers shall pay interest on overdue principal at the rate of 2% per annum in excess of the then applicable interest rate on the Securities; they shall pay interest on overdue installments of interest (without regard to any applicable grace periods) at the same rate to the extent lawful. 2. Method of Payment. The Issuers shall pay interest on this Security (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the Interest Record Date immediately preceding the Interest Payment Date, even if such Securities are cancelled after such Interest Record Date and on or before such Interest Payment Date. Securityholders must surrender Securities to a Paying Agent to collect principal payments. The Issuers shall pay principal premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S. Legal Tender"). However, the Issuers may pay principal, premium, if any, and interest by its check payable in such U.S. Legal Tender. The Issuers may deliver any such interest payment to the Paying Agent or to a Securityholder at the Securityholder's registered address. EXHIBIT B Page 6 3. Paying Agent and Registrar. Initially, the Trustee will act as Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-registrar without prior notice to any Securityholder. The Issuers, or any Subsidiary Guarantor may act in any such capacity. 4. Indenture. The Issuers issued the Securities under an Indenture, dated as of December 30, 1997 (the "Indenture"), among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the TIA as in effect on the date the Indenture is qualified, except as the Indenture otherwise provides. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Securities. The Securities are senior Obligations of the Issuers limited to $105,000,000 in aggregate principal amount. 5.(a) Optional Redemption. Except as indicated in the next succeeding paragraph, Securities will not be redeemable at the option of the Issuers prior to December 15, 2002. On and after such date, the Securities will be redeemable, at the Issuers' option, in whole or in part, at any time upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each Holder's registered address, at the following redemption prices (expressed in percentages of principal amount), if redeemed during the 12-month period commencing on December 15th of the years set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date): Period ------ Redemption Price ---------------- 2002...................... 106.00% 2003...................... 104.00% 2004...................... 102.00% 2005 and thereafter....... 100.00% (b) Optional Redemption Upon Public Equity Offerings. In the event of the sale by an Issuer prior to December 15, 2000 of its Capital Stock (other than Disqualified Stock) in one or more Public Equity Offerings the Net Cash Proceeds of which are at least $25.0 million in the aggregate, the Issuers may, at their option, use the EXHIBIT B Page 7 Net Cash Proceeds of such sale or sales of Capital Stock to redeem up to 25% of the aggregate principal amount of the aggregate principal amount of the Securities at a redemption price, in the case of a redemption date prior to December 15, 1999, equal to 112.0% of the Accreted Value thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) and for any redemption date on or after December 15, 1999, at a redemption price equal to 112.0% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date); provided, however, that after any such redemption the aggregate principal amount of the Securities outstanding must equal at least $79.0 million. In order to effect the foregoing redemption with the proceeds of any such sale of Capital Stock, the Issuers shall make such redemption not more than 90 days after the consummation of any such sale or sales of Capital Stock. 6. Mandatory Redemption. The Securities are not subject to mandatory redemption or sinking fund payments. 7. Repurchase at Option of Securityholder. (a) If there is a Change of Control, each Holder of Securities will have the right to require the Issuers to repurchase all or any part of such Holder's Securities, in the case of a repurchase date prior to December 15, 1999, at a purchase price in cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Securityholders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) and for any repurchase date on or after December 15, 1999, at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Securityholders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) (such applicable purchase price being hereinafter referred to as the "Change of Control Purchase Price"). Within 30 days following any Change of Control, the Issuers will mail a notice to each Securityholder stating (i) that a Change of Control has occurred and that such Securityholder has the right to require the Issuers to repurchase all or any part of such Securityholder's Securities at a repurchase price in cash equal to the Change of Control Purchase Price (subject to the right of Holders of record on the relevant Interest Record Date to receive interest due on the relevant Interest Payment Date); (ii) the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization after giving effect to such Change of Control); (iii) the repurchase date (which will be no earlier then 30 days nor later than 60 days from the EXHIBIT B Page 8 date such notice is mailed); and (iv) the procedures, determined by the Issuers consistent with the Indenture, that a Securityholder must follow in order to have its Securities repurchased. Securityholders that are subject to an offer to repurchase may elect to have such Securities repurchased by completing the form entitled "Option of Securityholder to Elect Purchase" appearing below. (b) If an Issuer or a Subsidiary consummates any Asset Disposition, and when the aggregate amount of Net Available Cash from such an Asset Disposition exceeds $10 million (except as otherwise set forth in Section 4.10 of the Indenture), the Issuers shall be required to offer to purchase the maximum principal amount of Securities, that is in an integral multiple of $1,000, that may be purchased out of the Net Available Cash, at 100% of the Accreted Value thereof if such purchase date occurs prior to December 15, 1999, and at 100% of the principal amount thereof if such purchase date occurs on or after December 15, 1999, in each case plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer in accordance with the procedures set forth in the Indenture. If the aggregate principal amount of Securities surrendered by Holders thereof exceeds the amount of Net Available Cash, the Securities to be redeemed shall be selected on a pro rata basis to the extent practicable. Securityholders that are the subject of an offer to purchase will receive an Asset Disposition Offer from the Issuers prior to any related purchase date and may elect to have such Securities purchased by completing the form entitled "Option of Securityholder to Elect Purchase" appearing below. 8. Notice of Redemption. Notice of redemption shall be mailed at least 30 days before the redemption date to each Holder whose Securities are to be redeemed at its registered address. Securities may be redeemed in part but only in whole multiples of $1,000, unless all of the Securities held by a Securityholder are to be redeemed. On and after the redemption date, interest ceases to accrue on Securities or portions of them called for redemption. 9. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Securityholder among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities during a period beginning on the opening of business on a Business Day 15 days before the day of any selection of Securities to be redeemed and ending on the EXHIBIT B Page 9 close of business on the day of selection or during the period between a Interest Record Date and the corresponding Interest Payment Date. 10. Persons Deemed Owners. Prior to due presentment to the Trustee for registration of the transfer of this Security, the Trustee, any Agent and the Issuers may deem and treat the Person in whose name this Security is registered as its absolute owner for the purpose of receiving payment of principal of, premium, if any, and interest on this Security and for all other purposes whatsoever, whether or not this Security is overdue, and neither the Trustee, any Agent nor the Issuers shall be affected by notice to the contrary. The registered Securityholder shall be treated as its owner for all purposes. 11. Amendments and Waivers. Subject to certain exceptions provided in the Indenture, the Issuers and the Trustee may amend or supplement the Indenture or the Securities with the consent of the Holders of a majority in principal amount of the then outstanding Securities, and, among other things, any existing Default or Event of Default (except a payment default) may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities. Under certain conditions, without the consent of any Securityholder, the Issuers and the Trustee may amend the Indenture or the Securities may be amended to, among other things, cure any ambiguity, defect or inconsistency, to comply with the requirements of the Commission in order to effect or maintain qualification of the Indenture under the TIA or to make any change that does not adversely affect the rights of any Securityholder. 12. Defaults and Remedies. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities may declare the unpaid principal of, and any accrued and unpaid interest on, all the Securities to be due and payable immediately; provided, that in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to an Issuer or any Subsidiary Guarantor, all outstanding Securities shall become due and payable immediately without further action or notice. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Issuers and each Subsidiary Guarantor must furnish an annual compliance certificate to the Trustee. EXHIBIT B Page 10 13. Trustee Dealings with the Issuers. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers, the Subsidiary Guarantors or any Affiliate of the Issuers or the Guarantors, and may otherwise deal with the Issuers, the Subsidiary Guarantors and their respective Affiliates as if it were not Trustee. 14. Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Issuers and their Restricted Subsidiaries to, among other things, incur additional Indebtedness, make payments in respect of its Capital Stock or certain Indebtedness, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Subsidiaries, merge or consolidate with any other Person, sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions provided for in the Indenture. The Issuers and each Subsidiary Guarantor must annually report to the Trustee on compliance with such limitations. 15. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly and severally irrevocably and unconditionally guaranteed the payment of principal, premium, if any, and interest (including interest on overdue principal and overdue interest, if lawful) on the Securities; provided, however, each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. 17. Defeasance. Subject to certain conditions provided for in the Indenture, the Issuers at any time may terminate some or all of their obligations under the Securities and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the Securities to redemption or maturity, as the case may be. 18. Governing Law. The Laws of the State of New York shall govern this Security and the Indenture, without regard to principles of conflict of laws. 19. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT EXHIBIT B Page 11 (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 20. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Issuers will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Request may be made to: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47708 Attn: Alan R. Brill EXHIBIT B Page 12 FORM OF NOTATION ON SECURITY RELATING TO SUBSIDIARY GUARANTEE SUBSIDIARY GUARANTEE The Subsidiary Guarantors (as defined in the Indenture (the "Indenture") referred to in the Security upon which this notation is endorsed and each hereinafter referred to as a "Subsidiary Guarantor," which term includes any successor person under the Indenture) (i) have jointly and severally irrevocably and unconditionally guaranteed as a primary obligor and not a surety, (such guarantee by each Subsidiary Guarantor being referred to herein as the "Subsidiary Guarantee") (a) the due and punctual payment of the principal, premium, if any, and interest on the Securities, whether at Stated Maturity or interest payment date, by acceleration, call for redemption or otherwise, (b) the due and punctual payment of interest on the overdue principal of and interest, if any, on the Securities, to the extent lawful, (c) the due and punctual performance of all other monetary Obligations of the Issuers under the Indenture and the Securities to the Securityholders or the Trustee, all in accordance with the terms set forth in Article 10 of the Indenture and (d) in case of any extension of time of payment or renewal of any Securities or any such Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity by acceleration or otherwise and (ii) have agreed to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Securityholder in enforcing any rights under this Subsidiary Guarantee. The Obligations of each Subsidiary Guarantor to the Securityholders of Securities and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article 10 of the Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee. No stockholder, officer, director or incorporator, as such, past, present or future of any Subsidiary Guarantor shall have any liability under this Subsidiary Guarantee by reason of his or its status as such stockholder, officer, director or incorporator. This is a continuing Subsidiary Guarantee and, except as otherwise expressly provided for in Section 10.06 of the Indenture, shall remain in full force and effect and shall be binding upon the Subsidiary Guarantor and its successors and assigns until full and final payment of all of the Issuers' Obligations under the Securities and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Securityholders and, in the event of any transfer or assignment of rights by any Securityholder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to EXHIBIT B Page 13 the terms and conditions hereof. This is a Subsidiary Guarantee of payment and not of collectability. This Subsidiary Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Security upon which this Subsidiary Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE. Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. Subsidiary Guarantors: BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:____________________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 14 TRI-STATE BROADCASTING, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:____________________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 15 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation its Manager By:____________________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 16 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:____________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 17 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: Vice President HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager EXHIBIT B Page 18 By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________________ Name: Alan R. Brill Title: President EXHIBIT B Page 19 HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:____________________________ Alan R. Brill, President NCR III, LLC, a Virginia Limited Liability Company EXHIBIT B Page 20 By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager EXHIBIT B Page 21 By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: President EXHIBIT B Page 22 ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to ______________________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. no.) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint ______________________________________________________ EXHIBIT B Page 23 agent to transfer this Security on the books of the Issuers. The agent may substitute another to act for him. Date: ___________________ Your Signature: _____________________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: __________________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EXHIBIT B Page 24 OPTION OF SECURITYHOLDER TO ELECT PURCHASE If you want to elect to have all or any part of this Security purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture check the appropriate box: / / Section 4.10 / / Section 4.14 If you want to have only part of the Security purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $______________________ Date:________________________ Your Signature:________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: __________________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EXHIBIT C Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB Accredited Investors United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Attention: Corporate Trust Administration Re: Brill Media Company, LLC and Brill Media Management, Inc. 12% Senior Notes due 2007 Ladies and Gentlemen: In connection with our proposed purchase of 12% Senior Notes due 2007 (the "Securities") of Brill Media Company, LLC ("Brill") and Brill Media Management, Inc. (together with BMC, the "Issuers"), we confirm that: 1. We have received a copy of the Offering Memorandum (the "Offering Memorandum"), dated December 23, 1997 relating to the Securities and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agreed to the matters stated on pages (ii) and (iii) of the Offering Memorandum and in the section entitled "Notes Transfer Restrictions" of the Offering Memorandum including the restrictions on duplication and circulation of the Offering Memorandum. 2. We understand that any subsequent transfer of the Securities is subject to certain restrictions and conditions set forth in the Indenture relating to the Securities (as described in the Offering Memorandum) and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Securities except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "Securities Act"). EXHIBIT C Page 2 3. We understand that the offer and sale of the Securities have not been registered under the Securities Act, and that the Securities may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell or otherwise transfer any Securities prior to the date which is two years after the original issuance of the Securities, we will do so only (i) to an Issuer or any of its subsidiaries, (ii) inside the United States in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act), (iii) inside the United States to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture relating to the Securities), a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities, (iv) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Securities from us a notice advising such purchaser that resales of the Securities are restricted as stated herein. 4. We are not acquiring the Securities for or on behalf of, and will not transfer the Securities to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement Income Security Act of 1974), except as permitted in the section entitled "Transfer Restrictions" of the Offering Memorandum. 5. We understand that, on any proposed resale of any Securities, we will be required to furnish to the Trustee and the Issuers such certification, legal opinions and other information as the Trustee and the Issuers may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Securities purchased by us will bear a legend to the foregoing effect. 6. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be. EXHIBIT C Page 3 7. We are acquiring the Securities purchased by us for our account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, By: ------------------------------- Name: EXHIBIT D Form of Certificate To Be Delivered in Connection with Transfers Pursuant to Regulation S _______________,______ United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Attention: Corporate Trust Administration Re: Brill Media Company, LLC and Brill Media Management, Inc. (collectively the "Issuers") 12% Senior Notes due 2007 (the "Securities") Ladies and Gentlemen: In connection with our proposed sale of $_____________ aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that: (1) the offer of the Securities was not made to a Person in the United States; (2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any Person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States; EXHIBIT D Page 2 (3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (5) we have advised the transferee of the transfer restrictions applicable to the Securities. You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By: ---------------------- Authorized Signature EX-4.2 63 EXHIBIT 4.2 =============================================================================== BRILL MEDIA COMPANY, LLC, and BRILL MEDIA MANAGEMENT, INC. as Issuers, and THE SUBSIDIARY GUARANTORS NAMED HEREIN and UNITED STATES TRUST COMPANY OF NEW YORK as Trustee $3,000,000 aggregate principal amount APPRECIATION NOTES DUE 2007, SERIES A APPRECIATION NOTES DUE 2007, SERIES B -------------------------- ---------- APPRECIATION NOTE INDENTURE Dated as of December 30, 1997 ---------- =============================================================================== CROSS-REFERENCE TABLE* Trust Indenture Act Section Indenture Section 310(a)(1)............................... 7.10 (a)(2)............................... 7.10 (a)(3)............................... N.A. (a)(4)............................... N.A. (a)(5)............................... 7.10 (b).................................. 7.10 (c).................................. N.A. 311(a).................................. 7.11 (b).................................. 7.11 (c).................................. N.A. 312(a).................................. 2.05 (b).................................. 12.03 (c).................................. 12.03 313(a).................................. 7.06 (b)(1)............................... 7.06 (b)(2)............................... 7.06 (c).................................. 7.06 (d).................................. 7.06 314(a).................................. 4.04 (b).................................. N.A. (c)(1)............................... 12.05 (c)(2)............................... 12.05 (c)(3)............................... N.A. (d).................................. N.A. (e).................................. 12.05 (f).................................. N.A. 315(a).................................. 7.01 (b).................................. 7.05 (c).................................. 7.01 (d).................................. 6.03;7.01 (e).................................. 6.09 316(a).................................. 1.01 (a)(1)(A)............................ 6.02 (a)(1)(B)............................ 6.02 (a)(2)............................... N.A. (b).................................. 6.05 (c).................................. 2.19 317(a)(1)............................... 6.06 (a)(2)............................... 6.07 (b).................................. 2.04 318(a).................................. 12.01 (b).................................. N.A. (c).................................. 12.01 - ------------------- *This Cross-Reference Table is not part of the Indenture. N.A. means not applicable. (2) TABLE OF CONTENTS Page ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE ................. 1 SECTION 1.01. DEFINITIONS....................................... 1 SECTION 1.02. OTHER DEFINITIONS................................. 13 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.................................... 14 SECTION 1.04. RULES OF CONSTRUCTION............................. 14 ARTICLE 2 THE SECURITIES.............................................. 15 SECTION 2.01. FORM AND DATING................................... 15 SECTION 2.02. EXECUTION AND AUTHENTICATION...................... 16 SECTION 2.03. REGISTRAR AND PAYING AGENT........................ 16 SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST............... 17 SECTION 2.05. SECURITYHOLDER LISTS.............................. 17 SECTION 2.06. TRANSFER AND EXCHANGE............................. 18 SECTION 2.07. REPLACEMENT SECURITIES............................ 18 SECTION 2.08. OUTSTANDING SECURITIES............................ 19 SECTION 2.09. TREASURY SECURITIES............................... 19 SECTION 2.10. TEMPORARY SECURITIES.............................. 19 SECTION 2.11. CANCELLATION...................................... 20 SECTION 2.12. DEFAULTED INTEREST................................ 20 SECTION 2.13. CUSIP NUMBER...................................... 20 SECTION 2.14. DEPOSIT OF MONEYS................................. 21 SECTION 2.15. RESTRICTIVE LEGENDS............................... 21 SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY......... 23 SECTION 2.17. SPECIAL TRANSFER PROVISIONS....................... 25 SECTION 2.18. PERSONS DEEMED OWNERS............................. 27 ARTICLE 3 REDEMPTION.................................................. 27 SECTION 3.01. NOTICES TO TRUSTEE................................ 27 SECTION 3.02. [RESERVED]........................................ 27 SECTION 3.03. NOTICE OF OPTIONAL REDEMPTION BY THE ISSUERS...... 27 SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.................... 28 SECTION 3.05. DEPOSIT OF REDEMPTION PRICE....................... 28 SECTION 3.06. SECURITIES REDEEMED IN PART....................... 29 SECTION 3.07. REDEMPTION UPON MATURITY.......................... 29 SECTION 3.08. OPTIONAL REDEMPTION............................... 29 SECTION 3.09. MANDATORY REDEMPTION AT THE OPTION OF THE SECURITYHOLDERS UPON THE OCCURRENCE OF CERTAIN EVENTS................................... 30 SECTION 3.10. MANDATORY REDEMPTION AT THE OPTION OF THE SECURITYHOLDERS ON SPECIFIED DATES........... 31 ARTICLE 4 COVENANTS................................................... 32 SECTION 4.01. PAYMENT OF SECURITIES............................. 32 SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY................... 32 SECTION 4.03. SEC REPORTS....................................... 33 SECTION 4.04. COMPLIANCE CERTIFICATES........................... 34 SECTION 4.05. TAXES............................................. 35 SECTION 4.06. STAY, EXTENSION AND USURY LAWS.................... 35 SECTION 4.07. CORPORATE EXISTENCE............................... 35 SECTION 4.09. FURTHER INSTRUMENTS AND ACTS...................... 36 ARTICLE 5 SUCCESSORS.................................................. 36 SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS................................ 36 SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED................. 37 ARTICLE 6 REMEDIES.................................................... 37 SECTION 6.01. REMEDIES.......................................... 37 SECTION 6.02. WAIVER OF PAST DEFAULTS........................... 37 SECTION 6.03. CONTROL BY MAJORITY............................... 38 SECTION 6.04. LIMITATION ON SUITS............................... 38 SECTION 6.05. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT...... 39 SECTION 6.06. COLLECTION SUIT BY TRUSTEE........................ 39 SECTION 6.07. TRUSTEE MAY FILE PROOFS OF CLAIM.................. 39 SECTION 6.08. PRIORITIES........................................ 40 SECTION 6.09. UNDERTAKING FOR COSTS............................. 40 ARTICLE 7 TRUSTEE..................................................... 41 SECTION 7.01. DUTIES OF TRUSTEE................................. 41 SECTION 7.02. RIGHTS OF TRUSTEE................................. 42 SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE...................... 43 SECTION 7.04. TRUSTEE'S DISCLAIMER.............................. 43 SECTION 7.05. NOTICE OF DEFAULTS................................ 43 SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS............. 44 SECTION 7.07. COMPENSATION AND INDEMNITY........................ 44 SECTION 7.08. REPLACEMENT OF TRUSTEE............................ 45 SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.................. 46 SECTION 7.10. ELIGIBILITY; DISQUALIFICATION..................... 47 (ii) SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS.............................. 47 ARTICLE 8 DISCHARGE OF INDENTURE...................................... 47 SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES.............. 47 SECTION 8.02. APPLICATION OF TRUST MONEY........................ 48 SECTION 8.03. REPAYMENT TO THE ISSUERS.......................... 48 SECTION 8.04. REINSTATEMENT..................................... 48 ARTICLE 9 AMENDMENTS.................................................. 49 SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS................ 49 SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS................... 50 SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT............... 52 SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS................. 52 SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES............. 52 SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC................... 53 ARTICLE 10 SUBORDINATION.......................................... 53 SECTION 10.01. AGREEMENT TO SUBORDINATE.......................... 53 SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY.............. 53 SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OR GUARANTOR SENIOR INDEBTEDNESS.................... 54 SECTION 10.04. WHEN DISTRIBUTION MUST BE PAID OVER............... 54 SECTION 10.05. SUBROGATION....................................... 54 SECTION 10.06. RELATIVE RIGHTS................................... 55 SECTION 10.07. SUBORDINATION MAY NOT BE IMPAIREDBY ISSUERS OR THE SUBSIDIARY GUARANTORS............. 55 SECTION 10.08. RIGHTS OF TRUSTEE AND PAYING AGENT................ 55 SECTION 10.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.......... 56 SECTION 10.10. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT....... 56 SECTION 10.11. TRUSTEE ENTITLED TO RELY.......................... 56 SECTION 10.12. TRUSTEE TO EFFECTUATE SUBORDINATION............... 57 SECTION 10.13. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS AND SUBSIDIARY GUARANTOR SENIOR INDEBTEDNESS.............................. 57 SECTION 10.14. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS AND GUARANTOR SENIOR INDEBTEDNESS ON SUBORDINATION PROVISIONS....................................... 57 ARTICLE 11 SUBSIDIARY GUARANTEE OF SECURITIES..................... 58 SECTION 11.01. SUBSIDIARY GUARANTEE.............................. 58 (iii) SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.... 59 SECTION 11.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC........... 59 SECTION 11.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.... 60 SECTION 11.05. CONTRIBUTION...................................... 61 SECTION 11.06. RELEASE........................................... 61 SECTION 11.07. ADDITIONAL SUBSIDIARY GUARANTORS.................. 61 SECTION 11.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.................................... 62 SECTION 11.09. SUCCESSORS AND ASSIGNS............................ 63 SECTION 11.10. WAIVER OF STAY, EXTENSION OR USURY LAWS........... 63 ARTICLE 12 MISCELLANEOUS.......................................... 63 SECTION 12.01. TRUST INDENTURE ACT CONTROLS...................... 63 SECTION 12.02. NOTICES........................................... 64 SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER SECURITYHOLDERS.................................. 65 SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................................ 65 SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..... 65 SECTION 12.06. RULES BY TRUSTEE AND AGENTS....................... 66 SECTION 12.07. LEGAL HOLIDAYS.................................... 66 SECTION 12.08. NO RECOURSE AGAINST OTHERS........................ 66 SECTION 12.09. DUPLICATE ORIGINALS............................... 66 SECTION 12.10. GOVERNING LAW..................................... 67 SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..... 67 SECTION 12.12. SUCCESSORS........................................ 67 SECTION 12.13. SEVERABILITY...................................... 67 SECTION 12.14. COUNTERPART ORIGINALS............................. 67 SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC.................. 67 (iv) EXHIBIT A - FORM OF INITIAL SECURITY WITH SUBSIDIARY GUARANTEE EXHIBIT B - FORM OF EXCHANGE SECURITY WITH SUBSIDIARY GUARANTEE EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO NON-QIB ACCREDITED INVESTORS EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S SCHEDULE 1 SUBSIDIARY GUARANTORS (v) APPRECIATION NOTE INDENTURE, dated as of December 30, 1997, among Brill Media Company, LLC, a Virginia limited liability company ("BMC"), Brill Media Management, Inc., a Virginia corporation ("Media" and, collectively with BMC, the "Issuers"), the subsidiary guarantors listed on Schedule I attached hereto as Subsidiary Guarantors (as defined) of the Issuers' obligations hereunder, and United States Trust Company of New York, a banking corporation organized and existing under the laws of the State of New York, as Trustee (the "Trustee"). The Issuers have duly authorized the creation of an issue of Appreciation Notes due 2007, Series A (the "Initial Securities") and Appreciation Notes due 2007, Series B (the "Exchange Securities") and, to provide therefor, the Issuers and the Subsidiary Guarantors have duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities (as defined), when duly issued and executed by the Issuers, and authenticated and delivered hereunder, the valid obligations of the Issuers and the Subsidiary Guarantors, and to make this Indenture a valid and binding agreement of the Issuers and the Subsidiary Guarantors, have been done. The Issuers, the Subsidiary Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the Securities: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. DEFINITIONS. "Administrative Management Agreement" means any management agreements between either of the Issuers or any of the Subsidiary Guarantors and BMCLP, pursuant to which BMCLP provides management services to such Issuer or such Subsidiary Guarantors. "Adjusted Net Assets" of a Subsidiary Guarantor at any date means the lesser of the amount by which (x) the fair value of the property of such Subsidiary Guarantor exceeds the total amount of liabilities, including, without limitation, the probable liability of such Subsidiary Guarantor with respect to its contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the present fair salable value of the assets of such Subsidiary Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Subsidiary Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date and after giving effect to any collection from any Subsidiary by such Subsidiary Guarantor in respect of the obligations of such Subsidiary under the Subsidiary Guarantee), excluding debt in respect of the Subsidiary Guarantee, as they become absolute and matured. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar, Paying Agent or co-registrar. "Appreciation Notes Registration Rights Agreement" means the registration rights agreement relating to the Securities and dated December 30, 1997 among the Issuers, the Subsidiary Guarantors and the Initial Purchaser for the benefit of themselves and the Securityholders, as the same may be amended or modified from time to time in accordance with the terms thereof. "Attributable Indebtedness" in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Securities, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). "Bankruptcy Code" means Title 11, U.S. Code or any similar Federal, state or foreign law for the relief of debtors. "BMC" has the meaning set forth in the preamble to this Indenture until a successor replaces such Person in accordance with Article 5 hereof and thereafter means such successor. "BMCLP" means Brill Media Company, L.P, a Virginia limited partnership, and its successors. "Board of Directors" means as to BMC (i) so long as BMC or any successor to BMC is a limited liability company or a partnership, the board of directors of Media, which is the manager of BMC and (ii) at any other time, the board of directors of BMC, and as to Media, the board of directors of Media. "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person (or, in the case of BMC so 2 long as it is a limited liability company or a partnership, of Media, which is the manager of BMC) to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means a day that is not a Legal Holiday. "Capital Stock" of any Person means any and all shares, membership and other interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligation" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof, (iii) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500 million, (iv) repurchase obligations for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by Moody's or S&P and in each case maturing within one year after the date of acquisition, (vi) investment funds investing 95% of their assets in securities of the types described in clauses (i)-(v) above, (vii) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable either Moody's or S&P and (viii) Indebtedness or Preferred Stock issued by Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's. "Commission" means the U.S. Securities and Exchange Commission or its successor. "Consolidated EBITDA" means, for any period an amount equal to Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (i) the provision for taxes for such period based on income or profits and any provision for taxes utilized in computing net loss, (ii) Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization expense (including the amortization of debt issuance costs), (v) all other non-cash items reducing Consolidated Net Income for such period 3 (excluding any non-cash item to the extent it represents an accrual of or reserve for cash disbursements for any subsequent period prior to the Stated Maturity of the Securities or amortization of a pre-paid cash expense that was paid in a prior period), minus (b) all non-cash items increasing Consolidated Net Income for such period, in each case on a consolidated basis for the Issuers and their Subsidiaries for such period determined in accordance with GAAP. "Consolidated Interest Expense" means, for any period, the total interest expense of the Issuers and their Subsidiaries determined on a consolidated basis in accordance with GAAP, plus, to the extent not included in such interest expense, (i) interest expense attributable to Capitalized Lease Obligations, (ii) capitalized interest, (iii) non-cash interest expense, (iv) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (v) interest actually paid by either Issuer or any such Subsidiary under any Guarantee of Indebtedness or other obligation of any other Person, (vi) net payments (whether positive or negative) pursuant to Interest Rate Agreements and (vii) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than an Issuer) in connection with Indebtedness incurred by such plan or trust and less (a) to the extent included in such interest expense, the amortization of capitalized debt issuance costs and (b) interest income. "Consolidated Net Income" means, for any period, the consolidated net income (loss) of the Issuers and their respective consolidated Subsidiaries determined in accordance with GAAP. "Consolidated Net Worth" means the total of the amounts shown on the balance sheets of the Issuers and their consolidated Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of the end of the most recent fiscal quarter of the Issuers ending prior to the taking of any action for the purpose of which the determination is being made and for which financial statements are available (but in no event ending more than 135 days prior to the taking of such action), as (i) the par or stated value of all outstanding Capital Stock of an Issuer plus (ii) paid in capital or capital surplus relating to such Capital Stock plus (iii) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 11.02 or such other address as to which the Trustee may give notice to the Issuers. "Currency Agreement" means in respect of a Person any foreign exchange contract, currency swap agreement or other similar agreement as to which such Person is a party or a beneficiary. 4 "Default" means any failure by an Issuer or a Subsidiary Guarantor to comply with its covenants hereunder. "Depository" means The Depository Trust Company, its nominees and successors. "Designated Senior Indebtedness" means any Senior Indebtedness in the case of the Issuers, or Guarantor Senior Indebtedness in the case of a Subsidiary Guarantor which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof, are committed to lend up to, at least $5 million and is specifically designated by an Issuer or such Subsidiary Guarantor in the instrument evidencing or governing such Senior Indebtedness or Guarantor Senior Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture; provided, however, that the Indebtedness of the Issuers under the Notes, and the Subsidiary Guarantee of each Subsidiary Guarantor under its Guarantee of the Notes, shall always constitute Designated Senior Indebtedness. "Disqualified Stock" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (i) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the final Stated Maturity of the Securities, or (ii) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (a) debt securities or (b) any Capital Stock referred to in (i) above, in each case at any time prior to the final Stated Maturity of the Securities. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, or any successor statute or statutes thereto. "Exchange Offer" means the registration by the Issuers and the Subsidiary Guarantors under the Securities Act pursuant to a registration statement of the offer by the Issuers and the Subsidiary Guarantors to each Securityholder of the Initial Securities to exchange all the Initial Securities held by such Securityholder for the Exchange Securities in an aggregate principal amount equal to the aggregate principal amount of the Initial Securities held by such Securityholder, all in accordance with the terms and conditions of the Appreciation Notes Registration Rights Agreement. "Exchange Securities" has the meaning set forth in the preamble to this Indenture. 5 "fair market value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of BMC acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of BMC delivered to the Trustee. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the date of this Indenture, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP. "Group" means any "group" for purposes of Section 13(d) of the Exchange Act. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Guarantor Senior Indebtedness" means, with respect to a Subsidiary Guarantor, whether outstanding on the Issue Date or thereafter issued, all Guarantees by such Subsidiary Guarantor of Senior Indebtedness of an Issuer and all other Indebtedness of such Subsidiary Guarantor, including interest and fees thereon, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is expressly provided that the obligations of such Subsidiary Guarantor in respect of such Indebtedness are not superior in right of payment to the obligations of such Subsidiary Guarantor under the Guarantee of the Securities; provided, however, that Guarantor Senior Indebtedness shall not include (1) any obligations of such Subsidiary Guarantor to the Issuers or any other Subsidiary of the Issuers or (2) any Indebtedness, Guarantee or obligation of such Subsidiary Guarantor that is expressly subordinate or junior in right of payment to any other Indebtedness, Guarantee or obligation of such Subsidiary Guarantor, including any Guarantor Subordinated Indebtedness of such Subsidiary Guarantor. 6 "Guarantor Subordinated Indebtedness" means, with respect to a Subsidiary Guarantor, the obligations of such Subsidiary Guarantor under the Guarantee of the Securities and any other Indebtedness of such Subsidiary Guarantor that specifically provides that such Indebtedness is to rank pari passu in right of payment with the obligations of such Subsidiary Guarantor under the Guarantee of the Securities. "Incur" means issue, assume, guarantee, incur or otherwise become liable for. "Indebtedness" means, with respect to any Person on any date of determination (without duplication), (i) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money, (ii) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto) (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i), (ii) and (v) ) entered into in the ordinary course of business of such Person to the extent that such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third business day following receipt by such Person of a demand for reimbursement following payment on the letter of credit), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except (x) trade payables and accrued expenses (including accrued management fees under the Administrative Management Agreements) incurred in the ordinary course of business and (y) contingent or "earnout" payment obligations in respect of any business acquired by an Issuer or any Restricted Subsidiary), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, (v) all Capitalized Lease Obligations and all Attributable Indebtedness of such Person, (vi) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, (vii) all Indebtedness of other Persons to the extent Guaranteed by such Person, and (viii) to the extent not otherwise included in this definition, obligations under Currency Agreements and Interest Rate Agreements. "Indenture" means this Indenture, as amended or supplemented from time to time. "Initial Public Offering" means an offering or offerings of Capital Stock of an Issuer under one or more effective registration statements under the Securities Act such that, after giving effect thereto, such offerings result in aggregate cash proceeds being received by an Issuer and the persons selling such Capital Stock of at least $25 million before deduction of underwriter's discounts and other expenses, as a result of such Capital Stock is listed or admitted to trading on a national securities exchange or quoted by NASDAQ. "Initial Purchaser" means NatWest Capital Markets Limited. 7 "Initial Securities" has the meaning set forth in the preamble to this Indenture. "Institutional Accredited Investor" means an institution that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Interest Rate Agreement" means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary. "Issue Date" means the date on which the Initial Securities are originally issued. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Managed Affiliate", means a Person at least 90% of the Capital Stock of which is owned, directly or indirectly, by Alan R. Brill. "Managed Affiliate Notes" mean any promissory notes of a Managed Affiliate, issued to an Issuer or a Subsidiary. "Maturity Date" means December 15, 2007. "Media Cashflow" for any period means for any Person an amount equal to Consolidated EBITDA for such period plus interest income received in respect of the Managed Affiliate Notes during such period and the following to the extent deducted in calculating such Consolidated EBITDA (i) management fees charged by BMCLP under the Administrative Management Agreements, (ii) expenses accruing under Performance Compensation Agreements , (iii) consulting fees payable in connection with acquisitions and (iv) fees paid under time brokerage agreements. "Moody's" means Moody's Investors Service, Inc., or its successors. "Non-U.S. Person" means a Person who is not a U.S. person, as defined in Regulation S of the Securities Act. "Notes" means the 12% Senior Notes due 2007 issued under the Senior Note Indenture. 8 "Obligations" means any principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Offering Memorandum" means the Offering Memorandum dated December 23, 1997, pursuant to which the Initial Securities were offered, and any supplements thereto. "Officer" means the Chairman of the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer or the Secretary of an Issuer (or, in the case of BMC, so long as it is a limited liability company or a partnership, of Media, which is the manager of BMC). "Officers' Certificate" means a certificate signed by two Officers of an Issuer at least one of whom shall be the principal executive, financial or accounting officer of an Issuer. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee, and which complies, if applicable, with the provisions of Section 12.04 hereof. The counsel may be an employee of or counsel to an Issuer or the Trustee. "Performance Compensation Agreement" means any agreements between an Issuer or any Subsidiary and any executive officer of such Subsidiary pursuant to which such Subsidiary provides deferred compensation to such officer by crediting amounts (as determined under a formula set forth in such agreement) to an identified account for the benefit of such executive officer. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock" as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. "Pro Rata Percentage" of a Security, means the Specified Percentage of such Security divided by 5%. "Qualified Institutional Buyer" or "QIB" shall have the meaning specified in Rule 144A under the Securities Act. 9 "Related Brill Party" means (A) the spouse or immediate family member of Alan R. Brill or (B) any trust, corporation, partnership or other entity, the beneficiaries, shareholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of Alan R. Brill and/or such other Persons referred to in the immediately preceding clause (A). "Representative" means the trustee, agent or representative (if any) for an issue of Senior Indebtedness. "Responsible Officer" when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee (or any successor group of the Trustee) with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Security" has the meaning assigned to such term in Rule 144(a)(3) under the Securities Act. "Restricted Subsidiary" has the meaning assigned to such term in the Senior Note Indenture as in effect from time to time. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc, or its successors. "Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired whereby an Issuer or a Subsidiary transfers such property to a Person and such Issuer or a Subsidiary of such Issuer leases it from such Person. "Sale of the Company" means (i) any sale, lease, exchange or other transfer (in one transaction or in a series of transactions) of all or substantially all of the assets of an Issuer or an Issuer and its Subsidiaries on a consolidated basis or (ii) the acquisition by any Person or Group (other than Alan R. Brill or any Related Brill Party) of the power, directly or indirectly, to vote or direct the voting of securities having more than 50% of the ordinary voting power for the election of directors of an Issuer, or any direct or indirect holding company thereof. "Securities" means the Initial Securities and the Exchange Securities treated as a single class of securities, as amended or supplemented from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. 10 "Securityholder" or "Holder" means a registered holder of one or more Securities. "Senior Indebtedness" in the case of the Securities means, whether outstanding on the Issue Date or thereafter issued, all obligations under the Notes and all other Indebtedness of the Issuers, or either one of the Issuers, including interest and fees thereon, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that the obligations in respect of such Indebtedness are not superior in right of payment to the Securities; provided, however, that Senior Indebtedness will not include any obligation of an Issuer to any Subsidiary or any Subordinated Obligations. "Senior Note Indenture" means the Indenture, dated as of the Issue Date, among the Issuers, the Subsidiary Guarantors and the United States Trust Company of New York relating to the Notes. "Specified Event Purchase Price" means for a Security a redemption price equal to (i) in the case of a redemption with respect to an Initial Public Offering, the price at which Capital Stock is sold in such Initial Public Offering (less underwriting discounts and commissions, if any), which represent a percentage interest in BMC equal to the Specified Percentage of such Security, (ii) in the case of redemption with respect to a Sale of the Company as defined in clause (i) of the definition thereof, the amount equal to the Specified Percentage of such Security of the sum of the aggregate fair market value of all consideration received by the Issuers and their Subsidiaries, net of any debt repaid therewith, net of ordinary and customary transaction expenses of the related transfer and the fair market value of the Issuers as determined after giving effect to such sale, and (iii) in the case of a redemption with respect to Sale of the Company defined in clause (ii) of the definition thereof, the price at which Capital Stock is sold in such Sale of the Company or in the transaction which resulted in such Sale of the Company, which represent a percentage interest in BMC equal to the Specified Percentage of such Security, and (iv) in the case of a redemption with respect to a liquidation of either Issuer, an amount equal to the fair market value of the distribution received by Capital Stock in an amount equal to the Specified Percentage of such Security in connection with such liquidation. "Specified Percentage" of a Security means a percentage equal to (i) 5% multiplied by (ii) a fraction the numerator of which is the principal amount of such Security and the denominator of which is $3,000,000. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision. "Subordinated Obligation" means with respect to an Issuer or any Subsidiary Guarantor, any Indebtedness of such Issuer or such Subsidiary Guarantor, as the case may be 11 (whether outstanding on the Issue Date or thereafter incurred) which is expressly subordinate or junior in right of payment to the Securities or such Subsidiary Guarantor's Guarantee of the Securities, as the case may be, in each case pursuant to a written agreement. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary shall refer to a Subsidiary of an Issuer. "Subsidiary Guarantee" means the Guarantee of the Securities by a Subsidiary Guarantor. "Subsidiary Guarantor" means each Subsidiary of an Issuer on the Issue Date and each newly organized or acquired Restricted Subsidiary that operates and executes a supplemental indenture pursuant to Section 11.07. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA, except as provided in Section 9.03 hereof; provided, however, that, in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means United States Trust Company of New York, a banking corporation organized and existing under the laws of the State of New York, until a successor replaces it in accordance with Article 7 and thereafter means the successor serving hereunder. "Value" of BMC on the Maturity Date means an amount equal to 12 times Media Cashflow for the then most recent four fiscal quarters for which financial statements of BMC are available plus the cash and Cash Equivalents of BMC and its Subsidiaries on the Maturity Date less the aggregate amount of Indebtedness of BMC and its Subsidiaries on a consolidated basis outstanding on the Maturity Date. "Wholly-Owned Subsidiary" means a Subsidiary of an Issuer, at least 95% of the Capital Stock of which (other than directors' qualifying shares) is owned by such Issuer or another Wholly-Owned Subsidiary. 12 SECTION 1.02. OTHER DEFINITIONS. Defined in Term Section "actual knowledge"................................... 7.02 "Agent Members"...................................... 2.16 "Funding Guarantor"................................. 11.05 "Global Appreciation Note"........................... 2.01 "Guaranteed Obligations"............................ 11.01 "Legal Holiday"..................................... 12.07 "Offshore Physical Securities"....................... 2.01 "Paying Agent"....................................... 2.03 "Physical Securities"................................ 2.01 "Private Placement Legend"........................... 2.15 "Registrar".......................................... 2.03 "Successor Company".................................. 5.01 "U.S. Physical Securities"........................... 2.01 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Securities and the Subsidiary Guarantees; "indenture security holder" means a Securityholder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; "obligor" on the Securities means the Issuer, the Guarantors and any successor obligor upon the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them. 13 SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) "or" is not exclusive; (iv) words in the singular include the plural, and in the plural include the singular; and (v) provisions apply to successive events and transactions. ARTICLE 2 THE SECURITIES SECTION 2.01. FORM AND DATING. The Initial Securities, the notation thereon relating to the Subsidiary Guarantees and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit A hereto. The Exchange Securities, the notation thereon relating to the Subsidiary Guarantees and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit B hereto. The Securities may have notations, legends or endorsements required by law, stock exchange rule or Depository rule or usage. The Issuers, the Subsidiary Guarantors and the Trustee shall approve the form of the Securities and any notation, legend or endorsement on them. Each Security shall be dated the date of its authentication. The terms and provisions contained in the forms of the Securities and the Subsidiary Guarantees, annexed hereto as Exhibits A and B, shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Issuers, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. Securities offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global notes in registered form, in substantially the form set forth in Exhibit A (the "Global Appreciation Note"), deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Global Appreciation Note may from time to 14 time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided. Securities offered and sold in offshore transactions in reliance on Regulation S shall be issued in the form of permanent certificated Securities in registered form in substantially the form set forth in Exhibit A (the "Offshore Physical Securities"). Securities offered and sold in reliance on any other exemption from registration under the Securities Act other than as described in the preceding paragraph shall be issued, and Securities offered and sold in reliance on Rule 144A may be issued, in the form of permanent certificated Securities in registered form, in substantially the form set forth in Exhibit A (the "U.S. Physical Securities"). The Offshore Physical Securities and the U.S. Physical Securities are sometimes collectively herein referred to as the "Physical Securities". SECTION 2.02. EXECUTION AND AUTHENTICATION. (a) Two Officers of each Issuer (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall sign the Securities for such Issuer by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. Each Subsidiary Guarantor shall execute a Subsidiary Guarantee in the manner set forth in Section 11.02. (b) A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature of the Trustee shall be conclusive evidence that the Security has been authenticated under this Indenture. (c) The Trustee shall authenticate (i) Initial Securities for original issue in the aggregate principal amount not to exceed $3,000,000 and an aggregate Specified Percentage not to exceed 5% and (ii) Exchange Securities from time to time for issue only in exchange for a like principal amount and Specified Percentage of Initial Securities, in each case upon receipt of a written order of the Issuers. Securities may only be issued in denominations of $28.571428 or integral multiples thereof, provided, however, that fractions of a cent shall be rounded down to the nearest whole cent. (d) The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Issuers or an Affiliate. 15 SECTION 2.03. REGISTRAR AND PAYING AGENT. (a) The Issuers shall maintain an office or agency (which shall be located in the Borough of Manhattan in the City of New York, State of New York) where (i) Securities may be presented for registration of transfer or for exchange ("Registrar"), (ii) Securities may be presented for payment ("Paying Agent") and (iii) notices and demands to or upon the Issuers in respect of the Securities and this Indenture may be served. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Issuers may appoint one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Issuers may change any Paying Agent, Registrar or co-registrar without prior notice to any Securityholder. The Issuers shall notify the Trustee and the Trustee shall notify the Securityholders of the name and address of any Agent not a party to this Indenture. If the Issuers fail to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. An Issuer or any Subsidiary Guarantor may act as Paying Agent, Registrar or co-registrar. The Issuers shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate the provisions of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuers shall notify the Trustee of the name and address of any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, or fail to give the foregoing notice, the Trustee shall act as such, and shall be entitled to appropriate compensation in accordance with Section 7.07 hereof. (b) The Issuers initially appoint the Trustee as Registrar, Paying Agent and agent for service of notices and demands in connection with the Securities. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Issuers, the Subsidiary Guarantors or any other obligor on the Securities shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of the Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, and interest on the Securities, and shall notify the Trustee of any Default by the Issuers, any of the Subsidiary Guarantors or any other obligor on the Securities in making any such payment. While any such Default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuers, the Subsidiary Guarantors or any other obligor on the Securities at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than an Issuer or a Subsidiary Guarantor) shall have no further liability for the money delivered to the Trustee. If an Issuer, any Subsidiary Guarantor or any other obligor on the Securities acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders all money held by it as Paying Agent. 16 SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuers, the Subsidiary Guarantors or any other obligor on the Securities shall furnish to the Trustee at least seven Business Days before any date on which payment is due on the Securities and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders, including the aggregate principal amount of the Securities held by each thereof, and the Issuers, the Subsidiary Guarantors or any other obligor on the Securities shall otherwise comply with TIA Section 312(a). SECTION 2.06. TRANSFER AND EXCHANGE. (a) Where Securities are presented to the Registrar or a co-registrar with a request to register the transfer thereof or exchange them for an equal principal amount of Securities of other denominations, the Registrar shall, subject to Section 2.17, register the transfer or make the exchange if its requirements for such transactions are met; provided, however, that any Security presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar and the Trustee duly executed by the Securityholder thereof or his attorney duly authorized in writing. To permit registrations of transfer and exchanges, the Issuers shall issue and the Trustee shall authenticate Securities at the Registrar's request. (b) The Issuers shall not be required (i) to issue, to register the transfer of or to exchange Securities during a period beginning at the opening of business on a Business Day 15 days before the day of any selection of Securities for redemption under Section 3.02 hereof and ending at the close of business on the day of selection or (ii) to register the transfer of or exchange any Security so selected for redemption. (c) No service charge shall be made for any registration of a transfer or exchange (except as otherwise expressly permitted herein), but the Issuers may require payment by the Securityholder of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.10, 3.06 or 9.05 hereof). (d) Any Holder of the Global Appreciation Note shall, by acceptance of such Global Appreciation Note, agree that transfers of beneficial interests in such Global Appreciation Note may be effected only through a book entry system maintained by the Holder of such Global Appreciation Note (or its agent), and that ownership of a beneficial interest in the Global Appreciation Note shall be required to be reflected in a book entry. 17 SECTION 2.07. REPLACEMENT SECURITIES. (a) If any mutilated Security is surrendered to the Trustee, or an Issuer and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, the Issuers shall issue and the Trustee, upon receipt by it of the written order of the Issuers signed by two Officers of each of the Issuers, shall authenticate a replacement Security if the Trustee's requirements for replacements of Securities are met. If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Subsidiary Guarantors, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Security is replaced. The Issuers and the Trustee may charge a Securityholder for reasonable out-of-pocket expenses in replacing a Security. (b) Every replacement Security is an obligation of each of the Issuers and each of the Subsidiary Guarantors. SECTION 2.08. OUTSTANDING SECURITIES. (a) The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those cancelled by the Issuers or by the Trustee, those delivered to the Trustee for cancellation and those described in this Section as not outstanding. (b) If a Security is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. (c) If the principal amount of any Security is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. (d) Subject to Section 2.09 hereof, a Security does not cease to be outstanding because an Issuer or an Affiliate of an Issuer or a Subsidiary Guarantor holds the Security. SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by an Issuer, a Subsidiary Guarantor, or any of their respective Affiliates shall be considered as though not outstanding, except that for purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Responsible Officer knows to be so owned shall be so considered. 18 SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Issuers, the Subsidiary Guarantors and the Trustee consider appropriate for temporary Securities. Without unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of the written order of the Issuers signed by two Officers of each of the Issuers, shall authenticate definitive Securities in exchange for temporary Securities. Until such exchange, temporary Securities shall be entitled to the same rights, benefits and privileges as definitive Securities. SECTION 2.11. CANCELLATION. The Issuers at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Securities, if not already cancelled, surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Securities (subject to the record retention requirement of the Exchange Act), and deliver certification of their destruction to the Issuers, unless by a written order, signed by two Officers of each of the Issuers, the Issuers shall direct that cancelled Securities be returned to them. The Issuers may not issue new Securities to replace Securities that they have redeemed or paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Issuers default in a payment of interest on the Securities, they shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Securityholders on a subsequent special record date, which date shall be at the earliest practicable date but in all events at least five Business Days prior to the payment date, in each case at the rate provided in the Securities and in Section 4.01 hereof. The Issuers shall, with the consent of the Trustee, fix or cause to be fixed each such special record date and payment date. At least 15 days before the special record date, the Issuers (or the Trustee, in the name of and at the expense of the Issuers) shall mail to Securityholders a notice that states the special record date, the related payment date and the amount of such interest to be paid. SECTION 2.13. CUSIP NUMBER. The Issuers in issuing the Securities may use a "CUSIP" number, and if so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to Securityholders; provided, however, that no representation shall be deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP number printed in the notice or on the 19 Securities, and that reliance may be placed only on the other identification numbers printed on the Securities. The Issuers shall promptly notify the Trustee of any change in the CUSIP number. SECTION 2.14. DEPOSIT OF MONEYS. Prior to 11:00 a.m. New York City time on each date on which payments are due under the Securities and Maturity Date, the Issuers shall deposit with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such date or Maturity Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Securityholders on such date or Maturity Date, as the case may be. SECTION 2.15. RESTRICTIVE LEGENDS. Each Global Appreciation Note and Physical Security that constitutes a Restricted Security shall bear the following legend (the "Private Placement Legend") unless otherwise agreed by the Issuers and the Securityholder thereof: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO AN ISSUER THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE 20 TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS HEREOF THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING AS DESCRIBED IN CLAUSE (1)(B) ABOVE FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT BE PERMITTED TO TRANSFER THIS NOTE TO AN INSTITUTIONAL ACCREDITED INVESTOR. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING PURSUANT TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUERS HEREOF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF 21 THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS. Each Global Appreciation Note shall also bear the following legend on the face thereof: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY. 22 (a) The Global Appreciation Note initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Section 2.15. Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Appreciation Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Appreciation Note, and the Depository may be treated by the Issuers, the Trustee and any agent of an Issuer or the Trustee as the absolute owner of the Global Appreciation Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of an Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security. (b) Transfers of the Global Appreciation Note shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Interest of beneficial owners in the Global Appreciation Note may be transferred or exchanged for Physical Securities in accordance with the rules and procedures of the Depository and the provisions of Section 2.17. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in the Global Appreciation Note if (i) the Depository notifies the Issuers that it is unwilling or unable to continue as Depository for the Global Appreciation Note and a successor depository is not appointed by the Issuers within 90 days of such notice or (ii) a default has occurred and is continuing and the Registrar has received a written request from the Depository or the Trustee to issue Physical Securities. (c) In connection with any registration of transfer or exchange of a portion of the beneficial interest in the Global Appreciation Note to beneficial owners pursuant to paragraph (b) above, the Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the beneficial interest in the Global Appreciation Note to be transferred, and the Issuers shall execute, and the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and amount. (d) In connection with the registration of transfer of the entire Global Appreciation Note to beneficial owners pursuant to paragraph (b), the Global Appreciation Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the Global Appreciation Note, an equal aggregate principal amount of Physical Securities of authorized denominations. (e) Any Physical Security constituting a Restricted Security delivered in exchange for an interest in the Global Appreciation Note pursuant to paragraph (b) or (c) above 23 shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.17, bear the legend regarding transfer restrictions applicable to the Physical Securities set forth in Section 2.15. (f) The Holder of the Global Appreciation Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Securityholder is entitled to take under this Indenture or the Securities. SECTION 2.17. SPECIAL TRANSFER PROVISIONS. (a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to any Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person: (i) the Registrar shall register the transfer of any Security constituting a Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after December 30, 1999 or (y) (1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S.Persons), the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit C hereto or (2) in the case of a transfer to a Non-U.S. Person, the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit D hereto; and (ii) if the proposed transferor is an Agent Member holding a beneficial interest in the Global Appreciation Note, upon receipt by the Registrar of (x) the certificate, if any, required by paragraph (i) above and (y) instructions given in accordance with the Depository's and the Registrar's procedures, whereupon (a) the Registrar shall reflect on its books and records the date and (if the transfer does not involve a transfer of outstanding Physical Securities) a decrease in the principal amount of the Global Appreciation Note in an amount equal to the principal amount of the beneficial interest in the Global Appreciation Note to be transferred, and (b) the Issuers shall execute and the Trustee shall authenticate and deliver one or more Physical Securities of like tenor and amount. 24 (b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons): (i) the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Security stating, or has otherwise advised the Issuer and the Registrar in writing, that the sale has been effected in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Issuers and the Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that any such account is a QIB within the meaning of Rule 144A, and it is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; and (ii) if the proposed transferee is an Agent Member and the Securities to be transferred consist of Physical Securities which after transfer are to be evidenced by an interest in the Global Appreciation Note, upon receipt by the Registrar of instructions given in accordance with the Depository's and the Registrar's procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Appreciation Note in an amount equal to principal amount of the Physical Securities to be transferred, and the Trustee shall cancel the Physical Securities so transferred. (c) Private Placement Legend. Upon the registration of the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the registration of the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar shall deliver only Securities that bear the Private Placement Legend unless (i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17 exists or (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Issuers and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (d) General. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of 25 such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. The Registrar shall retain for at least two years copies of all letters, notices and other written communications received pursuant to Section 2.16 or this Section 2.17. The Issuers shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. SECTION 2.18. PERSONS DEEMED OWNERS. Prior to due presentment of a Security for registration of transfer and subject to Section 2.12, the Issuers, the Trustee, any Paying Agent, any Registrar and any co-registrar shall treat the Person in whose name any Security shall be registered upon the register of Securities kept by the Registrar as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of the ownership or other writing thereon made by anyone other than an Issuer, any Registrar or any co-registrar) for the purpose of receiving payments of principal of or interest on such Security and for all other purposes; and none of the Issuers, the Trustee, any Paying Agent, any Registrar or any co-registrar shall be affected by any notice to the contrary. SECTION 2.19. TAX CONSIDERATIONS AND ALLOCATION OF PURCHASE PRICE. BMC agrees, and each holder of a Security by acceptance of a Security agrees, to treat the Securities as indebtedness for all U.S. federal, state and local income tax purposes. Based on their estimate of the relative fair market values of the Notes and the Securities, the Issuers agree that of the initial purchase price of $922.0 for each $1,000 principal amount of Securities, they shall treat for U.S. federal income tax purposes $899.63 of such initial purchase price as allocable to the Notes and $22.37 as allocable to the Securities. ARTICLE 3 REDEMPTION SECTION 3.01. NOTICES TO TRUSTEE. (a) If the Issuers elect to redeem Securities pursuant to the optional redemption provisions of Section 3.08 hereof, they shall furnish to the Trustee, at least 45 days (unless a shorter period is acceptable to the Trustee) but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, and (iii) the redemption price. 26 (b) If the Issuers are required to make an offer to redeem Securities pursuant to the provisions of Section 3.09 hereof, they shall furnish to the Trustee at least 30 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the redemption price and (iv) further setting forth a statement to the effect that a Specified Event has occurred and the conditions set forth in Section 3.09 have been satisfied. SECTION 3.02. [RESERVED]. SECTION 3.03. NOTICE OF OPTIONAL REDEMPTION BY THE ISSUERS OR MATURITY. (a) At least 30 days before a redemption pursuant to Section 3.08, the Issuers shall mail a notice of redemption by first class mail, postage prepaid to each Holder at the last address for such Holder then shown on the registry books. The notice shall state that all Securities are to be redeemed and shall further state: (i) the redemption date; (ii) the redemption price; (iii) the name and address of the Paying Agent; (iv) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (v) that, unless the Issuers default in making such redemption payment, interest on Securities called for redemption ceases to accrue on and after the redemption date; (vi) the paragraph of the Securities and/or Section of this Indenture pursuant to which the Securities called for redemption are being redeemed. (b) At the Issuers' request, the Trustee shall give the notice of redemption in the Issuers' names and at the Issuers' expense; provided, however, that the Issuers shall have delivered to the Trustee at least 45 days (unless a shorter period is acceptable to the Trustee) prior to the proposed redemption date an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 27 SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Securities called for redemption become due and payable on the redemption date at the redemption price plus accrued and unpaid interest, if any. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. (a) Prior to 11:00 a.m., New York City time, on or before any date on which the Securities are being redeemed or otherwise paid in full, the Issuers shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price and other applicable payments due on all Securities to be redeemed or otherwise paid in full. The Trustee or the Paying Agent shall promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption price and any other applicable payment due on all Securities. If any Security to be redeemed shall not be so paid upon surrender for redemption because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid and, to the extent lawful, on any interest not paid on such unpaid principal, in each case at the rate of 17% per annum as provided in the Securities and in Section 4.01 hereof. SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Issuers shall issue and the Trustee shall authenticate for the Securityholder at the expense of the Issuer a new Security equal in principal amount and Specified Percentage to the unredeemed portion of the Security surrendered. SECTION 3.07. REDEMPTION UPON MATURITY. The Securities will mature on the Maturity Date. Each Security will entitle the Holder thereof to receive on the Maturity Date a cash payment of principal and interest in the amount equal to (i) the principal amount thereof plus (ii) the amount by which the Specified Percentage of such Security of the Value of BMC on the Maturity Date exceeds the principal amount of such Security. At least five Business Days prior to the Maturity Date, the Issuers shall deliver to the Trustee an Officers' Certificate, upon which the Trustee may conclusively rely, certifying the amount to be paid on each $28.571428 principal amount of the Securities on the Maturity Date. SECTION 3.08. OPTIONAL REDEMPTION. 28 (a) The Securities will not be redeemable at the option of the Issuers prior to June 15, 1999. Thereafter, if an Initial Public Offering has not occurred on or before a date set forth below, the Securities will be redeemable, at the Issuers' option, in whole but not in part, on such date, at a redemption price for each Security equal to the Pro Rata Percentage of such Security of the amount set forth below opposite such redemption date (which amount, in each case, represents payment in full of all principal and interest on the Securities): Date Amount ---- ------ June 15, 1999 $ 3.0 million June 15, 2000 $ 8.3 million June 15, 2001 $12.8 million June 15, 2002 $18.0 million June 15, 2003 $24.0 million June 15, 2004 $31.0 million June 15, 2005 $39.0 million June 15, 2006 $48.0 million June 15, 2007 $58.0 million SECTION 3.09. MANDATORY REDEMPTION AT THE OPTION OF THE SECURITYHOLDERS UPON THE OCCURRENCE OF CERTAIN EVENTS. (a) Upon the occurrence of an Initial Public Offering, a Sale of the Company or the liquidation of either Issuer (each such event, a "Specified Event"), each Holder shall have the right to require the Issuers to redeem all or any part of such Holder's Securities at the relevant Specified Event Purchase Price (which amount, in each case, represents payment in full of all principal and interest on such Securities) in accordance with this Section 3.09. (b) Within 30 days following the occurrence of any Specified Event, unless the Issuers have mailed a redemption notice with respect to all the outstanding Securities, the Issuers shall mail a notice to each Holder with a copy to the Trustee stating: 29 (i) that a Specified Event has occurred and that such Securityholder has the right to require the Issuers to redeem such Securityholder's Securities at a purchase price in cash equal to the Specified Event Purchase Price (stating the Specified Event Purchase Price for each $28.571428 principal amount of the Securities); (ii) the redemption date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); (iii) the name and address of the Paying Agent; and (iv) the procedures determined by the Issuers, consistent with this Indenture, that a Securityholder must follow in order to have its Securities redeemed. (c) Securityholders electing to have a Security redeemed will be required to surrender the Security, with the form entitled "Option of Securityholder to Elect Redemption" on the reverse of the Security completed, to the Issuers at the address specified in the notice at least 10 Business Days prior to the redemption date. Securityholders will be entitled to withdraw their election if the Trustee or the Issuers receives not later than three Business Days prior to the redemption date, a telegram, telex, facsimile transmission or letter setting forth the name of the Securityholder, the principal amount of the Security which was delivered for redemption by the Securityholder and a statement that such Securityholder is withdrawing his election to have such Security redeemed. (d) On the redemption date, all Securities redeemed by the Issuers under this Section 3.09 shall be delivered by the Trustee for cancellation, and the Issuers shall pay the redemption price plus accrued and unpaid interest, if any, to the Securityholders entitled thereto. (e) The Issuers shall to the extent applicable comply with any tender offer rules under the Exchange Act which may then be applicable, including Rule 14e-1, in connection with any offer required to be made by the Issuers to redeem the Securities as a result of a Specified Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relative to the Issuers' obligation to make an offer to redeem the Securities as a result of a Specified Event, the Issuers shall comply with the applicable securities laws and regulations and will not be deemed to have breached their obligations under such provisions of this Indenture by virtue thereof. SECTION 3.10. MANDATORY REDEMPTION AT THE OPTION OF THE SECURITYHOLDERS ON SPECIFIED DATES. If an Initial Public Offering has not occurred on or before a date set forth below, the Securityholders may require the Issuers to redeem their Securities, in whole or in part within 90 days of such date at a redemption price for each Security equal to the Pro Rata Percentage 30 of such Security of the amount set forth below opposite such date (which amount, in each case, represents payment in full of all principal and interest thereon): Date Amount ---- ------ June 30, 2003 $24.0 million June 30, 2004 $20.0 million June 30, 2005 $13.0 million A Securityholder may exercise its rights to require the redemption of the Securities held by such Holder by delivering a notice to the Issuers (with a copy to the Trustee in the manner set forth in Section 12.02) on or before a date as set forth above stating that such Holder is demanding that the Issuers redeem such Holder's Securities and the portion of Securities to be redeemed. Upon receipt of any such notice the Issuers shall redeem the Securities for which such notice has been delivered by no later than the 90th day following the relevant date. Within five Business Days following the relevant date specified above, the Issuers shall mail a notice to each Holder that has elected to have all or a portion of its Securities redeemed following such relevant date and to the Trustee stating (1) the redemption date; (2) the aggregate principal amount of the Securities that will be redeemed on the redemption date; (3) the aggregate redemption price; (4) the name and address of the Paying Agent; and (5) that Securities to be redeemed must be surrendered to the Paying Agent to collect the redemption price for such Securities. ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF SECURITIES. (a) The Issuers shall pay the principal of, premium, if any, and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than an Issuer or a Subsidiary Guarantor, holds as of 11:00 a.m. New York City time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. Such Paying Agent shall return to the Issuers, no later than five days following the date of payment, any money 31 (including accrued interest paid by the Issuers) that exceeds such amount of principal, premium, if any, and interest paid on the Securities. (b) The Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Code) on overdue principal and other amounts not paid when due at a rate of 17% per annum to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Code) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. (a) The Issuers shall maintain in the Borough of Manhattan, in the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuers in respect of the Securities and this Indenture may be served. The Issuers shall give prior written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. (b) The Issuers may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuers of their obligation to maintain an office or agency in the Borough of Manhattan, in the City of New York for such purposes. The Issuers shall give prior written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. (c) The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 2.03. SECTION 4.03. SEC REPORTS. (a) Upon consummation of the Exchange Offer and the issuance of the Exchange Securities, each Issuer and each Subsidiary Guarantor (at its own expense) shall file with the Commission and shall furnish to the Trustee and each Securityholder within 15 days after it files them with the Commission copies of the quarterly and annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) to be filed pursuant to Section 13 or 15(d) of the Exchange Act (without regard to whether either of the Issuers is subject to the 32 requirements of such Section 13 or 15(d) of the Exchange Act). Notwithstanding the foregoing, in the event that the Issuers are not required to file such reports with the Commission pursuant to the Exchange Act, the Issuers will nevertheless deliver such Exchange Act information to the Holders of the Securities within 15 days after it would have been required to file it with the Commission. Upon qualification of this Indenture under the TIA, the Issuers and each of the Subsidiary Guarantors shall also comply with the provisions of TIA Section 314(a). (b) At the Issuers' expense, each Issuer and each of the Subsidiary Guarantors, as applicable, shall cause an annual report if furnished by it to stockholders generally and each quarterly or other financial report if furnished by it to stockholders generally to be filed with the Trustee and mailed to the Securityholders at their addresses appearing in the register of Securities maintained by the Registrar at the time of such mailing or furnishing to stockholders. (c) Each Issuer and each of the Subsidiary Guarantors shall provide to any Securityholder any information reasonably requested by such Securityholder concerning the Issuers and the Subsidiary Guarantors (including financial statements) necessary in order to permit such Securityholder to sell or transfer Securities in compliance with Rule 144A under the Securities Act. SECTION 4.04. COMPLIANCE CERTIFICATES. (a) Each of the Issuers and each Subsidiary Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate signed by its principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of such Issuer and its Subsidiaries or such Subsidiary Guarantor and its Subsidiaries, as the case may be, during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether each has kept, observed, performed and fulfilled its Obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge each has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto). (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03 above shall be accompanied by a written statement of (x) the Issuers' independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that either Issuer has violated any provisions of Article 4 or 5 of this Indenture insofar as they relate to accounting matters or, if any such violation has occurred, specifying the nature and period of existence thereof, it being 33 understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation and (y) if any Subsidiary Guarantor's financial statements are not prepared on a consolidated basis with the applicable Issuer's, such Subsidiary Guarantor's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that any of the Subsidiary Guarantors is in Default under this Indenture or, if any such Default has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) Each Issuer and each of the Subsidiary Guarantors shall, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of (i) any Default or (ii) any event of default under any other mortgage, indenture or instrument to which either Issuer or a Subsidiary Guarantor is a party, an Officers' Certificate specifying such Default, or event of default and what action such Issuer or such Subsidiary Guarantor, as the case may be, is taking or proposes to take with respect thereto. (d) Each Issuer and each of the Subsidiary Guarantors shall also comply with TIA Section 314(a)(4). SECTION 4.05. TAXES. Each Issuer and each of the Subsidiary Guarantors shall pay, and shall cause each of their respective Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings. SECTION 4.06. STAY, EXTENSION AND USURY LAWS. Each of the Issuers and the Subsidiary Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture (including, but not limited to, the payment of the principal of or interest on the Securities); and each Issuer and each Subsidiary Guarantor (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. 34 SECTION 4.07. CORPORATE EXISTENCE. Subject to Article 5 hereof, each Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and the corporate, partnership or other existence of each Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Subsidiary and the rights (charter and statutory), licenses and franchises of each Issuer and its Subsidiaries; provided, however, that the Issuers shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Subsidiary, if the Board of Directors of an Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuers and their Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Securityholders. SECTION 4.08. FUTURE GUARANTORS. The Issuers shall cause each newly organized or acquired Restricted Subsidiary to execute and deliver to the Trustee pursuant to Section 11.07 (a) a supplemental Indenture in which such Restricted Subsidiary agrees to be bound by the terms of this Indenture as a Subsidiary Guarantor and (b) a Subsidiary Guarantee. SECTION 4.09. FURTHER INSTRUMENTS AND ACTS. The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Issuers, except as otherwise set forth herein, but the Trustee may require of the Issuers full information and advice as to the performance of the covenants, conditions and agreements contained herein, and upon request of the Trustee, the Issuers will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture. ARTICLE 5 SUCCESSORS SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS. Neither Issuer shall consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a corporation, partnership, trust or limited liability company organized and 35 existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not an Issuer) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Issuer under the Securities and this Indenture; (ii) immediately after giving effect to such transaction, the Successor Company shall have a Consolidated Net Worth equal or greater to the Consolidated Net Worth of the relevant Issuer immediately prior to such transaction; (iii) the Issuers shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and (iv) there has been delivered to the Trustee an Opinion of Counsel to the effect that Holders of Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such consolidation, merger, conveyance, transfer or lease and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such consolidation, merger, conveyance, transfer or lease had not occurred. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the applicable Issuer under this Indenture, but, in the case of a lease of all or substantially all its assets, the applicable Issuer will not be released from the obligation to pay the principal of and interest on the Securities. ARTICLE 6 REMEDIES SECTION 6.01. REMEDIES. (a) If a Default occurs and is continuing, the Trustee and the Securityholders may pursue any available remedy to collect the payment of principal, premium, if any, or interest on the Securities as they become due and payable or to enforce the performance of any provision of the Securities or this Indenture, it being understood that a Default shall not cause the acceleration of principal, premium or interest on the Securities. 36 (b) The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon a Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Default. All remedies are cumulative to the extent permitted by law. SECTION 6.02. WAIVER OF PAST DEFAULTS. Securityholders of not less than a majority in aggregate principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default and its consequences, except a continuing Default in the payment of the principal, premium, if any, or interest on any Security or a Default that cannot be modified or amended without the consent of the Holder of each outstanding Security affected. Upon any such waiver, such Default shall cease to exist and shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.03. CONTROL BY MAJORITY. Securityholders of a majority in principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Securityholders or that may involve the Trustee in personal liability. SECTION 6.04. LIMITATION ON SUITS. (a) A Securityholder may pursue a remedy with respect to this Indenture or the Securities only if: (i) the Securityholder has previously given to the Trustee written notice of a continuing Default; (ii) the Holders of at least 25% in principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy; (iii) such Securityholder or Securityholders offer, and, if requested, provide, to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and 37 (v) during such 60-day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee, in the reasonable opinion of such Trustee, a direction inconsistent with the request. (b) A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.05. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Securityholder to receive payment of principal, premium, if any, and interest on the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Securityholder. SECTION 6.06. COLLECTION SUIT BY TRUSTEE. If a Default in the payment of the Securities occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against an Issuer or any Subsidiary Guarantor or any other obligor on the Securities for the whole amount of principal, premium, if any, and accrued interest remaining unpaid on the Securities and interest on overdue principal, premium, if any, and, to the extent lawful, interest on overdue installments of interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including any advances made by the Trustee and the reasonable compensation, expenses and disbursements of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. SECTION 6.07. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof) and the Securityholders allowed in any judicial proceedings relative to the Issuers or any Subsidiary Guarantor (or any other obligor on the Securities), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Securityholder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and 38 any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Securityholders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Securityholder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding. SECTION 6.08. PRIORITIES. (a) If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: (i) First: to the Trustee, its agents and attorneys for amounts due under Section 7.07, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; (ii) Second: if the Securityholders are forced to proceed against the Issuers directly without the Trustee, to the Securityholders for their collection costs; (iii) Third: subject to Article 10, to the Securityholders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, premium, if any, and interest, respectively; and (iv) Fourth: to the Issuers or, to the extent the Trustee collects any amount pursuant to Article 11 hereof from any Subsidiary Guarantor, to such Subsidiary Guarantor, or to such party as a court of competent jurisdiction shall direct. (b) The Trustee may fix a record date and payment date for any payment to Securityholders. SECTION 6.09. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit 39 by the Trustee, a suit by a Securityholder pursuant to Section 6.04 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 7 TRUSTEE SECTION 7.01. DUTIES OF TRUSTEE. (a) If a Default in the payment of the Securities has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances and in the conduct of his own affairs. (b) Except during the continuance of a Default in the payment of the Securities: (i) the Trustee undertakes to perform only those duties as are specifically set forth in this Indenture and the duties of the Trustee shall be determined solely by the express provisions of this Indenture, the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the same to determine whether or not they conform to the requirements of this Indenture. (c) Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and 40 (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.03 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers. Assets held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document unless the Trustee has reason to believe such fact or matter is not true. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers or any Subsidiary Guarantor shall be sufficient if signed by an Officer of an Issuer or any Subsidiary Guarantor. 41 (f) The permissive rights of the Trustee to do certain things enumerated in this Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than its negligence or wilful default with respect to such permissive rights. (g) Except for a Default in the payment of the Securities (other than with respect to Additional Interest (as defined in the Securities)), the Trustee shall not be deemed to have notice of any Default unless (i) specifically notified in writing of such event by an Issuer or the Securityholders of not less than 25% in aggregate principal amount of Securities outstanding or (ii) a Responsible Officer of the Trustee has actual knowledge of such Default; as used herein, the term "actual knowledge" means the actual fact or statement of knowing, without any duty to make any investigation with regard thereto. SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuers, any Subsidiary Guarantor or any Affiliate of an Issuer or any Subsidiary Guarantor with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11 hereof. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Securities or the Subsidiary Guarantees, it shall not be accountable for the Issuers' use of the proceeds from the Securities or any money paid to an Issuer or upon the direction of an Issuer under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Securities or the Subsidiary Guarantees or any other document in connection with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication. SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder a notice of the Default within 60 days after it occurs. Except in the case of a Default in any payment of principal or interest on any Security, the Trustee may withhold the notice if a committee of its officers in good faith determines that withholding the notice is in the interest of the Securityholders. In addition, each Issuer is required to deliver to the Trustee, within 90 days after each fiscal year of such Issuer, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Issuers shall also deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events which would constitute a Default. 42 SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS. (a) Within 60 days after each June 15 beginning with the June 15 following the date of this Indenture, the Trustee shall mail to the Securityholders a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b), (c) and (d). (b) A copy of each report at the time of its mailing to the Securityholders shall be filed with the Commission and each stock exchange, if any, on which the Securities are listed. The Issuers shall promptly notify the Trustee if and when the Securities are listed on any stock exchange. SECTION 7.07. COMPENSATION AND INDEMNITY. (a) Each of the Issuers and the each of the Subsidiary Guarantors, jointly and severally, shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. Each of the Issuers and each of the Subsidiary Guarantors, jointly and severally, shall reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. (b) Each of the Issuers and each of the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder, except as set forth below in subparagraph (d). The Trustee shall notify the Issuers and each of the Subsidiary Guarantors promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuers or any Subsidiary Guarantor shall not relieve the Issuers or any of the Subsidiary Guarantors of their Obligations hereunder. The Trustee may have separate counsel and each of the Issuers and each of the Subsidiary Guarantors, jointly and severally, shall pay the reasonable fees and expenses of such counsel. Neither the Issuers nor any Subsidiary Guarantor need pay for any settlement made without its consent, which consent shall not be unreasonably withheld. (c) The obligations of each of the Issuers and each of the Subsidiary Guarantors under this Section 7.07 shall survive the resignation or removal of the Trustee and the satisfaction and discharge or termination of this Indenture. 43 (d) Notwithstanding subparagraphs (a) or (b) above, neither the Issuers nor any Subsidiary Guarantor need reimburse any expense or indemnify against any loss or liability incurred by the Trustee through its own negligence, bad faith or willful misconduct. (e) To secure the Issuers' and each of the Subsidiary Guarantor's payment obligations in this Section, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, and interest on particular Securities. Such Lien shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. (f) When the Trustee incurs expenses or renders services after the occurrence of bankruptcy, insolvency or other similar event with respect to an Issuer or a Subsidiary Guarantor the expenses and the compensation for such services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under the Bankruptcy Code. SECTION 7.08. REPLACEMENT OF TRUSTEE. (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. (b) The Trustee may resign at any time and be discharged from the trust hereby created by so notifying the Issuers. The Securityholders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the Trustee and the Issuers. The Issuers may remove the Trustee if: (i) the Trustee fails to comply with Section 7.10 hereof; (ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Code; (iii) a Custodian, receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall notify each Securityholder of such event and promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers. 44 (d) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to each Securityholder. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers' and each of the Subsidiary Guarantor's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. (e) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, any of the Subsidiary Guarantors or the Securityholders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) If the Trustee after written request by any Securityholder who has been a Securityholder for at least six months fails to comply with Section 7.10, such Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to another corporation, the resulting, surviving or transferee corporation without any further act shall, if such resulting, surviving or transferee corporation is otherwise eligible hereunder, be the successor Trustee; provided, however, that such corporation shall be otherwise qualified and eligible under this Article Seven. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. (a) There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or the District of Columbia authorized under such laws to exercise corporate trustee power, shall be subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority and shall have a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition. (b) This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall comply with TIA Section 310(b). The provisions 45 of TIA Section 310 shall also apply to the Issuers and each of the Subsidiary Guarantors, as obligor of the Securities. SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. The provisions of TIA Section 311 shall apply to the Issuers and each of the Subsidiary Guarantors as obligor on the Securities. ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. (a) When (i) the Issuers deliver to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.07 hereof) canceled or for cancellation or (ii) all outstanding Securities have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to Section 3.08, and the Issuers have irrevocably deposited with the Trustee funds sufficient to pay at maturity all outstanding Securities, including interest thereon (other than Securities replaced pursuant to Section 2.07 hereof), and if in either case the Issuers pay all other sums payable hereunder by the Issuers, then this Indenture shall, subject to Sections 8.01(c) and 8.04 hereof, be satisfied and discharged and cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Issuers accompanied by an Officers' Certificate and an Opinion of Counsel at the cost and expense of the Issuers. (b) Notwithstanding clause (a) above, the Issuers' obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07 and 7.07 hereof and the obligations of each Subsidiary Guarantor under Article 11 in respect thereof shall survive until the Securities have been paid in full. Thereafter, the Issuers' obligations in Section 7.07 hereof and the obligations of Subsidiary Guarantors under Article 11 in respect thereof shall survive. SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money deposited with it pursuant to this Article 8. It shall apply the deposited money through the Paying Agent and in accordance with this Indenture to the payment of principal, premium, if any, and interest on the Securities. 46 SECTION 8.03. REPAYMENT TO THE ISSUERS. (a) The Trustee and the Paying Agent shall promptly pay to the Issuers upon written request any excess money or securities held by them at any time; provided, however, that the Trustee shall not pay any such excess to the Issuers unless the amount remaining on deposit with the Trustee, after giving effect to such transfer are sufficient to pay principal, premium, if any, and interest on the outstanding Securities, which amount shall be certified by independent public accountants. (b) The Trustee and the Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal, premium, if any, or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Issuers shall have either caused notice of such payment to be mailed to each Securityholder entitled thereto no less than 30 days prior to such repayment or within such period shall have published such notice in a financial newspaper of widespread circulation published in the City of New York. After payment to the Issuers, Securityholders entitled to the money must look to the Issuers and the Subsidiary Guarantors for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. SECTION 8.04. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers' and each of the Guarantor's Obligations under this Indenture and the Securities and the Subsidiary Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with this Article 8; provided, however, that if an Issuer or any Subsidiary Guarantor has made any payment of principal of, premium, if any, or interest on any Securities because of the reinstatement of its Obligations, such Issuer or any of the Subsidiary Guarantors, as the case may be, shall be subrogated to the rights of the Securityholders to receive such payment from the money held by the Trustee or Paying Agent. 47 ARTICLE 9 AMENDMENTS SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS. (a) Notwithstanding Section 9.02 of this Indenture, the Issuers, when authorized by Board Resolutions, and the Trustee may amend or supplement this Indenture or the Securities without the consent of any Securityholder: (i) to cure any ambiguity, omission, defect or inconsistency or to provide for the assumption by a successor corporation, partnership trust or limited liability company of the obligation of an Issuer under this Indenture; provided, however, that such amendment or supplement does not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect the rights of any Securityholder in any respect; (ii) to comply with Article 5 hereof; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code of 1986, as amended, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Internal Revenue Code of 1986, as amended; (iv) to add Guarantees with respect to the Securities; (v) to add to the covenants of the Issuers or the Subsidiary Guarantors for the benefit of the Securityholders or to surrender any right or power herein conferred upon the Issuers or the Subsidiary Guarantors; (vi) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the TIA; (vii) to make any change that does not, as evidenced by an Opinion of Counsel delivered to the Trustee, adversely affect the rights of any Securityholder in any respect; or (viii) to evidence or provide for a replacement Trustee under Section 7.08 hereof; provided, that the Issuers have delivered to the Trustee an Opinion of Counsel stating that any such amendment or supplement complies with the provisions of this Section 9.01. 48 (b) Upon the request of the Issuers and the Subsidiary Guarantors accompanied by Board Resolutions of their respective Boards of Directors or board of managers, as the case may be, authorizing the execution of any such supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Issuers and the Subsidiary Guarantors in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into such supplemental indenture which affects its own rights, duties or immunities under this Indenture or otherwise. (c) After an amendment or supplement under this Section 9.01 becomes effective, the Issuers shall mail to all Securityholders a notice briefly describing such amendment or supplement. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section. SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS. (a) The Issuers, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture or the Securities with the written consent of the Securityholders of not less than a majority in aggregate principal amount of the Securities, voting as a single class, then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) and any existing Default and its consequences or compliance with any provision of this Indenture or the Securities may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities (including consents obtained in connection with a tender offer or exchange offer for the Securities). Furthermore, subject to Sections 6.02 and 6.05 hereof, the Holders of a majority in aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities) may waive compliance in a particular instance by the Issuers or the Subsidiary Guarantors with any provision of this Indenture or the Securities. However, without the consent of each Securityholder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Securities held by a non-consenting Holder): (i) reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or extend the time for payment of any interest on any Security; 49 (iii) reduce the principal of or extend the Stated Maturity of any Security or alter the redemption provisions (including without limitation Sections 3.07, 3.08, 3.09 and 3.10 hereof) with respect thereto; (iv) reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed in accordance with Section 3.07, 3.08, 3.09 and 3.10; (v) make any Security payable in money other than that stated in the Security; (vi) make any change in Section 6.02 or 6.05 hereof or in this Section 9.02(a); or (vii) waive a Default in the payment of principal of premium, if any, or interest on, or redemption payment with respect to, any Security; (viii) impair the right of any Holder to receive payment of principal of and interest on such Holder's Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's Securities. (b) Upon the request of the Issuers and the Subsidiary Guarantors accompanied by Board Resolutions of their respective Boards of Directors or board of managers, as the case may be, authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Securityholders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Issuers and the Subsidiary Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. (c) It shall not be necessary for the consent of the Securityholders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. (d) After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuers shall mail to all Securityholders a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver. 50 SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or supplement to this Indenture or the Securities shall comply with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. (a) Until an amendment, supplement or waiver becomes effective, a consent to it by a Securityholder is a continuing consent by the Securityholder and every subsequent Securityholder or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Securityholder or subsequent Securityholder may revoke the consent as to its Security if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder. (b) The Issuers may fix a record date for determining which Securityholders must consent to such amendment, supplement or waiver. If the Issuers fix a record date, the record date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Securityholders furnished to the Trustee prior to such solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the Issuers shall designate. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. (a) Securities authenticated and delivered after the execution of any supplemental indenture may bear a notation in form approved by the Trustee as to any matter provided for in such amendment, supplement or waiver on any Security thereafter authenticated. The Issuers in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment, supplement or waiver. (b) Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver. SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amendment, waiver or supplemental indenture authorized pursuant to this Article 9 if the amendment, waiver or supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, waiver or supplemental indenture, the Trustee shall be entitled to receive and, subject to Section 7.01, shall be fully protected in relying upon, in addition to the documents required by Section 12.04, 51 an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment, waiver or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Issuers in accordance with its terms. ARTICLE 10 SUBORDINATION SECTION 10.01. AGREEMENT TO SUBORDINATE. The Issuers and each Subsidiary Guarantor agree, and each Holder by accepting an Security and the related Subsidiary Guarantee agrees, that the Indebtedness evidenced by the Securities and the related Subsidiary Guarantees is subordinated in right of payment, to the extent and in the manner provided in this Article 10, to the prior payment of (i) all Senior Indebtedness in the case of an Security and (ii) all Guarantor Senior Indebtedness of each Subsidiary Guarantor in the case of its obligations under its Subsidiary Guarantee and that the subordination is for the benefit of and enforceable by the holders of Senior Indebtedness and such Guarantor Senior Indebtedness. SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment or distribution of the assets of an Issuer or any Subsidiary Guarantor to creditors upon a total or partial liquidation or a total or partial dissolution of an Issuer or such Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to an Issuer or such Subsidiary Guarantor or their respective properties: (a) holders of Senior Indebtedness in the case of the Issuers or holders of Guarantor Senior Indebtedness of such Subsidiary Guarantor in the case of such Subsidiary Guarantor shall be entitled to receive payment in full of all Senior Indebtedness in the case of the Issuers or all such Guarantor Senior Indebtedness in the case of such Subsidiary Guarantor before Holders shall be entitled to receive any payment of principal of or interest on or other amounts with respect to the Securities from the Issuers or such Subsidiary Guarantor, whether directly by the Issuers or pursuant to the Subsidiary Guarantees; and (b) until the Senior Indebtedness in the case of the Issuers or such Guarantor Senior Indebtedness in the case of such Subsidiary Guarantor is paid in full, any payment or distribution to which Holders would be entitled but for this Article 10 shall be made to holders of Senior Indebtedness in the case 52 of payments or distributions made by the Issuers or to the holders of such Guarantor Senior Indebtedness in the case of payments or distributions made by such Subsidiary Guarantor, in each case as their respective interests may appear. SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OR GUARANTOR SENIOR INDEBTEDNESS. Neither the Issuers nor any Subsidiary Guarantor may pay the principal of, premium (if any), or interest on the Securities or repurchase, redeem or otherwise retire any Securities, whether directly by the Issuers or by such Subsidiary Guarantor under its Subsidiary Guarantee (collectively, "pay the Securities") if (i) any Designated Senior Indebtedness not paid when due or (ii) any other default on Designated Senior Indebtedness occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, (x) the default has been cured or waived and any such acceleration has been rescinded or (y) such Designated Senior Indebtedness has been paid in full in cash; provided, however, that the Issuers or such Subsidiary Guarantor may pay the Securities, whether directly or pursuant to the Subsidiary Guarantee, without regard to the foregoing if the Issuers or such Subsidiary Guarantor and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) of this sentence has occurred or is continuing. SECTION 10.04. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution is made to Holders that because of this Article 10 should not have been made to them, the Holders who receive the distribution shall hold it in trust for holders of Senior Indebtedness and Guarantor Senior Indebtedness and promptly pay it over to them as their respective interests may appear. SECTION 10.05. SUBROGATION. After all Senior Indebtedness and Guarantor Senior Indebtedness is paid in full in cash and until the Securities are paid in full, Holders shall be subrogated to the rights of holders of Senior Indebtedness and Guarantor Senior Indebtedness to receive distributions applicable to Senior Indebtedness and Guarantor Senior Indebtedness. A distribution made under this Article 10 to holders of Senior Indebtedness or Guarantor Senior Indebtedness which otherwise would have been made to Holders is not, as between the Issuers and Holders, a payment by an Issuer of Senior Indebtedness or, as between a Subsidiary Guarantor and Holders, a payment by such Subsidiary Guarantor of Guarantor Senior Indebtedness. SECTION 10.06. RELATIVE RIGHTS. This Article 10 defines the relative rights of Holders and holders of Senior Indebtedness and Guarantor Senior Indebtedness. Nothing in this Article 10 shall: 53 (1) impair, as between the Issuers or the Subsidiary Guarantors, as the case may be, and Holders, the obligation of the Issuers or the Subsidiary Guarantors, as the case may be, which is absolute and unconditional, to pay principal of and interest on the Securities in accordance with their terms; or (2) prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of holders of Senior Indebtedness and Guarantor Senior Indebtedness to receive distributions otherwise payable to Holders. SECTION 10.07. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS OR THE SUBSIDIARY GUARANTORS. No right of any holder of Senior Indebtedness or Guarantor Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Securities or the related Subsidiary Guarantee shall be impaired by any act or failure to act by the Issuers or any Subsidiary Guarantor or by the failure of any of them to comply with this Indenture. SECTION 10.08. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make payments on the Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Responsible Officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article 10. The Issuers, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness or Guarantor Senior Indebtedness may give the notice; provided, however, that, if an issue of Senior Indebtedness or Guarantor Senior Indebtedness has a Representative, only the Representative may give the notice. The Trustee in its individual or any other capacity may hold Senior Indebtedness or Guarantor Senior Indebtedness with the same rights it would have if it were not the Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 10 with respect to any Senior Indebtedness or Guarantor Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness or Guarantor Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 10 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 10.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. 54 Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness or Guarantor Senior Indebtedness, the distribution may be made and the notice given to their Representative (if any). SECTION 10.10. ARTICLE 10 NOT TO PREVENT DEFAULT. The failure to make a payment in respect of the Securities, whether directly or pursuant to the Subsidiary Guarantees, by reason of any provision in this Article 10 shall not be construed as preventing the occurrence of a Default. Nothing in this Article 10 shall have any effect on the right of the Holders or the Trustee to make a claim for payment under the Subsidiary Guarantees. SECTION 10.11. TRUSTEE ENTITLED TO RELY. Upon any payment or distribution pursuant to this Article 10, the Trustee and the Holders shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (iii) upon the Representatives for the holders of Senior Indebtedness or Guarantor Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness, Guarantor Senior Indebtedness and other Indebtedness of the Issuers or the Subsidiary Guarantors, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness or Guarantor Senior Indebtedness to participate in any payment or distribution pursuant to this Article 10, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness or Guarantor Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 10, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 10. SECTION 10.12. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder by accepting a Security authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Indebtedness and Guarantor Senior Indebtedness as provided in this Article 10 and appoints the Trustee as attorney-in-fact for any and all such purposes. 55 SECTION 10.13. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS AND SUBSIDIARY GUARANTOR SENIOR INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness or Guarantor Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Issuers, the Subsidiary Guarantors or any other Person, money or assets to which any holders of Senior Indebtedness or Guarantor Senior Indebtedness shall be entitled by virtue of this Article 10 or otherwise. SECTION 10.14. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS AND GUARANTOR SENIOR INDEBTEDNESS ON SUBORDINATION PROVISIONS. Each Holder by accepting a Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness or Guarantor Senior Indebtedness, whether such Senior Indebtedness or Guarantor Senior Indebtedness was created or acquired before or after the issuance of the Securities, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness or Guarantor Senior Indebtedness and such holder of Senior Indebtedness or Guarantor Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness or Guarantor Senior Indebtedness. ARTICLE 11 SUBSIDIARY GUARANTEE OF SECURITIES SECTION 11.01. SUBSIDIARY GUARANTEE (a) Each Subsidiary Guarantor hereby jointly and severally irrevocably and unconditionally guarantees, as a primary obligor and not a surety, to each Securityholder of a Security now or hereafter authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Securities or the Obligations of the Issuers hereunder or thereunder, (i) the due and punctual payment of the principal, premium, if any, interest (including post-petition interest in any proceeding under any Bankruptcy Code whether or not an allowed claim in such proceeding) on overdue principal, premium, if any, and interest, if lawful on such Security, and (ii) all other monetary Obligations payable by the Issuers under this Indenture (including under Section 7.07 hereof) and the Securities (all of the foregoing being hereinafter collectively called the "Guaranteed Obligations"), when and as the same shall become due and payable, whether by acceleration thereof, call for redemption or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), in accordance with the terms of any such Security and of this Indenture, subject, however, in the case of (i) 56 and (ii) above, to the limitations set forth in Section 11.04 hereof. Each Subsidiary Guarantor hereby agrees that its Obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any failure to enforce the provisions of any such Security or this Indenture, any waiver, modification or indulgence granted to the Issuers with respect thereto, the recovery of any judgment against an Issuer, any action to enforce the same, by the Securityholders or the Trustee, the recovery of any judgment against the Issuer, any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, filing of claims with a court in the event of a merger or bankruptcy of an Issuer, any right to require a proceeding first against the Issuers, the benefit of discussion, protest or notice with respect to any such Security or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Subsidiary Guarantee shall not be discharged as to any such Security except by payment in full of the principal thereof, premium, if any, and all accrued interest thereon. (b) Each Subsidiary Guarantor further agrees that this Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Securityholder or the Trustee to any Security held for payment of the Guaranteed Obligations. (c) Each Subsidiary Guarantor agrees that it shall not be entitled to, and hereby irrevocably waives, any right of subrogation in relation to the Securityholders or the Trustee in respect of any Guaranteed Obligations. (d) Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Securityholder in enforcing any rights under this Article 11. (e) The Subsidiary Guarantee set forth in this Article 11 shall not be valid or become obligatory for any purpose with respect to a Security until the certificate of authentication on such Security shall have been signed by or on behalf of the Trustee. SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE. (a) To evidence each Subsidiary Guarantor's Subsidiary Guarantee set forth in this Article 11, each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee shall be placed on each Security authenticated and delivered by the Trustee. (b) This Indenture shall be executed on behalf of each Subsidiary Guarantor, and an Officer of each Subsidiary Guarantor shall sign the notation of the Subsidiary Guarantee on the Securities by manual or facsimile signature. If an Officer whose signature is on this Indenture or the notation of the Subsidiary Guarantee no longer holds that office at the time the 57 Trustee authenticates the Security on which the Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless. Each Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of the Subsidiary Guarantee. (c) The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of each Subsidiary Guarantor. SECTION 11.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC. Upon failure of payment when due of any Guaranteed Obligation for whatever reason, each Subsidiary Guarantor will be obligated to pay the same immediately. Each Subsidiary Guarantor hereby agrees that its obligations hereunder shall be continuing, absolute and unconditional, irrespective of: the recovery of any judgment against an Issuer or any Subsidiary Guarantor; any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of an Issuer under this Indenture or any Security, by operation of law or otherwise; any modification or amendment of or supplement to this Indenture or any Security; any change in the corporate existence, structure or ownership of an Issuer, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting an Issuer or its assets or any resulting release or discharge of any obligation of an Issuer contained in this Indenture or any Security; the existence of any claim, set-off or other rights which any Subsidiary Guarantor may have at any time against an Issuer, the Trustee, any Securityholder or any other Person, whether in connection herewith or any unrelated transactions; provided, however, that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; any invalidity or unenforceability relating to or against an Issuer for any reason of this Indenture or any Security, or any provision of applicable law or regulation purporting to prohibit the payment by an Issuer of the principal, premium, if any, or interest on any Security or any other Guaranteed Obligation; or any other act or omission to act or delay of any kind by an Issuer, the Trustee, any Securityholder or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Subsidiary Guarantors' obligations hereunder. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuers, protest, notice and all demand whatsoever and covenants that this Subsidiary Guarantee will not be discharged except by the complete performance of the obligations contained in the Securities, this Indenture and in this Article 11. Each Subsidiary Guarantor's obligations hereunder shall remain in full force and effect until this Indenture shall have terminated and the principal of and interest on the Securities and all other Guaranteed Obligations shall have been paid in full. If at any time any payment of the principal of or interest on any Security or any other payment in respect of any Guaranteed Obligation is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of an Issuer or otherwise, each Subsidiary Guarantor's obligations hereunder with 58 respect to such payment shall be reinstated as though such payment had been due but not made at such time, and this Article 11, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder to be subrogated to the rights of the payee against the Issuers with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Issuers in respect thereof. SECTION 11.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY. Each Subsidiary Guarantor and by its acceptance hereof each Securityholder hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, Federal and state fraudulent conveyance laws or other legal principles. To effectuate the foregoing intention, the Securityholders and each Guarantor hereby irrevocably agree that the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to Section 11.05 hereof, result in the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee not constituting such fraudulent transfer or conveyance under federal or state law. SECTION 11.05. CONTRIBUTION. In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a "Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from all other Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Issuer's obligations with respect to the Securities or any other Subsidiary Guarantor's obligations with respect to the Subsidiary Guarantee. SECTION 11.06. RELEASE. Upon the sale or disposition of all of the equity interests of a Subsidiary Guarantor to an entity which is not an Issuer or a Subsidiary of an Issuer, which is otherwise in compliance with this Indenture, such Subsidiary Guarantor shall be deemed released from all its obligations under this Indenture without any further action required on the part of the Trustee or any Securityholder; provided, however, that any such termination shall occur if and only to the extent that all Obligations of each Subsidiary Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure any other 59 Indebtedness of an Issuer and the other Subsidiary Guarantors shall also terminate upon such release, sale or transfer. The Trustee shall deliver an appropriate instrument evidencing such release upon receipt of a request by the Issuers accompanied by an Officers' Certificate certifying as to the compliance with this Section 11.06. Any Subsidiary Guarantor not so released remains liable for the full amount of principal, premium, if any, and interest on the Securities as provided in this Article 11. SECTION 11.07. ADDITIONAL SUBSIDIARY GUARANTORS. Any Person that was not a Subsidiary Guarantor on the date of this Indenture may become a Subsidiary Guarantor by executing and delivering to the Trustee (a) a supplemental indenture in form and substance satisfactory to the Trustee, which subjects such Person to the provisions (including, without limitation, the representations and warranties in this Article 11) of this Indenture as a Subsidiary Guarantor and (b) an Opinion of Counsel complying with Section 9.06 and to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning creditors' rights and equitable principles as may be acceptable to the Trustee in its discretion). The Subsidiary Guarantee of each Person described in this Section 11.07 shall apply to all Securities theretofore executed and delivered, notwithstanding any failure of such Securities to contain a notation of such Subsidiary Guarantee thereon. SECTION 11.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. (a) Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Subsidiary Guarantor with or into an Issuer or another Subsidiary Guarantor that is a Wholly-Owned Subsidiary of an Issuer or shall prevent any sale or conveyance of the property of a Subsidiary Guarantor as an entirety or substantially as an entirety, to an Issuer or another Subsidiary Guarantor that is a Wholly-Owned Subsidiary of an Issuer. Upon any such consolidation, merger, sale or conveyance, the Subsidiary Guarantee given by such Subsidiary Guarantor shall no longer have any force or effect. (b) Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Subsidiary Guarantor with or into a corporation or corporations other than an Issuer or another Subsidiary Guarantor (whether or not affiliated with the Subsidiary Guarantor), or successive consolidations or mergers in which a Subsidiary Guarantor or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of the property of a Subsidiary Guarantor as an entirety or substantially as an entirety, to a corporation other than an Issuer or another Subsidiary Guarantor (whether or not affiliated with the Subsidiary Guarantor); provided, however, that, subject to Sections 11.06 and 11.08(a), (x) (i) immediately after such transaction, and giving effect thereto, no Default shall 60 have occurred as a result of such transaction and be continuing and (ii) such transaction does not violate any covenants set forth in this Indenture, and (y) if the surviving corporation is not the Subsidiary Guarantor, each Subsidiary Guarantor hereby covenants and agrees that, upon any such consolidation, merger, sale or conveyance, the Subsidiary Guarantee set forth in this Article 11, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by such Subsidiary Guarantor, shall be expressly assumed (in the event that the Subsidiary Guarantor is not the surviving corporation in the merger), by supplemental indenture satisfactory in form to the Trustee of the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Subsidiary Guarantor, such successor corporation shall succeed to, and be substituted for, the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor. SECTION 11.09. SUCCESSORS AND ASSIGNS. This Article 11 shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Securityholders and, in the event of any transfer or assignment of rights by any Securityholder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 11.10. WAIVER OF STAY, EXTENSION OR USURY LAWS. Each Subsidiary Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive each such Subsidiary Guarantor from performing its Subsidiary Guarantee as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) each such Subsidiary Guarantor hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 61 ARTICLE 12 MISCELLANEOUS SECTION 12.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. Until such time as this Indenture becomes qualified under the TIA, the Issuers, the Subsidiary Guarantors and the Trustee shall be deemed subject to and governed by the TIA as if this Indenture were so qualified on the date hereof. SECTION 12.02. NOTICES. (a) Any notice or communication by the Issuers, any Subsidiary Guarantor or the Trustee to the other is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested), confirmed facsimile transmission or overnight air courier guaranteeing next day delivery, to the other's address: If to the Issuers or any of the Subsidiary Guarantors: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47708 Attention: Alan R. Brill If to the Trustee: United States Trust Company of New York 114 West 47th Street New York, NY 10036 Attention: Corporate Trust Administration Facsimile Number: (212) 852-1625 (b) The Issuers or the Trustee, by notice to the other, may designate additional or different addresses for subsequent notices or communications. (c) All notices and communications (other than those sent to Securityholders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt 62 acknowledged, if by facsimile transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. (d) Any notice or communication to a Securityholder shall be mailed by first class mail, postage prepaid, to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. (e) If a notice or communication is mailed to any Person in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. (f) If the Issuers mail a notice or communication to Securityholders, they shall mail a copy to the Trustee and each Agent at the same time. SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER SECURITYHOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Issuers, the Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Issuers and/or any of the Subsidiary Guarantors to the Trustee to take any action under this Indenture, the Issuers and/or any of the Subsidiary Guarantors, as the case may be, shall furnish to the Trustee: (i) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied (except with regard to an authentication order pursuant to Section 2.02(c) hereof, which shall require a certificate of two Officers); and (ii) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 63 SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall include: (i) a statement that the person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied. SECTION 12.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Securityholders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 12.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in New York City, or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. SECTION 12.08. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, agent, manager, stockholder or partner of an Issuer or its predecessors shall have any liability for any Obligations of an Issuer under the Securities or this Indenture or for any claim based on, in respect of, or by reason of such Obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. This waiver and release are part of the consideration for issuance of the Securities. 64 SECTION 12.09. DUPLICATE ORIGINALS. The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture. SECTION 12.10. GOVERNING LAW. This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of any of the Subsidiary Guarantors, an Issuer or their respective Subsidiaries. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 12.12. SUCCESSORS. All agreements of the Issuers and the Subsidiary Guarantors in this Indenture and the Securities shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 12.13. SEVERABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 12.14. COUNTERPART ORIGINALS. This Indenture may be executed in any number of counterparts, each of which so executed shall be an original, but all of them together represent the same agreement. SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 65 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above. SIGNATURES BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By_______________________ Name: Alan R. Brill Title: President BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By_______________________ Name: Alan R. Brill Title: President 66 BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:______________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President TRI-STATE BROADCASTING, INC.,a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 67 NCR II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:______________________ Name: Alan R. Brill Title: Vice President 68 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation its Manager By:______________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 69 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 70 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 71 HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 72 HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 73 NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:______________________ Alan R. Brill, President NCR III, LLC, a Virginia Limited Liability Company By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President 74 NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 75 CMN HOLDING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:______________________ Name: Title: 76 SCHEDULE 1 SUBSIDIARY GUARANTORS 1. BMC Holdings, LLC 2. Reading Radio, Inc. 3. Tri-State Broadcasting, Inc. 4. Northern Colorado Radio, Inc. 5. NCR II, Inc. 6. Central Missouri Broadcasting, Inc. 7. CMB II, Inc. 8. Northland Broadcasting, LLC 9. NB II, Inc. 10. Central Michigan Newspapers, Inc. 11. Cadillac Newspapers, Inc. 12. CMN Associated Publications, Inc. 13. Central Michigan Distribution Co., L.P. 14. Central Michigan Distribution Co., INC. 15. Gladwin Newspapers, Inc. 16. Graph Ads Printing, Inc. 17. Midland Buyer's Guide, Inc. 18. St. Johns Newspapers, Inc. 19. Huron Holdings, LLC 20. Northern Colorado Holdings, LLC 21. NCR III, LLC 22. NCH II, LLC 23. Northland Holdings, LLC 24. CMN Holding, Inc. 25. Brill Radio Inc. 26. Brill Newspapers, Inc. 27. Huron P.S., LLC 28. Huron Newspapers, LLC EXHIBIT A [THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS HEREOF THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN EXHIBIT A Page 2 COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT AN INITIAL INVESTOR PURCHASING AS DESCRIBED IN CLAUSE (1)(B) ABOVE FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT BE PERMITTED TO TRANSFER THIS NOTE TO AN INSTITUTIONAL ACCREDITED INVESTOR. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING PURSUANT TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUERS HEREOF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS EXHIBIT A Page 3 NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.](*) [UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.](**) [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED - ------------------------- * To be included in a Restricted Security only. ** To be included in the Global Appreciation Note only. EXHIBIT A Page 4 OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](***) THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET. SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE DATE OF THIS SECURITY IS DECEMBER 30, 1997. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF BRILL MEDIA MANAGEMENT, INC. AT 812-423-6200 OR AT THE ADDRESS SET FORTH ON THE REVERSE OF THIS SECURITY. - ------------------------- ** To be included in the Global Appreciation Note only. EXHIBIT A Page 5 CUSIP No: (Front of Security) No. 1 $___________ Specified Percentage: _____% BRILL MEDIA COMPANY, LLC BRILL MEDIA MANAGEMENT, INC. Appreciation Notes due 2007, Series A BRILL MEDIA COMPANY, LLC, a Virginia limited liability company ("BMC"), and BRILL MEDIA MANAGEMENT, INC. ("Media"), a Virginia corporation, jointly and severally, promise to pay to ______________________________________, or its registered assigns, on December 15, 2007 the sum of (i) ________________ (the "Principal Amount") and (ii) the amount by which the Specified Percentage set forth above (the "Specified Percentage") of the Value of BMC on such date exceeds the Principal Amount. Additional provisions of this Security are set forth on the other side of this Security. Dated: BRILL MEDIA COMPANY, LLC, a Virginia Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _____________________________ Name: Alan R. Brill Title: President By: _____________________________ BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By: _____________________________ Name: Alan R. Brill Title: President By: _____________________________ EXHIBIT A Page 6 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:_________________________________ Authorized Officer EXHIBIT A Page 7 (Reverse of Security) APPRECIATION NOTE DUE 2007, Series A Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. Payment Obligations. Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a Virginia corporation (together with BMC, the "Issuers"), jointly and severally, promise to pay principal of, and interest and premium, if any, on this Security in the amounts and in the manner specified below. 2. Terms of Securities. The Securities will mature on December 15, 2007 (the "Maturity Date"). Each Security will entitle the Holder thereof to receive on the Maturity Date a cash payment of principal and interest in the amount equal to (i) the Principal Amount plus (ii) the amount by which the Specified Percentage of the Value of BMC on the Maturity Date exceeds the Principal Amount. 3. Additional Interest. The rate of interest payable on this Security shall be subject to the assessment of interest (the "Additional Interest") as follows: (i) if the Exchange Offer Registration Statement (as defined below) or Shelf Registration Statement (as defined below) is not filed within 60 days following the Issue Date (the "Filing Date"), Additional Interest shall accrue on the Principal Amount at a rate of 0.50% per annum for the first 60 days commencing on the 61st day after the Filing Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; (ii) if the Exchange Offer Registration Statement or Shelf Registration Statement is not declared effective within 150 days following the Filing Date, Additional Interest shall accrue on the Principal Amount at a rate of 0.50% per annum for the first 120 days commencing on the 151st day after the Filing Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; or (iii) if (A) the Issuers and the Subsidiary Guarantors have not exchanged all Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to 180 days after the Filing Date or (B) the Exchange Offer Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective at any time prior to the second anniversary of the Issue Date (unless all the Securities have been sold thereunder), then Additional Interest shall accrue on the Principal Amount at a rate of 0.50% per annum for the first 30 days EXHIBIT A Page 8 commencing on (x) the 181st day after the Filing Date with respect to the Securities validly tendered and not exchanged by the Issuers, in the case of (A) above, or (y) the day the Exchange Offer Registration Statement ceases to be effective or usable for its intended purpose in the case of (B) above, or (z) the day such Shelf Registration Statement ceases to be effective in the case of (C) above, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; provided, however, that the Additional Interest rate on the Securities may not exceed in the aggregate 1.5% per annum; and provided further, that (1) upon the filing of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of (ii) above), or (3) upon the exchange of Exchange Securities for all Securities tendered (in the case of clause (iii)(A) above), or upon the effectiveness of the Exchange Offer Registration Statement which had ceased to remain effective (in the case of clause (iii)(B) above), or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iii)(C) above), Additional Interest on the Securities as a result of such clause or the relevant subclause thereof, as the case may be, shall cease to accrue. Accrued Additional Interest shall be due and payable on each June 15 and December 15. "Appreciation Notes Registration Rights Agreement" means the registration rights agreement pertaining to the Securities dated as of December 30, 1997 among the Issuers, the Subsidiary Guarantors and the Initial Purchasers. "Exchange Offer" shall mean the exchange offer by the Issuers of Initial Securities for Exchange Securities pursuant to Section 2(a) of the Appreciation Notes Registration Rights Agreement. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Offering Memorandum or prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Issuers and the Subsidiary Guarantors pursuant to the provisions of the Appreciation Notes Registration Rights Agreement which covers all of the Initial Securities on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Offering Memorandum contained therein, all exhibits thereto and all material incorporated by reference therein. 4. Method of Payment. The Issuers shall pay amounts due on the Securities to the Persons who are registered Holders of Securities at the close of business on the date on EXHIBIT A Page 9 which payment is due. Securityholders must surrender Securities to a Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S. Legal Tender"). However, the Issuers may pay principal, premium, if any, and interest by its check payable in such U.S. Legal Tender. The Issuers may deliver any such payment to the Paying Agent or to a Securityholder at the Securityholder's registered address. 5. Paying Agent and Registrar. Initially, the Trustee will act as Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-registrar without prior notice to any Securityholder. The Issuers or any Subsidiary Guarantor may act in any such capacity. 6. Indenture. The Issuers issued the Securities under an Indenture, dated as of December 30, 1997 (the "Indenture"), among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the TIA as in effect on the date the Indenture is qualified, except as the Indenture otherwise provides. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Securities. As and to the extent set forth in the Indenture, the Securities are subordinated in right of payment to the payment of all payments due and payable on all existing and future Senior Indebtedness. 7. Optional Redemption. The Securities will not be redeemable at the option of the Issuers prior to June 15, 1999. Thereafter, if an Initial Public Offering has not occurred on or before a date set forth below, the Securities will be redeemable, at the Issuers' option, in whole but not in part, on such date upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price for each Security equal to the Pro Rata Percentage of each such Security of the amount set forth below opposite such redemption date (which amount, in each case, represents payment in full of all principal and interest on the Securities): Date Amount ------------ -------------- June 15, 1999 $ 3.0 million June 15, 2000 $ 8.3 million June 15, 2001 $12.8 million June 15, 2002 $18.0 million June 15, 2003 $24.0 million June 15, 2004 $31.0 million June 15, 2005 $39.0 million June 15, 2006 $48.0 million June 15, 2007 $58.0 million EXHIBIT A Page 10 8. Mandatory Redemption at the Option of the Securityholders upon the Occurrence of Certain Events. Upon the occurrence of an Initial Public Offering, a Sale of the Company or the liquidation of either Issuer, each Holder will have the right to require the Issuers to redeem all or any part of such Holder's Securities at the relevant Specified Event Purchase Price (which amount, in each case, represents payment in full of all principal and interest on the Securities). 9. Mandatory Redemption at the Option of the Securityholders on Specified Dates. If an Initial Public Offering has not occurred on or before a date set forth below, the Securityholders may require the Issuers to redeem their Securities, in whole or in part, within 90 days of such date at a redemption price for each Security equal to the Pro Rata Percentage of such Security of the amount set forth below opposite such date (which amount, in each case, represents payment in full of all principal and interest thereon): Date Amount June 30, 2003 $24.0 million June 30, 2004 $20.0 million June 30, 2005 $13.0 million A Securityholder may exercise its rights to require the redemption of the Securities held by such Holder by mailing a notice to the Trustee on or before a date as set forth above stating that such Holder is demanding that the Issuers redeem the Securities and the portion of the Securities to be redeemed. Upon receipt of such notice the Issuers shall redeem the Securities for which such notice has been received by no later than the 90th day following the relevant date. 10. Notice of Optional Redemption by the Issuers. Notice of optional redemption shall be mailed at least 30 but not more than 60 days before the redemption date to each Holder whose Securities are to be redeemed at its registered address pursuant to an optional redemption by the Issuers. Securities may only be redeemed in full. 11. Notice of Mandatory Redemption upon Specified Events. Within 30 days following the occurrence of any Specified Event, unless the Issuers have mailed a redemption notice with respect to all the outstanding Securities, the Issuers shall mail a notice to each Holder with a copy to the Trustee stating: (i) that a Specified Event has occurred and that such Securityholder has the right to require the Issuers to redeem such Securityholder's Securities at a purchase price in cash equal to the Specified Event Purchase Price (stating the Specified Event Purchase Price for each $28.571428 principal amount of the Securities); (ii) the redemption date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); (iii) the name and address of the Paying Agent; and EXHIBIT A Page 11 (iv) the procedures determined by the Issuers, consistent with this Indenture, that a Securityholder must follow in order to have its Securities redeemed. Securityholders electing to have a Security redeemed will be required to surrender the Security, with the form entitled "Option of Securityholder to Elect Redemption" on the reverse of the Security completed, to the Issuers at the address specified in the notice at least 10 Business Days prior to the redemption date. Securityholders will be entitled to withdraw their election if the Trustee or the Issuers receive not later than three Business Days prior to the redemption date, a telegram, telex, facsimile transmission or letter setting forth the name of the Securityholder, the principal amount of the Security which was delivered for redemption by the Securityholder and a statement that such Securityholder is withdrawing his election to have such Security redeemed. 12. Subordination. To the extent provided in the Indenture, the Securities are subordinated to Senior Indebtedness as defined in the Indenture. The Issuers agree, and each Holder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give them effect and appoints the Trustee as attorney-in-fact for such purpose. The Issuers may not pay the Securities and may not otherwise purchase, redeem or otherwise retire any Security (collectively, "pay the Securities") if (i) any Designated Senior Indebtedness is not paid when due or (ii) any other default on Designated Senior Indebtedness occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash. However, the Issuers may pay the Securities without regard to the foregoing if the Issuers and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) of the immediately preceding sentence has occurred and is continuing. EXHIBIT A Page 12 13. Registration Rights. Pursuant to the Appreciation Note Registration Rights Agreement, and subject to certain terms and conditions stated therein, the Issuers will be obligated to consummate an Exchange Offer pursuant to which the Holders of the Initial Securities shall have the right to exchange Initial Securities for Exchange Securities, which have been registered under the Securities Act, in like principal amount and having terms identical in all material respect to the Initial Securities. 14. Transfer, Exchange. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Securityholder among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. 15. Persons Deemed Owners. Prior to due presentment to the Trustee for registration of the transfer of this Security, the Trustee, any Agent and the Issuers shall treat the Person in whose name this Security is registered as its absolute owner for the purpose of receiving payment of principal of, premium, if any, and interest on this Security and for all other purposes whatsoever, whether or not this Security is overdue, and neither the Trustee, any Agent nor the Issuers shall be affected by notice to the contrary. The registered Securityholder shall be treated as its owner for all purposes. 16. Amendments and Waivers. Subject to certain exceptions provided in the Indenture, the Indenture or the Securities may be amended with the consent of the Holders of a majority in principal amount of the then outstanding Securities, and any existing Default or Event of Default (except a payment default may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended to, among other things, cure any ambiguity, defect or inconsistency, to comply with the requirements of the Commission in order to effect or maintain qualification of the Indenture under the TIA or to make any change that does not adversely affect the rights of any Securityholder. 17. Trustee Dealings with the Issuers. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers, the Subsidiary Guarantors or any Affiliate of the Issuers or the Subsidiary Guarantors, and may otherwise deal with the Issuers, the Subsidiary Guarantors and their respective Affiliates as if it were not Trustee. 18. Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Issuers and their Restricted Subsidiaries to, among other things, merge or consolidate with any other Person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such limitations are subject to a number of important qualifications and exceptions provided for in the Indenture. The Issuers and each Subsidiary Guarantor must annually report to the Trustee on compliance with such limitations. EXHIBIT A Page 13 19. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 20. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly and severally irrevocably and unconditionally guaranteed the payment of principal, premium, if any, and interest (including interest on overdue principal and overdue interest, if lawful) on the Securities; provided, however, each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. 21. Governing Law. The Laws of the State of New York shall govern this Security and the Indenture, without regard to principles of conflict of laws. 22. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 23. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Issuers will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Request may be made to: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47708 Attn: Alan R. Brill EXHIBIT A Page 14 FORM OF NOTATION ON SECURITY RELATING TO SUBSIDIARY GUARANTEE SUBSIDIARY GUARANTEE The Subsidiary Guarantors (as defined in the Indenture (the "Indenture") referred to in the Security upon which this notation is endorsed and each hereinafter referred to as a "Subsidiary Guarantor," which term includes any successor Person under the Indenture) (i) have jointly and severally irrevocably and unconditionally guaranteed as a primary obligor and not a surety (such guarantee by each Subsidiary Guarantor being referred to herein as the "Subsidiary Guarantee"), (a) the due and punctual payment of the principal, premium, if any, and interest on the Securities, whether at Stated Maturity, call for redemption or otherwise, (b) the due and punctual payment of interest on the overdue principal of and interest, if any, on the Securities, to the extent lawful, (c) the due and punctual performance of all other monetary Obligations of the Issuers under the Indenture and the Securities to the Securityholders or the Trustee, all in accordance with the terms set forth in Article 11 of the Indenture and (d) in case of any extension of time of payment or renewal of any Securities or any such Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity by acceleration or otherwise and (ii) have agreed to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Securityholder in enforcing any rights under this Subsidiary Guarantee. The Obligations of each Subsidiary Guarantor to the Securityholders of Securities and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article 10 and Article 11 of the Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee. Indebtedness evidenced by this Subsidiary Guarantee is subordinated to Guarantor Senior Indebtedness as set forth in the Indenture. No stockholder, officer, director or incorporator, as such, past, present or future of any Subsidiary Guarantor shall have any liability under this Subsidiary Guarantee by reason of his or its status as such stockholder, officer, director or incorporator. This is a continuing Subsidiary Guarantee and, except as otherwise expressly provided for in Section 11.06 of the Indenture, shall remain in full force and effect and shall be binding upon the Subsidiary Guarantor and its successors and assigns until full and final payment of all of the Issuers' Obligations under the Securities and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Securityholders and, in the event of any transfer or assignment of rights by any Securityholder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Subsidiary Guarantee of payment and not of collectability. This Subsidiary Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Security upon which this Subsidiary Guarantee is noted EXHIBIT A Page 15 shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE. Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. Subsidiary Guarantors: BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:______________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President TRI-STATE BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 16 NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 17 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation its Manager By:______________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 18 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 19 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT A Page 20 HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President EXHIBIT A Page 21 HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:______________________________ Alan R. Brill, President EXHIBIT A Page 22 NCR III, LLC, a Virginia Limited Liability Company By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation, its Manager By:______________________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________________ Name: Alan R. Brill Title: President EXHIBIT A Page 23 NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By:______________________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:______________________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:______________________________ Name: Alan R. Brill Title: President OPTION OF SECURITYHOLDER TO ELECT PURCHASE EXHIBIT A Page 24 If you want to have all or part of this Security purchased by the Issuers pursuant to Section 3.09 of the Indenture, state the amount you elect to have purchased: $________________ Date: ___________ Your Signature: _______________________________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: ________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to (Insert assignee's soc. sec. or tax I.D. no.) - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint ---------------------------------------------------- EXHIBIT A Page 25 agent to transfer this Security on the books of the Issuers. The agent may substitute another to act for him. Date:______________ Your Signature: _______________________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: __________________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EXHIBIT A Page 26 In connection with any transfer of this Security occurring prior to the date which is the earlier of (i) the date of the declaration by the Commission of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer) and (ii) December 30, 1999, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that this Security is being transferred: Check One (1) ___ to an Issuer or a Subsidiary thereof; or (2) ___ pursuant to and in compliance with Rule 144A under the Securities Act; or (3) ___ to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or (4) ___ outside the United States to a "foreign person" in compliance with Rule 904 of Regulation S under the Securities Act; or (5) ___ pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or (6) ___ pursuant to an effective registration statement under the Securities Act; or (7) ___ pursuant to another available exemption from the registration requirements of the Securities Act. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Securityholder thereof; provided that if box (3), (4), (5) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Securities, in its sole discretion, such legal opinions, certifications (including an investment letter in the case of box (3) or (4)) and other information as the Trustee or an Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Security in the name of any Person other than the Securityholder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.17 of the Indenture shall have been satisfied. EXHIBIT A Page 27 Dated:_______________ Signed:_________________________________ (Sign exactly as name appears on the other side of this Security) Signature Guarantee:__________________________________________ __________________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated:___________________ ____________________________________ NOTICE: To be executed by an executive officer EXHIBIT B [UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.](*) [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED ________________________ * To be included in the Global Appreciation Note only. EXHIBIT B Page 2 OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](**) THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET. SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE DATE OF THIS SECURITY IS DECEMBER 30, 1997. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF BRILL MEDIA MANAGEMENT, INC. AT 812-423-6200 OR AT THE ADDRESS SET FORTH ON THE REVERSE OF THIS SECURITY. ________________________ ** To be included in the Global Appreciation Note only. EXHIBIT B Page 3 CUSIP No: (Front of Security) No. $___________ Specified Percentage: _____% BRILL MEDIA COMPANY, LLC BRILL MEDIA MANAGEMENT, INC. Appreciation Notes due 2007, Series A BRILL MEDIA COMPANY, LLC, a Virginia limited liability company ("BMC"), and BRILL MEDIA MANAGEMENT, INC. ("Media"), a Virginia corporation, jointly and severally, promise to pay to ______________________________________, or its registered assigns, on December 15, 2007 the sum of (i) ________________ (the "Principal Amount") and (ii) the amount by which the Specified Percentage set forth above (the "Specified Percentage") of the Value of BMC on such date exceeds the Principal Amount. Additional provisions of this Security are set forth on the other side of this Security. Dated: BRILL MEDIA COMPANY, LLC, a Virginia Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_____________________________ Name: Alan R. Brill Title: President By:_____________________________ BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By:_____________________________ Name: Alan R. Brill Title: President By:_____________________________ EXHIBIT B Page 4 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the within-mentioned Indenture UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:_________________________________ Authorized Officer EXHIBIT B Page 5 (Reverse of Security) APPRECIATION NOTE DUE 2007, Series B Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. Payment Obligations. Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a Virginia corporation (together with BMC, the "Issuers"), jointly and severally, promise to pay principal of, and interest and premium, if any, on this Security in the amounts and in the manner specified below. 2. Terms of Securities. The Securities will mature on December 15, 2007 (the "Maturity Date"). Each Security will entitle the Holder thereof to receive on the Maturity Date a cash payment of principal and interest in the amount equal to (i) the Principal Amount plus (ii) the amount by which the Specified Percentage of the Value of BMC on the Maturity Date exceeds the Principal Amount. 3. Method of Payment. The Issuers shall pay amounts due on the Securities to the Persons who are registered Holders of Securities at the close of business on the date on which payment is due. Securityholders must surrender Securities to a Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts ("U.S. Legal Tender"). However, the Issuers may pay principal, premium, if any, and interest by its check payable in such U.S. Legal Tender. The Issuers may deliver any such payment to the Paying Agent or to a Securityholder at the Securityholder's registered address. 4. Paying Agent and Registrar. Initially, the Trustee will act as Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-registrar without prior notice to any Securityholder. The Issuers or any Subsidiary Guarantor may act in any such capacity. 5. Indenture. The Issuers issued the Securities under an Indenture, dated as of December 30, 1997 (the "Indenture"), among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the TIA as in effect on the date the Indenture is qualified, except as the Indenture otherwise provides. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the TIA for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Securities. As and to the extent set forth in the Indenture, the Securities are EXHIBIT B Page 6 subordinated in right of payment to the payment of all payments due and payable on all existing and future Senior Indebtedness. 6. Optional Redemption. The Securities will not be redeemable at the option of the Issuers prior to June 15, 1999. Thereafter, if an Initial Public Offering has not occurred on or before a date set forth below, the Securities will be redeemable, at the Issuers' option, in whole but not in part, on such date upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price for each Security equal to the Pro Rata Percentage of each such Security of the amount set forth below opposite such redemption date (which amount, in each case, represents payment in full of all principal and interest on the Securities): Date Amount ---- ------ June 15, 1999 $ 3.0 million June 15, 2000 $ 8.3 million June 15, 2001 $12.8 million June 15, 2002 $18.0 million June 15, 2003 $24.0 million June 15, 2004 $31.0 million June 15, 2005 $39.0 million June 15, 2006 $48.0 million June 15, 2007 $58.0 million 7. Mandatory Redemption at the Option of the Securityholders upon the Occurrence of Certain Events. Upon the occurrence of an Initial Public Offering, a Sale of the Company or the liquidation of either Issuer, each Holder will have the right to require the Issuers to redeem all or any part of such Holder's Securities at the relevant Specified Event Purchase Price (which amount, in each case, represents payment in full of all principal and interest on the Securities). 8. Mandatory Redemption at the Option of the Securityholders on Specified Dates. If an Initial Public Offering has not occurred on or before a date set forth below, the Securityholders may require the Issuers to redeem their Securities, in whole or in part, within 90 days of such date at a redemption price for each Security equal to the Pro Rata Percentage of such Security of the amount set forth below opposite such date (which amount, in each case, represents payment in full of all principal and interest thereon): Date Amount ---- ------ June 30, 2003 $24.0 million June 30, 2004 $20.0 million June 30, 2005 $13.0 million A Securityholder may exercise its rights to require the redemption of the Securities held by such Holder by mailing a notice to the Trustee on or before a date as set forth above EXHIBIT B Page 7 stating that such Holder is demanding that the Issuers redeem the Securities and the portion of the Securities to be redeemed. Upon receipt of such notice the Issuers shall redeem the Securities for which such notice has been received by no later than the 90th day following the relevant date. 9. Notice of Optional Redemption by the Issuers. Notice of optional redemption shall be mailed at least 30 but not more than 60 days before the redemption date to each Holder whose Securities are to be redeemed at its registered address pursuant to an optional redemption by the Issuers. Securities may only be redeemed in full. 10. Notice of Mandatory Redemption upon Specified Events. Within 30 days following the occurrence of any Specified Event, unless the Issuers have mailed a redemption notice with respect to all the outstanding Securities, the Issuers shall mail a notice to each Holder with a copy to the Trustee stating: (i) that a Specified Event has occurred and that such Securityholder has the right to require the Issuers to redeem such Securityholder's Securities at a purchase price in cash equal to the Specified Event Purchase Price (stating the Specified Event Purchase Price for each $28.571428 principal amount of the Securities); (ii) the redemption date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); (iii) the name and address of the Paying Agent; and (iv) the procedures determined by the Issuers, consistent with this Indenture, that a Securityholder must follow in order to have its Securities redeemed. Securityholders electing to have a Security redeemed will be required to surrender the Security, with the form entitled "Option of Securityholder to Elect Redemption" on the reverse of the Security completed, to the Issuers at the address specified in the notice at least 10 Business Days prior to the redemption date. Securityholders will be entitled to withdraw their election if the Trustee or the Issuers receive not later than three Business Days prior to the redemption date, a telegram, telex, facsimile transmission or letter setting forth the name of the Securityholder, the principal amount of the Security which was delivered for redemption by the Securityholder and a statement that such Securityholder is withdrawing his election to have such Security redeemed. EXHIBIT B Page 8 11. Subordination. To the extent provided in the Indenture, the Securities are subordinated to Senior Indebtedness as defined in the Indenture. The Issuers agree, and each Holder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give them effect and appoints the Trustee as attorney-in-fact for such purpose. The Issuers may not pay the Securities and may not otherwise purchase, redeem or otherwise retire any Security (collectively, "pay the Securities") if (i) any Designated Senior Indebtedness is not paid when due or (ii) any other default on Designated Senior Indebtedness occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the default has been cured or waived and any such acceleration has been rescinded or such Designated Senior Indebtedness has been paid in full in cash. However, the Issuers may pay the Securities without regard to the foregoing if the Issuers and the Trustee receive written notice approving such payment from the Representative of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) of the immediately preceding sentence has occurred and is continuing. 12. Transfer, Exchange. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Securityholder among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. 13. Persons Deemed Owners. Prior to due presentment to the Trustee for registration of the transfer of this Security, the Trustee, any Agent and the Issuers shall treat the Person in whose name this Security is registered as its absolute owner for the purpose of receiving payment of principal of, premium, if any, and interest on this Security and for all other purposes whatsoever, whether or not this Security is overdue, and neither the Trustee, any Agent nor the Issuers shall be affected by notice to the contrary. The registered Securityholder shall be treated as its owner for all purposes. 14. Amendments and Waivers. Subject to certain exceptions provided in the Indenture, the Indenture or the Securities may be amended with the consent of the Holders of a majority in principal amount of the then outstanding Securities, and any existing Default or Event of Default (except a payment default may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended to, among other things, cure any EXHIBIT B Page 9 ambiguity, defect or inconsistency, to comply with the requirements of the Commission in order to effect or maintain qualification of the Indenture under the TIA or to make any change that does not adversely affect the rights of any Securityholder. 15. Trustee Dealings with the Issuers. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers, the Subsidiary Guarantors or any Affiliate of the Issuers or the Subsidiary Guarantors, and may otherwise deal with the Issuers, the Subsidiary Guarantors and their respective Affiliates as if it were not Trustee. 16. Restrictive Covenants. The Indenture imposes certain limitations on the ability of the Issuers and their Restricted Subsidiaries to, among other things, merge or consolidate with any other Person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such limitations are subject to a number of important qualifications and exceptions provided for in the Indenture. The Issuers and each Subsidiary Guarantor must annually report to the Trustee on compliance with such limitations. 17. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 18. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly and severally irrevocably and unconditionally guaranteed the payment of principal, premium, if any, and interest (including interest on overdue principal and overdue interest, if lawful) on the Securities; provided, however, each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee shall be entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor. 19. Governing Law. The Laws of the State of New York shall govern this Security and the Indenture, without regard to principles of conflict of laws. 20. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 21. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. EXHIBIT B Page 10 The Issuers will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Request may be made to: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47708 Attn: Alan R. Brill EXHIBIT B Page 11 FORM OF NOTATION ON SECURITY RELATING TO SUBSIDIARY GUARANTEE SUBSIDIARY GUARANTEE The Subsidiary Guarantors (as defined in the Indenture (the "Indenture") referred to in the Security upon which this notation is endorsed and each hereinafter referred to as a "Subsidiary Guarantor," which term includes any successor Person under the Indenture) (i) have jointly and severally irrevocably and unconditionally guaranteed as a primary obligor and not a surety (such guarantee by each Subsidiary Guarantor being referred to herein as the "Subsidiary Guarantee"), (a) the due and punctual payment of the principal, premium, if any, and interest on the Securities, whether at Stated Maturity, call for redemption or otherwise, (b) the due and punctual payment of interest on the overdue principal of and interest, if any, on the Securities, to the extent lawful, (c) the due and punctual performance of all other monetary Obligations of the Issuers under the Indenture and the Securities to the Securityholders or the Trustee, all in accordance with the terms set forth in Article 11 of the Indenture and (d) in case of any extension of time of payment or renewal of any Securities or any such Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity by acceleration or otherwise and (ii) have agreed to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Securityholder in enforcing any rights under this Subsidiary Guarantee. The Obligations of each Subsidiary Guarantor to the Securityholders of Securities and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article 10 and Article 11 of the Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee. Indebtedness evidenced by this Subsidiary Guarantee is subordinated to Guarantor Senior Indebtedness as set forth in the Indenture. No stockholder, officer, director or incorporator, as such, past, present or future of any Subsidiary Guarantor shall have any liability under this Subsidiary Guarantee by reason of his or its status as such stockholder, officer, director or incorporator. This is a continuing Subsidiary Guarantee and, except as otherwise expressly provided for in Section 11.06 of the Indenture, shall remain in full force and effect and shall be binding upon the Subsidiary Guarantor and its successors and assigns until full and final payment of all of the Issuers' Obligations under the Securities and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Securityholders and, in the event of any transfer or assignment of rights by any Securityholder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Subsidiary Guarantee of payment and not of collectability. This Subsidiary Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Security upon which this Subsidiary Guarantee is noted EXHIBIT B Page 12 shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE. Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. Subsidiary Guarantors: BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:______________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President TRI-STATE BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 13 NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 14 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation its Manager By:______________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 15 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 16 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President EXHIBIT B Page 17 HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President EXHIBIT B Page 18 HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:__________________________ Alan R. Brill, President EXHIBIT B Page 19 NCR III, LLC, a Virginia Limited Liability Company By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President EXHIBIT B Page 20 NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President EXHIBIT B Page 21 OPTION OF SECURITYHOLDER TO ELECT PURCHASE If you want to have all or part of this Security purchased by the Issuers pursuant to Section 3.09 of the Indenture, state the amount you elect to have purchased: $___________________ Date:_______________ Your Signature:________________________________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: ______________________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to (Insert assignee's soc. sec. or tax I.D. no.) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint ____________________________________________________ EXHIBIT B Page 22 agent to transfer this Security on the books of the Issuers. The agent may substitute another to act for him. Date:______________ Your Signature: ______________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee: __________________________ (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EXHIBIT C Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB Accredited Investors United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Attention: Corporate Trust Administration Re: Brill Media Company, LLC, Brill Media Management, Inc. Appreciation Notes due 2007 Ladies and Gentlemen: In connection with our proposed purchase of Appreciation Notes due 2007 (the "Securities") of Brill Media Company, LLC ("BMC") and Brill Media Management, Inc. (together with BMC, the "Issuers"), we confirm that: 1. We have received a copy of the Offering Memorandum (the "Offering Memorandum"), dated December 23, 1997 relating to the Securities and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agreed to the matters stated on pages (ii) and (iii) of the Offering Memorandum and in the section entitled "Appreciation Note Transfer Restrictions" of the Offering Memorandum including the restrictions on duplication and circulation of the Offering Memorandum. 2. We understand that any subsequent transfer of the Securities is subject to certain restrictions and conditions set forth in the Indenture relating to the Securities (as described in the Offering Memorandum) and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Securities except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the "Securities Act"). 3. We understand that the offer and sale of the Securities have not been registered under the Securities Act, and that the Securities may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell or otherwise EXHIBIT C Page 2 transfer any Securities prior to the date which is two years after the original issuance of the Securities, we will do so only (i) to an Issuer or any of its subsidiaries, (ii) inside the United States in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act), (iii) inside the United States to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture relating to the Securities), a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities, (iv) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Securities from us a notice advising such purchaser that resales of the Securities are restricted as stated herein. 4. We are not acquiring the Securities for or on behalf of, and will not transfer the Securities to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement Income Security Act of 1974), except as permitted in the section entitled "Appreciation Notes Transfer Restrictions" of the Offering Memorandum. 5. We understand that, on any proposed resale of any Securities, we will be required to furnish to the Trustee and the Issuers such certification, legal opinions and other information as the Trustee and the Issuers may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Securities purchased by us will bear a legend to the foregoing effect. 6. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be. 7. We are acquiring the Securities purchased by us for our account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, EXHIBIT C Page 3 By:___________________________ Name: EXHIBIT D Form of Certificate To Be Delivered in Connection with Transfers Pursuant to Regulation S _______________, ____ United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Attention: Corporate Trust Administration Re: Brill Media Company, LLC and Brill Media Management, Inc. (collectively the "Issuers") Appreciation Notes due 2007 (the "Securities") Ladies and Gentlemen: In connection with our proposed sale of $_____________ aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that: (1) the offer of the Securities was not made to a Person in the United States; (2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any Person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States; (3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; EXHIBIT D Page 2 (4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and (5) we have advised the transferee of the transfer restrictions applicable to the Securities. You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By:___________________________ Authorized Signature EX-5.1 64 EXHIBIT 5.1 EX-5.1 [Letterhead of Carter, Ledyard & Milburn] January ___, 1998 Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Ladies and Gentlemen: This opinion is rendered in connection with Registration Statement (No. ) on Form S-4 (the "Registration Statement") of Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a Virginia corporation ("Media" and collectively with BMC, the "Company"), relating to $105,000,000 in aggregate principal amount of the Company's Series B 12% Senior Notes due 2007 (the "Exchange Notes") and $3,000,000 aggregate principal amount of the Company's Series B Appreciation Notes due 2007 (the "Exchange Appreciation Notes"), which are being offered pursuant to an exchange offer (the "Exchange Offer") in exchange for the Company's outstanding 12% Senior Notes due 2007 (the "Original Notes") and the Company's outstanding Appreciation Notes due 2007 (the "Original Appreciation Notes"), respectively. In connection with this opinion, we, as special counsel to the Company, have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Indenture (the "Indenture") dated as of December 30, 1997 among the Company, the subsidiary guarantors of the Company (the "Guarantors") and United States Trust Company of New York, as trustee (the "Trustee"), pursuant to which the Exchange Notes would be issued, (ii) the Appreciation Notes Indenture (the "Appreciation Note Indenture") dated as of December 30, 1997 among the Company, the Guarantors and the Trustee, pursuant to which the Exchange Appreciation Notes would be issued,(iii) the Registration Statement, (iv) the form of Exchange Notes, (v) the form of Exchange Appreciation Notes, (vi) the form of guarantees by the Guarantors of the Exchange Notes and the Exchange Appreciation Notes (the "Guarantees") and (vii) all such Brill Media Company, LLC -2- additional agreements, certificates and other statements of government officials and officers and other representatives of the Company and other documents as we have deemed necessary to form a basis for this opinion. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the originals (and the authenticity of such originals) of all documents submitted to us as copies. We have, when relevant facts material to our opinion were not independently established by us, relied upon certificates of public officials and certificates and other written statements of officers of the Company. Based upon and subject to the foregoing and to the qualifications expressed below, we advise you that, in our opinion: (i) The Exchange Notes, when duly executed by the proper officers of the Company, duly authenticated by the Trustee in accordance with the terms of the Indenture and issued and delivered in accordance with the terms of the Exchange Offer and the Indenture, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights and (B) general principles of equity (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. (ii) The Exchange Appreciation Notes, when duly executed by the proper officers of the Company, duly authenticated by the Trustee in accordance with the terms of the Appreciation Note Indenture and issued and delivered in accordance with the terms of the Exchange Offer and the Appreciation Note Indenture, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights and (B) general principles of equity (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. (iii) Each Guarantee will constitute a valid and legally binding agreement of the applicable Guarantor, enforceable against such Guarantor in accordance with its terms, except that enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights and (B) general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor may be brought. The opinions rendered herein are qualified, inasmuch as they relate to the Exchange Appreciation Notes, to the extent that they are subject to the applicability of the limitations on rates of interest imposed by sections 190.40 and 190.42 of the New York Penal Law. Section 5-501(6)(b) of the New York General Obligations Law provides an exemption from such sections for loans or forbearances aggregating two million five hundred thousand dollars or more which are to be made or advanced "to any one borrower" in one or more installments pursuant to a written agreement. Inasmuch as the Exchange Appreciation Notes would be issued by BMC and Media jointly and severally, and there has not been any allocation of the aggregate value of the Exchange Notes and the Exchange Appreciation Notes as between BMC and Media, it is in the Brill Media Company, LLC -3- absence of controlling precedent not clear that the exemption contained in Section 5-501(6)(b) is available. However, in view of the facts that (i) BMC is the sole owner of Media and, indirectly, of all of the Guarantors, (ii) the Exchange Notes and the Exchange Appreciation Notes are integral parts of one transaction, (iii) the aggregate principal amount of the Exchange Notes and the Exchange Appreciation Notes greatly would exceed the minimum amount set forth in Section 5-501(6)(b) and (iv) the issuance of the Exchange Notes, the Exchange Appreciation Notes and the Guarantees are integral parts of transactions that resulted from arms-length negotiations in which BMC, Media and each Guarantor had an opportunity to consult with their financial and legal advisors, we believe that a court applying the law of New York would conclude that the exemption contained in Section 5-501(6)(b) is available in the circumstances. We are admitted to practice law in the State of New York and the opinions expressed herein are limited to the laws of the State of New York. We have relied, as to certain matters of the laws of the Commonwealth of Virginia, on the accompanying opinion dated January ____, 1998 of Thompson & McMullan, P.C. We hereby consent to being named in the Registration Statement and in the Prospectus which constitutes a part thereof as special counsel for the Company and the Guarantors who have passed upon certain legal matters in connection with the securities to which the Registration Statement and the Prospectus relate. We further consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, EX-5.2 65 EXHIBIT 5.2 EXHIBIT 5.2 [LETTERHEAD OF THOMPSON & MCMULLAN, P.C.] January ___, 1998 Brill Media Company, LLC 420 NW Fifth Street, Suite 3-B Evansville, Indiana 47708 Re: $105,000,000 in Securities -------------------------- Gentlemen: We have acted as counsel to the Company and to the Guarantors, each as identified in that certain Purchase Agreement with exhibits thereto (the "Purchase Agreement") dated December 22, 1997 and entered into by and among NatWest Capital Markets Limited as the "Initial Purchaser"; and Brill Media Company, LLC (the "Company"); Brill Media Management, Inc. (Media"); and the "Guarantors" as therein identified, in connection with the sale and issuance of the "Securities" as therein defined. All capitalized terms not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. In connection with this opinion, we have examined and relied on such documents as we have deemed appropriate and upon factual statements and representations from one or more of the Company and the Guarantors or their officers, and have made such other examinations and investigations as we have deemed appropriate and necessary. We have assumed the truthfulness of all representations and warranties, the good faith of all parties, the genuineness of all signatures on (other than the signatures of Brill, the Company, or the Guarantors) and the authenticity of all documents submitted to us as originals, the conformity to the original of documents submitted to us as copies, and the due execution, delivery, and performance by the parties to all instruments delivered on the Closing Date at consummation of the transactions contemplated by the Purchase Agreement. We are authorized to practice law in the Commonwealth of Virginia and have made such examination of the laws of the Commonwealth of Virginia and of the federal laws of the United States of America as we deem relevant and necessary for the purposes of this opinion. We do not (and do not purport to) Brill Media Company, LLC January ___, 1998 Page 2 render any opinion with regard to matters that are controlled by the laws of any jurisdiction other than the Commonwealth of Virginia. Each opinion expressed herein is limited to the effect of the laws of the Commonwealth of Virginia (excluding those dealing with or controlled by the principles of choice of laws or conflicts of laws) or the federal laws of the United States, if any, in each case only as and to the extent they are determined to be applicable and controlling, and, in any event, only as such laws are presently in effect in the Commonwealth of Virginia as of the date hereof. We call to your attention that the validity and interpretation of the Exchange Notes, the Appreciation Exchange Notes, the Guarantees and many related documents are governed by and construed in accordance with the laws of the State of New York. Based upon and subject to the foregoing, as of the date hereof we are of the following opinions: (i) Each of the Company and each Guarantor has all requisite corporate, company, or partnership power and authority to execute, deliver, and perform its respective obligations under the Exchange Notes and the Appreciation Exchange Notes. The Exchange Notes and Appreciation Exchange Notes have been duly and validly authorized by the Company and each Guarantor. (ii) Each of the Guarantors has all requisite corporate company or partnership power and authority to execute, deliver, and perform its obligations under its respective Guarantee. Each Guarantee issued by a Guarantor has been duly and validly authorized, executed, and delivered by the applicable Guarantor. Our opinion speaks as of the date hereof and is based on applicable law as presently in effect in the Commonwealth of Virginia and the United States and facts existing or assumed to exist on the date hereof. The opinion expressed herein is limited to those matters expressly and explicitly set forth herein, and no other opinions are implied by or may be inferred from the contents of this letter. Carter, Ledyard & Milburn may rely on this letter as if it had been addressed to them. We hereby consent to being named in the Registration Statement of the Company and the Guarantors relating to the Exchange Notes, the Appreciation Exchange Notes and the Guarantees (the "Registration Statement") and in the Prospectus which constitutes a part thereof as counsel for the Company and the Guarantors who have passed upon legal matters in connection with the securities to which the Registration Statement and the Prospectus relate. We further consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, EX-8 66 EXHIBIT 8 EX-8 [Carter, Ledyard & Milburn Letterhead] (212) 238-8809 January ____, 1998 Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Re: Form S-4 Registration Statement Ladies and Gentlemen: We have acted as counsel to Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a Virginia corporation ("Media" and collectively with BMC, the "Company"), in connection with an exchange offer (the "Exchange Offer") under which $105,000,000 in aggregate principal amount of the Company's Series B 12% Senior Notes due 2007 (the "Exchange Notes") and $3,000,000 in aggregate principal amount of the Company's Series B Appreciation Notes due 2007 (the "Exchange Appreciation Notes"), will be offered in exchange for the Company's outstanding 12% Senior Notes due 2007 (the "Original Notes") and the Company's outstanding Appreciation Notes (the "Original Appreciation Notes"), respectively. The Exchange Offer is the subject of a Registration Statement on Form S-4 under the Securities Act of 1933 (the "Registration Statement"). We have examined originals or copies, certified or otherwise identified to our satisfaction, of all such agreements, certificates and other statements of corporate officers and other representatives of the Company as we have deemed necessary as a basis for this opinion. In such examination we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. Brill Media Company, LLC -2- Based on and subject to the foregoing, we are of the opinion that the section entitled "Certain Federal Income Tax Considerations" in the prospectus constituting Part I of the Registration Statement contains an accurate general description, under currently applicable law, of the principal United States federal income tax considerations that apply to holders of Exchange Notes and Exchange Appreciation Notes. We consent to the filing of this opinion as an Exhibit to the Registration Statement. In giving this consent we do not acknowledge that we come within the category of persons whose consent is required by the Securities Act or the rules and regulations promulgated thereunder. Very truly yours, JJC:lrh EX-10.1(A) 67 EXHIBIT 10.1(A) EX-10.1(a) Performance Incentive Plan Agreement PERFORMANCE AGREEMENT This is an agreement made this 26th day of November, 1985, by and between Clifton E. Forrest (hereinafter "Executive") and Central Michigan Newspapers, Inc., a Virginia corporation (hereinafter "Company") Recitals Executive has loyally and effectively served Company in a key management capacity, and Company desires to recognize Executive's past contributions to Company's business, to retain Executive's experience and knowledge in Company's management, and to induce Executive to remain in the employ of Company or an Affiliate. To these ends, Company desires by this agreement to provide identifiable financial incentives for Executive to foster the financial growth and expansion of Company and its Affiliates. In consideration of the foregoing and of the covenants and agreements hereinafter contained, Company and Executive hereby covenant and agree as follows: 1. Executive. Executive shall perform such duties as normally are incident to Executive's current position as President of Company and such offer or additional duties as Company's Board of Directors hereafter may, from time to time, prescribe and shall devote such reasonable time, attention, and effort as are necessary properly to fulfill Executive's duties and responsibilities to Executive's employer. 2. Creation of Account. With respect to the company designated as provided in Section 3 ("Performance Company"), Company hereby credits to a special account identified to this agreement and created for such purpose ("Account") the number of units ("Units") designed in Section 3. The value of the Account as determined from time to time ("Account Value") shall be that amount, not less than zero, determined by applying the formula set Forth in Exhibit A, adjusted as permitted by Section 10, ("Formula") to the Performance Company, using the factor designated in Section 3. ("Factor"). 3. Participation Certificate and Designations. Subject to the provisions of Section 10., for purposes of this agreement, the following are hereby designated: (a) the number of Units is 4000.; (b) the Performance Company is CMN Holding, Inc. & Subsidiaries (Consolidated); and (c) the Factor is -0-. This designation is memorialized in participation certificate ("Certificate") number 1 delivered to Executive this date, receipt of which is hereby acknowledged by Executive. The Certificate shall create no rights, and all rights of Executive shall be solely as expressly 1 provided in this agreement. 4. Vesting. Subject to Section 13. and if Executive is then employed by Company or an Affiliate and vesting shall not have been earlier terminated by Company as provided in Section 6., on February 28 of the year next following the date of this agreement Executive's interest in the Account Value shall be 80 % vested, and thereafter during the period of Executive's continued employment by Company or an Affiliate an additional 20 % interest in such Account Value shall vest on each subsequent February 28 of each of the next succeeding 1 fiscal years. 5. Accelerated Vesting. Subject to Section 13., if Executive is then employed by Company or an Affiliate and vesting shall not have been earlier terminated, Executive's interest in the Account Value shall immediately be 100% vested as of the date when any of the following occurs: (a) Executive's death, (b) Executive's retirement from employment by Company or any Affiliate after attaining the age of 65 years, or (c) termination of Executive's employment by. Company or any Affiliate due to Executive's inability to perform the tasks of Executive's then position because of a medically determinable physical or mental impairment, not caused or contributed to by any action of Executive, that is expected by Company to continue for a continuous period of 12 calendar months or more extending beyond the date of such termination of employment. 6. Payment of Vested Amount; Termination of Vesting. Subject to the provisions of Sections 7. and 13., and to the extent not then prohibited or restricted by any agreement to which Company or its assets then are subject, on that date (the "Satisfaction Date") which is the earlier to occur of (i) the date when Executive ceases to be an employee of Company or any Affiliate, or (ii) the date when Executive receives written notice from Company of Company's election to discontinue vesting hereunder as to Executive, Executive shall become entitled to either of the following: A. If Executive has then ceased to be an employee of Company or any Affiliate, Executive shall be entitled to payment in cash of an amount equal to Executive's then vested percentage of the Executive's then Account Value ("Vested Amount") upon delivery to Company of an acceptable receipt, payable to Executive as follows: either (a) in full within 60 days after the Satisfaction Date, or, at Company's sole election, (b) in quarterly installments of at least 2.5% of the Vested Amount, payable until such time as the Vested Amount is paid in full; the first of any such quarterly installments to be due and payable on that date 2 which is l90 days after the Satisfaction Date. If paid in quarterly installments as provided in (b), the balance of the Vested Amount owing on any quarterly installment date may be paid in full at Company's then election, but if not so paid the then unpaid balance of the Vested Amount owing as of the next subsequent quarterly installment date shall be an amount equal to 102% of the amount of any unpaid balance of the Vested Amount as of the immediately preceding installment date, or B. If Executive is an employee of Company or any Affiliate but has received written notice from Company of its election to discontinue vesting hereunder as to Executive, Executive shall be entitled to receive from Company, within 60 days after such notice, and at Company's sole election, either (a) the Vested Amount paid as provided in A. above, or (b) a new performance agreement substantially identical herewith in form and economic effect but executed and entered into by Executive and an Affiliate, whereupon sue; Affiliate shall thereby assume and become solely liable for any then vested percentage of the Executive's then Account Value hereunder, as in such agreement provided, and Company thereafter shall have no further responsibility to Executive hereunder. In no event shall Executive be entitled to payment, or to any other right or rights, under or pursuant to this agreement other than as herein expressly provided, and Company, at its sole option, may discontinue vesting hereunder as to Executive at any time, with or without cause, by delivering or mailing notice of such discontinuance to Executive, and thereafter the Account Value shall be fixed and no further interest in the Account Value shall vest in Executive pursuant to this agreement. 7. Reduction for Cause. (a) If Company or any Affiliate shall terminate Executive's employment for Cause then the terminating entity, at its sole election, may reduce Executive's then vested interest, if any, in the Account Value to no less than 50% of its then amount, effective as of the Satisfaction Date. (b) If at any time or times within the period ending three years after the Satisfaction Date Executive shall engage in Prohibited Competition, then Company, at its sole option, may reduce Executive's then Vested Amount so that Executive thereafter shall not receive, and Company shall not thereafter make or be required to make, payment or payments, in whole or in part, which will cause the aggregate amount of all payments made by Company on the Vested Amount to exceed 30% of the amount of the Vested Amount as determined as of the Satisfaction Date. 8. Beneficiaries. Each payment on the Vested Amount required hereby shall be made to Executive so long as Executive shall live. After Executive's death each required payment on the 3 Vested Amount shall be made to Executive's personal representative to be a part of Executive's estate, unless during Executive's lifetime Executive shall have filed with Company a written designation acceptable to Company designating one or more named beneficiaries ["Beneficiary(ies)"] to receive any such payment after Executive's death, in which case each such required payment shall be made to any designated Beneficiary then living, in accordance with such designation. 9. Definitions. When used in this agreement and any exhibit hereto, each term defined in Exhibit B shall have the meaning therein set forth. 10. Subsequent Designation of Performance Company. If the Performance Company specified in Section 3. shall (a) or any reason cease to be an Affiliate, or (b) shall be merged or combined with or into another company, or (c) shall have its results consolidated for accounting purposes with companies other than those consolidated with it as of the date of this agreement, Company at its sole option may, by a writing mailed or delivered to Executive, designate from among Company and its then Affiliates a new Performance Company for all purposes of this agreement. Upon any such designation the formula set forth in Exhibit A shall be adjusted in order to minimize any change in the then amount of the Account Value as of the date the new Performance Company is designated. 11. Not an Employment Contract. This is not an employment contract, does not confer upon Executive any right to any present or future position or scale of remuneration or to a continuation of employment for any time, and does not in any way restrict or limit the right of Company or any Affiliate to terminate Executive's employment at any time, with or without cause or for no cause. 12. No Shareholder or Other Rights. This agreement and the Certificate delivered to Executive pursuant hereto create no rights as a shareholder in Company or any Affiliate, create no rights with respect to any share to Company's capital stock, and create no security or other interest or right in and to any property or assets of Company or any Affiliate. 13. Annulment of Agreement. Anything to the contrary in this agreement notwithstanding, this agreement and all rights of Executive or of his personal representative, estate, or of any Beneficiary, arising hereunder, including, without limitation, any right then or thereafter to receive any payment or payments of all or any portion of any Vested Amount hereunder, whether then or thereafter to be determined, shall cease and determine and this agreement, all rights hereunder, and the Certificate, each shall be void upon Executive's (a) executing a petition to 4 be declared a bankrupt, or (b) making a general, written assignment for the benefit of Executive's creditors, or (c) without Company's previous written consent, attempting in any way, in whole or in part, to anticipate, sell, assign, pledge, alienate, encumber, charge, or otherwise transfer or grant a security or other interest in ("Transfer"), any right or rights hereunder or thereunder. 14. No additional Units. This agreement gives the Executive no right to any additional or different number of Units other than as expressly set forth herein. 15. Miscellaneous. This agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, personal representatives, successors, and assigns and sets forth the entire agreement of the parties hereto concerning the subject matter hereof. Executive may not, directly or indirectly, or in whole or in part, Transfer any right to Executive under this agreement and upon any such Transfer or attempted Transfer all of Executive's rights hereunder shall cease and determine and become void. This agreement may not be amended without the prior written consent of all parties hereto, and shall be governed by and construed in accordance with the domestic, substantive laws of the Commonwealth of Virginia. The captions herein are for ease of reference only and do not constitute a substantive part of this agreement. WITNESS the following signatures as of the day, month, and year first above written. Company: Central Michigan Newspapers, Inc. By: /s/ Alan Brill ---------------------------------- a Duly authorized officer Executive: /s/ Clifton E. Forrest ---------------------------------- (name) 5 Exhibit A Account Value The Account Value at any time shall be the sum of (a) Primary Unit Rights multiplied by Working Capital Adjustment, (b) Primary Unit Rights multiplied by Long Term Debt multiplied by (-1), (c) Primary Unit Rights multiplied by the sum of Dividends less Dividends Received, (d) Secondary Unit rights multiplied by the sum of (1) Revenues, multiplied by the coverage percentage, and (2) The quotient of Factor divided by Multiple, when applied with respect to the Performance Company; provided that if Account Value is determined in conjunction with a sale of this Performance Company, such amount as determined in (d) shall not exceed 10 percent of the sale price. 6 Exhibit B DEFINITIONS As used herein the following terms shall have the following meanings: 1. Affiliate - Means as of any time each corporation of which Alan R. Brill then owns, directly or through an Affiliate, at least 51 % of the then issued and outstanding voting capital stock. 2. Coverage Percentage - Means as of any time the result, of Revenues divided into the sum of: (a) net income (loss) before income taxes and equity in the income of Affiliates; (b) depreciation; (c) management fee; and (d) non-operating expenses, net of non-operating income, each to be conclusively determined by Company from Performance Company's financial statements for its then most recently ended fiscal year. 3. Cause - Means any fraudulent or criminal act by Executive or any willful act by Executive to the material detriment of the operations or business of Company or any Affiliate. 4. Dividends - Means cumulative distributions on the common stock of the Performance Company subsequent to the date of this agreement. 5. Dividends Received - Means cumulative distributions to the Performance Company on stock investments in its affiliates subsequent to the date of this agreement. 6. Factor - Means the amount specified in Section 3. 7. Long-Term Debt - Means as of any time that portion of all long-term liabilities of the Performance Company as reflected in its financial statements plus the gross obligations under non-operating consulting or non-competition agreements to extent not otherwise reflected in such statements, for its then most recently ended fiscal year, which Company elects in its sole discretion, to include in computing the Account Value. 8. Multiple - Means a number of -8- eight to be used in determination of Secondary Unit Rights. 9. Primary Unit Rights - Primary Unit Rights are the Unit Rights multiplied by (.25). 7 10. Prohibited Competition - Means Executive's (a) serving, directly or indirectly, as an officer agent, partner, or director of, or being employed by, consulting with, assisting, or rendering advice to, or having more than a 5% ownership interest as a stockholder, partner, or otherwise in any partnership, corporation or other person, or persons, natural or corporate, engaged in any business activity competing for personnel of or with any business conducted by Company or any Affiliate, including any owner or operator of a business located within, or which regularly solicits advertising in, a significant circulation or broadcast area of any publication or broadcast station then owned by Company or any Affiliate, or (b) divulging any material, confidential, or commercially sensitive information concerning the business, profits, sales, customers, financing, or financial condition of Company or any Affiliate to any person or persons natural or corporate, other than an officer, director, stockholder, or duly authorized agent, or employee of Company or an Affiliate. 11. Revenues - Means as of any time annual operating revenues of the Performance Company as reported in the financial statements of Performance Company for its then; most recently ended fiscal year, including trade, and other non-primary revenues net of related expenses. 12. Secondary Unit Rights - Secondary Unit Rights are the Primary Unit Rights multiplied by the Multiple. 13. Unit Rights - Unit Rights are the number of Units as specified in Section (3) multiplied by the Unit Value. 14. Unit Value - Unit Value is .00D1. 15. Working Capital Adjustment - As of any time the Working Capital Adjustment is the excess (or deficit) of current assets over current liabilities, further adjusted to include non-current assets of a non-operating investment nature (such as notes-receivable, cash value of life insurance, and investment in subsidiaries) and less par value of preferred stock and any deferred tax liability, all as determined by Company from the Performance Company's financial statements for its then most recently ended fiscal year. 8 EX-10.1(B) 68 EXHIBIT 10.1(B) EX-10.1(b) Performance Incentive Plan Agreement PERFORMANCE AGREEMENT This is an agreement made this 26th day of November, 1985, by and between Alan L. Beck (hereinafter "Executive") and WIOV, Inc., a Virginia corporation (hereinafter "Company"). Recitals Executive has loyally and effectively served Company in a key management capacity, and Company desires to recognize Executive's past contributions to Company's business, to retain Executive's experience and knowledge in Company's management, and to induce Executive to remain in the employ of Company or an Affiliate. To these ends, Company desires by this agreement to provide identifiable financial incentives for Executive to foster the financial growth and expansion of Company and its Affiliates. In consideration of the foregoing and of the covenants and agreements hereinafter contained, Company and Executive hereby covenant and agree as follows: 1. Executive. Executive shall perform such duties as normally are incident to Executive's current position as President of Company and such other or additional duties as Company's Board of Directors hereafter may, from time to time, prescribe and shall devote such reasonable time, attention, and effort as are necessary properly to fulfill Executive's duties and responsibilities to Executive's employer. 2. Creation of Account. With respect to the company designated as provided in Section 3 ("Performance Company"), Company hereby credits to a special account identified to this agreement and created for such purpose ("Account") the number of units ("Units") designed in Section 3. The value of the Account as determined from time to time ("Account Value") shall be that amount, not less than zero, determined by applying the formula set forth in Exhibit A, adjusted as permitted by Section 10, ("Formula") to the Performance Company, using the factor designated in Section 3. ("Factor"). 3. Participation Certificate and Designations. Subject to the provisions of Section 10., for purposes of this agreement, the following are hereby designated: (a) the number of Units is 4000.; (b) the Performance Company is WIOV, Inc.; and (c) the Factor is -0-. This designation is memorialized in participation certificate ("Certificate") number 1 delivered to Executive this date, receipt of which is hereby acknowledged by Executive. The Certificate shall create no rights, and all rights of Executive shall be solely as expressly provided in this agreement. 4. Vesting. Subject to Section 13., and if Executive is then employed by Company or an Affiliate and vesting shall not have been earlier terminated by Company as provided in Section 6., on February 28 of the year next following the date of this agreement Executive's interest in the Account Value shall be 10% vested, and thereafter during the period of Executive's continued employment by Company or an Affiliate an additional 10% interest in such Account Value shall vest on each subsequent February 28 of each of the next succeeding 9 fiscal years. 5. Accelerated Vesting. Subject to Section 13., if Executive is then employed by Company or an Affiliate and vesting shall not have been earlier terminated, Executive's interest in the Account Value shall immediately be 100% vested as of the date when any of the following occurs: (a) Executive's death, (b) Executive's retirement from employment by Company or any Affiliate after attaining the age of 65 years, or (c) termination of Executive's employment by Company or any Affiliate due to Executive's inability to perform the tasks of Executive's then position because of a medically determinable physical or mental impairment, not caused or contributed to by any action of Executive, that is expected by Company to continue for a continuous period of 12 calendar months or more extending beyond the date of such termination of employment. 6. Payment of Vested Amount; Termination of Vesting. Subject to the provisions of Sections 7. and 13., and to the extent not then prohibited or restricted by any agreement to which Company or its assets then are subject, on that date (the "Satisfaction Date") which is the earlier to occur of (i) the date when Executive ceases to be an employee of Company or any Affiliate, or (ii) the date when Executive receives written notice from Company of Company's election to discontinue vesting hereunder as to Executive, Executive shall become entitled to either of the following: A. If Executive has then ceased to be an employee of Company or any Affiliate, Executive shall be entitled to payment in cash of an amount equal to Executive's then vested percentage of the Executive's then Account Value ("Vested Amount") upon delivery to Company of an acceptable receipt, payable to Executive as follows: either (a) in full within 60 days after the Satisfaction Date, or, at Company's sole election, (b) in quarterly installments of at least 2.5% of the Vested Amount, payable until such time as the Vested Amount is paid in full; the first of any such quarterly installments to be due and payable on that date which is 90 days after the Satisfaction Date. If paid in quarterly installments as provided in (b), the balance of the Vested Amount owing on any quarterly installment date may be paid in full at Company's then election, but if not so paid the then unpaid balance of the Vested Amount owing as of the next subsequent quarterly installment date shall be an amount equal to 102% of the amount of any unpaid balance of the Vested Amount as of the immediately preceding installment date, or B. If Executive is an employee of Company or any Affiliate but has received written notice from Company of its election to discontinue vesting hereunder as to Executive, Executive shall be entitled to receive from Company, within 60 days after such notice, and at Company's sole election, either (a) the Vested Amount paid as provided in A. above, or (b) a new performance agreement substantially identical herewith in form and economic effect but executed and entered into by Executive and an Affiliate, whereupon such Affiliate shall thereby assume and become solely liable for any then vested percentage of the Executive's then Account Value hereunder, as in such agreement provided, and Company thereafter shall have no further responsibility to Executive hereunder. In no event shall Executive be entitled to payment, or to any other right or rights, under or pursuant to this agreement other than as herein expressly provided, and Company, at its sole option, may discontinue vesting hereunder as to Executive at any time, with or without cause, by delivering or mailing notice of such discontinuance to Executive, and thereafter the Account Value shall be fixed and no further interest in the Account Value shall vest in Executive pursuant to this agreement. 7. Reduction for Cause. (a) If Company or any Affiliate shall terminate Executive's employment for Cause then the terminating entity, at its sole election, may reduce Executive's then vested interest, if any, in the Account Value to no less than 50% of its then amount, effective as of the Satisfaction Date. (b) If at any time or times within the period ending three years after the Satisfaction Date Executive shall engage in Prohibited Competition, then Company, at its sole option, may reduce Executive's then Vested Amount so that Executive thereafter shall not receive, and Company shall not thereafter make or be required to make, payment or payments, in whole or in part, which will cause the aggregate amount of all payments made by Company on the Vested Amount to exceed 30% of the amount of the Vested Amount as determined as of the Satisfaction Date. 8. Beneficiaries. Each payment on the Vested Amount required hereby shall be made to Executive so long as Executive shall live. After Executive's death each required payment on the Vested Amount shall be made to Executive's personal representative to be a part of Executive's estate, unless during Executive's lifetime Executive shall have filed with Company a written designation acceptable to Company designating one or more named beneficiaries ["Beneficiary(ies)"] to receive any such payment after Executive's death, in which case each such required payment shall be made to any designated Beneficiary then living, in accordance with such designation. 9. Definitions. When used in this agreement and any exhibit hereto, each term defined in Exhibit B shall have the meaning therein set forth. 10. Subsequent Designation of Performance Company. If the Performance Company specified in Section 3. shall (a) for any reason cease to be an Affiliate, or (b) shall be merged or combined with or into another company, or (c) shall have its results consolidated for accounting purposes with companies other than those consolidated with it as of the date of this agreement, Company at its sole option may, by a writing mailed or delivered to Executive, designate from among Company and its then Affiliates a new Performance Company for all purposes of this agreement. Upon any such designation the formula set forth in Exhibit A shall be adjusted in order to minimize any change in the then amount of the Account Value as of the date the new Performance Company is designated. 11. Not an Employment Contract. This is not an employment contract, does not confer upon Executive any right to any present or future position or scale of remuneration or to a continuation of employment for any time, and does not in any way restrict or limit the right of Company or any Affiliate to terminate Executive's employment at any time, with or without cause, or for no cause. 12. No Shareholder or Other Rights. This agreement and the Certificate delivered to Executive pursuant hereto create no rights as a shareholder in Company or any Affiliate, create no rights with respect to any share to Company's capital stock, and create no security or other interest or right in and to any property or assets of Company or any Affiliate. 13. Annulment of Agreement. Anything to the contrary in this agreement notwithstanding, this agreement and all rights of Executive or of his personal representative, estate, or of any Beneficiary, arising hereunder, including, without limitation, any right then or thereafter to receive any payment or payments of all or any portion of any Vested Amount hereunder, whether then or thereafter to be determined, shall cease and determine and this agreement, all rights hereunder, and the Certificate, each shall be void upon Executive's (a) executing a petition to be declared a bankrupt, or (b) making a general, written assignment for the benefit of Executive's creditors, or (c) without Company's previous written consent, attempting in any way, in whole or in part, to anticipate, sell, assign, pledge, alienate, encumber, charge, or otherwise transfer or grant a security or other interest in ("Transfer"), any right or rights hereunder or thereunder. 14. No additional Units. This agreement gives the Executive no right to any additional or different number of Units other than as expressly set forth herein. 15. Miscellaneous. This agreement shall be binding upon and inure to the benefit of the parties hereto or their heirs, personal representatives, successors, and assigns and sets forth the entire agreement of the parties hereto concerning the subject matter hereof. Executive may not, directly or indirectly, or in whole or in part, transfer any right to Executive under this agreement and upon any such Transfer or attempted Transfer all of Executive's rights hereunder shall cease and determine and become void. This agreement may not be amended without the prior, written consent of all parties hereto, and shall be governed by and construed in accordance with the domestic, substantive laws of the Commonwealth of Virginia. The captions herein are for ease of reference only and do not constitute a substantive part of this agreement. WITNESS the following signatures as ,of the day, month, and year first above written. Company: WIOV, INC. By: /s/ Alan R. Brill ----------------------------- a duly authorized officer Executive: /s/ Alan Beck --------------------------------- (name) Exhibit A Account Value The Account Value at any time shall be the sum of (a) Primary Unit Rights multiplied by Working Capital Adjustment, (b) Primary Unit Rights multiplied by Long Term Debt multiplied by (-1), (c) Primary Unit Rights multiplied by the sum of Dividends less Dividends Received, (d) Secondary Unit rights multiplied by the sum of (1) Revenues, multiplied by the coverage percentage, and (2) The quotient of Factor divided by Multiple, when applied with respect to the Performance Company; provided that if Account Value is determined in conjunction with a sale of this Performance Company, such amount as determined in (d) shall not exceed 10 percent of the sale price. Exhibit B DEFINITIONS As used herein the following terms shall have the following meanings: 1. Affiliate - Means as of any time each corporation of which Alan R. Brill then owns, directly or through an Affiliate, at least 51% of the then issued and outstanding voting capital stock. 2. Coverage Percentage - Means as of any time the result of Revenues divided into the sum of: (a) net income (loss) before income taxes and equity in the Income of Affiliates; (b) depreciation; (c) management fee; and (d) non-operating expenses, net of non-operating income, each to be conclusively determined by Company from Performance Company's financial statements for its then most recently ended fiscal year. 3. Cause - Means any fraudulent or criminal act by Executive or any willful act by Executive to the material detriment of the operations or business of Company or any Affiliate. 4. Dividends - Means cumulative distributions on the common stock of the Performance Company subsequent to the date of this agreement. 5. Dividends Received - Means cumulative distributions to the Performance Company on stock investments in its affiliates subsequent to the date of this agreement. 6. Factor - Means the amount specified in Section 3. 7. Long-Term Debt - Means as of any time that portion of all long-term liabilities of the Performance Company as reflected in its financial statements plus the gross obligations under non-operating consulting or non-competition agreements to extent not otherwise reflected in such statements, for its then most recently ended fiscal year, which Company elects in its sole discretion, to include in computing the Account Value. 8. Multiple - Means a number of -8- eight to be used in determination of Secondary Unit Rights. 9. Primary Unit Rights - Primary Unit Rights are the Unit Rights multiplied by (.25). 10. Prohibited Competition - Means Executive's (a) serving, directly or indirectly, as an officer, agent, partner, or director of, or being employed by, consulting with, assisting, or rendering advice to, or having more than a 5% ownership interest as a stockholder, partner, or otherwise in any part- nership, corporation or other person, or persons, natural or corporate, engaged in any business activity competing for personnel of or with any business conducted by Company or any Affiliate, including any owner or operator of a business located within, or which regularly solicits advertising in, a significant circulation or broadcast area of any publication or broadcast station then owned by Company or any Affiliate, or (b) divulging any material, confidential, or commercially sensitive information concerning the business, profits, sales, customers, financing, or financial condition of Company or any Affiliate to any person or persons natural or corporate, other than an officer, director, stockholder, or duly authorized agent, or employee of Company or an Affiliate. 11. Revenues - Means as of any time annual operating revenues of the Performance Company as reported in the financial statements of Performance Company for its then most recently ended fiscal year, including trade, and other non-primary revenues net of related expenses. 12. Secondary Unit Rights - Unit Rights are the number of Units as specified in Section (3) multiplied by the Unit Value. 13. Unit Rights - Unit Rights are the number of Units as specified in Section (3) multiplied by the Unit Value. 14. Unit Value - Unit Value is .0001. 15. Working Capital Adjustment - As of any time the Working Capital Adjustment is the excess (or deficit) of current assets over current liabilities, further adjusted to include non-current assets of a non-operating investment nature (such as notes-receivable, cash value of life insurance, and investment in subsidiaries) and less par value of preferred stock and any deferred tax liability, all as determined by Company from the Performance Company's financial statements for its then most recently ended fiscal year. EX-10.2 69 EXHIBIT 10.2 Exhibit 10.2 MANAGED AFFILIATES SUBORDINATION AGREEMENT This is an agreement entered into this 30th day of December 1997, by and among BRILL MEDIA COMPANY, L.P. ("BMCLP") and READING RADIO, INC.; TRI-STATE BROADCASTING, INC.; NORTHERN COLORADO RADIO, INC.; NCR II, INC.; CENTRAL MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHLAND BROADCASTING, LLC; NB II, INC.; CENTRAL MICHIGAN NEWSPAPERS, INC.; CADILLAC NEWSPAPERS, INC.; CMN ASSOCIATED PUBLICATIONS, INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.; CENTRAL MICHIGAN DISTRIBUTION CO., INC.; GLADWIN NEWSPAPERS, INC; GRAPH ADS PRINTING, INC.; MIDLAND BUYER'S GUIDE, INC.; ST. JOHNS NEWSPAPERS, INC.; HURON P.S., LLC; HURON NEWSPAPERS, LLC; NCR III, LLC; NCH II, LLC; HURON HOLDINGS, LLC; NORTHERN COLORADO HOLDINGS, LLC; NORTHLAND HOLDINGS, LLC; CMN HOLDINGS, INC.; BRILL RADIO, INC.; and BRILL NEWSPAPERS, INC. (severally and collectively, the "Company"). RECITALS BMCLP and each Company have entered into a management agreement (severally and collectively the "Administrative Management Agreement") pursuant to which BMCLP provides certain management services to each Company as therein provided. BMCLP and each Company now desire to subordinate BMCLP's right to receive payment under each Administrative Management Agreement as and to the extent herein provided. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and each Company agree as follows: Section 1.01. Subordination of Liabilities. Each Company and BMCLP for itself and its successors and assigns, covenants and agrees that the payment of the management fees and other amounts owed to BMCLP under each Administrative Management Agreement (the "Subordinated Indebtedness") is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, to the prior payment in full in cash of all Senior Indebtedness (as defined in Section 1.07) or any default under the Managed Affiliate Note (as defined in Section 1.07). The provisions of this agreement shall constitute a continuing offer to all persons who, in reliance upon such provisions, become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the holders of Senior Indebtedness, and such holders are hereby made obligees hereunder the same as if their names were written herein as such, and they and/or each of them may proceed to enforce such provisions. Section 1.02. Company not to Make Payments with Respect to Subordinated Indebtedness in Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness (including interest thereon or fees or any other amounts owing in respect thereof), whether at Page 2 stated maturity, by acceleration or otherwise, all Obligations (as defined in Section 1.07 of this Annex) owing in respect thereof, in each case to the extent due and owing, shall first be paid in full in cash, before any payment, whether in cash, property, securities or other wise, is made on account of the Subordinated Indebtedness. (b) The Company may not, directly or indirectly, make any payment of any Subordinated Indebtedness and may not acquire any Subordinated Indebtedness for cash or property until all Senior Indebtedness has been paid in full in cash if any Default or Event of Default under, and as defined in, the Indenture (as defined in Section 1.07 of this agreement or any default under the Managed Affiliate Note (as defined in Section 1.07 of this Agreement) is then in existence or would result therefrom. BMCLP hereby agrees that, so long as any such Default or Event of Default exists or any restrictions set forth in any issue of Senior Indebtedness reduces the amount permitted to be paid in respect of the Subordinated Indebtedness, BMCLP will not sue for, or otherwise take any action to enforce the Company's obligations to pay, amounts owing in respect of the Subordinated Indebtedness. (c) In the event that notwithstanding the provisions of the preceding subsections (a) and (b) of this Section 1.02, the Company shall make any payment on account of the Subordinated Indebtedness at a time when payment is not permitted by said subsection (a) or (b), such payment shall be held by BMCLP, in trust for the benefit or, and shall be paid forthwith over and delivered to, the holders of Senior Indebtedness or their representative or the trustee under the indenture or other agreement pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, for application prorata to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full, in cash, in accordance with the terms of such Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. Section 1.03. Subordination to Prior Payment of all Senior Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon any distribution of assets of the Company upon dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise): (a) the holders of all Senior Indebtedness shall first be entitled to receive payment in full in cash of all Senior Indebtedness (including, without limitation, post-petition Page 3 interest at the rate provided in the documentation with respect to the Senior Indebtedness, whether or not such post-petition interest is an allowed claim against the debtor in any bankruptcy or similar proceeding) before BMCLP is entitled to receive any payment on account of the Subordinated Indebtedness; (b) any payment or distributions of assets of the Company of any kind or character, whether in cash, property or securities to which BMCLP would be entitled except for the provisions of this Annex, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or agent, directly to the holders of Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness may have been issued, to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; and (c) in the event that, notwithstanding the foregoing provisions of this Section 1.03, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, shall be received by BMCLP on account of Subordinated Indebtedness before all Senior Indebtedness is paid in full in cash, such payment or distribution shall be received and held in trust for and shall be paid over to the holders of the Senior Indebtedness remaining unpaid or unprovided for or their representative or representatives, or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, for application to the payment of such Senior Indebtedness until all such Senior Indebtedness shall have been paid in full in cash, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness. Section 1.04. Subrogation. Subject to the prior payment in full in cash of all Senior Indebtedness, BMCLP shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness until all amounts owing on the Subordinated Indebtedness shall be paid in full, and for the purpose of such subrogation no payments or distributions to the holders of the Senior Indebtedness by or on behalf of the Company or by or on behalf of BMCLP by virtue of this Annex which otherwise Page 4 would have been made to BMCLP shall, as between the Company, its creditors other than the holders of Senior Indebtedness, and BMCLP, be deemed to be payment by the Company to or on account of the Senior Indebtedness, it being understood that the provisions of this Annex are and are intended solely or the purpose of defining the relative rights of BMCLP, on the one hand, and the holders of the Senior Indebtedness, on the other hand. Section 1.05. Obligation of the Company Unconditional. Nothing contained in this Annex or in the Administrative Management Agreement is intended to or shall impair, as between the Company and BMCLP, the obligation of the Company, which is absolute and unconditional, to pay to BMCLP the Subordinated Indebtedness as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of BMCLP and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein (except to the extent set forth in this Annex) prevent BMCLP from exercising all remedies otherwise permitted by applicable law and this Annex upon a default under the Administrative Management Agreement, subject to the rights, if any, under this Annex of the holders of Senior Indebtedness in respect of cash, property, or securities of the Company received upon the exercise of any such remedy. Upon any distribution of assets of the Company referred to in this Annex, BMCLP shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or other person making any distribution to BMCLP, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Annex. Section 1.06. Subordination Rights not Impaired by Aces or Omissions of Company or Holders of Senior Indebtedness. No right of any present or future holders of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the par, of the Company or by any act or failure to act in good faith by any such holder, or by any noncompliance by the Company with the terms and provisions of the Administrative Management Agreement, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of the Senior Indebtedness may, without in any way affecting the obligations of BMCLP with respect hereto, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment of, change or extend the time of payment of, or renew or Page 5 alter, any Senior Indebtedness or amend, modify or supplement any agreement or instrument governing or evidencing such Senior Indebtedness or any other document referred to therein, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness including, without limitation, the waiver of default thereunder and the release of any collateral securing such Senior Indebtedness, all without notice to or assent from BMCLP. Section 1.07. Senior Indebtedness. The term "Senior Indebtedness" shall mean all Obligations (as defined below) of each Company under, or in respect of, each Note dated December 30, 1997, made by each Company to the order of Tri-State Broadcasting, Inc. (the "Managed Affiliate Notes") and the Managed Affiliate Management Agreements dated December 30, 1997, between each Company and Tri-State Broadcasting, Inc. As used herein, (x) the term "Indenture" shall mean the Indenture dated as of December 30, 1997 among BMC, Media, the Subsidiary Guarantors named therein and United States Trust Company of New York, and (y) the term "Obligation" shall mean any principal, interest, premium, penalties, fees, expenses, indemnities, and other liabilities and obligations payable under the documentation governing any Senior Indebtedness (including interest accruing after the commendement of any bankruptcy, insolvency, receivership, or similar proceeding, whether or not such interest is an allowed claim against the debtor in any such proceeding). IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. BRILL MEDIA COMPANY, L.P. By:___________________________ a duly authorized officer READING RADIO, INC. By:___________________________ a duly authorized officer TRI-STATE BROADCASTING, INC. By:___________________________ a duly authorized officer NORTHERN COLORADO RADIO, INC. By:___________________________ Page 6 a duly authorized officer NCR II, INC. By:___________________________ a duly authorized officer CENTRAL MISSOURI BROADCASTING, INC. By:___________________________ a duly authorized officer CMB II, INC. By:___________________________ a duly authorized officer NORTHLAND BROADCASTING, LLC By: BMC Holdings, LLC, its manager By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer NB II, INC. By:___________________________ a duly authorized officer CENTRAL MICHIGAN NEWSPAPERS, INC. By:___________________________ a duly authorized officer CADILLAC NEWSPAPERS, INC. By:___________________________ Page 7 a duly authorized officer CMN ASSOCIATED PUBLICATIONS, INC. By:___________________________ a duly authorized officer CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By:___________________________ a duly authorized officer CENTRAL MICHIGAN DISTRIBUTION CO., INC. By:___________________________ a duly authorized officer GLADWIN NEWSPAPERS, INC. By:___________________________ a duly authorized officer GRAPH ADS PRINTING, INC. By:___________________________ a duly authorized officer MIDLAND BUYER'S GUIDE, INC. By:___________________________ a duly authorized officer ST. JOHNS NEWSPAPERS, INC. By:___________________________ a duly authorized officer HURON P.S., LLC By: Huron Holdings, LLC, its manager By: BMC Holdings, LLC, its manager Page 8 By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer HURON NEWSPAPERS, LLC By: Huron Holdings, LLC, its manager By: BMC Holdings, LLC, its manager By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer Page 9 NCR III, LLC By: NCH II, LLC, its manager By: BMC Holdings, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer NCH II, LLC By: BMC Holdings, LLC, its manager By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer HURON HOLDINGS, LLC By: BMC Holdings, LLC, its manager By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer NORTHERN COLORADO HOLDINGS, LLC By: BMC Holdings, LLC, its manager By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer NORTHLAND HOLDINGS, LLC By: BMC Holdings, LLC, its manager By: Brill Media Company, LLC, its manager By: Brill Media Management, Inc. By:___________________________ a duly authorized officer CMN HOLDINGS, INC. Page 10 By:___________________________ a duly authorized officer BRILL RADIO, INC. By:___________________________ a duly authorized officer BRILL NEWSPAPERS, INC. By:___________________________ a duly authorized officer EX-10.3 70 EXHIBIT 10.3 EX-10.3 Management and Consulting Agreements MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and BRILL NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof 2 and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. BRILL NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and BRILL RADIO, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer BRILL RADIO, INC. By:________________________________ a duly authorized officer 3 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CADILLAC NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. CADILLAC NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. CENTRAL MICHIGAN NEWSPAPERS, BRILL MEDIA COMPANY, L.P. INC. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CENTRAL MISSOURI BROADCASTING, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and 1 supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof 2 and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer CENTRAL MISSOURI BROADCASTING, INC. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CMB II, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer CMB II, INC. By:________________________________ a duly authorized officer 3 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. CENTRAL MICHIGAN DISTRIBUTION BRILL MEDIA COMPANY, L.P. CO., INC. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CENTRAL MICHIGAN DISTRIBUTION CO., L.P., a Virginia limited partnership (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. CENTRAL MICHIGAN DISTRIBUTION BRILL MEDIA COMPANY, L.P. CO., L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CMN HOLDINGS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. CMN HOLDINGS, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 3 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and CMN ASSOCIATED PUBLICATIONS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. CMN ASSOCIATED PUBLICATIONS INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and GLADWIN NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. GLADWIN NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and GRAPH ADS PRINTING, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. GRAPH ADS PRINTING, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and HURON HOLDINGS, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof 2 and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. BRILL MEDIA COMPANY, L.P. by:____________________________ a duly authorized officer HURON HOLDINGS, LLC by: BMC Holdings, LLC; its manager by: Brill Media Company, LLC; its manager by: Brill Media Management, Inc. by:________________________________ a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and HURON NEWSPAPERS, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. BRILL MEDIA COMPANY, L.P. by:____________________________ a duly authorized officer HURON NEWSPAPERS, LLC by: Huron Holdings, LLC, its manager by: BMC Holdings, LLC, its manager by: Brill Media Company, LLC, its manager by: Brill Media Management, Inc. by:________________________________ a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and HURON P.S., LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof 2 and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. BRILL MEDIA COMPANY, L.P. by:____________________________ a duly authorized officer HURON P.S., LLC by: Huron Holdings, LLC; its manager by: BMC Holdings, LLC; its manager by: Brill Media Company, LLC; its manager by: Brill Media Management, Inc. by:________________________________ a duly authorized officer 4 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and MIDLAND BUYER'S GUIDE, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. MIDLAND BUYER'S GUIDE, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NB II, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NB II, INC. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NCH II, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NCH II, LLC by: BMC Holdings, LLC, its manager by: Brill Media Company, LLC, its manager by: Brill Media Management, Inc. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NCR II, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NCR II, INC. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NCR III, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NCR III, LLC by: NCH II, LLC, its manager by: BMC Holdings, LLC, its manager by: Brill Media Company, LLC, its manager by: Brill Media Management, Inc. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NORTHLAND BROADCASTING, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and 1 supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof 2 and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NORTHLAND BROADCASTING, LLC by: Northland Holdings, LLC, its manager by: BMC Holdings, LLC, its manager by: Brill Media Company, LLC, its manager by: Brill Media Management, Inc. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NORTHLAND HOLDINGS, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and 1 supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NORTHLAND HOLDINGS, LLC by: BMC Holdings, LLC, its manager by: Brill Media Company, LLC, its manager by: Brill Media Management, Inc. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NORTHERN COLORADO HOLDINGS, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and 1 supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five hundred dollars ($500.00) per month, together with reimbursement of any expenses advanced by BMCLP, payable on the first day of each month. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NORTHERN COLORADO HOLDINGS, LLC by: BMC Holdings, LLC, its manager by: Brill Media Company, LLC, its manager by: Brill Media Management, Inc. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and NORTHERN COLORADO RADIO, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer NORTHERN COLORADO RADIO, INC. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and READING RADIO, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer READING RADIO, INC. By:________________________________ a duly authorized officer 3 MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed as of this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and ST. JOHNS NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to local newspapers on a consulting and contractual basis. Company owns, publishes, and distributes, directly or indirectly, one or more local newspapers and shoppers and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the production, printing, distribution, and marketing of Company's and others' newspapers, shoppers and circulars, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person or independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out-of-pocket expenses directly applicable to benefits of the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee of five per centum (5%) per year of Company's annual consolidated net operating revenues in each of Company's fiscal years during the Term, payable on the first day of each month based on the revenues of the immediately preceding month. 6. Term. The term of this agreement shall be one (1) year from its date, and thereafter shall be automatically renewed for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 3 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month, and year first above written. ST. JOHNS NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P. by:____________________________ by:____________________________ a duly authorized officer a duly authorized officer 4 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and TRI-STATE BROADCASTING, INC., a Virginia corporation (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has provided such services and consultation to Company upon the terms hereinafter set forth in this agreement, and it is the parties' desire now formally to put into writing their long-standing relationship and agreement. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, 1 joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. 2 IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer TRI-STATE BROADCASTING, INC. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and TSB III, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an 1 independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 2 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer TSB III, LLC by: Tri-State Holdings, LLC, its manager by: Tri-State Management, Inc. By:________________________________ a duly authorized officer 3 BUSINESS MANAGEMENT AND CONSULTING AGREEMENT THIS AGREEMENT is executed this 30th day of December, 1997, by and between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and TSB IV, LLC, a Virginia limited liability company (hereinafter referred to as "Company"). RECITALS BMCLP is engaged in the business of managing communications and publishing businesses and of providing advisory and consulting services to persons, firms, and corporations owning, operating, and managing communications businesses and is, therefore, in a position to render valuable management services to owners and operators of broadcast properties on a consulting and contractual basis. Company owns, operates, and manages, directly or indirectly, one or more local broadcast properties and recognizes, therefore, that BMCLP is in a position to render Company valuable services and consultation, not now available to Company, and therefore, desires to employ BMCLP as herein provided. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, BMCLP and Company agree as follows: 1. Employment of BMCLP. For the Term (hereinafter defined) Company employs BMCLP as a business manager and consultant to provide assistance and supervision to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, as herein provided, and BMCLP hereby accepts such employment on the conditions herein set forth. 2. BMCLP's Services and Relationship. During the Term and at Company's request, BMCLP shall from time to time consult with counsel, and advise Company, its management, its officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner BMCLP deems necessary and advisable, in connection with the management and operation of Company's business, and BMCLP shall use its best efforts and judgment in rendering such services, without, however, guaranteeing the result and without liability to any person on account thereof. At all times BMCLP is and shall be only an independent contractor as to Company; with respect to Company's operation and management BMCLP will be subject to direction and 1 supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between BMCLP and Company by this agreement or BMCLP's performance hereunder. 3. Support Services and Benefits. BMCLP also will make available to Company the pooled benefits available generally to its affiliates such as group insurance programs, general insurance coverage, training programs, audit coordination, cash management, profit sharing plan, bulk purchasing, accounting, marketing, and recruiting services. The expertise and manpower of BMCLP shall be available to provide such services at no further charge, but out of pocket expenses directly applicable to benefits to the Company will be borne by the Company. 4. Intent. The basic intent and purpose of this agreement is that BMCLP's experience and organization be made available to assist Company in its operations, and Company and BMCLP believe, expect, and expressly recognize that BMCLP's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for BMCLP's services hereunder Company will pay to BMCLP a management fee at the rate of ten per centum (10%) per year of Company's annual consolidated net cash revenues (exclusive of trades) in each of Company's fiscal years during the Term, payable in monthly installments on the first day of each month based on Company's revenues for the immediately preceding month; provided, however that in each of Company's fiscal years the amount of such fee shall in no event exceed the amount permitted by application of restrictions on such a management fee contained in any agreement entered into by and between Company and others as at any time and from time to time then in effect. 6. Term. The term ("Term") of this agreement shall extend for one (1) year from its date, and thereafter for an additional one (1) year period, unless and until such time as either party shall give the other written notice to terminate at least ninety (90) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by BMCLP or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof 2 and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. IN WITNESS WHEREOF, the parties have hereunto set their signatures the day, month and year first above written. BRILL MEDIA COMPANY, L.P. By:________________________________ a duly authorized officer TSB IV, LLC by: Tri-State Holdings, LLC, its manager by: Tri-State Management, Inc. By:________________________________ a duly authorized officer 3 EX-10.4(A) 71 EXHIBIT 10.4(A) EX-10.4(a) Managed Affiliate Management Agreement MANAGED AFFILIATE MANAGEMENT AGREEMENT This agreement is entered into as of this 30th day of December, 1997, by and between TRI-STATE BROADCASTING, INC. ("Tri-State"), a Virginia corporation, and TSB III, LLC, a Virginia limited liability company ("Company"). RECITALS Tri-State owns and operates radio stations located in the Evansville, Indiana, Owensboro, Kentucky, area. Company owns, operates, and manages one or more local broadcast properties in this area and recognizes, therefore, that Tri-State is in a unique position to render Company valuable services and support, not now available to Company, and Company therefore, desires to employ Tri-State as herein provided. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, Tri-State and Company agree as follows: 1. Employment of Tri-State. For the Term (hereinafter defined) Company employs Tri-State to provide consultation, assistance, and support to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, and Tri-State hereby accepts such employment on the conditions herein set forth. 2. Tri-State's Services and Relationship. During the Term, Tri-State shall from time to time consult with counsel and advise Company, its management, officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner Tri-State deems necessary and advisable, in connection with the management and operation of Company's broadcast properties and business and shall use its best efforts and judgment in rendering such services without, however, guaranteeing the result. 3. Relationships. At all times Tri-State is and shall be only an independent contractor as to Company; with respect to Company's operation and management Tri-State will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between Tri-State and Company by this agreement or Tri-State's performance hereunder. 4. Intent. The basic intent and purpose of this agreement is that Tri-State's experience and organization be made available to assist Company in its operations, and Company and Tri-State believe, expect, and expressly recognize that Tri-State's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for Tri-State's services hereunder on or before the 15th day in June and December of each year, Company will pay to Tri-State the fee (the "Media Affiliate Management Fee") determined as set forth and described in Attachment 5.1 hereto. 6. Term. The term ("Term") of this agreement shall be for a period ending fifteen (15) years from its date, and thereafter shall be automatically renewed for an additional five (5) year period, unless and until such time as either party shall give the other written notice to terminate at least thirty (30) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by Tri-State or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. IN WITNESS WHEREOF, the parties have hereunto set their signatures as of the day, month, and year first above written. Tri-State Broadcasting, Inc. by:_________________________________ a duly authorized officer TSB III, LCC by: Tri-State Management, Inc. Its manager by:___________________________ a duly authorized officer ATTACHMENT 5.1 Managed Affiliate Management Fee The amount of the "Managed Affiliate Management Fee" (I) shall be computed and accrued based on Available Media Cashflow and (II) shall be paid from Net Media Cashflow pursuant to the following formula. "Media Cashflow" is Net Income plus (or minus): (a) depreciation, (b) amortization, (c) interest expense, (d) acquisition related charges (such as consulting or time brokerage fees), (e) other financing related charges, (f) other non-cash charges, (g) income taxes, (h) (gain) or loss on disposition of assets, (i) Administrative Management Fees charged pursuant to the Administrative Management Agreement, and, (j) Managed Affiliate Management Fees. Media Cashflow represents all the cash that is generated by the business (aside from timing differences for accrued income and expenses) and that is available to the business to pay its obligations other than operating obligations. "Available Media Cashflow" is Media Cashflow reduced by interest expense; acquisition related charges paid in cash; other financing related charges paid in cash; income taxes and distribution in lieu of income taxes; losses realized in cash on dispositions of assets, and the amount of the Base Fee. "Net Media Cashflow" is Media Cash Flow remaining after payment of the following, in the order listed: debt service; other financing related charges; acquisition related charges; income taxes and distributions in lieu of taxes; capital expenditure requirements utilizing cash; working capital expansion, and the amount of the Base Fee. (I) The amount of the Managed Affiliate Management Fee shall be computed and accrued as follows: A. The "Base Fee" of $10,000.00 per month, and B. The "Variable Fee" of (i) 75% of the positive amount of Available Media Cashflow as adjusted below, until such time as the Administrative Management Fee payable to Brill Media Company, L.P. is provided for, and (ii) 90% of Available Media Cashflow thereafter. In computing each of (i) and (ii), Available Media Cashflow shall be adjusted to provide for the Administrative Management Fee (until provided for to the full extent of its accrual) to the extent of 20% of the positive amount of Available Media Cashflow. (II) After the Base Fee has been paid and the Variable Fee has been accrued in its entirety, the Variable Fee shall be paid from Net Media Cashflow as follows: (i) 20% of the amount of Net Media Cashflow shall be applied to payment of the accrued Administrative Management Fee, until the accrual is paid in full, and (ii) 75% of the amount of Net Media Cashflow shall be applied to payment of the Variable Fee, until the Administrative Management Fee is paid in full, and then (iii) 90% of Net Media Cashflow shall be applied to payment of the Variable Fee until paid in full. EX-10.4(B) 72 EXHIBIT 10.4(B) EX-10.4(b) Managed Affiliate Management Agreement MANAGED AFFILIATE MANAGEMENT AGREEMENT This agreement is entered into as of this 30th day of December, 1997, by and between TRI-STATE BROADCASTING, INC. ("Tri-State"), a Virginia corporation, and TSB IV, LLC, a Virginia limited liability company ("Company"). RECITALS Tri-State owns and operates radio stations located in the Evansville, Indiana, Owensboro, Kentucky, area. Company owns, operates, and manages one or more local broadcast properties in this area and recognizes, therefore, that Tri-State is in a unique position to render Company valuable services and support, not now available to Company, and Company therefore, desires to employ Tri-State as herein provided. NOW, THEREFORE, in consideration of and relying upon the foregoing and for other valuable considerations, Tri-State and Company agree as follows: 1. Employment of Tri-State. For the Term (hereinafter defined) Company employs Tri-State to provide consultation, assistance, and support to Company's management in the operation, promotion, marketing, and management of Company's broadcast properties, and Tri-State hereby accepts such employment on the conditions herein set forth. 2. Tri-State's Services and Relationship. During the Term, Tri-State shall from time to time consult with counsel and advise Company, its management, officers, agents, employees, accountants, auditors, and other consultants as, to the extent, and in the manner Tri-State deems necessary and advisable, in connection with the management and operation of Company's broadcast properties and business and shall use its best efforts and judgment in rendering such services without, however, guaranteeing the result. 3. Relationships. At all times Tri-State is and shall be only an independent contractor as to Company; with respect to Company's operation and management Tri-State will be subject to direction and supervision of Company's officers and management, and no agency, joint venture, or partnership relationship is intended to be or shall be created by and between Tri-State and Company by this agreement or Tri-State's performance hereunder. 4. Intent. The basic intent and purpose of this agreement is that Tri-State's experience and organization be made available to assist Company in its operations, and Company and Tri-State believe, expect, and expressly recognize that Tri-State's services and resources to be provided hereby will be of real, if perhaps intangible, value to Company and will be of great benefit and advantage to Company in the conduct of its business. 5. Compensation. During the Term, for Tri-State's services hereunder on or before the 15th day in June and December of each year, Company will pay to Tri-State the fee (the "Media Affiliate Management Fee") determined as set forth and described in Attachment 5.1 hereto. 6. Term. The term ("Term") of this agreement shall be for a period ending fifteen (15) years from its date, and thereafter shall be automatically renewed for an additional five (5) year period, unless and until such time as either party shall give the other written notice to terminate at least thirty (30) days prior to the expiration of the then period. 7. Assignment. This agreement may not be assigned by Tri-State or Company. 8. Virginia Law. This agreement is made pursuant to and the rights of the parties shall be governed by the laws of the Commonwealth of Virginia. 9. Entire Agreement. This agreement constitutes the entire agreement between the parties on the subject matter hereof and may be changed, altered, or amended only by an agreement in writing duly executed by all parties hereto. IN WITNESS WHEREOF, the parties have hereunto set their signatures as of the day, month, and year first above written. Tri-State Broadcasting, Inc. by:________________________________ a duly authorized officer TSB IV, LCC by: Tri-State Management, Inc. Its manager by:___________________________ a duly authorized officer ATTACHMENT 5.1 Managed Affiliate Management Fee The amount of the "Managed Affiliate Management Fee" (I) shall be computed and accrued based on Available Media Cashflow and (II) shall be paid from Net Media Cashflow pursuant to the following formula. "Media Cashflow" is Net Income plus (or minus): (a) depreciation, (b) amortization, (c) interest expense, (d) acquisition related charges (such as consulting or time brokerage fees), (e) other financing related charges, (f) other non-cash charges, (g) income taxes, (h) (gain) or loss on disposition of assets, (i) Administrative Management Fees charged pursuant to the Administrative Management Agreement, and, (j) Managed Affiliate Management Fees. Media Cashflow represents all the cash that is generated by the business (aside from timing differences for accrued income and expenses) and that is available to the business to pay its obligations other than operating obligations. "Available Media Cashflow" is Media Cashflow reduced by interest expense; acquisition related charges paid in cash; other financing related charges paid in cash; income taxes and distribution in lieu of income taxes; losses realized in cash on dispositions of assets, and the amount of the Base Fee. "Net Media Cashflow" is Media Cash Flow remaining after payment of the following, in the order listed: debt service; other financing related charges; acquisition related charges; income taxes and distributions in lieu of taxes; capital expenditure requirements utilizing cash; working capital expansion, and the amount of the Base Fee. (I) The amount of the Managed Affiliate Management Fee shall be computed and accrued as follows: A. The "Base Fee" of $10,000.00 per month, and B. The "Variable Fee" of (i) 75% of the positive amount of Available Media Cashflow as adjusted below, until such time as the Administrative Management Fee payable to Brill Media Company, L.P. is provided for, and (ii) 90% of Available Media Cashflow thereafter. In computing each of (i) and (ii), Available Media Cashflow shall be adjusted to provide for the Administrative Management Fee (until provided for to the full extent of its accrual) to the extent of 20% of the positive amount of Available Media Cashflow. (II) After the Base Fee has been paid and the Variable Fee has been accrued in its entirety, the Variable Fee shall be paid from Net Media Cashflow as follows: (i) 20% of the amount of Net Media Cashflow shall be applied to payment of the accrued Administrative Management Fee, until the accrual is paid in full, and (ii) 75% of the amount of Net Media Cashflow shall be applied to payment of the Variable Fee, until the Administrative Management Fee is paid in full, and then (iii) 90% of Net Media Cashflow shall be applied to payment of the Variable Fee until paid in full. EX-10.5(A) 73 EXHIBIT 10.5(A) EX-10.5(a) THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. TSB III, LLC Managed Affiliate Promissory Note $6,455,000.00 December 30, 1997 For value received, TSB III, LLC, a Virginia limited liability company ("Maker"), promises to pay to Tri-State Broadcasting, Inc. ("Payee"), or order, at Payee's address located at 420 N.W. Fifth St., Evansville, Indiana, the principal sum of Six Million Four Hundred Fifty Five Thousand and no/100 Dollars ($6,455,000.00) in lawful money of the United States of America, together with simple interest in like money at the rate of twelve per cent (12.0%) per annum from the date hereof for so long as payment on any principal balance hereof remains unpaid, such principal and interest to be due and payable on the following obligatory schedule (except as and to the extent offset, anticipated, or prepaid, in whole or in part, as hereinafter provided): Beginning June 15, 1998, and on December 15 and June 15 of each year thereafter Maker shall pay to the holder hereof interest accrued on the outstanding principal balance hereof until January 1, 2001, when final payment of all then unpaid principal and accrued interest thereon shall be due and payable. The Maker reserves the right to anticipate and prepay at any time or from time to time, without penalty, all or any part of the indebtedness evidenced by this note. Any partial prepayment of principal also shall include accrued interest on the unpaid principal balance to the date of such prepayment, and each prepayment shall be applied to and be deducted from the scheduled obligatory payments falling due hereunder in the inverse order of their scheduled due dates. All prepayments on this note shall be recorded when made on the reverse side hereof by the then holder of this note. The following, and only the following, shall constitute an "Event of Default" under this note: (a) any failure of Maker to make (or to cause to be made) to the then holder of this note any scheduled obligatory payment of principal or interest on this note when due and payable, which failure continues for a period of at least thirty (30) consecutive calendar days after written notice of such failure has been given to Maker by such holder, or (b) the commencement by maker of a voluntary case under and within the meaning of the United States Bankruptcy Code, or (c) entry by a court of competent jurisdiction of an order in an involuntary case commenced against Maker under and within the meaning of the United States Bankruptcy Code that (i) forbids the Maker to continue to use, acquire, or dispose of property as if no such involuntary case had been commenced, or (ii) is for relief against Maker, or (iii) appoints an interim trustee to take possession of Maker's property, or (iv) orders the liquidation of Maker, and, in each case, sixty (60) consecutive calendar days shall have elapsed since entry of any such order, such order shall then be unstayed and effective, and such involuntary case shall then still be pending and not dismissed. Upon the occurrence and during the continuation of an Event of Default, and not otherwise, the then holder of this note, at such holder's sole election made by a written notice executed by such holder (expressly referring to and describing this note and the Event of Default) and given to Maker, may declare all of the then unpaid principal balance of this note, together with any interest accrued thereon, to be, and they shall thereupon become, immediately due and payable without presentment, demand, protest, or other notice of any kind. Any notice to Maker shall be deemed to have been given only upon the earlier to occur of (a) actual receipt of such notice by Maker (whether by hand delivery or facsimile transmission), or (b) the eighth day after the date of deposit of such notice in the U.S. mail, postage prepaid, certified or registered, with return receipt or proof of deliver required, addressed to Maker at the address for Maker shown herein or at such other address as Maker may theretofore establish by notice to Payee as provided in the Agreement. Mere delay or failure to act shall not preclude the exercise or enforcement of any right or remedy hereunder; all such rights and remedies shall be cumulative and may be exercised singularly or concurrently, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other right or remedy. The rights of all parties hereto and of each holder hereof shall be governed by and enforced or construed only in accordance with the domestic, substantive laws of the Commonwealth of Virginia, excluding those relating to conflicts of laws. The payment of any management fee by the Maker pursuant to any management agreement [other than a Managed Affiliate Management Agreement with the Payee as an affiliate of Brill Media Company, LLC and Brill Media Management, Inc. (the "Issuer")] shall be subordinated to the obligation of the Maker under this note to the same extent as the obligation of the Issuer and its subsidiaries under the management agreements with Brill Media Company, L.P. are subordinated to the obligation of the Issuer and its subsidiaries under the Notes and the Subsidiary Guarantees issued and made by such persons under and pursuant to an Offering Memorandum dated December 23, 1997, and entered into by the Issuer and the subsidiaries therein identified. Maker agrees to pay all reasonable attorneys' fees that may be incurred in collecting this note after an Event of Default, but not to exceed 5% of any then due and payable principal balance. IN WITNESS WHEREOF, Maker has caused this note to be executed by its duly authorized officer on the day, month, and year first above written. TSB III, LLC By: Tri-State Management, Inc. Its Manager By:_______________________________ a duly authorized officer EX-10.5(B) 74 EXHIBIT 10.5(B) EX-10.5(b) THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. TSB IV, LLC Managed Affiliate Promissory Note $9,861,000.00 December 30, 1997 For value received, TSB IV, LLC, a Virginia limited liability company ("Maker"), promises to pay to Tri-State Broadcasting, Inc. ("Payee"), or order, at Payee's address located at 420 N.W. Fifth St., Evansville, Indiana, the principal sum of Nine Million Eight Hundred Sixty One Thousand and no/100 Dollars ($9,861,000.00) in lawful money of the United States of America, together with simple interest in like money at the rate of twelve per cent (12.0%) per annum from the date hereof for so long as payment on any principal balance hereof remains unpaid, such principal and interest to be due and payable on the following obligatory schedule (except as and to the extent offset, anticipated, or prepaid, in whole or in part, as hereinafter provided): Beginning June 15, 1998, and on December 15 and June 15 of each year thereafter Maker shall pay to the holder hereof interest accrued on the outstanding principal balance hereof until January 1, 2001, when final payment of all then unpaid principal and accrued interest thereon shall be due and payable. The Maker reserves the right to anticipate and prepay at any time or from time to time, without penalty, all or any part of the indebtedness evidenced by this note. Any partial prepayment of principal also shall include accrued interest on the unpaid principal balance to the date of such prepayment, and each prepayment shall be applied to and be deducted from the scheduled obligatory payments falling due hereunder in the inverse order of their scheduled due dates. All prepayments on this note shall be recorded when made on the reverse side hereof by the then holder of this note. The following, and only the following, shall constitute an "Event of Default" under this note: (a) any failure of Maker to make (or to cause to be made) to the then holder of this note any scheduled obligatory payment of principal or interest on this note when due and payable, which failure continues for a period of at least thirty (30) consecutive calendar days after written notice of such failure has been given to Maker by such holder, or (b) the commencement by maker of a voluntary case under and within the meaning of the United States Bankruptcy Code, or (c) entry by a court of competent jurisdiction of an order in an involuntary case commenced against Maker under and within the meaning of the United States Bankruptcy Code that (i) forbids the Maker to continue to use, acquire, or dispose of property as if no such involuntary case had been commenced, or (ii) is for relief against Maker, or (iii) appoints an interim trustee to take possession of Maker's property, or (iv) orders the liquidation of Maker, and, in each case, sixty (60) consecutive calendar days shall have elapsed since entry of any such order, such order shall then be unstayed and effective, and such involuntary case shall then still be pending and not dismissed. Upon the occurrence and during the continuation of an Event of Default, and not otherwise, the then holder of this note, at such holder's sole election made by a written notice executed by such holder (expressly referring to and describing this note and the Event of Default) and given to Maker, may declare all of the then unpaid principal balance of this note, together with any interest accrued thereon, to be, and they shall thereupon become, immediately due and payable without presentment, demand, protest, or other notice of any kind. Any notice to Maker shall be deemed to have been given only upon the earlier to occur of (a) actual receipt of such notice by Maker (whether by hand delivery or facsimile transmission), or (b) the eighth day after the date of deposit of such notice in the U.S. mail, postage prepaid, certified or registered, with return receipt or proof of deliver required, addressed to Maker at the address for Maker shown herein or at such other address as Maker may theretofore establish by notice to Payee as provided in the Agreement. Mere delay or failure to act shall not preclude the exercise or enforcement of any right or remedy hereunder; all such rights and remedies shall be cumulative and may be exercised singularly or concurrently, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other right or remedy. The rights of all parties hereto and of each holder hereof shall be governed by and enforced or construed only in accordance with the domestic, substantive laws of the Commonwealth of Virginia, excluding those relating to conflicts of laws. The payment of any management fee by the Maker pursuant to any management agreement [other than a Managed Affiliate Management Agreement with the Payee as an affiliate of Brill Media Company, LLC and Brill Media Management, Inc. (the "Issuer")] shall be subordinated to the obligation of the Maker under this note to the same extent as the obligation of the Issuer and its subsidiaries under the management agreements with Brill Media Company, L.P. are subordinated to the obligation of the Issuer and its subsidiaries under the Notes and the Subsidiary Guarantees issued and made by such persons under and pursuant to an Offering Memorandum dated December 23, 1997, and entered into by the Issuer and the subsidiaries therein identified. Maker agrees to pay all reasonable attorneys' fees that may be incurred in collecting this note after an Event of Default, but not to exceed 5% of any then due and payable principal balance. IN WITNESS WHEREOF, Maker has caused this note to be executed by its duly authorized officer on the day, month, and year first above written. TSB IV, LLC By: Tri-State Management, Inc. Its Manager By:_______________________________ a duly authorized officer EX-10.6(A) 75 EXHIBIT 10.6(A) EX-10.6(a) Assets Purchase Agreement ASSETS PURCHASE AGREEMENT This agreement is entered into this 24th day of October 1997, by and between CMB II, INC., a Virginia corporation ("Seller"), and MVP Radio, Inc. a Missouri corporation ("Buyer"). RECITALS Seller is the broadcast licensee of and owns and operates radio station KATI-FM of California, Missouri (the "Station"). Buyer wishes to buy and Seller wishes to sell and transfer to Buyer certain of Seller's assets, and Buyer wishes to obtain an assignment of, and Seller wishes to assign and transfer to Buyer, each license and authorization issued by the Federal Communications Commission (the "Commission") for the operation of the Station, all upon the terms and conditions set forth herein. NOW, THEREFORE, for and in consideration of the foregoing and the agreements contained herein, Seller and Buyer hereby agree as follows: 1. Purchase and Sale of Property and Assets. 1.1 Upon and subject to compliance with all terms and conditions of this agreement, at Closing (hereinafter defined) Buyer agrees to buy from Seller, and Seller agrees to sell, assign, transfer, convey, and deliver to Buyer all of Seller's right, title, and interest in and to all of the real, personal, tangible, and intangible property and assets owned or leased and used by Seller in the Stations' operations (including all of Seller's interests in and to any of the Stations' real or personal property; machinery; vehicles; fixtures; studio, broadcast, or transmitter equipment; supplies; music collection; contracts, and leaseholds), excluding only the property described in Section 1.2 (collectively, the "Property Sold"). 1.2 The following are not part of the Property Sold and are not being sold to Buyer: (a) Seller's (i) rights under this agreement, (ii) cash on hand or in bank, (iii) corporate stock records, seal, and minute book, (iv) insurance policies, or the proceeds thereof, (v) books of account and original entry, (vi) unliquidated claims or choses in action, and (vii) notes or accounts receivable, including all accounts with or due from related or affiliated persons or companies; (b) such items otherwise includable as part of the Property Sold as may be disposed of by Seller before Closing in the ordinary course of Seller's business while acting in accordance with Seller's past practices, and (c) those assets of Seller not used in the Stations' operations. 2. Purchase Price. 2.1 The purchase price (the "Purchase Price") payable for the Property Sold shall be the sum of One Million Fifty Thousand and no/100 Dollars ($1,050,000.00), adjusted as required by Section 2.2, to be paid by Buyer to Seller at Closing in cash or by wire transfer of immediately available federal funds and shall be allocated as set forth on Exhibit 2.01 hereof. 2.2 (a) Operation of Station and use of the Property Sold, and any income or expenses attributable thereto, shall be for Seller's account until Closing and thereafter shall be for Buyer's account. At Closing all prepaid items (other than income taxes) that are received by Buyer or that will accrue to Buyer's benefit after Closing shall be prorated between Buyer and Seller as of Closing and the Purchase Price adjusted accordingly. (b) If Buyer and Seller disagree as to the amount of any adjustment required by this Section 2.2, such disputed amount or amounts will be finally determined by Ernst & Young, and its fees and expenses shared equally by Buyer and Seller. 2.3 Pursuant to an escrow agreement of even date herewith (the "Escrow Agreement"), Buyer has deposited with Old National Trust Company, Evansville, Indiana ("Agent") cash in the amount of Six Hundred Thousand and No/100 Dollars ($600,000.00) (together with all income earned thereon, the "Deposit"), to be held by the Agent pursuant to the terms and conditions of the Escrow Agreement. 3. Closing; Applications; Etc. 3.1 Unless sooner terminated as herein provided for, consummation of the sale and purchase contemplated hereby ("Closing") shall take place at 10:00 o'clock a.m., local time, at the offices of Thompson & McMullan, P.C., 100 Shockoe Slip, Richmond, Virginia 23219, on (a) the fifth (5th) business day following the date on which the Commission's consent to the Applications has become final, or (b), at Seller's option upon ten (10) days prior notice to Buyer at such earlier time for Closing as Seller designates in such notice given after Seller has received notice of the Commission's consent to the Applications, or (c) at such other time and/or place as Buyer and Seller hereafter may agree upon in writing (such date as so determined, designated, or agreed upon shall be the "Closing Date"). 3.2 In exchange for and upon receipt of the items to be delivered at Closing by Buyer, as described in Section 3.3, Seller agrees to and shall deliver or cause to be delivered to Buyer at Closing each of the following: 2 (a) such documents and duly executed instruments as shall be necessary and appropriate to Closing, including instruments of conveyance, assignment, or transfer sufficient to assign, convey, transfer to, and vest in Buyer all of Seller's right, title, and interest in and to the Property Sold free and clear of any and all liens or encumbrances as and to the extent warranted by Seller in Section 4.6; (b) a certified copy of necessary corporate proceedings and resolutions duly adopted by Seller and its shareholder(s) authorizing and approving execution and delivery of this agreement and consummation of the transactions contemplated hereby; (c) the legal opinion of Messrs. Thompson & McMullan, 100 Shockoe Slip, Richmond, Virginia 23219, dated as of the Closing Date, in form and substance satisfactory to Buyer as to the matters set forth in Sections 4.1 and 4.2; and (d) a list of Seller's accounts receivable (aged 30, 60, 90 days, etc.) for the Station (the "Accounts Receivable"). 3.3 Contemporaneously with Seller's performance of its obligations described in Section 3.2, Buyer agrees to and shall deliver to Seller at Closing each of the following: (a) payment to Seller of the Purchase Price as described in Section 2.1; (b) the legal opinion of Buyer's legal counsel, dated as of the Closing Date, in form and substance satisfactory to Seller as to the matters set forth in Sections 7.1, 7.2, and 7.3; (c) to the extent appropriate, certified copies of duly adopted resolutions authorizing and approving execution and delivery of this agreement and consummation of the transactions contemplated hereby; and (d) such duly executed instruments, in form and substance satisfactory to Seller, as are required by Section 3.6. 3.4 Until Closing Buyer shall not directly or indirectly control, determine, supervise, or direct or attempt to control, determine, supervise, or direct the operations of Station or its policies or programs. 3.5 Within five (5) business days of the date hereof, Buyer and Seller will file or cause to be filed with the Commission appropriate, formal applications ("Applications") for consent to assignment to Buyer of the Licenses (hereinafter defined), and thereafter Seller and Buyer will diligently process the 3 Applications and will supply all information, filings, and documentation concerning Buyer, Seller, and Station or their operations as the Commission reasonably may require in connection therewith. The obligation for all charges made by the Commission for filing and processing the Applications shall be borne equally by Buyer and Seller. 3.6 As of and after Closing Buyer assumes and agrees to perform, pay, and discharge all obligations, contracts, and liabilities of Seller as of or arising after Closing pursuant to those instruments or agreements of Seller identified on Exhibit 3.06.1 and as set forth in instruments of assumption [the "Assumption Agreement(s)"], in form and substance satisfactory to Seller, to be executed and delivered to Seller by Buyer at Closing. 3.7 At Closing, Seller will assign the Accounts Receivable to Buyer as its agent for purposes of collection only for the period of ninety (90) days immediately following Closing. During such period, as Seller's agent Buyer shall have the exclusive right to and shall collect the Accounts Receivable in Seller's name in the same manner and with the same diligence as used by Buyer to collect Buyer's own accounts, except that Buyer shall not be required to file any action or hire any collection agency for such purpose. Payments received by Buyer on an account from any customer of Buyer that is also an account debtor to Seller shall first be applied to Seller's Accounts Receivable. At the end of each calendar month, Buyer will remit all collections on such Accounts Receivable to Seller and shall deliver to Seller a summary of all such collections for such month. When received by Buyer, such collections shall be deposited in a separate account as designated by Seller. At the end of such ninety (90) day period, Buyer shall deliver all remaining collections to Seller along with a final summary of all collections for such period and shall return to Seller all such Accounts Receivable then remaining uncollected, and Buyer's responsibility and authority with respect to such Accounts Receivable thereupon shall terminate. 3.8 Exhibit 3.08.1 is an accurate and complete list and brief description of all contracts, leases, or other agreements to which Seller is a party or to which it is bound. 4. Seller's Representations and Warranties. To induce Buyer to enter into and perform this agreement, Seller represents and warrants to Buyer that each of the following is true: 4.1 Seller is a corporation duly organized, validly existing, and in good standing under the laws of the Commonwealth of Virginia, has all requisite corporate power and authority to conduct its business as it is now being conducted and to own and operate Station, and is duly domesticated and qualified to do business as a foreign corporation in the State of Missouri. 4 4.2 This agreement and the actions contemplated hereby have been validly authorized by Seller, and this agreement has been duly executed and delivered by Seller and constitutes a legal, valid, and binding obligation of Seller enforceable against Seller in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, or similar laws generally affecting the enforcement of creditors' rights. 4.3 As listed and briefly identified on Exhibit 4.03, Seller presently holds licenses and authorizations issued by the Commission for the ownership and operation of the Station (the "Licenses"); the Licenses are in full force and effect, and the Station is being operated in compliance with all material terms of the Licenses and the Commission's applicable rules and regulations. 4.4 The Property Sold, together with the assets described in Section 1.2, include all of Seller's assets that are currently being used by Seller to operate the Station. 4.5 Except as Seller may have advised Buyer otherwise, Seller knows of no legal, administrative, arbitrative, investigative, or other suit or action pending or threatened against Seller. 4.6 Except for property leased by Seller, at Closing Seller will convey to Buyer good, record (where applicable), and marketable title to all of the Property Sold free and clear of all liens or encumbrances other than those for (a) unpaid taxes not overdue and other liens, encumbrances, or minor imperfections of title that do not materially detract from Seller's use or materially interfere with Stations' operations as presently conducted, (b) such as would be disclosed by a survey of any real property that is a part of the Property Sold, and (c) the obligations listed on Exhibit 3.06.1 and to be assumed by Buyer at Closing pursuant to Assumption Agreements. 4.7 Seller's execution of, delivery of, performance of, compliance with, and Closing of this agreement will not constitute a default under or result in any material breach of any term, condition, or provision of any applicable agreement to which Seller is a party 5. Conduct Prior to Closing. Until Closing, Seller covenants and agrees that: 5.1 Seller will carry on its business only in the ordinary course and substantially in the same manner as heretofore. 5 5.2 Upon prior reasonable notice from Buyer, Seller shall give Buyer's authorized representatives reasonable access to the Station. 5.3 Without Buyer's prior consent, which shall not be unreasonably withheld, Seller will not agree to any material modification of any written agreement materially affecting the Station or the Property Sold. 5.4 Seller shall notify Buyer if it becomes aware that any litigation or other judicial proceeding has been commenced against Seller. 5.5 No later than thirty (30) days prior to the Closing Date, Buyer shall have performed a lien search with respect to the Property Sold and notified Seller of any lien of record [other than a permitted lien described in Section 4.6 above] as to any material portion of the Property Sold that Buyer is unwilling to waive (a "Recorded Lien"). Failure to perform such search or to notify Seller of each such Recorded Lien shall be deemed to be a waiver of Buyer's right to object to any Recorded Lien that would have been discoverable by such a search or to any defect so discovered or discoverable. Within fifteen (15) days of receipt of such notice, Seller shall notify Buyer either that (a) Seller will cause such Recorded Lien to be cured by, upon, or at Closing on the Closing Date, or (b) Seller will not cure such Recorded Lien, and in the event of (b) Buyer may either (i) proceed to Closing on the Closing Date subject to such Recorded Lien or (ii) terminate this agreement by notice to Seller given within ten (10) days after receipt of Seller's notice and thereupon be entitled to a prompt refund of the Deposit. 6. Conditions to Buyer's Obligations. As conditions for the benefit of Buyer, each and any of which Buyer may waive, each obligation of Buyer under this agreement shall be subject to and conditioned upon satisfaction as of Closing of each of the following: 6.1 Seller shall have complied in all material respects with the terms of this agreement applicable to it. 6.2 In all material respects, each of Seller's representations and warranties contained herein shall have been true and correct when made, shall be deemed to be made again at and as of Closing, and in all material respects shall then be true and correct. 6.3 Seller shall have delivered to Buyer each item listed in Section 3.2. 6 6.4 Since the date of this agreement, no uninsured loss or damage materially affecting Station or the Property Sold shall have occurred and be continuing. 6.5 No law or order shall directly restrain or prohibit Closing, and no suit, action, investigation, inquiry, or governmental or other proceeding, judicial or administrative, shall have been instituted or be threatened raising any material question as to the validity, legality, or enforceability of this agreement or the transactions contemplated hereby. 6.6 The Commission's consent to the Applications shall have been obtained and, unless Seller elects otherwise, such consent shall have become a final order. 7. Buyer's Representations and Warranties. To induce Seller to enter into and perform this agreement, Buyer represents and warrants to Seller that each of the following is true: 7.1 Buyer has all requisite power and authority to enter into this agreement, to consummate the transactions contemplated hereby, to conduct Buyer's business as it is now being conducted, and to own and operate Buyer's properties and assets. 7.2 This agreement and the actions contemplated hereby have been validly authorized by Buyer, and this agreement has been duly executed and delivered by Buyer and constitutes a legal, valid, and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, or similar laws generally affecting the enforcement of creditors' rights. 7.3 No litigation or proceeding is pending or, to Buyer's knowledge, threatened that affects or may affect in any material, adverse manner Buyer's power, authority, or ability to consummate the transactions contemplated hereby. 7.4 Buyer is now legally and financially qualified and able to undertake and perform Buyer's obligations under and as contemplated by this agreement, and Closing by Buyer on the Closing Date as contemplated hereby will not violate, conflict with, or be void or voidable under any instrument, law, rule, or regulation. 8. Conditions to Seller's Obligations. As conditions for the sole benefit of Seller, each and any of which Seller may waive, each obligation of Seller under this agreement shall be subject to and conditioned upon satisfaction as of Closing of each of the following: 8.1 Buyer shall have complied in all material respects with the terms of this agreement applicable to Buyer. 7 8.2 In all material respects, each of Buyer's representations and warranties contained herein shall have been true and correct when made, shall be deemed to be made again at and as of Closing, and in all material respects shall then be true and correct. 8.3 Buyer shall have delivered to Seller each item listed in Section 3.3. 8.4 Seller shall have determined that the conditions set forth in Sections 6.5 and 6.6 shall have been met to Seller's reasonable satisfaction. 8.5 Contemporaneously with Closing hereunder, Closing (as therein defined) shall have occurred under that certain agreement of even date herewith entered into by and between Central Missouri Broadcasting, Inc. as "Seller", and Zimmer Broadcasting of Mid-Missouri, Inc. as "Buyer" for the sale to "Buyer" by "Seller" of all of the assets of radio stations KLIK-AM and KTXY-FM as therein provided. 8.6 Buyer shall have complied in all respects with its obligations under the Time Brokerage Agreement of even date herewith entered into by and between Seller and Buyer. 9. Miscellaneous. 9.1. (a) Seller agrees to indemnify, defend, and hold Buyer harmless from each and any action, suit, cause of action, loss, damage, or claim (singly a "Claim"; collectively, the "Claims") asserted against or incurred or sustained by Buyer and arising from, based on, or on account of (i) Company's operation of the Station prior to Closing, (ii) any Claim asserted against Seller, or (iii) any material failure to perform or breach or untruthfulness of any material covenant, representation, or warranty of Seller herein. (b) Buyer agrees to indemnify, defend, and hold Seller harmless from each and any Claim or Claims asserted against or incurred or sustained by Seller and arising from, based on, or on account of (i) Buyer's operation of the Station after Closing, (ii) any Claim asserted against Buyer, or (iii) any material failure to perform or breach or untruthfulness of any material covenant, representation or warranty of Buyer herein. (c) Each indemnity obligation herein shall be enforceable only after the aggregate amount of all Claims against the indemnified party shall have exceeded Five Thousand and no/100 Dollars ($5,000.00) and shall survive Closing but expire as to all 8 Claims made after the last day of the twenty-fourth (24th) full calendar month following Closing. 9.2 Each notice or other communication hereunder shall be in writing and shall be effective only upon receipt if sent prepaid via overnight courier service, or if delivered personally, or if sent by telecopy (during business hours) followed by overnight courier service, postage prepaid, or ten (10) days after having been mailed certified or registered United States mail, postage prepaid, addressed to the appropriate party as follows: If to Seller: CMB II, Inc. c/o Brill Media Company, L.P. 420 N.W. Fifth Street Evansville, Indiana 47708 Attention: Mr. Alan R. Brill Facsimile No.: (812) 428-4021 copy to: Charles W. Laughlin, Esquire Thompson & McMullan, P.C. 100 Shockoe Slip Richmond, Virginia 23219 Facsimile No.: (804) 780-1813 if to Buyer: MVP Radio, Inc. 324 Broadway P.O. Box 1610 Cape Giradeau, MO 63702-1610 By a like notice, either party may change the address of such party for future notices. 9.3 This agreement may not be assigned or amended, in whole or in part, without the prior, written consent of all parties hereto and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 9.4 Without any liability on Seller as a result of such actions, Seller may, but shall not be required to, rescind and terminate this agreement and Seller's obligations hereunder by notice to Buyer (a) within thirty (30) days after Seller first receives notice either (i) that Buyer is not FCC qualified or (ii) that filings have been made in opposition to any of the Applications or that any of the Applications will be or has been designated for hearing, or (b) if Closing shall not have occurred (through no fault of Seller) within one hundred eighty (180) days of the date hereof. 9.5 Buyer and Seller represent and warrant each to the other that only Media Services Group shall be entitled to a commission as a result of Closing, which commission, at agreed 9 rates, Buyer shall pay upon Closing, and Buyer shall hold Seller harmless from any claim therefor. If a claim is made by any other broker in connection with this transaction, the party who is alleged to have engaged or retained such broker shall indemnify and hold harmless the other party from any and all liabilities and expenses connected therewith. 9.6 Wherever used in this agreement each of the following terms shall have the meaning defined in the Section of this agreement identified below: Term Section ---- ------- Accounts Receivable ss. 3.2(d) Applications ss. 3.5 Agent ss. 2.3 Assumption Agreement(s) ss. 3.6 Buyer Preamble Claim(s) ss. 9.1(a) Closing ss. 3.1 Closing Date ss. 3.1 Commission Recitals Deposit ss. 2.3 Escrow Agreement ss. 2.3 Licenses ss. 4.3 Property Sold ss. 1.1 Purchase Price ss. 2.1 Recorded Lien ss. 5.5 Seller Preamble Station Recitals 9.7 If Closing does not occur on the Closing Date, Buyer shall forthwith return all documents received from Seller and thereafter will cause all confidential information it obtained concerning Seller, Station, or the Company to be treated as such. 9.8 This agreement, its enforceability or interpretation, and the legal relationships between Buyer and Seller created hereby shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to such laws' principles regarding choice of law or conflicts of laws. 9.9 The Section headings were inserted for convenience only and are not a substantive part of this agreement. 9.10 If any one or more of the provisions contained in this agreement, or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, then to the maximum extent permitted by law such invalidity, illegality, or unenforceability shall not 10 affect any other provision of this agreement or any other such instrument. 9.11 This agreement contains the entire understanding of the parties hereto with respect to its subject matter. As between Buyer and Seller there are no agreements, restrictions, promises, representations, warranties, covenants, or undertakings other than as expressly set forth herein, and this agreement waives, releases, and supersedes any and all such and also each and any prior agreement or understanding between the parties (or their agents, principals, or representatives) concerning the transactions contemplated hereby. 9.12 This agreement may be executed in any number of counterparts, each of which shall constitute an original, which, when the first such counterpart shall have been executed by each of Buyer and Seller, shall constitute but one and the same agreement. 9.13 Buyer and Seller agree that Buyer has had and shall have the right to examine the Property Sold to the extent reasonably desired, that the personal property included in the Property Sold is being sold "as is", with "all faults" as of the date hereof, reasonable wear and tear excepted, and without and excluding each and any warranty, express or implied, other than the warranty of title as and to the extent expressly set forth in Section 4.6, and that as to each, all, or any part of the personal property included in the Property Sold there is no warranty, express or implied, as to its or their merchantability, freedom or lack of freedom from defect, fitness for any particular use or purpose, or value or condition. IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the day, month, and year first above written. Seller: CMB II, Inc. by:___________________________ a duly authorized officer Buyer: MVP Radio, Inc. by:________________________________ a duly authorized officer 11 Exhibit 2.01 Allocation of Purchase Price CMB II, Inc. - ------------ Studio Building Leasehold Improvements $ 5,000 Broadcast Equipment 245,000 Goodwill, FCC License and other intangibles 800,000 ---------- Total $1,050,000 ========== Exhibit 3.06.1 Assumed Obligations Reducing the Purchase Price Pursuant to Section 3.06.1 (to come) Exhibit 3.08.1 List of Contracts Exhibit 4.03 License KATI-FM, California, Missouri 94.3 MHz Class "C2", 50 kw nondirectional; 150 meters HAAT; unlimited hours License file # BZH951013KA Grant: 1/28/97 Expires: 2/1/05 EX-10.6(B) 76 EXHIBIT 10.6(B) EX-10.6(b) Assets Purchase Agreement ASSETS PURCHASE AGREEMENT This agreement is entered into this 24th day of October 1997, by and between CENTRAL MISSOURI BROADCASTING, INC., a Virginia corporation ("Seller"), and ZIMMER RADIO OF MID-MISSOURI, INC. a Missouri corporation ("Buyer"). RECITALS Seller is the broadcast licensee of and owns and operates radio stations KLIK-AM and KTXY-FM of Jefferson City, Missouri (the "Stations"). Buyer wishes to buy and Seller wishes to sell and transfer to Buyer certain of Seller's assets, and Buyer wishes to obtain an assignment of, and Seller wishes to assign and transfer to Buyer, each license and authorization issued by the Federal Communications Commission (the "Commission") for the operation of the Stations, all upon the terms and conditions set forth herein. NOW, THEREFORE, for and in consideration of the foregoing and the agreements contained herein, Seller and Buyer hereby agree as follows: 1. Purchase and Sale of Property and Assets. 1.1 Upon and subject to compliance with all terms and conditions of this agreement, at Closing (hereinafter defined) Buyer agrees to buy from Seller, and Seller agrees to sell, assign, transfer, convey, and deliver to Buyer all of Seller's right, title, and interest in and to all of the real, personal, tangible, and intangible property and assets owned or leased and used by Seller in the Stations' operations (including all of Seller's interests in and to any of the Stations' real or personal property; machinery; vehicles; fixtures; studio, broadcast, or transmitter equipment; supplies; music collection; contracts, and leaseholds), excluding only the property described in Section 1.2 (collectively, the "Property Sold"). 1.2 The following are not part of the Property Sold and are not being sold to Buyer: (a) Seller's (i) rights under this agreement, (ii) cash on hand or in bank, (iii) corporate stock records, seal, and minute book, (iv) insurance policies, or the proceeds thereof, (v) books of account and original entry, (vi) unliquidated claims or choses in action, and (vii) notes or accounts receivable, including all accounts with or due from related or affiliated persons or companies; (b) such items otherwise includable as part of the Property Sold as may be disposed of by Seller before Closing in the ordinary course of Seller's business while acting in accordance with Seller's past practices, and (c) those assets of Seller not used in the Stations' operations. 2. Purchase Price. 2.1 The purchase price (the "Purchase Price") payable for the Property Sold shall be the sum of Six Million Six Hundred Twenty-Five Thousand and no/100 Dollars ($6,625,000.00), adjusted as required by Section 2.2, to be paid by Buyer to Seller at Closing in cash or by wire transfer of immediately available federal funds and shall be allocated as set forth on Exhibit 2.01 hereof. 2.2 (a) Operation of Stations and use of the Property Sold, and any income or expenses attributable thereto, shall be for Seller's account until Closing and thereafter shall be for Buyer's account. At Closing all prepaid items (other than income taxes) that are received by Buyer or that will accrue to Buyer's benefit after Closing shall be prorated between Buyer and Seller as of Closing and the Purchase Price adjusted accordingly. (b) The Purchase Price shall be reduced at Closing by the then amount of Seller's liabilities listed and briefly described on Exhibit 2.02, which liabilities shall be assumed by Buyer at Closing pursuant to the Assumption Agreements (hereinafter defined). (c) If Buyer and Seller disagree as to the amount of any adjustment required by this Section 2.2, such disputed amount or amounts will be finally determined by Ernst & Young, and its fees and expenses shared equally by Buyer and Seller. 2.3 Pursuant to an escrow agreement of even date herewith (the "Escrow Agreement"), Buyer has deposited with Old National Trust Company, Evansville, Indiana ("Agent") cash in the amount of Two Million Four Hundred Thousand and No/100 Dollars ($2,400,000.00) (together with all income earned thereon, the "Deposit"), to be held by the Agent pursuant to the terms and conditions of the Escrow Agreement. 3. Closing; Applications; Etc. 3.1 Unless sooner terminated as herein provided for, consummation of the sale and purchase contemplated hereby ("Closing") shall take place at 10:00 o'clock a.m., local time, at the offices of Thompson & McMullan, P.C., 100 Shockoe Slip, Richmond, Virginia 23219, on (a) the fifth (5th) business day following the date on which Seller receives notice that the Commission's consent to the Applications has become final, or (b), at Seller's option upon ten (10) days prior notice to Buyer at such earlier time for Closing as Seller designates in such notice given after Seller has received notice of the Commission's consent to the Applications, or (c) at such other time and/or place as Buyer and Seller hereafter may agree upon in writing (such date as so 2 determined, designated, or agreed upon shall be the "Closing Date"). 3.2 In exchange for and upon receipt of the items to be delivered at Closing by Buyer, as described in Section 3.3, Seller agrees to and shall deliver or cause to be delivered to Buyer at Closing each of the following: (a) such documents and duly executed instruments as shall be necessary and appropriate to Closing, including instruments of conveyance, assignment, or transfer sufficient to assign, convey, transfer to, and vest in Buyer all of Seller's right, title, and interest in and to the Property Sold free and clear of any and all liens or encumbrances as and to the extent warranted by Seller in Section 4.6; (b) a certified copy of necessary corporate proceedings and resolutions duly adopted by Seller and its shareholder(s) authorizing and approving execution and delivery of this agreement and consummation of the transactions contemplated hereby; (c) the legal opinion of Messrs. Thompson & McMullan, 100 Shockoe Slip, Richmond, Virginia 23219, dated as of the Closing Date, in form and substance satisfactory to Buyer as to the matters set forth in Sections 4.1 and 4.2; (d) a list of Seller's accounts receivable (aged 30, 60, 90 days, etc.) for the Stations (the "Accounts Receivable"); and (e) transfer to Buyer from Tower Company, Inc. ("Tower") of title to the broadcast equipment listed and briefly described on Exhibit 3.02.1 in return for payment by Buyer to Tower Company of Twenty Five Thousand and no/100 Dollars ($25,000.00) cash. 3.3 Contemporaneously with Seller's performance of its obligations described in Section 3.2, Buyer agrees to and shall deliver to Seller at Closing each of the following: (a) payment to Seller of the Purchase Price as described in Section 2.1 and to Tower of the agreed purchase price for the broadcast equipment listed on Exhibit 3.02.1; (b) the legal opinion of Buyer's legal counsel, dated as of the Closing Date, in form and substance satisfactory to Seller as to the matters set forth in Sections 7.1, 7.2, and 7.3; (c) to the extent appropriate, certified copies of duly adopted resolutions authorizing and approving execution and 3 delivery of this agreement and consummation of the transactions contemplated hereby; and (d) such duly executed instruments, in form and substance satisfactory to Seller, as are required by Section 3.6. 3.4 Until Closing Buyer shall not directly or indirectly control, determine, supervise, or direct or attempt to control, determine, supervise, or direct the operations of Stations or their policies or programs. 3.5 Within five (5) business days of the date hereof, Buyer and Seller will file or cause to be filed with the Commission appropriate, formal applications ("Applications") for consent to assignment to Buyer of the Licenses (hereinafter defined), and thereafter Seller and Buyer will diligently process the Applications and will supply all information, filings, and documentation concerning Buyer, Seller, and Stations or their operations as the Commission reasonably may require in connection therewith. The obligation for all charges made by the Commission for filing and processing the Applications shall be borne equally by Buyer and Seller. 3.6 As of and after Closing Buyer assumes and agrees to perform, pay, and discharge all obligations, contracts, and liabilities of Seller as of or arising after Closing pursuant to those instruments or agreements of Seller identified on Exhibit 3.06.1 and as set forth in instruments of assumption [the "Assumption Agreement(s)"], in form and substance satisfactory to Seller, to be executed and delivered to Seller by Buyer at Closing. 3.7 At Closing, Seller will assign the Accounts Receivable to Buyer as its agent for purposes of collection only for the period of ninety (90) days immediately following Closing. During such period, as Seller's agent Buyer shall have the exclusive right to and shall collect the Accounts Receivable in Seller's name in the same manner and with the same diligence as used by Buyer to collect Buyer's own accounts, except that Buyer shall not be required to file any action or hire any collection agency for such purpose. Payments received by Buyer on an account from any customer of Buyer that is also an account debtor to Seller shall first be applied to Seller's Accounts Receivable. At the end of each calendar month, Buyer will remit all collections on such Accounts Receivable to Seller and shall deliver to Seller a summary of all such collections for such month. When received by Buyer, such collections shall be deposited in a separate account as designated by Seller. At the end of such ninety (90) day period, Buyer shall deliver all remaining collections to Seller along with a final summary of all collections for such period and shall return to Seller all such Accounts Receivable then remaining uncollected, 4 and Buyer's responsibility and authority with respect to such Accounts Receivable thereupon shall terminate. 3.8 Exhibit 3.08.1 is an accurate and complete list and brief description of all contracts, leases, or other agreements to which Seller is a party or to which it is bound. 4. Seller's Representations and Warranties. To induce Buyer to enter into and perform this agreement, Seller represents and warrants to Buyer that each of the following is true: 4.1 Seller is a corporation duly organized, validly existing, and in good standing under the laws of the Commonwealth of Virginia, has all requisite corporate power and authority to conduct its business as it is now being conducted and to own and operate Stations, and is duly domesticated and qualified to do business as a foreign corporation in the State of Missouri. 4.2 This agreement and the actions contemplated hereby have been validly authorized by Seller, and this agreement has been duly executed and delivered by Seller and constitutes a legal, valid, and binding obligation of Seller enforceable against Seller in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, or similar laws generally affecting the enforcement of creditors' rights. 4.3 As listed and briefly identified on Exhibit 4.03, Seller presently holds licenses and authorizations issued by the Commission for the ownership and operation of the Stations (the "Licenses"); the Licenses are in full force and effect, and the Stations are being operated in compliance with all material terms of the Licenses and the Commission's applicable rules and regulations. 4.4 The Property Sold, together with the assets described in Section 1.2, include all of Seller's assets that are currently being used by Seller to operate the Stations. 4.5 Except as Seller may have advised Buyer otherwise, Seller knows of no legal, administrative, arbitrative, investigative, or other suit or action pending or threatened against Seller. 4.6 Except for property leased by Seller, at Closing Seller will convey to Buyer good, record (where applicable), and marketable title to all of the Property Sold free and clear of all liens or encumbrances other than (a) those for unpaid taxes not overdue and other liens, encumbrances, or minor imperfections of title that do not materially detract from Seller's use or materially interfere with Stations' operations as presently conducted, (b) such as would be disclosed by a survey of any real property that is a part of the Property Sold, and (c) the 5 obligations listed on Exhibit 3.06.1 and to be assumed by Buyer at Closing pursuant to Assumption Agreements. 4.7 Seller's execution of, delivery of, performance of, compliance with, and Closing of this agreement will not constitute a default under or result in any material breach of any term, condition, or provision of any applicable agreement to which Seller is a party 5. Conduct Prior to Closing. Until Closing, Seller covenants and agrees that: 5.1 Seller will carry on its business only in the ordinary course and substantially in the same manner as heretofore. 5.2 Upon prior reasonable notice from Buyer, Seller shall give Buyer's authorized representatives reasonable access to the Stations. 5.3 Without Buyer's prior consent, which shall not be unreasonably withheld, Seller will not agree to any material modification of any written agreement materially affecting the Stations or the Property Sold. 5.4 Seller shall notify Buyer if it becomes aware that any litigation or other judicial proceeding has been commenced against Seller. 5.5 No later than thirty (30) days prior to the Closing Date, Buyer shall have performed a lien search with respect to the Property Sold and notified Seller of any lien of record [other than a permitted lien described in Section 4.6 above] as to any material portion of the Property Sold that Buyer is unwilling to waive (a "Recorded Lien"). Failure to perform such search or to notify Seller of each such Recorded Lien shall be deemed to be a waiver of Buyer's right to object to any Recorded Lien that would have been discoverable by such a search or to any defect so discovered or discoverable. Within fifteen (15) days of receipt of such notice, Seller shall notify Buyer either that (a) Seller will cause such Recorded Lien to be cured by, upon, or at Closing on the Closing Date, or (b) Seller will not cure such Recorded Lien, and in the event of (b) Buyer may either (i) proceed to Closing on the Closing Date subject to such Recorded Lien or (ii) terminate this agreement by notice to Seller given within ten (10) days after receipt of Seller's notice and thereupon be entitled to a prompt refund of the Deposit. 6. Conditions to Buyer's Obligations. As conditions for the benefit of Buyer, each and any of which Buyer may waive, each obligation of Buyer under this agreement shall be subject to and 6 conditioned upon satisfaction as of Closing of each of the following: 6.1 Seller shall have complied in all material respects with the terms of this agreement applicable to it. 6.2 In all material respects, each of Seller's representations and warranties contained herein shall have been true and correct when made, shall be deemed to be made again at and as of Closing, and in all material respects shall then be true and correct. 6.3 Seller shall have delivered to Buyer each item listed in Section 3.2. 6.4 Since the date of this agreement, no uninsured loss or damage materially affecting Stations or the Property Sold shall have occurred and be continuing. 6.5 No law or order shall directly restrain or prohibit Closing, and no suit, action, investigation, inquiry, or governmental or other proceeding, judicial or administrative, shall have been instituted or be threatened raising any material question as to the validity, legality, or enforceability of this agreement or the transactions contemplated hereby. 6.6 The Commission's consent to the Applications shall have been obtained and, unless Seller elects otherwise, such consent shall have become a final order. 6.7 At Closing, Tower shall have transferred to Buyer title to the broadcast equipment listed and briefly described on Exhibit 3.02.1 upon Buyer's payment to Tower of the agreed purchase price therefor. 7. Buyer's Representations and Warranties. To induce Seller to enter into and perform this agreement, Buyer represents and warrants to Seller that each of the following is true: 7.1 Buyer has all requisite power and authority to enter into this agreement, to consummate the transactions contemplated hereby, to conduct Buyer's business as it is now being conducted, and to own and operate Buyer's properties and assets. 7.2 This agreement and the actions contemplated hereby have been validly authorized by Buyer, and this agreement has been duly executed and delivered by Buyer and constitutes a legal, valid, and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, or similar laws generally affecting the enforcement of creditors' rights. 7 7.3 No litigation or proceeding is pending or, to Buyer's knowledge, threatened that affects or may affect in any material, adverse manner Buyer's power, authority, or ability to consummate the transactions contemplated hereby. 7.4 Buyer is now legally and financially qualified and able to undertake and perform Buyer's obligations under and as contemplated by this agreement, and Closing by Buyer on the Closing Date as contemplated hereby will not violate, conflict with, or be void or voidable under any instrument, law, rule, or regulation. 8. Conditions to Seller's Obligations. As conditions for the sole benefit of Seller, each and any of which Seller may waive, each obligation of Seller under this agreement shall be subject to and conditioned upon satisfaction as of Closing of each of the following: 8.1 Buyer shall have complied in all material respects with the terms of this agreement applicable to Buyer. 8.2 In all material respects, each of Buyer's representations and warranties contained herein shall have been true and correct when made, shall be deemed to be made again at and as of Closing, and in all material respects shall then be true and correct. 8.3 Buyer shall have delivered to Seller each item listed in Section 3.3. 8.4 Seller shall have determined that the conditions set forth in Sections 6.5 and 6.6 shall have been met to Seller's reasonable satisfaction. 8.5 Contemporaneously with Closing hereunder, Closing (as therein defined) shall have occurred under that certain agreement of even date herewith entered into by and between CMB II, Inc. as "Seller", and MVP Radio, Inc. as "Buyer" for the sale to "Buyer" by "Seller" of all assets of radio station KATI-FM as therein provided. 8.6 Buyer shall have complied in all respects with its obligations under the Time Brokerage Agreement of even date herewith entered into by and between Seller and Buyer. 9. Miscellaneous. 9.1. (a) Seller agrees to indemnify, defend, and hold Buyer harmless from each and any action, suit, cause of action, loss, damage, or claim (singly a "Claim"; collectively, the "Claims") asserted against or incurred or sustained by Buyer and 8 arising from, based on, or on account of (i) Company's operation of the Stations prior to Closing, (ii) any Claim asserted against Seller, or (iii) any material failure to perform or breach or untruthfulness of any material covenant, representation, or warranty of Seller herein. (b) Buyer agrees to indemnify, defend, and hold Seller harmless from each and any Claim or Claims asserted against or incurred or sustained by Seller and arising from, based on, or on account of (i) Buyer's operation of the Stations after Closing, (ii) any Claim asserted against Buyer, or (iii) any material failure to perform or breach or untruthfulness of any material covenant, representation or warranty of Buyer herein. (c) Each indemnity obligation herein shall be enforceable only after the aggregate amount of all Claims against the indemnified party shall have exceeded Five Thousand and no/100 Dollars ($5,000.00) and shall survive Closing but expire as to all Claims made after the last day of the twenty-fourth (24th) full calendar month following Closing. 9.2 Each notice or other communication hereunder shall be in writing and shall be effective only upon receipt if sent prepaid via overnight courier service, or if delivered personally, or if sent by telecopy (during business hours) followed by overnight courier service, postage prepaid, or ten (10) days after having been mailed certified or registered United States mail, postage prepaid, addressed to the appropriate party as follows: If to Seller: Central Missouri Broadcasting, Inc. c/o Brill Media Company, L.P. 420 N.W. Fifth Street Evansville, Indiana 47708 Attention: Mr. Alan R. Brill Facsimile No.: (812) 428-4021 copy to: Charles W. Laughlin, Esquire Thompson & McMullan, P.C. 100 Shockoe Slip Richmond, Virginia 23219 Facsimile No.: (804) 780-1813 if to Buyer: Zimmer Radio of Mid-Missouri, Inc. 324 Broadway P.O. Box 1610 Cape Giradeau, MO 63702-1610 By a like notice, either party may change the address of such party for future notices. 9 9.3 This agreement may not be assigned or amended, in whole or in part, without the prior, written consent of all parties hereto and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 9.4 Without any liability on Seller as a result of such actions, Seller may, but shall not be required to, rescind and terminate this agreement and Seller's obligations hereunder by notice to Buyer (a) within thirty (30) days after Seller first receives notice either (i) that Buyer is not FCC qualified or (ii) that filings have been made in opposition to any of the Applications or that any of the Applications will be or has been designated for hearing, or (b) if Closing shall not have occurred (through no fault of Seller) within one hundred eighty (180) days of the date hereof. 9.5 Buyer and Seller represent and warrant each to the other that only Media Services Group shall be entitled to a commission as a result of Closing, which commission, at agreed rates, Buyer shall pay upon Closing, and Buyer shall hold Seller harmless from any claim therefor. If a claim is made by any other broker in connection with this transaction, the party who is alleged to have engaged or retained such broker shall indemnify and hold harmless the other party from any and all liabilities and expenses connected therewith. 9.6 Wherever used in this agreement each of the following terms shall have the meaning defined in the Section of this agreement identified below: Term Section ---- ------- Accounts Receivable ss. 3.2(d) Applications ss. 3.5 Agent ss. 2.3 Assumption Agreement(s) ss. 3.6 Buyer Preamble Claim(s) ss. 9.1(a) Closing ss. 3.1 Closing Date ss. 3.1 Commission Recitals Deposit ss. 2.3 Escrow Agreement ss. 2.3 Licenses ss. 4.3 Property Sold ss. 1.1 Purchase Price ss. 2.1 Recorded Lien ss. 5.5 Seller Preamble Stations Recitals Tower ss. 3.2(e) 10 9.7 If Closing does not occur on the Closing Date, Buyer shall forthwith return all documents received from Seller and thereafter will cause all confidential information it obtained concerning Seller, Stations, or the Company to be treated as such. 9.8 This agreement, its enforceability or interpretation, and the legal relationships between Buyer and Seller created hereby shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without giving effect to such laws' principles regarding choice of law or conflicts of laws. 9.9 The Section headings were inserted for convenience only and are not a substantive part of this agreement. 9.10 If any one or more of the provisions contained in this agreement, or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, then to the maximum extent permitted by law such invalidity, illegality, or unenforceability shall not affect any other provision of this agreement or any other such instrument. 9.11 This agreement contains the entire understanding of the parties hereto with respect to its subject matter. As between Buyer and Seller there are no agreements, restrictions, promises, representations, warranties, covenants, or undertakings other than as expressly set forth herein, and this agreement waives, releases, and supersedes any and all such and also each and any prior agreement or understanding between the parties (or their agents, principals, or representatives) concerning the transactions contemplated hereby. 9.12 This agreement may be executed in any number of counterparts, each of which shall constitute an original, which, when the first such counterpart shall have been executed by each of Buyer and Seller, shall constitute but one and the same agreement. 9.13 Buyer and Seller agree that Buyer has had and shall have the right to examine the Property Sold to the extent reasonably desired, that the personal property included in the Property Sold is being sold "as is", with "all faults" as of the date hereof, reasonable wear and tear excepted, and without and excluding each and any warranty, express or implied, other than the warranty of title as and to the extent expressly set forth in Section 4.6, and that as to each, all, or any part of the personal property included in the Property Sold there is no warranty, express or implied, as to its or their merchantability, freedom or lack of freedom from defect, fitness for any particular use or purpose, or value or condition. 11 IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the day, month, and year first above written. Seller: Central Missouri Broadcasting, Inc. by:___________________________ a duly authorized officer Buyer: Zimmer Radio of Mid-Missouri, Inc. by:________________________________ a duly authorized officer 12 Exhibit 2.01 Allocation of Purchase Price Central Missouri Broadcasting, Inc. Studio Building Leasehold Improvements $ 35,000 Business Equipment 85,000 Vehicles 65,000 AM Towers 175,000 Broadcast Equipment 350,000 Goodwill, FCC License and other intangibles 5,915,000 ---------- Total $6,625,000 ========== Exhibit 2.02 Assumed Obligations Reducing the Purchase Price Pursuant to Section 2.2 Balance to Monthly Reduce Creditor Description Payment Price - -------- ----------- ------- ---------- Tower Company Tower space lease $6,000.00 $256,000 KTXY-FM Exhibit 3.02.1 Description of Broadcast Equipment Transmitter and antenna Harris HT-35 FM 35 RW Transmitter and accessories Bird meter assembly (2 meters), accessories and lines Myat Transfer Panel and associated accessories Andrew Dehydrator and accessories Altronic 35 KW Dummy Load L.E.A. Voltage Surge Suppressor QEI Modulation Monitor Harris 6-foot Rack and Panel VRC 2000 Remote control system with Data Interface, Video Display, printer and Modem Emerson Uninterrupted Power Supply Marti SCA Generator and Marti SCA Demodular Marti TSC-30 Package including Scala antenna and accessories Moseley 6030 STL System and Mark Products 10-foot dish and 6- foot dish ERI FMT 8AC FM antennae with Shorting Stub, Beam Tilt, Deicer System with Rosemount detector and controller Main Transmission Line 1300-foot Andrew 4" Heliax, connectors, hangers, etc. STL and TSL Transmission Line 1200-foot CSI 7/8 Coaxial Cable with grips, hangers, connectors, etc. Exhibit 3.06.1 Contracts to be Assumed Exhibit 3.08.1 List of Contracts Exhibit 4.03 Licenses 1. KTXY-FM, Jefferson City, Missouri 106.9 MHz, class "C", 100kw non-directional unlimited hours, 381 meters HAAT License #BLH-900727KA Grant: 1/31/97 Expiration: 2/01/05 2. KLIK-AM, Jefferson City, Missouri 950 KHz, 5kw day non-directional; 5kw night directional unlimited hours File# BZ-900205AA Grant: 1/31/97 Expiration: 2/01/05 3. KPK310 450.01 MHz RP Auxiliary Remote Pick Up, Affiliated station KTXY Power: 30 watts File #900052MA Effective: 10/24/90 Expiration: 2/01/05 4. WLO-653 949.00 MHz Auxiliary Broadcast Aural STL Unlimited hours. Affiliated with KTXY Power: 10 watts File #BPLST-880921MB Effective: 6/15/89 Expiration: 2/01/05 5. KB-55702 450.15 MHz and 450.25 MHz Auxiliary Broadcast R/P Mobile System, Associated with KTXY Power: 15 watts File # BLNRE-880714MB Effective: 9/26/88 Expiration: 2/01/05 6. WMU-454 951.5 MHz Auxiliary Broadcast Aural Intercity Relay, Associated with KTXY Power: 5 watts File #BPLIC-930923MD Effective: 12/16/93 Expiration: 2/01/05 Exhibit 4.03 Licenses (continued from previous page) 7. WLO-538 948 MHz Auxiliary Broadcast Aural STL, Associated with KTXY Power: 6 watts File #BPLST-880921MA Effective: 2/07/89 Expiration: 2/01/05 8. KEH-584 161.70, 161.76 MHz Remote Pick Up base Mobile System. Associated with KLIK, KTXY Power: 90 watts File #BLRE-28345 Effective: 8/29/77 Expiration: 2/01/05 EX-10.8(A) 77 EXHIBIT 10.8(A) EX-10.8(a) Time Brokerage Agreement TIME BROKERAGE AGREEMENT This time brokerage agreement dated November 1, 1997, is entered into by and between CMB II, INC., a Virginia corporation ("Licensee"), and MVP RADIO, INC., a Missouri corporation ("Programmer", and with Licensee, the "Parties"). Recitals. Licensee owns radio station KATI-FM of California, Missouri (the "Station"). Programmer's personnel are experienced in radio station ownership and operation, and Licensee wishes to retain Programmer to provide sales and marketing services, technical support, and programming for the Station, in conformity with the rules, regulations, and policies for time brokerage agreements of the Federal Communications Commission ("FCC") and this agreement. Programmer as "Buyer" and Licensee as "Seller" have this day entered into a certain agreement (the "Assets Purchase Agreement") for sale of the Station's assets to Buyer as therein provided for. Terms not otherwise defined herein shall be defined as in the Assets Purchase Agreement. NOW, THEREFORE, in consideration of the above recitals and the mutual promises and covenants herein contained and other good and valuable consideration, the Parties, intending to be bound legally, agree as follows: Section 1 Term and Programmer Services 1.1 Effective Date. The term (hereinafter defined) of this agreement shall begin on the date hereof (the "Effective Date"). 1.2 Term. The term (the "Term") shall continue from the Effective Date until the earlier to occur of: (a) Closing (as therein defined) of the Assets Purchase Agreement, or (b) termination of this agreement (as herein provided for) or of the Assets Purchase Agreement. 1.3 Programmer Services. During the Term, Licensee agrees to make available to Programmer on an exclusive basis broadcast time on the Station as set forth in this agreement. Subject to Licensee's reasonable approval, Programmer shall provide programming in the format and content of its selection complete with commercial matter, news, public service announcements, and other suitable programming for at least one hundred sixty-two (162) hours per week, which broadcast time of the Station Licensee shall make available during the Term exclusively to Programmer, free and clear of all rights of any other person or entity. Licensee reserves to itself, however, the right to broadcast its own programming material for up to six (6) hours per week between the hours of 6 AM - - 12:00 Noon on Sundays ("Licensee's Reserved Time") for its own regularly scheduled news, public affairs and other suitable programming designed to serve the community needs and interests of the Station's listening audience. Licensee shall cooperate with and promptly notify Programmer if Licensee will use all or any part of Licensee's Reserved Time, and Programmer shall have the right to use any unused portion of Licensee's Reserved Time in default of such a notice from Licensee. 1.4 Consideration, Fee. As consideration for the air time made available during the term hereof Programmer shall make payments as set forth in Exhibit 1.4 hereto. The Parties agree that Exhibit 1.4 contains proprietary and confidential information and each agrees to take all steps reasonably necessary to maintain such confidentiality, including redacting such confidential information from any copy of this Agreement that is filed with the FCC. 1.5 Expenses and Revenues. Programmer shall be solely responsible for all expenses attributable to its programming on the Station, including but not limited to any expenses incurred in the origination and/or delivery of its programming to the Station's studio and transmitter sites, for all costs associated with the acquisition, clearance, and production of its own programming, and for the salaries, taxes, insurance and related costs for all personnel employed by Programmer in connection with the sale of advertising time, marketing of the Station, technical maintenance of Station's equipment, and production and delivery of programming. Programmer shall retain all revenues from the sale of commercial time during its programming of the Station, including any revenues arising from Programmer's programming during Licensee's Reserved Time. 1.6 Use of Station's Facilities. Subject to overall supervision by Licensee and its employees, during the Term, Programmer shall make its studio facilities (located within the Station's principal community contour) reasonably available to Licensee only for the production and presentation of Licensee's programming as provided for hereunder, and as otherwise necessary to fulfill Licensee's obligations as FCC Licensee. 1.7 Contracts. Programmer shall cooperate with Licensee to fulfill all appropriate contracts, agreements, and leases in effect on the Effective Date that involve operation of the Station. 1.8 Collection of Accounts Receivable. During the Term, as agent for Licensee Programmer shall collect the Licensee's accounts 2 receivable for the Station that exist as of the Effective Date. Licensee shall provide Programmer with a list of all such accounts receivable to be collected by Programmer. In collecting such accounts receivable, Programmer shall use reasonable diligence, but shall not be required to institute legal proceedings to collect any account receivable, or to defend any claim or counterclaim by any account debtor. All amounts received by Programmer from an account debtor that also is an account debtor of Programmer during the Term shall be applied first to payment of the accounts receivable of Licensee unless otherwise specifically identified by the account debtor. Within ten (10) days of the end of each calendar month of the Term, Licensee shall deliver to Programmer the amount of all amounts collected and credited to the accounts receivable of Licensee during the prior calendar month in accordance with this Section 1.8. Within ten (10) days after the end of the Term, Programmer shall deliver to Licensee all records of uncollected accounts receivable of Licensee and any amounts not previously remitted to Licensee at which time Programmer's obligation for the collection of Licensee's accounts receivable as herein provided shall cease. Section 2 Licensee's and Programmer's Duties and Obligations 2.1 Licensee's Authority. During the Term, Licensee shall have full authority, power, and control over the management and operation of the Station, and at its sole expense shall be responsible for compliance by Station with all applicable provisions of the Communications Act of 1934, as amended (the "Act"), the rules, regulations and policies of the FCC, and all other applicable laws, rules, and regulations. During the Term, at its sole expense, Licensee shall maintain all FCC Licenses for the Station's operation in full force and effect in compliance with all FCC rules, regulations, and policies, and shall timely file all necessary reports and prosecute to a satisfactory conclusion all renewal or other applications necessary to maintain such Licenses in full force and effect during the Term, without material change or restriction. Upon Licensee's failure to fulfill any obligation hereunder, Programmer may take reasonable steps to cure such failure(s) and may charge the expense thereof to Licensee and/or deduct all or any part of such expense from any payment otherwise due to Licensee from Programmer. 2.2 Programming. Programmer recognizes that the Station is obligated to broadcast programming to meet the needs and interests of the California, Missouri, area, and Programmer shall air programming on issues of importance to the local community. In the event of the occurrence of a local or national emergency that in 3 the good faith, reasonable judgment of Licensee, is not being adequately addressed by Programmer, Licensee retains the right to interrupt Programmer's programming and substitute programming produced by Licensee that is more responsive to the emergency. 2.3 Station's ID. During the Term, Programmer shall coordinate with Licensee to ensure that the Station's hourly station identification and any other required announcements are aired as Licensee may direct, and Licensee shall retain all present call signs of the Station. 2.4 Political Advertising. During the Term, Programmer shall cooperate with Licensee in Licensee's compliance with all rules of the FCC regarding political broadcasting. Licensee shall promptly supply to Programmer, and Programmer shall promptly supply to Licensee, such information, including all inquiries concerning the broadcast of political advertising, as may be necessary to comply with FCC rules and polices, including those concerning the lowest unit rate, equal opportunities, reasonable access, political file, and related requirements of federal law. Programmer, in consultation with Licensee, shall develop a statement that discloses the Station's political broadcasting policies to political candidates, and Programmer shall follow those policies in the sale of any political programming or advertising during the Term. In the event that Programmer fails to satisfy political broadcasting requirements under the Act and the rules, regulations, and policies of the FCC and such failure inhibits Licensee in its compliance with the political broadcasting requirements of the FCC, then to the extent reasonably necessary to assure such compliance, Programmer shall either provide rebates to political advertisers or release advertising availabilities to Licensee. 2.5 Main Studio. During the Term, Licensee shall (i) maintain and staff a main studio, as that term is defined by the FCC, at a location that complies with FCC rules for the location of a main studio within such area, (ii) maintain a local public inspection file within California, Missouri, and (iii) prepare and place in such inspection file in a timely manner all material required by Section 73.3526 of the FCC's rules, including without limitation the Station's quarterly issues/program lists. Programmer shall provide Licensee with timely information concerning Programmer's programs as is necessary to assist Licensee in the preparation of such lists. 2.6 Employment Practices. Programmer shall provide to Licensee such information as Licensee reasonably may request concerning Programmer's recruitment, hiring, or employment practices in connection with Programmer's provision of services to 4 the Station. Programmer shall be directly and solely responsible for the salaries, taxes, insurance, and related costs for all of the personnel employed by it in operating the Station after the Effective Date. Section 3 Programming 3.1 Programming Policy Statement. During the Term, Programmer shall comply in all material respects with all applicable laws, rules, and regulations. 3.2 Licensee's Oversight of Programming. Programmer recognizes that Licensee has the right to reject or refuse any portion of Programmer's programming that is contrary to the public interest. 3.3 Compliance. Programmer shall not broadcast any material in violation of any applicable law, rule, or regulation. 3.4 Payola. Programmer will not accept, and will not knowingly permit any of its employees to accept, any consideration, compensation, gift, or gratuity of any kind whatsoever, regardless of its value or form, for the broadcast of any material on the Station, unless the payer is identified on the program for which consideration was provided as having paid for or furnished such consideration, in accordance with the Act and FCC requirements. 3.5 Cooperation on Programming. Programmer and Licensee mutually acknowledge their interest in ensuring that the Station serves the needs and interest of the residents of the California, Missouri, area and agree to cooperate during the Term in doing so. 3.6 Confidential Review. Prior to the Effective Date, Programmer shall acquaint Licensee, upon request, with the nature and type of the programming to be provided. Licensee shall be entitled to review at its discretion from time to time on a confidential basis any of Programmer's programming material it may reasonably request. Programmer shall promptly provide Licensee with copies of all correspondence and complaints received from the public (including any telephone logs of complaints called in). Section 4 Indemnification 5 4.1 Indemnification. Programmer shall indemnify, defend, and hold harmless Licensee from and against any and all claims, losses, costs, liabilities, damages, and expenses, including any FCC fines or forfeitures (including reasonable legal fees and other expenses incidental thereto) of every kind, nature, and description arising out of Programmer's broadcasts on the Station and/or sale of advertising time under this agreement during the Term, or the actions or conduct of Programmer's employees. 4.2 Time Brokerage Challenge. If this agreement is challenged at the FCC or in any other administrative or judicial forum, whether or not in connection with any license assignment application, counsel for Licensee and Programmer shall jointly defend the agreement and the Parties' performance hereunder throughout all such proceedings. If any portion of this agreement does not receive the FCC's approval, then the Parties shall reform the agreement, consistent with the provisions of Section 6.6 below, as necessary to satisfy the FCC's concerns. 6 Section 5 Termination 5.1 Termination. Unless the parties otherwise agree hereafter in writing, this agreement and the Term hereof shall terminate automatically upon the earlier to occur of: (a) declaration that this agreement is invalid or illegal in whole or material part by an order or decree of an administrative agency or court of competent jurisdiction and such order or decree is final and is no longer subject to further administrative or judicial review, (b) termination of the Assets Purchase Agreement, (c) Closing of the Assets Purchase Agreement, (d) notice of termination by Programmer to Licensee upon Licensee's failure to perform as agreed herein, or (e) upon notice from Programmer or Licensee to the other party given after the date that is one hundred eighty (180) days from the date hereof. 5.2 Force Majeure. Any failure or impairment of the Station's facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to acts of God, strikes, lockouts, material or labor restrictions imposed by any governmental authority, civil riot, flood, or any other cause not reasonably within the control of Licensee or Programmer, shall not constitute a breach of this agreement or create liability to or on any of the Parties. Section 6 Miscellaneous 6.1 Assignment. This agreement is binding upon the Parties, their successors and assigns. Neither of the Parties may assign its rights under this agreement without the prior written consent of the other party. 6.2 Amendment. No amendment to this agreement shall be effective unless evidenced by an instrument in writing signed by both Parties. 6.3 Headings. The headings herein are for convenience only and do not control or affect the meaning or construction of the provisions of this agreement. 6.4 Governing Law. This agreement is subject to applicable federal, state, and local law, rules and regulations, including, but not limited to, the Act and the rules, regulations, and policies of the FCC. The construction and interpretation of this agreement and the Parties' obligations hereunder will be determined 7 under and controlled by the laws of the Commonwealth of Virginia, without giving effect to such laws' principles regarding choice of law or conflicts of laws. 6.5 Notices. Each notice, consent, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given only upon the earlier of receipt (by hand delivery, fax, or otherwise) or ten (10) days after having been mailed, certified or registered United States mail, postage prepaid, addressed as follows: (a) If to Licensee: CMB II, Inc. c/o Brill Media Company, L.P. 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Attention: Alan R. Brill Facsimile No.: (812) 428-4021 With a copy to: Charles W. Laughlin, Esquire Thompson & McMullan, P.C. 100 Shockoe Slip Richmond, Virginia 23219 Facsimile No. (804) 780-1813 (b) If to Programmer: MVP Radio, Inc. 324 Broadway P.O. Box 1610 Cape Giradeau, MO 63702-1610 Facsimile No.: _____________ or to such other address as either party may designate from time to time by written notice to the other. 6.6 Invalidity. If any provision of this agreement or the application thereof to any person or circumstances shall be held invalid or unenforceable to any extent, the Parties shall negotiate in good faith and attempt to agree on an amendment to this agreement that will provide the Parties with substantially the same rights, economic benefits, and obligations to the greatest extent possible as the original agreement in valid, binding, and enforceable form. 8 Section 7 Counterparts 7.1 Counterparts. This agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. For purposes of executing this agreement, a facsimile signature shall be as effective as an actual signature, so long as the original signature is promptly delivered thereafter. IN WITNESS WHEREOF, the Parties have executed this agreement as of the date first written above. LICENSEE: CMB II, Inc. by:_____________________________________ a duly authorized officer PROGRAMMER: MVP Radio, Inc. by:_____________________________________ a duly authorized officer 9 EXHIBIT 1.4 Station's Operating Expenses Included in Time Brokerage Agreement In accordance with Section 1.4 of the foregoing Time Brokerage Agreement (the "TBA") between CMB II, Inc. ("Licensee"), and MVP Radio, Inc. ("Programmer") for the operation of radio station KATI-FM, California, Missouri (the "Station"), Programmer shall reimburse Licensee for the costs and expenses incurred by Licensee for the operation of the Station during the Term of the TBA, including but not limited to the following items: o FCC filing and regulatory fees; o Local, state and federal property taxes, license fees and similar regulatory charges; o Contract engineering fees in order to maintain the operation of the Stations' transmitter facilities; o Electric power and other utility charges; o Telephone and facsimile charges, copying, printing, postage and similar administrative expenses; o Payments for the specific financing agreements of the studio sites and equipment currently used for the operation of the Stations; o Insurance premiums for the Stations' general liability, health, auto, umbrella, property coverage and errors and omissions policies; and o Music licensing fees. Monthly Fee. In addition to the reimbursement of expenses for the operation of the Stations, Programmer shall pay to Licensee beginning on the Effective Date and on the first day of every month thereafter a Monthly Fee of Ten Thousand Dollars ($10,000.00) as additional consideration for the programming rights provided to Programmer under the TBA. Failure to Close. Notwithstanding any other provision in the TBA or the Purchase Agreement, in the event the Parties fail to close on the sale of the Stations to Programmer, Licensee shall not be obligated to repay to Programmer any amounts advanced by Programmer to Licensee under the TBA. EX-10.8(B) 78 EXHIBIT 10.8(B) EX-10.8(b) Time Brokerage Agreement TIME BROKERAGE AGREEMENT This time brokerage agreement dated November 1, 1997, is entered into by and between CENTRAL MISSOURI BROADCASTING, INC., a Virginia corporation ("Licensee"), and ZIMMER RADIO OF MID-MISSOURI, INC. a Missouri corporation ("Programmer", and with Licensee, the "Parties"). Recitals. Licensee owns radio stations KLIK-AM and KTXY-FM in Jefferson City, Missouri (the "Stations"). Programmer's personnel are experienced in radio station ownership and operation, and Licensee wishes to retain Programmer to provide sales and marketing services, technical support, and programming for the Stations, in conformity with the rules, regulations, and policies for time brokerage agreements of the Federal Communications Commission ("FCC") and this agreement. Programmer as "Buyer" and Licensee as "Seller" have this day entered into a certain agreement (the "Assets Purchase Agreement") for sale of the Stations' assets to Buyer as therein provided for. Terms not otherwise defined herein shall be defined as in the Assets Purchase Agreement. NOW, THEREFORE, in consideration of the above recitals and the mutual promises and covenants herein contained and other good and valuable consideration, the Parties, intending to be bound legally, agree as follows: Section 1 Term and Programmer Services 1.1 Effective Date. The term (hereinafter defined) of this agreement shall begin on the date hereof (the "Effective Date"). 1.2 Term. The term (the "Term") shall continue from the Effective Date until the earlier to occur of: (a) Closing (as therein defined) of the Assets Purchase Agreement, or (b) termination of this agreement (as herein provided for) or of the Assets Purchase Agreement. 1.3 Programmer Services. During the Term, Licensee agrees to make available to Programmer on an exclusive basis broadcast time on the Stations as set forth in this agreement. Subject to Licensee's reasonable approval, Programmer shall provide programming in the format and content of its selection complete with commercial matter, news, public service announcements, and other suitable programming for at least one hundred sixty-two (162) hours per week, which broadcast time of the Stations Licensee shall make available during the Term exclusively to Programmer, free and clear of all rights of any other person or entity. Licensee reserves to itself, however, the right to broadcast its own programming material for up to six (6) hours per week between the hours of 6 AM - 12:00 Noon on Sundays ("Licensee's Reserved Time") for its own regularly scheduled news, public affairs and other suitable programming designed to serve the community needs and interests of the Stations' listening audience. Licensee shall cooperate with and promptly notify Programmer if Licensee will use all or any part of Licensee's Reserved Time, and Programmer shall have the right to use any unused portion of Licensee's Reserved Time in default of such a notice from Licensee. 1.4 Consideration, Fee. As consideration for the air time made available during the term hereof Programmer shall make payments as set forth in Exhibit 1.4 hereto. The Parties agree that Exhibit 1.4 contains proprietary and confidential information and each agrees to take all steps reasonably necessary to maintain such confidentiality, including redacting such confidential information from any copy of this Agreement that is filed with the FCC. 1.5 Expenses and Revenues. Programmer shall be solely responsible for all expenses attributable to its programming on the Stations, including but not limited to any expenses incurred in the origination and/or delivery of its programming to the Stations' studio and transmitter sites, for all costs associated with the acquisition, clearance, and production of its own programming, and for the salaries, taxes, insurance and related costs for all personnel employed by Programmer in connection with the sale of advertising time, marketing of the Stations, technical maintenance of Stations' equipment, and production and delivery of programming. Programmer shall retain all revenues from the sale of commercial time during its programming of the Stations, including any revenues arising from Programmer's programming during Licensee's Reserved Time. 1.6 Use of Stations' Facilities. Subject to overall supervision by Licensee and its employees, during the Term, Programmer shall make its studio facilities (located within the Stations' principal community contour) reasonably available to Licensee only for the production and presentation of Licensee's programming as provided for hereunder, and as otherwise necessary to fulfill Licensee's obligations as FCC Licensee. 1.7 Contracts. Programmer shall cooperate with Licensee to fulfill all appropriate contracts, agreements, and leases in effect on the Effective Date that involve operation of the Stations. 2 1.8 Collection of Accounts Receivable. During the Term, as agent for Licensee Programmer shall collect the Licensee's accounts receivable for the Stations that exist as of the Effective Date. Licensee shall provide Programmer with a list of all such accounts receivable to be collected by Programmer. In collecting such accounts receivable, Programmer shall use reasonable diligence, but shall not be required to institute legal proceedings to collect any account receivable, or to defend any claim or counterclaim by any account debtor. All amounts received by Programmer from an account debtor that also is an account debtor of Programmer during the Term shall be applied first to payment of the accounts receivable of Licensee unless otherwise specifically identified by the account debtor. Within ten (10) days of the end of each calendar month of the Term, Licensee shall deliver to Programmer the amount of all amounts collected and credited to the accounts receivable of Licensee during the prior calendar month in accordance with this Section 1.8. Within ten (10) days after the end of the Term, Programmer shall deliver to Licensee all records of uncollected accounts receivable of Licensee and any amounts not previously remitted to Licensee at which time Programmer's obligation for the collection of Licensee's accounts receivable as herein provided shall cease. Section 2 Licensee's and Programmer's Duties and Obligations 2.1 Licensee's Authority. During the Term, Licensee shall have full authority, power, and control over the management and operation of the Stations, and at its sole expense shall be responsible for compliance by Stations with all applicable provisions of the Communications Act of 1934, as amended (the "Act"), the rules, regulations and policies of the FCC, and all other applicable laws, rules, and regulations. During the Term, at its sole expense, Licensee shall maintain all FCC Licenses for the Stations' operation in full force and effect in compliance with all FCC rules, regulations, and policies, and shall timely file all necessary reports and prosecute to a satisfactory conclusion all renewal or other applications necessary to maintain such Licenses in full force and effect during the Term, without material change or restriction. Upon Licensee's failure to fulfill any obligation hereunder, Programmer may take reasonable steps to cure such failure(s) and may charge the expense thereof to Licensee and/or deduct all or any part of such expense from any payment otherwise due to Licensee from Programmer. 2.2 Programming. Programmer recognizes that the Stations are obligated to broadcast programming to meet the needs and interests of the Jefferson City, Missouri, area, and Programmer shall air 3 programming on issues of importance to the local community. In the event of the occurrence of a local or national emergency that in the good faith, reasonable judgment of Licensee, is not being adequately addressed by Programmer, Licensee retains the right to interrupt Programmer's programming and substitute programming produced by Licensee that is more responsive to the emergency. 2.3 Stations' ID. During the Term, Programmer shall coordinate with Licensee to ensure that the Stations' hourly station identifications and any other required announcements are aired as Licensee may direct, and Licensee shall retain all present call signs of the Stations. 2.4 Political Advertising. During the Term, Programmer shall cooperate with Licensee in Licensee's compliance with all rules of the FCC regarding political broadcasting. Licensee shall promptly supply to Programmer, and Programmer shall promptly supply to Licensee, such information, including all inquiries concerning the broadcast of political advertising, as may be necessary to comply with FCC rules and polices, including those concerning the lowest unit rate, equal opportunities, reasonable access, political file, and related requirements of federal law. Programmer, in consultation with Licensee, shall develop a statement that discloses the Stations' political broadcasting policies to political candidates, and Programmer shall follow those policies in the sale of any political programming or advertising during the Term. In the event that Programmer fails to satisfy political broadcasting requirements under the Act and the rules, regulations, and policies of the FCC and such failure inhibits Licensee in its compliance with the political broadcasting requirements of the FCC, then to the extent reasonably necessary to assure such compliance, Programmer shall either provide rebates to political advertisers or release advertising availabilities to Licensee. 2.5 Main Studio. During the Term, Licensee shall (i) maintain and staff a main studio, as that term is defined by the FCC, at a location that complies with FCC rules for the location of a main studio within such area, (ii) maintain a local public inspection file within Jefferson City, Missouri, and (iii) prepare and place in such inspection file in a timely manner all material required by Section 73.3526 of the FCC's rules, including without limitation the Stations' quarterly issues/program lists. Programmer shall provide Licensee with timely information concerning Programmer's programs as is necessary to assist Licensee in the preparation of such lists. 2.6 Employment Practices. Programmer shall provide to Licensee such information as Licensee reasonably may request 4 concerning Programmer's recruitment, hiring, or employment practices in connection with Programmer's provision of services to the Stations. Programmer shall be directly and solely responsible for the salaries, taxes, insurance, and related costs for all of the personnel employed by it in operating the Stations after the Effective Date. Section 3 Programming 3.1 Programming Policy Statement. During the Term, Programmer shall comply in all material respects with all applicable laws, rules, and regulations. 3.2 Licensee's Oversight of Programming. Programmer recognizes that Licensee has the right to reject or refuse any portion of Programmer's programming that is contrary to the public interest. 3.3 Compliance. Programmer shall not broadcast any material in violation of any applicable law, rule, or regulation. 3.4 Payola. Programmer will not accept, and will not knowingly permit any of its employees to accept, any consideration, compensation, gift, or gratuity of any kind whatsoever, regardless of its value or form, for the broadcast of any material on the Stations, unless the payer is identified on the program for which consideration was provided as having paid for or furnished such consideration, in accordance with the Act and FCC requirements. 3.5 Cooperation on Programming. Programmer and Licensee mutually acknowledge their interest in ensuring that the Stations serve the needs and interest of the residents of the Jefferson City, Missouri, area and agree to cooperate during the Term in doing so. 3.6 Confidential Review. Prior to the Effective Date, Programmer shall acquaint Licensee, upon request, with the nature and type of the programming to be provided. Licensee shall be entitled to review at its discretion from time to time on a confidential basis any of Programmer's programming material it may reasonably request. Programmer shall promptly provide Licensee with copies of all correspondence and complaints received from the public (including any telephone logs of complaints called in). Section 4 Indemnification 5 4.1 Indemnification. Programmer shall indemnify, defend, and hold harmless Licensee from and against any and all claims, losses, costs, liabilities, damages, and expenses, including any FCC fines or forfeitures (including reasonable legal fees and other expenses incidental thereto) of every kind, nature, and description arising out of Programmer's broadcasts on the Stations and/or sale of advertising time under this agreement during the Term, or the actions or conduct of Programmer's employees. 4.2 Time Brokerage Challenge. If this agreement is challenged at the FCC or in any other administrative or judicial forum, whether or not in connection with any license assignment application, counsel for Licensee and Programmer shall jointly defend the agreement and the Parties' performance hereunder throughout all such proceedings. If any portion of this agreement does not receive the FCC's approval, then the Parties shall reform the agreement, consistent with the provisions of Section 6.6 below, as necessary to satisfy the FCC's concerns. 6 Section 5 Termination 5.1 Termination. Unless the parties otherwise agree hereafter in writing, this agreement and the Term hereof shall terminate automatically upon the earlier to occur of: (a) declaration that this agreement is invalid or illegal in whole or material part by an order or decree of an administrative agency or court of competent jurisdiction and such order or decree is final and is no longer subject to further administrative or judicial review, (b) termination of the Assets Purchase Agreement, (c) Closing of the Assets Purchase Agreement, (d) notice of termination by Programmer to Licensee upon Licensee's failure to perform as agreed herein, or (e) upon notice from Programmer or Licensee to the other party given after the date that is one hundred eighty (180) days from the date hereof. 5.2 Force Majeure. Any failure or impairment of the Stations' facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to acts of God, strikes, lockouts, material or labor restrictions imposed by any governmental authority, civil riot, flood, or any other cause not reasonably within the control of Licensee or Programmer, shall not constitute a breach of this agreement or create liability to or on any of the Parties. Section 6 Miscellaneous 6.1 Assignment. This agreement is binding upon the Parties, their successors and assigns. Neither of the Parties may assign its rights under this agreement without the prior written consent of the other party. 6.2 Amendment. No amendment to this agreement shall be effective unless evidenced by an instrument in writing signed by both Parties. 6.3 Headings. The headings herein are for convenience only and do not control or affect the meaning or construction of the provisions of this agreement. 6.4 Governing Law. This agreement is subject to applicable federal, state, and local law, rules and regulations, including, but not limited to, the Act and the rules, regulations, and policies of the FCC. The construction and interpretation of this agreement and the Parties' obligations hereunder will be determined 7 under and controlled by the laws of the Commonwealth of Virginia, without giving effect to such laws' principles regarding choice of law or conflicts of laws. 6.5 Notices. Each notice, consent, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given only upon the earlier of receipt (by hand delivery, fax, or otherwise) or ten (10) days after having been mailed, certified or registered United States mail, postage prepaid, addressed as follows: (a) If to Licensee: Central Missouri Broadcasting, Inc. c/o Brill Media Company, L.P. 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Attention: Alan R. Brill Facsimile No.: (812) 428-4021 With a copy to: Charles W. Laughlin, Esquire Thompson & McMullan, P.C. 100 Shockoe Slip Richmond, Virginia 23219 Facsimile No. (804) 780-1813 (b) If to Programmer: Zimmer Radio of Mid-Missouri, Inc. 324 Broadway P.O. Box 1610 Cape Giradeau, MO 63702-1610 Facsimile No.: _____________ or to such other address as either party may designate from time to time by written notice to the other. 6.6 Invalidity. If any provision of this agreement or the application thereof to any person or circumstances shall be held invalid or unenforceable to any extent, the Parties shall negotiate in good faith and attempt to agree on an amendment to this agreement that will provide the Parties with substantially the same rights, economic benefits, and obligations to the greatest extent possible as the original agreement in valid, binding, and enforceable form. 8 Section 7 Counterparts 7.1 Counterparts. This agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. For purposes of executing this agreement, a facsimile signature shall be as effective as an actual signature, so long as the original signature is promptly delivered thereafter. IN WITNESS WHEREOF, the Parties have executed this agreement as of the date first written above. LICENSEE: Central Missouri Broadcasting, Inc. by:_____________________________________ a duly authorized officer PROGRAMMER: Zimmer Broadcasting of Mid-Missouri, Inc. by:_____________________________________ a duly authorized officer 9 EXHIBIT 1.4 Stations' Operating Expenses Included in Time Brokerage Agreement In accordance with Section 1.4 of the foregoing Time Brokerage Agreement (the "TBA") between Central Missouri Broadcasting, Inc. ("Licensee"), and Zimmer Broadcasting of Mid-Missouri, Inc. ("Programmer") for the operation of radio stations KLIK-AM and KTXY-FM, Jefferson City, Missouri (the "Stations"), Programmer shall reimburse Licensee for the costs and expenses incurred by Licensee for the operation of the Stations during the Term of the TBA, including but not limited to the following items: o FCC filing and regulatory fees; o Local, state and federal property taxes, license fees and similar regulatory charges; o Contract engineering fees in order to maintain the operation of the Stations' transmitter facilities; o Electric power and other utility charges; o Telephone and facsimile charges, copying, printing, postage and similar administrative expenses; o Payments for the specific financing agreements of the studio sites and equipment currently used for the operation of the Stations; o Insurance premiums for the Stations' general liability, health, auto, umbrella, property coverage and errors and omissions policies; and o Music licensing fees. Monthly Fee. In addition to the reimbursement of expenses for the operation of the Stations, Programmer shall pay to Licensee beginning on the Effective Date and on the first day of every month thereafter a Monthly Fee of Forty Thousand Dollars ($40,000.00) as additional consideration for the programming rights provided to Programmer under the TBA. Failure to Close. Notwithstanding any other provision in the TBA or the Purchase Agreement, in the event the Parties fail to close on the sale of the Stations to Programmer, Licensee shall not be obligated to repay to Programmer any amounts advanced by Programmer to Licensee under the TBA. EX-10.8(C) 79 EXHIBIT 10.8(C) EX-10.8(c) Time Brokerage Agreement TIME BROKERAGE AGREEMENT This time brokerage agreement dated June 27, 1997, is entered into by and between ONYX BROADCASTING, INC. a Delaware corporation ("Licensee"), and NCR II, INC, a Virginia corporation ("Programmer"). Collectively, Licensee and Programmer shall be identified as the "Parties"). Recitals. Licensee owns radio station KTRR-FM of Loveland, Colorado (the "Station"). The principals of Programmer are experienced in radio station ownership and operation, and Licensee wishes to retain Programmer to provide sales and marketing services, technical support, and programming for the Station that is in conformity with the rules, regulations, and policies for time brokerage agreements of the Federal Communications Commission ("FCC") and this agreement. NOW, THEREFORE, in consideration of the above recitals and the mutual promises and covenants contained herein, the Parties, intending to be bound legally, agree as follows: Section 1 Effective Date and Programmer Services 1.1 Effective Date. The Initial Term (hereinafter defined) of this agreement shall begin (the "Effective Date") on the earlier to occur of August 5, 1996 or the termination, cancellation, or expiration of Licensee's present Program Services Agreement (the "Duchossois Agreement") entered into on August 5, 1991 with Duchossois Communications Company of Colorado, Inc. ("Duchossois"). 1.2 Term. The initial term shall continue after the Effective Date for a period of five years (the "Initial Term"), and thereafter for four additional five year terms [the "Additional Term(s)," and, with the Initial Term, the "Term")] unless sooner terminated by Programmer's notice of termination given to Licensee no less than one hundred eighty (180) days before expiration of the Initial Term or of any Additional Term. 1.3 Programmer Services. During the Term, Licensee agrees to make available to Programmer on an exclusive basis broadcast time on the Station as set forth in this agreement. Programmer shall provide entertainment programming in the format and content of its selection complete with commercial matter, news, public service announcements, and other suitable programming for at least one hundred sixty-two (162) hours per week, which broadcast time of the Station Licensee shall make available during the Term exclusively to Programmer, free and clear of all rights of any other person or entity. Licensee reserves to itself, however, the right to broadcast its own programming material for up to six (6) hours per week between the hours of 6 AM - 12:00 Noon on Sundays ("Licensee's Reserved Time") for its own regularly scheduled news, public affairs and other suitable non-entertainment programming designed to serve the community needs and interests of the Station's listening audience. Licensee shall cooperate with and promptly (at least 24 hours before) notify Programmer if Licensee will use all or any part of Licensee's Reserved Time, and Programmer shall have the right to use any unused portion of Licensee's Reserved Time in default of such a notice from Licensee. 1.4 Consideration. As consideration for Programmer's rights hereunder and the air time made available during the Term hereof, Programmer shall make payments as set forth in Attachment 1.4 attached hereto and identified by the initials of the Parties' representatives. The Parties agree that Attachment 1.4 and Attachment 7.3 contain proprietary and confidential information, and each agrees to take all steps reasonably necessary to maintain such confidentiality, including redacting such confidential information from any copy of this agreement that is filed with the FCC. 1.5 Expenses and Revenues. Licensee shall be solely responsible for the timely payment of all taxes and other costs incidental thereto, all FCC regulatory fees, real estate and personal property taxes, all utility costs relating to the existing transmitter site, transmitter and antenna, and all maintenance and repair costs on the transmitter equipment. Programmer shall be solely responsible for all expenses attributable to its programming on the Station, including but not limited to any expenses incurred in the origination and/or delivery of its programming to the Station's studio and transmitter sites, for all costs associated with the acquisition, clearance, and production of its own programming, and for the salaries, taxes, insurance and related costs for all personnel employed by Programmer in connection with the sale of advertising time, marketing of the Station, technical maintenance of Station's equipment, and production and delivery of programming. Programmer shall retain all revenues from the sale of commercial time during its programming of the Station, including any revenues arising from such programming during Licensee's Reserved Time. In the event Licensee broadcasts programming outside Licensee's Reserved Time, other than as a result of preemptions under Section 2.1 or Section 3.2, it shall reimburse Programmer at the Station's then highest unit rate, per half-hour, or any portion thereof, in accordance with the Station's existing rate cards, said amount to be deducted from the next payment to Licensee due under Section 1.4 above. 2 1.6 Use of Station's Facilities. Throughout the entire Term Programmer shall make its studio facilities, located within the Station's principal community contour, reasonably available to Licensee, at no charge, for the production and presentation of Licensee's programming and as otherwise necessary to fulfill Licensee's obligations as an FCC licensee. Consistent with its obligations under this agreement and with all requirements of the laws, rules, and regulations of the FCC, Programmer shall have full use of the Station's facilities, studios, and equipment free from any hindrance or interference from any person or persons whomsoever claiming by, through, or under Licensee, which facilities Programmer shall use only for the purpose of exercising its rights and fulfilling its obligations under this agreement. 1.7 Contracts. This agreement does not obligate Programmer to assume any of Licensee's existing contracts, agreements, or leases. Notwithstanding the foregoing, Programmer shall cooperate with Licensee to fulfill all appropriate contracts, agreements, and leases in effect on the Effective Date that involve operation of the Station. From and after the date hereof, Licensee will take all actions necessary to make certain that, and, as a precondition of Programmer's agreements and liability hereunder, it shall be a fact that, as of the Effective Date the Station (or Licensee for Station) is not then subject to, and that Licensee has not entered into or committed Station to, any contract, lease, or agreement that will bind Programmer during the Term or any part thereof, except such as may have received the prior, written approval of Programmer, or as may be expressly permitted hereunder. Except with Licensee's prior written approval, Programmer will not enter into any contracts, leases, or agreements that will bind Licensee in any way after termination of this agreement, except for agreements for the sale of broadcast time for cash entered into in the normal course of business that may be canceled without penalty on no more than thirty (30) days prior notice. Section 2 Licensee's Duties and Obligations 2.1 Licensee's Authority. At all time, Licensee shall remain responsible for compliance by Station with all applicable provisions of the Communications Act of 1934, as amended (the "Act"), the rules, regulations and policies of the FCC, and all other applicable laws. Licensee shall be solely responsible for and pay in a timely manner all operating costs of the Station, including but not limited to the expenses listed and identified as Licensee's expenses on Attachment 1.4 including the salaries, taxes, insurance, and related costs for all personnel employed by Licensee. Licensee shall maintain insurance consistent with its 3 existing coverages covering the Station's transmission facilities, and shall include Programmer as a named additional insured as its interests may appear. Programmer recognizes that the Station is obligated to broadcast programming to meet the needs and interests of the Red Lion, Pennsylvania, area, and Programmer shall air programming on issues of importance to the local community. In the event of the occurrence of a local or national emergency that in the good faith, reasonable judgment of Licensee, is not being adequately addressed by Programmer, Licensee retains the right to interrupt Programmer's programming to substitute programming produced by Licensee that is more responsive to the emergency. During the Term, Licensee shall maintain all FCC Licenses for the Station's operation in full force and effect in compliance with all FCC rules, regulations, and policies, and shall timely file all necessary reports and prosecute to a satisfactory conclusion all renewal or other applications necessary to maintain such Licenses in full force and effect during the Term, without material change or restriction. 2.1A Station Signal. At all times during the Term, at its sole expense Licensee shall maintain the Station's broadcast signal within such signal's present technical parameters and without Programmer's prior consent, shall not materially change the Station's presently licensed tower or transmission facilities. 2.2 Additional Licensee Obligations. (a) Station's ID. During the Term, Programmer shall coordinate with Licensee to ensure that the Station's hourly station identifications and any other required announcements are aired as Licensee may direct, and Licensee shall not change "KTRR-FM" as the Station's call sign without the consent of Programmer. (b) Political Advertising. During the Term, Programmer shall cooperate with Licensee to assist Licensee in complying with all rules of the FCC regarding political broadcasting. Licensee shall promptly supply to Programmer, and Programmer shall promptly supply to Licensee, such information, including all inquiries concerning the broadcast of political advertising, as may be necessary to comply with FCC rules and polices, including the lowest unit rate, equal opportunities, reasonable access, political file, and related requirements of federal law. Programmer, in consultation with Licensee, shall develop a statement that discloses the Station's political broadcasting policies to political candidates, and Programmer shall follow those policies in the sale of political programming or advertising during the Term. In the event that Programmer fails to satisfy political broadcasting requirements under the Act and the rules, regulations, 4 and policies of the FCC and such failure inhibits Licensee in its compliance with the political broadcasting requirements of the FCC, then to the extent reasonably necessary to assure such compliance, Programmer shall either provide rebates to political advertisers or release advertising availabilities to Licensee. (c) Main Studio. In cooperation with Programmer, during the Term Licensee shall (i) maintain and staff a main studio, as that term is defined by the FCC, which Licensee may locate within facilities that Programmer shall provide within the Station's principal community contour, or at such other location that complies with FCC rules for the location of a main studio within such area, (ii) maintain a local public inspection file within Loveland, Colorado, and (iii) prepare and place in such inspection file in a timely manner all material required by Section 73.3526 of the FCC's rules, including without limitation the Station's quarterly issues/program lists. Programmer shall provide Licensee with timely information concerning Programmer's programs as is necessary to assist Licensee in the preparation of such lists. (d) Employment Practices. During the Term, Programmer shall provide to Licensee such information as Licensee reasonably may request concerning Programmer's recruitment, hiring, or employment practices in connection with Programmer's provision of services to the Station. 2.3 Responsibility for Employees. Licensee shall provide and be responsible for the Station's personnel necessary to fulfill Licensee's responsibilities or as otherwise required by the FCC for agreements of this nature. Programmer shall be directly and solely responsible for the salaries, taxes, insurance, and related costs for all of the personnel employed by it in operating the Station after the Effective Date. 2.4 Collection of Accounts Receivable. For a period of ninety (90) days (the "Collection Period") following any termination of this agreement, Licensee shall collect as agent for Programmer the accounts receivable of the Station in existence as of the termination date. Programmer shall provide Licensee with a list of all such accounts receivable to be collected by Licensee. In collecting such accounts receivable, Licensee shall use reasonable diligence, but shall not be required to institute legal proceedings to collect any account receivable, or to defend any claim or counterclaim by any account debtor. All amounts received from an account debtor that also is an account debtor of Licensee after the termination date shall be applied first to payment of the accounts receivable of Programmer. Within ten (10) days of the end of each calendar month of the Collection Period, Licensee shall 5 deliver to Programmer the net amount, after deducting any sales commission, agency fees and similar direct expenses attributable to such accounts receivable, of all amounts collected and credited to the accounts receivable of Programmer during the prior calendar month in accordance with this Section 2.4. Within ten (10) days of the end of the Collection Period, Licensee shall deliver to Programmer all records of uncollected accounts receivable of Programmer and any amounts not previously remitted to Programmer at which time Licensee's obligation for the collection of Programmer's accounts receivable shall cease. 2.5 Failures to Broadcast. If during the Term, the Station fails to broadcast for any reason, other than as a result of circumstances or events attributable to Programmer, or as provided in Section 2.1 or Section 2.3. Programmer shall be entitled to deduct $1,000 per day from the amount payable to Licensee hereunder for each twenty-four hours in which broadcasting at the Station was interrupted for an aggregate of two or more hours, which amount shall be offset by any payments due and payable to Licensee pursuant to the last sentence of Section 1.5. 2.6 Right to Cure. Any deficiency or degradation in the coverage or power of the Station occurring at any time during the Term, or the effects of any and all actions or failures to act by Licensee that adversely affect Station or its broadcast operations, or any obligations of Licensee that are not fulfilled, remedied, or cured by Licensee as promptly as is possible, may be fulfilled, remedied, or cured by Programmer at its sole election in order to ensure the availability and full utility of the broadcast time herein made available to Programmer, and the expense of any such actions by Programmer shall be charged to Licensee and may first be deducted from the amounts payable to Licensee hereunder, except to the extent that any such loss of Programmer's is covered by business interruption or similar insurance coverage payable to Programmer. Section 3 Licensee's Programming Policies 3.1 Programming Policy Statement. Licensee has adopted a Programming Policy Statement (the "Policy Statement"), a copy of which appears as Attachment 3.1 attached hereto and identified by the initials of the Parties' representatives. During the Term, Programmer shall comply in all material respects with the Policy Statement and with all applicable rules and regulations of the FCC. If a program, commercial announcement, or promotional material supplied by Programmer contains material that is obscene, indecent, libelous, constitutes a "personal attack"; or an invasion of 6 privacy or violates the Act or the FCC's rules, or otherwise does not comply with the Policy Statement Licensee may, after prior, written notice to Programmer (to the extent time permits such notice), suspend or cancel such program, commercial announcement, or promotional material and may require Programmer to substitute a suitable program, commercial announcement, or promotional material. Notwithstanding the foregoing or Attachment 3.1, the parties agree that the regular broadcast of programming similar in style and content to the Rush Limbaugh and Don Imus programs shall not constitute a violation of Section 3.1 or Attachment 3.1, and further agree that the isolated broadcast of material that is inconsistent with certain provisions of Attachment 3.1 shall not constitute a violation of Section 3.1 or Attachment 3.1. 3.2 Licensee Oversight of Programming. Programmer recognizes that Licensee has the right to reject or refuse such portions of the Programmer's programming that is contrary to the public interest. At all times, all actions of Licensee shall be based upon Licensee's good faith implementation of its responsibilities as an FCC Licensee and shall not be taken for commercial purposes or for the commercial, economic, or business advantage of Licensee. Within the limitation of Attachment 3.2, at all times Programmer shall determine the entertainment format and marketing and promotional direction of the Station. Attached hereto as Attachment 3.2 is a general description of Programmer's presently planned programming. Licensee is generally familiar with Programmer's operating standards and, in particular, approves of the programming outlined in Attachment 3.2. Programmer shall make no substantial and material change in its scheduled programming from that described in Attachment 3.2 without Licensee's prior consent, which shall not be unreasonably withheld. 3.3 Compliance with Copyright Act. Programmer represents, warrants and covenants to Licensee that Programmer has full authority to broadcast its format and programming on the Station, and that Programmer shall not knowingly broadcast any material in violation of the Copyright Act. Licensee will be responsible for all copyright clearances for its programming and shall maintain the Station's copyright licenses in full force and effect. 3.4 Payola. With respect to its programming on the Station during the Term, Programmer agrees that it will not accept, and will not knowingly permit any of its employees to accept, any consideration, compensation, gift, or gratuity of any kind whatsoever, regardless of its value or form, for the broadcast of any material on the Station unless the payer is identified on the program for which consideration was provided as having paid for or 7 furnished such consideration, in accordance with the Act and FCC requirements. 3.5 Cooperation on Programming. Programmer and Licensee mutually acknowledge their interest in ensuring that the Station serve the needs and interest of the residents of the Loveland, Colorado area and agree to cooperate during the Term in doing so. Licensee shall, on a regular basis, assess (which results shall be shared with Programmer on a regular basis) the issues of public concern and address those issues in the Station's public service programming. Licensee shall describe those issues and responsive programming and place issues/programs lists in the Station's public inspection file as required by FCC rules. Further, during the Term Programmer shall provide Licensee with information concerning such of Programmer's programs as are responsive to community issues in order to assist Licensee in meeting its public service programming obligations. Upon Licensee's reasonable request, Programmer shall also provide Licensee with such other information as reasonably may be necessary to enable Licensee to prepare records and reports required by the Commission or other local, state, or federal government entities. Section 4 Indemnification 4.1 Programmer's Indemnification. Programmer shall indemnify and hold harmless Licensee from and against any and all claims, losses, costs, liabilities, damages, and expenses, including any FCC fines or forfeitures (including reasonable legal fees and other expenses incidental thereto) of every kind, nature, and description, including but not limited to slander or defamation or otherwise (hereinafter "Claims"), arising out of Programmer's broadcasts on the Station and/or sale of advertising time under this agreement during the Term, or the actions or conduct of Programmer's employees. 4.2 Licensee's Indemnification. Licensee shall indemnify and hold harmless Programmer from and against any and all Claims arising out of broadcasts originated by Licensee pursuant to this agreement, and for the actions or conduct of Licensee or Licensee's employees. 4.3 Time Brokerage Challenge. If this agreement is challenged at the FCC or in any other administrative or judicial forum, whether or not in connection with any license assignment application, counsel for Licensee and Programmer shall jointly defend the agreement and the Parties' performance hereunder throughout all such proceedings. If portions of this agreement do not receive the approval of the FCC, then the Parties shall reform 8 the agreement, consistent with the provisions of Section 6.6 below, as necessary to satisfy the FCC's concerns. Section 5 Termination 5.1 Termination. (a) Automatic Termination. This agreement and the Term hereof shall terminate automatically upon the occurrence of any of the following: (i) the earlier of (a) Programmer's termination of the Term hereof as herein provided, or (b) the day before the anniversary date hereof in the year 2022; (ii) this agreement is declared invalid or illegal in whole or substantial part by an order or decree of an administrative agency or court of competent jurisdiction and such order or decree has become final and is no longer subject to further administrative or judicial review, or (iii) there is a material change in FCC rules, policies or precedent that causes this agreement to be in material, incurable violation thereof and such change is in effect and not the subject of an appeal or further administrative review, provided, however, that in such event the Parties first shall negotiate in good faith and attempt to agree on an amendment to this agreement consistent with Section 6.6 below. (b) Other Termination. This agreement may be terminated (i) by the Parties' mutual written consent, or (ii) by Licensee giving Programmer prior, written notice of such termination in the event of (a) Programmer's material breach of a material provision of this agreement that is not cured (or a cure instituted and carried forward in good faith) within thirty (30) days after written notice thereof to Programmer describing such breach in detail, or (b) failure to close and consummate any agreed Sale of the Station to Programmer as hereafter agreed upon by the Parties, which failure is due solely to Programmer's material, uncured default under such agreement of Sale after thirty (30) days written notice of such default given to Programmer by Licensee describing such default in detail, or (iii) by Programmer giving Licensee at least sixty (60) days prior, written notice of such termination at any time upon or after any Sale (hereinafter defined) or other transfer of the 9 Station or the Station's Licenses to an owner other than the Licensee. 5.2 Force Majeure. Subject to Section 2.6, any failure or impairment of the Station's facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to acts of God, strikes, lockouts, material or labor restrictions by any governmental authority, civil riot, floods and any other cause not reasonably within the control of Licensee or Programmer, shall not constitute a breach of this agreement or create liability to or on any of the Parties. Section 6 Miscellaneous 6.1 Assignment. This agreement is binding upon the Parties, their successors and assigns. Neither of the Parties may assign its rights under this agreement without the prior written consent of the other party. For purposes of this Section 6.1, an assignment shall include any change in control of a Party, e.g., by sale of capital stock, merger, or operation of law. 6.2 Amendment. No amendment to this agreement shall be effective unless evidenced by an instrument in writing signed by both Parties. 6.3 Headings. The headings herein are for convenience only and do not control or affect the meaning or construction of the provisions of this agreement. 6.4 Governing Law. This agreement is subject to applicable federal, state, and local law, rules and regulations, including, but not limited to, the Act and the rules, regulations, and policies of the FCC. The construction and interpretation of this agreement and the Parties' obligations hereunder will be determined under and controlled by the laws of the Commonwealth of Virginia, without giving effect to such laws' principles regarding choice of law or conflicts of laws. 6.5 Notices. Each notice, consent, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given only upon the earlier of receipt (by hand delivery, fax, or otherwise) or five (5) days after having been mailed, certified or registered United States mail, postage prepaid, addressed as follows: 10 if to Licensee or Onyx Broadcasting, Inc. Gammon: 8401 Old Courthouse Road, Suite 140 Tyson's Corner, Virginia 22180 Attention: Mr. Thomas P. Gammon President copy to: Meredith Senter, Esquire c/o Leventhal, Senter & Lerman Suite 600 2000 K Street, N.W. Washington, D.C. 2006-1809 if to Programmer: NCR II, Inc. c/o Brill Media Company, L.P. 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Attention: Alan R. Brill copy to: Charles W. Laughlin, Esquire c/o Thompson & McMullan, P.C. 100 Shockoe Slip Richmond, Virginia 23219 or when so delivered or mailed to such other place or person as a party hereafter from time to time may have designated in a prior written notice to the other party. 6.6 Invalidity. If any provision of this agreement or the application thereof to any person or circumstances shall be held invalid or unenforceable to any extent, the Parties shall negotiate in good faith and attempt to agree on an amendment to this agreement that will provide the Parties with substantially the same rights, economic benefits, and obligations to the greatest extent possible as the original agreement in valid, binding, and enforceable form. 6.7 Governing Laws; Attorneys' Fees. This agreement, the rights and obligations of the Parties, and any claims or disputes arising hereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia (without regard to the choice-of-law rules utilized in that jurisdiction), and the state and federal courts of Virginia shall have nonexclusive jurisdiction over any controversy or claim arising out of or related to the interpretation or enforcement of this agreement. In the event of a dispute between the Parties arising out of or related to the interpretation or enforcement of this agreement, the prevailing Party shall be entitled to reimbursement of reasonable attorneys' fees, costs and other expenses (including expert fees). Such right of reimbursement shall be in addition to any other 11 right or remedy that the prevailing Party may have under this agreement. In addition, to the fullest extent permitted by law, any objection that any Party now or hereafter may have to the laying of venue of any suit, action, or proceeding arising out of or relating to this agreement or any judgment entered by any court in respect thereof in the Commonwealth of Virginia is hereby waived, and any claim that any suit, action, or proceeding brought in the Commonwealth of Virginia has been brought in an inconvenient forum is hereby further irrevocably waived. Each Party hereby further agrees that if any such suit, action, or proceeding is pending in more than one jurisdiction, the Licensee's selection of the forum shall be binding upon the Parties. Section 7 Security Interest; Sale of Station 7.1 Security Agreements, Pledges. (a) Licensee. In order to secure Licensee's performance of this agreement, Licensee has executed and delivered to Programmer a stock pledge agreement, in form and substance satisfactory to Programmer, granting to Programmer a security interest in and a pledge of all of the capital stock of Licensee, as therein more particularly provided. (b) Programmer. In order to secure Programmer's performance of this agreement, Programmer has executed and delivered to Licensee a stock pledge agreement, in form and substance satisfactory to Licensee, granting to Licensee a security interest in and a pledge of all of the capital stock of Programmer, as therein more particularly provided. 7.2. Restrictions on Sale of the Station. During the Term, Licensee agrees that it will not agree to, enter into a contract for, or consummate a sale or other transfer of the Station without first complying with the provisions of this agreement. Upon any such Sale or other transfer the rights of any purchaser or transferee shall be and be made subject and subordinate to the terms and conditions of this agreement and to Programmer's rights hereunder, and any such Sale or other transfer, except a Sale to Programmer (or its designated affiliate), shall not affect Programmer's rights under this agreement. 7.3. Purchase Option. Licensee hereby grants to Programmer, (or an affiliate of Programmer) during the Term, the sole and exclusive option to purchase (for Programmer or its affiliate) (the "Purchase Option") from Licensee the Station, including its broadcast license(s) and all assets used or useful in the business 12 of the Station, for the price and upon the terms and conditions set forth in Attachment 7.3 (the "Purchase Agreement") attached hereto and identified by the initials of the Parties' representatives. Such option shall be exercised by Programmer giving Licensee at least ten (10) days prior, written notice of Programmer's intent to exercise its Purchase Option at least one hundred eighty (180) days prior to expiration of the Initial Term or of any Additional Term. Within five (5) business days of Licensee's receipt of such notice, the Parties shall enter into and execute, and thereafter shall perform, the Purchase Agreement. 7.4. Sale Option. So long as (a) Programmer has not exercised its Purchase Option, (b) Thomas P. Gammon of Fairfax County, Virginia, remains the sole stockholder of Licensee, (c) Licensee is not in material default under this agreement, and (d) this agreement has not been terminated, at any time on and after the date upon which the order of the FCC approving the Licensee's application for renewal of its current broadcast license shall have become a Final Order as defined in the Purchase Agreement (the "Sale Option Date"), or at such earlier time as the Parties may agree upon in writing, Licensee shall have the sole and exclusive option (the "Sale Option") to sell to Programmer (or to Programmer's designated affiliate) the Station, including the License(s) and all assets used or useful in the business of the Station, for the price and upon the terms and conditions set forth in the Purchase Agreement. Such Sale Option may be exercised by Licensee giving Programmer at least ten (10) days prior, written notice of Licensee's intent to exercise its Sale Option, at lease one hundred eighty (180) days prior to expiration of the Initial Term or of any Additional Term. Within five (5) business days of Programmer's receipt of such notice, the Parties shall enter into and execute, and thereafter shall perform, the Purchase Agreement. 7.5 Notice of Sale. Until the Sale Option Date shall have passed, within ten (10) days after receipt of any good faith bona fide written offer from a third party ("Offer") for a Sale of the Station or its stock or assets (the "Proposed Sale') that Licensee desires to accept, Licensee will give written notice to Programmer of the Offer (the "Sale Notice") stating (a) the name and address of the offeror (the "Offeror"), (b) that Licensee proposes to accept the Offer, and (c) the essential terms of the Offer, accompanies by a true and complete copy of the Offer. 7.6 Sale Preconditions. If, during the period of thirty (30) days (the "Option Period") immediately following Programmer's receipt of a Sale Notice complying with Section 7.5 Programmer (or its affiliate) shall fail to exercise its Purchase Option granted by Section 3 by giving written notice of such exercise to Licensee 13 and Offeror within such Option Period, then during the period thirty (30) days (the "Sale Period") immediately following the expiration of such Option Period, and only during such Sale Period, Licensee or its shareholder(s) may enter into a contract (the "Sale Contract") with the Offeror for such Proposed Sale, but if, and only if, (a) such Sale Contract is entered into in writing with conditions set forth in such Sale Notice, (b) if the Sale Contract is entered into prior to June 1, 1997, the purchase price to be paid under such Sale Contract is at least $2,000,000.00, (c) a true, complete, and fully executed copy of such Sale Contract is delivered to Programmer before expiration of such Sale Period, and (d) the Offeror, as potential purchaser of the Station, and transferee of its License(s), enters into an agreement in writing (the "Assumption Agreement") with Programmer, in form and substance satisfactory to Programmer, providing that Station and the Offeror as such owner and transferee shall assume, agree to, be bound by, and be subject to all obligations of Licensee under this agreement and to all other provisions of this agreement, including Programmer's Term. If the Sale agreed upon in such Sale Contract is not closed and consummated upon the terms agreed upon in the Sale Contract, or if any other of such preconditions is not met, then Licensee or its shareholder(s) thereafter may not agree to or consummate any Sale of the Station or its stock or assets pursuant to such Sale Contract and must again comply with all requirements of this agreement, including the notice and precondition provisions of Sections 7.5 and 7.6, before any Sale. Any attempted Sale other than in compliance with all provisions of this agreement shall be null and void. Section 8 Counterparts 8.1 Counterparts. This agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. For purposes of executing this agreement, a facsimile signature shall be as effective as an actual signature, so long as the original signature is promptly delivered thereafter. 14 IN WITNESS WHEREOF, the Parties have executed this agreement as of the date first written above. LICENSEE: ONYX BROADCASTING, INC. By:___________________________ a duly authorized officer PROGRAMMER: NCR II, INC. by:___________________________ a duly authorized officer DISTRICT OF COLUMBIA CITY OF WASHINGTON, to-wit: The foregoing Time Brokerage Agreement was acknowledged before me this 27th day of June 1996, by Tom Gammon as President of Onyx Broadcasting, Inc., a Delaware corporation, as Licensee on behalf of the corporation, in the City of Washington, D.C. My commission expires: / / ----------------------------------- Notary Public (Official Seal) COMMONWEALTH OF INDIANA CITY/COUNTY OF VANDERBURG, to-wit: The foregoing Time Brokerage Agreement was acknowledged before me this 22 day of June, 1996, by Alan R. Brill as President of NCR II, Inc., a Virginia corporation, as Programmer, on behalf of the corporation, in the City/County of Evansville, Vanderburg. My commission expires: / / ----------------------------------- Notary Public (Official Seal) 15 ATTACHMENT 1.4 Station Expenses (1 page) Licensee's Expenses. In accordance with Section 1.4 of the foregoing Time Brokerage Agreement dated __________, 19__ (the "Operating Agreement") between Onyx Broadcasting, Inc. ("Licensee"), and NCR II, Inc. ("Programmer") for the operation of radio station KTRR-FM, Loveland, Colorado (the "Station"), Licensee shall be solely responsible for the costs and expenses incurred as Licensee of the Station during the Term of the Operating Agreement, including but not limited to each of the following items: o Employee salaries and fringe benefits, including withholding taxes and health insurance, for (a) a management employee, for (b) a full time receptionist who also will provide such services for Programmer, and for (c) each additional employee hired by Licensee or required to be hired by License; o FCC filing and regulatory fees; o Local, state and federal property taxes, license fees and similar regulatory charges; o Contract engineering fees in order to maintain the operation of the Station's transmitter facilities; o Electric power and other utility charges at the transmitter site; o Telephone and facsimile charges, copying, printing, postage and similar administrative expenses of Licensee; o Insurance premiums for the Licensee's general liability, and any health, auto, umbrella, property coverage and errors and omissions policies; o Music licensing fees for Licensee's programming; and o All transmitter site lease payments. Monthly Fee. Programmer shall pay to Licensee beginning on the Effective Date and on the first day of every month thereafter during the Term a Monthly Fee of Four Thousand Dollars ($4,000.00) together with reimbursement for such costs for the receptionist as are advanced by Licensee. ATTACHMENT 3.1 Station Programming Policies (2 pages) In accordance with Section 3.1 of the foregoing Time Brokerage Agreement dated __________, 19__ (the "Operating Agreement") between Onyx Broadcasting, Inc. ("Licensee"), and NCR II, Inc. ("Programmer") for the operation of radio station KTRR-FM, Loveland, Colorado (the "Station"), Programmer shall comply with the following programming policies of Licensee. 1. Controversial Issues. Any discussion of controversial issues of public importance will be reasonably balanced with the presentation of contrasting viewpoints in the course of overall programming; no attacks on the honesty, integrity or like personal qualities of any person or group of persons will be made during the discussions of controversial issues of public importance; and, during the course of political campaigns, the programs are not to be used as a forum for editorializing about individual candidates. 2. No Plugola or Payola. The mention of any business activity or "plug" for any commercial, professional or other related endeavor, except where contained in an actual commercial message of a sponsor, is prohibited. No commercial messages (plugs) or undue references shall be made in programming presented over the Station to any business venture, profit making activity or other interest (other than noncommercial announcements for bona fide charities, church activities or other public service activities) in which Programmer is directly or indirectly interested without the same having been approved in advance by the Stations' Manager and such broadcast being announced as sponsored material. 3. No Gambling. Any form of gambling on a program is prohibited. This provision shall not prohibit the broadcast of information concerning state-operated lotteries or other contests that are lotteries but are not in violation of state or federal law. 4. Election Procedures. At least 90 days before the start of any election campaign, Programmer will review with the Station's Manager the rates that will be charged for the time to be sold to candidates for public office or their supporters to make certain that such rates conform with the applicable law and Station policy. 5. Required Announcements. Programmer will broadcast (i) an announcement in a form satisfactory to Licensee at the beginning of each hour to identify the Station, and (ii) any other announcements required by applicable law or Station policy. - ------ 1 of 2 (continued) 6. Credit Terms Advertising. Unless all applicable state and federal guidelines relative to disclosure of credit terms are complied with, no advertising of credit terms will be made over the Station beyond mention of the fact that, if desired, credit terms are available. 7. No Illegal Announcements. No announcements or promotions prohibited by law of any lottery or game of change will knowingly be broadcast over the Station. - ------ 2 of 2 (continued) ATTACHMENT 3.2 Programming Format During the Term, the format of the Station shall be an adult mainstream format, and shall not be changed to another format that is inconsistent therewith without the prior consent of Licensee, which consent shall not be unreasonably withheld. ATTACHMENT 7.3 ASSETS PURCHASE AGREEMENT (22 pages) This agreement is entered into this ____ day of ________, 19__, by and among NCR II, INC., a Virginia corporation (sometimes hereinafter, "Buyer"), ONYX BROADCASTING, INC., a Delaware corporation ("Seller"), and THOMAS P. GAMMON of Fairfax County, Virginia ("Stockholder"). RECITALS Seller is the broadcast licensee and owner of radio station KTRR-FM of Loveland, Colorado (the "Station"); Stockholder is the sole owner of all of the issued and outstanding shares of stock of Seller, and Seller heretofore has entered into a Time Brokerage Agreement dated __________, 1996 with NCR II, Inc. as "Programmer" for the Station, which agreement (the "Operating Agreement") is in full force and effect and is not affected by this agreement. All terms defined in the Operating Agreement shall have such meaning when used herein. Buyer wishes to purchase from Seller, and Seller wishes to sell and transfer to Buyer, substantially all of the Station's property and assets subject to the Operating Agreement and the rights of Programmer thereunder, and Buyer wishes to obtain an assignment of, and Seller wishes to assign and transfer to Buyer (or its nominee), each operating license and authorization (as hereinafter further defined, the "Licenses") issued by the Federal Communications Commission (the "Commission") for the Station, all in the manner and upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of and relying upon the foregoing recitals, each covenant, agreement, representation, and warranty set forth herein and each act done pursuant to this agreement, the parties hereto agree as follows: 1. PURCHASE AND SALE OF PROPERTY AND ASSETS: 1.1 Agreement to Purchase and to Sell. Upon and subject to (i) compliance with all terms and conditions of this agreement, and (ii) the rights of the Programmer under the Operating Agreement for Station during the Term thereof, Buyer agrees to purchase from Seller, and Seller agrees to sell, deliver, transfer, and convey to Buyer (or its nominee as to the Licenses) as an operating business all right, title, and interest in and to substantially all of the tangible and intangible property, rights, and assets of Station owned by Seller, and excluding only the Excluded Property (jointly and severally the "Property Sold"). 1 1.2 Excluded Property. The following (the "Excluded Property") are not part of the Property Sold and are not being sold to Buyer: Seller's (i) notes, (ii) cash on hand or on deposit, (iii) accounts receivable, (iv) rights under this agreement, (v) insurance policies insuring the Property Sold, (vi) corporate stock records, seal, and minute book, (vii) the tower and the tower site, and (viii) original financial and accounting records, and such items of the Property Sold as may be disposed of by Seller before Closing for value and in the ordinary course of Seller's business while acting in accordance with Seller's past practices and in compliance with this agreement. 2. PURCHASE PRICE: 2.1 Purchase Price. As full and complete consideration for purchase of the Property Sold, at Closing Buyer shall pay or deliver to Seller (a) cash or immediately available federal funds payable by wire transfer in the amount of Five Hundred Fifty Thousand and no/100 Dollars ($550,000.00), and (b) Buyer's promissory note payable to Seller substantially in the form and containing the substance of Exhibit 2.01 (the "Note"). If this agreement is executed and entered into by and between the parties named above on or before June 1, 1997, the original principal amount of such Note (the "Principal Amount") shall be One Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00). If neither the Sale Option nor the Purchase Option shall have been exercised before June 1, 1997, then on June 1, 1997, and on June 1 of each year thereafter until either the Sale Option or the Purchase Option shall have been exercised, such Principal Amount of the Note shall be increased by Seventy-Five Thousand and no/100 Dollars ($75,000.00) and the amount of cash payable under (a) above shall be increased by Seventy-Five Thousand and no/100 Dollars ($75,000.00). The Principal Amount of the Note, together with the amount of item (a) above shall constitute the "Purchase Price," which Purchase Price shall be adjusted, however, as may be required by paragraph 2.2 and allocated as set forth in Exhibit 2.01.1. 2.2 Adjustments. At and as of Closing on the Closing Date certain adjustments in the Purchase Price shall be made ("Closing Adjustment(s)") as follows: (a) Seller's and Station's expenses incurred for or accrued during all periods ending with, upon, or prior to Closing (regardless of when assessed, determined, calculated, paid, or collected) shall be Seller's sole responsibility, and at and as of Closing Station's paid and unpaid expenses (excluding any income taxes) shall be prorated as appropriate between Buyer and Seller and the Purchase Price adjusted accordingly, so that Seller shall be responsible for and pay all of Station's expenses incurred or accrued for all periods ending prior to the Closing and Buyer shall 2 be responsible for all of Station's expenses incurred or accrued thereafter, and (b) also, the Purchase Price and Buyer's cash portion thereof due at Closing shall be reduced as appropriate, without duplication, by (i) the amount of any prepaid revenues received or extraordinary discounts given by Seller for Station's goods or services to be delivered or rendered by Station after the Closing Date, (ii) the amount of Seller's liabilities as of the Closing Date for advertising time owed to vendors for trade of goods or services received by Seller prior to the Closing Date, (iii) the amount of any reduction in the Purchase Price required by paragraph 7.3. and (iv) by any amount necessary to discharge, satisfy, or cure each Lien, other than Permitted Liens (hereinafter defined), then applicable to any part of the Property Sold. 2.3 How Adjustments Payable. Each of the Closing Adjustments (including any expenses payable pursuant to paragraph 10.1) shall be made by adjustments to and be payable in and from cash at Closing by the party responsible. 2.4 Security at Closing. Buyer shall execute and deliver to Seller (a) a security agreement substantially in the form and substance of Exhibit 2.04 (the "Security Agreement"), and (b) a stock pledge agreement (the "Stock Pledge Agreement") substantially in the form and substance of Exhibit 2.04.1, in each case securing payment of the Note as and to the extent therein provided. 2.5 Deposit. Buyer has deposited cash in the amount of One Hundred Thousand and no/100 Dollars ($100,000.00) (the "Deposit") with Old National Trust Company, Evansville, Indiana, pursuant to the escrow agreement in the form and containing the substance of Exhibit 2.05 (the "Escrow Agreement") entered into this date. If Seller is not in default hereunder but Closing shall not occur solely because of Buyer's material breach of this agreement, then Seller may retain all or any part of the Deposit as a part of any damages that Seller may suffer as a result of such default, without prejudice to any claim for additional damages to Seller arising from Buyer's breach of or default under this agreement, otherwise the Deposit, or the remaining part thereof, shall be returned to Buyer upon Closing or other termination of this agreement, all as more particularly provided for in the Escrow Agreement. 3. CLOSING; COVENANTS. 3.1 Closing, and Closing Date. Unless this agreement is earlier terminated or its Closing is postponed as herein provided for, consummation of the sale and purchase contemplated hereby ("Closing") shall take place beginning at 10:00 o'clock 3 a.m., local time, at the offices of Messrs. Leventhal, Senter & Lerman, Suite 600, 2000 K Street N.W., Washington, D.C. ("Seller's Counsel") on the date designated by Buyer, which shall be between the fifth (5th) and tenth (10th) business day following the date on which the Commission's consents to the Applications (hereinafter defined) have become a Final Order (hereinafter defined), or at such other time and place as Buyer and Seller hereafter may agree upon in writing (such date of Closing as so determined, designated, agreed upon, or postponed; hereinafter, the "Closing Date"). 3.2 Duties of Seller at Closing. At Closing Seller agrees to and, at Seller's sole expense [except as required by (g) below], shall tender and deliver to Buyer at 10:00 o'clock a.m., local time on the Closing Date, in form and substance reasonably satisfactory to Buyer and its counsel, each of the following: (a) such documents and duly executed instruments as shall be necessary or appropriate to Closing and to carry out the transactions contemplated by and the intent of this agreement, including, without limitation, such instruments of conveyance, assignment, consent, or transfer as are sufficient to assign, convey, transfer to, and vest in Buyer (and/or its nominee as to the Licenses) the Licenses and all right, title, and interest in and to each item and all of the Property Sold free and clear of all Liens except (i) Permitted Liens and (ii) all rights of the Programmer under the Operating Agreement and the Lien of the security agreement securing the same, which Lien also shall be a Permitted Lien; (b) subject to such Permitted Liens and the rights of Programmer under the Operating Agreement, peaceful, exclusive, and unencumbered possession of all tangible items of the Property Sold; (c) a copy, certified by an appropriate officer of Seller as being true and complete, of Seller's bylaws and articles of incorporation as then in effect and of necessary corporate proceedings and resolutions duly adopted by Seller's board of directors and shareholders; (d) the legal opinion of Seller's Counsel dated as of the Closing Date substantially in the form and containing the substance of Exhibit 3.02; (e) a copy of a noncompetition agreement substantially in the form of Exhibit 3.02.1 ("Noncompetition Agreement") dated as of the Closing Date and duly executed by all parties thereto other than Buyer; (f) a duly executed copy of each agreement, consent, waiver, or approval described in paragraph 6.5 and of each 4 instrument necessary or effective to terminate on or before the Closing Date each employee benefit plan as applicable to any of Station's employees; (g) release of the Deposit to Buyer; (h) each other document, opinion, waiver, consent, certificate, statement, or instrument that this agreement requires Seller to deliver; (i) a lease substantially in the form and substance of Exhibit 3.02.2 (the "Tower Lease") dated as of the Closing and duly executed by all parties thereto other than Buyer; (j) a copy of such nondisturbance or similar agreement(s) [collectively, the "Nondisturbance Instrument(s)"] as then reasonably may be required by Buyer as to the Tower Lease, each to be executed by Seller and by all other parties thereto other than Buyer and to be in form and substance reasonably satisfactory to Buyer; and (k) such net cash payment to Buyer as may be necessitated by paragraph 2.3. 3.3 Duties of Buyer at Closing. Contemporaneously with Seller's performance of its obligations described in paragraph 3.2, on Closing Buyer agrees to and, at Buyer's sole expense, shall tender and deliver to Seller in form and substance reasonably satisfactory to Seller and Seller's Counsel, each of the following: (a) the Purchase Price, adjusted and paid as herein agreed, including the Note duly executed by Buyer; (b) certified copies of any necessary resolutions authorizing and approving Buyer's execution and delivery of this agreement and consummation of the transactions contemplated hereby; (c) subject to each Permitted Lien and to each Lien then existing as to all or any part of the Property Sold, the Security Agreement duly executed by Buyer; (d) the legal opinion of Buyer's counsel dated as of the Closing Date substantially in the form and containing the substance of Exhibit 3.03; (e) a copy of the Noncompetition Agreement duly executed by Buyer; (f) a copy of the Stock Pledge Agreement duly executed by Buyer; 5 (g) a copy of the Tower Lease duly executed by Buyer; (h) a copy of an agreement duly executed by Seller, Buyer, and the Programmer under the Operating Agreement dated as of the Closing Date and substantially in the form and containing the substance of Exhibit 3.03.1; (i) such net cash payment to Seller as may be necessitated by paragraph 2.3, and (j) such assumption agreement(s) as may be entered into by Buyer pursuant to paragraph 3.4, duly executed by Buyer. 3.4 Certain Liabilities. Unless and except as Buyer hereafter may otherwise expressly agree in an agreement executed by Buyer at Closing, Buyer assumes no liability of Seller, contractual or otherwise, except for Seller's obligations as Licensee under the Operating Agreement as reflected in Exhibit 3.03.1, and Seller covenants and agrees with and for the benefit of Buyer that Seller will discharge all of Seller's liabilities and obligations in the ordinary course, including all obligations for payment of Seller's accounts payable. 3.5 Transfer Assurances. After Closing, on Buyer's reasonable request Seller shall take or cause to be taken all such further actions and shall execute, acknowledge, and deliver all such instruments as reasonably may be required to memorialize or effectuate the transactions occurring at Closing in order to ensure that Buyer receives and realizes all of Seller's rights in the Property Sold as of Closing as herein provided for. 4. SELLER'S AND STOCKHOLDER'S REPRESENTATIONS AND WARRANTIES: To induce Buyer to enter into and perform pursuant to this agreement, Seller and Stockholder, jointly and severally, represent and warrant to Buyer that each of the following is true: 4.1 Corporate Organization, Qualification, Authorization, Etc. Seller is a corporation duly organized, validly existing, and in good standing under the laws of the state of its incorporation, has no subsidiaries, has all requisite corporate power and authority to conduct its business as now being conducted, to own and (subject to the Operating Agreement and the Programmer's rights thereunder) operate Station, and to own, possess, occupy, or use the Property Sold. 4.2 Call Signs. Seller has the full and exclusive right to use the call sign "KTRR" (FM) under Commission regulations, and as of the Closing Date the use of such call sign 6 and such other names or slogans as are being or have been used by Seller will not infringe upon or violate any use or right to use of or by any other person. 4.3 Seller's Licenses. As of the Closing Date Seller will hold such valid licenses and authorizations issued by the Commission as are necessary to own and operate the Station, including, as at present, a regular, seven-year, unconditional license authorizing operation of Station KTRR-FM and each auxiliary station license presently associated therewith (singly a "License"; collectively, the "Licenses"), all without material change or qualification. Each License shall be in full force and effect, unimpaired by any act or omission of Seller. 4.4 Environmental Matters. As of August 6, 1996, no part of the Property Sold ever had been used (in violation of any law, rule, or regulation) to generate, manufacture, refine, transport, release, treat, store, handle, or dispose of any hazardous, industrial, toxic, or harmful substances, wastes, or materials (e.g. asbestos, urea formaldehyde, polychlorinated biphenyls, or other waste exhibiting hazardous characteristics) or any substance or element the generation, release, storage, use, or handling of which was identified, prohibited or regulated (singly, a "Hazardous Material"; collectively, "Hazardous Materials") by or pursuant to any law, rule, or regulation (federal, state, or local) regarding (a) health or safety, or (b) the effect on or use of land, water, air, or the environment (e.g. the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; 42 U.S.C.; ss. 6.01 et seq.; RCRA; or similar acts), or (c) the use, transport, handling, storage, treatment, release, or disposal of any such Hazardous Materials (singly, an "Environmental Law," collectively, the "Environmental Laws"). As of such date, Seller always had complied with each such Environmental Law, and no event had occurred and no condition existed or affected any part of the Property Sold that, if known to the proper authorities, could have resulted in any material complaint, notice, citation, action, proceeding, or investigation before any authority in connection with any Hazardous Material or any Environmental Law or the violation thereof or any claim against or liability to Seller or Buyer arising out of or based on any Environmental Law or the breach or enforcement thereof. 4.5 Conduct of Business; Absence of Change. During the last six months, there has been no material, adverse change in the condition of the Station's transmitter site or equipment or of the License. 4.6 Ownership of Station and Title to Property Sold. Except for the presently existing Lien securing Programmer pursuant to the Operating Agreement (and the security agreement securing Licensee's performance thereunder), except as otherwise expressly 7 disclosed and described as permitted liens in Exhibit 4.06 ("Permitted Liens"), and except for property leased by Seller pursuant to leases listed on Exhibit 4.15.1, at Closing Seller will be the sole owner of the Property Sold and will have, and at and as of Closing, subject to the Operating Agreement and Programmer's rights thereunder, will convey and transfer to Buyer, full and exclusive legal, equitable, good, record (where applicable), and marketable title to and all rights in (and the right to immediate, exclusive, peaceful, and unencumbered possession of) the Property Sold free and clear of any and all Liens except any then existing Permitted Liens, and Seller's said title is warranted against the claims of any and all persons. 4.7 Execution. This agreement has been duly executed and delivered by Seller and constitutes a legal, valid, and binding obligation of Seller enforceable against Seller in accordance with its terms. 4.8 License and Permits. At Closing, Seller will hold all franchises, licenses, certificates, or permits needed to possess, own, lease, use, or occupy the Property Sold, to operate the Station, or to conduct Station's present business; each will be in full force and effect according to its terms, and no action will be pending or threatened looking toward the amendment, revocation, restriction, or revision of any of them. 4.9 Tax Matters. Seller has properly and timely filed in correct form with appropriate governmental authorities all tax returns required to be filed by it; all taxes due and payable by Seller have been properly and timely reported, determined, and paid, and Seller has no liability for payment of any unpaid tax, interest thereon, or any related penalty. 4.10 Employee Status. As of Closing each of Station's employees shall have been paid all wages, salaries, commissions, severance pay, vacation pay, sick leave, or other pay, benefits, or entitlements due and payable by Seller and earned or accrued by or for each such employee as of, or for any period prior to, or as a result of Closing. 4.11 Labor Agreements; Working Conditions. Seller has no written or oral contract, express or implied, with any of Station's employees and is not a party to any contract with a labor organization or to any collective bargaining agreement covering or relating to any of Station's employees. Seller has complied with all laws, rules, and regulations relating to conditions of employment or applicable to the hiring, employment, or discharge of Station's employees, including those relating to civil rights, wages, hours, pay, harassment, discrimination, disability, occupational safety and health, collective bargaining, or the withholding and payment of taxes and contributions. There are no 8 material claims or controversies pending or threatened between or concerning Seller and any of its employees. 4.12 Benefit Plans. As a result of this agreement and Closing hereunder, Buyer shall have and will incur no funding or other obligation or liability in connection with any pension, profit-sharing, or other employee benefit plan, its funding or termination, or any withdrawal therefrom, in whole or in part. 4.13 Authorization for Agreement. Seller has full power and authority to execute, perform, and deliver this agreement and to consummate the transactions contemplated hereby. Seller's execution of, delivery of, performance of, and compliance with this agreement have been duly and validly authorized by all necessary corporate action. 4.14 Conveyances, Etc. When delivered to Buyer at Closing, the instruments of conveyance, assignment, consent, or transfer will constitute legal, valid, and binding obligations of each party thereto, and such instruments will be effective to vest in Buyer, and as of Closing Buyer will thereby receive and become the sole, vested owner of all right, title, and interest in and to the Property Sold as and to the extent herein provided. 4.15 Agreements, Contracts, Leases, Etc. Exhibit 4.15.1 contains an accurate and complete list and brief description of each material agreement, obligation, contract, lease, or commitment (oral or written, express or implied) applicable to or affecting Station as to which Seller is a party, or by which it is bound, or that applies to or affects the Property Sold or any of Station's properties or assets (the "Contracts"), and an accurate and complete copy or statement of the terms of each such Contract has been or forthwith will be supplied to Buyer. Except as so listed and described in Exhibit 4.15.1 Seller is not a party to any other material agreement (oral or written, express or implied) that affects Station or all or any part of the Property Sold. Each of the Contracts is in full force and effect and is legal, valid, binding, and enforceable in accordance with its terms; Seller has not defaulted as to or breached, nor has it received notice of any claim or assertion that it has defaulted as to or breached, any term or condition of any Contract, or other agreement applicable to it, and no event has occurred that with notice or the lapse of time, or both, would constitute such a breach or default. At Closing all of Seller's rights under each Contract will be assignable to Buyer, and Seller knows of no term, condition, or provision of, or event affecting, any Contract that might effect the validity, continuation, or effectiveness thereof, or that might prevent Buyer from realizing Seller's present rights therein and all benefits to accrue thereunder after Closing. 9 4.16 Statements, Etc., True and Not Misleading. No representation or warranty made by Seller in this agreement, and no record, document, instrument, or certificate furnished or to be furnished by Seller to Buyer (its representatives, agents, attorneys, or accountants) pursuant to this agreement, or in connection with Closing or the transactions contemplated hereby, contains or will contain any untrue statement of a material fact. 4.17 Investment. On Closing, Seller will take the Note for its own account, for investment purposes only, and not with a view or intention to distribute or otherwise dispose of all or any part thereof. Seller understands that the Note is to be issued without registration under any securities law and pursuant to an exemption from registration under the provisions of the Securities Act of 1933 as amended (the "Act") and that Seller (or other holder thereof) may not hypothecate or otherwise transfer or dispose of the Note except upon registration under the Act, unless an exemption from registration provisions of the Act is available. Seller agrees that before it transfers or disposes of the Note it will give Buyer notice of such proposed disposition, and any new note issued by Buyer under such circumstances shall bear a legend similar in form and substance to that appearing on Exhibit 2.01. Seller is aware that Buyer is a newly-formed entity with limited capital and no previous financial or operating history and that for the foreseeable future payment of the Note will depend upon Buyer's revenues from the Station and its use of the Property Sold. Seller is able to bear the risk of holding the Note for an indefinite period of time and has received (or had free access to) all requisite information, financial or otherwise, concerning Buyer. 5. CONDUCT PRIOR TO CLOSING: Seller covenants and agrees that prior to and until Closing: 5.1 Conduct of Business. Seller will conduct its business diligently, only in the ordinary course, in accordance with its customary policies, and except as may otherwise be expressly permitted or required hereby, without Buyer's prior written consent expressly identifying and referring to this paragraph 5.1, Seller will not directly or indirectly do or agree to do any one or more of the following: (a) encumber, mortgage, pledge, or subject the Property Sold or any part thereof to any Lien, security interest, charge, or encumbrance; (b) grant, agree to, offer, or pay any kickback, discount, incentive payment, commission, or promotional or other allowance to any advertiser or customer, or sell or agree to sell 10 or otherwise dispose of any part of the Property Sold other than for value and in the ordinary and usual course of business; (c) terminate, restrict, or waive any right materially affecting the value of the Property Sold; (d) conduct its business other than in compliance with all laws, rules, and regulations of all local, state, and federal governmental authorities, entities, and agencies; (e) enter into any employment contract or lease that will survive Closing, or (f) enter into any contract or other commitment binding upon Seller for a period of more than thirty (30) days or other than in the ordinary course of business. 5.2 Reports; Taxes; Etc. Seller will properly and timely file all necessary reports or returns with federal, state, foreign, local, or other authorities (including taxing authorities) and on or before the Closing Date will pay all taxes, charges, or assessments then due and payable by Seller or the Station. 5.3 Termination of Plans. Without any liability to Buyer, Seller, at its sole expense, shall terminate or cause to be terminated each pension, profit-sharing, or other employee benefit plan of Seller as applicable to the Station's employees, all in accordance with the provisions thereof and applicable laws, rules, and regulations and shall satisfy and discharge each withdrawal, termination, or other liability thereunder. 5.4 Commission Applications. Within ten (10) business days after the date of this agreement, Seller will join with Buyer in filing or causing to be filed with the Commission appropriate, formal applications (singly an "Application"; collectively, the "Applications") for consent to the assignment from Seller to Buyer of each of the Station's Licenses and authorizations. Each party will pay one-half of the filing fees for the Applications. Thereafter Seller will cooperate with Buyer in processing each of the Applications to a conclusion, and Buyer and Seller will promptly supply all information, filings, and documentation required by the Commission. Each of Buyer and Seller shall pay such fees and expenses as may be incurred by it or imposed on such party by the Commission during such process. 5.5 Licenses' Renewals. As and when prudent or necessary under the Commission's orders, rules, or regulations Seller will promptly tender for filing with the Commission a formal application for renewal of each of the Licenses in form, substance, and content acceptable to the Commission, without any deficiency material to the Commission, and will diligently process each such 11 application to a favorable conclusion, causing each License to be renewed, without termination, lapse, interruption, delay, or material modification of or adverse change in its content from the present, for the regular term beginning immediately upon expiration of each License's current term. 6. CONDITIONS TO BUYER'S OBLIGATIONS: As conditions precedent for the sole benefit of Buyer, which Buyer may waive (but only by and to the extent of its express, written consent given hereafter), Closing and each obligation of Buyer under this agreement shall be subject to and conditioned upon Buyer being satisfied as to each of the following: 6.1 Compliance with Agreement; No Prohibition. Until, at, or prior to Closing, each material term, covenant, agreement, and condition of this agreement to be complied with or performed by Seller shall have been complied with or performed, and nothing then shall restrain, inhibit, or prohibit Closing. 6.2 Representations and Warranties; Certificate. Unless waived, each of Seller's and Stockholder's representations and warranties contained herein shall in all material respects have been true and correct when made, shall be deemed to be made again at and as of Closing, and shall then be in all material respects true and correct, and Seller shall have delivered to Buyer a certificate to such effect, executed by Stockholder, in such form and containing such substance and giving Buyer such assurances as Buyer reasonably may require. 6.3 Delivery. Buyer shall not have terminated this agreement as permitted hereby, and Seller shall have delivered to Buyer each item required by paragraph 3.2. 6.4 Environmental. A Phase I environmental site assessment of the Real Property shall have been completed prior to Closing by a company chosen by Buyer, the cost for such assessment to be borne by Buyer, the results thereof shall have been reasonably satisfactory to Buyer, and no part of the Property Sold shall have been contaminated by any Hazardous Material. 6.5 Approvals and Consents. All agreements, consents, waivers, or approvals necessary or appropriate for Closing or for consummation of the transactions contemplated hereby shall have been obtained from such parties and in such form and substance as is reasonably satisfactory to Buyer, and copies thereof delivered to Buyer. 6.6 Final Orders. The Commission's consent to the Applications shall have been obtained without any condition adverse to Buyer, and such consent shall have become a final order (meaning 12 that it shall no longer be subject to appeal, challenge, review, or reconsideration on any administrative or judicial level, that the time for initiating any further appeal, challenge, review, or reconsideration of any kind shall have expired, and that no action, or request for a stay is pending concerning any Application) ("Final Order") and shall be effective, unchanged, and unamended as of Closing. 6.7 Possession. Subject to the Operating Agreement, Programmer's rights thereunder, and to any Permitted Liens, Seller shall have delivered to Buyer peaceful possession of the Property Sold, including all of Station's properties and premises tenanted by Seller, and at Buyer's request Seller shall have obtained and delivered to Buyer duly executed subordination or Nondisturbance Instruments in form and substance reasonably satisfactory to Buyer, assuring to Buyer quiet possession of any such leased property and premises for the term of the lease. 6.8 Closing Adjustments. Buyer and Seller shall have agreed upon the Closing Adjustments to be made at Closing, as memorialized by a closing statement executed at Closing by Buyer and Seller. 7. INDEMNIFICATION AND RISK OF LOSS: 7.1 Subject to the limitations of paragraph 7.2: (a) Buyer's Indemnity. From and after Closing, Seller and Stockholder, jointly and severally, agree to indemnify, defend, and hold Buyer, its owners, officers, agents, representatives, successors and assigns, jointly and severally, harmless from and against each, any, and all actions, suits, causes of action, losses, costs, claims, damages, response costs, liabilities, fines, judgments, or expenses (including all consequential or incidental damages and all attorneys' or experts' fees) (singly a "Claim"; collectively the "Claims") asserted against or incurred or sustained by each, any, or all of them as a result of, arising out of, based upon, or on account of, in whole or in part, each, any, or all of the following: (i) any violation of any law, rule, or regulation or any act or failure to act by Seller or any one or more of its officers, directors, agents, representatives, servants, or employees (or any other person or entity for which Seller is or may be held responsible), (ii) any agreement made by, claim against, or liability of Seller (except such Claims as are caused by Buyer pursuant to assumption agreement(s) as described in paragraph 3.4), (iii) the conduct of Seller's business or the ownership, use, or operation of either or both of the Station or the Property Sold, or any part or parts thereof, at any time prior to Closing, (iv) any illegal payment received, directly or indirectly, by Seller at any time or times prior to Closing, (v) any Lien existing at Closing on or as to any 13 part or all of the Property Sold, other than a Permitted Lien, (vi) any breach of any representation or warranty made by Seller or Stockholder in this agreement or in any certificate or other instrument delivered by or on behalf of Seller pursuant to this agreement or in connection with Closing; (vii) any breach of any covenant set forth in this agreement to be performed prior to or after Closing by Seller or Stockholder; (viii) any liability or obligation (whether absolute, accrued, contingent, or otherwise) assumed by Seller hereunder. As to each Claim the obligations imposed hereby shall include, but not be limited to, an obligation to pay to or for Buyer all costs incurred by or for Buyer to investigate, defend, or settle such Claim and all amounts necessary to put Buyer in the same position and condition that Buyer would have been in if such Claim had not arisen. (b) Seller's Indemnity. From and after Closing, Buyer agrees to indemnify, defend, protect and hold Seller, its officers, directors, affiliates, agents, representatives, successors and assigns harmless from and against each, any, and all Claims asserted against or incurred or sustained by each, any, or all of them as a result of, arising out of, based upon, or on account of, in whole or in part, each, any, or all of the following: (i) any breach of any representation or warranty made by Buyer in this Agreement or in any certificate or other instrument delivered by or on behalf of Buyer pursuant to this Agreement or in connection with Closing; (ii) any breach of any covenant set forth in this agreement to be performed prior to or after Closing by Buyer; (iii) any liability or obligation (whether absolute, accrued, contingent, or otherwise) assumed by Buyer hereunder, or (iv) Buyer's operation of the Station after the Closing Date. 7.2 Limitations on Indemnity. Any indemnity obligation of any party shall be enforceable only after the aggregate amount of all Claims for which such party is responsible for indemnity shall have exceeded $5,000 and shall survive Closing but expire as to all Claims not made on or before the last day of the twelfth (12th) full calendar month following Closing except for Claims (i) for taxes or penalties, or (ii) based on any Lien on any part of the Property Sold existing at or before Closing, or (iii) for violation of any Environmental Law or the misuse of any Hazardous Material, or (iv) based on uninsured title defect(s) applicable to any part of the Property Sold, and for each such excepted Claim the obligation to indemnify shall survive until barred by operation of law. 7.3 Risk of Loss. Until Closing, the risk of destruction of or loss or damage to the Station or any part of the Property Sold arising from any actual or proposed condemnation or taking of all or any part of the Property Sold or of the Station by governmental authority or by exercise of the power of eminent 14 domain, or from any fire, explosion, riot, flood, war, or other cause or casualty shall remain with Seller. If Seller becomes aware of any such actual or potential taking, loss, damage, or destruction, Seller will promptly notify Buyer of all particulars thereof prior to Closing. If such damaged property is material to Station's operations or value and is not completely replaced or repaired and restored to its former condition by Seller before the Closing Date then Buyer at its sole option may: (a) by notice to Seller postpone the Closing Date or abandon and terminate this agreement and all obligations of Buyer hereunder, or (b) effect Closing, in which case Seller shall assign and pay to Buyer all insurance proceeds received or to be received by Seller with respect to policies insuring the Property Sold and there shall be an appropriate reduction in the Purchase Price to reflect the amount of any uninsured loss, damage, or destruction to the Property Sold. 8. BUYER'S REPRESENTATIONS AND WARRANTIES: To induce Seller to enter into and perform pursuant to this agreement, Buyer represents and warrants to Seller that each of the following is true: 8.1 Corporate Organization. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the Commonwealth of Virginia and has all requisite power and authority as such to conduct its business as it is now being conducted and to own its properties and assets. 8.2 Authorization for Agreements. Buyer's execution and delivery of this agreement have been duly and validly authorized by all necessary action on the part of Buyer, and this agreement constitutes a valid and binding obligation of Buyer. 8.3 FCC Qualifications. Buyer is qualified to be licensee of the Station under the Communications Act of 1934, as amended, and the rules and regulations of the FCC and knows of no facts that would delay the consummation of the transactions contemplated by this agreement. Buyer has no reason to believe that the FCC assignment contemplated herein might be challenged or might not be granted by the FCC in the ordinary course. Buyer is financially qualified to consummate the sale and purchase contemplated by this agreement. 8.4 Absence of Conflicting Agreements or Required Consents. Except for the requirement of prior FCC consent, the execution, delivery and Closing of this Agreement by Buyer: (a) do not and will not violate any provision of Buyer's articles of incorporation and bylaws; (b) do not and will not require the consent of any third party or governmental authority; (c) do not and will not violate any law, judgment, order, injunction, decree, 15 rule, regulation, or ruling of any governmental authority applicable to Buyer; and (d) do not and will not, either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination or acceleration of or result in a breach of the terms, conditions, or provisions of, or constitute a default under any agreement, lease, instrument, license, or permit to which Buyer is now subject. 8.5 Bankruptcy. No insolvency proceedings of any character, including, without limitation, bankruptcy, receivership, reorganization, composition, or arrangement with creditors, voluntary or involuntary, affecting Buyer are pending or threatened, and Buyer has made no assignment for the benefit of creditors or taken any action in contemplation of or which would constitute the basis for the institution of such insolvency proceedings. 8.6 Ownership and Capitalization of Buyer. Alan R. Brill and Bonnie P. Brill own (directly or indirectly) at least 80% of the capital stock of Buyer. Except for obligations to Seller under this agreement, Buyer has and at Closing will have no material debt whatsoever except as permitted by Paragraph 3 of the Security Agreement. Buyer's obligations hereunder are not subject to a contingency based on the availability or suitability of financing. 9. CONDITIONS TO SELLER'S OBLIGATIONS: As conditions precedent for the sole benefit of Seller, which Seller may waive (but only by and to the extent of its express, written consent given hereafter), Closing and each obligation of Seller under this agreement shall be subject to and conditioned upon Seller being satisfied of each of the following: 9.1 Delivery. Seller shall not have terminated this agreement as permitted hereby, and Buyer shall have delivered to Seller each item as and when required by paragraph 3.3. 9.2 Compliance with Agreement; No Prohibition. Until, at, or prior to Closing, each material term, covenant, agreement, and condition of this agreement to be complied with or performed by Buyer shall have been complied with or performed, and nothing then shall restrain, inhibit, or prohibit Closing. 9.3 Representations and Warranties. Unless waived, each of Buyer's representations and warranties contained in Section 8 shall in all material respects have been true and correct when made, shall be deemed to be made again at and as of Closing, and shall then be in all material respects true and correct, and Buyer shall have delivered to Seller a certificate to such effect, executed by its President, in such form and containing such 16 substance and giving Seller such assurances as Seller reasonably may require. 9.4 Agreement. Buyer and Programmer shall have duly entered into, executed, and delivered an agreement in the form and containing the substance of Exhibit 3.03.1. 9.5 Operating Agreement. Buyer shall have complied in all material particulars with its obligations as Programmer under the Operating Agreement, including its obligations for all monthly fees payable thereunder. 9.6 Final Order. The conditions of paragraph 6.6 shall have been met. 9.6 Compliance with Agreement; No Prohibition. Until, at, or prior to Closing, each term, covenant, agreement, and condition of this agreement to be complied with or performed by Buyer shall have been complied with or performed, and nothing then shall restrain, inhibit, or prohibit Closing. 9.7 Approvals and Consents. All agreements, consents, waivers, or approvals necessary or appropriate for Closing or for consummation of the transactions contemplated hereby shall have been obtained from such parties and in such form and substance as is reasonably satisfactory to Seller, and copies thereof delivered to Seller. 9.8 Closing Adjustments. Buyer and Seller shall have agreed upon the Closing Adjustments to be made at Closing, as memorialized by a closing statement executed at Closing by Buyer and Seller. 10. MISCELLANEOUS: 10.1 Expenses. Except as may otherwise be provided in this agreement, each party shall be solely responsible for and shall pay all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this agreement. All recordation, transfer, documentary, excise, sales or use taxes or fees imposed on this transaction shall be borne in equal shares by Buyer and Seller. 10.2 Notices. Each notice, consent, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given only upon the earlier of receipt (by hand delivery, fax, or otherwise) or five (5) days after having been mailed, certified or registered United States mail, postage prepaid, addressed as follows: 17 if to Seller or Onyx Broadcasting, Inc. Stockholder: 8401 Old Courthouse Road, Suite 140 Tyson's Corner, Virginia 22180 Attention: Mr. Thomas P. Gammon President copy to: Meredith S. Senter, Jr., Esquire Leventhal, Senter & Lerman Suite 1600 2000 K Street, N.W. Washington, D.C. 20006-1809 if to Buyer: NCR II, Inc. c/o Brill Media Company, Inc. Post Office Box 3353 Evansville, Indiana 47732 Attention: Mr. Alan R. Brill copy to: Charles W. Laughlin, Esquire c/o Thompson & McMullan, P.C. 100 Shockoe Slip Richmond, Virginia 23219 or when so delivered or mailed to such other place or person as a party hereafter from time to time may have designated in a prior written notice to the other party. 10.3 Survival of Representations and Warranties. Each representation or warranty made herein shall remain operative and in full force and effect regardless of and shall not be affected by any investigation made or knowledge obtained by or on behalf of Seller or Buyer prior to Closing and shall survive Closing. From and after Closing, the right to indemnification under paragraph 7 of this agreement shall be the exclusive remedy of any party in connection with any breach by another party of any representation, warranty, or covenant contained in this agreement. 10.4 Termination. (a) This agreement may be terminated by either Buyer or Seller, if the party seeking to terminate is not in material default or breach of this agreement or the Operating Agreement, upon written notice to the other after the occurrence of any of the following (assuming that any required notice has been duly given): (i) if the other party has defaulted in any material respect in the observance or in the due and timely performance of any of its covenants or agreements contained herein, and such default has been neither cured nor waived by the earlier to occur of (x) the Closing Date and (y) the thirtieth (30th) day after written notice of such default; (ii) if the Operating Agreement has been terminated pursuant to Section 5 thereof; (iii) if there shall 18 be in effect any judgment, final decree, or order that prevents or makes unlawful the Closing, or if the Commission shall have released a hearing designation order requiring a formal hearing on any of the Applications; or (iv) if the Commission has not granted the Application(s) within three hundred sixty (360) days of filing. (b) This agreement may be terminated by Buyer, upon written notice to Seller: (i) pursuant to Section 7.3 (Risk of Loss); (ii) if regular broadcast transmission of the Station has been interrupted for a period of more than seven (7) consecutive calendar days for any reason other than an Act of God; or (iii) if the Commission makes a material, adverse change in any of the Station's broadcast Licenses. (c) This agreement may be terminated by mutual written consent of Buyer and Seller. (d) The termination of this agreement pursuant to this paragraph 10.4 shall not relieve any party of any liability for breach of this agreement prior to the date of termination. 10.5 Successors and Assigns. This agreement and each provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and may not be assigned without the prior written consent of all parties hereto. For purposes of this Section 10.5, an assignment shall include any change in control of a party whether by sale of stock, merger, operation of law, or otherwise. 10.6 Indemnity Concerning Brokers. Buyer and Seller represent and warrant each to the other that no broker has been used, employed, or connected with this transaction, and each party agrees to indemnify, defend, and save harmless the other and its officers, agents, and employees against each liability, cost, or expense, including attorneys' fees, that may be asserted on account of any and all commissions, fees, expenses, or charges due and owing on account of any brokerage services related to this transaction incurred by reason of any agreement made by such party with any broker or finder. 10.7 Amendment and Waiver. Except for a waiver by Seller pursuant to Section 9 or by Buyer pursuant to Section 6, no provision of this agreement may be amended or its observance waived (whether generally or in a particular instance and whether retroactively or prospectively) except with and by the waiving party's prior, express, written consent. No other act, failure to act, or course of dealing shall cause or constitute a waiver by Buyer or Seller. 19 10.8 Definitions. Wherever used in this agreement each of the following terms shall have the meaning defined in the paragraphs of this agreement identified below: Term Definition ---- ---------- Act P. 4.18 Application(s) P. 5.4 Buyer Preamble Buyer's Commission P. 3.6 Claim(s) P. 7.1 Closing P. 3.1 Closing Adjustments P. 2.2 Closing Date P. 3.1 Collection Costs P. 3.6 Collection Period P. 3.6 Commission Recitals Contracts P. 4.15 Deposit P. 2.5 Environmental Law(s) P. 4.4 Escrow Agreement P. 2.5 Excluded Property P. 1.2 Final Order P. 6.6 Hazardous Material(s) P. 4.4 License(s) Recitals, P. 4.3 Lien(s) P. 10.9 Noncompetition Agreement P. 3.2 Nondisturbance Instruments P. 3.2 Note P. 2.1 Operating Agreement Recitals Permitted Liens P. 4.6 Property Sold P. 1.1 Purchase Price P. 2.1 Real Property P. 1.1 Security Agreement P. 2.4 Seller Preamble Seller's Counsel P. 3.1 Station Recitals Stockholder Preamble Stock Pledge Agreement P. 2.4 Tower Lease P. 3.2 10.9 Additional Definitions. Wherever used in this agreement, the term "Liens" (singly, "Lien") shall mean and include each, any, and all liens, mortgages, security interests, pledges, title retention devices, claims (legal or equitable, including without limitation, liability to or claims of any taxing authority, creditor, or other person), conditional sale or other agreements, encumbrances, leases, trusts, options, servitudes, rights, charges, assessments, consignments or bailments, reservations, exceptions, encroachments, easements, rights-of-way, conditions, restrictions, 20 imperfections or deficiencies of title, or liabilities of any nature and however arising [including those arising from violation of or noncompliance with any law, ordinance, rule, or regulation (including, without limitation, municipal ordinances relating to the zoning, occupancy, or use of real property)], whether recorded or unrecorded, choate or inchoate, or appurtenant or non-appurtenant, and whether arising by operation of law or otherwise, whether dependent on or independent of possession, whether known or unknown, and whether now in existence or to come into existence merely by the giving of notice or the lapse of time, or both. 10.10 Control of the Station. Until Closing, Buyer will not directly or indirectly control, supervise, or direct or attempt to control, supervise, or direct the Station's operations contrary to Commission rules and regulations. 10.11 Governing Law. This agreement, its enforceability, interpretation, and the legal relationships between the parties created hereby shall be governed by and construed in accordance with the laws of the State of Virginia, excluding those relating to choice of law or conflicts of laws. Any suit, action, or proceeding with respect to this agreement, or any judgment entered by any court in respect thereof, may be brought in the courts of the Commonwealth of Virginia or in the U.S. District Court for the Eastern District of Virginia, and the nonexclusive jurisdiction of those courts for the purpose of any suit, action, or proceeding is hereby accepted by the parties hereto. In addition, to the fullest extent permitted by law, any objection that any party may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out of or relating to this agreement or any judgment entered by any court in respect thereof, in the Commonwealth of Virginia is hereby waived, and any claim that any suit, action, or proceeding brought in the Commonwealth of Virginia has been brought in an inconvenient forum is hereby further irrevocably waived. Buyer hereby further agrees that if any such suit, action, or proceeding is pending in more than one jurisdiction, then Seller's selection of the forum shall be binding upon the parties hereto. 10.12 Headings. The headings of the Sections and paragraphs of this agreement are for convenience only and are not a substantive part hereof. 10.13 Integration. This agreement, including its exhibits, which are a material part hereof and are incorporated herein by reference, contains the entire understanding of the parties with respect to the subject matter hereof. 10.14 Counterparts. This instrument may be executed in any number of counterparts (each of which shall constitute an original) and when Seller and Buyer shall have executed at least 21 one such counterpart shall constitute but one and the same agreement. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the day, month, and year first above written. Buyer NCR II, INC. by________________________________ a duly authorized officer Seller ONYX BROADCASTING, INC. by_________________________________ a duly authorized officer Stockholder ----------------------------------- Thomas P. Gammon 22 EX-10.9 80 EXHIBIT 10.9 EXECUTION COPY BRILL MEDIA COMPANY, LLC. and BRILL MEDIA MANAGEMENT, INC. 105,000 Units Consisting of 12% SENIOR NOTES DUE 2007 and APPRECIATION NOTES DUE 2007 PURCHASE AGREEMENT December 22, 1997 BRILL MEDIA COMPANY, LLC and BRILL MEDIA MANAGEMENT, INC. 105,000 Units Representing $105,000,000 Principal Amount of 12% Senior Notes Due 2007 and $3,000,000 of Appreciation Notes Due 2007 PURCHASE AGREEMENT December 22, 1997 Natwest Capital Markets Limited 135 Bishopsgate London, EC2M 3XT England Ladies and Gentlemen: Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a Virginia corporation (collectively with BMC, the "Company"), and the subsidiary guarantors listed in Schedule 2 attached hereto (the "Guarantors") each hereby confirms its agreement with you (the "Initial Purchaser"), as set forth below. 1. The Securities. Subject to the terms and conditions herein contained, (i) the Company proposes to issue and sell to the Initial Purchaser 105,000 Units (the "Units") representing $105,000,000 aggregate principal amount of its 12% Senior Notes due 2007 (collectively, where context permits, with the Senior Guarantees defined below, the "Notes") and Appreciation Notes due 2007 (the "Appreciation Notes"). The Units, the Notes and the Appreciation Notes are referred to herein collectively as the "Securities". The Units are to be issued under a Unit Agreement (as defined below). The Notes will be guaranteed (the "Senior Guarantees") by each of the Guarantors on a senior basis. The Appreciation Notes will be guaranteed (the "Appreciation Note Guarantee" and collectively with the Senior Guarantees, the "Guarantees") by each of the Guarantors on a subordinated basis. The Notes are to be issued under an indenture (the "Indenture") to be dated as of the Closing Date (as defined in Section 3 below), by and among the Company, the Guarantors and The United States Trust Company of New York, as trustee (the "Trustee"). The Appreciation Notes are to be issued under an indenture (the "Appreciation Notes Indenture") to be dated as of the Closing Date by and among the Company, the Guarantors and United States Trust Company of New York, as trustee (the "Appreciation Notes Trustee"). The Units will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated December 3, 1997 (the "Preliminary Memorandum") and will prepare a final offering memorandum dated December 22, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as the "Memorandum") relating to the Securities. The Company, the Guarantors and the Initial Purchaser will enter into a Registration Rights Agreement in substantially the form attached as Exhibit A hereto (the "Registration Rights Agreement") prior to or concurrently with the issuance of the Notes. Pursuant to the Registration Rights Agreement, under the circumstances and the terms set forth therein, the Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "Commission"): (i) a registration statement on Form S-4 (the "Exchange Offer Registration Statement") relating to a registered Exchange Offer (as defined in the Registration Rights Agreement) for the Notes under the Act to offer to the holders of the Notes the opportunity to exchange their Notes for an issue of notes substantially identical to the Notes (except that such notes will not contain restrictions on transfer that would be registered under the Act (the "Exchange Notes"); or (ii) alternatively, in the event that applicable interpretations of the Commission do not permit the Company and the Guarantors to effect the Exchange Offer or do not permit any holder (who is otherwise able to make the representations set forth in the Registration Rights Agreement and acquire the Exchange Notes) of the Notes to participate in the Exchange Offer, a shelf registration statement (the "Shelf Registration Statement") to cover resales of Notes by such holders who satisfy certain conditions relating to and including the provision of information in connection with the Shelf Registration Statement. The Company, the Guarantors and the Initial Purchaser will enter into an Appreciation Notes Registration Rights Agreement in substantially the form attached as Exhibit B hereto (the "Appreciation Notes Registration Rights Agreement") prior to or concurrently with the issuance of the Appreciation Notes. Pursuant to the Appreciation Notes Registration Rights Agreement, under the circumstances and the terms set forth 2 therein, the Company and the Guarantors will agree to file with the Commission: (i) a registration statement on Form S-4 (the "Appreciation Notes Exchange Offer Registration Statement") relating to a registered Appreciation Notes Exchange Offer (as defined in the Appreciation Notes Registration Rights Agreement) for the Appreciation Notes under the Act to offer to the holders of the Appreciation Notes the opportunity to exchange their Appreciation Notes for an issue of notes substantially identical to the Appreciation Notes (except that such notes will not contain restrictions on transfer) that would be registered under the Act (the "Appreciation Exchange Notes"); or (ii) alternatively, in the event that applicable interpretations of the Commission do not permit the Company and the Guarantors to effect the Appreciation Notes Exchange Offer or do not permit any holder (who is otherwise able to make the representations set forth in the Appreciation Notes Registration Rights Agreement and acquire the Appreciation Exchange Notes) of the Appreciation Notes to participate in the Appreciation Notes Exchange Offer, a shelf registration statement (the "Appreciation Notes Shelf Registration Statement") to cover resales of Appreciation Notes by such holders who satisfy certain conditions relating to and including the provision of information in connection with the Appreciation Notes Shelf Registration Statement. The Company and the Guarantors will enter into a unit agreement (the "Unit Agreement") dated as of the Closing Date, with United States Trust Company of New York, as unit agent (the "Unit Agent"). 2. Representations and Warranties. The Company and each Guarantor represents and warrants to, and agrees, jointly and severally with the Initial Purchaser that: (a) Neither the Preliminary Memorandum as of the date thereof nor the Final Memorandum nor any amendment or supplement thereto as of the date thereof and at all times subsequent thereto up to the Closing Date (as defined in Section 3 below) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 2(a) do not apply to statements or omissions made in reliance upon and in conformity with information relating to the Initial Purchaser furnished to the Company in writing by the Initial Purchaser expressly for use in the Preliminary Memorandum, the Final Memorandum or any amendment or supplement thereto. The Final Memorandum conforms in all material respects to the requirements of the Act and the rules and regulations promulgated thereunder, as if it were a prospectus filed as part of a registration statement on Form S-3 relating to the Notes (except that such a prospectus would include the following information specified 3 in items of Regulation S-K under the Act: (i) the pricing table specified in Item 501; (ii) the statements regarding availability of additional information specified in Item 502; and (iii) disclosure of the Commission's position on indemnification specified in Item 510). (b) As of the Closing Date, the Company will have the pro-forma capitalization set forth in the Final Memorandum; the Guarantors constitute all of the subsidiaries of the Company; the Company, directly or indirectly will own one hundred percent of the issued and outstanding stock, partnership or membership interests (or other equity securities) of each Guarantor (except that for the Guarantors listed on Schedule 3 hereto the Company will directly or indirectly own at least 98% of the membership interests in such Guarantors and the remaining membership interest in each of such Guarantors will be indirectly owned by Alan R. Brill), and such capital stock shall be free and clear of all liens, charges, encumbrances or restrictions other than (x) liens in favor of AMRESCO Funding Corporation and Goldman Sachs Credit Partners, securing the obligations of the Company and the Guarantors under the Amended and Restated Credit Agreement dated September 30, 1997 (the "Credit Agreement") and (y) the liens on the capital stock of CMB II, Inc., NB II, Inc., St. John Newspapers, Inc. and NCR II, Inc. securing obligations the principal amount of which does not exceed $4,900,000 in the aggregate. All of the outstanding shares of capital stock (or other equity securities) of the Company or any Guarantors have been, and as of the Closing Date will be, duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights; there are no (i) options, warrants or other rights to purchase from the Company or any Guarantor, (ii) agreements or other obligations of the Company or any Guarantor to issue or (iii) other rights to convert any obligation into, or exchange any securities for, shares of capital stock of or ownership interests in the Company or any Guarantor outstanding. The entities listed on Schedule 2 hereto are the only subsidiaries, direct or indirect of the Company. Except as disclosed on Schedule 2 or as disclosed in the Final Memorandum, the Company does not own, directly or indirectly, any capital stock or any other equity or long-term debt securities or have any equity interest in any firm, partnership, joint venture, limited liability company or other entity. (c) Each of the Company and each Guarantor has been duly incorporated or organized, is validly existing and is in good standing as a corporation, limited liability company or limited partnership under the laws of its jurisdiction of incorporation or formation, with all requisite corporate, company or partnership power and authority to own its properties and conduct its business as now conducted and as described in the Final Memorandum; each of the Company and each Guarantor is duly qualified to do business as a foreign corporation, limited liability company or limited partnership in good standing in all other jurisdictions where the ownership or leasing of 4 its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the general affairs, business, condition (financial or otherwise), prospects or results of operations of the Company and the Guarantors, taken as a whole (any such event, a "Material Adverse Effect"). (d) The Company and each Guarantor has all requisite corporate, company or partnership power, as the case may be, and authority to execute, deliver and perform its obligations under the Notes and the Appreciation Notes, including, in the case of the Guarantors, the Guarantees. The Notes and the Appreciation Notes have been duly and validly authorized by the Company and each of the Guarantors and, when executed by the Company and each of the Guarantors, authenticated by the Trustee and the Appreciation Notes Trustee, respectively, in accordance with the provisions of the Indenture and the Appreciation Notes Indenture, respectively, and delivered to and paid for by the Initial Purchaser, in accordance with the terms of this Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Company and each of the Guarantors, entitled to the benefits of the Indenture and the Appreciation Notes Indenture, respectively, and enforceable against the Company and each Guarantor in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally, and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (e) The Company has all requisite corporate, company or partnership power, as the case may be, and authority to execute, deliver and perform their obligations under the Units. The Units have been duly and validly authorized by the Company (as of the Closing Date) and, when executed by the Company, authenticated by the Unit Agent in accordance with the provisions of the Unit Agreement and delivered to and paid for by the Initial Purchaser in accordance with the terms of the Unit Agreement, will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally, and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (f) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under the Exchange Notes and the Private Exchange Notes (as defined in the 5 Registration Rights Agreement). The Exchange Notes and the Private Exchange Notes have been duly and validly authorized by the Company and each of the Guarantors and, when the Exchange Notes and the Private Exchange Notes have been duly executed and delivered by the Company and each of the Guarantors and authenticated by the Trustee in accordance with the terms of the Indenture, will constitute valid and legally binding obligations of the Company, and each of the Guarantors, entitled to the benefits of the Indenture, and enforceable against the Company and each of the Guarantors in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, (ii) general principles of equity and the discretion of any court before which any proceeding therefore may be brought. (g) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under the Indenture. The Indenture meets the requirements for qualification under the Trust Indenture Act of 1939, as amended (the "TIA"). The Indenture has been duly and validly authorized by the Company and each of the Guarantors and, when executed and delivered by the Company and each of the Guarantors (assuming the due authorization, execution and delivery of the Indenture by the Trustee), will constitute a valid and legally binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and or other similar laws now or hereafter in effect, relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (h) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under the Registration Rights Agreement. The Registration Rights Agreement has been duly and validly authorized by the Company and each of the Guarantors and, when executed and delivered by the Company and each of the Guarantors, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally, (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought, (iii) the indemnification provisions contained therein may be unenforceable as contrary to public policy, and (iv) the provisions for liquidated 6 damages contained therein may be unenforceable if they were deemed to constitute a penalty. (i) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under the Appreciation Exchange Notes and the Private Appreciation Exchange Notes (as defined in the Appreciation Notes Registration Rights Agreement). The Appreciation Exchange Notes and the Private Appreciation Exchange Notes have been duly and validly authorized (as of the Closing Date) by the Company and each of the Guarantors and, when the Appreciation Exchange Notes and the Private Appreciation Exchange Notes have been duly executed and delivered by the Company and each of the Guarantors and authenticated by the Appreciation Notes Trustee in accordance with the terms of the Appreciation Notes Indenture, will constitute valid and legally binding obligations of the Company, and each of the Guarantors, entitled to the benefits of the Appreciation Notes Indenture, and enforceable against the Company and each of the Guarantors in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, (ii) general principles of equity and the discretion of any court before which any proceeding therefore may be brought. (j) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under the Appreciation Notes Indenture. The Appreciation Notes Indenture meets the requirements for qualification under the Trust Indenture Act of 1939, as amended (the "TIA"). The Appreciation Notes Indenture has been duly and validly authorized (as of the Closing Date) by the Company and each of the Guarantors and, when executed and delivered by the Company and each of the Guarantors (assuming the due authorization, execution and delivery of the Appreciation Notes Indenture by the Appreciation Notes Trustee), will constitute a valid and legally binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and or other similar laws now or hereafter in effect, relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (k) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under the Appreciation Notes Registration Rights Agreement. The Appreciation Notes Registration Rights Agreement has been duly and validly authorized 7 by (as of the Closing Date) the Company and each of the Guarantors and, when executed and delivered by the Company and each of the Guarantors, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally, (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought, (iii) the indemnification provisions contained therein may be unenforceable as contrary to public policy, and (iv) the provisions for liquidated damages contained therein may be unenforceable if they were deemed to constitute a penalty. (l) The Company and each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly authorized and has been duly executed and delivered by the Company and each of the Guarantors and (assuming the due authorization, execution and delivery of this Agreement by the Initial Purchaser) constitutes a valid legally binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, except that the enforcement hereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally, (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought, and (iii) the indemnification provisions contained in Section 9 hereof may be unenforceable as contrary to public policy. (m) Each of the Guarantors has all requisite corporate, company or partnership, power and authority to execute, deliver and perform its obligations under the Guarantees executed by it. Each Guarantee has been duly and validly authorized by each Guarantor and when executed and delivered by the Guarantors, will constitute a valid and legally binding agreement of the Guarantors, enforceable against the Guarantors in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law). (n) The Company and the Guarantors have all requisite corporate, partnership or company power, as the case may be, and authority (as of the Closing Date 8 as to the Company) to execute, deliver and perform their obligations under the Unit Agreement. (o) No additional consent, approval, authorization or order of any court or governmental agency or body, or third party is required for the performance of this Agreement, the Registration Rights Agreement, the Indenture, the Appreciation Notes Indenture, the Guarantees, the Unit Agreement and the Appreciation Notes Registrations Rights Agreement by the Company or any of the Guarantors or the consummation by the Company or any of the Guarantors of the transactions contemplated hereby and thereby that are to be completed on or before the Closing Date, except such as have been obtained or disclosed in the Final Memorandum and such as may be required under state securities or "Blue Sky" laws in connection with the purchase and resale of the Notes and the Appreciation Notes by the Initial Purchaser. None of the Company or any of the Guarantors is (i) in violation of its certificate of incorporation or bylaws or operating agreement or partnership agreement (or similar organizational document), (ii) in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to any of them or any of their respective properties or assets, or (iii) in breach of or in default under (nor has any event occurred which, with notice or passage of time or both, would constitute a default under) or in violation of any of the terms or provisions of any indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate, contract or other agreement or instrument to which any of them is a party or to which any of them or their respective properties or assets is subject (collectively, "Contracts") except such violations, breaches or defaults that would not, individually or in the aggregate, have a Material Adverse Effect. (p) The execution, delivery and performance by the Company and the Guarantors, as applicable, of this Agreement, the Indenture, the Appreciation Notes Indenture, the Registration Rights Agreement, the Unit Agreement and the Appreciation Notes Registration Rights Agreement and the consummation by the Company and the Guarantors of the transactions contemplated hereby and thereby, and the fulfillment of the terms hereof and thereof, and the retention by BMC of NatWest Capital Markets Limited ("NatWest") pursuant to those certain letter agreements (including the engagement and indemnity letter agreements) dated as of September 18, 1997 (collectively, the "NatWest Engagement Letter") and NatWest's acting as contemplated hereby and thereby, will not conflict with or constitute or result in a breach of or a default under (or an event which with notice or passage of time or both would constitute a default under) or violation of any of (i) the terms or provisions of any Contract except such conflicts, breaches, defaults or violations, that would not, individually or in the aggregate, have a Material Adverse Effect, (ii) the certificate of incorporation or by-laws or operating agreement or partnership agreement (or similar organizational document) 9 of the Company or any of the Guarantors or (iii) any statute, judgment, decree, order, rule or regulation applicable to the Company or any of the Guarantors or any of their respective properties or assets except such conflicts, breaches, defaults or violations that would not, individually or in the aggregate, have a Material Adverse Effect. (q) The audited consolidated financial statements of the radio and newspaper businesses of Alan R. Brill included in the Preliminary Memorandum and the Final Memorandum present fairly in all material respects the financial position, results of operations and cash flows of such entities at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis, except as otherwise stated therein. The summary and selected financial and statistical data in the Preliminary Memorandum and the Final Memorandum present fairly in all material respects the information shown therein and have been prepared and compiled on a basis consistent with the audited financial statements included therein, except as otherwise stated therein. Ernst & Young LLP is an independent public accounting firm within the meaning of the Act and the rules and regulations promulgated thereunder. (r) The Company and the Guarantors collectively comprise all of the radio and newspaper businesses of Alan R. Brill included in the financial statements of the radio and newspaper businesses of Alan R. Brill set forth in the Memorandum. (s) Except as noted in the Memorandum, the pro forma financial information included in the Preliminary Memorandum and the Final Memorandum will (i) comply as to form in all material respects with the applicable requirements of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements, and (iii) have been properly computed on the bases described therein. The assumptions used in the preparation of the pro forma financial data and other pro forma financial information included in the Preliminary Memorandum and the Final Memorandum are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (t) Except as set forth in the Memorandum, there is not pending or, to the knowledge of the Company or any Guarantor, threatened any action, suit, proceeding, inquiry or investigation to which the Company or any of the Guarantors is a party, or to which the property or assets of the Company or any of the Guarantors are subject, before or brought by any court, arbitrator or governmental agency or body which, if determined adversely to the Company or any of the Guarantors would, individually or in the aggregate, have a Material Adverse Effect or which seeks to 10 restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Notes, the Units or the Appreciation Notes to be sold hereunder or the consummation of the other transactions described in the Preliminary Memorandum and the Final Memorandum. (u) Each of the Company and the Guarantors owns or possesses adequate licenses or other rights to use all material patents, trademarks, service marks, trade names, copyrights and know-how necessary to conduct the businesses now or proposed to be operated by it as described in the Preliminary Memorandum and the Final Memorandum, and none of the Company or the Guarantors has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how which, if such assertion of infringement or conflict were sustained, would, individually or in the aggregate, have a Material Adverse Effect. (v) Each of the Company and the Guarantors possesses all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, presently required or necessary to own or lease, as the case may be, and to operate its respective properties and to carry on its respective businesses as now or proposed to be conducted as set forth in the Preliminary Memorandum and the Final Memorandum (collectively, the "Permits"), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Guarantors has fulfilled and performed all of its obligations with respect to such Permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such Permit except where such revocation, termination or impairment would not, individually or in the aggregate, have a Material Adverse Effect; and none of the Company or the Guarantors has received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Final Memorandum and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. (w) Since the date of the most recent financial statements appearing in the Final Memorandum, except as described in the Memorandum, (i) none of the Company or the Guarantors has incurred any liabilities or obligations, direct or contingent, or entered into or agreed to enter into any transactions or Contracts (written or oral) not in the ordinary course of business which liabilities, obligations, transactions or Contracts could, individually or in the aggregate, be material to the general affairs, 11 management, business, condition (financial or otherwise), prospects or results of operations of the Company and the Guarantors, taken as a whole (a "Material Change"), (ii) other than as described in the Memorandum none of the Company or the Guarantors has purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock and (iii) other than as described in the Memorandum, there shall not have been any change in the capital stock or long-term indebtedness of the Company or the Guarantors which could, individually or in the aggregate, constitute a Material Change. (x) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and the Guarantors, either individually or taken as a whole, from that set forth in the Preliminary Memorandum (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement). (y) Each of the Company and the Guarantors has filed all necessary federal, state, local and foreign income and franchise tax returns, and has paid all taxes shown as due thereon; and, other than tax deficiencies which the Company or any Guarantor is contesting in good faith, and for which the Company or such Guarantor has provided adequate reserves, there is no tax deficiency that has been asserted against the Company or any of the Guarantors. (z) The statistical and ratings market-related data and regulatory information included in the Memorandum are based on or derived from sources which are believed to be reliable and accurate. (aa) None of the Company, the Guarantors or any agent acting on their behalf has taken or will take any action that might cause this Agreement or the sale of the Notes or Appreciation Notes to violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, in each case as in effect, or as the same may hereafter be in effect, on the Closing Date. (bb) Each of the Company and the Guarantors has good and marketable title to all real property and good title to all personal property described in the Preliminary Memorandum and the Final Memorandum as being owned by it and good and marketable title to any leasehold estate in the real and personal property described in the Preliminary Memorandum and the Final Memorandum as being leased by it free and clear of all recorded liens, charges, encumbrances or restrictions, except as disclosed in the Preliminary Memorandum and the Final Memorandum or in the Exhibits to the Credit Agreement and except for the liens in favor of AMRESCO 12 Funding Corporation and Goldman Sachs Credit Partners L.P. pursuant to the Credit Agreement (it being understood that the indebtedness secured by the Credit Agreement will be fully satisfied from the proceeds of the Notes and that such liens will be discharged as promptly as practicable following the Closing), or to the extent the failure to have such title or the existence of such liens, charges, encumbrances or restrictions would not, individually or in the aggregate, have a Material Adverse Effect. All Contracts to which the Company or any of the Guarantors is a party or by which any of them is bound are valid and enforceable against the Company or such Guarantor, and are valid and enforceable against the other party or parties thereto and are in full force and effect with only such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect. (cc) There are no legal or governmental proceedings involving or affecting the Company or any Guarantor or any of their respective properties or assets which would be required to be described in a prospectus pursuant to the Act that are not described in the Preliminary Memorandum and the Final Memorandum, nor are there any material contracts or other documents which would be required to be described in a prospectus pursuant to the Act that are not described in the Preliminary Memorandum and the Final Memorandum. (dd) Except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect (A) each of the Company and the Guarantors is in compliance with and not subject to liability under applicable Environmental Laws (as defined below), (B) each of the Company and the Guarantors has made all filings and provided all notices required under any applicable Environmental Law, and has and is in compliance with all Permits required under any applicable Environmental Laws and each of them is in full force and effect, (C) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or, to the knowledge of the Company or any of the Guarantors, threatened against the Company or any of the Guarantors under any Environmental Law, (D) no lien, charge, encumbrance or restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Company or any of the Guarantors, (E) none of the Company or the Guarantors has received notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or any comparable state law, (F) no property or facility of the Company or any of the Guarantors is (i) listed or proposed for listing on the National Priorities List under CERCLA or is (ii) listed in the Comprehensive Environmental Response, Compensation, Liability Information System List promulgated pursuant to 13 CERCLA, or on any comparable list maintained by any state or local governmental authority. For purposes of this Agreement, "Environmental Laws" means the common law and all applicable foreign and federal, state and local laws or regulations, codes, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder, relating to pollution or protection of public or employee health and safety or the environment, including, without limitation, laws relating to (i) emissions, discharges, releases or threatened releases of hazardous materials, into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of hazardous materials, and (iii) underground and above ground storage tanks, and related piping, and emissions, discharges, releases or threatened releases therefrom. (ee) There is no strike, labor dispute, slowdown or work stoppage with the employees of the Company or any of the Guarantors which is pending or, to the knowledge of the Company or any of the Guarantors, threatened. (ii) Each of the Company and the Guarantors carries insurance in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties. Neither the Company nor any of the Guarantors has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance. (ff) None of the Company or the Guarantors has any material liability for any prohibited transaction (within the meaning of Section 4975(c) of the Code or Part 4 of Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (or an accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA) or any complete or partial withdrawal liability (within the meaning of Section 4201 of ERISA) with respect to any pension, profit sharing or other plan which is subject to ERISA, to which the Company or any of the Guarantors makes or ever has made a contribution and in which any employee of the Company or of any Guarantor is or has ever been a participant. With respect to such plans, the Company and each Guarantor is in compliance in all material respects with all applicable provisions of ERISA. (ii) Each of the Company and the Guarantors (i) makes and keeps accurate books and records and (ii) maintains internal accounting controls which provide reasonable assurance that (A) transactions are executed in accordance with management's authorization, (B) transactions are recorded as necessary to permit 14 preparation of its financial statements and to maintain accountability for its assets, (C) access to its assets is permitted only in accordance with management's authorization and (D) the reported accountability for its assets is compared with existing assets at reasonable intervals. (gg) None of the Company or the Guarantors is or immediately after the sale of the Notes and the application of the proceeds from such sale as described in the Final Memorandum under "Use of Proceeds" will be, an "investment company" or "promoter" or "principal underwriter" for an "investment company," within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. (hh) The Notes, the Exchange Notes, the Indenture, the Registration Rights Agreement, the Units, the Unit Agreement, the Appreciation Notes, the Exchange Appreciation Notes, the Appreciation Notes Indenture and the Appreciation Notes Registration Rights Agreement, will conform in all material respects to the descriptions thereof in the Final Memorandum. (ii) No holder of securities of the Company or any of the Guarantors will be entitled to have such securities registered under the registration statements required to be filed by the Company pursuant to the Registration Rights Agreement or the Appreciation Notes Registration Rights Agreement other than as expressly permitted thereby. (jj) Immediately after the consummation of the transactions contemplated by this Agreement, the fair value and present fair saleable value of the assets of each of the Company and the Guarantors (each on a consolidated basis) will exceed the sum of its stated liabilities and identified contingent liabilities; none of the Company or the Guarantors (each on a consolidated basis) is, nor will any of the Company or the Guarantors (each on a consolidated basis) be, after giving effect to the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, (a) left with unreasonably small capital with which to carry on its business as it is currently or proposed to be conducted, (b) unable to pay its debts (contingent or otherwise) as they mature or otherwise become due or (c) otherwise insolvent. (kk) None of the Company, the Guarantors or any of their respective Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any "security" (as defined in the Act) which is or could be integrated with the sale of the Securities in a manner that would require the registration 15 under the Act of the Notes or the Appreciation Notes or (ii) engaged in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) in connection with the offering of the Securities or in any manner involving a public offering within the meaning of Section 4(2) of the Act. Neither the Company nor any Guarantor has distributed and will not distribute any offering material in connection with the offering of the Securities other than the Final Memorandum and any Preliminary Memorandum. No securities of the same duration, interest rate and ranking as the Notes have been issued and sold by the Company within the six-month period immediately prior to the date hereof. (ll) Assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 8 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchaser in the manner contemplated by this Agreement to register any of the Securities under the Act or to qualify the Indenture under the TIA except as required by the Registration Rights Agreement. (mm) No securities of the Company or any Guarantor are of the same class (within the meaning of Rule 144A as promulgated under the Act ("Rule 144A")) as any of the Securities and listed on a national securities exchange registered under Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer quotation system. (nn) None of the Company or the Guarantors has taken, nor will any of them take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Securities. (oo) None of the Company or the Guarantors, or any person acting on any of their behalf (other than the Initial Purchaser or any Affiliate of the Initial Purchaser) has engaged in any directed selling efforts (as that term is defined in Regulation S under the Act ("Regulation S")) with respect to the Securities; the Company and its respective Affiliates and any person acting on any of their behalf (other than the Initial Purchaser or any Affiliate of the Initial Purchaser) have complied with the offering restrictions requirement of Regulation S. (pp) Each of the Preliminary Memorandum and the Final Memorandum, as of its respective date, contains all of the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Act. 16 (qq) The Notes and the Appreciation Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the Act. (rr) Neither the Company nor any of the Guarantors nor, to the Company's knowledge, any officer or director purporting to act on behalf of the Company or any of the Guarantors has at any time: (i) made any contributions to any candidate for political office, or failed to disclose fully any such contributions, in violation of law, (ii) made any payment of funds to, or received or retained any funds from, any state, federal or foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or allowed by applicable law, (iii) violated or is in violation of the Foreign Corrupt Practices Act of 1977, (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment or (v) engaged in any transactions, maintained any bank account or used any corporate funds except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Company and the Guarantors. (ss) Except as disclosed in the Memorandum, there are no material outstanding loans or dividends or distributions or advances or material guarantees of indebtedness by the Company or any of its Guarantors to or for the benefit of any of the officers or directors of the Company or any of the Guarantors or any of the members of the families of any of them. (tt) Neither the Company nor any affiliate of the Company does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Florida Statutes Section 517.075. (uu) None of the Company or the Guarantors has engaged or retained any person, other than NatWest as the Initial Purchaser (and Standard Capital), to act as a financial advisor, underwriter or placement agent in connection with the issuance of the Securities and, except for the fees and expenses payable in connection with the issuance of the Securities as described in the Final Memorandum, no person has the right to receive a material amount of financial advisory, underwriting, placement, finder's or similar fees in connection with, or as a result of, the issuance of the Securities and the purchase of the Securities by the Initial Purchaser or the consummation of the other transactions contemplated hereby. Any certificate signed by any officer of the Company or any Guarantor and delivered to the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed a joint and several representation and warranty by the Company and each of the Guarantors to the Initial Purchaser as to the matters covered thereby. 17 3. Purchase, Sale and Delivery of the Securities. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the Company the number of Units set forth opposite its name on Schedule 1 hereto at a price of $882.0 per Unit. One or more certificates in definitive form for the Units that the Initial Purchaser has agreed to purchase hereunder, and in such denomination or denominations and registered in such name or names as the Initial Purchaser requests upon notice to the Company at least 36 hours prior to the Closing Date, shall be delivered by or on behalf of the Company to the Initial Purchaser, against payment by or on behalf of the Initial Purchaser of the purchase price therefor by wire transfer of same day funds to such account or accounts as the Company shall specify prior to the Closing Date, or by such means as the parties hereto shall agree prior to the Closing Date. Such delivery of and payment for the Units shall be made at the offices of White & Case, 1155 Avenue of the Americas, New York, New York at 10:00 A.M., New York time, on December __, 1997, or at such other place, time or date as the Initial Purchaser, on the one hand, and the Company, on the other hand, may agree upon, such time and date of delivery against payment being herein referred to as the "Closing Date." The Company will make such certificate or certificates for the Units available for inspection and packaging by the Initial Purchaser at such place as designated by the Initial Purchaser at least 24 hours prior to the Closing Date. 4. Offering by the Initial Purchaser. The Initial Purchaser proposes to make an offering of the Units, in accordance with Section 8 hereof, at the price and upon the terms set forth in the Final Memorandum, as soon as practicable after this Agreement is entered into and as in the judgment of the Initial Purchaser is advisable. 5. Covenants of the Company and the Guarantors. Each of the Company and the Guarantors, jointly and severally covenants and agrees with the Initial Purchaser that: (a) The Company and the Guarantors will not amend or supplement the Final Memorandum or any amendment or supplement thereto unless the Initial Purchaser shall previously have been advised and furnished a copy of such amendment or supplement for a reasonable period of time prior to the proposed amendment or supplement and as to which the Initial Purchaser shall have consented, such consent not to be unreasonably withheld. The Company and the Guarantors will promptly, upon the reasonable request of the Initial Purchaser or counsel for the Initial Purchaser, make any amendments or supplements to the Preliminary Memorandum or the Final Memorandum that may be necessary or advisable in connection with the resale of the Notes or the Appreciation Notes by the Initial Purchaser. 18 (b) The Company and the Guarantors will cooperate with the Initial Purchaser in arranging for any necessary qualification of the Securities for offering and sale under the securities or "Blue Sky" laws of such jurisdictions as the Initial Purchaser may designate and will continue such qualifications in effect for as long as may be necessary to complete the resale of the Securities by the Initial Purchaser; provided, however, that in connection therewith, none of the Company or any Guarantor shall be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction or subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. (c) If, at any time prior to the earlier of (i) completion of the initial resale by the Initial Purchaser of the Securities or (ii) two years from the date hereof any event occurs or information becomes known as a result of which the Final Memorandum as then amended or supplemented would, in the judgment of the Company or any Guarantor or in the reasonable opinion of counsel to the Initial Purchaser include any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it is necessary at any time to amend or supplement the Final Memorandum to comply with applicable law, the Company and the Guarantors will promptly notify the Initial Purchaser thereof and will prepare, at the expense of the Company and the Guarantors, an amendment or supplement to the Final Memorandum that corrects such statement or omission or effects such compliance. (d) The Company and the Guarantors will, without charge, provide to the Initial Purchaser and to counsel for the Initial Purchaser as many copies of the Preliminary Memorandum and the Final Memorandum or any amendment or supplement thereto as the Initial Purchaser may reasonably request. (e) The Company and the Guarantors will apply the net proceeds from the sale of the Notes or the Appreciation Notes as set forth under "Use of Proceeds" in the Final Memorandum. (f) The Company and the Guarantors will furnish to the Initial Purchaser copies of all reports and other communications (financial or otherwise) furnished by the Company to the Trustee, the holders of the Notes, the Unit Agent, holders of the Units, the Appreciation Notes Trustee and the holders of Appreciation Notes and, as soon as available, copies of any reports or financial statements furnished to or filed by the Company or any Guarantors with the Commission or any national securities exchange on which any class of securities of the Company may be listed. 19 (g) Prior to the Closing Date, the Company will furnish to the Initial Purchaser, as soon as they have been prepared, a copy of any unaudited interim financial statements of the Company and the Guarantors for any period subsequent to the period covered by the most recent financial statements appearing in the Final Memorandum. (h) None of the Company or the Guarantors or any of their Affiliates will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any "security" (as defined in the Act) which could be integrated with the sale of the Notes or the Appreciation Notes in a manner which would require the registration under the Act of the Securities. (i) None of the Company or the Guarantors will engage in any form of "general solicitation" or "general advertising" (as those terms are used in Regulation D under the Act) in connection with the offering of the Units or in any manner involving a public offering of the Units within the meaning of Section 4(2) of the Act. (j) None of the Company, the Guarantors or their Affiliates nor any person acting on its or their behalf will engage, in any directed selling efforts (as that term is defined in Regulation S under the Act) with respect to the Units, and will comply, and will have its Affiliates and each person acting on its or their behalf (other than the Initial Purchaser and its Affiliates) comply, with the offering restrictions requirements of Regulation S under the Act. (k) For so long as any of the Securities remain outstanding, the Company and the Guarantors will make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Act, unless the Company and the Guarantors are then subject to Section 13 or 15(d) of the Exchange Act or the Securities may be resold pursuant to Rule 144(k) under the Act. (l) For a period of 180 days from the date of the Final Memorandum, neither the Company nor any Guarantor will offer for sale, sell, contract to sell or otherwise dispose of, directly or indirectly, or file a registration statement for, or announce any offer, sale, contract for sale of or other disposition of any debt securities issued or guaranteed by the Company or any of the Guarantors (other than the Notes or the Exchange Notes or the Private Exchange Notes or the Appreciation Notes or the Appreciation Exchange Notes) without the prior written consent of the Initial Purchaser. (m) During the period from the Closing Date until two years after the Closing Date, without the prior written consent of the Initial Purchaser, neither the Company nor any Guarantor will, or permit any of their affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been reacquired 20 by them, except for Securities purchased by the Company or any Guarantor or any of their affiliates and resold in a transaction registered under the Securities Act. (n) In connection with the offering of the Securities, until the Initial Purchaser shall have notified the Company of the completion of the resale of the Notes and the Appreciation Notes, the Company and the Guarantors will not, and will cause their affiliated purchasers (as defined under the Exchange Act) not to, either alone or with one or more other persons (i), bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Securities, or attempt to induce any person to purchase any Securities and (ii) make bids or purchase for the purpose of creating actual, or apparent, active trading in or of raising the price of the Securities. (o) The Company and the Guarantors will not take any action prior to the execution and delivery of the Indenture which, if taken after such execution and delivery, would have violated any of the covenants contained in the Indenture; (p) The Company and the Guarantors will not take any action prior to the Closing Date which would require the Final Memorandum to be amended or supplemented pursuant to Section 5(c). (q) Prior to the Closing Date, the Company and the Guarantors will not issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company or the Guarantors, its condition, financial or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company and of which the Initial Purchaser is notified), without the prior written consent of the Initial Purchaser, unless in the judgment of the Company and its counsel, after notification to the Initial Purchaser, such press release or communication is required by law. (r) The Company will use its best efforts to (i) permit the Units, Notes and Appreciation Notes to be designated PORTAL securities in accordance with the rules and regulations adopted by the NASD relating to trading in the Private Offerings, Resales and Trading through Automated Linkages market (the "Portal Market") and (ii) permit the Units, Notes and Appreciation Notes to be eligible for clearance and settlement through the Depository Trust Company. (s) The Company shall, immediately upon receipt of the proceeds from the Offering, pay, or cause to be paid, all outstanding indebtedness, including all indebtedness of the Guarantors, owed to AMRESCO Funding Corporation and 21 Goldman Sachs Credit Partners L.P., including indebtedness under the Credit Agreement and upon such payment the Company shall then cause the lien securing such indebtedness to be released. (t) The Company shall use its best efforts to perform the transactions contemplated by the Offering Memorandum. 6. Expenses. The Company and the Guarantors agree, jointly and severally, to pay all costs and expenses incident to the performance of their obligations under this Agreement, whether or not the transactions contemplated herein are consummated or this Agreement is terminated pursuant to Section 11 hereof, including all costs and expenses incident to (i) the printing, word processing or other production of documents with respect to the transactions contemplated hereby, including any costs of printing the Preliminary Memorandum and the Final Memorandum and any amendment or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial Purchaser of copies of the foregoing documents, (iii) the fees and disbursements of counsel, accountants and any other experts or advisors retained by the Company, (iv) preparation (including printing), issuance and delivery to the Initial Purchaser of the Notes, (v) the qualification of the Securities under state securities and "Blue Sky" laws, including filing fees and fees and disbursements of counsel for the Initial Purchaser relating thereto, (vi) the Company's expenses in connection with any meetings with prospective investors in the Securities, (vii) fees and expenses of the Trustee including fees and expenses of its counsel, (viii) all expenses and listing fees incurred in connection with the application for quotation of the Securities on the PORTAL Market, (ix) any fees charged by investment rating agencies for the rating of the Securities and (x) reasonable out-of-pocket expenses of the Initial Purchaser (including without limitation, road show expenses and the fees and disbursements of legal counsel retained by the Initial Purchaser) incurred by the Initial Purchaser or any of their affiliates in connection with, or arising out of, the offering and sale of the Securities (but not more than $75,000). If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Initial Purchaser set forth in Section 7 hereof is not satisfied, because this Agreement is terminated or because of any failure, refusal or inability on the part of the Company or any Guarantor to perform all obligations and satisfy all conditions on their part to be performed or satisfied hereunder (other than solely by reason of a default by the Initial Purchaser of its obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Initial Purchaser upon demand for all out-of-pocket expenses (including the reasonable fees, disbursements and charges of White & Case, counsel for the Initial Purchaser) that shall have been incurred by the Initial Purchaser in connection with the proposed purchase and sale of the Securities. 22 7. Conditions of the Initial Purchaser's Obligations. The obligation of the Initial Purchaser to purchase and pay for the Securities shall, in its sole discretion, be subject to the satisfaction or waiver of the following conditions on or prior to the Closing Date: (a) On the Closing Date, the Initial Purchaser shall have received the opinion, dated as of the Closing Date and addressed to the Initial Purchaser, of Thompson & McMullan, counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchaser, substantially to the effect that: (i) Each of the Company and the Guarantors is duly incorporated or formed, as the case may be, validly existing and in good standing under the laws of its respective jurisdiction of incorporation or formation and has all requisite corporate or partnership power and authority to own, lease and operate its properties and to conduct its business as described in the Final Memorandum. Each of the Company and the Guarantors is duly qualified as a foreign corporation, limited liability company or limited partnership and is in good standing in the jurisdictions set forth below such Guarantor's name on Schedule A attached to such opinion, except such jurisdictions in which the failure to be so qualified would not be reasonably expected to have a Material Adverse Effect. (ii) The Company has the authorized and issued capital stock (or other equity securities) set forth in the Final Memorandum. To the knowledge of Thompson & McMullan, the Guarantors constitute all the subsidiaries of the Company and the Company, directly or indirectly, will own one hundred percent of the issued and outstanding stock, partnership, or membership interests (or other equity securities) of each of the Guarantors (except that for the Guarantors listed on Schedule 3 hereto the Company will directly or indirectly own at least 98% of the membership interests in such Guarantors and the remaining membership interest in each of such Guarantors will be indirectly owned by Alan R. Brill), free and clear of all security interests perfected, or otherwise, and free and clear of all other liens, encumbrances, equities and claims or restrictions on transferability or voting in each case other than liens securing the obligations of the Company and the Guarantors under the Credit Agreement and obligations secured by pledge of the capital stock of CMB II, Inc., NB II, Inc., St. Johns Newspapers, Inc. and NCR, II, Inc. All of the outstanding shares of capital stock, partnership or membership interests (or other equity securities) of the Company and the Guarantors have been duly authorized and validly issued, are fully paid and nonassessable and were not issued in violation of any preemptive or similar rights; (iii) Except as set forth in the Final Memorandum, to the knowledge of such counsel (A) no options, warrants or other rights to purchase from the Company 23 or any Guarantor shares of capital stock or ownership interests in the Company or any Guarantor are outstanding and, (B) no agreements or other obligations of the Company or any Guarantor to issue, or other rights to cause the Company or any Guarantor to convert, any obligation into, or exchange any securities for, shares of capital stock or ownership interests in the Company or any Guarantor are outstanding. (iv) The Company and each Guarantor has all requisite corporate, company or partnership power and authority to execute, deliver and perform its respective obligations under this Agreement, the Indenture, the Notes, the Registration Rights Agreement, the Exchange Notes and the Private Exchange Notes, the Unit Agreement, the Appreciation Notes Indenture, the Appreciation Notes, the Appreciation Notes Registration Rights Agreement, the Appreciation Exchange Notes and the Private Appreciation Exchange Notes, and the Indenture and Appreciation Notes Indenture have been duly and validly authorized by the Company and each Guarantor. (v) The Global Note, the Global Appreciation Note and each other Note and Appreciation Note have been duly and validly authorized by the Company and authorized and duly executed and delivered by the Company and each Guarantor. (vi) The Exchange Notes, the Private Exchange Notes, the Appreciation Exchange Notes and the Private Appreciation Exchange Notes have been duly and validly authorized by the Company and each Guarantor. (vii) The Unit Agreement has been duly and validly authorized by the Company. (viii) The Units have been duly and validly authorized by the Company. (ix) The Company and each Guarantor has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under each of the Registration Rights Agreement and the Appreciation Notes Registration Rights Agreement and each of the Registration Rights Agreement and the Appreciation Notes Registration Rights Agreement has been duly and validly authorized by the Company and each Guarantor. (x) The Company and each Guarantor has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby; this Agreement and the consummation by the Company and each Guarantor of 24 the transactions contemplated hereby have been duly and validly authorized, executed and delivered by the Company and each Guarantor. (xi) Each of the Guarantors has all requisite corporate, company or partnership power and authority to execute, deliver and perform its obligations under its respective Guarantee. Each Guarantee issued by a Guarantor has been duly and validly authorized, executed and delivered by the applicable Guarantor. (xii) Except as disclosed in the Memorandum, no legal or governmental proceedings are pending or, to the knowledge of such counsel, threatened to which any of the Company or the Guarantors is a party or to which the property or assets of the Company or the Guarantors is subject before or brought by any court, arbitrator or governmental agency or body which, if determined adversely to the Company or the Guarantors, would result, individually or in the aggregate, in a Material Adverse Effect, or which seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to be sold hereunder or the consummation of the other transactions described in the Final Memorandum. (xiii) None of the Company or any Guarantor is (i) in violation of its certificate of incorporation or bylaws or operating agreement or partnership agreement (or similar organizational document) or (ii) to the knowledge of such counsel, in breach or violation of any judgment, decree or order of any court, arbitrator or governmental body, agency or authority applicable to any of them or any of their respective properties or assets. (xiv) The execution and delivery of this Agreement, the Indenture, the Registration Rights Agreement, the Unit Agreement, the Appreciation Notes Indenture and the Appreciation Notes Registration Rights Agreement and the Guarantees and the closing of the transactions contemplated hereby and thereby (including, without limitation, the issuance and sale of the Securities to the Initial Purchaser) will not conflict with or constitute or result in a breach or a default under (or an event which with notice or passage of time or both would constitute a default under) or violation of any of (i) the terms or provisions of any Contract known to such counsel, (ii) the certificate of incorporation or bylaws or operating agreement or partnership agreement (or similar organizational document) of the Company or any Guarantor, or (iii) (assuming compliance with all applicable state securities or "Blue Sky" laws any statute, judgment, decree, order, rule or regulation of the Commonwealth of Virginia or of the federal government of the United States (other than the Communications Act or FCC Rules (as defined in Section 7(c)(i) hereof) and securities laws as to each of which such counsel need not express any opinion) which, in such counsel's experience, is normally applicable both to general business corporations or limited liability companies or 25 limited partnerships which are not engaged in regulated business activities and to transactions of the type contemplated by the Final Memorandum. (xv) To the knowledge of such counsel, the Company and each of the Guarantors possess all Permits presently required or necessary, under the laws of the Commonwealth of Virginia and the federal laws of the United States (except for securities laws, the Communications Act and the FCC Rules) to own or lease, as the case may be, and to operate its respective properties and to carry on its respective businesses as now or proposed to be conducted as described in the Preliminary Memorandum and the Final Memorandum, except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Guarantors has fulfilled and performed all of its obligations with respect to such Permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such Permit except where such revocation, termination or impairment would not, individually or in the aggregate, have a Material Adverse Effect; and none of the Company or the Guarantors has received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Final Memorandum and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. (xvi) Lien searches performed with respect to the Company and the Guarantors in connection with the Credit Agreement and as described in Exhibits to the Credit Agreement, disclose that as of September 30, 1997 the real and personal property of the Company described in the Memorandum were free and clear of all recorded liens, charges, encumbrances or restrictions, except as therein described and as described in the Memorandum or to the extent that the failure to have such title or the existence of such liens, charges, encumbrances or restrictions would not, individually or in the aggregate, have a Material Adverse Effect. At the time the foregoing opinion is delivered, Thompson & McMullan shall additionally state that it has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company, representatives of the Initial Purchaser and counsel for the Initial Purchaser, at which conferences the contents of the Final Memorandum and related matters were discussed, and, although it has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, no facts have come to its attention which lead it to believe that the Final Memorandum, on the date thereof or at the Closing Date, contained an untrue statement of a material fact or omitted to state a 26 material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, it being understood that such firm expresses no opinion with respect to any of the financial statements (actual, summary, selected or pro-forma) outlined therein or the related notes thereto and the other financial, statistical and accounting data included in the Final Memorandum or any information therein concerning or furnished in writing by the Initial Purchaser for inclusion therein. In rendering such opinion, Thompson & McMullan shall have received and may rely upon such certificates and other documents and information as it may reasonably request to pass on such matters. The opinion of Thompson & McMullan described in this Section shall be rendered to the Initial Purchaser at the request of the Company and shall so state therein. If requested by the Trustee, Thompson & McMullan shall allow the Trustee to rely on its opinion and shall expressly so state. References to the Final Memorandum in this subsection (a) shall include any amendment or supplement thereto prepared in accordance with the provisions of this Agreement at the Closing Date. (b) On the Closing Date, the Initial Purchaser shall have received the opinion, dated as of the Closing Date and addressed to the Initial Purchaser, of Carter, Ledyard & Milburn, counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchaser, substantially to the effect that: (i) Except as set forth in the Final Memorandum, to the knowledge of such counsel (A) no options, warrants or other rights to purchase from the Company or any Guarantor shares of capital stock or ownership interests in the Company or any Guarantor are outstanding, (B) no agreements or other obligations of the Company or any Guarantor to issue, or other rights to cause the Company or any Guarantor to convert, any obligation into, or exchange any securities for, shares of capital stock or ownership interests in the Company or any Guarantor are outstanding and (C) no holder of securities of or equity interests in the Company or any Guarantor is entitled to have such securities registered under a registration statement filed by the Company and the Guarantors pursuant to the Registration Rights Agreement. (ii) The Indenture is in sufficient form for qualification under the TIA; the Indenture when duly executed and delivered by the Company and each Guarantor (assuming the due authorization, execution and delivery thereof by the Company, each Guarantor and the Trustee), will constitute the valid and legally binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms, except that the enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, 27 moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (B) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (iii) The Appreciation Notes Indenture is in sufficient form for qualification under the TIA; the Appreciation Notes Indenture when duly executed and delivered by the Company and each Guarantor (assuming the due authorization, execution and delivery thereof by the Company, each Guarantor and the Appreciation Notes Trustee), will constitute the valid and legally binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms, except that the enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (B) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (iv) The Global Note (as such term is defined in the Indenture) and each other Note to be delivered on the Closing Date are in the form contemplated by the Indenture. The Global Note and each such other Note when duly executed and delivered by the Company and when paid for by the Initial Purchaser in accordance with the terms of this Agreement (assuming the due authorization, execution and delivery of the Indenture by the Company, each Guarantor and the Trustee and due authentication and delivery of the Notes by the Trustee in accordance with the Indenture), will constitute valid and legally binding obligations of the Company, entitled to the benefits of the Indenture, and enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (v) The Global Appreciation Note (as such term is defined in the Appreciation Notes Indenture) and each other Appreciation Note to be delivered on the Closing Date are in form contemplated by the Appreciation Notes Indenture. The Global Appreciation Note and each such other Appreciation Note when duly executed and delivered by the Company and when paid for by the Initial Purchaser in accordance with the terms of this Agreement (assuming the due authorization, execution and delivery of the Appreciation Notes Indenture by the Company, each Guarantor and the Appreciation Notes Trustee and due authentication and delivery of the Appreciation Notes by the Trustee in accordance with the Appreciation Notes Indenture), will constitute valid and legally binding obligations of the Company enforceable against the 28 Company and each Guarantor in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. With respect to the applicability of the limitations on rates of interest imposed by sections 190.40 and 190.42 of the Penal Law, and the availability of the exemption therefrom provided by section 5-501(6) of the General Obligations Law, such opinion may be a reasoned opinion. (vi) The Exchange Notes when duly executed and delivered by the Company (assuming the due authorization, execution and delivery of the Indenture by the Trustee, the Company and each Guarantor and due authentication and delivery of the Exchange Notes by the Trustee in accordance with the Indenture), will constitute the valid and legally binding obligations of the Company and each Guarantor, entitled to the benefits of the Indenture, and enforceable against the Company and each Guarantor in accordance with their terms, except that the enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (B) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (vii) The Appreciation Exchange Notes when duly executed and delivered (assuming the due authorization, execution and delivery of the Appreciation Notes Indenture by the Appreciation Notes Trustee, the Company and each Guarantor and due authentication and delivery of the Appreciation Exchange Notes by the Appreciation Notes Trustee in accordance with the Appreciation Notes Indenture), will constitute the valid and legally binding obligations of the Company and each Guarantor, entitled to the benefits of the Appreciation Notes Indenture, and enforceable against the Company and each Guarantor in accordance with their terms, except that the enforcement thereof may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (B) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. With respect to the applicability of the limitations on rates of interest imposed by sections 190.40 and 190.42 of the Penal Law, and the availability of the exemption therefrom provided by section 5-501(6) of the General Obligations Law, such opinion may be a reasoned opinion. (viii) The Registration Rights Agreement (assuming due authorization, execution and delivery thereof by the Company, each Guarantor and the Initial 29 Purchaser) will constitute the valid and legally binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms, except that (A) the enforcement thereof may be subject to (1) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (2) general principles of equity and the discretion of the court before which any proceeding therefor may be brought; (B) the indemnification provisions contained therein may be unenforceable as contrary to public policy; and (C) the provisions for liquidated damages contained therein may be unenforceable if they were deemed to constitute a penalty. (ix) The Appreciation Notes Registration Rights Agreement (assuming due authorization, execution and delivery thereof by the Company, each Guarantor and the Initial Purchaser), will constitute the valid and legally binding agreement of the Company and each Guarantor, enforceable against the Company and each Guarantor in accordance with its terms, except that (A) the enforcement thereof may be subject to (1) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally and (2) general principles of equity and the discretion of the court before which any proceeding therefor may be brought; (B) the indemnification provisions contained therein may be unenforceable as contrary to public policy; and (C) the provisions for liquidated damages contained therein may be unenforceable if they were deemed to constitute a penalty. (x) This Agreement (assuming its due authorization, execution and delivery by the Company, each Guarantor and the Initial Purchaser) constitutes a valid and legally binding agreement of the Company, and each Guarantor, enforceable against the Company, and each Guarantor in accordance with its terms, except that (A) the enforcement thereof may be subject to (1) bankruptcy insolvency, reorganization fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors rights generally and (2) general principles of equity and the discretion of the court before which any proceeding therefor may be bought; and (B) the indemnification provisions contained in Section 9 of this Agreement may be unenforceable as contrary to public policy. (xi) Assuming that each Guarantee issued by a Guarantor has been duly and validly authorized, executed and delivered by the applicable Guarantor, such Guarantee will constitute a valid and legally binding agreement of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (regardless of whether the 30 issue of enforceability is considered in a proceeding in equity or at law) and the discretion of the court before which any proceeding therefor me be brought. (xii) The Unit Agreement (assuming due authorization, execution and delivery thereof by the Company and the Unit Agent) constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be subject to (1) bankruptcy, insolvency, reorganization fraudulent conveyance, moratorium and other similar laws now or hereafter in effect relating to creditors rights generally and (2) general principles of equity and the discretion of the court before which any proceeding therefor may be bought. (xiii) The Units (assuming due authorization by the Company), when issued and delivered by the Company against payment therefor by the Initial Purchaser in accordance with the terms of this Agreement will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that the enforcement hereof may be subject to (i) bankruptcy, insolvency, reorganization or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought. (xiv) The Indenture, the Notes (when issued, authorized and delivered), the Exchange Notes (when issued, authorized and delivered), the Registration Rights Agreement, the Unit Agreement, the Appreciation Notes Indenture, the Appreciation Notes (when issued, authorized and delivered), and the Appreciation Notes Exchange Notes (when issued, authorized and delivered), the Appreciation Notes Registration Rights Agreement conform in all material respects to the descriptions thereof contained in the Final Memorandum and the statements in the Final Memorandum under "Description of Notes"; and "Exchange Offer and Registration Rights", "Description of Units", "Description of Appreciation Notes"; and "Appreciation Notes Exchange Offer and Registration Rights" and "Descriptions of Membership Interests" insofar as they describe the provisions of the documents and instruments therein described, constitute fair summaries thereof in all material respects. (xv) No consent, approval, authorization or order of any United States federal or New York State governmental authority is required for the issuance and sale by the Company of the Securities to the Initial Purchaser or the other transactions contemplated under the Indenture, the Registration Rights Agreement, the Guarantees, the Unit Agreement, the Appreciation Notes Indenture, the Appreciation Notes Registration Rights Agreement and this Agreement, except such as are disclosed in the Final Memorandum (or as may be required under Blue Sky laws or as may be required 31 by the FCC, as to which such counsel need express no opinion), and those which have previously been obtained. (xvi) The execution and delivery of this Agreement, the Indenture, the Registration Rights Agreement, the Unit Agreement, the Appreciation Notes Indenture, the Appreciation Notes Registration Rights Agreement and the Guarantees and the consummation of the transactions contemplated hereby and thereby (including, without limitation, the issuance and sale of the Notes and Appreciation Notes to the Initial Purchaser) will not (assuming compliance with all applicable state securities or "Blue Sky" laws and assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 8 hereof) violate (A) any United States federal or New York State statute, law, rule or regulation (other than the Communications Act or FCC Rules as to which such counsel need not express any opinion) or (B) any judgment, decree or order known to us and specifically binding on the Company or any Guarantor. (xvii) None of the Company or the Guarantors is, or immediately after the sale of the Securities to be sold hereunder and the application of the proceeds from such sale (as described in the Final Memorandum under the caption "Use of Proceeds") will be, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. (xviii) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Act. (xix) No registration under the Act of the Notes is required in connection with the sale of the Notes to the Initial Purchaser as contemplated by this Agreement and the Final Memorandum or in connection with the initial resale of the Notes by the Initial Purchaser in accordance with Section 8 of this Agreement, and prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement (as defined in the Registration Rights Agreement), the Indenture is not required to be qualified under the TIA, in each case assuming (A) that the purchasers who buy such Notes in the initial resale thereof are qualified institutional buyers ("QIBs") as defined in Rule 144A promulgated under the Act ("Rule 144A") or institutions that are accredited investors as defined in Rule 501(a) (1), (2), (3) or (7) promulgated under the Act ("Accredited Investors"), (B) the accuracy of the Initial Purchaser's representations in Section 8 hereof and those of the Company and the Guarantors contained in this Agreement and (C) the due performance by the Initial Purchaser of the agreements set forth in Section 8 hereof. (xx) No registration under the Act of the Appreciation Notes is required in connection with the sale of the Appreciation Notes to the Initial Purchaser as 32 contemplated by this Agreement and the Final Memorandum or in connection with the initial resale of the Appreciation Notes by the Initial Purchaser in accordance with Section 8 of this Agreement, and prior to the commencement of the Appreciation Notes Exchange Offer or the effectiveness of the Shelf Registration Statement (as defined in the Appreciation Notes Registration Rights Agreement), the Appreciation Notes Indenture is not required to be qualified under the TIA, in each case assuming (A) that the purchasers who buy such Appreciation Notes in the initial resale thereof are qualified institutional buyers ("QIBs") as defined in Rule 144A promulgated under the Act ("Rule 144A") or institutions that are accredited investors as defined in Rule 501(a) (1), (2), (3) or (7) promulgated under the Act ("Accredited Investors"), (B) the accuracy of the Initial Purchaser's representations in Section 8 hereof and those of the Company and the Guarantors contained in this Agreement and (C) the due performance by the Initial Purchaser of the agreements set forth in Section 8 hereof. (xxi) Neither the consummation of the transactions contemplated by this Agreement nor the sale, issuance, execution or delivery of the Notes or Appreciation Notes will violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. In rendering such opinion, such counsel may rely (A) as to matters involving the Commonwealth of Virginia, upon Thompson & McMullan, (B) as to matters involving the application of laws of any jurisdiction other than the Commonwealth of Virginia, the State of New York or the United States or the General Corporation Law of the State of Delaware, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel who are satisfactory to counsel for the Initial Purchaser and (C) as to matters of fact on certificates of officers of the Company and public officials. At the time the foregoing opinion is delivered, Carter, Ledyard & Milburn shall additionally state that it has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company, representatives of the Initial Purchaser and counsel for the Initial Purchaser, at which conferences the contents of the Final Memorandum and related matters were discussed, and, although it has not independently verified and is not passing upon and assumes no responsibility for the accuracy, completeness or fairness of the statements contained in the Final Memorandum, no facts have come to its attention which lead it to believe that the Final Memorandum, on the date thereof or at the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, it being understood that such firm need 33 express no view with respect to the financial statements (actual, summary, selected or pro-formas) contained therein or the related notes thereto and the other financial, statistical and accounting data included in the Final Memorandum or any information therein concerning or furnished by the Initial Purchaser. The opinion of Carter, Ledyard & Milburn described in this Section shall be rendered to the Initial Purchaser at the request of the Company and shall so state therein. If requested by the Trustee or the Company, Carter, Ledyard & Milburn shall allow the Trustee or the Company to rely on its opinion and shall expressly so state. References to the Final Memorandum in this subsection (b) shall include any amendment or supplement thereto prepared in accordance with the provisions of this Agreement at the Closing Date. (c) On the Closing Date, the Initial Purchaser shall have received an opinion, dated the Closing Date, of Irwin, Campbell & Tannenwald, P.C., counsel for the Company. The opinion of such counsel shall be rendered to the Initial Purchaser at the request of the Company and shall so state therein. The opinion shall be in form and substance satisfactory to counsel for the Initial Purchaser, substantially to the effect that: (i) Those statements in the Memorandum that describe provisions of the Communications Act of 1934, as amended (the "Communications Act"), and the rules, regulations and published orders, policies and decisions of the FCC ("FCC Rules") are accurate descriptions in all material respects. (ii) The execution, delivery and performance of the obligations by the Company and the Guarantors under the Indenture, the Registration Rights Agreement, the Notes, the Appreciation Notes Indenture, the Appreciation Notes Registration Agreement, the Appreciation Notes and this Agreement are not and will not be contrary to the Communications Act, or to the terms of any radio license, will not result in any violation of the FCC Rules or, will not cause any forfeiture or impairment of any FCC license of any of the radio stations, and will not require any consent, approval or authorization of the FCC, except that the prior approval of the FCC is required for the pro forma reorganization of the intermediate entities between Alan R. Brill, as the controlling shareholder/member, and the licensees of stations WIOV-AM and WIOV-FM (Reading Radio, Inc.), WOMI-AM and WBKR-FM (Tri-State Broadcasting, Inc.), KLIK-AM and KTXY-FM (Central Missouri Broadcasting, Inc.), KATI-FM (CMB II, Inc.), KUAD-FM (Northern Colorado Radio, Inc.), WEBC-AM and KKCB-FM (Northland Broadcasting, LLC), and KLDJ-FM (NB II, Inc.) which FCC consents to the pro forma transfer of control were granted by the FCC on December 19, 1997. 34 (iii) The Company and each of the Guarantors validly hold all FCC licenses or authorizations necessary for the operation of the radio stations in the manner in which they are described as being conducted in the Memorandum ("FCC Licenses"); the FCC Licenses are valid in accordance with their terms and are not subject to any conditions or requirements not generally imposed by the FCC upon the holders of such licenses. (iv) All applicable administrative and judicial appeal, review and reconsideration periods relating to the grant of the FCC Licenses have expired without such counsel being served with any timely filing or petition requesting reconsideration, review or appeal of such actions, and without the FCC having instituted review or reconsideration of the grant of any of the FCC Licenses on its own motion. (v) To our knowledge, the Company and each of the Guarantors filed with the FCC all material reports, documents, instruments, information and applications required to be filed pursuant to the Communications Law. No notice has been issued by the FCC which could permit, or after notice or lapse of time or both could permit, revocation or termination of any of the FCC Licenses prior to the expiration dates thereof or which could result in any other material impairment of any of the Company's and each of the Guarantors' rights thereunder. (vi) To our knowledge, there is not outstanding or pending any notice of violation, notice of apparent liability, order to show cause, material complaint or investigation by or before the FCC, except for the pending Petition To Deny the renewal application for station KUAD-FM filed by the Rainbow-PUSH Condition alleging violation of the FCC equal employment opportunity rules and factual misrepresentations, and the pending Petition To Deny and informal objection to the assignment applications involving stations KLIK-AM, KTXY-FM and KATI-FM alleging undue media concentration in the Jefferson City, Missouri market if the proposed buyers are permitted to acquire these stations, and order of forfeiture in the amount of $3,000.00 against station KUAD-FM for violation of the sponsorship identification provisions of the FCC Rules. We have no knowledge of facts at this time, subject to the Company's and the Guarantors' continued regulatory compliance and the favorable resolution of the Petition To Deny the KUAD-FM renewal application, that would lead us to believe that the FCC Licenses will not be renewed in the ordinary course. (vii) Subject to obtaining the prior consent of the FCC to the pro forma transfer of control applications as noted in paragraph (ii) above, the acquisitions and the proposed acquisitions described in the Memorandum, under the section "Transactions", are in compliance with the Communications Law. 35 (viii) To our knowledge, the Company and each of the Guarantors possess all FCC Licenses presently required or necessary under the Communications Act and the FCC Rules to operate its respective properties and to carry on its respective businesses as now or proposed to be conducted as described in the Preliminary Memorandum and except where the failure to obtain such FCC Licenses would not, individually or in the aggregate, have a Material Adverse Effect; to our knowledge, no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such FCC License except where such revocation termination or impairment would not, individually or in the aggregate, have a Material Adverse Effect. (d) On the Closing Date, the Initial Purchaser shall have received the opinion, in form and substance satisfactory to the Initial Purchaser, dated as of the Closing Date and addressed to the Initial Purchaser, of White & Case, counsel for the Initial Purchaser, with respect to certain legal matters relating to this Agreement and such other related matters as the Initial Purchaser may reasonably require. In rendering such opinion, White & Case shall have received and may rely upon such certificates and other documents and information as it may reasonably request to pass upon such matters. (e) The Initial Purchaser shall have received from each of Ernst & Young LLP a comfort letter dated the date hereof and the Closing Date, substantially in the form attached as Exhibit B hereto. (f) On the Closing Date, the Initial Purchaser shall have received the following agreements, duly authorized, executed and (except for the Indenture, to which the Initial Purchaser is not a party) delivered by each of the parties thereto, in form and substance satisfactory to counsel for the Initial Purchaser, and containing such terms and conditions that are usual and customary in transactions similar to those contemplated hereby and thereby, dated the Closing Date, and each such agreement shall be in full force and effect according to its terms: (i) the Indenture; (ii) the Registration Rights Agreement; (iii) the Guarantees; (iv) the Unit Agreement; 36 (v) the Appreciation Notes Indenture; and (vi) the Appreciation Notes Registration Rights Agreement. (g) On the Closing Date, the Initial Purchaser shall have received evidence that all obligations of the Company and the Guarantors with respect to the Credit Agreement, shall have been terminated and the total commitment under the Credit Agreement shall have been terminated, all loans thereunder shall have been repaid in full, together with interest thereon and all other amounts owing pursuant to the Credit Agreement shall have been repaid in full and the Credit Agreement shall have been terminated and be of no further force or effect. The Initial Purchaser shall have received copies of all original documents (including a pay-off letter) giving effect to the matters contemplated by this subparagraph (g) in form, scope and substance reasonably satisfactory to counsel to the Initial Purchaser. (h) On the Closing Date, the Initial Purchaser shall have received executed copies of the following agreements or notes, duly authorized and executed by each of the parties thereto, in form and substance satisfactory to counsel for the Initial Purchaser, and containing such terms and conditions that are usual and customary in transactions similar to those contemplated hereby and thereby, dated the Closing Date, and each such agreement shall be in full force and effect according to its terms: (i) the Managed Affiliate Management Agreements (as defined in the Memorandum); and (ii) the Managed Affiliate Notes (as defined in the Memorandum), executed by each of TSB III, LLC and TSB IV, LLC in favor of Tri-State Broadcasting, Inc. (i) The Initial Purchaser shall have received good standing certificates for the Company and each of the Guarantors from their respective states of incorporation or formation, as the case may be, and from each of the respective jurisdictions where each of them is qualified to do business as a foreign corporation, limited liability company or limited partnership. (j) The representations and warranties of the Company and the Guarantors contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date; the statements of the Company's or any Guarantor's officers made pursuant to any certificate delivered in accordance with the provisions hereof shall be true and correct on and as of the date made and on and as of the Closing Date; the Company and the Guarantors shall 37 have performed all covenants and agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date; and, except as described in the Final Memorandum (exclusive of any amendment or supplement thereto after the date hereof), subsequent to the date of the most recent financial statements in such Final Memorandum, there shall have been no event or development that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect. (k) The sale of the Securities hereunder shall not be enjoined (temporarily or permanently) on the Closing Date. (l) The Securities shall have been approved by the NASD for trading in the PORTAL Market. (m) There shall not have occurred any invalidation of Rule 144A under the Securities Act by any court or any withdrawal or proposed withdrawal of any rule or regulation under the Securities Act or the Exchange Act by the Commission or any amendment or proposed amendment thereof by the Commission which in the judgment of the Initial Purchaser would materially impair the ability of the Initial Purchaser to purchase, hold or effect resales of the Securities as contemplated hereby. (n) There shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and the Guarantors, taken as a whole, from that set forth in the Final Memorandum that constitutes a Material Adverse Effect and that makes it, in the Initial Purchaser's judgment, impracticable to market the Notes or the Appreciation Notes on the terms and in the manner contemplated in the Final Memorandum. (o) Subsequent to the date of the most recent financial statements in the Final Memorandum (exclusive of any amendment or supplement thereto after the date hereof), the conduct of the business and operations of the Company and the Guarantors shall not have been interfered with by strike, fire, flood, hurricane, accident or other calamity (whether or not insured) or by any court or governmental action, order or decree, and, except as otherwise stated therein, the properties of the Company and the Guarantors shall not have sustained any loss or damage (whether or not insured) as a result of any such occurrence, except any such calamity, action, order, decree, loss or damage which would not, individually or in the aggregate, have a Material Adverse Effect. 38 (p) No securities of the Company or any Guarantor shall have been downgraded or placed on any "watch list" for possible downgrading by any nationally recognized statistical rating organization. (q) The Initial Purchaser shall have received certificates of the Company and each Guarantor, dated the Closing Date, signed by their respective Chairman of the Board, President or any Senior Vice President and the Chief Financial Officer, to the effect that: (i) The representations and warranties of the Company and such Guarantor contained in this Agreement are true and correct as of the date hereof and as of the Closing Date, and the Company and each Guarantor has performed all covenants and agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date; (ii) At the Closing Date, since the date hereof or since the date of the most recent financial statements in the Final Memorandum (exclusive of any amendment or supplement thereto after the date hereof), no event or events have occurred, no information has become known nor does any condition exist that, individually or in the aggregate, would have a Material Adverse Effect; (iii) The sale of the Securities hereunder has not been enjoined (temporarily or permanently); (iv) Contemporaneously with the sale of the Units to the Initial Purchaser on the Closing Date, the Company shall have caused to be paid or paid all indebtedness owed to AMRESCO Funding Corporation and Goldman Sachs Credit Partners, L.P. under the Credit Agreement; and (v) such other information as the Initial Purchaser may reasonably request. (r) The Initial Purchaser shall have received a certificate from the corporate secretary of the Company, dated the Closing Date, attaching certified copies of (i) all resolutions of the Board of Directors or board of managers of the Company, as the case may be, authorizing the transactions contemplated by this Agreement, including, without limitation, approving the offering of the Units, the entering into this Agreement, the Indenture, the Registration Rights Agreement, the Unit Agreement, the Appreciation Notes Indenture, the Appreciation Notes Registration Rights Agreement and the Managed Affiliate Management Agreements (as defined in the Memorandum), (ii) the certificate of incorporation and by-laws of the Company, or the operating 39 agreement or the partnership agreement, as the case may be, and (iii) certifying the names and true signatures of those officers of the Company executing any documents contemplated by this Agreement. (s) Prior to the Closing Date, the FCC consents referred to in paragraph (ii) of Section 7(c) hereof shall be obtained. On or before the Closing Date, the Initial Purchaser and counsel for the Initial Purchaser shall have received such further documents, opinions, certificates, letters and schedules or instruments relating to the business, corporate, legal and financial affairs of the Company and the Guarantors as they shall have heretofore reasonably requested from the Company and the Guarantors. All such documents, opinions, certificates, letters, schedules or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are reasonably satisfactory in all material respects to the Initial Purchaser and counsel for the Initial Purchaser. The Company and the Guarantors shall furnish to the Initial Purchaser such conformed copies of such documents, opinions, certificates, letters, schedules and instruments in such quantities as the Initial Purchaser shall reasonably request. 8. Offering of Notes; Restrictions on Transfer. The Initial Purchaser agrees with the Company that (i) it has not and will not solicit offers for, or offer or sell, the Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Act; (ii) it has not engaged in any "directed selling efforts" (as such term is defined in Rule 902 of Regulation S under the Act) with respect to Securities offered in reliance on Regulation S and (iii) it has and will solicit offers for the Securities only from, and will offer the Securities only to (A) in the case of offers inside the United States, (x) persons whom the Initial Purchaser reasonably believes to be QIBs or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to the Initial Purchaser that each such account is a QIB, in each case to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A, and, in each case, in transactions under Rule 144A or (y) a limited number of other institutional investors reasonably believed by the Initial Purchaser to be Accredited Investors that, prior to their purchase of the Securities, deliver to the Initial Purchaser a letter containing the representations and agreements set forth in Exhibit A to the Final Memorandum and (B) in the case of offers outside the United States, to or for the account or benefit of persons other than U.S. persons ("foreign purchasers," which term shall include dealers or other professional fiduciaries in the United States acting on 40 a discretionary basis for foreign beneficial owners (other than an estate or trust)); provided, however, that, in the case of this clause (B), (x) in purchasing such Securities such persons are deemed to have represented and agreed as provided under the caption "Transfer Restrictions" contained in the Final Memorandum and (y) no sales shall be made pursuant to this clause (B) to any person unless, at the time that the order to purchase the Securities was placed, such person was outside the United States or the Initial Purchaser and any person acting on its behalf reasonably believed, at the time such order was placed, that such person was outside the United States. For the purposes of this Section 8 the term "United States" shall have the meaning ascribed thereto in Rule 902 of Regulation S under the Act. The Initial Purchaser represents and warrants that it is a QIB, with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Units. The Initial Purchaser agrees to comply with the applicable provisions of Rule 144A and Regulation S under the Act. In connection with sales of the Units outside the United States, the Initial Purchaser agrees that it will not offer, sell or deliver the Units to, or for the account or benefit of, U.S. Persons (i) as part of its distribution at any time or (ii) otherwise prior to 40 days after the offering of the Units and it will send to any dealer to whom they sell Units during such period a confirmation or other notice setting forth the restrictions on offers and sales of the Units within the Unites States or to, or for the account or benefit of, U.S. Persons. The Initial Purchaser hereby acknowledges that the Company and the Guarantors and, for purposes of the opinions to be delivered to the Initial Purchaser pursuant to Section 7(b) hereof, counsel to the Company, will rely upon the accuracy and truth of the representations contained in this Section 8 and the Initial Purchaser hereby consents to such reliance. 9. Indemnification and Contribution. (a) The Company and the Guarantors jointly and severally agree to indemnify and hold harmless the Initial Purchaser and its respective affiliates, directors, officers, agents, representatives general partners and employees of the Initial Purchaser or its affiliates, and each other person, if any, who controls the Initial Purchaser or its affiliates within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the full extent lawful against any losses, claims, damages, expenses or liabilities (or actions in respect thereof, including, without, limitation, shareholder derivative actions and arbitration proceedings) to which the Initial Purchaser or such other person may become subject under the Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in any Memorandum or any amendment or supplement thereto or any 41 application or other document, or any amendment or supplement thereto, executed by the Company, or any Guarantor or based upon written information furnished by or on behalf of the Company, or any Guarantor filed in any jurisdiction in order to qualify the Securities under the securities or "Blue Sky" laws thereof or filed with any securities association or securities exchange (each an "Application"); (ii) the omission or alleged omission to state, in any Memorandum or any amendment or supplement thereto or any Application, a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iii) any breach of any of the representations and warranties of the Company and the Guarantors set forth in this Agreement, the Registration Rights Agreement, the Unit Agreement, the Appreciation Notes Registration Rights Agreement and the Guarantees, and will reimburse, as incurred, the Initial Purchaser and each such other person for any legal or other expenses incurred by the Initial Purchaser or such other person in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, the Company and the Guarantors will not be liable in any such case to the extent that any such loss, claim, damage, or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission (A) made in any Memorandum or any amendment or supplement thereto or any Application in reliance upon and in conformity with written information concerning the Initial Purchaser furnished to the Company by the Initial Purchaser specifically for use therein or (B) which results from the fact that a copy of the Final Memorandum was not sent or given to such person, and if the untrue statement or omission or alleged untrue statement or omission that was contained in the Preliminary Memorandum has been corrected in the Final Memorandum and delivered to the Initial Purchaser on a timely basis to permit such delivery or sending. This indemnity agreement will be in addition to any liabilities or obligations that the Company and the Guarantors may otherwise have to the indemnified parties, including without limitation the indemnification obligations of the Company pursuant to the NatWest Engagement Letter. The Company and the Guarantors shall not be liable under this Section 9 for any settlement of any claim or action effected without their prior written consent, which shall not be unreasonably withheld. (b) The Initial Purchaser agrees to indemnify and hold harmless the Company and the Guarantors, their directors, their officers and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Company or the Guarantors or any such director, officer or controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or 42 liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Memorandum or any amendment or supplement thereto or any Application, or (ii) the omission or the alleged omission to state therein a material fact required to be stated in any Memorandum or any amendment or supplement thereto or any Application, or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning the Initial Purchaser, furnished to the Company or the Guarantors by the Initial Purchaser specifically for use therein; and subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any legal or other expenses incurred by the Company, or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability that the Initial Purchaser may otherwise have to the indemnified parties. The Initial Purchaser shall not be liable under this Section 9 for any settlement of any claim or action effected without its prior written consent, which shall not be unreasonably withheld. The Company and the Guarantors shall not, without the prior written consent of the Initial Purchaser, effect any settlement or compromise of any pending or threatened proceeding in respect of which the Initial Purchaser is or could have been a party, or indemnity could have been sought hereunder by the Initial Purchaser, unless such settlement (A) includes an unconditional written release of the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of the Initial Purchaser. (c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action for which such indemnified party is entitled to indemnification under this Section 9, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) and (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if (i) the use of counsel chosen by the 43 indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt by the indemnifying party of notice of the institution of such action, then, in each such case, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Initial Purchaser in the case of paragraph (a) of this Section 9 or either the Company or any of the Guarantors in the case of paragraph (b) of this Section 9, representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnified party waived in writing its rights under this Section 9, in which case the indemnified party may effect such a settlement without such consent. (d) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 9 is unavailable to an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the 44 indemnified party on the other from the offering of the Securities or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchaser on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of commissions and before deducting expenses) received by the Company and the Guarantors bear to the total discounts and commissions received by the Initial Purchaser. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors on the one hand, or the Initial Purchaser on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission, and any other equitable considerations appropriate in the circumstances. The Company, the Guarantors and the Initial Purchaser agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (d). Notwithstanding any other provision of this paragraph (d), the Initial Purchaser shall not be obligated to make contributions hereunder that in the aggregate exceed the total discounts, commissions and other compensation received by the Initial Purchaser under this Agreement, less the aggregate amount of any damages that the Initial Purchaser has otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Initial Purchaser, and each director of the Company, each officer of the Company and each person, if any, who controls the Company or the Guarantors within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Company. 10. Survival Clause. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Company, the Guarantors, their respective officers and the Initial Purchaser set forth in this Agreement or made by or on behalf of them pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Company, the Guarantors, any of their respective officers or directors, the Initial Purchaser or any other person 45 referred to in Section 9 hereof and (ii) delivery of and payment for the Securities. The respective agreements, covenants, indemnities and other statements set forth in Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement. 11. Termination. (a) This Agreement may be terminated in the sole discretion of the Initial Purchaser by notice to the Company given prior to the Closing Date in the event that the Company, or any Guarantor shall have failed, refused or been unable to perform all obligations and satisfy all conditions on their respective part to be performed or satisfied hereunder at or prior thereto or, if at or prior to the Closing any of the following shall have occurred: (i) either the Company, or any Guarantor shall have sustained any loss or interference with respect to its businesses or properties from fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any strike, labor dispute, slow down or work stoppage or any legal or governmental proceeding, which loss or interference has had, has or could be reasonably likely to have a Material Adverse Effect, or there shall have been, in the sole judgment of the Initial Purchaser, any event or development that, individually or in the aggregate, has or could be reasonably likely to have a Material Adverse Effect (including without limitation a change in control of the Company or the Guarantors), except in each case as described in the Final Memorandum (exclusive of any amendment or supplement thereto); (ii) there shall have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and the Guarantors taken as a whole, from that set forth in the Final Memorandum that is material and adverse and that makes it, in the Initial Purchaser's judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Final Memorandum; (iii) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers, Inc. or the setting of minimum prices for trading on such exchange or market shall have occurred or trading of any securities of the Company or the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iv) a banking moratorium shall have been declared by New York or United States authorities; 46 (v) there shall have been (A) an outbreak or escalation of hostilities between the United States and any foreign power, (B) an outbreak or escalation of any other insurrection or armed conflict involving the United States, (C) any material change in the financial markets of the United States or (D) any other national or international calamity or emergency which, in the case of (A), (B), (C) or (D) above and in the sole judgment of the Initial Purchaser, makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities as contemplated by the Final Memorandum; (vi) the taking of any action by any federal, state or local government or agency in respect of its monetary or fiscal affairs that has a material adverse effect on the financial markets in the United States, and would, in the sole judgment of the Initial Purchaser, make it impracticable or inadvisable to market the Securities; (vii) the proposal, enactment, publication, decree, or other promulgation of any federal or state statute, regulation, rule or order of any court or other governmental authority which, in the sole judgment of the Initial Purchaser, would have a Material Adverse Effect; (viii) any securities of the Company shall have been downgraded or placed on any "watch list" for possible downgrading by any nationally recognized statistical rating organization; or (ix) it shall have become impractical, in the sole judgment of the Initial Purchaser, for the Company to consummate the offering of the Units, on the terms described in the Final Memorandum. (b) Termination of this Agreement pursuant to this Section 11 shall be without liability of any party to any other party except as provided in Sections 6 and 10 hereof. 12. Information Supplied by the Initial Purchaser. The statements set forth in the "stabilization legend" on the inside front cover page of each Memorandum and the fifth through ninth paragraphs under the heading "Plan of Distribution" in each Memorandum (to the extent any such statements relate to the Initial Purchaser) constitute as of the date hereof the only information furnished by the Initial Purchaser to the Company for the purposes of Sections 2(a), 7(a), 7(b) and 9 hereof. 13. Notices. All communications hereunder shall be in writing and, if sent to the Initial Purchaser, shall be mailed or delivered to (i) NatWest Capital Markets Limited, 135 Bishopgate, London, England, Attention: Roger Hoit; with a copy to White & Case, 1155 Avenue of the Americas, New York, NY 10036, Attention: Timothy B. 47 Goodell, Esq.; if sent to the Company, shall be mailed or delivered to the Company at Brill Media Company, LLC, 420 N.W. Fifth Street, Suite 3-B, P.O. Box 3353, Evansville, Indiana 47732, Attention: Alan R. Brill, with a copy to Thompson & McMullan, 100 Shockoe Slip, Richmond, VA 2329-4140, Attention: Charles W. Laughlin, Esq. All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; and one business day after being timely delivered to a next-day air courier. 14. Successors. This Agreement shall inure to the benefit of and be binding upon the Initial Purchaser, the Company, the Guarantors and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Company and the Guarantors contained in Section 9 of this Agreement shall also be for the benefit of any person or persons who control the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchaser contained in Section 9 of this Agreement shall also be for the benefit of the directors of the Company and officers and any person or persons who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of Units from the Initial Purchaser will be deemed a successor because of such purchase. 15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW. 16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 48 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company, the Guarantors and the Initial Purchaser. Very truly yours, BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By_________________________ Name: Alan R. Brill Title:President BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By____________________________ Name: Alan R. Brill Title: President BMC HOLDINGS, LLC, a Virginia Limited Liability Company BY: BRILL MEDIA COMPANY, LLC, its Manager BY: BRILL MEDIA MANAGEMENT, INC., its Manager By:______________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President TRI-STATE BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:______________________ Name: Alan R. Brill Title: Vice President NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation its Manager By:______________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC. a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:____________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:___________________________ Alan R. Brill, President NCR III, LLC, a Virginia Limited Liability Company By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Limited Liability Company By:_____________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_____________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By:___________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:_____________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:____________________ Name: Alan R. Brill Title: President The foregoing Agreement is hereby confirmed and accepted as of the date first above written. NATWEST CAPITAL MARKETS LIMITED By:_____________________________ Name: Title: SCHEDULE 1 Principal Amount of Initial Purchaser Notes - ------------------ ------ NatWest Capital Markets Limited....... $105,000,000 Number of Units ----- NatWest Capital Markets Limited....... 105,000 SCHEDULE 2 GUARANTORS Name 1. Holdings 2. Reading Radio, Inc. 3. Tri-State Broadcasting, Inc. 4. Northern Colorado Radio, Inc. 5. NCR II, Inc. 6. Central Missouri Broadcasting, Inc. 7. CMB II, Inc. 8. Northland Broadcasting, LLC 9. NB II, Inc. 10. Central Michigan Newspapers, Inc. 11. Cadillac Newspapers, Inc. 12. CMN Associated Publications, Inc. 13. Central Michigan Distribution Co., L.P. 14. Central Michigan Distribution Co., Inc. 15. Gladwin Newspapers, Inc. 16. Graph Ads Printing, Inc. 17. Midland Buyer's Guide, Inc. 18. St. Johns Newspapers, Inc. 19. Huron P.S., LLC 20. Huron Newspapers, LLC 21. Huron Holdings, LLC 22. Northern Colorado Holdings, LLC 23. NCR III, LLC 24. NCH II, LLC 25. Northland Holdings, LLC 26. CMN Holdings, Inc. 27. Brill Radio Inc. 28. Brill Newspapers, Inc. SCHEDULE 3 Northland Broadcasting, LLC Huron P.S., LLC Huron Newspapers, LLC Huron Holdings, LLC Northern Colorado Holdings, LLC NCR III, LLC NCH II, LLC Northland Holdings, LLC EX-10.10(A) 81 EXHIBIT 10.10(A) Execution Copy ----------------------------- ----------------------------- REGISTRATION RIGHTS AGREEMENT Dated as of December 30, 1997 by and among BRILL MEDIA COMPANY, LLC, BRILL MEDIA MANAGEMENT, INC., THE SUBSIDIARY GUARANTORS named herein and NATWEST CAPITAL MARKETS LIMITED as Initial Purchaser ----------------------------- ----------------------------- $105,000,000 12% SENIOR NOTES DUE 2007 TABLE OF CONTENTS Page 1. Definitions ........................................................... 1 2. Exchange Offer ........................................................ 5 3. Shelf Registration .................................................... 8 4. Additional Interest ................................................... 10 5. Registration Procedures ............................................... 12 6. Registration Expenses ................................................. 21 7. Indemnification ....................................................... 22 8. Rules 144 and 144A .................................................... 26 9. Underwritten Registrations ............................................ 26 10. Miscellaneous ......................................................... 27 (a) No Inconsistent Agreements ....................................... 27 (b) Adjustments Affecting Registrable Notes .......................... 27 (c) Amendments and Waivers ........................................... 27 (d) Notices .......................................................... 27 (e) Successors and Assigns ........................................... 29 (f) Counterparts ..................................................... 29 (g) Headings ......................................................... 29 (h) Governing Law .................................................... 29 (i) Severability ..................................................... 29 (j) Notes Held by the Issuers or their Affiliates .................... 29 (k) Third Party Beneficiaries ........................................ 30 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is dated as of December 30, 1997, by and among Brill Media Company, LLC, a Virginia limited liability company ("BMC"), Brill Media Management, Inc., a Virginia corporation ("Media" and, collectively with BMC, the "Company"), the subsidiary guarantors of the Company's obligations hereunder as listed on Schedule A hereto (collectively, the "Guarantors"), and NatWest Capital Markets Limited (the "Initial Purchaser"). This Agreement is entered into in connection with the Purchase Agreement, dated December 22, 1997, among the Company, the Guarantors and the Initial Purchaser (the "Purchase Agreement"), which provides for the sale by the Company to the Initial Purchaser of $105,000,000 aggregate principal amount of the Company's 12% Senior Notes due 2007 (the "Notes"), which Notes will be guaranteed by the Guarantors. The Company and the Guarantors are collectively referred to herein as the "Issuers." In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchaser and its direct and indirect transferees. The execution and delivery of this Agreement is a condition to the obligation of the Initial Purchaser to purchase the Notes under the Purchase Agreement. The parties hereby agree as follows: 1. Definitions As used in this Agreement, the following terms shall have the following meanings: Additional Interest: Has the meaning provided in Section 4(a) hereof. Advice: Has the meaning provided in the last paragraph of Section 5 hereof. Agreement: Has the meaning provided in the first introductory paragraph hereto. Applicable Period: Has the meaning provided in Section 2(b) hereof. Closing Date: Has the meaning provided in the Purchase Agreement. Company: Has the meaning provided in the first introductory paragraph hereto. Effectiveness Date: The 90th day after the Filing Date. Effectiveness Period: Has the meaning provided in Section 3(a) hereof. Event Date: Has the meaning provided in Section 4(b) hereof. Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Exchange Notes: Has the meaning provided in Section 2(a) hereof. Exchange Offer: Has the meaning provided in Section 2(a) hereof. Exchange Registration Statement: Has the meaning provided in Section 2(a) hereof. Filing Date: The 60th day after the Issue Date. Guarantors: Has the meaning provided in the first introductory paragraph hereto. Holder: Any holder of a Registrable Note or Registrable Notes. Indemnified Person: Has the meaning provided in Section 7(c) hereof. Indemnifying Person: Has the meaning provided in Section 7(c) hereof. Indenture: The Indenture, dated as of December 30, 1997 between the Company, the Guarantors and United States Trust Company of New York, as trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. Initial Purchaser: Has the meaning provided in the first introductory paragraph hereto. Inspectors: Has the meaning provided in Section 5(o) hereof. 2 Issue Date: The date on which the original Notes were sold to the Initial Purchaser pursuant to the Purchase Agreement. Issuers: Has the meaning provided in the second introductory paragraph hereto. NASD: Has the meaning provided in Section 5(s) hereof. Notes: Has the meaning provided in the second introductory paragraph hereto. Participant: Has the meaning provided in Section 7(a) hereof. Participating Broker-Dealer: Has the meaning provided in Section 2(b) hereof. Persons: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity. Private Exchange: Has the meaning provided in Section 2(b) hereof. Private Exchange Notes: Has the meaning provided in Section 2(b) hereof. Prospectus: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. Purchase Agreement: Has the meaning provided in the second introductory paragraph hereto. Records: Has the meaning provided in Section 5(o) hereof. 3 Registrable Notes: Each Note upon original issuance of the Notes and at all times subsequent thereto and each Private Exchange Note upon original issuance thereof and at all times subsequent thereto, until in the case of any such Note or Private Exchange Note, as the case may be, the earliest to occur of (i) a Registration Statement covering such Note or Private Exchange Note, as the case may be, has been declared effective by the SEC and such Note (unless such Note was not tendered for exchange by the Holder thereof), or Private Exchange Note, as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Note or Private Exchange Note, as the case may be, is, or may be, sold in compliance with Rule 144, or (iii) such Note or Private Exchange Note, as the case may be, ceases to be outstanding for purposes of the Indenture. Registration Statement: Any registration statement of the Company, including, but not limited to, the Exchange Registration Statement, that covers any of the Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. Shelf Notice: Has the meaning provided in Section 2(c) hereof. 4 Shelf Registration: Has the meaning provided in Section 3(a) hereof. Shelf Registration Statement: shall mean a "shelf" registration statement of the Company and the Guarantors which covers all of the Registrable Notes on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. TIA: The Trust Indenture Act of 1939, as amended. Trustee(s): The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any). Underwritten registration or underwritten offering: A registration in which securities of one or more of the Issuers are sold to an underwriter for reoffering to the public. 2. Exchange Offer (a) Each of the Issuers agrees to file with the SEC no later than the Filing Date an offer to exchange (the "Exchange Offer") any and all of the Notes for a like aggregate principal amount of debt securities of the Company, guaranteed by the Guarantors, which are identical in all material respects to the Notes (the "Exchange Notes") (and which are entitled to the benefits of the Indenture or a trust indenture that is identical in all material respects to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA) and which, in either case, has been qualified under the TIA), except that (i) the Exchange Notes shall have been registered pursuant to an effective Registration Statement under the Securities Act and shall contain no restrictive legend thereon and (ii) the Exchange Notes shall not be entitled to any further registration rights hereunder or to any Additional Interest. The Exchange Offer shall be registered under the Securities Act on the appropriate form (the "Exchange Registration Statement") and shall comply with all applicable tender offer rules and regulations under the Exchange Act. The Issuers agree to use their reasonable best efforts to (x) cause the Exchange Registration Statement to be declared effective under the Securities Act no later than the 90th day after the Filing Date; (y) keep the Exchange Offer open for at least 20 business days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to the Holders; and (z) consummate the Exchange Offer on or prior to the 120th day following the Filing Date. If after such Exchange Registration 5 Statement is declared effective by the SEC, the Exchange Offer or the issuance of the Exchange Notes thereunder is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Exchange Registration Statement shall be deemed not to have become effective for purposes of this Agreement until such stop order, injunction or other order or requirement is no longer in effect. Each Holder who participates in the Exchange Offer will be required to represent that any Exchange Notes received by it will be acquired in the ordinary course of its business, that at the time of the consummation of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes in violation of the provisions of the Securities Act, that such Holder is not an "affiliate" of any of the Issuers within the meaning of the Securities Act and that such Holder is not acting on behalf of any person who could not truthfully make the foregoing representations. Upon consummation of the Exchange Offer in accordance with this Section 2, the Issuers shall have no further obligation to register Registrable Notes (other than Private Exchange Notes pursuant to Section 3 hereof). No securities other than the Exchange Notes shall be included in the Exchange Registration Statement. (b) The Issuers shall include within the Prospectus contained in the Exchange Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchaser, which shall contain a summary statement of the positions taken or policies made by the Staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the Staff of the SEC or such positions or policies, in the judgment of the Initial Purchaser, represent the prevailing views of the Staff of the SEC. Such "Plan of Distribution" section shall also expressly permit the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Notes. Each of the Issuers shall use its reasonable best efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by any Participating Broker-Dealer subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with applicable law in connection with any resale of the Exchange Notes; provided, however, that such period shall not exceed 180 days after the consummation of the Exchange Offer (or such longer period if extended pursuant to the last paragraph of Section 5 hereof) (the "Applicable Period"). 6 If, prior to consummation of the Exchange Offer, the Initial Purchaser holds any Notes acquired by it and having the status of an unsold allotment in the initial distribution, the Issuers shall, upon the request of the Initial Purchaser, simultaneously with the delivery of the Exchange Notes in the Exchange Offer issue and deliver to the Initial Purchaser in exchange (the "Private Exchange") for such Notes held by the Initial Purchaser a like principal amount of debt securities of the Company, guaranteed by the Guarantors, that are identical in all material respects to the Exchange Notes (the "Private Exchange Notes") (and which are issued pursuant to the same Indenture as the Exchange Notes) except for the placement of a restrictive legend on such Private Exchange Notes. The Private Exchange Notes shall if permissible bear the same CUSIP number as the Exchange Notes. Interest on the Exchange Notes and the Private Exchange Notes will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the Issue Date. In connection with the Exchange Offer, the Issuers shall: (1) mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal and related documents; (2) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; (3) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last business day on which the Exchange Offer shall remain open; and (4) otherwise comply in all material respects with all applicable laws, rules and regulations. As soon as practicable after the close of the Exchange Offer or the Private Exchange, as the case may be, the Issuers shall: (1) accept for exchange all Notes tendered and not validly withdrawn pursuant to the Exchange Offer or the Private Exchange; 7 (2) deliver to the Trustee for cancellation all Notes so accepted for exchange; and (3) cause the Trustee to authenticate and deliver promptly to each Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. The Exchange Notes and the Private Exchange Notes are to be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture, which in either event shall provide that (1) the Exchange Notes shall not be subject to the transfer restrictions set forth in the Indenture and (2) the Private Exchange Notes shall be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter. (c) If, (i) because of any change in law or in currently prevailing interpretations of the Staff of the SEC, the Issuers are not permitted to effect an Exchange Offer, (ii) the Exchange Offer is not consummated within 120 days after the Filing Date, (iii) any holder of Private Exchange Notes so requests at any time after the consummation of the Private Exchange, or (iv) if any Holder (other than the Initial Purchaser) is not eligible to participate in the Exchange Offer or such Holder does not receive Exchange Notes on the date of the exchange that may be sold without restriction under the state and federal securities laws (other than due solely to the status of such Holder as an affiliate of any of the Issuers within the meaning of the Securities Act), then the Issuers shall promptly deliver to the Holders and the Trustee written notice thereof (the "Shelf Notice") and, in the case of clauses (i) and (ii) above, to all Holders, in the case of clause (iii) above, to the Holders of the Private Exchange Notes and, in the case of clause (iv) above, to the affected Holder, and shall as promptly as reasonably practicable file a Shelf Registration pursuant to Section 3 hereof, provided, however, that in the case of clause (iii) above such holder shall pay all reasonable registration expenses of the Company as described in Section 6 hereof in connection with such Shelf Registration of such Private Exchange Notes. 3. Shelf Registration If a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then: (a) Shelf Registration. The Issuers shall as promptly as reasonably practicable file with the SEC a Registration Statement for an offering to be made on a 8 continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the "Shelf Registration"). If the Issuers shall not have yet filed an Exchange Registration Statement, each of the Issuers shall use its best efforts to file with the SEC the Shelf Registration on or prior to the Filing Date. The Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers shall not permit any securities other than the Registrable Notes to be included in the Shelf Registration. Each of the Issuers shall use its reasonable best efforts to cause the Shelf Registration to be declared effective under the Securities Act by the 180th day after the Issue Date and to keep the Shelf Registration continuously effective under the Securities Act until the date which is two years from the Issue Date, subject to extension pursuant to the last paragraph of Section 5 hereof, or such shorter period ending when all Registrable Notes covered by the Shelf Registration have been sold in the manner set forth and as contemplated in the Shelf Registration or when the Notes become eligible for transfer without volume restrictions pursuant to Rule 144 under the Securities Act (the "Effectiveness Period"). (b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), each of the Issuers shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof. (c) Supplements and Amendments. The Issuers shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested for such purpose by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes. 4. Additional Interest (a) The Issuers and the Initial Purchaser agree that the Holders of Registrable Notes will suffer damages if the Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree to pay, as the sole liquidated damages for such failure, additional interest on the Notes ("Additional Interest") under the circumstances and to the extent set forth below: 9 (i) if neither the Exchange Registration Statement nor the Shelf Registration has been filed on or prior to the Filing Date, then, commencing on the 61st day after the Issue Date, Additional Interest shall accrue on the Notes over and above the stated interest at a rate of 0.50% per annum for the first 30 days commencing on the 61st day after the Issue Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; (ii) if neither the Exchange Registration Statement nor the Shelf Registration is declared effective by the SEC on or prior to the Effectiveness Date, then, commencing on the 91st day after the Filing Date, Additional Interest shall accrue on the Notes included or which should have been included in such Registration Statement over and above the stated interest at a rate of 0.50% per annum for the first 30 days commencing on the 91st day after the Filing Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; and (iii) if (A) the Issuers have not exchanged Exchange Notes for all Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to the 120th day after the Filing Date or (B) the Exchange Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period, then Additional Interest shall accrue (over and above any interest otherwise payable on such Notes) at a rate of 0.50% per annum for the first 30 days commencing on (x) the 121st day after the Filing Date with respect to the Notes validly tendered and not exchanged by the Company, in the case of (A) above, or (y) the day the Exchange Registration Statement ceases to be effective in the case of (B) above, or (z) the day such Shelf Registration ceases to be effective in the case of (C) above, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each such subsequent 30-day period; provided, however, that in any event the Additional Interest rate on any affected Notes may not exceed at any one time in the aggregate 1.5% per annum; and provided, further, that (1) upon the filing of the Exchange Registration Statement or a Shelf Registration (in the case of clause (i) of this Section 4(a)), (2) upon the effectiveness of the Exchange Registration Statement or the Shelf Registration (in the case of clause (ii) of this Section 4(a)), or (3) upon the exchange of Exchange Notes for all Notes tendered (in the case of clause (iii)(A) of this Section 4(a)), or upon 10 the effectiveness of the Exchange Registration Statement which had ceased to remain effective (in the case of (iii)(B) of this Section 4(a)), or upon the effectiveness of the Shelf Registration which had ceased to remain effective (in the case of (iii)(C) of this Section 4(a)), Additional Interest on the affected Notes as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. (b) The Issuers shall notify the Trustee within one business day after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). The Company shall pay the Additional Interest due on the transfer restricted Notes by depositing with the paying agent (which shall not be the Company for these purposes) for the transfer restricted Notes, in trust, for the benefit of the holders thereof, prior to 11:00 A.M. on the next interest payment date specified by the Indenture (or such other indenture), sums sufficient to pay the Additional Interest then due. Any amounts of Additional Interest due pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable to the Holders of affected Notes in cash semi-annually on each interest payment date specified by the Indenture (or such other indenture) to the record holders entitled to receive the interest payment to be made on such date, commencing with the first such date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the affected Registrable Notes of such Holders, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 5. Registration Procedures In connection with the filing of any Registration Statement pursuant to Sections 2 or 3 hereof, the Issuers shall effect such registration(s) to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers hereunder, the Issuers shall: (a) Prepare and file with the SEC prior to the Filing Date a Registration Statement or Registration Statements as prescribed by Sections 2 or 3 hereof, and use their reasonable best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided, however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers 11 shall, if requested in writing, furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least three business days prior to such filing). The Issuers shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document under the immediately preceding sentence, if the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, their counsel, or the managing underwriters, if any, shall reasonably object thereto in writing. (b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period or until consummation of the Exchange Offer, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus; the Company shall be deemed not to have used its best efforts to keep a Registration Statement effective during the Applicable Period if it voluntarily takes any action that would result in selling Holders of the Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such Exchange Notes during that period unless such action is required by applicable law or unless the Company complies with this Agreement, including without limitation, the provisions of paragraph 5(k) hereof and the last paragraph of this Section 5. (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, notify the selling Holders of Registrable Notes, or each such Participating 12 Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within two business days), and confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the representations and warranties of the Issuers contained in any agreement (including any underwriting agreement), contemplated by Section 5(n) hereof cease to be true and correct, (iv) of the receipt by the Issuers of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the determination by the Issuers that a post-effective amendment to a Registration Statement would be appropriate. (d) Use its best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes for sale 13 in any jurisdiction, and, if any such order is issued, to use its best efforts to obtain the withdrawal of any such order at the earliest possible moment. (e) If a Shelf Registration is filed pursuant to Section 3 hereof and if requested by the managing underwriter or underwriters (if any), or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders, or counsel for any of them reasonably request to be included therein, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Issuers have received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement. (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes and to each such Participating Broker-Dealer who so requests and to counsel and each managing underwriter, if any, at the sole expense of the Issuers, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their respective counsel, and the underwriters, if any, at the sole expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, each Issuer hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case- 14 may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, to use its best efforts to register or qualify such Registrable Notes (and to cooperate with selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Notes) for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably request in writing; provided, however, that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Issuers agree to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h); keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided, however, that none of the Issuers shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request. 15 (j) Use its best efforts to cause the Registrable Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof or the underwriter or underwriters, if any, to dispose of such Registrable Notes, except as may be required solely as a consequence of the nature of a selling Holder's business, in which case each of the Issuers will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals. (k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (l) Use its best efforts to cause the Registrable Notes covered by a Registration Statement or the Exchange Notes, as the case may be, to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement or the Exchange Notes, as the case may be, or the managing underwriter or underwriters, if any. (m) Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes or Exchange Notes, as the case may be, in a form eligible for deposit with The Depositary Trust Company and (ii) provide a CUSIP number for the Registrable Notes or Exchange Notes, as the case may be. 16 (n) In connection with any underwritten offering initiated by the Company of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Notes and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to facilitate the registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Issuers and their respective subsidiaries and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by Issuers to underwriters in underwritten offerings of debt securities similar to the Notes, and confirm the same in writing if and when requested; (ii) obtain the written opinion of counsel to the Issuers and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten offerings of debt similar to the Notes and such other matters as may be reasonably requested by the managing underwriter or underwriters; (iii) obtain "cold comfort" letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of any subsidiary of any of the Issuers or of any business acquired by any of the Issuers for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt similar to the Notes and such other matters as reasonably requested by the managing underwriter or underwriters; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to said Section. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. (o) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the 17 Applicable Period, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the "Inspectors"), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and instruments of the Issuers and their respective subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuers and their respective subsidiaries to make available for inspection all information reasonably requested by any such Inspector in connection with such Registration Statement. Records which any of the Issuers determine, in good faith, to be confidential and any Records which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such information is, in the opinion of counsel (a copy of which shall be delivered to the Issuers) for any Inspector, necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement, or any transactions contemplated hereby or arising hereunder, or (iv) the information in such Records has been made generally available to the public. Each selling Holder of such Registrable Securities and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuers unless and until such information is generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Issuers and allow the Issuers to undertake appropriate action to prevent disclosure of the Records deemed confidential at the Issuers' sole expense. (p) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the Exchange Offer or the first Registration Statement relating to the Registrable Notes; and in connection therewith, cooperate 18 with the trustee under any such indenture and the Holders of the Registrable Notes, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner. (q) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said 12-month periods. (r) If an Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Issuers (or to such other Person as directed by the Issuers) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, the Issuers shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be; in no event shall such Registrable Notes be marked as paid or otherwise satisfied. (s) Cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"). (t) Use its best efforts to take all other steps necessary or advisable to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby. The Issuers may require each seller of Registrable Notes as to which any Registration Statement is being effected to furnish to the Issuers such information regarding 19 such seller and the distribution of such Registrable Notes as the Issuers may, from time to time, reasonably request. The Issuers may exclude from such Registration Statement the Registrable Notes of any seller who unreasonably fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuers all information required to be disclosed in order to make the information previously furnished to the Issuers by such seller not materially misleading. Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Issuers of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the "Advice") by the Issuers that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event the Issuers shall give any such notice, each of the Effectiveness Period and the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice. 6. Registration Expenses (a) Except as otherwise provided in Section 2(c) hereof, all fees and expenses incident to the performance of or compliance with this Agreement by the Issuers shall be borne by the Issuers whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of the Issuer's counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange 20 Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriter or underwriters, if any, by the Holders of a majority in aggregate principal amount of the Registrable Notes included in any Registration Statement or sold by any Participating Broker-Dealer, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Issuers, (v) fees and disbursements of all independent certified public accountants referred to in Section 5(n)(iii) hereof (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance by or incident to such performance), (vi) rating agency fees, if any, and any fees associated with making the Registrable Notes or Exchange Notes eligible for trading through The Depository Trust Company, (vii) Securities Act liability insurance, if the Issuers desire such insurance, (viii) fees and expenses of all other Persons retained by the Issuers, (ix) internal expenses of the Issuers (including, without limitation, all salaries and expenses of officers and employees of the Issuers performing legal or accounting duties), (x) the expense of any annual audit, (xi) the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange or any inter-dealer quotation system, if applicable, and (xii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, securities sales agreements, indentures and any other documents necessary in order to comply with this Agreement. (b) The Issuers, jointly and severally, shall (i) reimburse the Holders of the Registrable Notes being registered in a Shelf Registration for the reasonable fees and disbursements of not more than one counsel (in addition to appropriate local counsel) chosen by the Holders of a majority in aggregate principal amount of the Registrable Notes to be included in such Registration Statement and (ii) reimburse out-of-pocket expenses (other than legal expenses) of Holders of Registrable Notes incurred in connection with the registration and sale of the Registrable Notes pursuant to a Shelf Registration or in connection with the exchange of Registrable Notes pursuant to the Exchange Offer. In addition, the Issuers, jointly and severally, shall reimburse the Initial Purchaser for 50% (but not more than $30,000) of the reasonable fees and expenses of one counsel in connection with the Exchange Offer which shall be White & Case, and shall not be required to pay any other legal expenses of the Initial Purchaser in connection therewith. 7. Indemnification. (a) Each of the Issuers, jointly and severally, agrees to indemnify and hold harmless each Holder of Registrable Notes offered pursuant to a Shelf Registration Statement and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, the affiliates, directors, officers, agents, representatives 21 and employees of each such Person or its affiliates, and each other Person, if any, who controls any such Person or its affiliates within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Participant") from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable legal fees and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement pursuant to which the offering of such Registrable Notes or Exchange Notes, as the case may be, is registered (or any amendment thereto) or related Prospectus (or any amendments or supplements thereto) or any related preliminary prospectus, or caused by, arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Issuers will not be required to indemnify a Participant if (i) such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Participant furnished to the Issuers in writing by or on behalf of such Participant expressly for use therein or (ii) if such Participant sold to the person asserting the claim the Registrable Notes or Exchange Notes which are the subject of such claim and such untrue statement or omission or alleged untrue statement or omission was contained or made in any preliminary prospectus and corrected in the Prospectus or any amendment or supplement thereto and the Prospectus does not contain any other untrue statement or omission or alleged untrue statement or omission of a material fact that was the subject matter of the related proceeding and it is established by the Issuers in the related proceeding that such Participant failed to deliver or provide a copy of the Prospectus (as amended or supplemented) to such Person with or prior to the confirmation of the sale of such Registrable Notes or Exchange Notes sold to such Person if required by applicable laws, unless such failure to deliver or provide a copy of the Prospectus (as amended or supplemented) was a result of noncompliance by the Issuers with Section 5 of this Agreement. (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless the Issuers, their respective directors and officers and each Person who controls the Issuers within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Issuers to each Participant, but only (i) with reference to information relating to such Participant furnished to the Issuers in writing by or on behalf of such Participant expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary prospectus or (ii) with respect to any untrue statement or representation made by such Participant in writing to the Issuers. The liability of any Participant under this 22 paragraph shall in no event exceed the proceeds received by such Participant from sales of Registrable Notes or Exchange Notes giving rise to such obligations. (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such Person (the "Indemnified Person") shall promptly notify the Person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, shall have the right to retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may reasonably designate in such proceeding and shall pay the reasonable fees and expenses actually incurred by such counsel related to such proceeding; provided, however, that the failure to so notify the Indemnifying Person shall not relieve it of any obligation or liability which it may have hereunder or otherwise (unless and only to the extent that such failure results in the loss or compromise of any material rights or defenses by the Indemnifying Person). In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed in writing to the contrary, (ii) the Indemnifying Person shall have failed within a reasonable period of time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that, unless there exists a conflict among Indemnified Persons, the Indemnifying Person shall not, in connection with any one such proceeding or separate but substantially similar related proceeding in the same jurisdiction arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such reasonable fees and expenses shall be reimbursed promptly as they are incurred. Any such separate firm for the Participants and such control Persons of Participants shall be designated in writing by Participants who sold a majority in interest of Registrable Notes and Exchange Notes sold by all such Participants and any such separate firm for the Issuers, their directors, their officers and such control Persons of the Issuers shall be designated in writing by the Issuers. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its prior written consent, but if settled with such consent or if there be a final non-appealable judgment for the plaintiff for which the Indemnified Person is entitled to indemnification pursuant to this Agreement, the Indemnifying Person agrees to indemnify and hold harmless each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an 23 Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for reasonable fees and expenses actually incurred by counsel as contemplated by the third sentence of this paragraph, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided, however, that the Indemnifying Person shall not be liable for any settlement effected without its consent pursuant to this sentence if the Indemnifying Person is contesting, in good faith, the request for reimbursement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement or compromise of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party, and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional written release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any Indemnified Person. (d) If the indemnification provided for in Section 7(a) and 7(b) hereof is for any reason unavailable to, or insufficient to hold harmless, an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein, than each Indemnifying Person under such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect (i) the relative benefits received by the Indemnifying Person or Persons on the one hand and the Indemnified Person or Persons on the other from the offering of the Notes or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the Indemnifying Person or Persons on the one hand and the Indemnified Person or Persons on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or such Participant or such other Indemnified Person, as the case may be, on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. 24 (e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Participants were treated as one entity for such purposes) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Participant be required to contribute any amount in excess of the amount by which proceeds received by such Participant from sales of Registrable Notes or Exchange Notes, as the case may be, exceeds the amount of any damages that such Participant has otherwise been required to pay or has paid by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (f) The indemnity and contribution agreements contained in this Section 7 will be in addition to any liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above. 8. Rules 144 and 144A. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Notes, make publicly available annual reports and such information, documents and other reports of the type specified in Sections 13 and 15(d) of the Exchange Act. The Company further covenants for so long as any Registrable Notes remain outstanding, to make available to any Holder or beneficial owner of Registrable Notes in connection with any sale thereof and any prospective purchaser of such Registrable Notes from such Holder or beneficial owner the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Notes pursuant to Rule 144A. 9. Underwritten Registrations. If any of the Registrable Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Notes included in such offering and reasonably acceptable to the Issuers. 25 No Holder of Registrable Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 10. Miscellaneous. (a) No Inconsistent Agreements. None of the Issuers have entered, as of the date hereof, and none of the Issuers shall, after the date of this Agreement, enter into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. Other than as provided in Schedule A attached hereto, none of the Issuers have entered and none of the Issuers will enter into any agreement with respect to any of its securities which will grant to any Person piggy-back registration rights with respect to a Registration Statement. (b) Adjustments Affecting Registrable Notes. Other than as provided in Schedule B attached hereto, none of the Issuers shall, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration undertaken pursuant to this Agreement. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold by such Holders pursuant to such Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. (d) Notices. All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile: 26 1. if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture, with a copy in like manner to the Initial Purchaser as follows: NatWest Capital Markets Limited 135 Bishopgate London, England Attention: Roger Hoit with a copy to: White & Case 1155 Avenue of the Americas New York, NY 10036 Facsimile No: (212) 354-8113 Attention: Timothy B. Goodell, Esq. 2. if to the Initial Purchaser, at the addresses specified in Section 10(d)(1); 3. if to an Issuer, as follows: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Attention: Alan Brill with a copy to: Thompson & McMullan 100 Shockoe Slip Richmond, VA 2329-4140 Attention: Charles W. Laughlin All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; one business day after being timely 27 delivered to a next-day air courier; and when receipt is acknowledged by the addressee, if sent by facsimile. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in such Indenture. (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign holds Registerable Notes. (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning thereof. (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. (i) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 28 (j) Notes Held by the Issuers or their Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registerable Notes is required hereunder, Registerable Notes held by the Issuers or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (k) Third Party Beneficiaries. Holders of Registerable Notes and Participating Broker-Dealers are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Persons. 29 IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first written above. Issuers: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:_________________________ Name: Alan R. Brill Title: President BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By:____________________________ Name: Alan R. Brill Title: President 30 Guarantors: BMC HOLDINGS, LLC, a Virginia Limited Liability Company By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., its Manager By:______________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By:_______________________________ Name: Alan R. Brill Title: President TRI-STATE BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 31 NORTHERN COLORADO RADIO, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By:______________________ Name: Alan R. Brill Title: Vice President 32 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 33 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P., a Virginia Limited Partnership By: CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation, its General Partner By:______________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 34 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: Vice President 35 HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 36 HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 37 NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC. a Virginia Corporation, its Manager By:______________________ Alan R. Brill, President NCR III, LLC, a Virginia Limited Liability Company By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 38 NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By:______________________ Name: Alan R. Brill Title: President 39 CMN HOLDING, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President BRILL RADIO INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By:______________________ Name: Alan R. Brill Title: President The foregoing Agreement is hereby confirmed and accepted as of the date first above written: NATWEST CAPITAL MARKETS LIMITED By:__________________________ Name: Title: 40 SCHEDULE A SUBSIDIARY GUARANTORS 1. BMC Holdings, LLC 2. Reading Radio, Inc. 3. Tri-State Broadcasting, Inc. 4. Northern Colorado Radio, Inc. 5. NCR II, Inc. 6. Central Missouri Broadcasting, Inc. 7. CMB II, Inc. 8. Northland Broadcasting, LLC 9. NB II, Inc. 10. Central Michigan Newspapers, Inc. 11. Cadillac Newspapers, Inc. 12. CMN Associated Publications, Inc. 13. Central Michigan Distribution Co., L.P. 14. Central Michigan Distribution Co., Inc. 15. Gladwin Newspapers, Inc. 16. Graph Ads Printing, Inc. 17. Midland Buyer's Guide, Inc. 18. St. Johns Newspapers, Inc. 19. Huron P.S., LLC 20. Huron Newspapers, LLC 21. Huron Holdings, LLC 22. Northern Colorado Holdings, LLC 23. NCR III, LLC 24. NCH II, LLC 25. Northland Holdings, LLC 26. CMN Holdings, Inc. 27. Brill Radio Inc. 28. Brill Newspapers, Inc. EX-10.10(B) 82 EXHIBIT 10.10(B) Execution Copy ------------------------------------------------ ------------------------------------------------ APPRECIATION NOTES REGISTRATION RIGHTS AGREEMENT Dated as of December 30, 1997 by and among BRILL MEDIA COMPANY, LLC, BRILL MEDIA MANAGEMENT, INC., THE SUBSIDIARY GUARANTORS named herein and NATWEST CAPITAL MARKETS LIMITED as Initial Purchaser ------------------------------------------------ ------------------------------------------------ $3,000,000 Aggregate Principal Amount of APPRECIATION NOTES DUE 2007 TABLE OF CONTENTS 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Exchange Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3. Shelf Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4. Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . 12 6. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 21 7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 8. Rules 144 and 144A. . . . . . . . . . . . . . . . . . . . . . . . . . . 27 9. Underwritten Registrations. . . . . . . . . . . . . . . . . . . . . . . 27 10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 (a) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . 27 (b) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 27 (c) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 (d) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 29 (e) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 (f) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 (g) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 29 (h) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 (i) Notes Held by the Issuers or their Affiliates. . . . . . . . . . . 30 (j) Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . 30 i APPRECIATION NOTES REGISTRATION RIGHTS AGREEMENT This Appreciation Notes Registration Rights Agreement (the "Agreement") is dated as of December 30, 1997, by and among Brill Media Company, LLC, a Virginia limited liability company ("BMC"), Brill Media Management, Inc., a Virginia corporation ("Media" and, collectively with BMC, the "Company"), the subsidiary guarantors of the Company's obligations hereunder as listed on Schedule A hereto (collectively, the "Guarantors"), and NatWest Capital Markets Limited (the "Initial Purchaser"). This Agreement is entered into in connection with the Purchase Agreement, dated December 22, 1997, among the Company, the Guarantors and the Initial Purchaser (the "Purchase Agreement"), which provides, among other things, for the sale by the Company to the Initial Purchaser of $3,000,000 aggregate principal amount of the Company's Appreciation Notes due 2007 (the "Appreciation Notes"), which Appreciation Notes will be guaranteed by the Guarantors. The Company and the Guarantors are collectively referred to herein as the "Issuers." In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchaser and its direct and indirect transferees. The execution and delivery of this Agreement is a condition to the obligation of the Initial Purchaser to purchase the Appreciation Notes under the Purchase Agreement. The parties hereby agree as follows: 1. Definitions As used in this Agreement, the following terms shall have the following meanings: Additional Interest: Has the meaning provided in Section 4(a) hereof. Advice: Has the meaning provided in the last paragraph of Section 5 hereof. Agreement: Has the meaning provided in the first introductory paragraph hereto. Applicable Period: Has the meaning provided in Section 2(b) hereof. Appreciation Exchange Notes: Has the meaning provided in Section 2(a) hereof. Appreciation Notes: Has the meaning provided in the second introductory paragraph hereto. Appreciation Notes Indenture: The Indenture, dated as of December 30, 1997 between the Company, the Guarantors and United States Trust Company of New York, as trustee, pursuant to which the Appreciation Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof. Closing Date: Has the meaning provided in the Purchase Agreement. Company: Has the meaning provided in the first introductory paragraph hereto. Effectiveness Date: The 90th day after the Filing Date. Effectiveness Period: Has the meaning provided in Section 3(a) hereof. Event Date: Has the meaning provided in Section 4(b) hereof. Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Exchange Offer: Has the meaning provided in Section 2(a) hereof. Exchange Registration Statement: Has the meaning provided in Section 2(a) hereof. Filing Date: The 60th day after the Issue Date. Guarantors: Has the meaning provided in the first introductory paragraph hereto. Holder: Any holder of a Registrable Note or Registrable Notes. Indemnified Person: Has the meaning provided in Section 7(c) hereof. Indemnifying Person: Has the meaning provided in Section 7(c) hereof. 2 Indenture: The Indenture, dated as of December 30, 1997 between the Company, the Guarantors and United States Trust Company of New York, as trustee, pursuant to which $105,00,000 aggregate principal amount of the Company's 12% Senior Notes due 2007 are being issued, as amended or supplemented from time to time in accordance with the terms thereof. Initial Purchaser: Has the meaning provided in the first introductory paragraph hereto. Inspectors: Has the meaning provided in Section 5(o) hereof. Issue Date: The date on which the original Appreciation Notes were sold to the Initial Purchaser pursuant to the Purchase Agreement. Issuers: Has the meaning provided in the second introductory paragraph hereto. NASD: Has the meaning provided in Section 5(s) hereof. Participant: Has the meaning provided in Section 7(a) hereof. Participating Broker-Dealer: Has the meaning provided in Section 2(b) hereof. Persons: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity. Private Exchange: Has the meaning provided in Section 2(b) hereof. Private Appreciation Exchange Notes: Has the meaning provided in Section 2(b) hereof. Prospectus: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement including post-effective 3 amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. Purchase Agreement: Has the meaning provided in the second introductory paragraph hereto. Records: Has the meaning provided in Section 5(o) hereof. Registrable Notes: Each Appreciation Note upon original issuance of the Appreciation Notes and at all times subsequent thereto and each Private Appreciation Exchange Note upon original issuance thereof and at all times subsequent thereto, until in the case of any such Appreciation Note or Private Appreciation Exchange Note, as the case may be, the earliest to occur of (i) a Registration Statement covering such Appreciation Note or Private Appreciation Exchange Note, as the case may be, has been declared effective by the SEC and such Appreciation Note (unless such Appreciation Note was not tendered for exchange by the Holder thereof), or Private Appreciation Exchange Note, as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Appreciation Note or Private Appreciation Exchange Note, as the case may be, is, or may be, sold in compliance with Rule 144, or (iii) such Appreciation Note or Private Appreciation Exchange Note, as the case may be, ceases to be outstanding for purposes of the Indenture. Registration Statement: Any registration statement of the Company, including, but not limited to, the Exchange Registration Statement, that covers any of the Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. 4 Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. Shelf Notice: Has the meaning provided in Section 2(c) hereof. Shelf Registration: Has the meaning provided in Section 3(a) hereof. Shelf Registration Statement: shall mean a "shelf" registration statement of the Company and the Guarantors which covers all of the Registrable Notes on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. TIA: The Trust Indenture Act of 1939, as amended. Trustee(s): The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any). Underwritten registration or underwritten offering: A registration in which securities of one or more of the Issuers are sold to an underwriter for reoffering to the public. 2. Exchange Offer (a) Each of the Issuers agrees to file with the SEC no later than the Filing Date an offer to exchange (the "Exchange Offer") any and all of the Appreciation Notes for a like aggregate principal amount of debt securities of the Company, guaranteed by the Guarantors, which are identical in all material respects to the Appreciation Notes (the "Appreciation Exchange Notes") (and which are entitled to the benefits of the Appreciation Notes Indenture or a trust indenture that is identical in all material respects to the Appreciation Notes Indenture (other than such changes to the Appreciation Notes Indenture or any such identical trust indenture as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA) and 5 which, in either case, has been qualified under the TIA), except that (i) the Appreciation Exchange Notes shall have been registered pursuant to an effective Registration Statement under the Securities Act and shall contain no restrictive legend thereon and (ii) the Appreciation Exchange Notes shall not be entitled to any further registration rights hereunder or to any Additional Interest. The Exchange Offer shall be registered under the Securities Act on the appropriate form (the "Exchange Registration Statement") and shall comply with all applicable tender offer rules and regulations under the Exchange Act. The Issuers agree to use their reasonable best efforts to (x) cause the Exchange Registration Statement to be declared effective under the Securities Act no later than the 90th day after the Filing Date; (y) keep the Exchange Offer open for at least 20 business days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to the Holders; and (z) consummate the Exchange Offer on or prior to the 120th day following the Filing Date. If after such Exchange Registration Statement is declared effective by the SEC, the Exchange Offer or the issuance of the Appreciation Exchange Notes thereunder is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Exchange Registration Statement shall be deemed not to have become effective for purposes of this Agreement until such stop order, injunction or other order or requirement is no longer in effect. Each Holder who participates in the Exchange Offer will be required to represent that any Appreciation Exchange Notes received by it will be acquired in the ordinary course of its business, that at the time of the consummation of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Appreciation Exchange Notes in violation of the provisions of the Securities Act, that such Holder is not an "affiliate" of any of the Issuers within the meaning of the Securities Act and that such Holder is not acting on behalf of any person who could not truthfully make the foregoing representations. Upon consummation of the Exchange Offer in accordance with this Section 2, the Issuers shall have no further obligation to register Registrable Notes (other than Private Appreciation Exchange Notes pursuant to Section 3 hereof). No securities other than the Appreciation Exchange Notes shall be included in the Exchange Registration Statement. (b) The Issuers shall include within the Prospectus contained in the Exchange Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchaser, which shall contain a summary statement of the positions taken or policies made by the Staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Appreciation Exchange Notes received by such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the Staff of the SEC or such positions or policies, in the judgment of the Initial Purchaser, represent the prevailing views of the Staff of the SEC. 6 Such "Plan of Distribution" section shall also expressly permit the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Appreciation Exchange Notes. Each of the Issuers shall use its reasonable best efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by any Participating Broker-Dealer subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with applicable law in connection with any resale of the Appreciation Exchange Notes; provided, however, that such period shall not exceed 180 days after the consummation of the Exchange Offer (or such longer period if extended pursuant to the last paragraph of Section 5 hereof) (the "Applicable Period"). If, prior to consummation of the Exchange Offer, the Initial Purchaser holds any Appreciation Notes acquired by it and having the status of an unsold allotment in the initial distribution, the Issuers shall, upon the request of the Initial Purchaser, simultaneously with the delivery of the Appreciation Exchange Notes in the Exchange Offer issue and deliver to the Initial Purchaser in exchange (the "Private Exchange") for such Appreciation Notes held by the Initial Purchaser a like principal amount of debt securities of the Company, guaranteed by the Guarantors, that are identical in all material respects to the Appreciation Exchange Notes (the "Private Appreciation Exchange Notes") (and which are issued pursuant to the same Appreciation Notes Indenture as the Appreciation Exchange Notes) except for the placement of a restrictive legend on such Private Appreciation Exchange Notes. The Private Appreciation Exchange Notes shall if permissible bear the same CUSIP number as the Appreciation Exchange Notes. Interest on the Appreciation Exchange Notes and the Private Appreciation Exchange Notes will accrue from the last interest payment date on which interest was paid on the Appreciation Notes surrendered in exchange therefor or, if no interest has been paid on the Appreciation Notes, from the Issue Date. In connection with the Exchange Offer, the Issuers shall: (1) mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal and related documents; 7 (2) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; (3) permit Holders to withdraw tendered Appreciation Notes at any time prior to the close of business, New York time, on the last business day on which the Exchange Offer shall remain open; and (4) otherwise comply in all material respects with all applicable laws, rules and regulations. As soon as practicable after the close of the Exchange Offer or the Private Exchange, as the case may be, the Issuers shall: (1) accept for exchange all Appreciation Notes tendered and not validly withdrawn pursuant to the Exchange Offer or the Private Exchange; (2) deliver to the Trustee for cancellation all Appreciation Notes so accepted for exchange; and (3) cause the Trustee to authenticate and deliver promptly to each Holder of Appreciation Notes, Appreciation Exchange Notes or Private Appreciation Exchange Notes, as the case may be, equal in principal amount to the Appreciation Notes of such Holder so accepted for exchange. The Appreciation Exchange Notes and the Private Appreciation Exchange Notes are to be issued under (i) the Appreciation Notes Indenture or (ii) an indenture identical in all material respects to the Appreciation Notes Indenture, which in either event shall provide that (1) the Appreciation Exchange Notes shall not be subject to the transfer restrictions set forth in the Appreciation Notes Indenture and (2) the Private Appreciation Exchange Notes shall be subject to the transfer restrictions set forth in the Indenture. The Appreciation Notes Indenture or such indenture shall provide that the Appreciation Exchange Notes, the Private Appreciation Exchange Notes and the Appreciation Notes shall vote and consent together on all matters as one class and that none of the Appreciation Exchange Notes, the Private Appreciation Exchange Notes or the Appreciation Notes will have the right to vote or consent as a separate class on any matter. (c) If, (i) because of any change in law or in currently prevailing interpretations of the Staff of the SEC, the Issuers are not permitted to effect an Exchange Offer, (ii) the Exchange Offer is not consummated within 120 days after the Filing Date, (iii) any 8 holder of Private Appreciation Exchange Notes so requests at any time after the consummation of the Private Exchange, or (iv) if any Holder (other than the Initial Purchaser) is not eligible to participate in the Exchange Offer or such Holder does not receive Appreciation Exchange Notes on the date of the exchange that may be sold without restriction under the state and federal securities laws (other than due solely to the status of such Holder as an affiliate of any of the Issuers within the meaning of the Securities Act), then the Issuers shall promptly deliver to the Holders and the Appreciation Notes Trustee written notice thereof (the "Shelf Notice") and, in the case of clauses (i) and (ii) above, to all Holders, in the case of clause (iii) above, to the Holders of the Private Appreciation Exchange Notes and, in the case of clause (iv) above, to the affected Holder, and shall as promptly as reasonably practicable file a Shelf Registration pursuant to Section 3 hereof, provided, however, that in the case of clause (iii) above such holder shall pay all reasonable registration expenses of the Company as described in Section 6 hereof in connection with such Shelf Registration of such Private Appreciation Exchange Notes. 3. Shelf Registration If a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then: (a) Shelf Registration. The Issuers shall as promptly as reasonably practicable file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the "Shelf Registration"). If the Issuers shall not have yet filed an Exchange Registration Statement, each of the Issuers shall use its best efforts to file with the SEC the Shelf Registration on or prior to the Filing Date. The Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers shall not permit any securities other than the Registrable Notes to be included in the Shelf Registration. Each of the Issuers shall use its reasonable best efforts to cause the Shelf Registration to be declared effective under the Securities Act by the 180th day after the Issue Date and to keep the Shelf Registration continuously effective under the Securities Act until the date which is two years from the Issue Date, subject to extension pursuant to the last paragraph of Section 5 hereof, or such shorter period ending when all Registrable Notes covered by the Shelf Registration have been sold in the manner set forth and as contemplated in the Shelf Registration or when the Appreciation Notes become eligible for transfer without volume restrictions pursuant to Rule 144 under the Securities Act (the "Effectiveness Period"). 9 (b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), each of the Issuers shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof. (c) Supplements and Amendments. The Issuers shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested for such purpose by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes. 4. Additional Interest (a) The Issuers and the Initial Purchaser agree that the Holders of Registrable Notes will suffer damages if the Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree to pay, as the sole liquidated damages, for such failure additional interest on the Appreciation Notes ("Additional Interest") shall become payable with respect to the Appreciation Notes under the circumstances and to the extent set forth below: (i) if neither the Exchange Registration Statement nor the Shelf Registration has been filed on or prior to the Filing Date, then, commencing on the 61st day after the Issue Date, Additional Interest shall accrue on $3,000,000 at a rate of 0.50% per annum for the first 30 days commencing on the 61st day after the Issue Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; (ii) if neither the Exchange Registration Statement nor the Shelf Registration is declared effective by the SEC on or prior to the Effectiveness Date, then, commencing on the 91st day after the Filing Date, Additional Interest shall accrue on $3,000,000 at a rate of 0.50% per annum for the first 30 days commencing on the 91st day after the Filing Date, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each subsequent 30-day period; and (iii) if (A) the Issuers have not exchanged Exchange Notes for all Appreciation Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to the 120th day after the Filing Date or (B) the Exchange 10 Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated or (C) if applicable, the Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period (unless all Appreciation Notes have been sold thereunder), then Additional Interest shall accrue on $3,000,000 at a rate of 0.50% per annum for the first 30 days commencing on (x) the 121st day after the Filing Date with respect to the Appreciation Notes validly tendered and not exchanged by the Company, in the case of (A) above, or (y) the day the Exchange Registration Statement ceases to be effective in the case of (B) above, or (z) the day such Shelf Registration ceases to be effective in the case of (C) above, such Additional Interest rate increasing by an additional 0.50% per annum at the beginning of each such subsequent 30-day period; provided, however, that in any event the Additional Interest rate on any affected Appreciation Notes may not exceed at any one time in the aggregate 1.5% per annum; and provided, further, that (1) upon the filing of the Exchange Registration Statement or a Shelf Registration (in the case of clause (i) of this Section 4(a)), (2) upon the effectiveness of the Exchange Registration Statement or the Shelf Registration (in the case of clause (ii) of this Section 4(a)), or (3) upon the exchange of Appreciation Exchange Notes for all Appreciation Notes tendered (in the case of clause (iii)(A) of this Section 4(a)), or upon the effectiveness of the Exchange Registration Statement which had ceased to remain effective (in the case of (iii)(B) of this Section 4(a)), or upon the effectiveness of the Shelf Registration which had ceased to remain effective (in the case of (iii)(C) of this Section 4(a)), Additional Interest on the affected Appreciation Notes as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. (b) The Issuers shall notify the Trustee within one business day after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). The Company shall pay the Additional Interest due on the transfer restricted Appreciation Notes by depositing with the paying agent (which shall not be the Company for these purposes) for the transfer restricted Appreciation Notes, in trust, for the benefit of the holders thereof, prior to 11:00 A.M. on each June 15 and December 15, sums sufficient to pay the Additional Interest then due. Any amounts of Additional Interest due pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable to the Holders of affected Appreciation Notes in cash semi-annually on each interest payment date specified by the Indenture (or such other indenture) to the record holders entitled to receive the interest payment to be made on such date, commencing with the first such date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the affected Registrable Notes of such Holders, 11 multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 5. Registration Procedures In connection with the filing of any Registration Statement pursuant to Sections 2 or 3 hereof, the Issuers shall effect such registration(s) to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers hereunder, the Issuers shall: (a) Prepare and file with the SEC prior to the Filing Date a Registration Statement or Registration Statements as prescribed by Sections 2 or 3 hereof, and use their reasonable best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided, however, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers shall, if requested in writing, furnish to and afford the Holders of the Registrable Notes covered by such Registration Statement or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least three business days prior to such filing). The Issuers shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document under the immediately preceding sentence, if the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, their counsel, or the managing underwriters, if any, shall reasonably object thereto in writing. (b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously 12 effective for the Effectiveness Period or the Applicable Period or until consummation of the Exchange Offer, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus; the Company shall be deemed not to have used its best efforts to keep a Registration Statement effective during the Applicable Period if it voluntarily takes any action that would result in selling Holders of the Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Appreciation Exchange Notes not being able to sell such Registrable Notes or such Appreciation Exchange Notes during that period unless such action is required by applicable law or unless the Company complies with this Agreement, including without limitation, the provisions of paragraph 5(k) hereof and the last paragraph of this Section 5. (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within two business days), and confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Appreciation Exchange Notes by Participating Broker-Dealers the representations and warranties of the Issuers contained in any agreement (including any underwriting agreement), contemplated by Section 5(n) hereof cease 13 to be true and correct, (iv) of the receipt by the Issuers of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Appreciation Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the determination by the Issuers that a post-effective amendment to a Registration Statement would be appropriate. (d) Use its best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Appreciation Exchange Notes for sale in any jurisdiction, and, if any such order is issued, to use its best efforts to obtain the withdrawal of any such order at the earliest possible moment. (e) If a Shelf Registration is filed pursuant to Section 3 hereof and if requested by the managing underwriter or underwriters (if any), or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders, or counsel for any of them reasonably request to be included therein, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Issuers have received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement. 14 (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes and to each such Participating Broker-Dealer who so requests and to counsel and each managing underwriter, if any, at the sole expense of the Issuers, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their respective counsel, and the underwriters, if any, at the sole expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, each Issuer hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case-may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Appreciation Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, to use its best efforts to register or qualify such Registrable Notes (and to cooperate with selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Notes) for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker- 15 Dealer, or the managing underwriter or underwriters reasonably request in writing; provided, however, that where Appreciation Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Issuers agree to cause their counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h); keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Appreciation Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided, however, that none of the Issuers shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request. (j) Use its best efforts to cause the Registrable Notes covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof or the underwriter or underwriters, if any, to dispose of such Registrable Notes, except as may be required solely as a consequence of the nature of a selling Holder's business, in which case each of the Issuers will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals. (k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 16 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Appreciation Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (l) Use its best efforts to cause the Registrable Notes covered by a Registration Statement or the Appreciation Exchange Notes, as the case may be, to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement or the Appreciation Exchange Notes, as the case may be, or the managing underwriter or underwriters, if any. (m) Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes or Appreciation Exchange Notes, as the case may be, in a form eligible for deposit with The Depositary Trust Company and (ii) provide a CUSIP number for the Registrable Notes or Appreciation Exchange Notes, as the case may be. (n) In connection with any underwritten offering initiated by the Company of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Appreciation Notes and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to facilitate the registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Issuers and their respective subsidiaries and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily 17 made by Issuers to underwriters in underwritten offerings of debt securities similar to the Appreciation Notes, and confirm the same in writing if and when requested; (ii) obtain the written opinion of counsel to the Issuers and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions requested in underwritten offerings of debt similar to the Appreciation Notes and such other matters as may be reasonably requested by the managing underwriter or underwriters; (iii) obtain "cold comfort" letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of any subsidiary of any of the Issuers or of any business acquired by any of the Issuers for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt similar to the Appreciation Notes and such other matters as reasonably requested by the managing underwriter or underwriters; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to said Section. The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. (o) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Appreciation Exchange Notes during the Applicable Period, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the "Inspectors"), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and instruments of the Issuers and their respective subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuers and their respective subsidiaries to make available for inspection all information reasonably requested by any such Inspector in connection with such Registration Statement. Records which any of the Issuers determine, in good faith, to be confidential and any Records which it notifies the 18 Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such information is, in the opinion of counsel (a copy of which shall be delivered to the Issuers) for any Inspector, necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement, or any transactions contemplated hereby or arising hereunder, or (iv) the information in such Records has been made generally available to the public. Each selling Holder of such Registrable Securities and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuers unless and until such information is generally available to the public. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Issuers and allow the Issuers to undertake appropriate action to prevent disclosure of the Records deemed confidential at the Issuers' sole expense. (p) Provide an indenture trustee for the Registrable Notes or the Appreciation Exchange Notes, as the case may be, and cause the Appreciation Notes Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the Exchange Offer or the first Registration Statement relating to the Registrable Notes; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Notes, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner. (q) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which 19 Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said 12-month periods. (r) If an Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Issuers (or to such other Person as directed by the Issuers) in exchange for the Appreciation Exchange Notes or the Private Appreciation Exchange Notes, as the case may be, the Issuers shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being cancelled in exchange for the Appreciation Exchange Notes or the Private Appreciation Exchange Notes, as the case may be; in no event shall such Registrable Notes be marked as paid or otherwise satisfied. (s) Cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"). (t) Use its best efforts to take all other steps necessary or advisable to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby. The Issuers may require each seller of Registrable Notes as to which any Registration Statement is being effected to furnish to the Issuers such information regarding such seller and the distribution of such Registrable Notes as the Issuers may, from time to time, reasonably request. The Issuers may exclude from such Registration Statement the Registrable Notes of any seller who unreasonably fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuers all information required to be disclosed in order to make the information previously furnished to the Issuers by such seller not materially misleading. Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Appreciation Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Issuers of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith dis- 20 continue disposition of such Registrable Notes covered by such Registration Statement or Prospectus or Appreciation Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the "Advice") by the Issuers that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event the Issuers shall give any such notice, each of the Effectiveness Period and the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or Appreciation Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice. 6. Registration Expenses (a) Except as otherwise provided in Section 2(c) hereof, all fees and expenses incident to the performance of or compliance with this Agreement by the Issuers shall be borne by the Issuers whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of the Issuer's counsel in connection with Blue Sky qualifications of the Registrable Notes or Appreciation Exchange Notes and determination of the eligibility of the Registrable Notes or Appreciation Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of the Appreciation Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of Registrable Notes or Appreciation Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Notes or Appreciation Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriter or underwriters, if any, by the Holders of a majority in aggregate principal amount of the Registrable Notes included in any Registration Statement or sold by any Participating Broker-Dealer, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Issuers, (v) fees and disbursements of all independent certified public accountants referred to in Section 5(n)(iii) hereof (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance by or incident to such performance), (vi) rating agency 21 fees, if any, and any fees associated with making the Registrable Notes or Appreciation Exchange Notes eligible for trading through The Depository Trust Company, (vii) Securities Act liability insurance, if the Issuers desire such insurance, (viii) fees and expenses of all other Persons retained by the Issuers, (ix) internal expenses of the Issuers (including, without limitation, all salaries and expenses of officers and employees of the Issuers performing legal or accounting duties), (x) the expense of any annual audit, (xi) the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange or any inter-dealer quotation system, if applicable, and (xii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, securities sales agreements, indentures and any other documents necessary in order to comply with this Agreement. (b) The Issuers, jointly and severally, shall (i) reimburse the Holders of the Registrable Notes being registered in a Shelf Registration for the reasonable fees and disbursements of not more than one counsel (in addition to appropriate local counsel) chosen by the Holders of a majority in aggregate principal amount of the Registrable Notes to be included in such Registration Statement and (ii) reimburse out-of-pocket expenses (other than legal expenses) of Holders of Registrable Notes incurred in connection with the registration and sale of the Registrable Notes pursuant to a Shelf Registration or in connection with the exchange of Registrable Notes pursuant to the Exchange Offer. In addition, the Issuers, jointly and severally, shall reimburse the Initial Purchaser for 50% (but not more than $30,000) of the reasonable fees and expenses of one counsel in connection with the Exchange Offer which shall be White & Case, and shall not be required to pay any other legal expenses of the Initial Purchaser in connection therewith. 7. Indemnification. (a) Each of the Issuers, jointly and severally, agrees to indemnify and hold harmless each Holder of Registrable Notes offered pursuant to a Shelf Registration Statement and each Participating Broker-Dealer selling Appreciation Exchange Notes during the Applicable Period, the affiliates, directors, officers, agents, representatives and employees of each such Person or its affiliates, and each other Person, if any, who controls any such Person or its affiliates within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Participant") from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable legal fees and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement pursuant to which the offering of such Registrable Notes or Appreciation Exchange Notes, as the case may be, is registered (or any amendment thereto) or related Prospectus (or any amendments or supplements thereto) or any related preliminary prospectus, or caused by, arising out of or based upon any omission or alleged omission to 22 state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Issuers will not be required to indemnify a Participant if (i) such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Participant furnished to the Issuers in writing by or on behalf of such Participant expressly for use therein or (ii) if such Participant sold to the person asserting the claim the Registrable Notes or Appreciation Exchange Notes which are the subject of such claim and such untrue statement or omission or alleged untrue statement or omission was contained or made in any preliminary prospectus and corrected in the Prospectus or any amendment or supplement thereto and the Prospectus does not contain any other untrue statement or omission or alleged untrue statement or omission of a material fact that was the subject matter of the related proceeding and it is established by the Issuers in the related proceeding that such Participant failed to deliver or provide a copy of the Prospectus (as amended or supplemented) to such Person with or prior to the confirmation of the sale of such Registrable Notes or Appreciation Exchange Notes sold to such Person if required by applicable laws, unless such failure to deliver or provide a copy of the Prospectus (as amended or supplemented) was a result of noncompliance by the Issuers with Section 5 of this Agreement. (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless the Issuers, their respective directors and officers and each Person who controls the Issuers within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Issuers to each Participant, but only (i) with reference to information relating to such Participant furnished to the Issuers in writing by or on behalf of such Participant expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary prospectus or (ii) with respect to any untrue statement or representation made by such Participant in writing to the Issuers. The liability of any Participant under this paragraph shall in no event exceed the proceeds received by such Participant from sales of Registrable Notes or Exchange Notes giving rise to such obligations. (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such Person (the "Indemnified Person") shall promptly notify the Person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, shall have the right to retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may reasonably designate in such proceeding and shall pay the 23 reasonable fees and expenses actually incurred by such counsel related to such proceeding; provided, however, that the failure to so notify the Indemnifying Person shall not relieve it of any obligation or liability which it may have hereunder or otherwise (unless and only to the extent that such failure results in the loss or compromise of any material rights or defenses by the Indemnifying Person). In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed in writing to the contrary, (ii) the Indemnifying Person shall have failed within a reasonable period of time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that, unless there exists a conflict among Indemnified Persons, the Indemnifying Person shall not, in connection with any one such proceeding or separate but substantially similar related proceeding in the same jurisdiction arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such reasonable fees and expenses shall be reimbursed promptly as they are incurred. Any such separate firm for the Participants and such control Persons of Participants shall be designated in writing by Participants who sold a majority in interest of Registrable Notes and Appreciation Exchange Notes sold by all such Participants and any such separate firm for the Issuers, their directors, their officers and such control Persons of the Issuers shall be designated in writing by the Issuers. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its prior written consent, but if settled with such consent or if there be a final non-appealable judgment for the plaintiff for which the Indemnified Person is entitled to indemnification pursuant to this Agreement, the Indemnifying Person agrees to indemnify and hold harmless each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for reasonable fees and expenses actually incurred by counsel as contemplated by the third sentence of this paragraph, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided, however, that the Indemnifying Person shall not be liable for any settlement effected without its consent pursuant to this sentence if the Indemnifying Person is contesting, in good faith, the request for reimbursement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement or com- 24 promise of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party, and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional written release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any Indemnified Person. (d) If the indemnification provided for in Section 7(a) and 7(b) hereof is for any reason unavailable to, or insufficient to hold harmless, an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein, than each Indemnifying Person under such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect (i) the relative benefits received by the Indemnifying Person or Persons on the one hand and the Indemnified Person or Persons on the other from the offering of the Appreciation Notes or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the Indemnifying Person or Persons on the one hand and the Indemnified Person or Persons on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or such Participant or such other Indemnified Person, as the case may be, on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. (e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Participants were treated as one entity for such purposes) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Participant be required to contribute any 25 amount in excess of the amount by which proceeds received by such Participant from sales of Registrable Notes or Appreciation Exchange Notes, as the case may be, exceeds the amount of any damages that such Participant has otherwise been required to pay or has paid by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (f) The indemnity and contribution agreements contained in this Section 7 will be in addition to any liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above. 8. Rules 144 and 144A. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Notes, make publicly available annual reports and such information, documents and other reports of the type specified in Sections 13 and 15(d) of the Exchange Act. The Company further covenants for so long as any Registrable Notes remain outstanding, to make available to any Holder or beneficial owner of Registrable Notes in connection with any sale thereof and any prospective purchaser of such Registrable Notes from such Holder or beneficial owner the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Notes pursuant to Rule 144A. 9. Underwritten Registrations. If any of the Registrable Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Notes included in such offering and reasonably acceptable to the Issuers. No Holder of Registrable Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 10. Miscellaneous. (a) No Inconsistent Agreements. None of the Issuers have entered, as of the date hereof, and none of the Issuers shall, after the date of 26 this Agreement, enter into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. (b) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold by such Holders pursuant to such Registration Statement; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence. (c) Notices. All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile: 1. if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture, with a copy in like manner to the Initial Purchaser as follows: NatWest Capital Markets Limited 135 Bishopgate London, England Attention: Roger Hoit with a copy to: White & Case 1155 Avenue of the Americas New York, NY 10036 Facsimile No: (212) 354-8113 27 Attention: Timothy B. Goodell, Esq. 2. if to the Initial Purchaser, at the addresses specified in Section 10(c)(1); 3. if to an Issuer, as follows: Brill Media Company, LLC 420 N.W. Fifth Street, Suite 3-B P.O. Box 3353 Evansville, Indiana 47732 Attention: Alan Brill with a copy to: Thompson & McMullan 100 Shockoe Slip Richmond, VA 2329-4140 Attention: Charles W. Laughlin All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; one business day after being timely delivered to a next-day air courier; and when receipt is acknowledged by the addressee, if sent by facsimile. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in such Indenture. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign holds Registerable Notes. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 28 (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning thereof. (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. (h) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (i) Notes Held by the Issuers or their Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registerable Notes is required hereunder, Registerable Notes held by the Issuers or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (j) Third Party Beneficiaries. Holders of Registerable Notes and Participating Broker-Dealers are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Persons. 29 IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first written above. Company: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: President 30 Guarantors: BMC HOLDINGS, LLC, a Virginia Limited Liability Company By: BRILL MEDIA COMPANY, LLC., its Manager By: BRILL MEDIA MANAGEMENT, INC. its Manager By: _______________________________ Name: Alan R. Brill Title: President READING RADIO, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: President TRI-STATE BROADCASTING, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President 31 NORTHERN COLORADO RADIO, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President NCR II, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President CENTRAL MISSOURI BROADCASTING, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President CMB II, INC. By: _______________________________ Name: Alan R. Brill Title: Vice President 32 NORTHLAND BROADCASTING, LLC, a Virginia Limited Liability Company By: NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President NB II, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President 33 CADILLAC NEWSPAPERS, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President CMN ASSOCIATED PUBLICATIONS, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., L.P. By: CENTRAL MICHIGAN DISTRIBUTION CO., INC. its General Partner By: _______________________________ Name: Alan R. Brill Title: Vice President CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President 34 GLADWIN NEWSPAPERS, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President GRAPH ADS PRINTING, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President MIDLAND BUYER'S GUIDE, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President ST. JOHNS NEWSPAPERS, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President 35 HURON P.S. LLC, a Virginia Limited Liability Company By: HURON HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President HURON NEWSPAPERS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President 36 HURON HOLDINGS, LLC, a Virginia Limited Liability Company By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President NORTHERN COLORADO HOLDINGS, LLC By: BMC HOLDINGS, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President NCR III, LLC, a Virginia Limited Liability Company 37 By: NCH II, LLC, a Virginia Limited Liability Company, its Manager By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Company, LLC, a Virginia Limited Liability Company, its Manager By: Brill Media Management, Inc., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President NCH II, LLC, a Virginia Limited Liability Company By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President NORTHLAND HOLDINGS, LLC, a Virginia Limited Liability Company 38 By: BMC Holdings, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA COMPANY, LLC, a Virginia Limited Liability Company, its Manager By: BRILL MEDIA MANAGEMENT, INC., a Virginia Corporation, its Manager By: _______________________________ Name: Alan R. Brill Title: President CMN HOLDING, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: Vice President BRILL RADIO INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: President BRILL NEWSPAPERS, INC., a Virginia Corporation By: _______________________________ Name: Alan R. Brill Title: President 39 40 The foregoing Agreement is hereby confirmed and accepted as of the date first above written: NATWEST CAPITAL MARKETS LIMITED By: __________________________ Name: Title: 1 SCHEDULE A SUBSIDIARY GUARANTORS 1. Holdings 2. Reading Radio, Inc. 3. Tri-State Broadcasting, Inc. 4. Northern Colorado Radio, Inc. 5. NCR II, Inc. 6. Central Missouri Broadcasting, Inc. 7. CMB II, Inc. 8. Northland Broadcasting, LLC 9. NB II, Inc. 10. Central Michigan Newspapers, Inc. 11. Cadillac Newspapers, Inc. 12. CMN Associated Publications, Inc. 13. Central Michigan Distribution Co., L.P. 14. Central Michigan Distribution Co., Inc. 15. Gladwin Newspapers, Inc. 16. Graph Ads Printing, Inc. 17. Midland Buyer's Guide, Inc. 18. St. Johns Newspapers, Inc. 19. Huron P.S., LLC 20. Huron Newspapers, LLC 21. Huron Holdings, LLC 22. Northern Colorado Holdings, LLC 23. NCR III, LLC 24. NCH II, LLC 25. Northland Holdings, LLC 26. CMN Holdings, Inc. 27. Brill Radio Inc. 28. Brill Newspapers, Inc. EX-10.11(A) 83 EXHIBIT 10.11(A) EX-10.11(a) Revolving Credit Agreement REVOLVING CREDIT AGREEMENT dated as of December 30, 1997 By and Among NB, II, INC.; NORTHLAND BROADCASTING, LLC; READING RADIO, INC.; CENTRAL MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHERN COLORADO RADIO, INC.; NCR II, INC.; TRI-STATE BROADCASTING, INC.; CENTRAL MICHIGAN NEWSPAPERS, INC.; GRAPH ADS PRINTING, INC.; GLADWIN NEWSPAPERS, INC.; CADILLAC NEWSPAPERS, INC.; MIDLAND BUYER'S GUIDE, INC.; CMN ASSOCIATED PUBLICATIONS, INC.; CENTRAL MICHIGAN DISTRIBUTION CO., INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.; BRILL NESPAPERS, INC.; BRILL RADIO, INC.; HURON HOLDINGS, LLC; NORTHERN COLORADO HOLDINGS, LLC; NCR III, LLC; NORTHLAND HOLDINGS, LLC, CMN HOLDINGS, INC.; NCH II, LLC; ST. JOHNS NEWSPAPERS, INC.; HURON NEWSPAPERS, LLC; and HURON P.S., LLC ("Borrowers") and BMC HOLDINGS, LLC a Virginia Limited Liability Company ("Lender") REVOLVING CREDIT AGREEMENT This REVOLVING CREDIT AGREEMENT is dated as of December 30, 1997, and is entered into by and among the following parties: Northland Broadcasting, LLC ("Northland"); Reading Radio, Inc. ("Reading"); Central Missouri Broadcasting, Inc. ("CMB"); Northern Colorado Radio, Inc. ("NCR"); Tri-State Broadcasting, Inc. (Tri-State"); CMB II, Inc. ("CMB II"); NB II, Inc. ("NB II"); Central Michigan Newspapers, Inc. ("CMN"); Graph Ads Printing, Inc. ("Graph Ads"); Gladwin Newspapers, Inc. ("Gladwin"); Cadillac Newspapers, Inc. ("Cadillac"); Midland Buyer's Guide, Inc. ("MBG"); CMN Associated Publications, Inc. ("CMN Assoc."); Central Michigan Distribution, Inc. ("CMD"); Central Michigan Distribution Co., L.P. ("CMD L.P."); Brill Newspapers, Inc. ("BNI"); Brill Radio, Inc. ("BRI"); Huron Holdings, LLC ("HH LLC"); Northern Colorado Holdings, LLC ("NCH LLC"); NCR III, LLC ("NCR III"); Northland Holdings, LLC ("NH LLC"); CMN Holdings, Inc. ("CMNH"); NCH II, LLC ("NCH II"); St. Johns Newspapers, Inc. ("St. Johns"); NCR II, Inc. ("NCR II"); Huron Newspapers, LLC ("Huron Newspapers"); and Huron P.S., LLC ("HPS"); (all of the entities identified in this section shall be referred to individually sometimes as a "Borrower" and collectively as "Borrowers"), as borrowers; and BMC Holdings, LLC, a Virginia limited liability company (hereinafter "Lender") as the lender. RECITALS (Capitalized terms used herein are defined below.) Lender has agreed to extend a line of credit in favor of the Borrowers, jointly and severally, in the maximum principal amount of $108,000,000.00 (the "Credit Facility"), to be borrowed and reborrowed by the Borrowers, jointly and severally, upon the terms hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing, and the covenants contained herein, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS SECTION 1.1 Definitions. The following terms, as used herein, shall have the following meanings: "Additional Advance" and "Additional Advances" shall have the meaning set forth in Section 2.1 hereof. 1 "Advances" means collectively the Closing Date Advances and the Additional Advances. "Agreement" means this Revolving Credit Agreement, together with any concurrent or subsequent rider, amendment, modification, schedule or exhibit to this Revolving Credit Agreement. "Bankruptcy Code" means Title 11 of the United States Code entitled "The Bankruptcy Code," as amended or supplemented from time to time, or any successor statute, and any and all rules and regulations issued or promulgated in connection therewith. "Borrower" or "Borrowers" means individually or collectively the Borrowers described in the introduction to this Agreement and any other Person that becomes a Borrower by executing this Agreement. "Brill" means Alan R. Brill of Evansville, Indiana. "Brill Media" means Brill Media Company, LLC. "Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial lenders in the City of New York, New York, are authorized or required by law or executive order or decree to close. "Closing" shall have the meaning set forth in Section 3.1 hereof. "Closing Date" means December 30, 1997. "Closing Date Advance" and "Closing Date Advances" shall have the respective meanings set forth in Section 2.2 hereof. "Credit Document(s)" means each of the following documents, instruments, and agreements individually or collectively, as the context requires: (a) this Agreement; (b) the Revolving Credit Note; (c) the Indenture; and (d) such other documents, instruments, and agreements as Lender may reasonably request in connection with any transaction contemplated hereunder. "Cure Period" shall mean the thirty (30) day period immediately following the occurrence of an Event of Default. "Default" means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Default Rate" means the fixed rate of interest of fifteen percent (15%) per annum. 2 "Dollars" or "$" means lawful currency of the United States of America. "Event(s) of Default" shall have the meanings set forth in Section 7.1 hereof. "FCC" means the Federal Communications Commission or any Governmental authority succeeding to any of its functions. "FCC Licenses" means all commercial broadcast station licenses, permits and other certificates required by (A) the FCC, (B) the Communications Act of 1934, as amended, (C) 47 CFR Part 73, or (D) any other governmental entity in connection with the ownership and operation of each of the Radio Stations and granted or assigned to the Borrowers by the FCC or any other public or governmental agency or regulatory body for the operation of said Radio Stations. "Final FCC Order" means an order, action or decision of the FCC (or subsequent court order or judgment) that (A) has not been reversed, stayed, enjoined, modified or amended and as to which the time for appeal, petition for certiorari, to seek reargument, rehearing, administrative reconsideration or review has expired; and (B) as to which no appeal, reargument, petition for certiorari, rehearing, petition for reconsideration or application for review is pending; or (C) as to which any right to appeal, reargue, petition for certiorari, rehearing, reconsideration or review has been sought, the order or judgment of the court or FCC has been (1) affirmed by the highest court (or administrative entity or body) to which the order was appealed or from which the argument, rehearing, reconsideration or review was sought, or (2) certiorari has been denied, and (3) the time to take any further appeal or to seek certiorari or further reargument, rehearing, reconsideration or review has expired. "Financial Statement(s)" means, with respect to any accounting period of any Person, statements of income and statements of changes in financial position of such Person for such period, and balance sheets of such Person as of the end of such period, setting forth in each case in comparative form figures for the corresponding period in the preceding Fiscal Year, or, if such period is a full Fiscal Year, corresponding figures from the preceding annual audit, all prepared in reasonable detail and in accordance with GAAP where appropriate. "Financial Statement(s)" shall include the notes and schedules thereto. "Fiscal Year" means, for each Borrower, the time period from and including March 1 through the last day of the following February. 3 "Funding Borrower" shall have the meaning set forth in Section 2.9(b) hereof. "Fiscal Year End" means, for each Borrower, the last day of February. "GAAP" means generally accepted accounting principles in the United States of America, consistently applied, which are in effect as of the date of their application. "Guaranty" means the Borrowers' joint and several guaranty of payment of the Media Notes. "Indenture" means that certain Trust Indenture entered into by and among Brill Media and Brill Media Management, Inc. (collectively as the "Issuer"), and U.S. Trust Company as "Trustee" dated December 30, 1997, in which each present Borrower is identified as a "Restricted Subsidiary". "Initial Interest Rate" means the fixed rate of interest of 7.292% per annum until December 15, 1999 and thereafter at the rate of 11.6666% per annum during any period that the unpaid principal balance of the Note exceeds $105 million and 12.0% per annum during any period that the unpaid principal balance of the Note is $105 million or less. "Insolvency Proceeding" means any proceeding commenced by or against any Person, under any provision of the Bankruptcy Code, or under any other bankruptcy or insolvency law, including, but not limited to, assignments for the benefit of creditors, formal or informal moratoriums, compositions, or extensions with some or all creditors. "Internal Revenue Code" means the Internal Revenue Code of 1986, as supplemented and amended from time to time, or any successor statute, and any and all regulations and rules promulgated thereunder. "Lender" means only BMC Holdings, LLC, a Virginia limited liability company. "Lending Office" means Lender's office located at the address set forth in Section 8.1 or such other office of Lender as it may hereafter designate as its Lending Office by notice to the Borrowers. "Licenses" means all FCC Licenses. "Loan" at any time means, collectively, the aggregate amount of all Advances hereunder then outstanding. 4 "Material Adverse Effect" means any material adverse change in (a) the financial condition of the Borrowers taken as a whole, (b) the ability of the Borrowers taken as a whole to perform the Obligations under the Credit Documents (including, without limitation, repayment of the Obligations as they come due), or (c) other than as the result of some action or inaction by Lender, the validity or enforceability of this Agreement, the other Credit Documents, or the rights or remedies of Lender hereunder and thereunder. "Maturity Date" means the earlier of December 15, 2007, or the maturity of the Media Notes according to their terms, or such earlier date to which the maturity of the Loan may be accelerated as provided herein. "Media Notes" mean the notes issued by Brill Media and Brill Media Management, Inc. as co-issuers pursuant to the Indenture, the payment of which is guaranteed by the Borrowers. "Newspaper Operators" means, collectively, CMN, Graph Ads, Gladwin, Cadillac, MBG, CMN Assoc., CMD Inc., CMD L.P., St. Johns, Huron Newspapers, HPS and any other Borrower that operates or owns or controls any Newspaper from time to time. "Newspapers" means, collectively, the Morning Sun; Mt. Pleasant Buyers Guide; Clare County Buyers Guide; Alma Reminder; Gladwin Buyers Guide; Isabella County Herald; Cadillac Buyers Guide; Midland Buyers Guide; Carson City Reminder; Edmore Advertiser; Hemlock Shoppers Guide; St. Johns Reminder; The Northeastern Shopper Guides; and any other newspaper, periodical, tabloid, magazine or other publication business owned and operated by any Borrower from time to time, and "Newspaper" shall mean any one of the Newspapers. "Obligations" means any and all indebtedness, liabilities, and obligations of the Borrowers or any of them owing to Lender, arising out of or in connection with this Agreement or any other Credit Document, previously, now, or hereafter incurred, and howsoever evidenced, whether direct or indirect, absolute or contingent, joint or several, liquidated or unliquidated, voluntary or involuntary, due or not due, legal or equitable, whether incurred before, during, or after any Insolvency Proceeding, and whether recovery thereof is or becomes otherwise unenforceable or unallowable as claims in any Insolvency Proceeding, together with all interest thereupon (including all interest accruing during the pendency of an Insolvency Proceeding), including without limitation all principal and interest owing under the Revolving Credit Note and any other fees and expenses due hereunder, and all other indebtedness evidenced by the Credit Documents. 5 "Person" means and includes natural persons, corporations, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, lenders, trust companies, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof. "Post-Closing Lender Expenses" means all reasonable costs or expenses paid or advanced by Lenders which are required to be paid by the Borrowers under this Agreement and all other documents executed in connection herewith on or after the Closing Date, including without limitation all costs or expenses paid or advanced by Lenders in connection with any Advances, including without limitation, all recording fees, taxes, and any other fees and costs incurred in connection with the funding of any Advances pursuant to Section 2.7 and Section 3.2; all taxes and insurance premiums of every nature and kind of the Borrowers paid by Lenders; all amounts advanced by Lenders to cure defaults under Permitted Debt; reasonable and customary appraisal, filing, recording, documentation, publication and search fees paid or actually incurred by Lenders to correct any default or enforce any provision of this Agreement and all other Credit Documents executed in connection herewith on or after the Closing Date; reasonable costs and expenses of suits or arbitration proceedings incurred by Lenders in enforcing or defending this Agreement, or any portion hereof, and reasonable attorneys' fees and expenses incurred by Lenders in amending, terminating, enforcing, defending or taking other action concerning this Agreement or any other Credit Documents or any other documents executed in connection herewith, whether or not suit is brought, such attorneys' fees to include the reasonable estimate of the allocated costs and expense of Lenders' in-house legal counsel and professional staff. All Post-Closing Lender Expenses paid or incurred by Lenders are payable upon demand, and if not reimbursed within thirty (30) days after demand, shall become a part of the Obligations and shall immediately thereafter bear interest, together with all other amounts to be paid by the Borrowers pursuant hereto, at the appropriate interest rate in accordance with the provisions of Section 2.3 hereof. "Radio Operators" means, collectively, Northland, Reading, CMB, NCR, Tri-State, CMB II, NB II, and NCR II, and any other Borrower that operates, owns or controls any Radio Station from time to time. "Radio Stations" means each of the broadcast radio stations presently owned and operated by any of the Borrowers and any other broadcast radio station hereafter owned or operated by any Borrower, and the Licenses with respect thereto. "Radio Station" means any one of the Radio Stations. 6 "Revolving Credit Note" or the "Note" means that certain Revolving Credit Note of even date herewith in the principal amount of One Hundred Eight Million Dollars ($108,000,000.00) executed by the Borrowers to the order of Lender, together with any amendments thereto or modifications thereof. SECTION 1.2 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP. SECTION 1.3 Computation of Time Periods. In this Agreement, with respect to the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding." Periods of days referred to in this Agreement shall be counted in calendar days unless otherwise stated. SECTION 1.4 Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular and to the singular include the plural, references to any gender include any other gender, the part includes the whole, the term "including" is not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, exhibit and schedule references are to this Agreement, unless otherwise specified. Any reference in this Agreement or any of the other Credit Documents to this Agreement includes any and all permitted alterations, amendments, changes, extensions, modifications, renewals, or supplements thereto or thereof, as applicable. SECTION 1.5 Schedules. All of the schedules attached hereto shall be deemed incorporated herein by reference. SECTION 1.6 Independence of Provisions. All agreements and covenants hereunder, under the other Credit Documents, and the other documents, instruments, and agreements entered into in connection herewith shall be given independent effect such that if a particular action or condition is prohibited by the terms of any such agreement or covenant, the fact that such action or condition would be permitted within the limitations of another agreement or covenant shall not be construed as allowing such action to be taken or condition to exist, except as and to the extent otherwise herein provided. 7 ARTICLE II THE REVOLVING CREDIT SECTION 2.1 The Loan. Subject to the terms and conditions hereof Lender hereby agrees to make Advances to the Borrowers as follows: (a) Closing Date Advances. Lender agrees to lend to the Borrowers on the Closing Date an amount equal to the sum of the Closing Date Advances as set forth in Section 2.2. (b) Additional Advances. Subject to Borrowers' compliance with the requirements of Section 3.2, from and after the Closing Date, from time to time from funds available to Lender therefor the Lender shall lend and relend funds and make additional advances to Borrowers upon the request of Borrowers (the "Additional Advances"); provided, however, that at any time before December 15, 2007, the principal amount of all Closing Date Advances and Additional Advances then outstanding shall not exceed the amount set forth in Section 2.2. Any Additional Advances and any portion of the Closing Date Advances subsequently repaid or prepaid may be reborrowed as herein provided. SECTION 2.2 Purpose and Disbursement of Proceeds of Closing Date Advances. On the Closing Date Advances shall be made to Borrowers in the aggregate amount of One Hundred Eight Million Dollars ($108,000,000.00) (the "Closing Date Advances"). SECTION 2.3 Interest Rates. The unpaid principal balance of the Loan shall bear interest at the applicable rate per annum provided below: (a) Initial Interest Rate. From and after the Closing Date, interest shall accrue on the outstanding principal balance of the Loan at the Initial Interest Rate. (b) Default Rate. Upon the occurrence and during the continuance of an Event of Default, interest shall accrue on the then outstanding principal balance of the Loan at the Default Rate. In the event the Event of Default is cured within the Cure Period, if applicable, the interest rate on the Loan shall revert to the Initial Interest Rate effective as of the date the cure is effectuated. Interest which has accrued on the Obligations at the Default Rate shall be due and payable with the next required payment hereunder or on demand as it accrues if after the Maturity Date. 8 (c) Computation of Interest. All computations of interest shall be calculated on the basis of a year of three hundred sixty (360) days for the actual days elapsed. SECTION 2.4 Repayment of the Loan. The Borrowers shall repay the Loan as follows: (a) Interest Payments. The Borrowers shall pay to Lender semi-annual interest payments in arrears on the aggregate outstanding principal balance of the Note, to include all interest then due and accrued at the Initial Interest Rate, on the first day of each June and December, commencing June 15, 1998, and each June and December thereafter continuing to the Maturity Date when all then outstanding Obligations shall be due and payable, unless sooner repaid. All interest due at the Default Rate shall be paid in accordance with Section 2.3(b) hereof. (b) Payment of Principal and Remaining Obligations. Except as otherwise set forth herein, all principal amounts outstanding under the Note and all other Obligations shall be due and payable in full on the Maturity Date. SECTION 2.5 Statements of Obligations. The Loan and the joint and several Borrowers' obligation to repay the same shall be evidenced by the Revolving Credit Note and this Agreement, and all payments of principal or interest with respect to the Loan shall be evidenced by notations made by Lender on Lender's books and records showing the date and amount of the applicable Advance and each payment of principal or interest. SECTION 2.6 Prepayments. In the event the Borrowers desire to repay any or all of the then outstanding principal balance due under the Note prior to the Maturity Date, the Borrowers may do so at any time without penalty. SECTION 2.7 Cross-Default/Cross-Collateral Provisions. An Event of Default hereunder shall constitute an Event of Default under the Revolving Credit Note. SECTION 2.8 Time and Place of Payment. Each payment due on the Revolving Credit Note shall be made to Lender in immediately available funds, not later than 12:00 p.m., local time, on the day of payment, at the Lender's then business office. SECTION 2.9 Joint and Several Liability: Payment; Indemnifications. (a) Each Borrower hereby agrees and acknowledges that the obligation of each Borrower for payment of the Obligations shall be joint and several with the obligations of each other Borrower 9 hereunder regardless of which Borrower actually receives the proceeds of any borrowing. Each Borrower hereby agrees and acknowledges that it will receive substantial benefits from the Loan, including each and all Advances. The Obligations shall not be impaired or released by any action or inaction on the part of Lender with respect to any other Borrower, including any action or inaction that otherwise would release a surety. (b) In order to provide for just and equitable contribution between the Borrowers if any payment is made by a Borrower (for purposes of this Section 2.9(b), a "Funding Borrower") in discharging any of the Obligations, that Funding Borrower shall be entitled to a contribution from the other Borrowers for all payments, damages and expenses incurred by that Funding Borrower in discharging the Obligations, in the manner and to the extent required to allocate liabilities in an equitable manner among the Borrowers on the basis of the relative benefits received by the Borrowers. If and to the extent that a Funding Borrower makes any payment to the Lender or any other Person in respect of the Obligations, any claim that such Funding Borrower may have against the other Borrowers by reason thereof shall be subject and subordinate to the prior cash payment in full of the Obligations. (c) The parties hereto acknowledge that the right to contribution hereunder shall constitute an asset of the party to which such contribution is owing. Notwithstanding any of the foregoing to the contrary, such contribution arrangements shall not limit in any manner the joint and several nature of the Obligations; shall not limit, release or otherwise impair any rights of the Lender under the Credit Documents, and shall not alter, limit or impair the obligation of any Borrower, which obligation is absolute and unconditional, to repay the Obligations. (d) The parties expressly agree that payment by any Borrower of amounts due and payable on the Media Notes that is made pursuant to such Borrower's Guaranty agreement shall to the extent and in the amount of such payment constitute a payment and discharge of such Borrower's Obligations on the Note and the Loan. ARTICLE III CONDITIONS TO BORROWING SECTION 3.1 Disbursement of Closing Date Advances and Effectiveness of Agreement. This Agreement shall become effective and Lender shall disburse the Closing Date Advances in accordance with Section 2.2 above if, and only if, each of the following conditions have been fulfilled to the satisfaction of 10 Lender and its legal counsel (the occurrence of which shall be called, collectively, the "Closing"): (a) receipt by Lender of this Agreement and each of the other Credit Documents, all duly executed and, where required, acknowledged; and (b) receipt by Lender of all other documents Lender reasonably may request be delivered by Borrowers. SECTION 3.2 Conditions to Lender's Approval of Additional Advance(s). Lender shall not be deemed to have approved and shall not make any Additional Advance(s) unless and until the following conditions have been fulfilled with respect to each such Additional Advance: (a) Lender shall have received and approved a request from the Borrower(s) for disbursement of such an Additional Advance; (b) the Maturity Date shall not have occurred; (c) the then sum of the Advances outstanding and unpaid (including the Advance then requested) shall not exceed the amount specified in Section 2.2; (d) no Borrower then is in default of any material term, covenant or condition under any Credit Document; and (e) Lender is not then in default to Brill Media on Lender's note payable to Brill Media of even date herewith in the initial principal amount of the Credit Facility. ARTICLE IV REPRESENTATIONS AND WARRANTIES Each Borrower makes the following representations and warranties to Lender, which representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect until the payment, performance and satisfaction in full of the Obligations. SECTION 4.1 Legal Status. Each Borrower is an entity duly organized and existing under the laws of the Commonwealth of Virginia. SECTION 4.2 No Violation: Compliance. As of Closing, the execution, delivery, and performance of this Agreement and the other Credit Documents are within each Borrower's respective powers, are not in conflict with the terms of any charter, bylaw, or other agreement, and do not result in a breach of or 11 constitute a default under any contract, obligation, indenture, or other instrument to which either is a party or by which either is bound or affected; and there is no law, rule or regulation, nor is there any judgment, decree or order of any court or governmental authority binding on any Borrower that would be contravened by the execution, delivery, performance, or enforcement of this Agreement or the other Credit Documents. SECTION 4.3 Authorization; Validity. Each Borrower has taken all partnership, corporate, limited liability company, or other action necessary to authorize the execution and delivery of this Agreement and the other Credit Documents, and the consummation of the transactions contemplated hereby and thereby. SECTION 4.4 Approvals; Consents. As of the date of this Agreement, no approval, consent, exemption or other action by, or notice to or filing with, any governmental authority is presently necessary in connection with the execution, delivery, performance or enforcement of this Agreement or the other Credit Documents except as may have been obtained by the Borrowers with certified copies delivered to Lender. SECTION 4.5 Binding Agreements. This Agreement and all other Credit Documents have been duly executed and delivered by each Borrower. This Agreement and each other Credit Document to which any Borrower is a party, constitute the legal, valid and binding obligations of each Borrower enforceable in accordance with their terms, except insofar as the enforceability hereof or thereof may be limited by applicable bankruptcy, insolvency or other similar laws now or hereafter in effect affecting the enforcement of creditors' rights generally, or by general principals of equity. ARTICLE V AFFIRMATIVE COVENANTS Borrower covenants and agrees that until the Obligations have been paid in full to Lender, each Borrower shall: SECTION 5.1 Punctual Payments. Punctually pay the interest and principal on the Loan, and any fees or other liabilities due under this Agreement and the other Credit Documents, at the times and place and in the manner specified in this Agreement. SECTION 5.2 Books and Records. Maintain adequate books and records and permit any authorized representative of Lender, or Lender, at any reasonable time during normal business hours, to inspect, audit, and examine such books and records, to make copies of the same, and to inspect the Borrowers' Assets. 12 SECTION 5.3 Financial Statements. Deliver to Lender the following, all in form and detail reasonably satisfactory to Lender: (a) as soon as available but not later than thirty (30) days after receipt, a Financial Statement for each Borrower for the Fiscal Year then ended; and (b) from time to time such other information as Lender may reasonably request. SECTION 5.4 Existence; Compliance with Law. Preserve and maintain its existence and all of its licenses (including without limitation, all FCC licenses), permits, governmental approvals, rights, privileges and franchises required for the operations of the Borrowers to the extent that failure to preserve and maintain the same could reasonably be expected to have a Material Adverse Effect; comply with the provisions of all documents pursuant to which each Borrower is organized that govern such Borrower's continued existence to the extent that failure to so comply could reasonably be expected to have a Material Adverse Effect on any Borrower; and comply with the requirements of all applicable laws, rules, regulations, orders of any governmental authority and requirements for the maintenance of each Borrower's insurance, licenses, permits, governmental approvals, rights, privileges and franchises, to the extent that failure to so comply could reasonably be expected to have a Material Adverse Effect. SECTION 5.5 Inspection of Assets. Allow Lender and its representatives access to inspect the Assets, including the Radio Stations, and the Newspapers, upon reasonable notice by Lender to the Borrowers. SECTION 5.6 Notice to Lender. Promptly upon the Borrowers acquiring knowledge thereof, give notice to Lender of: (a) all litigation affecting the Borrowers where the amount claimed is in excess of One Hundred Thousand Dollars ($100,000) for any individual matter or in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate and when such amount is not covered by applicable insurance (less applicable deductibles); (b) any substantial dispute which may exist between any Borrower, on the one hand, and any governmental regulatory body or law enforcement authority, on the other, if the determination of such dispute could reasonably be expected to have a Material Adverse Effect; 13 (c) any labor controversy resulting in or threatening to result in a strike against any Borrower, if the commencement of such strike could reasonably be expected to have a Material Adverse Effect; (d) any Default or Event of Default; (e) any other matter that has resulted in or could reasonably be expected to have a Material Adverse Effect upon a Borrower; and (f) any sale or transfer of any capital stock of membership interest in, or partnership interest in, any Borrower or any affiliate directly or indirectly owning or owned by any Borrower. SECTION 5.7 Compliance with Indenture. Comply in all respects with requirements of the Indenture as applicable to each Borrower as a "Restricted Subsidiary" as therein identified and defined. SECTION 5.8 Notice of FCC Reports. Promptly upon their becoming available, provide Lender with copies of each periodic or special report filed by or on behalf of any Borrower with the FCC, if such reports indicate any material adverse change in the business, operations, affairs, or conditions of Borrower's business, and copies of any material notices or other communications from the FCC that specifically relate to the operation of any Borrower's business. ARTICLE VI NEGATIVE COVENANTS The Borrowers further covenant and agree that until the Obligations have been fully paid to Lender, without Lender's prior consent and except as and to the extent permitted to a Restricted Subsidiary under the Indenture, the Borrowers shall not: SECTION 6.1 Compliance with Indenture. Take any action not permitted to a Restricted Subsidiary by the Indenture. SECTION 6.2 Character of Business. Engage in any business activities or operations substantially different from or unrelated to the present business activities and operations of the Borrowers. SECTION 6.3 Dividends, Distributions. While an Event of Default shall have occurred and be continuing, declare, make, or pay any dividend or distribution in cash or kind except as otherwise provided for or permitted herein or in the Indenture. 14 SECTION 6.4 Change in Ownership. Cause, permit or suffer any material change, direct or indirect, in the capital ownership, membership, or control of any Borrower. SECTION 6.5 Change in Name. Cause, permit or suffer any material change in the name of any Borrower. SECTION 6.6 Change in Fiscal Year or Fiscal Year End. Change any Borrower's Fiscal Year or Fiscal Year End. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES SECTION 7.1 Events of Default. The occurrence of any one or more of the following events, acts or occurrences shall constitute an event of default (an "Event of Default") hereunder: (a) The Borrowers fail to timely make or cause to be made any payment of interest due on the Revolving Credit Note; (b) The Borrowers fail to pay the Loan when due and payable at maturity, including the payment of any Post-Closing Lender Expenses, or any other amount then payable hereunder; (c) The Borrowers fail to observe or perform any covenant applicable to a Restricted Subsidiary and set forth in the Indenture or in Article V, Article VI or Article VIII herein or any other Credit Document; (d) Any Borrower commences a voluntary Insolvency Proceeding seeking liquidation, reorganization or other relief with respect to itself or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary Insolvency Proceeding or fails generally to pay its debts as they become due, or takes any corporate action to authorize any of the foregoing; (e) (1) A court of competent jurisdiction enters a decree or order for relief in respect of any Borrower in an insolvency case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency, or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (2) An involuntary Insolvency Proceeding is commenced against any Borrower seeking liquidation, reorganization or other relief with respect to it or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such 15 involuntary Insolvency Proceeding remains undismissed and unstayed for a period of sixty (60) days: (f) A judgment creditor obtains possession of any of the Assets of any Borrower by any means, including levy, discounts replevin, or self-help, or one or more judgments are entered against the Borrowers involving singly or in the aggregate a liability in excess of Five Hundred Thousand Dollars ($500,000) (to the extent not fully covered by insurance) or any order, judgment or decree is entered decreeing the dissolution of the Borrowers and such order remains undischarged or unstayed for a period in excess of ninety (90) calendar days; (g) The FCC Licenses (excluding any auxiliary licenses) are modified adversely, revoked, suspended, canceled or otherwise rendered non-transferable by the FCC or any other regulatory agency or court of competent jurisdiction and such action shall have become a Final FCC Order; or (h) Any Radio Operator shall fail to be the licensee under any or all of the FCC Licenses other than in connection with a sale or transfer of any of the FCC Licenses consented to by Lender. SECTION 7.2 Remedies. Upon the occurrence and during the continuance of any Event of Default not cured within the Cure Period or waived by the Lender, the principal amount then due under the Note shall begin to accrue interest at the Default Rate. In the event such Event of Default is cured within any applicable Cure Period, the interest rate on the Loan thereupon shall revert to the Initial Interest Rate. The Lender also shall have all remedies set forth herein and in the other Credit Documents and all remedies at law or in equity that are consistent with the Communications Act and the rules and regulations of the FCC. ARTICLE VIII MISCELLANEOUS SECTION 8.1 Notices. All notices, requests and other communications to any party hereunder shall be in writing and shall be given to such party at its address and to the telefax number set forth below or such other address or telefax number as such party may hereafter specify for the purpose by notice to the other party: If to the Borrowers: 16 Central Michigan Newspapers, Inc. c/o Brill Media Company, L.P. 420 N.W. Fifth Street, Suite 420 P.O. Box 3353 Evansville, IN 47732 Attention: Mr. Alan R. Brill Telephone: (812) 423-6200 Facsimile: (812) 428-4021 with a copy to: Charles W. Laughlin, Esq. Thompson & McMullan 100 Shockoe Slip Richmond, VA 23219 Telephone: (804) 649-7545 Facsimile: (804) 780-1813 If to Lender: BMC Holdings, LLC c/o Brill Media Company, L.P. 420 N.W. Fifth Street, Suite 420 P.O. Box 3353 Evansville, IN 47732 Any notice or other communication provided for or allowed hereunder shall be considered to have been validly given if delivered personally, and evidenced by a receipt signed by an authorized Lender or addressee, or ten (10) hours after being deposited in the United States mail, registered or certified, postage prepaid, return receipt requested, or forty-eight (48) hours after being sent by Federal Express or other courier service, or, in the case of telefaxed notice, when telefaxed, receipt acknowledged. SECTION 8.2 No Implied Waivers. No failure or delay by Lender in exercising any right, power, or privilege hereunder or under any Credit Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION 8.3 Expenses; Documentary Taxes; Indemnification. Borrower shall pay (1) all Lender's Post-Closing Expenses; and (2) if an Event of Default occurs, all out-of-pocket expenses incurred by Lender, including reasonable attorneys' fees and expenses incurred in connection with such Event of Default and 17 collection and other enforcement proceedings resulting therefrom or in connection with any refinancing or restructuring of the Obligations and the liabilities of the Borrowers under this Agreement, any of the other Credit Documents, or any other document, instrument or agreement subsequently entered into. SECTION 8.4 Amendments and Waivers. Any provision of this Agreement, or any of the other Credit Documents to which the Borrowers are a party, may be amended or waived at any time if, but only if, such amendment or waiver is in writing and is signed by the Borrowers and Lender. SECTION 8.5 No Assignment; Non-Recourse. Neither Borrowers nor Lender shall have the right to assign or transfer to any party, in whole or in part, any of the rights, duties or obligations of Borrower(s) or Lender under this Agreement or any of the Credit Documents executed contemporaneously herewith, or any subsequent amendment, renewal, extension, modification, or restatement of this Agreement or any of the Credit Documents. Anything herein to the contrary notwithstanding, all indebtedness on the Note, the Obligations, or this Agreement shall be Non-Recourse Debt as defined in and meant by the Indenture. SECTION 8.6 Counterparts; Integration; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective upon the execution of a counterpart hereof by each Borrower and Lender and receipt by Borrowers and Lender of written or telephonic notification of such execution and authorization of delivery thereof. SECTION 8.7 Governing Law; Jurisdiction. (a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. (b) JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN THE COMMONWEALTH OF VIRGINIA. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE 18 EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8.7(b) AND STIPULATE THAT ANY SUCH COURT SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR THE OTHER CREDIT DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THEIR ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 8.1 HEREOF. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL FOR ALL PURPOSES BE DEEMED TO HAVE BEEN ENTERED INTO IN THE COMMONWEALTH OF VIRGINIA. (c) WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS. The scope of this waiver is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject mater of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. The parties hereto each (1) acknowledge that this waiver is a material inducement for the parties to enter into a business relationship, that the parties hereto have already relied on this waiver in entering into this Agreement or accepting the benefits thereof, as the case may be, and that each will continue to rely on this waiver in their related future dealings, and (2) further warrant and represent that each has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, OR MODIFICATIONS OF THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. SECTION 8.8 Survival of Warranties. All agreements and the representations and warranties made herein shall survive the execution and delivery of this Agreement. SECTION 8.9 Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. Neither this Agreement nor any Credit Document nor any part or parts thereof shall create any right in any third party that is not a party signatory hereto or thereto. 19 SECTION 8.10 Maximum Interest Rate. Notwithstanding anything to the contrary contained in the Revolving Credit Note or this Agreement, the Borrowers shall not be obligated to pay, and Lender shall not be entitled to charge, collect, receive, reserve, or take interest (it being understood that interest shall be calculated as the aggregate of all charges which constitute interest under applicable law that are contracted for, charged, reserved, received, or paid) in excess of the maximum rate permitted by law. During any period of time in which the interest rates specified herein exceed the maximum rate permitted by law, interest shall accrue and be payable at such maximum rate. If from any circumstances whatsoever, fulfillment of any provision of the Revolving Credit Note, or this Agreement or of any other document pertaining hereto or thereto, shall involve transcending the limit of validity prescribed by law for the collection or charging of interest, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstances Lender shall ever receive anything of value as interest or deemed interest by applicable law under the Revolving Credit Note, this Agreement, any of the other Credit Documents or any other document pertaining hereto, thereto or otherwise an amount that would exceed the maximum rate permitted by law, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing under the Revolving Credit Note or on account of any other indebtedness of the Borrowers to Lender, and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of such indebtedness, such excess shall be refunded to the Borrowers. In determining whether or not the interest paid or payable with respect to any indebtedness of the Borrowers to Lender, under any specified contingency, exceeds the maximum rate permitted by law, the Borrowers and Lender shall, to the maximum extent permitted by applicable law, (a) characterize any non-principal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary prepayments and the effects thereof, (c) amortize, prorate, allocate, and spread the total amount of interest throughout the actual term of such indebtedness such that it does not exceed the maximum amount permitted by applicable law, and/or (d) allocate interest between portions of such indebtedness, to the end that no such portion shall bear interest at a rate greater than that permitted by applicable law. SECTION 8.11 Headings. Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. SECTION 8.12 Marshaling; Payments Set Aside. Lender shall be under no obligation to marshal any assets in favor of the Borrowers or any other party or against or in payment of any or 20 all of the Obligations. To the extent any Borrower makes a payment or payments to Lender, or exercises its rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, or other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred. SECTION 8.13 Further Assurances and Release By Lender. Upon payment in full of the Obligations, as herein provided, this Agreement and each of the other Credit Documents (other than the Indenture) shall terminate and the Lender shall, at the Borrowers' sole expense, execute and deliver to the Borrowers such statements or such other instruments and further assurances as the Borrowers' reasonably may request acknowledging satisfaction and discharge of the Obligations and this Agreement and each of the other Credit Documents (other than the Indenture). IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date and year first above written. BORROWERS: NORTHLAND BROADCASTING, LLC By: Northland Management, Inc., a Virginia corporation, Managing Member By:________________________________ a duly Authorized Officer READING RADIO, INC. By:________________________________ a duly Authorized Officer CENTRAL MISSOURI BROADCASTING, INC. By:________________________________ a duly Authorized Officer 21 NORTHERN COLORADO RADIO, INC. By:________________________________ a duly Authorized Officer TRI-STATE BROADCASTING, INC. By:________________________________ a duly Authorized Officer CMB II, INC. By:________________________________ a duly Authorized Officer NB II, INC. By:________________________________ a duly Authorized Officer CENTRAL MICHIGAN NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer GRAPH ADS PRINTING, INC. By:________________________________ a duly Authorized Officer GLADWIN NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer CADILLAC NEWSPAPERS, INC By:________________________________ a duly Authorized Officer 22 MIDLAND BUYER'S GUIDE. INC. By:________________________________ a duly Authorized Officer CMN ASSOCIATED PUBLICATIONS, INC. By:________________________________ a duly Authorized Officer CENTRAL MICHIGAN DISTRIBUTION CO., INC. By:________________________________ a duly Authorized Officer CENTRAL MICHIGAN DISTRIBUTION CO., INC. By: Central Michigan Distribution Co., Inc., Its General Partner By:________________________________ a duly Authorized Officer BRILL NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer BRILL RADIO, INC. By:________________________________ a duly Authorized Officer HURON HOLDINGS, LLC By: By:________________________________ a duly Authorized Officer 23 NORTHERN COLORADO HOLDINGS, LLC By: By:________________________________ a duly Authorized Officer NCR III, LLC By: By:________________________________ a duly Authorized Officer NORTHLAND HOLDINGS, LLC By: By:________________________________ a duly Authorized Officer CMN HOLDINGS, INC. By:________________________________ a duly Authorized Officer NCH II, LLC By: By:________________________________ a duly Authorized Officer ST. JOHNS NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer NCR II, INC. By:________________________________ a duly Authorized Officer 24 HURON NEWSPAPERS, LLC By: Huron Management, Inc., a Virginia corporation, Managing Member By:________________________________ a duly Authorized Officer HURON P.S., LLC By: Huron Management, Inc., a Virginia corporation, Managing Member By:________________________________ a duly Authorized Officer LENDER: BMC HOLDINGS, LLC, a Virginia Limited Liability Company By: Brill Media Company, LLC, its Member By: Brill Media Management, Inc., its Manager By:_________________________ a duly Authorized Officer 25 EX-10.11(B) 84 EXHIBIT 10.11(B) EX-10.11(b) Revolving Credit Note THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. REVOLVING CREDIT NOTE FOR VALUE RECEIVED, at the times and place, and in the manner, below provided, NB, II, INC.; NORTHLAND BROADCASTING, LLC; READING RADIO, INC.; CENTRAL MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHERN COLORADO RADIO, INC.; NCR II, INC.; TRI-STATE BROADCASTING, INC.; CENTRAL MICHIGAN NEWSPAPERS, INC.; GRAPH ADS PRINTING, INC.; GLADWIN NEWSPAPERS, INC.; CADILLAC NEWSPAPERS, INC.; MIDLAND BUYER'S GUIDE, INC.; CMN ASSOCIATED PUBLICATIONS, INC.; CENTRAL MICHIGAN DISTRIBUTION CO., INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.; BRILL NEWSPAPERS, INC.; BRILL RADIO, INC.; HURON HOLDINGS, LLC; NORTHERN COLORADO HOLDINGS, LLC; NCR III, LLC; NORTHLAND HOLDINGS, LLC, CMN HOLDINGS, INC.; NCH II, LLC; ST. JOHNS NEWSPAPERS, INC.; HURON NEWSPAPERS, LLC; and HURON P.S., LLC (hereinafter together with their successors and assigns collectively referred to as "Makers"), jointly and severally promise to pay to BMC HOLDINGS, LLC, a Virginia limited liability company ("Lender"), or order, the principal sum of One Hundred Eight Million and 00/100 Dollars ($108,000,000) together with interest thereon as provided in the Credit Agreement defined below. 1. Defined Terms. Any and all initially capitalized terms used herein shall have the meanings ascribed to them under that certain Revolving Credit Agreement, dated as of December 30, 1997 ("Credit Agreement"), entered into between the Makers, on the one hand, and the Lender, on the other hand. This Revolving Credit Note (the "Note") is the Revolving Credit Note defined in the Credit Agreement and is subject to, and entitled to the benefits of, the terms and conditions of the Credit Agreement. 2. Interest Rate. This Note shall bear interest at the various rates determined and calculated pursuant to the provisions of Section 2.3 of the Credit Agreement. 3. Time, Place and Manner of Payments. All principal and interest due hereunder is payable at the times and place, and in the manner, set forth in Section 2.8 of the Credit Agreement. 4. Maturity Date. This Note shall be due and payable in full on the Maturity Date as defined in the Credit Agreement. 5. Prepayments. Makers may prepay the principal balance due under this Note, in whole or in part, at any time or from time to time, without penalty or permission upon three (3) Business Days' prior written notice. 6. Application of Payments. Except to the extent otherwise provided in the Credit Agreement, all payments (including prepayments) made hereunder shall be applied first to fees and expenses, then to the payment of accrued and unpaid interest, with the balance remaining applied to the payment of the unpaid principal balance of this Note. 7. Incorporation. THIS NOTE IS SUBJECT TO THE PROVISIONS OF THE CREDIT AGREEMENT, ALL OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND MADE A PART HEREOF. 8. GOVERNING LAW. THIS NOTE AND THE OTHER CREDIT DOCUMENTS (EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. 9. JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS SECTION OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN THE COMMONWEALTH OF VIRGINIA. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATE THAT ANY SUCH COURT SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS SECTION, OR THE OTHER CREDIT DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THEIR ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 8.1 OF THE CREDIT AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL FOR ALL PURPOSES BE DEEMED TO HAVE BEEN ENTERED INTO IN THE COMMONWEALTH OF VIRGINIA. 10. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE CREDIT AGREEMENT OR THE OTHER CREDIT DOCUMENTS. The scope of this waiver is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject 2 mater of this transaction, including without limitation contract claims, tort claims, breach of duty claims and all other common law and statutory claims. The parties hereto each (1) acknowledge that this waiver is a material inducement for the parties to enter into a business relationship, that the parties hereto have already relied on this waiver in entering into this Agreement or accepting the benefits thereof, as the case may be, and that each will continue to rely on this waiver in their related future dealings, and (2) further warrant and represent that each has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, OR MODIFICATIONS OF THIS AGREEMENT. In the event of litigation, this Note and other Credit Documents may be filed as a written consent to a trial by the court. 11. Expenses. In addition to all other sums payable hereunder or under the Credit Agreement, if an Event of Default occurs, Makers shall pay all reasonable out-of-pocket expenses incurred by Lender, including fees and disbursements of counsel, in connection with such Event of Default and collection and other enforcement proceedings resulting therefrom or in connection with any subsequent refinancing or restructuring of the Credit Obligations. 12. Amendments, etc. This Note may not be changed, modified, amended, or terminated except as provided in the Credit Agreement. 13. Headings. Section headings used in this Note are solely for convenience of reference, shall not constitute a part of this Note for any other purpose, and shall no affect the construction of this note. WITNESS the following MAKERS: signatures as of December 30, 1997: NORTHLAND BROADCASTING, LLC By: Northland Management, Inc., a Virginia corporation, Managing Member By:________________________________ a duly Authorized Officer READING RADIO, INC. By:________________________________ a duly Authorized Officer 3 CENTRAL MISSOURI BROADCASTING, INC. By:________________________________ a duly Authorized Officer NORTHERN COLORADO RADIO, INC. By:________________________________ a duly Authorized Officer TRI-STATE BROADCASTING, INC. By:________________________________ a duly Authorized Officer CMB II, INC. By:________________________________ a duly Authorized Officer NB II, INC. By:________________________________ a duly Authorized Officer CENTRAL MICHIGAN NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer GRAPH ADS PRINTING, INC. By:________________________________ a duly Authorized Officer GLADWIN NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer 4 CADILLAC NEWSPAPERS, INC By:________________________________ a duly Authorized Officer MIDLAND BUYER'S GUIDE. INC. By:________________________________ a duly Authorized Officer CMN ASSOCIATED PUBLICATIONS, INC. By:________________________________ a duly Authorized Officer CENTRAL MICHIGAN DISTRIBUTION CO., INC. By:________________________________ a duly Authorized Officer CENTRAL MICHIGAN DISTRIBUTION CO., INC. By: Central Michigan Distribution Co., Inc., Its General Partner By:________________________________ a duly Authorized Officer BRILL NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer BRILL RADIO, INC. By:________________________________ a duly Authorized Officer HURON HOLDINGS, LLC By: By:________________________________ a duly Authorized Officer 5 NORTHERN COLORADO HOLDINGS, LLC By: By:________________________________ a duly Authorized Officer NCR III, LLC By: By:________________________________ a duly Authorized Officer NORTHLAND HOLDINGS, LLC By: By:________________________________ a duly Authorized Officer CMN HOLDINGS, INC. By:________________________________ a duly Authorized Officer NCH II, LLC By: By:________________________________ a duly Authorized Officer ST. JOHNS NEWSPAPERS, INC. By:________________________________ a duly Authorized Officer NCR II, INC. By:________________________________ a duly Authorized Officer 6 HURON NEWSPAPERS, LLC By: Huron Management, Inc., a Virginia corporation, Managing Member By:________________________________ a duly Authorized Officer HURON P.S., LLC By: Huron Management, Inc., a Virginia corporation, Managing Member By:________________________________ a duly Authorized Officer 7 EX-10.11(C) 85 EXHIBIT 10.11(C) EX-10.11(c) Promissory Note THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BMC HOLDINGS, LLC Promissory Note $108,000,000.00 December 30, 1997 For value received, BMC Holdings, LLC, a Virginia limited liability company ("Maker"), promises to pay to Brill Media Company, LLC ("Payee"), or order, at Payee's address located at 100 Shockoe Slip, Richmond, Virginia 23219, the principal sum of One Hundred Eight Million and no/100 Dollars ($108,000,000.00) in lawful money of the United States of America, together with simple interest on any unpaid balance hereof in like money at the rate of 7.292% per annum until December 15, 1999, and thereafter at the rate of 11.6666% per annum during any period that the unpaid principal balance hereof exceeds $105 million and 12.0% per annum during any period that the unpaid principal balance hereof is $105 million or less for so long as payment on any principal balance hereof remains unpaid, such principal and interest to be due and payable on the following obligatory schedule (except as and to the extent offset, anticipated, or prepaid, in whole or in part, as hereinafter provided): Commencing June 15, 1998, on the 15th day of December and June thereafter, and on each ensuing anniversary thereof thereafter, Maker shall pay to the holder hereof interest accrued on the outstanding principal balance hereof until December 15, 2007, when final payment of all then unpaid principal and accrued interest thereon shall be due and payable. The Maker reserves the right to anticipate and prepay at any time or from time to time, without penalty, all or any part of the indebtedness evidenced by this note. Any partial prepayment of principal also shall include accrued interest on the unpaid principal balance to the date of such prepayment, and each prepayment shall be applied to and be deducted from the scheduled obligatory payments falling due hereunder in the inverse order of their scheduled due dates. All prepayments on this note shall be recorded when made on the reverse side hereof by the then holder of this note. The following, and only the following, shall constitute an "Event of Default" under this note: (a) any failure of Maker to make (or to cause to be made) to the then holder of this note any scheduled obligatory payment of principal or interest on this note when due and payable, which failure continues for a period of at least thirty (30) consecutive calendar days after written notice of such failure has been given to Maker by such holder, or (b) any uncured Event of Default (as therein defined) on the Notes issued by Payee and Brill Media Management, Inc. pursuant to the Indenture dated December 30, 1997, and the Offering Memorandum dated December 23, 1997, or (c) the commencement by maker of a voluntary case under and within the meaning of the United States Bankruptcy Code, or (d) entry by a court of competent jurisdiction of an order in an involuntary case commenced against Maker under and within the meaning of the United States Bankruptcy Code that (i) forbids the Maker to continue to use, acquire, or dispose of property as if no such involuntary case had been commenced, or (ii) is for relief against Maker, or (iii) appoints an interim trustee to take possession of Maker's property, or (iv) orders the liquidation of Maker, and, in each case, sixty (60) consecutive calendar days shall have elapsed since entry of any such order, such order shall then be unstayed and effective, and such involuntary case shall then still be pending and not dismissed. Upon the occurrence and during the continuation of an Event of Default, and not otherwise, the then holder of this note, at such holder's sole election made by a written notice executed by such holder (expressly referring to and describing this note and the Event of Default) and given to Maker, may declare all of the then unpaid principal balance of this note, together with any interest accrued thereon, to be, and they shall thereupon become, immediately due and payable without presentment, demand, protest, or other notice of any kind. Any notice to Maker shall be deemed to have been given only upon the earlier to occur of (a) actual receipt of such notice by Maker (whether by hand delivery or facsimile transmission), or (b) the eighth day after the date of deposit of such notice in the U.S. mail, postage prepaid, certified or registered, with return receipt or proof of deliver required, addressed to Maker at the address for Maker shown herein or at such other address as Maker may theretofore establish by notice to Payee as provided in the Agreement. Mere delay or failure to act shall not preclude the exercise or enforcement of any right or remedy hereunder; all such rights and remedies shall be cumulative and may be exercised singularly or concurrently, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other right or remedy. The rights of all parties hereto and of each holder hereof shall be governed by and enforced or construed only in accordance with the domestic, substantive laws of the Commonwealth of Virginia, excluding those relating to conflicts of laws. Maker agrees to pay all reasonable attorneys' fees that may be incurred in collecting this note after an Event of Default, but not to exceed 5% of any then due and payable principal balance. IN WITNESS WHEREOF, Maker has caused this note to be executed by its duly authorized officer on the day, month, and year first above written. BMC HOLDINGS, LLC By: BRILL MEDIA COMPANY, LLC, By: Brill Media Management, Inc. Its Manager By:___________________________ a duly authorized officer EX-12.1 86 EXHIBIT 12.1 Exhibit 12.1 Brill Media Company, LLC Ratio of Earnings to Fixed Charges ($000s)
Historical Pro Forma -------------------------------------------------------------------- ------------------------ Six Months Six Months Year Six Months Ended Ended Ended Ended Year Ended February 28 or 29, August 31, August 31, February 28, August 31, 1993 1994 1995 1996 1997 1996 1997 1997 1997 -------- ------ -------- -------- -------- ---------- ---------- ------------ ---------- Earnings Income (loss) before income taxes and extraordinary item.......... $(2,863) $ 952 $(3,753) $(5,186) $(2,486) $ (403) $(1,464) $(8,048) $(3,471) Fixed charges..................... 4,523 4,682 5,882 7,200 7,514 3,729 4,032 12,633 6,327 ------- ------ ------- ------- ------- ------ ------- ------- ------- $ 1,660 $5,634 $2,129 $2,014 $ 5,028 $3,326 $ 2,568 $ 4,585 $ 2,856 ------- ------ ------- ------- ------- ------ ------- ------- ------- ------- ------ ------- ------- ------- ------ ------- ------- ------- Fixed Charges Interest expense.................. $ 4,351 $4,466 $ 5,636 $ 6,633 $ 6,943 $3,342 $ 3,698 $11,996 $ 6,001 Portion of rent expense representative of interest...... 39 37 40 70 82 43 51 82 51 Amortization of deferred financing costs................. 133 179 206 497 489 344 283 555 275 ------- ------ ------- ------- ------- ------ ------- ------- ------- $ 4,523 $4,682 $ 5,882 $ 7,200 $ 7,514 $3,729 $ 4,032 $12,633 $ 6,327 ------- ------ ------- ------- ------- ------ ------- ------- ------- ------- ------ ------- ------- ------- ------ ------- ------- ------- Ratio of earnings to fixed charges.. -- 1.20 -- -- -- -- -- -- -- ------- ------ ------- ------- ------- ------ ------- ------- ------- ------- ------ ------- ------- ------- ------ ------- ------- -------
EX-21 87 EXHIBIT 21 EX-21 Subsidiaries Subsidiaries of Brill Media Company, LLC Brill Media Management, Inc. BMC Holdings, LLC Huron Holdings, LLC Northern Colorado Holdings, LLC NCR III, LLC NCH II, LLC Northland Holdings, LLC CMN Holding, Inc. Brill Radio, Inc. Brill Newspapers, Inc. Reading Radio, Inc. Tri-State Broadcasting, Inc. Northern Colorado Radio, Inc. NCR II, Inc. Central Missouri Broadcasting, Inc. CMB II, Inc. Northland Broadcasting, LLC NB II, Inc. Central Michigan Newspapers, Inc. Cadillac Newspapers, Inc. CMN Associated Publications, Inc. Central Michigan Distribution Co., L.P. Central Michigan Distribution Co., Inc. Gladwin Newspapers, Inc. Graph Ads Printing, Inc. Midland Buyer's Guide, Inc. St. Johns Newspapers, Inc. Huron P.S., LLC Huron Newspapers, LLC EX-23.2 88 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF ERNST & YOUNG LLP We consent to the reference to our firm under the caption "Experts" and to the use of our report dated November 14, 1997, except for Note 2 as to which the date is December 12, 1997 and Note 10 and Note 12 as to which the date is December 30, 1997, with respect to the financial statements of The Radio and Newspaper Businesses of Alan R. Brill included in the Registration Statement (Form S-4) and related Prospectus of Brill Media Company, LLC and Brill Media Management, Inc. for the registration of $105,000,000 of their 12% Senior Notes due 2007 and $3,000,000 of Appreciation Notes due 2007, and the guarantees thereof issued by the subsidiaries of Brill Media Company, LLC. Ernst & Young LLP Chicago, Illinois January 9, 1998 EX-25.1 89 EXHIBIT 25.1 EX-25.1 Statement of Eligibility - Series B 12% Senior SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 -------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE -------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _______ -------------------------- UNITED STATES TRUST COMPANY OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-3818954 (Jurisdiction of incorporation (I. R. S. Employer if not a U. S. national bank) Identification No.) 114 West 47th Street 10036 New York, New York (Zip Code) (Address of principal executive offices) -------------------------- Brill Media Company LLC (Exact name of obligor as specified in its charter) Virginia 52-2071822 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Brill Media Management, Inc (Exact name of obligor as specified in its charter) Virginia 54-1877458 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) c/o Brill Media Company 47732 P. O. Box 3353 (Zip code) Evansville, IN (Address of principal executive offices) - 2 - -------------------------- BMC Holdings, LLC (Exact name of registrant as specified in its charter) Viriginia 52-2071824 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Brill Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170289 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Brill Radio, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1148743 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Cadillac Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170305 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Central Michigan Distribution Co., Inc. (Exact name of registrant as specified in its charter) Virginia 38-2438162 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Central Michigan Distribution Co., LP (Exact name of registrant as specified in its charter) Virginia 62-1356763 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 3 - -------------------------- Central Michigan Newspapers, Inc. (Exact name of registrant as specified in its charter) Viriginia 54-1170307 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Central Missouri Broadcasting, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1163979 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- CMB II, Inc. (Exact name of registrant as specified in its charter) Virginia 43-1671356 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- CMN Associated Publiciations, Inc. (Exact name of registrant as specified in its charter) Virginia 38-2438130 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- CMN Holding, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170293 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Gladwin Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170304 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 4 - -------------------------- Graph Ads Printing, Inc. (Exact name of registrant as specified in its charter) Viriginia 38-2438126 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Huron Holdings, LLC (Exact name of registrant as specified in its charter) Virginia 54-1867829 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Huron Newspapers, LLC (Exact name of registrant as specified in its charter) Virginia 38-3372402 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Huron P.S., LLC (Exact name of registrant as specified in its charter) Virginia 38-3372410 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Midland Buyers Guide, Inc. (Exact name of registrant as specified in its charter) Virginia 38-2438164 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- NB II, Inc. (Exact name of registrant as specified in its charter) Virginia 41-1803205 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 5 - -------------------------- NCH II, LLC (Exact name of registrant as specified in its charter) Viriginia 54-1851918 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- NCR II. Inc. (Exact name of registrant as specified in its charter) Virginia 84-1347311 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- NCR III, LLC (Exact name of registrant as specified in its charter) Virginia 54-1851920 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Northern Colorado Holdings, LLC (Exact name of registrant as specified in its charter) Virginia 54-1862076 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Northern Colorado Radio, Inc. (Exact name of registrant as specified in its charter) Virginia 84-1091274 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Northland Broadcasting, LLC (Exact name of registrant as specified in its charter) Virginia 41-1862832 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 6 - -------------------------- Northland Holdings, LLC (Exact name of registrant as specified in its charter) Viriginia 54-1838750 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Reading Radio, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1163978 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- St. Johns Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 38-3299223 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Tri-State Broadcasting, Inc. (Exact name of registrant as specified in its charter) Virginia 35-1888093 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) c/o Brill Media Company 47732 P. O. Box 3353 (Zip code) Evansville, IN (Address of principal executive offices) -------------------------- 12% Series B Senior Notes due 2007 Series B Appreciation Notes due 2007 (Titles of the indenture securities) ================================================================================ - 7 - GENERAL 1. General Information Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of New York (2nd District), New York, New York (Board of Governors of the Federal Reserve System). Federal Deposit Insurance Corporation, Washington, D. C. New York State Banking Department, Albany, New York (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. 2. Affiliations with the Obligor If the obligor is an affiliate of the trustee, describe each such affiliation. None. 3,4,5,6,7,8,9,10,11,12,13,14 and 15. The obligors and the registrants are currently not in default under any of its outstanding securities for which United States Trust Company of New York is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-1 are not required under General Instruction B. 16. List of Exhibits T-1.1 -- Organization Certificate, as amended, issued by the State of New York Banking Department to transact business as a Trust Company, is incorporated by reference to Exhibit T-1.1 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). - 8 - 16. List of Exhibits (cont'd) T-1.2 -- Included in Exhibit T-1.1. T-1.3 -- Included in Exhibit T-1.1. T-1.4 -- The By-Laws of United States Trust Company of New York, as amended, is incorporated by reference to Exhibit T-1.4 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). T-1.6 -- The consent of the trustee required by Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990. T-1.7 -- A copy of the latest report of condition of the trustee pursuant to law or the requirements of its supervising or examining authority. NOTE As of January 12, 1998, the trustee had 2,999,020 shares of Common Stock outstanding, all of which are owned by its parent company, U. S. Trust Corporation. The term "trustee" in Item 2, refers to each of United States Trust Company of New York and its parent company, U. S. Trust Corporation. In answering Item 2 in this statement of eligibility, as to matters peculiarly within the knowledge of the obligor or its directors, the trustee has relied upon information furnished to it by the obligor and will rely on information to be furnished by the obligor and the trustee disclaims responsibility for the accuracy or completeness of such information. --------------------- - 6 - Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, United States Trust Company of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 12th day of January, 1998. UNITED STATES TRUST COMPANY OF NEW YORK, Trustee By: /s/ Patricia Stermer ------------------------------- Patricia Stermer Assistant Vice President RFL/pg (rev:PST010998) Exhibit T-1.6 The consent of the trustee required by Section 321(b) of the Act. United States Trust Company of New York 114 West 47th Street New York, NY 10036 September 1, 1995 Securities and Exchange Commission 450 5th Street, N.W. Washington, DC 20549 Gentlemen: Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the limitations set forth therein, United States Trust Company of New York ("U.S. Trust") hereby consents that reports of examinations of U.S. Trust by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. Very truly yours, UNITED STATES TRUST COMPANY OF NEW YORK /s/Gerard F. Ganey ---------------------- By: Gerard F. Ganey Senior Vice President EXHIBIT T-1.7 UNITED STATES TRUST COMPANY OF NEW YORK CONSOLIDATED STATEMENT OF CONDITION SEPTEMBER 30, 1997 ($ IN THOUSANDS) ASSETS Cash and Due from Banks $ 116,582 Short-Term Investments 183,652 Securities, Available for Sale 691,965 Loans 1,669,611 Less: Allowance for Credit Losses 16,067 ---------- Net Loans 1,653,544 Premises and Equipment 61,796 Other Assets 125,121 ---------- Total Assets $2,832,660 ========== LIABILITIES Deposits: Non-Interest Bearing $ 541,619 Interest Bearing 1,617,028 ---------- Total Deposits 2,158,647 Short-Term Credit Facilities 365,235 Accounts Payable and Accrued Liabilities 141,793 ---------- Total Liabilities $2,665,675 ========== STOCKHOLDER'S EQUITY Common Stock 14,995 Capital Surplus 49,542 Retained Earnings 99,601 Unrealized Gains (Losses) on Securities Available for Sale, Net of Taxes 2,847 ---------- Total Stockholder's Equity 166,985 ---------- Total Liabilities and Stockholder's Equity $2,832,660 ========== I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank do hereby declare that this Statement of Condition has been prepared in conformance with the instructions issued by the appropriate regulatory authority and is true to the best of my knowledge and belief. Richard E. Brinkmann, SVP & Controller November 13, 1997 EX-25.2 90 EXHIBIT 25.2 EX-25.2 Statement of Eligibility - Series B Appreciation SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 -------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE -------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _______ -------------------------- UNITED STATES TRUST COMPANY OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-3818954 (Jurisdiction of incorporation (I. R. S. Employer if not a U. S. national bank) Identification No.) 114 West 47th Street 10036 New York, New York (Zip Code) (Address of principal executive offices) -------------------------- Brill Media Company LLC (Exact name of obligor as specified in its charter) Virginia 52-2071822 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Brill Media Management, Inc (Exact name of obligor as specified in its charter) Virginia 54-1877458 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) c/o Brill Media Company 47732 P. O. Box 3353 (Zip code) Evansville, IN (Address of principal executive offices) - 2 - -------------------------- BMC Holdings, LLC (Exact name of registrant as specified in its charter) Viriginia 52-2071824 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Brill Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170289 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Brill Radio, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1148743 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Cadillac Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170305 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Central Michigan Distribution Co., Inc. (Exact name of registrant as specified in its charter) Virginia 38-2438162 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Central Michigan Distribution Co., LP (Exact name of registrant as specified in its charter) Virginia 62-1356763 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 3 - -------------------------- Central Michigan Newspapers, Inc. (Exact name of registrant as specified in its charter) Viriginia 54-1170307 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Central Missouri Broadcasting, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1163979 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- CMB II, Inc. (Exact name of registrant as specified in its charter) Virginia 43-1671356 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- CMN Associated Publiciations, Inc. (Exact name of registrant as specified in its charter) Virginia 38-2438130 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- CMN Holding, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170293 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Gladwin Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1170304 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 4 - -------------------------- Graph Ads Printing, Inc. (Exact name of registrant as specified in its charter) Viriginia 38-2438126 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Huron Holdings, LLC (Exact name of registrant as specified in its charter) Virginia 54-1867829 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Huron Newspapers, LLC (Exact name of registrant as specified in its charter) Virginia 38-3372402 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Huron P.S., LLC (Exact name of registrant as specified in its charter) Virginia 38-3372410 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Midland Buyers Guide, Inc. (Exact name of registrant as specified in its charter) Virginia 38-2438164 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- NB II, Inc. (Exact name of registrant as specified in its charter) Virginia 41-1803205 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 5 - -------------------------- NCH II, LLC (Exact name of registrant as specified in its charter) Viriginia 54-1851918 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- NCR II. Inc. (Exact name of registrant as specified in its charter) Virginia 84-1347311 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- NCR III, LLC (Exact name of registrant as specified in its charter) Virginia 54-1851920 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Northern Colorado Holdings, LLC (Exact name of registrant as specified in its charter) Virginia 54-1862076 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Northern Colorado Radio, Inc. (Exact name of registrant as specified in its charter) Virginia 84-1091274 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Northland Broadcasting, LLC (Exact name of registrant as specified in its charter) Virginia 41-1862832 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) - 6 - -------------------------- Northland Holdings, LLC (Exact name of registrant as specified in its charter) Viriginia 54-1838750 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Reading Radio, Inc. (Exact name of registrant as specified in its charter) Virginia 54-1163978 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- St. Johns Newspapers, Inc. (Exact name of registrant as specified in its charter) Virginia 38-3299223 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) -------------------------- Tri-State Broadcasting, Inc. (Exact name of registrant as specified in its charter) Virginia 35-1888093 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) c/o Brill Media Company 47732 P. O. Box 3353 (Zip code) Evansville, IN (Address of principal executive offices) -------------------------- 12% Series B Senior Notes due 2007 Series B Appreciation Notes due 2007 (Titles of the indenture securities) ================================================================================ - 7 - GENERAL 1. General Information Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of New York (2nd District), New York, New York (Board of Governors of the Federal Reserve System). Federal Deposit Insurance Corporation, Washington, D. C. New York State Banking Department, Albany, New York (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. 2. Affiliations with the Obligor If the obligor is an affiliate of the trustee, describe each such affiliation. None. 3,4,5,6,7,8,9,10,11,12,13,14 and 15. The obligors and the registrants are currently not in default under any of its outstanding securities for which United States Trust Company of New York is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-1 are not required under General Instruction B. 16. List of Exhibits T-1.1 -- Organization Certificate, as amended, issued by the State of New York Banking Department to transact business as a Trust Company, is incorporated by reference to Exhibit T-1.1 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). - 8 - 16. List of Exhibits (cont'd) T-1.2 -- Included in Exhibit T-1.1. T-1.3 -- Included in Exhibit T-1.1. T-1.4 -- The By-Laws of United States Trust Company of New York, as amended, is incorporated by reference to Exhibit T-1.4 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). T-1.6 -- The consent of the trustee required by Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990. T-1.7 -- A copy of the latest report of condition of the trustee pursuant to law or the requirements of its supervising or examining authority. NOTE As of January 12, 1998, the trustee had 2,999,020 shares of Common Stock outstanding, all of which are owned by its parent company, U. S. Trust Corporation. The term "trustee" in Item 2, refers to each of United States Trust Company of New York and its parent company, U. S. Trust Corporation. In answering Item 2 in this statement of eligibility, as to matters peculiarly within the knowledge of the obligor or its directors, the trustee has relied upon information furnished to it by the obligor and will rely on information to be furnished by the obligor and the trustee disclaims responsibility for the accuracy or completeness of such information. --------------------- - 6 - Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, United States Trust Company of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 12th day of January, 1998. UNITED STATES TRUST COMPANY OF NEW YORK, Trustee By: /s/ Patricia Stermer ------------------------------- Patricia Stermer Assistant Vice President RFL/pg (rev:PST010998) Exhibit T-1.6 The consent of the trustee required by Section 321(b) of the Act. United States Trust Company of New York 114 West 47th Street New York, NY 10036 September 1, 1995 Securities and Exchange Commission 450 5th Street, N.W. Washington, DC 20549 Gentlemen: Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the limitations set forth therein, United States Trust Company of New York ("U.S. Trust") hereby consents that reports of examinations of U.S. Trust by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. Very truly yours, UNITED STATES TRUST COMPANY OF NEW YORK /s/Gerard F. Ganey ---------------------- By: Gerard F. Ganey Senior Vice President EXHIBIT T-1.7 UNITED STATES TRUST COMPANY OF NEW YORK CONSOLIDATED STATEMENT OF CONDITION SEPTEMBER 30, 1997 ($ IN THOUSANDS) ASSETS Cash and Due from Banks $ 116,582 Short-Term Investments 183,652 Securities, Available for Sale 691,965 Loans 1,669,611 Less: Allowance for Credit Losses 16,067 ---------- Net Loans 1,653,544 Premises and Equipment 61,796 Other Assets 125,121 ---------- Total Assets $2,832,660 ========== LIABILITIES Deposits: Non-Interest Bearing $ 541,619 Interest Bearing 1,617,028 ---------- Total Deposits 2,158,647 Short-Term Credit Facilities 365,235 Accounts Payable and Accrued Liabilities 141,793 ---------- Total Liabilities $2,665,675 ========== STOCKHOLDER'S EQUITY Common Stock 14,995 Capital Surplus 49,542 Retained Earnings 99,601 Unrealized Gains (Losses) on Securities Available for Sale, Net of Taxes 2,847 ---------- Total Stockholder's Equity 166,985 ---------- Total Liabilities and Stockholder's Equity $2,832,660 ========== I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank do hereby declare that this Statement of Condition has been prepared in conformance with the instructions issued by the appropriate regulatory authority and is true to the best of my knowledge and belief. Richard E. Brinkmann, SVP & Controller November 13, 1997 EX-27 91 EXHIBIT 27 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS 12-MOS FEB-28-1997 FEB-28-1997 MAR-01-1997 MAR-01-1996 AUG-31-1997 FEB-28-1997 351 775 0 0 4,038 3,166 0 0 319 323 5,100 4,473 16,855 16,398 8,318 7,831 42,569 26,442 6,403 3,459 67,317 49,593 0 0 0 0 7 5 (31,157) (26,615) 42,569 26,442 15,100 27,036 15,100 27,036 12,552 23,097 12,552 23,097 0 0 0 0 3,981 7,432 (1,464) (2,486) 78 286 (1,542) (2,772) 0 0 0 0 0 0 (1,542) (2,772) 0 0 0 0
EX-99.1 92 EXHIBIT 99.1 Exhibit 99.1 FORM OF LETTER OF TRANSMITTAL TO TENDER FOR EXCHANGE 12% SENIOR NOTES DUE 2007 OF BRILL MEDIA COMPANY, LLC AND BRILL MEDIA MANAGEMENT, INC. PURSUANT TO THE PROSPECTUS DATED JANUARY , 1998 Offer to exchange Series B 12% Senior Notes due 2007 ("Exchange Notes"), which are fully and unconditionally guaranteed by subsidiaries of Brill Media Company, LLC, and Brill Media Management, Inc., and have been registered under the Securities Act, for any and all outstanding 12% Senior Notes due 2007 ("Original Notes"), which are fully and unconditionally guaranteed by subsidiaries of Brill Media Company, LLC, and Brill Media Management, Inc., and have not been so registered, pursuant to the Prospectus dated January , 1998. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). - -------------------------------------------------------------------------------- PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS If you desire to accept the Exchange Offer, this Letter of Transmittal should be completed, signed and submitted as follows: THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: THE UNITED STATES TRUST COMPANY OF NEW YORK (THE "EXCHANGE AGENT") FOR INFORMATION BY TELEPHONE: 1-800-548-6565 BY REGISTERED OR CERTIFIED MAIL: BY HAND BEFORE 4:30 P.M.: The United States Trust Company The United States Trust Company of New York of New York P.O. Box 843 Cooper Station 111 Broadway New York, New York 10276 New York, New York 10006 Attention: Corporate Trust Services Attention: Lower Level Corporate Trust Window BY OVERNIGHT COURIER AND BY FACSIMILE TRANSMISSION: BY HAND AFTER 4:30 P.M.: (212) 780-0592 The United States Trust Company Attention: Customer Service Of New York CONFIRM BY TELEPHONE TO: 770 Broadway, 13th Floor (800) 548-6565 New York, New York 10003
(ORIGINALS OF ALL DOCUMENTS SENT BY FACSIMILE SHOULD BE SENT PROMPTLY BY REGISTERED OR CERTIFIED MAIL, BY HAND, OR BY OVERNIGHT DELIVERY SERVICE.) DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX BELOW. List below the Original Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate number(s) and aggregate principal of Original Notes should be listed on a separate signed schedule affixed hereto. DESCRIPTION OF ORIGINAL NOTES TENDERED (ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
------------------------------------------------------------------------------------------- DESCRIPTION OF ORIGINAL NOTES TENDERED (ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY ------------------------------------------------------------------------------------------- (1) (2) (3) (4) (5) AGGREGATE PRINCIPAL AMOUNT OF NAME(S) AND ADDRESS(ES) OF ORIGINAL NOTES REGISTERED ORIGINAL NOTE AGGREGATE TENDERED IN HOLDER(S), EXACTLY AS NAME(S) CERTIFICATE PRINCIPAL AGGREGATE EXCHANGE FOR APPEAR(S) ON ORIGINAL NOTE NUMBER(S) OF AMOUNT PRINCIPAL CERTIFICATED CERTIFICATE(S) (PLEASE FILL ORIGINAL REPRESENTED BY AMOUNT EXCHANGE IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED** NOTES*** - --------------------------------------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- TOTAL - ---------------------------------------------------------------------------------------------
* Need not be completed if Original Notes are being tendered by book-entry transfer in accordance with DTC's ATOP procedures for transfer. ** Unless otherwise indicated in this column, the aggregate principal amount represented by all Original Notes Certificates identified in Column 1 or delivered to the Exchange Agent shall be deemed tendered. *** Unless otherwise indicated, the holder will be deemed to have tendered Original Notes in exchange for a beneficial interest in one or more fully registered global certificates, which will be deposited with, or on behalf of, The Depository Trust Company ("DTC") and registered in the name of Cede & Co., its nominee. 2 The undersigned hereby acknowledges receipt of the Prospectus dated , 1998 (the "Prospectus") of Brill Media Company, LLC, a Virginia limited liability company ("BMC") and Brill Media Management, Inc., a Virginia corporation (collectively with BMC, the "Issuer")and this Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Issuer's offer (the "Exchange Offer") to exchange its Series B 12% Senior Notes due 2007 (the "Exchange Notes"), for an equal principal amount of its outstanding 12% Senior Notes due 2007 (the "Original Notes"), of which $105,000,000 aggregate principal amount is outstanding. The terms of the Exchange Notes are identical in all material respect to the Original Notes, except that the Exchange Notes have been registered under the Securities Act of 1933, as amended (the "Securities Act") pursuant to a Registration Statement, and, therefore, will not bear legends restricting their transfer. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. The undersigned has completed the appropriate boxes above and below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. This Letter of Transmittal is to be used by holders of Original Notes to accept the Exchange Offer if: (i) tender of Original Notes is to be made according to the Automated Tender Offer Program ("ATOP") of the Depository Trust Company ("DTC"), for which the transaction is eligible, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Original Securities held through DTC"; (ii) certificates representing Original Notes are to be physically delivered to the Exchange Agent herewith by such holders, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Original Securities held by Holders"; or (iii) tender of Original Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures." NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE EXCHANGE OFFER MAY BE EFFECTED BY A PARTICIPANT IN DTC (A "DTC PARTICIPANT") TENDERING ORIGINAL NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE (AS DEFINED IN THE PROSPECTUS) PRIOR TO THE EXPIRATION DATE. ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO DTC THOUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. DTC Participants who wish to cause their Original Notes to be tendered, but who cannot transmit their acceptances through ATOP prior to the Expiration Date, may effect a tender in accordance with the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures--Original Securities held through DTC." Holders who wish to tender their Original Notes but (i) whose Original Notes are not immediately available and will not be available for tendering prior to the Expiration Date, or (ii) who cannot deliver their Original Notes, the Letter of Transmittal, or any other required documents to the Exchange Agent prior to the Expiration Date, may effect a tender in accordance with the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures--Original Securities Held by Holders." The undersigned must complete the appropriate boxes above and below and sign this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. 3 / / CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED TO THE EXCHANGE AGENT IN EXCHANGE FOR CERTIFICATED EXCHANGE NOTES. Unless the undersigned (i) has completed the appropriate column in the box entitled "Description of Original Notes Tendered" and (ii) has checked the box above, the undersigned will be deemed to have tendered Original Notes in exchange for a beneficial interest in one or more fully registered global certificates, which will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co., its nominee. Beneficial interests in such registered global certificates will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. See "Book-Entry, Delivery and Form" as set forth in the Prospectus. / / CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution __________________________________________________ The Depository Trust Company Account Number ____________________________________ Transaction Code Number ________________________________________________________ / / CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): _______________________________________________ Window Ticket Number (if any): _________________________________________________ Date of Execution of Notice of Guaranteed Delivery: ____________________________ Name of Eligible Institution that Guaranteed Delivery: _________________________ If delivered by book-entry transfer: Account Number ____________________ Transaction Code Number ____________________ 4 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to conditions of the Exchange Offer, the undersigned hereby tenders to the Issuer the Original Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Original Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Exchange Agent, as agent of the Issuer, all right, title and interest in and to such Original Notes as are being tendered hereby, and irrevocably constitutes and appoints the Exchange Agent as the agent and attorney-in-fact of the undersigned to cause the Original Notes tendered hereby to be transferred and exchanged. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Original Notes tendered hereby and to acquire the Exchange Notes issuable upon the exchange of such tendered Original Notes, and that the Exchange Agent, as agent of the Issuer, will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Exchange Agent, as agent of the Issuer. The undersigned will, upon request, execute and deliver any additional documents deemed by the Issuer or the Exchange Agent to be necessary or desirable to complete the exchange, sale, assignment and transfer of the Original Notes tendered hereby. The undersigned also acknowledges that this Exchange Offer is being made in reliance on the interpretation of the staff of the Securities and Exchange Commission (the "SEC"), as set forth in Exxon Capital Holdings Corporation (available May 13, 1988) or similar no-action letters issued to third parties. Based on such interpretation of the staff of the SEC set forth in such no-action letters, the Issuer believes that the Exchange Notes issued in exchange for the Original Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by a holder thereof (other than (i) a broker-dealer who purchases such Exchange Notes from the Issuer to resell pursuant to Rule 144A or any other available exemption under the Securities Act, or (ii) a person that is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act of 1933, as amended (the "Securities Act")) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that (i) such Exchange Notes are acquired in the ordinary course of such holder's business, (ii) at the time of the commencement of the Exchange Offer such holder has no arrangement with any person to participate in a distribution of the Exchange Notes and (iii) such holder is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes. By tendering Original Notes in exchange for Exchange Notes, each holder will represent to the Issuer that: (i) it is not such an affiliate of the Issuer, (ii) any Exchange Notes to be received by it will be acquired in the ordinary course of business and (iii) at the time of the commencement of the Exchange Offer it had no arrangement with any person to participate in a distribution of the Exchange Notes. If the undersigned is not a broker-dealer or is a broker-dealer but will not receive Exchange Notes for its own account in exchange for Original Notes, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes, where such Original Notes were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Nevertheless a broker-dealer may be deemed to be an "underwriter" under the Securities Act notwithstanding such disclaimer. The SEC has taken the position that such broker-dealers may fulfill their prospectus delivery requirements with respect to the Exchange Notes (other than a resale of Exchange Notes received in exchange for an unsold allotment from the original sale of the Original Notes) with the Prospectus. The Prospectus, as it may be amended or supplemented from time to time, may be used by such broker-dealers for a period of time, starting on the Expiration Date and ending 5 on the close of business 180 days after the date the Registration Statement relating to the Exchange Offer has become effective. The Issuer has agreed that for such period of time, it will make the Prospectus (as it may be amended or supplemented) available to each broker-dealer which, with the Issuer's prior written consent, makes a market in the Original Notes and receives Exchange Notes pursuant to the Exchange Offer (each a "Participating Broker-Dealer") for use in connection with any resale of such Exchange Notes. By acceptance of the Exchange Offer, each broker-dealer that receives Exchange Notes pursuant to the Exchange Offer hereby acknowledges and agrees to notify the Issuer prior to using the Prospectus in connection with the sale or transfer of Exchange Notes and that, upon receipt of notice from the Issuer of the happening of any event which makes any statement in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein not misleading, such broker-dealer will suspend use of the Prospectus until (i) the Issuer has amended or supplemented the Prospectus to correct such misstatement or omission and (ii) either the Issuer has furnished copies of the amended or supplemented Prospectus to such broker-dealer or, if the Issuer has not otherwise agreed to furnish such copies and declines to do so after such broker-dealer so requests, such broker-dealer has obtained a copy of such amended or supplemented Prospectus as filed with the SEC. The Issuer agrees to deliver such notice and such amended or supplemented Prospectus promptly to any Participating Broker-Dealer that has so notified the Issuer. Except as described above, the Prospectus may not be used for or in connection with an offer to resell, a resale or any other retransfer of Exchange Notes. The undersigned represents that (i) the Exchange Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of such holder's business, (ii) such holder has no arrangements with any person to participate in the distribution of such Exchange Notes or, if such holder intends to participate in the Exchange Offer for the purpose of distributing the Exchange Notes, such holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, and (iii) (x) such holder is not (a) a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes that were acquired as a result of market-making activities or other trading activities, or (b) an "affiliate," as defined in Rule 405 under the Securities Act, of the Issuer or (y) if such holder is such a broker-dealer or an affiliate, such holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in the instructions contained in this Letter of Transmittal. The undersigned understands that tenders of the Original Notes pursuant to any one of the procedures described under "The Exchange Offer--Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Issuer in accordance with the terms and subject to the conditions of the Exchange Offer. The undersigned understands that if its Original Notes are accepted for exchange, interest on the Exchange Notes will accumulate from the last interest payment date on which interest was paid on the Original Notes surrendered in exchange therefore, or if no interest has been paid, from the original date of issuance of the Original Notes. The undersigned recognizes that unless the holder of Original Notes (i) completes the appropriate column of the box entitled "Description of Original Notes Tendered" above and (ii) checks the box entitled "Check here if tendered shares of Original Notes are being delivered to the Exchange Agent in exchange for certificated Exchange Notes" above, such holder, when tendering such Original Notes, will be deemed to have tendered such Original Notes in exchange for a beneficial interest in one or more fully registered global certificates, which will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co., its nominee. Beneficial interests in such registered global certificates will be shown on, and transfers 6 thereof will be effected only through, records maintained by DTC and its participants. See "Book-Entry, Delivery and Form" in the Prospectus. The undersigned recognizes that, under certain circumstances set forth in the Prospectus under "The Exchange Offer--Conditions," the Issuer may not be required to accept for exchange any of the Original Notes tendered. Original Notes not accepted for exchange or withdrawn will be returned to the undersigned at the address set forth below unless otherwise indicated under "Special Delivery Instructions" below. All questions as to the validity, form, eligibility (including time of receipt) and acceptability of any tender will be determined by the Issuer, in its sole discretion, and such determination will be final and binding. Unless waived by the Issuer, irregularities and defects must be cured by the Expiration Date. The Issuer shall not be obligated to give notice of any defects or irregularities in tenders and shall not incur any liability for failure to give any such notice. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby requests that the Exchange Notes (and, if applicable, substitute certificates representing Original Notes for any Original Notes not exchanged) be issued in the name of the undersigned. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, the undersigned hereby requests that the Exchange Notes (and, if applicable, substitute certificates representing Original Notes for any Original Notes not exchanged) be sent to the undersigned at the address shown above in the box entitled "Description of Original Notes Tendered." 7 THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL NOTES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX(ES) ABOVE. PLEASE SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS) (COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9) - -------------------------------------------------------------------------------- ____________________________________________________________________________ ____________________________________________________________________________ SIGNATURE(S) OF OWNER(S) Date: ______________________________________________________________________ Area Code and Telephone Number: ____________________________________________ If a holder is tendering any Original Notes, this Letter of Transmittal must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Original Notes or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title below. See Instruction 3. Name(s): ___________________________________________________________________ ____________________________________________________________________________ (PLEASE TYPE OR PRINT) Capacity: __________________________________________________________________ Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 3) Signature(s) Guaranteed by an Eligible Institution: ___________________________________________________ (AUTHORIZED SIGNATURE) __________________________________________________________________________ __________________________________________________________________________ (TITLE) __________________________________________________________________________ (NAME OF FIRM) Dated: _____________________________________________________________________ ---------------------------------------------------------------------------- 8 - ------------------------------------------- SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if Exchange Notes (and, if applicable, substitute certificates representing Original Notes for any Original Notes not exchanged) are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above. Issue Exchange Notes to: Name(s): ___________________________________________________________________ (PLEASE TYPE OR PRINT) __________________________________________________________________________ (PLEASE TYPE OR PRINT) Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (ZIP CODE) (COMPLETE SUBSTITUTE FORM W-9) - ------------------------------------------------------ - ------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Exchange Notes (and, if applicable, substitute certificates representing Original Notes for any Original Notes not exchanged) are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above or to such person or persons at an address other than shown in the box entitled "Description of Original Notes Tendered" on this Letter of Transmittal above. Mail Exchange Notes to: Name(s): ___________________________________________________________________ (PLEASE TYPE OR PRINT) __________________________________________________________________________ (PLEASE TYPE OR PRINT) Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (ZIP CODE) - ----------------------------------------------------- IMPORTANT: EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF) TOGETHER WITH CERTIFICATES REPRESENTING ORIGINAL NOTES OR (B) A BOOK-ENTRY CONFIRMATION INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING HOLDER MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH HEREIN. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX ABOVE. 9 TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 5) PAYOR'S NAME: BRILL MEDIA COMPANY, LLC AND BRILL MEDIA MANAGEMENT, INC. - --------------------------------------------------------------------------------------------------- SUBSTITUTE PART I--Taxpayer Identification Social Security Number FORM W-9 Number OR ------------------------ Department of the Treasury Enter your taxpayer Employer Identification Number Internal Revenue Service identification number in the NOTE: If the account is in more appropriate box. For most than one name, see the chart on individuals, this your social page 2 of the enclosed security number. If you do not Guidelines to determine what have a number, see how to number to give. obtain a "TIN" in the enclosed Guidelines. ----------------------------------------------------------------- PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See enclosed Guidelines) Payor's Request for Taxpayer Identification Number ("TIN") and Certification - --------------------------------------------------------------------------------------------------- Under the penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION GUIDELINES--You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are not longer subject to backup withholding, do not cross our item (2). Signature Date -------------------- - --------------------------------------------------------------------------------------------------- CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER I certify, under penalties of perjury, that a Taxpayer Identification Number has not been issued to me, and that I mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office (or I intend to mail or deliver an application in the near future). I understand that if I do not provide a Taxpayer Identification Number to the payer, 31 percent of all payments made to me on account of the Exchange Notes shall be retained until I provide a Taxpayer Identification Number to the payer and that, if I do not provide my Taxpayer Identification Number within sixty (60) days, such retained amounts shall be remitted to the Internal Revenue Service as backup withholding and 31 percent of all reportable payments made to me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a Taxpayer Identification Number. Signature Date -------------------- - --------------------------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. -----
10 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ORIGINAL NOTES; GUARANTEED DELIVERY PROCEDURE. This Letter of Transmittal is to be completed by holders of Original Notes to accept the Exchange Offer if: (i) tender of Original Notes is to be made by DTC Participants through ATOP, for which the transaction is eligible, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Original Securities Held through DTC"; (ii) certificates representing Original Notes are to be physically delivered to the Exchange Agent herewith by such holders, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer-- Procedures for Tendering--Original Securities Held through DTC"; or (iii) tender of Original Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures." Notwithstanding the foregoing, valid acceptance of the terms of the Exchange Offer may be effected by a DTC Participant tendering Original Notes through ATOP where the Exchange Agent receives an Agent's Message prior to the Expiration Date. Accordingly, such DTC Participant must electronically transmit its acceptance to DTC through ATOP, and then DTC will edit and verify the acceptance, execute a book-entry delivery to the Exchange Agent's account at DTC and send an Agent's Message to the Exchange Agent for its acceptance. By tendering through ATOP, DTC Participants will expressly acknowledge receipt of this Letter of Transmittal and agree to be bound by its terms and the Issuer will be able to enforce such agreement against such DTC Participants. In order to validly tender Original Notes pursuant to the Exchange Offer, either (i) (A) this Letter of Transmittal, or a facsimile hereof, together with certificates representing Original Notes or (B) a Book-Entry Confirmation, including by means of an Agent's Message, of the transfer into the Exchange Agent's account at DTC of all Original Notes delivered electronically must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date, together with all other required documents, or (ii) the tendering holder must comply with the guaranteed delivery procedures set forth below. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. If a holder or DTC Participant desires to tender Original Notes pursuant to the Exchange Offer and time will not permit this Letter of Transmittal, certificates representing such Original Notes and all other required documents to reach the Exchange Agent, or the procedures for book-entry transfer, including those with respect to tenders through ATOP, cannot be completed, prior to the Expiration Date, such holder or DTC Participant, as the case may be, must tender such Original Notes pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Guaranteed Delivery Procedures." Pursuant to such procedures (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Issuer, must be received by the Exchange Agent either by hand delivery, mail, facsimile transmission or overnight courier, prior to the Expiration Date; and (iii) within three NYSE trading days after the date of the execution of the Notice of Guaranteed Delivery, (A) holders must deliver to the Exchange Agent a properly completed and duly executed Letter of Transmittal as well as the certificate(s) representing all tendered Original Notes in proper form for transfer, and all other documents required by the Letter of Transmittal or (B) DTC Participants must effect a Book-Entry Confirmation, including through ATOP by means of an Agent's Message, of the transfer of such Original Notes into the Exchange Agent's account at DTC as set forth in the Prospectus. 11 THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ORIGINAL NOTES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed for such documents to reach the Exchange Agent prior to the Expiration Date. Except as otherwise provided in this Instruction 1, delivery will be deemed made only when actually received by the Exchange Agent. No alternative, conditional or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Original Notes for exchange. See "The Exchange Offer" in the Prospectus. 2. WITHDRAWALS. Tenders of Original Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal of a tender of Original Notes to be effective, a letter, telex, telegram or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal by a DTC Participant must contain the name and number of the DTC Participant, the principal amount due at the stated maturity of Original Notes to which such withdrawal relates and the signature of the DTC Participant. Any such notice of withdrawal by a holder of Original Notes must (i) specify the name of the person who tendered the Original Notes to be withdrawn, (ii) contain a description of the Original Notes to be withdrawn (including the certificate number or numbers and principal amount due at the stated maturity of such Original Notes) and (iii) be signed by the holder of such Original Notes in the same manner as the original signature on this Letter of Transmittal (including any required signature guaranties), or be accompanied by (x) documents of transfer in a form acceptable to the Issuer, in its sole discretion and (y) a properly completed irrevocable proxy that authorized such person to effect such revocation on behalf of such holder. Any Original Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Original Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender, or termination of the Exchange Offer. Properly withdrawn Original Notes may be retendered by following the procedures described above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date. 3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the registered holder of the Original Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates without any change whatsoever. If any tendered Original Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Original Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any Original Notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should indicate when signing, and unless waived by the Issuer, proper evidence satisfactory to the Issuer of their authority so to act must be submitted. 12 The signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the Original Notes surrendered for exchange pursuant thereto are tendered (i) by a registered holder of the Original Notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" in this Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that the signatures in this Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States, or an "eligible institution" within the meaning of Rule l7Ad-l5 of the Securities Exchange Act of 1934, as amended (each an "Eligible Institution"). If Original Notes are registered in the name of a person other than the signer of this Letter of Transmittal, the Original Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Issuer in its sole discretion, duly executed by the registered holder with the signature thereon guaranteed by an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Original Notes should indicate in the applicable box the name and address to which Exchange Notes issued pursuant to the Exchange Offer are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. If no such instructions are given, any Exchange Notes will be issued in the name of, and delivered to, the name or address of the person signing this Letter of Transmittal and any Original Notes not accepted for exchange will be returned to the name or address of the person signing this Letter of Transmittal. 5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the federal income tax laws, payments that may be made by the Issuer on account of Exchange Notes issued pursuant to the Exchange Offer may be subject to backup withholding at the rate of 31%. In order to avoid such backup withholding, each tendering holder should complete and sign the Substitute Form W-9 included in this Letter of Transmittal and either (a) provide the correct taxpayer identification number ("TIN") and certify, under penalties of perjury, that the TIN provided is correct and that (i) the holder has not been notified by the Internal Revenue Service (the "IRS") that the holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the IRS has notified the holder that the holder is no longer subject to backup withholding; or (b) provide an adequate basis for exemption. If the tendering holder has not been issued a TIN and has applied for one, or intends to apply for one in the near future, such holder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, sign and date the Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I, the Issuer (or the Transfer Agent with respect to the Exchange Notes or a broker or custodian) may still withhold 31% of the amount of any payments made on account of the Exchange Notes until the holder furnishes the Issuer or the Transfer Agent with respect to the Exchange Notes, broker or custodian with its TIN. In general, if a holder is an individual, the taxpayer identification number is the Social Security number of such individual. If the Exchange Agent or the Issuer is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the IRS. Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such holder must submit a statement (generally, IRS Form W-8), signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Exchange Agent. For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if Original Notes are registered in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 13 Failure to complete the Substitute Form W-9 will not, by itself, cause Original Notes to be deemed invalidly tendered, but may require the Issuer or the Transfer Agent with respect to the Exchange Notes, broker or custodian to withhold 31% of the amount of any payments made on account of the Exchange Notes. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. 6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any, applicable to the transfer of Original Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Notes and/or substitute Original Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Original Notes tendered hereby, or if tendered Original Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Original Notes to the Issuer or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Original Notes specified in this Letter of Transmittal. 7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Original Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Original Notes for exchange. Neither the Issuer nor any other person is obligated to give notice of defects or irregularities in any tender, nor shall any of them incur any liability for failure to give any such notice. 9. INADEQUATE SPACE. If the space provided herein is inadequate, the aggregate principal amount of Original Notes being tendered and the certificate number or numbers (if available) should be listed on a separate schedule attached hereto and separately signed by all parties required to sign this Letter of Transmittal. 10. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL NOTES. Any holder whose Original Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number indicated above. All tendered Original Notes, executed Letters of Transmittal and other related documents should be directed to the Exchange Agent. Requests for assistance and additional copies of the Prospectus, the Letter of Transmittal and other related documents should be directed to the Exchange Agent. 14 THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: THE UNITED STATES TRUST COMPANY OF NEW YORK BY FACSIMILE: (212) 780-0592 (FOR ELIGIBLE INSTITUTIONS ONLY) BY TELEPHONE: (800) 548-6565 BY MAIL: UNITED STATES TRUST COMPANY OF NEW YORK P.O. BOX 843 COOPER STATION NEW YORK, NEW YORK 10276 ATTN: CORPORATE TRUST SERVICES BY HAND TO 4:30 P.M.: UNITED STATES TRUST COMPANY OF NEW YORK 111 BROADWAY NEW YORK, NEW YORK 10006 ATTENTION: LOWER LEVEL CORPORATE TRUST WINDOW BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.: UNITED STATES TRUST COMPANY OF NEW YORK 770 BROADWAY, 13TH FLOOR NEW YORK, NEW YORK 10003 ATTN: CORPORATE TRUST REDEMPTION UNIT 15 EX-99.2 93 EXHIBIT 99.2 Exhibit 99.2 FORM OF LETTER OF TRANSMITTAL TO TENDER FOR EXCHANGE APPRECIATION NOTES DUE 2007 OF BRILL MEDIA COMPANY, LLC AND BRILL MEDIA MANAGEMENT, INC. PURSUANT TO THE PROSPECTUS DATED JANUARY , 1998 Offer to exchange Series B Appreciation Notes due 2007 ("Exchange Appreciation Notes"), which are fully and unconditionally guaranteed by subsidiaries of Brill Media Company, LLC, and Brill Media Management, Inc., and have been registered under the Securities Act, for any and all outstanding Appreciation Notes due 2007 ("Original Appreciation Notes"), which are fully and unconditionally guaranteed by subsidiaries of Brill Media Company, LLC, and Brill Media Management, Inc., and have not been so registered, pursuant to the Prospectus dated January , 1998. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). - -------------------------------------------------------------------------------- PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS If you desire to accept the Exchange Offer, this Letter of Transmittal should be completed, signed and submitted as follows: THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: THE UNITED STATES TRUST COMPANY OF NEW YORK (THE "EXCHANGE AGENT") FOR INFORMATION BY TELEPHONE: 1-800-548-6565 BY REGISTERED OR CERTIFIED MAIL: BY HAND BEFORE 4:30 P.M.: The United States Trust Company The United States Trust Company of New York of New York P.O. Box 843 Cooper Station 111 Broadway New York, New York 10276 New York, New York 10006 Attention: Corporate Trust Services Attention: Lower Level Corporate Trust Window BY OVERNIGHT COURIER AND BY FACSIMILE TRANSMISSION: BY HAND AFTER 4:30 P.M.: (212) 780-0592 The United States Trust Company Attention: Customer Service Of New York Confirm by Telephone to: 770 Broadway, 13th Floor (800) 548-6565 New York, New York 10003
(ORIGINALS OF ALL DOCUMENTS SENT BY FACSIMILE SHOULD BE SENT PROMPTLY BY REGISTERED OR CERTIFIED MAIL, BY HAND, OR BY OVERNIGHT DELIVERY SERVICE.) DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX BELOW. List below the Original Appreciation Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate number(s) and aggregate principal of Original Appreciation Notes should be listed on a separate signed schedule affixed hereto.
------------------------------------------------------------------------------------------- DESCRIPTION OF ORIGINAL APPRECIATION NOTES TENDERED (ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY) ------------------------------------------------------------------------------------------- (1) (2) (3) (4) (5) AGGREGATE PRINCIPAL AMOUNT OF ORIGINAL NOTES NAME(S) AND ADDRESS(ES) OF TENDERED IN REGISTERED ORIGINAL NOTE CERTIFICATE AGGREGATE EXCHANGE FOR HOLDER(S), EXACTLY AS NAME(S) NUMBER(S) OF PRINCIPAL AGGREGATE CERTIFICATED APPEAR(S) ON ORIGINAL NOTE ORIGINAL AMOUNT PRINCIPAL EXCHANGE CERTIFICATE(S) (PLEASE FILL APPRECIATION REPRESENTED BY AMOUNT APPRECIATION IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED** NOTES*** - --------------------------------------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- TOTAL NUMBER OF WARRANTS - ---------------------------------------------------------------------------------------------
* Need not be completed if Original Appreciation Notes are being tendered by book-entry transfer in accordance with DTC's ATOP procedures for transfer. ** Unless otherwise indicated in this column, the aggregate principal amount represented by all Original Appreciation Notes Certificates identified in Column 1 or delivered to the Exchange Agent shall be deemed tendered. *** Unless otherwise indicated, the holder will be deemed to have tendered Original Appreciation Notes in exchange for a beneficial interest in one or more fully registered global certificates, which will be deposited with, or on behalf of, The Depository Trust Company ('DTC') and registered in the name of Cede & Co., its nominee. 2 The undersigned hereby acknowledges receipt of the Prospectus dated , 1998 (the "Prospectus") of Brill Media Company, LLC, a Virginia limited liability company ("BMC") and Brill Media Management, Inc., a Virginia corporation (collectively with BMC, the "Issuer")and this Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Issuer's offer (the "Exchange Offer") to exchange its Series B Appreciation Notes due 2007 (the "Exchange Appreciation Notes"), for an equal principal amount of its outstanding Appreciation Notes due 2007 (the "Original Appreciation Notes"), of which $3,000,000 aggregate principal amount is outstanding. The terms of the Exchange Appreciation Notes are identical in all material respect to the Original Appreciation Notes, except that the Exchange Appreciation Notes have been registered under the Securities Act of 1933, as amended (the "Securities Act") pursuant to a Registration Statement, and, therefore, will not bear legends restricting their transfer. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. The undersigned has completed the appropriate boxes above and below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. This Letter of Transmittal is to be used by holders of Original Appreciation Notes to accept the Exchange Offer if: (i) tender of Original Appreciation Notes is to be made according to the Automated Tender Offer Program ("ATOP") of the Depository Trust Company ("DTC"), for which the transaction is eligible, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer-- Procedures for Tendering--Original Securities held through DTC"; (ii) certificates representing Original Appreciation Notes are to be physically delivered to the Exchange Agent herewith by such holders, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Original Securities held by Holders"; or (iii) tender of Original Appreciation Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures." NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE EXCHANGE OFFER MAY BE EFFECTED BY A PARTICIPANT IN DTC (A 'DTC PARTICIPANT') TENDERING ORIGINAL APPRECIATION NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE (AS DEFINED IN THE PROSPECTUS) PRIOR TO THE EXPIRATION DATE. ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO DTC THOUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. DTC Participants who wish to cause their Original Appreciation Notes to be tendered, but who cannot transmit their acceptances through ATOP prior to the Expiration Date, may effect a tender in accordance with the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures--Original Securities held through DTC." Holders who wish to tender their Original Appreciation Notes but (i) whose Original Appreciation Notes are not immediately available and will not be available for tendering prior to the Expiration Date, or (ii) who cannot deliver their Original Appreciation Notes, the Letter of Transmittal, or any other required documents to the Exchange Agent prior to the Expiration Date, may effect a tender in accordance with the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures--Original Securities held by Holders." The undersigned must complete the appropriate boxes above and below and sign this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. 3 / / CHECK HERE IF TENDERED ORIGINAL APPRECIATION NOTES ARE BEING DELIVERED TO THE EXCHANGE AGENT IN EXCHANGE FOR CERTIFICATED EXCHANGE APPRECIATION NOTES. Unless the undersigned (i) has completed the appropriate columns in the box entitled "Description of Original Appreciation Notes Tendered" and (ii) has checked the box above, the undersigned will be deemed to have tendered Original Appreciation Notes in exchange for a beneficial interest in one or more fully registered global certificates, which will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co., its nominee. Beneficial interests in such registered global certificates will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. See "Book-Entry, Delivery and Form" as set forth in the Prospectus. / / CHECK HERE IF TENDERED ORIGINAL APPRECIAION NOTES ARE BEING DELIVERED BY BOOK- ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution __________________________________________________ The Depository Trust Company Account Number ____________________________________ Transaction Code Number ________________________________________________________ / / CHECK HERE IF TENDERED ORIGINAL APPRECIATION NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): _______________________________________________ Window Ticket Number (if any): _________________________________________________ Date of Execution of Notice of Guaranteed Delivery: ____________________________ Name of Eligible Institution that Guaranteed Delivery: _________________________ If delivered by book-entry transfer: ___________________________________________ Account Number ____________________ Transaction Code Number ____________________ 4 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to conditions of the Exchange Offer, the undersigned hereby tenders to the Issuer the Original Appreciation Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Original Appreciation Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Exchange Agent, as agent of the Issuer, all right, title and interest in and to such Original Appreciation Notes as are being tendered hereby, and irrevocably constitutes and appoints the Exchange Agent as the agent and attorney-in-fact of the undersigned to cause the Original Appreciation Notes tendered hereby to be transferred and exchanged. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Original Appreciation Notes tendered hereby and to acquire the Exchange Appreciation Notes issuable upon the exchange of such tendered Original Appreciation Notes, and that the Exchange Agent, as agent of the Issuer, will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Exchange Agent, as agent of the Issuer. The undersigned will, upon request, execute and deliver any additional documents deemed by the Issuer or the Exchange Agent to be necessary or desirable to complete the exchange, sale, assignment and transfer of the Original Appreciation Notes tendered hereby. The undersigned also acknowledges that this Exchange Offer is being made in reliance on the interpretation of the staff of the Securities and Exchange Commission (the "SEC"), as set forth in Exxon Capital Holdings Corporation (available May 13, 1988) or similar no-action letters issued to third parties. Based on such interpretation of the staff of the SEC set forth in such no-action letters, the Issuer believes that the Exchange Appreciation Notes issued in exchange for the Original Appreciation Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by a holder thereof (other than (i) a broker-dealer who purchases such Exchange Appreciation Notes from the Issuer to resell pursuant to Rule 144A or any other available exemption under the Securities Act, or (ii) a person that is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act of 1933, as amended (the "Securities Act")) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that (i) such Exchange Appreciation Notes are acquired in the ordinary course of such holder's business, (ii) at the time of the commencement of the Exchange Offer such holder has no arrangement with any person to participate in a distribution of the Exchange Appreciation Notes and (iii) such holder is not engaged in, and does not intend to engage in, a distribution of the Exchange Appreciation Notes. By tendering Original Appreciation Notes in exchange for Exchange Appreciation Notes, each holder will represent to the Issuer that: (i) it is not such an affiliate of the Issuer, (ii) any Exchange Appreciation Notes to be received by it will be acquired in the ordinary course of business and (iii) at the time of the commencement of the Exchange Offer it had no arrangement with any person to participate in a distribution of the Exchange Appreciation Notes. If the undersigned is not a broker-dealer or is a broker-dealer but will not receive Exchange Appreciation Notes for its own account in exchange for Original Appreciation Notes, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Appreciation Notes. 5 If the undersigned is a broker-dealer that will receive Exchange Appreciation Notes for its own account in exchange for Original Appreciation Notes, where such Original Appreciation Notes were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Appreciation Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Nevertheless a broker-dealer may be deemed to be an "underwriter" under the Securities Act notwithstanding such disclaimer. The SEC has taken the position that such broker-dealers may fulfill their prospectus delivery requirements with respect to the Exchange Appreciation Notes (other than a resale of Exchange Appreciation Notes received in exchange for an unsold allotment from the original sale of the Original Appreciation Notes) with the Prospectus. The Prospectus, as it may be amended or supplemented from time to time, may be used by such broker-dealers for a period of time, starting on the Expiration Date and ending on the close of business 180 days after the date the Registration Statement relating to the Exchange Offer has become effective. The Issuer has agreed that for such period of time, it will make the Prospectus (as it may be amended or supplemented) available to each broker-dealer which, with the Issuer's prior written consent, makes a market in the Original Appreciation Notes and receives Exchange Appreciation Notes pursuant to the Exchange Offer (each a "Participating Broker-Dealer") for use in connection with any resale of such Exchange Appreciation Notes. By acceptance of the Exchange Offer, each broker-dealer that receives Exchange Appreciation Notes pursuant to the Exchange Offer hereby acknowledges and agrees to notify the Issuer prior to using the Prospectus in connection with the sale or transfer of Exchange Appreciation Notes and that, upon receipt of notice from the Issuer of the happening of any event which makes any statement in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein not misleading, such broker-dealer will suspend use of the Prospectus until (i) the Issuer has amended or supplemented the Prospectus to correct such misstatement or omission and (ii) either the Issuer has furnished copies of the amended or supplemented Prospectus to such broker-dealer or, if the Issuer has not otherwise agreed to furnish such copies and declines to do so after such broker-dealer so requests, such broker-dealer has obtained a copy of such amended or supplemented Prospectus as filed with the SEC. The Issuer agrees to deliver such notice and such amended or supplemented Prospectus promptly to any Participating Broker-Dealer that has so notified the Issuer. Except as described above, the Prospectus may not be used for or in connection with an offer to resell, a resale or any other retransfer of Exchange Appreciation Notes. The undersigned represents that (i) the Exchange Appreciation Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of such holder's business, (ii) such holder has no arrangements with any person to participate in the distribution of such Exchange Appreciation Notes or, if such holder intends to participate in the Exchange Offer for the purpose of distributing the Exchange Appreciation Notes, such holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, and (iii) (x) such holder is not (a) a broker-dealer that will receive Exchange Appreciation Notes for its own account in exchange for Original Appreciation Notes that were acquired as a result of market-making activities or other trading activities, or (b) an "affiliate," as defined in Rule 405 under the Securities Act, of the Issuer or (y) if such holder is such a broker-dealer or an affiliate, such holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in the instructions contained in this Letter of Transmittal. 6 The undersigned understands that tenders of the Original Appreciation Notes pursuant to any one of the procedures described under "The Exchange Offer--Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Issuer in accordance with the terms and subject to the conditions of the Exchange Offer. The undersigned understands that if its Original Appreciation Notes are accepted for exchange, interest on the Exchange Appreciation Notes will accumulate from the last interest payment date on which interest was paid on the Original Appreciation Notes surrendered in exchange therefore, or if no interest has been paid, from the original date of issuance of the Original Appreciation Notes. The undersigned recognizes that unless the holder of Original Appreciation Notes (i) completes the appropriate column of the box entitled "Description of Original Appreciation Notes Tendered" above and (ii) checks the box entitled "Check here if tendered shares of Original Appreciation Notes are being delivered to the Exchange Agent in exchange for certificated Exchange Appreciation Notes" above, such holder, when tendering such Original Appreciation Notes, will be deemed to have tendered such Original Appreciation Notes in exchange for a beneficial interest in one or more fully registered global certificates, which will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co., its nominee. Beneficial interests in such registered global certificates will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. See "Book-Entry, Delivery and Form" in the Prospectus. The undersigned recognizes that, under certain circumstances set forth in the Prospectus under "The Exchange Offer--Conditions," the Issuer may not be required to accept for exchange any of the Original Appreciation Notes tendered. Original Appreciation Notes not accepted for exchange or withdrawn will be returned to the undersigned at the address set forth below unless otherwise indicated under "Special Delivery Instructions" below. All questions as to the validity, form, eligibility (including time of receipt) and acceptability of any tender will be determined by the Issuer, in its sole discretion, and such determination will be final and binding. Unless waived by the Issuer, irregularities and defects must be cured by the Expiration Date. The Issuer shall not be obligated to give notice of any defects or irregularities in tenders and shall not incur any liability for failure to give any such notice. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby requests that the Exchange Appreciation Notes (and, if applicable, substitute certificates representing Original Appreciation Notes for any Original Appreciation Notes not exchanged) be issued in the name of the undersigned. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, the undersigned hereby requests that the Exchange Appreciation Notes (and, if applicable, substitute certificates representing Original Appreciation Notes for any Original Appreciation Notes not exchanged) be sent to the undersigned at the address shown above in the box entitled "Description of Original Appreciation Notes Tendered." 7 THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL NOTES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX(ES) ABOVE. PLEASE SIGN HERE (TO BE COMPLETED BY ALL TENDERING HOLDERS) (COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9) - -------------------------------------------------------------------------------- ____________________________________________________________________________ ____________________________________________________________________________ SIGNATURE(S) OF OWNER(S) Date: ______________________________________________________________________ Area Code and Telephone Number: ____________________________________________ If a holder is tendering any Original Appreciation Notes, this Letter of Transmittal must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Original Appreciation Notes or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title below. See Instruction 3. Name(s): ___________________________________________________________________ ____________________________________________________________________________ (PLEASE TYPE OR PRINT) Capacity: __________________________________________________________________ Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (INCLUDE ZIP CODE) SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 3) Signature(s) Guaranteed by an Eligible Institution: ___________________________________________________ (AUTHORIZED SIGNATURE) __________________________________________________________________________ __________________________________________________________________________ (TITLE) __________________________________________________________________________ (NAME OF FIRM) Dated: _____________________________________________________________________ ---------------------------------------------------------------------------- 8 - ------------------------------------------------ SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if Exchange Appreciation Notes (and, if applicable, substitute certificates representing Original Appreciation Notes for any Original Appreciation Notes not exchanged) are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above. Issue Exchange Appreciation Notes to: Name(s): ___________________________________________________________________ (PLEASE TYPE OR PRINT) __________________________________________________________________________ (PLEASE TYPE OR PRINT) Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (ZIP CODE) (COMPLETE SUBSTITUTE FORM W-9) - ------------------------------------------------------------ - ------------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Exchange Appreciation Notes (and, if applicable, substitute certificates representing Original Appreciation Notes for any Original Appreciation Notes not exchanged) are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above or to such person or persons at an address other than shown in the box entitled "Description of Original Appreciation Notes Tendered" on this Letter of Transmittal above. Mail Exchange Appreciation Notes to: Name(s): ___________________________________________________________________ (PLEASE TYPE OR PRINT) __________________________________________________________________________ (PLEASE TYPE OR PRINT) Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (ZIP CODE) - ----------------------------------------------------- IMPORTANT: EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF) TOGETHER WITH CERTIFICATES REPRESENTING ORIGINAL APPRECIATION NOTES OR (B) A BOOK-ENTRY CONFIRMATION INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING HOLDER MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH HEREIN. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX ABOVE. 9 TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 5) PAYOR'S NAME: BRILL MEDIA COMPANY, LLC AND BRILL MEDIA MANAGEMENT, INC. - --------------------------------------------------------------------------------------------------- SUBSTITUTE PART I--Taxpayer Identification Social Security Number FORM W-9 Number OR ------------------------ Department of the Treasury Enter your taxpayer Employer Identification Number Internal Revenue Service identification number in the NOTE: If the account is in more appropriate box. For most than one name, see the chart on individuals, this your social page 2 of the enclosed security number. If you do not Guidelines to determine what have a number, see how to number to give. obtain a "TIN" in the enclosed Guidelines. ----------------------------------------------------------------- PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See enclosed Guidelines) Payor's Request for Taxpayer Identification Number ("TIN") and Certification - --------------------------------------------------------------------------------------------------- Under the penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION GUIDELINES--You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are not longer subject to backup withholding, do not cross our item (2). Signature Date -------------------- - --------------------------------------------------------------------------------------------------- CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER I certify, under penalties of perjury, that a Taxpayer Identification Number has not been issued to me, and that I mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office (or I intend to mail or deliver an application in the near future). I understand that if I do not provide a Taxpayer Identification Number to the payer, 31 percent of all payments made to me on account of the Exchange Appreciation Notes shall be retained until I provide a Taxpayer Identification Number to the payer and that, if I do not provide my Taxpayer Identification Number within sixty (60) days, such retained amounts shall be remitted to the Internal Revenue Service as backup withholding and 31 percent of all reportable payments made to me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a Taxpayer Identification Number. Signature Date -------------------- - --------------------------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. -----
10 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ORIGINAL APPRECIATION NOTES; GUARANTEED DELIVERY PROCEDURE. This Letter of Transmittal is to be completed by holders of Original Appreciation Notes to accept the Exchange Offer if: (i) tender of Original Appreciation Notes is to be made by DTC Participants through ATOP, for which the transaction is eligible, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Original Securities held through DTC"; (ii) certificates representing Original Appreciation Notes are to be physically delivered to the Exchange Agent herewith by such holders, pursuant to the procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Original Securities held by Holders"; or (iii) tender of Original Appreciation Notes is to be made according to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures." Notwithstanding the foregoing, valid acceptance of the terms of the Exchange Offer may be effected by a DTC Participant tendering Original Appreciation Notes through ATOP where the Exchange Agent receives an Agent's Message prior to the Expiration Date. Accordingly, such DTC Participant must electronically transmit its acceptance to DTC through ATOP, and then DTC will edit and verify the acceptance, execute a book-entry delivery to the Exchange Agent's account at DTC and send an Agent's Message to the Exchange Agent for its acceptance. By tendering through ATOP, DTC Participants will expressly acknowledge receipt of this Letter of Transmittal and agree to be bound by its terms and the Issuer will be able to enforce such agreement against such DTC Participants. In order to validly tender Original Appreciation Notes pursuant to the Exchange Offer, either (i) (A) this Letter of Transmittal, or a facsimile hereof, together with certificates representing Original Appreciation Notes or (B) a Book-Entry Confirmation, including by means of an Agent's Message, of the transfer into the Exchange Agent's account at DTC of all Original Appreciation Notes delivered electronically must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date, together with all other required documents, or (ii) the tendering holder must comply with the guaranteed delivery procedures set forth below. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. If a holder or DTC Participant desires to tender Original Appreciation Notes pursuant to the Exchange Offer and time will not permit this Letter of Transmittal, certificates representing such Original Appreciation Notes and all other required documents to reach the Exchange Agent, or the procedures for book-entry transfer, including those with respect to tenders through ATOP, cannot be completed, prior to the Expiration Date, such holder or DTC Participant, as the case may be, must tender such Original Appreciation Notes pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering--Guaranteed Delivery Procedures." Pursuant to such procedures (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Issuer, must be received by the Exchange Agent either by hand delivery, mail, facsimile transmission or overnight courier, prior to the Expiration Date; and (iii) within three NYSE trading days after the date of the execution of the Notice of Guaranteed Delivery, (A) holders must deliver to the Exchange Agent a properly completed and duly executed Letter of Transmittal as well as the certificate(s) representing all tendered Original Appreciation Notes in proper form for transfer, and all other documents required by the Letter of Transmittal or (B) DTC Participants must effect a Book-Entry Confirmation, including through ATOP by means of an Agent's Message, of the transfer of such Original Appreciation Notes into the Exchange Agent's account at DTC as set forth in the Prospectus. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ORIGINAL APPRECIATION NOTES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY 11 THROUGH DTC AND ANY ACCEPTANCE OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed for such documents to reach the Exchange Agent prior to the Expiration Date. Except as otherwise provided in this Instruction 1, delivery will be deemed made only when actually received by the Exchange Agent. No alternative, conditional or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Original Appreciation Notes for exchange. See "The Exchange Offer" in the Prospectus. 2. WITHDRAWALS. Tenders of Original Appreciation Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal of a tender of Original Appreciation Notes to be effective, a letter, telex, telegram or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal by a DTC Participant must contain the name and number of the DTC Participant, the principal amount due at the stated maturity of Original Appreciation Notes to which such withdrawal relates and the signature of the DTC Participant. Any such notice of withdrawal by a holder of Original Appreciation Notes must (i) specify the name of the person who tendered the Original Appreciation Notes to be withdrawn, (ii) contain a description of the Original Appreciation Notes to be withdrawn (including the certificate number or numbers and principal amount due at the stated maturity of such Original Appreciation Notes) and (iii) be signed by the holder of such Original Appreciation Notes in the same manner as the original signature on this Letter of Transmittal (including any required signature guaranties), or be accompanied by (x) documents of transfer in a form acceptable to the Issuer, in its sole discretion and (y) a properly completed irrevocable proxy that authorized such person to effect such revocation on behalf of such holder. Any Original Appreciation Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Original Appreciation Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender, or termination of the Exchange Offer. Properly withdrawn Original Appreciation Notes may be retendered by following the procedures described above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date. 3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the registered holder of the Original Appreciation Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates without any change whatsoever. If any tendered Original Appreciation Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Original Appreciation Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any Original Appreciation Notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should indicate when signing, and unless waived by the Issuer, proper evidence satisfactory to the Issuer of their authority so to act must be submitted. The signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the Original Appreciation Notes surrendered for exchange pursuant thereto are tendered (i) by a registered holder of the Original Appreciation Notes who has not completed the box 12 entitled "Special Issuance Instructions" or "Special Delivery Instructions" in this Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that the signatures in this Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States, or an "eligible institution" within the meaning of Rule l7Ad-l5 of the Securities Exchange Act of 1934, as amended (each an "Eligible Institution"). If Original Appreciation Notes are registered in the name of a person other than the signer of this Letter of Transmittal, the Original Appreciation Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Issuer in its sole discretion, duly executed by the registered holder with the signature thereon guaranteed by an Eligible Institution. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Original Appreciation Notes should indicate in the applicable box the name and address to which Exchange Appreciation Notes issued pursuant to the Exchange Offer are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. If no such instructions are given, any Exchange Appreciation Notes will be issued in the name of, and delivered to, the name or address of the person signing this Letter of Transmittal and any Original Appreciation Notes not accepted for exchange will be returned to the name or address of the person signing this Letter of Transmittal. 5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the federal income tax laws, payments that may be made by the Issuer on account of Exchange Appreciation Notes issued pursuant to the Exchange Offer may be subject to backup withholding at the rate of 31%. In order to avoid such backup withholding, each tendering holder should complete and sign the Substitute Form W-9 included in this Letter of Transmittal and either (a) provide the correct taxpayer identification number ("TIN") and certify, under penalties of perjury, that the TIN provided is correct and that (i) the holder has not been notified by the Internal Revenue Service (the "IRS") that the holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the IRS has notified the holder that the holder is no longer subject to backup withholding; or (b) provide an adequate basis for exemption. If the tendering holder has not been issued a TIN and has applied for one, or intends to apply for one in the near future, such holder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, sign and date the Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I, the Issuer (or the Transfer Agent with respect to the Exchange Appreciation Notes or a broker or custodian) may still withhold 31% of the amount of any payments made on account of the Exchange Appreciation Notes until the holder furnishes the Issuer or the Transfer Agent with respect to the Exchange Appreciation Notes, broker or custodian with its TIN. In general, if a holder is an individual, the taxpayer identification number is the Social Security number of such individual. If the Exchange Agent or the Issuer is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the IRS. Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such holder must submit a statement (generally, IRS Form W-8), signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Exchange Agent. For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if Original Appreciation Notes are registered in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. Failure to complete the Substitute Form W-9 will not, by itself, cause Original Appreciation Notes to be deemed invalidly tendered, but may require the Issuer or the Transfer Agent with respect to the 13 Exchange Appreciation Notes, broker or custodian to withhold 31% of the amount of any payments made on account of the Exchange Appreciation Notes. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. 6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any, applicable to the transfer of Original Appreciation Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Appreciation Notes and/or substitute Original Appreciation Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Original Appreciation Notes tendered hereby, or if tendered Original Appreciation Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Original Appreciation Notes to the Issuer or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Original Appreciation Notes specified in this Letter of Transmittal. 7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Original Appreciation Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Original Appreciation Notes for exchange. Neither the Issuer nor any other person is obligated to give notice of defects or irregularities in any tender, nor shall any of them incur any liability for failure to give any such notice. 9. INADEQUATE SPACE. If the space provided herein is inadequate, the aggregate principal amount of Original Appreciation Notes being tendered and the certificate number or numbers (if available) should be listed on a separate schedule attached hereto and separately signed by all parties required to sign this Letter of Transmittal. 10. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL APPRECIATION NOTES. Any holder whose Original Appreciation Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number indicated above. All tendered Original Appreciation Notes, executed Letters of Transmittal and other related documents should be directed to the Exchange Agent. Requests for assistance and additional copies of the Prospectus, the Letter of Transmittal and other related documents should be directed to the Exchange Agent. 14 THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: THE UNITED STATES TRUST COMPANY OF NEW YORK BY FACSIMILE: (212) 780-0592 (FOR ELIGIBLE INSTITUTIONS ONLY) BY TELEPHONE: (800) 548-6565 BY MAIL: UNITED STATES TRUST COMPANY OF NEW YORK P.O. BOX 843 COOPER STATION NEW YORK, NEW YORK 10276 ATTN: CORPORATE TRUST SERVICES BY HAND TO 4:30 P.M.: UNITED STATES TRUST COMPANY OF NEW YORK 111 BROADWAY NEW YORK, NEW YORK 10006 ATTENTION: LOWER LEVEL CORPORATE TRUST WINDOW BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.: UNITED STATES TRUST COMPANY OF NEW YORK 770 BROADWAY, 13TH FLOOR NEW YORK, NEW YORK 10003 ATTN: CORPORATE TRUST REDEMPTION UNIT 15 -----END PRIVACY-ENHANCED MESSAGE-----