RADIO
ONE
12 March 1997
WASHINGTON, DC
WMMJ-FM Xx. Xxxx X. Xxxxxxx
WKYS-FM Senior Vice President
WOL-AM Allied Capital
0000 X Xxxxxx N.W.
BALTIMORE, MD 9th Floor
WERQ-FM Washington, D.C. 20008
WWIN-FM
WWIN-AM
WOLB-AM By Telecopier (000) 000-0000
ATLANTA, GA
WNTA-FM Dear Xx. Xxxxxxx:
This Letter of Intent (the "LOI") outlines the principal terms
whereby Radio One Inc., a Delaware corporation ("Radio One" or
the "Buyer"), or any entity controled by the same principals who
control Buyer, will purchase from Allied Capital Financial
Corporation ("Allied" or the "Seller") in a warrant and stock
transaction (the "Transaction"), a warrant for all of the issued
and outstanding capital stock of Broadcast Holdings, Inc. ("BHI")
which owns radio station WYCB (AM), licensed to Washington, D.C.
(the "Station").
The consummation of the transaction contemplated by this LOI is
conditioned upon: Xxxxx's satisfaction, in its sole discretion,
with the results of its due diligence review of the Company as
further set forth below and the approval of the Federal
Communications Commission (the "FCC") and the negotiation and
execution of a definitive, mutually acceptable stock purchase
agreement (the "Definitive Agreement"). The parties hereto intend
this LOI to set forth the fundamental points of agreement and it
shall constitute a legally binding document, subject only to the
occurrence of such future events.
Buyer and Seller expect to enter into a Definitive Agreement,
within sixty (60) days of both Buyer and Seller executing this
LOI, subject solely to Buyer's reasonable satisfaction with its
due diligence investigation for a period of two weeks from the
date of execution of this LOI, after which, unless Buyer has so
notified Seller, the Buyer and Seller shall negotiate a
Definitive Agreement which shall be conditioned upon FCC approval
of the Transaction. Seller shall give Buyer and its authorized
representatives reasonable access at reasonable times to the
Station and shall furnish all information relating thereto as
they may request to enable Buyer to make such examinations and
investigations thereof as Buyer shall reasonably deem necessary.
We are prepared to move forward expeditously with the following
offer.
Xx. Xxxx X. Xxxxxxx
12 March 1997
Page 2
1. Consideration to be Paid by Xxxxx. On the date of closing, the
warrant shall be exercised by Buyer for $1.00 to purchase the BHI
stock. The consideration paid to Seller for the sale of the
warrant for the stock of BHI shall be $4,000,000 (the "Purchase
Price") of which $2,800,000 shall be used by Seller and BHI to
satisfy certain existing obligations of BHI; subject to
adjustment for any prorations and contingent liabilities, payable
as follows:
On the date of closing, by wire transfer to bank accounts
designated by Seller, the sum of $4,000,00 in immediately
available funds.
2. Escrow Closing.
(a) The date of closing for the transaction being
proposed herein shall occur no later than ten (10) days after the
consent of the FCC to the transfer of control of the licenses
shall have become a Final Order (the "Closing Date"). If the FCC
has not granted a transfer of control of the Station's licenses
within nine months after the FCC's acceptance for filing of the
application for transfer of control of such licenses, each of
Seller and Buyer shall have the right to rescind its obligations
under the Definitive Agreement, provided that such terminating
party is not then in breach of the terms and conditions of the
Definitive Agreement.
(b) If Buyer materially breaches the Definitive
Agreement or defaults in the performance of its obligations
thereunder, the sum of $100,000 shall be paid to Seller as
liquidated damages.
(c) If Seller materially breaches the Definitive
Agreement, Buyer shall have the right of specific performance.
3. Definitive Agreement. Radio One and Allied shall negotiate in
good faith the terms of the Definitive Agreement which shall
contain representations, warranties, covenants and conditions by
such parties as are usual and customary in transactions of this
kind, including provisions regarding (i) Indemnification of Radio
One and Allied; (ii) representations by the sole shareholder of
BHI as to the validity of the warrant and shares of stock; (iii)
Seller's responsibility for payment of all payables of BHI that
exist at closing and Seller's right to all pre-closing
receivables and cash; (iv) Seller's responsibility for all
obligations and liabilities that BHI may have for the employees
that Buyer does not assume. Buyer and Seller will jointly file an
application
Xx. Xxxx X. Xxxxxxx
12 March 1997
Page 3
requesting FCC approval of the transfer of control of the
Station's licenses to Buyer as contemplated herein no later than
five (5) business days after execution of the Definitive
Agreement.
4. Agreement to Negotiate Confidentiality. Xxxxx and Seller agree
to proceed diligently, expeditiously, and in good faith, to
execute the Definitive Agreement and the Transaction contemplated
herein in accordance with the terms set forth in this Letter of
Intent. Until the expiration or earlier termination of this
Letter of Intent, Seller shall not solicit, or negotiate with ,
any other prospective purchaser of the Station.
This Letter of Intent shall expire and be null and void upon the
earlier of (1) the expiration of the 60th day after the date of
acceptance of this Letter of Intent (subject to a reasonable
extension if the drafting of the Definitive Agreement is
proceeding diligently, (ii) the execution and delivery of the
Definitive Agreement).
We look forward to working with you to consummate the Transaction
proposed herein. Please do not hesitate to call me at
000-000-0000 with any questions or comments you may have relative
to anything contained herein.
Very truly yours,
RADIO ONE, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxx, Chief Financial Officer
Agreed: /s/ Xxxx X. Xxxxxxx
------------------------------------
By: Xxxx X. Xxxxxxx
------------------------------------
Name
SVP
------------------------------------
Title
3/13/97
------------------------------------
Date of Acceptance
July 1, 1997
Xx. Xxxx X. Xxxxxxx
Senior Vice President
Allied Capital
0000 X Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Dear Xx. Xxxxxxx:
Reference is made to that certain Letter of Intent dated as of March 12, 1997 by
and between Radio One, Inc. ("Radio One" or "Buyer") and Allied Capital
Financial Corporation ("Allied" or "Seller") pursuant to which Radio One, or any
entity controlled by the same principals who control Radio One, will purchase
from Allied, in a warrant and stock transaction, a warrant for all of the issued
and outstanding capital stock of BHI, as such Letter of Intent was extended by
that certain First Amendment dated as of May 6, 1997, that certain Second
Amendment dated as of May 30, 1997 and that certain Third Amendment dated as of
June 5, 1997, which Letter of Intent, as so amended, lapsed on June 18, 1997.
Capitalized terms used herein without definition shall have the meanings
assigned such terms in the Letter of Intent. Radio One and Allied hereby agree
to reinstate the provisions of the Letter of Intent, as amended by the
following:
1. The final sentence of the second paragraph of the Letter of Intent is hereby
deleted in its entirety and replaced with the following:
"The parties hereto intend this LOI to set forth the fundamental points of
agreement. However, this LOI shall not constitute a legally binding document."
2. The first sentence of the third paragraph of the Letter of Intent is hereby
deleted in its entirety.
3. Numbered Paragraph 1 of the Letter of Intent is hereby deleted in its
entirety and replaced with the following:
"Consideration to Paid by Xxxxx. On the date of closing, the warrant shall be
exercised by Buyer for $1.00 to purchase the BHI stock. The consideration paid
to Seller for the sale of the warrant for the stock of BHI, assuming BHI has no
debt at closing, shall be $4,000,000 (the "Purchase Price"), subject to
adjustment for any prorations and contingent liabilities. The form of payment of
the Purchase Price (i.e., cash, notes or a combination thereof) shall be
mutually agreed upon by Xxxxx and Seller."
4. The first sentence of numbered Paragraph 4 of the Letter of Intent is hereby
deleted in its entirety and replaced with the following:
"Buyer and Seller agree to proceed diligently, expeditiously, and in good faith
to reach agreement on the form of payment of the Purchase Price, and thereafter
to execute the Definitive Agreement and consummate the Transaction contemplated
herein in accordance with the terms set forth in this Letter of Intent, as
amended; provided, however, that nothing in this letter shall be construed to
create a duty of exclusive dealings between the parties."
5. The final sentence of numbered Paragraph 4 of the Letter of Intent is hereby
deleted in its entirety.
4. The penultimate paragraph of the Letter of Intent is hereby deleted in its
entirety and replaced with the following:
"This Letter of Intent shall expire and be null and void upon the earlier of (i)
July 31, 1997 (subject to a reasonable extension if the drafting of the
Definitive Agreement is proceeding diligently) and (ii) the execution and
delivery of the Definitive Agreement."
We look forward to working with you to consummate the transactions contemplated
by the Letter of Intent as modified hereby. Please do not hesitate to call me at
301/000-0000 with any questions or comments you may have relative to anything
contained herein.
Very truly yours,
RADIO ONE, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx
Chief Financial Officer
Agreed:
ALLIED CAPITAL FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx
Senior Vice President
FIRST AMENDMENT TO LETTER OF INTENT TO ENTER INTO OPTION AND
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO LETTER OF INTENT TO ENTER INTO OPTION AND STOCK
PURCHASE AGREEMENT, is dated this 6th day of May, 1997, and is made between
RADIO ONE, INC., and ALLIED CAPITAL FINANCIAL CORPORATION.
Radio One, Inc. ("Buyer") and Allied Capital Financial Corporation
("Seller") have executed a letter of intent dated March 12, 1997, which was
accepted by Seller on March 13, 1997 ("Letter"). The Letter describes the terms
upon which the parties would enter into an Option and Stock Purchase Agreement
("Agreement") whereby Buyer would acquire from Seller its option to acquire the
stock of Broadcast Holdings, Inc., licensee of Station WYCB(AM), Washington,
D.C.
Buyer and Seller agree that it would be mutually beneficial to amend
the provision contained in the Letter which requires that the parties enter into
an Agreement on or before May 12, 1997.
In consideration of the parties' mutual agreement to continue in good
faith to finalize the Agreement, which the parties hereby acknowledge
constitutes good and valuable consideration, Buyer and Seller agree to extend
the time period to May 30, 1997, in which to negotiate and enter into an
Agreement.
Except as described above, the terms and conditions of the Letter shall
not be modified.
This amendment may be signed in counterparts, facsimile signatures to
be binding upon receipt by facsimile transmission.
AGREED TO: AGREED TO:
/s/ Xxxxxx X. Xxxxxxx, III /s/ Xxxx X. Xxxxxxx
--------------------------- ---------------------------
Xxxxxx X. Xxxxxxx, III Xxxx X. Xxxxxxx
Radio One, Inc. Allied Capital Financial
Corporation
SECOND AMENDMENT TO LETTER OF INTENT TO ENTER INTO OPTION AND
STOCK PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO LETTER OF INTENT TO ENTER INTO OPTION AND
STOCK PURCHASE AGREEMENT, is dated this 30th day of May, 1997, and is made
between RADIO ONE, INC., and ALLIED CAPITAL FINANCIAL CORPORATION.
Radio One, Inc. ("Buyer") and Allied Capital Financial Corporation
("Seller") have executed a letter of intent dated March 12, 1997, which was
accepted by Seller on March 13, 1997 ("Letter"). The Letter describes the terms
upon which the parties would enter into an Option and Stock Purchase Agreement
("Agreement") whereby Buyer would acquire from Seller its option to acquire the
stock of Broadcast Holdings, Inc., licensee of Station WYCB(AM), Washington,
D.C.
Buyer and Seller agree that it would be mutually beneficial to amend
the provision contained in the Letter which requires that the parties enter into
an Agreement on or before May 30, 1997.
In consideration of the parties' mutual agreement to continue in good
faith to finalize the Agreement, which the parties hereby acknowledge
constitutes good and valuable consideration, Buyer and Seller agree to extend
the time period to June 6, 1997, in which to negotiate and enter into an
Agreement.
Except as described above, the terms and conditions of the Letter, as
amended on May 6, 1997, shall not be modified.
This amendment may be signed in counterparts, facsimile signatures to
be binding upon receipt by facsimile transmission.
AGREED TO: AGREED TO:
/s/ Xxxxxx X. Xxxxxxx, III /s/ Xxxx X. Xxxxxxx
--------------------------- ---------------------------
Xxxxxx X. Xxxxxxx, III Xxxx X. Xxxxxxx
Radio One, Inc. Allied Capital Financial
Corporation
THIRD AMENDMENT TO LETTER OF INTENT TO ENTER INTO OPTION AND
STOCK PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO LETTER OF INTENT TO ENTER INTO OPTION AND STOCK
PURCHASE AGREEMENT, is dated this 5th day of June, 1997, and is made between
RADIO ONE, INC., and ALLIED CAPITAL FINANCIAL CORPORATION.
Radio One, Inc. ("Buyer") and Allied Capital Financial Corporation
("Seller") have executed a letter of intent dated March 12, 1997, which was
accepted by Seller on March 13, 1997 ("Letter"). The Letter describes the terms
upon which the parties would enter into an Option and Stock Purchase Agreement
("Agreement") whereby Buyer would acquire from Seller its option to acquire the
stock of Broadcast Holdings, Inc., licensee of Station WYCB(AM), Washington,
D.C.
Buyer and Seller agree that it would be mutually beneficial to amend
the provision contained in the Letter which requires that the parties enter into
an Agreement on or before June 6, 1997.
In consideration of the parties' mutual agreement to continue in good
faith to finalize the Agreement, which the parties hereby acknowledge
constitutes good and valuable consideration, Buyer and Seller agree to extend
the time period to June 18, 1997, in which to negotiate and enter into an
Agreement.
Except as described above, the terms and conditions of the Letter, as
amended on May 6, 1997, and May 30, 1997, shall not be modified.
This amendment may be signed in counterparts, facsimile signatures to
be binding upon receipt by facsimile transmission.
AGREED TO: AGREED TO:
/s/ Xxxxxx X. Xxxxxxx, III /s/ Xxxx X. Xxxxxxx
--------------------------- ---------------------------
Xxxxxx X. Xxxxxxx, III Xxxx X. Xxxxxxx
Radio One, Inc. Allied Capital Financial
Corporation
