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Exhibit 2.1
ASSET PURCHASE AGREEMENT
AMONG
DICK BROADCASTING COMPANY, INC. OF TENNESSEE,
DICK BROADCASTING COMPANY, INC. OF ALABAMA,
DICK BROADCASTING COMPANY, INC. OF NASHVILLE,
DICK RADIO ALABAMA, INC.,
DFT REALTY,
DFT REALTY II, LLC,
CERTAIN SPECIFIED INDIVIDUALS
AND
CITADEL BROADCASTING COMPANY
EFFECTIVE AS OF APRIL 30, 2000
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), made effective as of April
30, 2000, by and among (i) DICK BROADCASTING COMPANY, INC. OF TENNESSEE, a
Tennessee corporation ("DBC of Tennessee"); (ii) DICK BROADCASTING COMPANY, INC.
OF ALABAMA, a Tennessee corporation ("DBC of Alabama"); (iii) DICK BROADCASTING
COMPANY, INC. OF NASHVILLE, a Tennessee corporation ("DBC of Nashville"); (iv)
DICK RADIO ALABAMA, INC., a Tennessee corporation ("DR Alabama"); (v) DFT
REALTY, a Tennessee general partnership ("Knoxville R/P Holder"); (vi) DFT
REALTY II, LLC, a Tennessee limited liability company ("Alabama R/P Holder");
(vii) JAMES ALLEN DICK, SR., JAMES ALLEN DICK, JR., CHARLES ARTHUR DICK, EMILY
DICK McALISTER and JEANNETTE DICK HUNDLEY (collectively, "Stockholders"); and
(viii) CITADEL BROADCASTING COMPANY, a Nevada corporation ("Citadel").
RECITALS:
A. DBC of Tennessee (i) is the licensee of and owns and operates radio
stations WIVK-FM, WNOX-AM, WNOX-FM and WSMJ-FM, each serving the Knoxville,
Tennessee radio market (collectively, the "Knoxville Stations"); (ii) will be
the licensee of and will own and operate radio stations WKDF-FM and WGFX-FM,
each serving the Nashville, Tennessee radio market (collectively, the "Nashville
Stations"), upon the effectiveness of the DBC of Nashville Merger; (iii) brokers
time on radio station WOKI-FM, Oak Ridge, Tennessee, serving the Knoxville,
Tennessee radio market pursuant to a local marketing agreement with Oak Ridge
FM, Inc. ("WOKI"); and (iv) will be the licensee of and will own and operate
radio station WRAX-FM, serving the Birmingham, Alabama radio market (also
referred to and included in the collective term "Birmingham Stations" below),
upon the effectiveness of the DR Alabama Merger.
B. DBC of Alabama is the licensee of and owns and operates radio
stations WZRR-FM, WYSF-FM, WJOX-AM and WAPI-AM, each serving the Birmingham,
Alabama radio market (collectively with radio station WRAX-FM, the "Birmingham
Stations"). The Knoxville Stations, the Nashville Stations, WOKI and the
Birmingham Stations are collectively referred to herein as the "Stations."
C. Knoxville R/P Holder owns various parcels of real property used in
the operation of certain of the Knoxville Stations and WOKI. Alabama R/P Holder
owns various parcels of real property used in the operation of certain of the
Birmingham Stations.
D. Stockholders, together with trusts which they have established for
the benefit of their family members, own all of the issued and outstanding
shares of capital stock of DBC of Tennessee. DBC of Tennessee owns all of the
issued and outstanding shares of capital stock of DBC of Alabama. Stockholders
(other than James Allen Dick, Sr.) own all of the issued and outstanding shares
of capital stock of DBC of Nashville and DR Alabama. Eleven (11) Trusts are the
sole partners of Knoxville R/P Holder. These Trusts and their respective
Trustees are as follows: (1) James Allen Dick, Jr., Trustee of Sub-Trust #1
f/b/o Erik Dick under Irrevocable Grandchildren's Trust of James A. and Marilyn
M. Dick - dated December 30, 1989; (2) Emily
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Dick McAlister, Trustee of Sub-Trust #2 f/b/o Harry McAlister under Irrevocable
Grandchildren's Trust of James A. and Marilyn M. Dick - dated December 30, 1989;
(3) Franklin Young Hundley and Emily Dick McAlister, Trustees of Sub-Trust #3
f/b/o Frank Hundley III under Irrevocable Grandchildren's Trust of James A. and
Marilyn M. Dick - dated December 30, 1989; (4) Franklin Young Hundley and Emily
Dick McAlister, Trustees of Sub-Trust #4 f/b/o James Hundley under Irrevocable
Grandchildren's Trust of James A. and Marilyn M. Dick - dated December 30, 1989;
(4) James Allen Dick, Jr., Trustee of Sub-Trust #1 f/b/o James Alexander Dick
under Irrevocable Grandchildren's Trust of James A. and Marilyn M. Dick - dated
December 10, 1990; (5) Emily Dick McAlister, Trustee of Sub-Trust #2 f/b/o
Daniel Pierce McAlister under Irrevocable Grandchildren's Trust of James A. and
Marilyn M. Dick - dated December 10, 1990; (6) James Allen Dick, Jr., Trustee
f/b/o Carl Taylor Dick under Irrevocable Grandchildren's Trust of James A. and
Marilyn M. Dick - dated December 21, 1992; (7) Charles Arthur Dick Trust f/b/o
Peter Georges under Irrevocable Grandchildren's Trust, James A. and Marilyn M.
Dick - dated November 11, 1992; (9) Emily Dick McAlister, Trustee f/b/o Matthew
McAlister under Irrevocable Grandchildren's Trust of James A. and Marilyn M.
Dick - dated December 20, 1993; (10) Charles Arthur Dick, Trustee f/b/o Charles
William Dick under Irrevocable Grandchildren's Trust of James A. and Marilyn M.
Dick - dated December 20, 1993; and (11) Charles Arthur Dick, Trustee f/b/o Gina
Jeannette Dick and Marilyn Mandel Dick under Irrevocable Grandchildren's Trust
of James A. and Marilyn M. Dick dated December 1, 1995. Two (2) trusts are the
sole members of Alabama R/P Holder and own all the equity interests therein: (1)
Franklin Young Hundley and Emily Dick McAlister, Trustees f/b/o Frank Hundley,
III and James Hundley under Irrevocable Trust of Jeannette Dick Hundley dated
November 14, 1992; and (2) James Allen Dick, Jr., Emily Dick McAlister and
Charles Arthur Dick Trustees f/b/o James Allen Dick, Jr., Emily Dick McAlister
and Charles Arthur Dick under Irrevocable Trust of James Allen Dick dated June
28, 1995.
E. DBC of Tennessee, DBC of Alabama, DBC of Nashville, DR Alabama,
Knoxville R/P Holder and Alabama R/P Holder are collectively referred to herein
as "Sellers."
F. Sellers desire to sell to Citadel, and Citadel desires to purchase
from Sellers, substantially all of the assets of the Stations, all of the assets
of Knoxville R/P Holder and substantially all of the assets of Alabama R/P
Holder, on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
DEFINITIONS
The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Accounts Receivable" has the meaning specified in Section 9.3.
"Accounts Receivable List" has the meaning specified in Section 9.3.
"Act" means the Communications Act of 1934, as amended.
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"Additional Letter of Credit" has the meaning specified in Section
3.2(a).
"Adjustment Amount" has the meaning specified in Section 10.2(b).
"Adjustment List" has the meaning specified in Section 10.2(b).
"Affiliate" of any Person means any other Person (a) that directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with, the first Person, or (b) any interests of which are owned, in
whole or in part, directly or indirectly, by the first Person. For purposes of
this definition, the term "control" (including the correlative meanings of the
terms "controls," "controlled by," and "under direct or indirect control with"),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of the Person, whether through the ownership of voting securities or by
contract or otherwise.
"Arbitrator" has the meaning specified in Section 3.4(d).
"Asset Schedule " has the meaning specified in Section 2.1(a).
"Assigned Contracts" has the meaning specified in Section 2.1(d).
"Assumed Obligations" has the meaning specified in Section 2.3.
"BCF" has the meaning specified in Section 3.4(a).
"BCF Shortfall" has the meaning specified in Section 3.4(a).
"Birmingham Stations" has the meaning specified in the recitals to this
Agreement.
"Business" means the business in which Sellers are now engaged.
"Business Day" shall mean every day of the week excluding Saturdays,
Sundays, Federal holidays, and such days when business is not regularly
conducted in Knoxville, Tennessee.
"Citadel Collection Period" has the meaning specified in Section 9.3.
"Citadel Transaction Documents" has the meaning specified in Section
12.1.
"Citadel's Disclosure Schedule" has the meaning specified in Section
5.3.
"Closing" means the consummation of the transactions contemplated by
this Agreement in accordance with the provisions of Section 11.1.
"Closing Date" has the meaning specified in Section 11.1.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" has the meaning specified in Section 10.8.
"Contracts" has the meaning specified in Section 4.9.
"Damages" has the meaning specified in Section 14.1.
"DBC of Nashville Merger" means the merger of DBC of Nashville with and
into DBC of Tennessee, with DBC of Tennessee surviving such merger.
"DOJ" has the meaning specified in Section 10.6.
"DR Alabama Merger" means the merger of DR Alabama with and into DBC of
Tennessee, with DBC of Tennessee surviving such merger.
"Draw Condition" has the meaning specified in Section 15.2(a).
"Draw Notice" has the meaning specified in Section 3.2(a).
"Environmental Claims" means and includes, without limitation: (a)
claims, demands, suits, causes of action for personal injury or lost use of
property, or consequential damages, to the extent any of the foregoing arise
directly or indirectly out of Environmental Conditions; (b) actual or threatened
damages to natural resources; (c) claims for the recovery of response costs, or
administrative or judicial orders directing the performance of investigations,
response or remedial actions under CERCLA, RCRA or other Environmental Laws; (d)
a requirement to implement "corrective action" pursuant to any order or permit
issued pursuant to RCRA; (e) claims for restitution, contribution or equitable
indemnity from third parties or any governmental agency; (f) fines, penalties or
Liens against property; (g) claims for injunctive relief or other orders or
notices of violation from Governmental Authorities; and (h) with regard to any
present or former employees, exposure to or injury from Environmental
Conditions.
"Environmental Conditions" means conditions of the environment,
including the ocean, natural resources (including flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata or the ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation, transportation, release,
spilling, leaking, pumping, pouring, emptying, discharging, injecting, escaping,
leaching, disposal, dumping, or threatened release of Hazardous Materials by
Sellers. With respect to claims by employees, Environmental Conditions also
includes the exposure of Persons to Hazardous Materials within work places on
any real estate owned or occupied by Sellers.
"Environmental Laws" has the meaning specified in the definition of
Hazardous Materials.
"Environmental Noncompliance" means, but is not limited to: (a) the
release or threatened release as a result of the activities of Sellers of any
Hazardous Materials into the
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environment, any storm drain, sewer, septic system or publicly owned treatment
works, in violation of any effluent emission limitations, standards or other
criteria or guidelines established by any federal, state or local law,
regulation, rule, ordinance, plan or order; (b) any facility operations,
procedures, designs, etc. which do not conform to the statutory or regulatory
requirements of the CAA, the CWA, the TSCA, the RCRA or any other Environmental
Laws intended to protect public health, welfare and the environment; and (c) any
condition noted in any environmental site assessments, studies, tests or reports
performed or commissioned for the Real Property or Leaseholds which is concluded
therein to create or cause to exist a recognized environmental condition (or
words of similar import) or to pose an environmental risk.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means Chase Manhattan Trust Company, National
Association.
"Escrow Agreement" means that certain Escrow Agreement dated as of May
9, 2000 among Citadel, DBC of Tennessee and the Escrow Agent, in the form
attached as Exhibit A hereto.
"Escrow Amount" has the meaning specified in Section 3.2(a).
"Estimated Proration Schedule" has the meaning specified in Section
10.2(a).
"Excluded Assets" has the meaning specified in Section 2.2.
"FCC" means the Federal Communications Commission.
"FCC Applications" has the meaning specified in Section 10.1.
"FCC Approval" has the meaning specified in Section 10.1.
"FCC Licenses" means the main station licenses for the Stations,
together with each of the other consents, rights, licenses, permits and
authorizations issued by the FCC and held by Sellers in connection with, or
pertaining to, the conduct of the radio station business and operation of the
Stations, together with any renewals and extensions thereof and any applications
therefor pending on the Closing Date, and any and all applications made by
Sellers for such consents, rights, licenses, permits and other authorizations.
"Final Order" means a written action or order issued by the FCC or its
staff setting forth the FCC Approval (or a denial thereof), (a) which action or
order has not been vacated, reversed, stayed, enjoined, set aside, annulled or
suspended, and (b) with respect to which action or order (i) no request has been
filed and is pending for administrative or judicial review, rehearing,
reconsideration, appeal or stay, and the time period for filing any such request
and for the FCC to set aside the action on its own motion under the provisions
of the Act or the rules, regulations and policies of the FCC has expired, or
(ii) in the event of review, reconsideration or appeal, the time for further
review, reconsideration or appeal has expired.
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"FTC" has the meaning specified in Section 10.6.
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time applied on a consistent basis during
the periods involved.
"Governmental Authority" means any government, whether federal, state
or local, or any other political subdivision thereof, or any agency, tribunal or
instrumentality of any such governmental or political subdivision, or any other
Person exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Materials" means hazardous wastes, hazardous substances,
hazardous constituents, toxic substances or related materials, whether solids,
liquids or gases including but not limited to substances defined as "PCBs,"
"hazardous wastes," "hazardous substances," "toxic substances," "pollutants,"
"contaminants," "radioactive materials," "petroleum," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C.
Section 2601 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 9601; the Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et
seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air
Act ("CAA"), 42 U.S.C. Section 7401 et seq.; or any similar state law; and in
the plans, rules, regulations or ordinances adopted, or other criteria and
guidelines promulgated pursuant to the preceding laws or other similar laws,
regulations, rules or ordinances now in effect (collectively, the "Environmental
Laws"); and any other substances, constituents or wastes subject to
environmental regulations under any applicable federal, state or local law,
regulation or ordinance.
"Held Back Amount" has the meaning specified in Section 3.4(b).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indebtedness for Borrowed Money" means (a) all indebtedness of Sellers
in respect of money borrowed (including, without limitation, indebtedness which
represents the unpaid amount of the purchase price of any property), (b) all
indebtedness of Sellers evidenced by a promissory note, bond or similar written
obligation to pay money, (c) all indebtedness guaranteed by Sellers or for which
Sellers are contingently liable, including, without limitation, guaranties in
the form of an agreement to repurchase or reimburse, and any commitment by which
any such Person assures a creditor against loss, including contingent
reimbursement obligations with respect to letters of credit, and (d) all
monetary obligations of Sellers under any lease or similar arrangement, which
obligations would be classified and accounted for as capital obligations on a
balance sheet of Sellers under GAAP.
"Indemnitee" has the meaning specified in Section 14.3.
"Indemnitor" has the meaning specified in Section 14.3.
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"Intellectual Property" has the meaning specified in Section 2.1(e).
"Joint Venture" means Dick Broadcasting/Capitol Networks Joint Venture,
a joint venture between DBC of Nashville and Capitol Radio Networks, Inc.
"Knowledge" shall mean with respect to any statement the absence of
actual present knowledge of any fact that would render the statement inaccurate.
"Knoxville Stations" has the meaning specified in the recitals to this
Agreement.
"Leaseholds " has the meaning specified in Section 4.8.
"Letter of Credit" has the meaning specified in Section 3.2(a).
"Lickton Property" has the meaning specified in Section 10.17(a).
"Lien" means any mortgage, pledge, hypothecation, assignment,
encumbrance, claim, easement, transfer restriction, lien (statutory or
otherwise) or security interest of any kind or nature whatsoever.
"Material" or "material" shall mean significant, substantial and
relevant under a commercially reasonable standard.
"Mandatory Consents" has the meaning specified in Section 6.11.
"Mergers" means, collectively, the DBC of Nashville Merger and the DR
Alabama Merger.
"Nashville Stations" has the meaning specified in the recitals to this
Agreement.
"Notice of Disagreement" has the meaning specified in Section 10.2(b).
"Obligations" means, without duplication, all (a) Indebtedness for
Borrowed Money, (b) accrued taxes, accounts payable, accrued liabilities and all
other liabilities and obligations of the type normally required by GAAP to be
reflected on a balance sheet, (c) commitments by which Sellers assure a creditor
against loss, including the face amount of all letters of credit and, without
duplication, all drafts drawn thereunder, (d) obligations guaranteed in any
manner by Sellers, (e) obligations under capitalized leases in respect of which
obligations Sellers are liable, contingently or otherwise, as obligor, guarantor
or otherwise, or in respect of which obligations such Person assures a creditor
against loss, (f) obligations under acceptance facilities, (g) obligations
secured by a Lien on property of Sellers, (h) obligations under interest rate or
currency exchange or swap agreements, (i) unsatisfied obligations for
"withdrawal liability" to a "multiemployer plan" as such terms are defined under
ERISA, (j) indebtedness issued or obligation incurred in substitution or
exchange for any Obligations, (k) costs or expenses incurred by Sellers of any
nature, whether or not currently payable, and (l) other liabilities
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or obligations of Sellers, in each of the foregoing instances whether absolute
or contingent, known or unknown, and whether or not normally required by GAAP to
be reflected on a balance sheet.
"Permits" has the meaning specified in Section 4.17(b).
"Permitted Exceptions" means those title exceptions which do not affect
the Real Property in any material respect and which are acceptable to Citadel in
its reasonable discretion.
"Person" means an individual, corporation, partnership, joint venture,
joint stock company, association, trust, business trust, unincorporated
organization, Governmental Authority, or any other entity of whatever nature.
"Personal Property" has the meaning specified in Section 2.1(a).
"Purchased Assets" has the meaning specified in Section 2.1.
"Purchase Price" has the meaning specified in Section 3.1.
"Real Property" has the meaning specified in Section 2.1(b).
"Real Property Leases" has the meaning specified in Section 2.1(c).
"Recipient" has the meaning specified in Section 10.8.
"Richland Towers Agreement" has the meaning specified in Section
10.17(a).
"Sellers" has the meaning specified in the recitals to this Agreement.
"Sellers' Adjustment Amount" has the meaning specified in Section
10.2(b).
"Sellers' Transaction Documents" has the meaning specified in Section
13.1.
"Sellers' Disclosure Schedule" has the meaning specified in Section
4.3.
"Stations" has the meaning specified in the recitals to this Agreement.
"Supplemental Financial Statements" has the meaning specified in
Section 6.10
"Taxes" means any (A) federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profits, environmental (including under
Section 59A of the Code), customs, duties, real property, real property gains,
personal property, capital stock, social security, unemployment, disability,
payroll, license, employee or other withholding, or other tax of any kind
whatsoever, including any interest, penalties, or additions to tax or additional
amounts in respect of the foregoing; (B) liability of any corporation for the
payment of any amounts of the type described in clause
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(A) arising as a result of being (or ceasing to be) a member of any "affiliated
group" (as that term is defined in Section 1504(a) of the Code) (or being
included in any Tax Return relating thereto); and (C) liability for the payment
of any amounts of the type described in clause (A) or (B) as a result of any
express or implied obligation to indemnify or otherwise assume or succeed to the
liability of any other Person.
"Threshold" has the meaning specified in Section 14.5(a).
"Titans Contract" means that certain Radio Broadcast Rights Agreement
dated August 1, 1996 between Tennessee Football, L.P. and the Joint Venture.
"Titans Contract Loss" has the meaning specified in Section 3.4(c).
"Trade Agreements" has the meaning specified in Section 6.9.
"Trade Imbalance" has the meaning specified in Section 6.9.
"Trade Liabilities" has the meaning specified in Section 6.9.
"Trade Receivables" has the meaning specified in Section 6.9.
"Trade Schedule" has the meaning specified in Section 6.9.
"Transferred Employees" has the meaning specified in Section 10.14(a).
"WGFX" has the meaning specified in Section 10.17(a).
"WOKI" has the meaning specified in the recitals to this Agreement.
"WYSF" has the meaning specified in Section 10.16.
"WYSF Transmitter Lease" has the meaning specified in Section 10.16.
SECTION 2
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale of Purchased Assets. Subject to the terms and
conditions of this Agreement, and on the basis of the representations,
warranties, covenants and agreements contained in this Agreement, at the
Closing, Sellers agree to sell, assign and convey to Citadel, and Citadel agrees
to purchase, acquire and accept from Sellers, all of the Purchased Assets. The
"Purchased Assets" consist of:
(a) All the tangible personal property, improvements and
fixtures of every kind or nature used in the operation of the Stations in the
ordinary course of business
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(the "Personal Property"), including, without limitation, the personal property
described on Schedule 2.1 to this Agreement (the "Asset Schedule");
(b) All of the right, title and interest of Sellers or any of
their Affiliates in and to any real property used in the operation of the
Stations in the ordinary course of business which are described on the Asset
Schedule (the "Real Property");
(c) The leasehold interests pursuant to the real property
leases described on the Asset Schedule (the "Real Property Leases");
(d) All of the right, title and interest of Sellers or any of
their Affiliates in and to those contracts, leases, licenses, memberships,
agencies, permits and agreements, other than Real Property Leases, to which any
Seller or any Affiliate thereof presently is a party or an assignee of a party
which are described on the Asset Schedule (the "Assigned Contracts");
(e) The call letters of the Stations and all of the
copyrights, trademarks, trade names and other similar rights, including
applications and registrations therefor, used in connection with the past or
present operation of the Stations in which any Seller or any Affiliate thereof
has any right, title or interest, including, without limitation, those items
listed on the Asset Schedule (collectively, the "Intellectual Property");
(f) The FCC Licenses, a complete list of which is included on
the Asset Schedule;
(g) All books, records and accounts relating to the operation
of the Stations, subject to the right of Sellers to make and retain photocopies
thereof for Sellers' personal use and reference and to obtain access to such
books, records and accounts in accordance with the provisions of Section 2.2(a);
and
(h) All other assets owned by Sellers as of the date of this
Agreement which are used or useful in connection with the operation of the
Stations as of the date of this Agreement, real and personal, tangible and
intangible.
2.2 Excluded Assets. Notwithstanding anything to the contrary contained
in this Agreement, it is expressly understood and agreed that there shall be
excluded from the assets transferred or assigned to Citadel the following
(collectively, the "Excluded Assets"):
(a) Except to the extent included in Section 2.1(g), all of
Sellers' corporate books and records and other documents relating to the
internal corporate affairs of Sellers, all other corporate records or files of
Sellers not relating to the business or operation of the Stations, and all
personnel records of employees who have not consented to the release of their
personnel records;
(b) All cash, cash equivalents or similar type investments
held by Sellers, such as certificates of deposit, Treasury bills and notes and
other marketable securities on hand as of the Closing;
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(c) All accounts receivable relating to or arising out of the
operations of Sellers and/or the Stations prior to the Closing;
(d) Assets not used or useful in connection with the Stations
and all Contracts not assumed by Citadel;
(e) Any and all claims of Sellers with respect to transactions
occurring or arising prior to the Closing Date, including, without limitation,
notes receivable, intercompany debt, debts or other obligations due from
Stockholders and claims for refunds of taxes for periods prior to the Closing
Date;
(f) The Assets identified on Schedule 2.2(f) as Excluded
Assets, if any;
(g) FCC Licenses for WOKI and other assets owned by the
licensee of WOKI;
(h) The assets of Dick Broadcasting Company, Inc. of North
Carolina (a wholly owned subsidiary of DBC of Tennessee) including, but not
limited to, the assets of radio stations WKRR-FM, Asheboro, North Carolina, and
WKZL-FM, Winston-Salem, North Carolina;
(i) The Beechcraft B300 KingAire airplane;
(j) Any and all policies of insurance, including, without
limitation, any and all rights thereunder;
(k) All rights of any Seller to enforce (i) the obligations of
Citadel to pay, perform or discharge the Assumed Obligations and (ii) all other
obligations of Citadel under or in connection with, as well as all other rights
of any Seller under or in connection with, this Agreement;
(l) Any and all claims or causes of action against third
parties which may have accrued in favor of any Seller prior to the Closing Date;
(m) Any assets of any employee benefit plan of any Seller in
effect as of the Closing Date (other than any assets specifically assumed by
Citadel);
(n) All shareholder and member equity interests, and all other
equity interests and securities, of or in any Seller (other than DBC of
Tennessee's interest in the Joint Venture);
(o) The rights to the name "Dick Broadcasting" and derivations
of that name and the rights to the names of each Seller and derivations of those
names; and
(p) The assets of Alabama R/P Holder situated at 192 Lewis
Street, Greensboro, North Carolina and leased to Dick Broadcasting Company, Inc.
of North Carolina.
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Notwithstanding the foregoing, any asset which is described above but which is
actually listed on the Asset Schedule shall be a Purchased Asset and not an
Excluded Asset.
2.3 Obligations. Citadel shall not assume, and shall purchase
the Purchased Assets free and clear of, any and all Obligations of Sellers,
except that Citadel shall assume those Obligations of Sellers arising from and
after the Closing Date (other than any liability or obligation for breach or
default which occurred prior to the Closing Date) pursuant to each of (a) the
Real Property Leases, (b) the Assigned Contracts, (c) those items subject to
proration pursuant to Section 10.2, (d) the Trade Liabilities and (e) those
additional items expressly set forth on Schedule 2.3 to this Agreement, if any
(collectively, the "Assumed Obligations"). Citadel shall assume and agrees to
pay, defend, discharge and perform as and when due all Assumed Obligations after
the Closing Date.
2.4 Transactions Prior to the Closing. Prior to the Closing,
Sellers may effect such transactions relating to ownership of Sellers or the
Stations as they may determine in their discretion; provided that (a) at all
times from the date of this Agreement to the Closing Date Sellers retain direct
or indirect control of the Stations and the Purchased Assets are owned or held
by Sellers or Affiliates of Sellers and (b) no such transaction prevents, delays
or otherwise interferes with consummation of the sale of all of the Purchased
Assets to Citadel in accordance with the terms of this Agreement. Without
limiting the generality of the foregoing, Sellers and Stockholders shall cause,
as soon as possible after the date hereof and in no event later than the Closing
Date, the Mergers to be effected in accordance with all applicable laws and
shall obtain all applicable consents of Governmental Authorities or other
Persons (including without limitation the consent of the FCC). From and after
the effectiveness of the Mergers, DBC of Tennessee shall have all rights and
obligations of DBC of Nashville and DR Alabama under this Agreement.
SECTION 3
PURCHASE PRICE; LETTER OF CREDIT; ESCROW AMOUNT
3.1 Purchase Price. The purchase price for the Purchased Assets shall
be $300,000,000, subject to adjustment as provided in Sections 3.4, 6.9 and 10.2
(the "Purchase Price"). At the Closing, Citadel shall deliver to DBC of
Tennessee, as agent for Sellers, the Purchase Price in cash by wire transfer of
immediately available, Federal funds to such account or accounts as directed in
writing by Sellers to Citadel, less the Escrow Amount (unless previously
returned to Citadel), which shall be paid to DBC of Tennessee, as agent for
Sellers, pursuant to the Escrow Agreement.
3.2 Letter of Credit; Escrow Amount.
(a) Simultaneously with the execution of this Agreement,
Citadel shall (i) deliver, or cause to be delivered, to Sellers an irrevocable
letter of credit in favor of Sellers, issued by Credit Suisse First Boston, in
the amount of $28,000,000, which shall be in the form attached as Exhibit B
hereto (such letter of credit, together with any extension or replacement
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thereof pursuant to Section 3.2(b), the "Letter of Credit") and (ii) deposit
into escrow with the Escrow Agent, pursuant to the Escrow Agreement, cash in the
amount of $2,000,000 (the "Escrow Amount").
(i) The Letter of Credit shall provide that the
issuing institution shall make payment on the Letter of Credit
upon such institution's receipt of (x) a joint certificate
from a duly authorized representative of Sellers and a duly
authorized representative of Citadel certifying that a Draw
Condition has occurred; or (y) a final non-appealable order of
a court of competent jurisdiction to the effect that a Draw
Condition has occurred. At the Closing, Sellers shall return
the original Letter of Credit to Citadel for cancellation.
(ii) On the date hereof, Citadel and DBC of
Tennessee, on behalf of all Sellers, shall execute and deliver
the Escrow Agreement. The Escrow Agent shall hold, invest and
disburse the Escrow Amount (and interest earned thereon) in
accordance with the Escrow Agreement. The Escrow Agreement
shall provide that the Escrow Agent shall pay the Escrow
Amount (A) to DBC of Tennessee upon the Escrow Agent's receipt
of (x) a certificate from a duly authorized representative of
DBC of Tennessee certifying that a Draw Condition has occurred
(the "Draw Notice"), so long as the Escrow Agent does not
receive a certificate from a duly authorized representative of
Citadel, within 10 Business Days after the delivery of the
Draw Notice to Citadel and the Escrow Agent in accordance with
Section 16.3 and the Escrow Agreement, stating that Citadel
objects to the Draw Notice; (y) a joint certificate from a
duly authorized representative of DBC of Tennessee and from a
duly authorized representative of Citadel certifying that the
Closing has occurred; or (z) a final non-appealable order of a
court of competent jurisdiction to the effect that a Draw
Condition has occurred; or (B) to Citadel in accordance with
Section 15.2(a). At any time prior to Closing, Citadel may
elect, in its sole discretion, to replace the Escrow Amount
with an irrevocable letter of credit in favor of Sellers
issued by Credit Suisse First Boston, in the amount of
$2,000,000, which shall be in the form of Exhibit B hereto
(such letter of credit, together with any extension or
replacement thereof pursuant to Section 3.2(b), the
"Additional Letter of Credit"). Immediately upon the delivery
of the Additional Letter of Credit to Sellers, Citadel and DBC
of Tennessee shall execute and deliver a joint notice to the
Escrow Agent instructing the Escrow Agent to release the
entire Escrow Amount to Citadel.
(b) If, at a time when the Letter of Credit and Additional
Letter of Credit (if applicable) would, by their respective terms, expire within
30 days, a bona fide dispute exists as to whether a Draw Condition has occurred,
Citadel shall take such action as is necessary to either, in Citadel's
discretion, (i) extend the expiration date of the Letter of Credit and
Additional Letter of Credit (if applicable), (ii) deliver to Sellers replacement
letters of credit in like amounts and substantially the same form from another
financial institution with a net worth at least equal to that as of the date of
this Agreement of Credit Suisse First Boston, or (iii) deposit $30,000,000 in
escrow, or $28,000,000 if the Escrow Amount is still held by the Escrow Agent
(pursuant to an escrow agreement in the form of the Escrow Agreement), until
such time as such dispute is
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resolved. Citadel agrees that Sellers may, at their option, have Citadel's
obligations under this Section 3.2(b) specifically enforced by a court of
competent jurisdiction and that, if there is then pending litigation as to
whether a Draw Condition has occurred, Citadel will not oppose specific
enforcement of its obligations under this Section 3.2(b).
3.3 Allocation of the Purchase Price. The parties hereto shall discuss
in good faith and agree upon the allocation of the Purchase Price among the
Purchased Assets for all purposes (including financial accounting and tax
purposes). Sellers and Citadel shall each file their respective tax returns,
including IRS Form 8594, in a manner consistent with such allocation. Neither
Sellers nor Citadel shall, after filing IRS Form 8594, revoke or amend IRS Form
8594 without the written consent of the other parties.
3.4 Purchase Price Adjustments.
(a) BCF Shortfall. In the event that the Stations' BCF for
calendar year 2000, excluding any Titans Contract Loss for calendar year 2000,
is less than $12,000,000 (such difference being referred to as the "BCF
Shortfall"), Sellers shall pay to Citadel an amount equal to 20 times the BCF
Shortfall. As used herein, "BCF" means broadcast cash flow, which is the
difference between (i) gross revenue (including revenue under Trade Agreements),
net of agency commissions, and (ii) operating expenses (including expenses under
Trade Agreements), excluding depreciation and amortization, corporate general
and administrative expenses (including without limitation capitalized leases,
related-party rental expenses, taxes, interest and debt service) and non-cash
and extraordinary charges. BCF shall be calculated on an accrual basis and in
accordance with GAAP. Not later than March 31, 2001, Citadel shall deliver to
Sellers a written calculation (together with supporting information) of the BCF
Shortfall, if any, and, within 10 Business Days thereafter, Sellers shall pay to
Citadel an amount equal to 20 times the BCF Shortfall. In the event Sellers'
disagree with Citadel's calculation of the BCF Shortfall, Citadel and Sellers
shall attempt in good faith to resolve such disagreement promptly. If such
disagreement cannot be resolved by the parties within such 10-Business Day
period, then such disagreement shall be submitted to the Arbitrator within 10
additional Business Days thereafter, pursuant to Section 3.4(d), and no payment
shall be made by Sellers under this Section 3.4(a) until such time as the
Arbitrator's final decision is rendered. The payment made by Sellers pursuant to
this Section 3.4(a), if any, shall constitute an adjustment to the Purchase
Price. If the Closing occurs in 2000, then from the Closing Date until December
31, 2000 Citadel shall (x) operate the Stations in accordance with good business
practices and consistent with the Stations' budgets for calendar year 2000; and
(y) subject to Section 10.8, provide reasonable access to Sellers and their
representatives, on a monthly basis, to financial information relating to the
Stations' performance, including internal income statements, billing information
and disbursement information.
(b) Hold Back for BCF Shortfall. If at the Closing Citadel and
Sellers reasonably conclude, based upon the Supplemental Financial Statements
delivered to Citadel hereunder, that there is likely to be a BCF Shortfall, then
at the Closing Citadel shall withhold from the Purchase Price an amount equal to
20 times the estimated BCF Shortfall (such amount being referred to as the "Held
Back Amount"). Citadel shall deposit the Held Back Amount with the Escrow Agent
in an interest-bearing escrow account for the benefit of the ultimate recipient
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of the Held Back Amount. At such time, Citadel and Seller shall execute and
deliver a new escrow agreement, in substantially the form attached as Exhibit A
hereto, which shall govern the retention and release of the Held Back Amount. To
the extent a payment is ultimately required from Sellers pursuant to Section
3.4(a), such payment shall be made first from the Held Back Amount and (x) if an
additional amount is still due, such balance shall be paid by Sellers or (y) if
the Held Back Amount exceeds the amount due, such excess amount, together with
interest earned thereon, shall be released to Sellers. If no payment is
ultimately required from Sellers pursuant to Section 3.4(a), then the entire
Held Back Amount, together with interest earned thereon, shall be released to
Sellers.
(c) Titans Contract. In the event that (i) the Closing occurs
prior to the expiration of the 2000-2001 NFL season and (ii) Citadel suffers any
Titans Contract Loss from the 2000-2001 NFL season, then Sellers shall pay to
Citadel, within 10 Business Days after Citadel delivers to Sellers a written
calculation (together with supporting information) of such Titans Contract Loss,
an amount in cash equal to such Titans Contract Loss. As used in this Agreement
"Titans Contract Loss" shall mean the excess of expenses incurred under or
relating to the Titans Contract over income derived from or relating to the
Titans Contract, whether directly or indirectly (through the Joint Venture). The
Titans Contract Loss, if any, shall be calculated on an accrual basis in
accordance with GAAP. In the event Sellers disagree with Citadel's calculation
of the Titans Contract Loss suffered by Citadel from the 2000-2001 NFL season,
Citadel and Sellers shall attempt in good faith to resolve such disagreement
promptly. If such disagreement cannot be resolved by the parties within such
10-Business Day period, then such disagreement shall be submitted to the
Arbitrator within 10 additional Business Days thereafter, pursuant to Section
3.4(d), and no payment shall be made by Sellers under this Section 3.4(c) until
such time as the Arbitrator's final decision is rendered. The payment made by
Sellers pursuant to this Section 3.4(c), if any, shall constitute an adjustment
to the Purchase Price. If the Closing occurs prior to the end of the 2000-2001
NFL season, then from the Closing Date until the end of the 2000-2001 NFL Season
Citadel shall (x) operate the Joint Venture in accordance with good business
practices and consistent with the budget for the Joint Venture and the Titans
Contract; and (y) subject to Section 10.8, provide reasonable access to Sellers
and their representatives, on a monthly basis, to financial information relating
to the Joint Venture's performance, including internal income statements,
billing information and disbursement information.
(d) Arbitration. Any disagreement over the amount of payment
due to Citadel pursuant to Section 3.4(a) or (c) shall be submitted to KPMG LLP
in Nashville or Knoxville, Tennessee (the "Arbitrator") with instructions that
the Arbitrator decide the dispute within 30 days after submission. The
Arbitrator's determination shall be final, conclusive and binding on the parties
hereto. The parties hereto shall share equally the cost and expense of the
Arbitrator, but each party shall bear its own legal and other expenses.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLERS AND STOCKHOLDERS
In connection with the purchase and sale of the Purchased Assets under
this Agreement and in order to induce Citadel to enter into and consummate the
transactions contemplated by this Agreement, Sellers and Stockholders jointly
and severally make the following representations and warranties to Citadel, as
of the date of this Agreement and as of the date of the Closing (except for
representations and warranties expressly and specifically relating to a time or
times other than the date hereof or thereof, which shall be made as of the
specified time or times); provided, however, that (a) James Allen Dick, Sr. is
expressly excluded from any individual guaranty with respect to representations,
warranties or covenants of Sellers and the remaining Stockholders; and (b) any
representations, warranties and covenants made or given herein by Knoxville R/P
Holder and/or Alabama R/P Holder and the respective trusts that own the
partnership or membership interests therein are expressly limited to such
entities and to the real property owned by them and sold to Citadel pursuant to
this Agreement:
4.1 Organization and Qualification.
(a) DBC of Tennessee. DBC of Tennessee is a corporation duly
organized and validly existing under the laws of the State of Tennessee, and has
full corporate power and authority (a) to own its assets and properties and to
conduct the Business in which DBC of Tennessee is now engaged and (b) to enter
into this Agreement and to consummate the transactions contemplated hereby. DBC
of Tennessee has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business. DBC of Tennessee's principal place of business is located
in the State of Tennessee. DBC of Tennessee is duly qualified to do business as
a foreign corporation in the State of Alabama. DBC of Tennessee does not own, of
record or beneficially, or have the right or obligation to acquire, any capital
stock or equity interest or investment in any Person, other than DBC of Alabama
and Dick Broadcasting Company Inc. of North Carolina. Stockholders, together
with trusts which they created for the benefit of their family members, own all
of the issued and outstanding shares of capital stock of DBC of Tennessee.
(b) DBC of Alabama. DBC of Alabama is a corporation duly
organized and validly existing under the laws of the State of Tennessee, and has
full corporate power and authority (a) to own its assets and properties and to
conduct the Business in which DBC of Alabama is now engaged and (b) to enter
into this Agreement and to consummate the transactions contemplated hereby. DBC
of Alabama has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business. DBC of Alabama's principal place of business is located in
the State of Alabama. DBC of Alabama is duly qualified to do business as a
foreign corporation in the State of Alabama. DBC of Alabama does not own, of
record or beneficially, or have the right or obligation to acquire, any capital
stock or equity interest or investment in any Person. DBC of Tennessee owns all
of the issued and outstanding shares of capital stock of DBC of Alabama.
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(c) DBC of Nashville. DBC of Nashville is a corporation duly
organized and validly existing under the laws of the State of Tennessee, and has
full corporate power and authority (a) to own its assets and properties and to
conduct the Business in which DBC of Nashville is now engaged and (b) to enter
into this Agreement and to consummate the transactions contemplated hereby. DBC
of Nashville has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business. DBC of Nashville's principal place of business is located
in the State of Tennessee. DBC of Nashville does not own, of record or
beneficially, or have the right or obligation to acquire, any capital stock or
equity interest or investment in any Person. The Stockholders (other than James
Allen Dick, Sr.) own all of the issued and outstanding shares of capital stock
of DBC of Nashville.
(d) DR Alabama. DR Alabama is a corporation duly organized and
validly existing under the laws of the State of Tennessee, and has full
corporate power and authority (a) to own its assets and properties and to
conduct the Business in which DR Alabama is now engaged and (b) to enter into
this Agreement and to consummate the transactions contemplated hereby. DR
Alabama has full power, authority and legal right and all necessary approvals,
permits, licenses and authorizations to own its properties and to conduct the
Business. DR Alabama's principal place of business is located in the State of
Alabama. DR Alabama is duly qualified to do business as a foreign corporation in
the State of Alabama. DR Alabama does not own, of record or beneficially, or
have the right or obligation to acquire, any capital stock or equity interest or
investment in any Person. The Stockholders (other than James Allen Dick, Sr.)
own all of the issued and outstanding shares of capital stock of DR Alabama.
(e) Knoxville R/P Holder. Knoxville R/P Holder is a general
partnership duly formed and validly existing under the laws of the State of
Tennessee, and has full partnership power and authority (a) to own its assets
and properties and to conduct the Business in which Knoxville R/P Holder is now
engaged and (b) to enter into this Agreement and to consummate the transactions
contemplated hereby. Knoxville R/P Holder has full power, authority and legal
right and all necessary approvals, permits, licenses and authorizations to own
its properties and to conduct the Business. Knoxville R/P Holder's principal
place of business is located in the State of Tennessee. Knoxville R/P Holder
does not own, of record or beneficially, or have the right or obligation to
acquire, any capital stock or equity interest or investment in any Person. The
partners in Knoxville R/P Holders are specified in the recitals to this
Agreement.
(f) Alabama R/P Holder. Alabama R/P Holder is a limited
liability company duly organized and validly existing under the laws of the
State of Tennessee, and has full limited liability company power and authority
(a) to own its assets and properties and to conduct the Business in which
Alabama R/P Holder is now engaged and (b) to enter into this Agreement and to
consummate the transactions contemplated hereby. Alabama R/P Holder has full
power, authority and legal right and all necessary approvals, permits, licenses
and authorizations to own its properties and to conduct the Business. Alabama
R/P Holder's principal place of business is located in the State of Alabama.
Alabama R/P Holder is duly qualified to do business as a foreign limited
liability company in the State of Alabama. Alabama R/P Holder does not own, of
record or beneficially, or have the right or obligation to acquire, any capital
stock or equity
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interest or investment in any Person. The ownership of all of the equity
interests in Alabama R/P Holder are specified in the recitals to this Agreement.
4.2 Authority. The execution and delivery of this Agreement by each
Seller, the performance by each Seller of its covenants and agreements hereunder
and the consummation by each Seller of the transactions contemplated hereby have
been duly authorized by all necessary corporate, partnership or limited
liability company (as applicable) action. This Agreement constitutes the valid
and legally binding agreement of Sellers and Stockholders, enforceable against
each of them in accordance with its terms.
4.3 No Legal Bar; Conflicts. Neither the execution and delivery of this
Agreement by Sellers or Stockholders, nor the consummation of the transactions
contemplated hereby by Sellers or Stockholders, (a) violates or will violate any
provision of the organizational documents of any Seller; (b) violates or will
violate any law, rule, regulation, writ, judgment, injunction, decree,
determination, award or other order of any Governmental Authority; or (c)
violates or will violate, or conflicts with or will conflict with, or will
result in any breach of any of the terms of, or constitutes or will constitute a
default under or results in or will result in the termination of or the creation
or imposition of any Lien pursuant to, the terms of any contract, commitment,
agreement, understanding or arrangement of any kind to which any Seller or any
Stockholder is a party or by which any Seller, any Stockholder or any of the
assets of any Seller or any Stockholder is bound. Except for the FCC Approval,
compliance with the HSR Act and the consents disclosed in Schedule 4.0 to this
Agreement ("Sellers' Disclosure Schedule"), no consent, approval or
authorization of, or filing with, any Governmental Authority or any other Person
are required in connection with the execution and delivery of this Agreement by
Sellers and Stockholders and the consummation of the transactions contemplated
hereby by Sellers and Stockholders.
4.4 Financial Statements. Sellers have delivered to Citadel the
following financial statements with respect to the Stations: (a) the audited
balance sheets as of December 31, 1998 and December 31, 1999 and the related
statements of income and cash flows for each of the years then ended; (b) the
unaudited balance sheet as of March 31, 2000 and the related statements of
income and cash flows for the three months then ended; and (c) the monthly
unaudited balance sheets and income statements for each month in 1999 and the
first three months of 2000. Each of the foregoing financial statements
(including in all cases the notes thereto, if any) (i) is accurate and complete
in all material respects, (ii) is consistent in all material respects with the
books and records of Sellers (which, in turn, are accurate and complete in all
material respects) and (iii) fairly presents in all material respects the
financial condition and results of operations of Sellers in accordance with GAAP
(subject in the case of unaudited financial statements to the lack of footnote
disclosure and changes resulting from normal year-end audit adjustments),
consistently applied, as of the dates and for the periods set forth therein.
4.5 Absence of Certain Changes. Since December 31, 1999, except as
disclosed in Sellers' Disclosure Schedule, there has not been any (a) material
adverse change in the condition of any of the Stations, financial or otherwise,
or in the results of operations, assets, liabilities or business of any of the
Stations; (b) material damage or destruction, whether or not insured, affecting
the operations of the Stations; (c) labor dispute or threatened labor dispute
involving
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any of the employees of the Stations; (d) actual or threatened dispute
pertaining to the Stations with any material provider of software, hardware or
services; (e) material change in the customary methods of operations of the
Stations; (f) except in the ordinary course of business or to the extent not
material to the Business or financial condition of the Stations, sale or
transfer of any tangible or intangible asset used or useful in the operation of
the Stations, mortgage, pledge or imposition of any Lien on any such asset,
lease of real property, machinery, equipment or buildings with respect to the
Stations entered into or modification, amendment or cancellation of any of its
existing leases relating to the Stations, or cancellation of any debt or claim;
or (g) liability or obligation (contingent or otherwise) incurred under
agreements or otherwise, except current liabilities entered into or incurred in
the ordinary course of business consistent with past practices.
4.6 Taxes. Except as disclosed in Sellers' Disclosure Schedule, Sellers
have filed or caused to be filed on a timely basis all federal, state, local and
other tax returns, reports and declarations required to be filed by them with
respect to the Stations and have paid all Taxes (including, but not limited to,
income, franchise, sales, use, unemployment, withholding, social security and
workers' compensation taxes and estimated income and franchise tax payments,
penalties and fines) reflected as due on such returns, reports or declarations
(whether or not shown on such returns, reports or declarations), or pursuant to
any assessment received by any of them in connection with such returns, reports
or declarations. All such returns, reports and declarations filed by or on
behalf of Sellers are true, complete and correct in all material respects. No
deficiency in payment of any Taxes for any period has been asserted against
Sellers by any taxing authority which remains unsettled as of the date hereof,
no written inquiries have been received by Sellers from any taxing authority
with respect to possible claims for taxes or assessments, and there is no basis
for any additional claims or assessments for Taxes. Since December 31, 1999,
Sellers have not incurred any liability for Taxes which materially affects the
operation of the Stations other than in the ordinary course of business. All
Taxes attributable to the Stations or their income, operations or properties
accruing up to and including the Closing have been or will be paid when due
regardless of whether such Taxes are due and payable as of the Closing.
4.7 Asset Schedule. The Asset Schedule includes complete and accurate
(a) listings of all Real Property; (b) listings of all Personal Property valued
at $5,000 or more; (c) listings of all Real Property Leases and Assigned
Contracts, none of which requires any consent of third parties in connection
with the transactions contemplated hereby, except otherwise as indicated in
Sellers' Disclosure Schedule; (d) listings of all of the Intellectual Property;
and (e) listings of all of the FCC Licenses, all of the foregoing of which will,
as of the Closing, be owned and held by Sellers as reflected in the Asset
Schedule.
4.8 Title to and Condition of Property.
(a) Title. Subject to the Permitted Exceptions, Sellers will
as of the Closing have good, marketable and exclusive title to and undisputed
possession of all of the real, personal and tangible property and improvements
included in the Purchased Assets. Except as set forth on Sellers' Disclosure
Schedule, the Purchased Assets are now free and clear of all Liens. Subject to
the Permitted Exceptions, the Purchased Assets will, as of the Closing, be free
and clear of all Liens.
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(b) Condition. The Personal Property is in good operating
condition, ordinary wear and tear excepted, adequate and suitable for the
operation of the Stations as they are currently being operated, and in proper
condition and repair so that the Stations can operate according to their FCC
Licenses, the rules, regulations and policies of the FCC and in all other
respects in compliance with the Act and in material compliance with all other
applicable federal and state laws.
(c) Insurance. The Personal Property included among the
Purchased Assets is and will be insured through the Closing Date in amounts
adequate to replace or repair any casualty or other insurable loss to any of
such property, as shown on Sellers' Disclosure Schedule.
(d) Sufficiency of Assets. The Purchased Assets include all of
the assets, of a sufficient nature, condition and quantity, necessary to permit
Citadel to operate the Stations immediately upon the Closing in the ordinary
course of business and consistent with the past practices of Sellers. Sellers
have not, since December 31, 1999, removed any material item of Personal
Property from the Stations other than removals in the ordinary course of
business which were not done in contemplation of the transactions contemplated
hereby or where such item of Personal Property was replaced by substitution of
equivalent Personal Property. None of the Excluded Assets identified on Schedule
2.2(f), individually or in the aggregate, is material to the operation of any of
the Stations.
(e) Real Property Leases.
(i) The Asset Schedule contains accurate descriptions
of the Real Property Leases and the location of the real estate leased
thereunder (the "Leaseholds") and the type of facility located on the
Leaseholds. Sellers will as of the Closing have a valid leasehold interest in
each of the Leaseholds.
(ii) None of the Leaseholds is subject to any
covenant or restriction preventing or limiting in any respect the consummation
of the transactions contemplated hereby, except for any consent listed on
Sellers' Disclosure Schedule required of the landlords under the Real Property
Leases. Sellers' right, title and interest in and to the Leaseholds will at the
Closing be held by Sellers free and clear of all Liens.
(iii) The use for which the Leaseholds are put is not
in violation of any zoning provisions and is consistent with past practices. The
use and occupancy of the Leaseholds by Sellers are permitted under the Real
Property Leases and are in compliance in all material respects with all
regulations, codes, ordinances and statutes applicable to Sellers and the
Business, and Sellers have not received any notice asserting any material
violation of sanitation laws and regulations, occupational safety and health
regulations, or electrical codes.
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(iv) There are no facts relating to Sellers, and to
the Knowledge of Sellers and Stockholders, no facts relating to any other party,
that would prevent the Leaseholds from being occupied and used by Citadel and/or
any assignee of Citadel after the Closing Date in the same manner as immediately
prior to the Closing.
(v) There is not under any Real Property Lease any
material default by Sellers or any condition that with notice or the passage of
time or both would constitute such a default, and Sellers have not received any
notice asserting the existence of any such default or condition.
(vi) Each Real Property Lease is valid and binding
and in full force and effect as to Sellers and, to the Knowledge of Sellers and
Stockholders, as to each other party thereto, and, except as disclosed on the
Asset Schedule, has not been amended or otherwise modified.
(vii) The Leaseholds constitute all of the real
property in which any Seller has a leasehold interest or other interest or right
(whether as lessor or lessee) and which is or will prior to the Closing be used
in the operation of the Stations.
(f) Real Property.
(i) The Asset Schedule contains an accurate
description of the location of each parcel of the Real Property and the type of
facility located on each such parcel. Sellers will as of the Closing have good
and marketable title to the Real Property, in fee simple, subject only to the
Permitted Exceptions.
(ii) None of the Real Property is subject to any
covenant or restriction preventing or limiting in any respect the consummation
of the transactions contemplated hereby. Sellers' right, title and interest in
and to the Real Property will at the Closing be held by Sellers free and clear
of all Liens except Permitted Exceptions.
(iii) The use for which the Real Property is put is
not in violation of any zoning provisions and is consistent with past practices.
The use and occupancy of the Real Property by Sellers are in compliance in all
material respects with all regulations, codes, ordinances and statutes
applicable to Sellers and the Business, and Sellers have not received any notice
asserting any material violation of sanitation laws and regulations,
occupational safety and health regulations, or electrical codes.
(iv) There are no condemnation proceedings or eminent
domain proceedings of any kind pending or, to the Knowledge of Sellers and
Stockholders, threatened against the Real Property.
(v) All of the Real Property is occupied under a
valid and current certificate of occupancy or similar permit, except where no
such permits are required. There are no facts that would prevent the Real
Property from being occupied and used by Citadel after the Closing Date in the
same manner as immediately prior to the Closing.
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(vi) The Real Property constitutes all of the real
property which is owned by any Seller and which is or will prior to Closing be
used in the operation of the Stations.
4.9 Contractual and Other Obligations. Set forth in the Asset Schedule
is a listing of all (a) Real Property Leases; (b) contracts, agreements,
licenses, leases, arrangements and other documents used solely in connection
with the present operation of the Stations to which any Seller is a party or by
which any Seller or any of the assets of any Seller are bound (including, in the
case of loan agreements, a description of the amounts of any outstanding
borrowings thereunder and the collateral, if any, for such borrowings); (c)
uncompleted orders for the purchase by any Seller of materials, supplies,
equipment and services for the requirements of the Stations existing as of the
date hereof and with respect to which the remaining obligation of any Seller is
in excess of $2,500; and (d) contingent contractual obligations and liabilities
of any Seller known to Sellers existing as of the date hereof (all of the
foregoing, collectively, the "Contracts"). Each of the Contracts is designated
in the Asset Schedule either as an Assigned Contract, or as a Contract that will
not be assigned to Citadel. Neither Sellers nor, to the Knowledge of Sellers and
Stockholders, any other Person is in material default in the performance of any
covenant or condition under any Contract and no claim of such a default has been
made and no event has occurred which with the giving of notice or the lapse of
time would constitute such a default under any covenant or condition under any
Contract. Except as disclosed in Sellers' Disclosure Schedule, no Seller is a
party to any Contract which would terminate or be materially adversely affected
by the consummation of the transactions contemplated by this Agreement.
Originals or true, correct and complete copies of all of the Assigned Contracts
have been provided to Citadel.
4.10 Compensation. Set forth in Sellers' Disclosure Schedule is a list
of (a) all agreements between Sellers and their employees or other Persons
providing services for compensation with regard to the Stations, whether
individually or collectively, and (b) all employees of Sellers or other Persons
providing services for Sellers with respect to the Stations entitled to receive
annual compensation in excess of $5,000 and their respective positions, job
categories and salaries. The transactions contemplated by this Agreement will
not result in any liability for severance pay to any such employee or other
Person. Sellers have not informed any such employee or other Person that such
Person will receive any increase in compensation or benefits or any ownership
interest in any Seller or the Business. Except as disclosed in Sellers'
Disclosure Schedule, all current employees of Sellers are "at will" employees
and may be terminated by Sellers at any time, without liability or obligation,
except the payment of normal compensation accrued up to the time of termination
of employment, provided the termination is not unlawful under any applicable
state or federal law or regulation and the provisions of the Worker Adjustment
and Retraining Notification Act.
4.11 Employee Benefit Plans.
(a) Sellers do not maintain or sponsor, and are not required
to make contributions to or to pay benefits from, any pension, profit-sharing,
savings, bonus, incentive or deferred compensation, severance pay, medical, life
insurance, welfare or other employee benefit
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plan which affects the employees working, or who formerly worked, at any
Station, except as set forth in Sellers' Disclosure Schedule. None of the plans,
funds, policies, programs, arrangements or understandings of any Seller is a
"multiemployer plan" (within the meaning of Section 3(37) of ERISA). Sellers'
Disclosure Schedule fully discloses all of the plans, funds, policies, programs,
arrangements or understandings, whether oral or written, sponsored or maintained
by any Seller pursuant to which any employee or former employee of any Station
(or any dependent or beneficiary of any such employee) might be or become
entitled to (1) retirement benefits; (2) severance or separation from service
benefits; (3) incentive, performance, stock, share appreciation or bonus awards;
(4) health care benefits; (5) disability income or wage continuation benefits;
(6) supplemental unemployment benefits; (7) life insurance, death or survivor's
benefits; (8) accrued sick pay or vacation pay; (9) any type of benefit offered
under any arrangement subject to characterization as an "employee benefit plan"
within the meaning of section 3(3) of ERISA; or (10) benefits of any other type
offered through any arrangement that could be characterized as providing for
additional compensation or fringe benefits. As to any such plan, fund, policy,
program, arrangement or understanding, all of the following are true with
respect to each Station: (A) all amounts due as contributions, insurance
premiums and benefits to the date hereof have been fully paid by Sellers; (B)
all applicable requirements of law have been observed with respect to the
establishment, operation and, if applicable, the termination thereof, and all
applicable reporting and disclosure requirements have been timely satisfied; (C)
no claim or demand has been made by any employee (or beneficiary or dependent of
any employee) for benefits (other than routine claims for benefits), or by any
taxing authority for taxes or penalties which has not been satisfied in full or
which may be or become subject to litigation or arbitration; (D) any such plan
represented by Sellers to be a "qualified" retirement plan satisfies, in both
form and operation, the applicable requirements of Section 401(a) of the Code;
and (E) any such plan may be terminated at any time without material liability
resulting from such action. Sellers' 401(k) plan is "qualified" under the Code,
and Sellers have received a favorable determination letter from the Internal
Revenue Service with respect to such plan.
(b) Sellers have no obligation to provide health or other
welfare benefits to former, retired or terminated employees, except as
specifically required under Section 4980B of the Code. Sellers are in compliance
with any applicable notice and continuation requirements of Section 4980B of the
Code and the regulations thereunder.
4.12 Labor Relations. There have been no material violations of any
federal, state or local statutes, laws, ordinances, rules, regulations, orders
or directives with respect to the employment of individuals by, or the
employment practices or work conditions of, Sellers, or the terms and conditions
of employment, wages (including overtime compensation) and hours. Except as set
forth in Sellers' Disclosure Schedule, the Stations are not engaged in any
unfair labor practice or other unlawful employment practice and there are no
charges of unfair labor practices or other employee-related complaints pending
or, to the Knowledge of Sellers and Stockholders, threatened against the
Stations before the National Labor Relations Board, the Equal Employment
Opportunity Commission, the Occupational Safety and Health Review Commission,
the Department of Labor or any other Governmental Authority. There is no strike,
picketing, slowdown or work stoppage or organizational attempt pending against
or, to the Knowledge of Sellers and Stockholders, threatened against or
involving the Stations. No issue with respect to union representation is pending
or, to the Knowledge of Sellers and Stockholders, threatened with respect to the
employees of the Stations.
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4.13 Increases in Compensation or Benefits. Subsequent to December 31,
1999, there have been no increases in the compensation payable or to become
payable to any of the employees of Sellers who work solely at the Stations, nor
have Sellers paid or provided for any awards, bonuses, stock options, loans,
profit-sharing, pension, retirement or welfare plans or similar or other
payments or arrangements for or on behalf of such employees in each case other
than (a) reasonable and customary increases made by Sellers in the ordinary
course of business, (b) pursuant to currently existing plans or arrangements set
forth in Sellers' Disclosure Schedule or (c) as was required from time to time
by governmental legislation affecting wages. The vacation policy of Sellers is
set forth in Sellers' Disclosure Schedule. No employee of any Seller who works
solely at the Stations is entitled to vacation time in excess of two weeks
during the current calendar year and no such employee has any accrued vacation
time with respect to any period prior to the current calendar year, except as
set forth in Sellers' Disclosure Schedule.
4.14 Insurance. Sellers maintain insurance policies covering all of
their properties and assets and the various occurrences which may arise in
connection with the operation of the Stations, each of which policies is
summarized in Sellers' Disclosure Schedule. Such policies are in full force and
effect and all installments of premiums due thereon have been paid in full.
Sellers have complied with the provisions of such policies. There are no notices
of any pending or threatened termination or premium increases with respect to
any of such policies. There has been no casualty loss or occurrence which may
give rise to any claim of any kind not covered by insurance and Sellers are not
aware of any casualty occurrence which may give rise to any claim of any kind
not covered by insurance. No third party has filed any claim against any Seller
for personal injury or property damage of a kind for which liability insurance
is generally available which is not fully insured, subject only to the standard
deductible.
4.15 Litigation; Disputes. Except as set forth in Sellers' Disclosure
Schedule, there are no claims, disputes, actions, suits, investigations or
proceedings pending or, to the Knowledge of Sellers and Stockholders, threatened
against or affecting any Seller or the Stations, and, to the Knowledge of
Sellers and Stockholders, there is no basis for any such claim, dispute, action,
suit, investigation or proceeding. Sellers have no Knowledge of any default
under any such action, suit or proceeding. Sellers are not in default in respect
of any judgment, order, writ, injunction or decree of any Governmental Authority
with respect to the operation of the Stations.
4.16 Environmental.
(a) Prior to the execution of this Agreement, Sellers have
provided to Citadel a true and correct copy of all environmental site
assessments, studies, tests, reports and communications relating to the Real
Property and Leaseholds.
(b) With respect to the period of Sellers' ownership and use
of the Real Property and Leaseholds and, to the Knowledge of Sellers and
Stockholders, with respect to periods prior thereto, except as disclosed on
Sellers' Disclosure Schedule, (i) there are no conditions, facilities,
procedures or any other facts or circumstances that constitute
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Environmental Noncompliance on any of the Real Property or Leaseholds and (ii)
there is not constructed, placed, deposited, stored, disposed of, nor located on
any of the Real Property or Leaseholds any asbestos in any form that has
released or, unless disturbed, threatens to release airborne asbestos fibers in
excess of applicable local, state and federal standards.
(c) With respect to the period of Sellers' ownership and use
of the Real Property and Leaseholds and, to the Knowledge of Sellers and
Stockholders, with respect to periods prior thereto, except as disclosed on
Sellers' Disclosure Schedule, no structure, improvements, equipment, fixtures,
activities or facilities located on any of the Real Property or Leaseholds uses
Hazardous Materials except those used in the ordinary course of the Business and
in compliance with applicable Environmental Laws.
(d) Except as specifically described on Sellers' Disclosure
Schedule, there have been no releases or threatened releases of Hazardous
Materials into the environment or which otherwise contribute to Environmental
Conditions arising solely from the activities of Sellers, or to the Knowledge of
Sellers and Stockholders arising from any other activities, except to the extent
that such releases or threatened releases do not constitute a condition of
Environmental Noncompliance relating to any of the Real Property or Leaseholds.
(e) Except as disclosed on Sellers' Disclosure Schedule, there
are no underground storage tanks, or underground piping associated with tanks,
used for the management of Hazardous Materials at any of the Real Property or
Leaseholds which were put in place by Sellers or, to the Knowledge of Sellers
and Stockholders, by any other Person, and there are no abandoned underground
storage tanks at any of the Real Property or Leaseholds.
(f) No Seller is subject to any Environmental Claims, no
Environmental Claims have been threatened, nor, to the Knowledge of Sellers and
Stockholders, is there any basis for any such Environmental Claims.
Notwithstanding anything to the contrary contained in this Agreement,
this Section 4.16 contains the sole representations and warranties of Sellers
and Stockholders with respect to environmental matters.
4.17 Permits; Compliance with Applicable Law.
(a) General. No Seller is in default under any, and each has
complied with all, statutes, ordinances, regulations, orders, judgments and
decrees of any Governmental Authority applicable to it or to the Business or the
assets and properties of Sellers as to which a default or failure to comply
might result in any material adverse change in the condition, financial or
otherwise, assets or properties of Sellers or the Business. Sellers have no
Knowledge of any basis for assertion of any violation of the foregoing or for
any claim for compensation or damages or otherwise arising out of any violation
of the foregoing. Sellers have not received any notification of any asserted
present or past failure to comply with any of the foregoing which has not been
satisfactorily responded to in the time period required thereunder.
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(b) Permits. Set forth in the Asset Schedule are complete and
accurate lists of all FCC Licenses applicable to the Stations, and all other
permits, licenses, approvals, franchises, notices and authorizations issued by
any Governmental Authority (collectively, the "Permits"), held by Sellers and
applicable to the Business and/or the Stations. The Stations are operating in
accordance with the Act and the FCC Licenses and are in compliance with the Act
and the rules, regulations and policies of the FCC. The Permits are all of the
permits, licenses, approvals, franchises, notices and authorizations required
for the conduct of the Business as presently conducted. All of the Permits are
in full force and effect, and Sellers have not engaged in any activity which
would cause or permit revocation or suspension of any such Permit, and no action
or proceeding looking to or contemplating the revocation or suspension of any
such Permit is pending or threatened. There are no existing defaults or events
of default or events or state of facts which with notice or lapse of time or
both would constitute a default by Sellers under any of the FCC Licenses or, to
the Knowledge of Sellers and Stockholders, any other Permits, and there is no
default or claimed or purported or alleged default or state of facts which with
notice or lapse of time or both would constitute a default on the part of any
party in the performance of any obligation to be performed or paid by any party
under any of the FCC Licenses or, to the Knowledge of Sellers and Stockholders,
any other Permits. Except for the FCC Approval and as set forth in Sellers'
Disclosure Schedule, the consummation of the transactions contemplated hereby
will in no way affect the continuation, validity or effectiveness of the
Permits, or require the consent of any Person. Except as set forth in Sellers'
Disclosure Schedule, Sellers are not required to be licensed by, and are not
subject to the regulation of, any Governmental Authority by reason of the
Business.
4.18 Intellectual Property. The use of the Intellectual Property in
connection with the operation of the Stations and in a manner consistent with
past practices does not infringe upon the proprietary rights of any other
Person. Citadel will, upon consummation of the transactions contemplated by this
Agreement, possess adequate rights, licenses and other authority to use the
Intellectual Property used by Sellers in the operation of the Stations following
the Closing in the manner now operated, to the Knowledge of Sellers and
Stockholders, without infringement or unlawful or improper use of any of the
Intellectual Property. No current or former stockholder, partner, member,
director, officer or employee of any Seller has any interest in any of the
Intellectual Property, all of which will, as of the Closing, be free and clear
of all Liens. Sellers have no Knowledge of any infringement by any Person upon
the rights of Sellers with respect to the Intellectual Property. Sellers have
not granted any outstanding licenses or other rights to any of the call letters,
copyrights, trademarks, trade names or other similar rights with regard to any
of the Intellectual Property.
4.19 Books and Records. The books of account of Sellers fairly and
accurately reflect its income, expenses, assets and liabilities and have been
maintained in accordance with good business practices. All of such books and
records, to the extent included within the Purchased Assets, will be located on
the date of the Closing on the business premises of the Stations.
4.20 Related Party Obligations. Except as set forth on Sellers'
Disclosure Schedule, no officer, director, shareholder, partner, member or
Affiliate of any Seller, or any individual related by blood or marriage to any
such Person, or any entity in which any such Person owns any beneficial
interest, is a party to any agreement, contract, commitment, promissory note,
loan, any
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other actual or proposed transaction with any Seller, or has any material
interest in any material property used by any Seller, which is material to the
operation of the Stations.
4.21 Disclosure. To the Knowledge of Sellers and Stockholders, no
representation or warranty made under this Section 4 and none of the information
furnished by Sellers or Stockholders set forth in this Agreement or in the
schedules or exhibits to this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
in this Agreement or in the schedules or exhibits to this Agreement not
misleading.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF CITADEL
In connection with the purchase and sale of the Purchased Assets under
this Agreement and in order to induce Sellers and Stockholders to enter into and
consummate the transactions contemplated by this Agreement, Citadel makes the
following representations and warranties to Sellers and Stockholders, as of the
date of this Agreement and as of the date of the Closing (except for
representations and warranties expressly and specifically relating to a time or
times other than the date hereof or thereof, which shall be made as of the
specified time or times):
5.1 Organization and Qualification. Citadel is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada, and has full corporate power and authority (a) to own its assets and
properties and to conduct its business and (b) to enter into this Agreement and
consummate the transactions contemplated hereby. Prior to the Closing, Citadel
will be duly qualified to do business as a foreign corporation in the States of
Tennessee and Alabama. Citadel has full power, authority and legal right and all
necessary approvals, permits, licenses and authorizations to own its properties
and to conduct its business.
5.2 Authority. The execution and delivery of this Agreement by Citadel,
the performance by Citadel of its covenants and agreements hereunder and the
consummation by Citadel of the transactions contemplated hereby have been duly
authorized by all necessary corporate action. This Agreement constitutes the
valid and legally binding agreement of Citadel, enforceable against it in
accordance with its terms.
5.3 No Legal Bar; Conflicts. Neither the execution and delivery of this
Agreement by Citadel, nor the consummation of the transactions contemplated
hereby by Citadel, (a) violates or will violate any provision of the Articles of
Incorporation or Bylaws of Citadel; (b) violates or will violate any law, rule,
regulation, writ, judgment, injunction, decree, determination, award or other
order of any Governmental Authority; or (c) violates or will violate, or
conflicts with or will conflict with, or will result in any breach of any of the
terms of, or constitutes or will constitute a default under or results in or
will result in the termination of or the creation or imposition of any Lien
pursuant to the terms of, any contract, commitment, agreement, understanding or
arrangement of any kind to which Citadel is a party or by which Citadel or any
of the assets of Citadel is bound (including without limitation Citadel's credit
agreement). Except for the FCC Approval, compliance with the HSR Act and the
consents disclosed in
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Schedule 5.0 ("Citadel's Disclosure Schedule"), no consent, approval or
authorization of, or filing with, any Governmental Authority or any other Person
are required on the part of Citadel in connection with the execution and
delivery of this Agreement by Citadel and the consummation of the transactions
contemplated hereby by Citadel.
5.4 FCC and HSR Act Qualifications. To the Knowledge of Citadel,
Citadel is qualified as, and is not presently taking action or contemplating
taking action which might disqualify it from being, under present law (including
the Act) and present rules, regulations, policies and practices of the FCC, the
DOJ or the FTC, the holder of the FCC Licenses or an owner or operator of the
Stations.
5.5 Litigation. As of the date of this Agreement, there is no claim,
litigation or proceeding pending or, to Citadel's Knowledge, threatened against
Citadel which seeks to enjoin or prohibit, or which otherwise questions the
validity of, any action taken or to be taken in connection with this Agreement
or any Citadel Transaction Document.
5.6 Available Funds. Citadel has, or will have on the date on which the
Closing is to take place, sufficient funds available to pay the Purchase Price
on such date.
5.7 Disclosure. To Citadel's Knowledge, no representation or warranty
contained in this Section 5 contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements in this Section
5 not misleading.
SECTION 6
AFFIRMATIVE COVENANTS OF SELLERS
From and after the date of this Agreement and until the Closing,
Sellers jointly and severally covenant and agree with Citadel to:
6.1 Compliance With Law. Comply with all applicable laws and
regulations required for the valid and effective consummation of the
transactions contemplated hereby.
6.2 Payment of Obligations. Fully discharge all Obligations of Sellers,
except the Assumed Obligations, on a timely basis.
6.3 Access. Afford Citadel and its authorized representatives, upon
reasonable notice to Sellers, reasonable access during normal business hours to
the Stations and the Stations' employees, and permit Citadel and its authorized
representatives to examine all operations, equipment, properties and other
assets, logs, books, relevant records, contracts and documents of Sellers
pertinent to the Stations; provided, however, that in each instance mutually
satisfactory arrangements shall be made in advance in order to avoid
interruption and to minimize interference with the normal business and
operations of the Stations.
6.4 Preservation of Organization. Conduct the business and operations
of the Stations solely in the ordinary course of business consistent with past
practices (except as otherwise
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contemplated by this Agreement and resulting from the transactions contemplated
by this Agreement), and exercise all reasonable efforts to preserve the business
organization of the Stations intact, and assist Citadel, as and when requested
by Citadel, to preserve the present relationships of the Stations with
employees, suppliers, advertisers and customers and others having business
relationships with the Stations; provided, however, that nothing contained in
this Agreement shall require Sellers to expend money in fulfillment of their
obligations set forth in this Section 6.4 other than those expenditures that
Sellers would have made in the ordinary course of the business of the Stations
and consistent with past practices. Without limiting the generality of the
foregoing, Sellers shall maintain their advertising and promotional expenditures
for the Stations through the Closing in accordance with their budgets in effect
as of the date of this Agreement.
6.5 Books and Records. Maintain the books and records of Sellers in
accordance with good business practices, on a basis consistent with past
practices, and promptly make available to Citadel the books, records, tax
returns, leases, contracts and other documents or agreements material to the
Stations as Citadel, its counsel, accountants or other authorized
representatives may from time to time reasonably request.
6.6 Employees. Pay as and when the same shall become due and payable
any amounts owed by Sellers to their employees who have performed services up to
the time of Closing, whether fixed or accrued, for wages, vacation pay, sick
pay, severance pay, employee benefits, damages and otherwise.
6.7 Compliance with FCC Matters. Comply with the FCC Licenses
applicable to the Stations and with the provisions of the Act, the rules,
regulations and policies of the FCC, and with all other laws, ordinances,
regulations, rules and orders of any Governmental Authority applicable to
Sellers or to the Stations.
6.8 Taxes. File all federal, state and municipal tax returns, reports
and declarations required to be filed by Sellers prior to the Closing, and
satisfy all Taxes related thereto, and either pay in full on or before the
Closing or effect a proration pursuant to Section 10.2 for all accrued taxes
attributable to Sellers, or their income, operations or properties, accruing
through the Closing, regardless of whether such Taxes otherwise would have been
then due and payable.
6.9 Trade-Outs. Citadel shall assume as of the Closing the Trade
Agreements existing as of the Closing and that have not yet been performed. To
the extent that the aggregate liability of the Stations as of the Closing for
unperformed time (valued at the prevailing rates at the time the Trade
Agreements were agreed to) under the Trade Agreements (the "Trade Liabilities")
exceeds the value of the goods and services to be received by the Stations or
Citadel after the Closing under the Trade Agreements (the "Trade Receivables")
by more than $10,000, the Purchase Price payable at the Closing shall be reduced
by the amount by which such excess exceeds $10,000 (the "Trade Imbalance").
Sellers shall deliver to Citadel at the Closing a schedule of Trade Liabilities
and Trade Receivables existing as of the Closing (the "Trade Schedule"). Sellers
shall exercise reasonable efforts to minimize the amount of additional Trade
Liabilities incurred after execution of this Agreement, and to prevent a Trade
Imbalance. For purposes hereof, the term "Trade Agreements" means and includes
those agreements entered into
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by any Seller for the sale of advertising time on the Stations for consideration
other than cash. For purposes hereof, the value of Trade Receivables and the
Trade Liabilities as of the Closing shall be the fair market value thereof, as
previously agreed to by Sellers and the applicable vendor, and unperformed time
for station advertising shall be valued at the Stations' prevailing rates at the
time the Trade Agreements were entered into. Citadel shall assume Sellers'
remaining obligations under such contracts.
6.10 Supplemental Financial Statements. Sellers shall provide Citadel
with copies of the monthly unaudited income statements and balance sheets
applicable to the Stations prepared by Sellers in the ordinary course of
business commencing with the month ending April 30, 2000 until Closing
(collectively, the "Supplemental Financial Statements"). Sellers shall provide
such Supplemental Financial Statements to Citadel promptly upon such
Supplemental Financial Statements becoming available to Sellers. The
Supplemental Financial Statements shall be subject to the representations and
warranties as set forth in Section 4.4.
6.11 Consents. Exercise all reasonable efforts to obtain, prior to the
Closing, the consent and approval (in a form reasonably acceptable to Citadel)
of any third parties whose consent or approval is necessary in connection with
the consummation of the transactions contemplated hereby, with respect to the
Assigned Contracts set forth on Sellers' Disclosure Schedule and requiring such
consent. If any such consent or approval is not obtained, Sellers will use
commercially reasonable efforts (not involving the payment of money to any
Person) to secure an arrangement satisfactory to Citadel intended to provide for
Citadel following the Closing the benefits under each Assigned Contract for
which such consent or approval is not obtained; provided, however, that Citadel
shall have the right to seek Damages from Sellers and Stockholders as a result
of any failure by Sellers to obtain any consent or approval set forth on
Sellers' Disclosure Schedule which is marked with an asterisk (collectively, the
"Mandatory Consents"), and Sellers and Stockholders shall indemnify Citadel, in
accordance with Section 14, for Damages incurred by Citadel as a result of
Sellers' failure to obtain any Mandatory Consent.
Nothing in this Agreement will constitute an assignment or transfer or
an attempted assignment or transfer of any Assigned Contract which by its terms
or under applicable law or governmental rules or regulations requires the
consent or approval of a third party (including, without limitation, a
Governmental Authority) unless such consent or approval is obtained.
6.12 Further Information. Furnish to Citadel prior to the Closing such
financial (including tax), legal and other information with respect to Sellers
and the Stations as Citadel or its authorized representatives may from time to
time reasonably request.
6.13 Notice. Promptly notify Citadel in writing (a) upon the occurrence
or the nonoccurrence of any event which does then, or which upon the passing of
time or the giving of notice would, constitute a breach of or default under, or
render misleading or untrue in any material respect, any agreement, covenant,
representation or warranty of Sellers or Stockholders set forth in this
Agreement; and (b) of any litigation, arbitration or administrative proceeding
pending or, to their knowledge, threatened against Sellers which challenges the
transactions contemplated hereby, including any challenges to the FCC
Applications, and shall use their reasonable best efforts to take such steps as
may be necessary to remove any such impediment to the transactions contemplated
by this Agreement.
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6.14 Phase I Site Assessments. Perform or commission Phase I Site
Assessments of the Real Property and such other studies, tests or reports of the
Real Property and Leaseholds as Citadel or its lenders may reasonably require,
and provide copies of the written reports for such assessments, studies, tests
and reports to Citadel promptly upon such reports becoming available to Sellers.
Such assessments, studies, tests and reports shall be performed by an
environmental company reasonably acceptable to Citadel and its lenders. The cost
and expense of all such assessments, studies, tests and reports shall be split
equally between Sellers, on the one hand, and Citadel, on the other; provided,
however, that the entire cost and expense of any required Phase II Site
Assessment shall be borne by Sellers. If any of the assessments, studies, tests
or reports indicate that any Real Property contains one or more conditions of
Environmental Noncompliance, Sellers shall promptly commence remedial action to
cure the conditions, and shall cure the conditions, prior to Closing; provided,
however, that if the aggregate cost of such remedial action, as originally or
thereafter estimated, together with the cost of any Phase II Site Assessments,
exceeds $500,000, Sellers shall not be obligated to commence such remedial
action to cure such conditions, and, if Sellers elect by written notice not to
cure such conditions, Citadel shall be permitted, in its sole discretion, to
terminate this Agreement (in which event the original Letter of Credit,
Additional Letter of Credit and Escrow Amount (as applicable) shall be returned
to Citadel and no party hereto shall have any further liability hereunder).
6.15 Title Insurance and Surveys. Prior to Closing, Sellers shall cause
each parcel of the Real Property to be surveyed by a registered professional
surveyor (who shall be reasonably acceptable to Citadel) and Sellers shall cause
ALTA surveys (which shall be in form satisfactory to remove the standard survey
exception from the Owner's and Mortgagee's title insurance policies) to be
delivered to Citadel at least 10 days prior to Closing. The cost and expense of
all such surveys shall be split equally between Sellers, on the one hand, and
Citadel, on the other. In addition, Sellers shall cooperate with Citadel in
obtaining, at or prior to Closing, title insurance on the Real Property from a
nationally recognized title insurance company acceptable to Citadel and its
lenders in their reasonable judgment. Not later than 30 days prior to Closing,
Sellers shall furnish to such title insurance company such documentation as may
be reasonably required by it to issue extended Owner's and Mortgagee's title
insurance policies which shall additionally be without exception as to the
capacity, authority and execution of instruments by Sellers.
6.16 Transfer Taxes and Expenses. Any and all realty transfer taxes and
documentary stamps payable to the State of Tennessee or Alabama or any other
Governmental Authority in connection with the transfer of the Real Property or
the other Purchased Assets shall be shared equally and paid in equal parts by
Sellers, on the one hand, and Citadel, on the other. Sellers shall be
responsible for the cost of (a) deed preparation and (b) all matters of title
clearance. Citadel shall be responsible for the cost of (a) recording the deeds
and (b) title insurance premiums.
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SECTION 7
NEGATIVE COVENANTS OF SELLERS
From and after the date of this Agreement and until the Closing,
Sellers jointly and severally covenant and agree not to take, or not to cause to
be taken, any of the following actions without Citadel's prior approval, which
may not be unreasonably withheld:
7.1 Sales, Transfers and Liens. Make any sale, transfer, assignment,
conveyance, mortgage, hypothecation, encumbrance or other placement of any Lien
on any of the Purchased Assets, except in the ordinary course of business, which
does not materially interfere with the operations of the Stations, and which in
the case of a sale, transfer or assignment, is replaced with an asset of equal
or greater value, and, in the case of a conveyance, mortgage, hypothecation,
encumbrance or other Lien, is released at or prior to the Closing.
7.2 Assumed Obligations. Amend, terminate or renew any of the Assumed
Obligations (including any renewal or termination resulting from the failure to
provide, after the date of this Agreement, timely notice of nonrenewal or
termination as required by the terms of any of the Assumed Obligations).
7.3 Breaches, Defaults. Do any act or omit to do any act, or permit any
act or omission to occur, that will cause a breach of any contract, commitment
or obligation of it or them in any respect that would have a material adverse
effect on the Purchased Assets or the business operations of the Stations as
presently conducted.
7.4 Obligations. Incur any Obligations except in the ordinary course of
business in a manner consistent with past practices.
7.5 Salary Increases. Increase any salary, other payments, disbursement
or distributions in any manner or form to any employees of Sellers except (a) in
the ordinary course of business consistent with past practices or (b) in
accordance with the existing terms of contracts entered into prior to the date
of this Agreement.
7.6 Non-Solicitation. Directly or indirectly solicit or negotiate with
any Person (other than a party hereto) or accept any proposal to acquire Sellers
or the Stations in whole or in part, including without limitation an acquisition
of all or substantially all of the assets of any Seller or any equity in any
Seller.
SECTION 8
COVENANTS OF STOCKHOLDERS
From and after the date of this Agreement and until the Closing,
Stockholders hereby jointly and severally covenant and agree with Citadel as
follows:
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8.1 Compliance With Law. Stockholders shall comply with all applicable
laws and regulations required for the valid and effective consummation of the
transactions contemplated by this Agreement.
8.2 Notice. Stockholders shall promptly notify Citadel in writing (a)
upon the occurrence or the non-occurrence of any event of which they have
Knowledge which does then, or which upon the passing of time or the giving of
notice would, constitute a breach of or default under, or render misleading or
untrue in any material respect, any agreement, covenant, representation or
warranty of Sellers or Stockholders set forth in this Agreement; and (b) of any
litigation, arbitration or administrative proceeding pending or, to their
knowledge, threatened against Stockholders which challenges the transactions
contemplated hereby, including any challenges to the FCC Applications, and shall
use their reasonable best efforts to take such steps as may be necessary to
remove any such impediment to the transactions contemplated by this Agreement.
8.3 Non-Solicitation. Stockholders shall not, directly or indirectly,
solicit or negotiate with any Person (other than a party hereto) or accept any
proposal to acquire Sellers or the Stations in whole or in part, including
without limitation an acquisition of all or substantially all of the assets of
any Seller or any equity in any Seller.
SECTION 9
COVENANTS OF CITADEL
From and after the date of this Agreement and until the Closing (except
with respect to Section 9.3, which shall survive the Closing), Citadel covenants
and agrees with Sellers and Stockholders as follows:
9.1 Compliance With Law. Citadel shall comply with all applicable laws
and regulations required for the valid and effective consummation of the
transactions contemplated by this Agreement.
9.2 Notice. Citadel shall promptly notify Sellers in writing (a) upon
the occurrence or the non-occurrence of any event of which they have Knowledge
which does then, or which upon the passing of time or the giving of notice
would, constitute a breach of or default under, or render misleading or untrue
in any material respect, any agreement, covenant, representation or warranty of
Citadel set forth in this Agreement; and (b) of any litigation, arbitration or
administrative proceeding pending or, to its knowledge, threatened against
Citadel which challenges the transactions contemplated hereby, including any
challenges to the FCC Applications, and shall use its reasonable best efforts to
take such steps as may be necessary to remove any such impediment to the
transactions contemplated by this Agreement.
9.3 Accounts Receivable. Subject to Citadel's receipt from Sellers at
the Closing of a list (the "Accounts Receivable List") of accounts receivable of
the Stations existing as of the Closing, exclusive of Trade Receivables, if any
(the "Accounts Receivable"), for a period of 120 days commencing with the
Closing Date (the "Citadel Collection Period"), Citadel, as agent for
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Sellers, shall collect the Accounts Receivable in accordance with Citadel's
normal collection processes and procedures. In no event shall Citadel be
required to institute litigation or to retain third parties to institute
collection procedures with respect to the Accounts Receivable. All remittances
will be applied first to the oldest Accounts Receivable, unless the client
asserts that a dispute exists with respect to a particular account or the client
specifies the particular invoice to which the payment is to be applied, in which
case the remittances shall be applied to the specific account and Citadel shall
promptly notify Sellers of any dispute. Remittances collected by Citadel on
behalf of Sellers shall be remitted to Sellers without offset of any kind within
10 days after the end of each calendar month during the Citadel Collection
Period, and within five days after termination of the Citadel Collection Period.
During the Citadel Collection Period, at Sellers' option, Sellers shall be
permitted to collect the Accounts Receivable that remain outstanding after 60
days, or are disputed in writing by the relevant account debtor. Each remittance
by Citadel to Sellers shall be accompanied by a written report from Citadel
setting forth the aggregate amount of the Accounts Receivable and the aggregate
amount of cash collections of such Accounts Receivable during the period for
which payment is made, along with a breakdown by account debtor. At the end of
the Citadel Collection Period, Citadel shall account for all collected Accounts
Receivable and provide Sellers with all documentation related to uncollected
Accounts Receivable, and Citadel shall have no further responsibilities with
respect to any uncollected Accounts Receivables except to remit promptly to
Sellers any amounts subsequently received by Citadel. Citadel shall have no
obligation with respect to any Accounts Receivable it is unable to collect.
After the end of the Citadel Collection Period, Sellers shall be entitled to
collect any Accounts Receivable that remain uncollected.
9.4 Non-Solicitation of Employees. If this Agreement is terminated,
Citadel will not, beginning on the date hereof and continuing for a period of
two years thereafter, without the prior written approval of Sellers, directly or
indirectly, hire, solicit, encourage, entice or induce any Person who is
employed by Sellers at the date hereof or at any time hereafter that precedes
such termination, to terminate his or her employment with Sellers (or any
Affiliate of Sellers). Citadel agrees that any remedy at law for any breach by
it of this Section 9.4 would be inadequate, and Sellers would be entitled to
injunctive relief in such a case. If it is ever held that the restrictions
placed on Citadel by this Section 9.4 are too onerous and are not necessary for
the protection of Sellers, the parties hereto agree that any court of competent
jurisdiction may reduce the duration or scope hereof, or delete specific words
or phrases, and in its reduced form such provision will then be enforceable and
will be enforced.
SECTION 10
ADDITIONAL COVENANTS OF THE PARTIES
10.1 Application for Assignment of FCC Licenses. As promptly as
practicable after the signing of this Agreement, and in no event later than 10
Business Days after the signing of this Agreement, Sellers and Citadel shall
file applications with the FCC (collectively, the "FCC Applications") requesting
FCC consent to assignment of the licenses for the Stations (other than WOKI)
from Sellers to Citadel (the "FCC Approval"). Citadel shall advance the filing
fee for the FCC Applications, and Sellers shall reimburse Citadel for one-half
of such filing fee at the Closing (or upon the earlier termination of this
Agreement). All other costs and expenses
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incurred by each party in connection with the filing and prosecution of the FCC
Applications shall be paid by the party incurring the cost or expense. Sellers
and Citadel shall prosecute the FCC Applications with all reasonable diligence
and otherwise use their reasonable best efforts to obtain the grant of the FCC
Applications as expeditiously as practicable. If the FCC Approval imposes any
condition on any party hereto, such party shall use its reasonable best efforts
to comply with such condition, including, but not limited to, any FCC Approval
conditioned upon the outcome of a pending FCC rulemaking proceeding. Citadel
shall provide Sellers, and Sellers shall provide Citadel, with a copy of any
pleading, order or other document served on it relating to the FCC Applications.
Neither Citadel nor Sellers shall, and each of them shall use its reasonable
best efforts not to cause or permit any of its officers, directors, partners or
other Affiliates to, take any action which could reasonably be expected to
adversely affect the likelihood of the grant of the FCC Approval. If
reconsideration or judicial review is sought with respect to the FCC Approval,
the party affected shall vigorously oppose such efforts for reconsideration or
judicial review; provided, however, that nothing herein shall be construed to
limit either party's right to terminate this Agreement pursuant to Section 15.
In the event that the FCC denies the FCC Applications and such denial becomes a
Final Order, this Agreement shall be terminated in accordance with the express
terms and conditions of Section 15.
10.2 Proration of Income and Expenses. All income and expenses arising
from the conduct of the business and operation of the Stations shall be prorated
between Citadel and Sellers as of the Closing Date in accordance with GAAP. Such
prorations shall be based upon the principle that Sellers shall be entitled to
all income earned and shall be responsible for all liabilities and obligations
incurred or accruing in connection with the operation of the Stations until the
Closing Date, and Citadel shall be entitled to all income earned and be
responsible for such liabilities and obligations incurred or accruing in
connection with its operation of the Stations thereafter. Such prorations shall
include, without limitation, all ad valorem, real estate and other property
Taxes (but excluding taxes arising by reason of the transfer of the Purchased
Assets as contemplated hereby, which shall be paid as set forth in Section
6.16), business and license fees, music and other license fees, wages and
salaries of employees, utility expenses, liabilities and obligations under all
Assigned Contracts, rents, security deposits and similar prepaid and deferred
items, and all other expenses attributable to the ownership and operation of the
Stations. To the extent not known, real estate Taxes shall be apportioned on the
basis of Taxes assessed for the preceding year, with a reapportionment as soon
as the new tax rate and valuation can be ascertained, which covenant shall
survive the Closing.
(a) Within three Business Days prior to the Closing Date,
Sellers shall deliver to Citadel a schedule setting forth their reasonable good
faith estimates of all proration items, including all estimated accrued income
and liabilities (the "Estimated Proration Schedule"), based upon the principles
described above. The Purchase Price payable at Closing shall be adjusted in
accordance with the Estimated Proration Schedule.
(b) Within 90 days after the Closing Date, Citadel shall
prepare and deliver to Sellers an itemized list (the "Adjustment List") of its
determination of all proration items based upon the proration principles
described above and of the amounts described in Section 6.9 regarding Trade
Agreements. Such list shall show the net amount of the increase or decrease, as
applicable, to the Purchase Price (the "Adjustment Amount"). The Adjustment List
shall be
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conclusive and binding upon Sellers unless Sellers provide Citadel with written
notice of objection (the "Notice of Disagreement") within 30 days after Sellers'
receipt of the Adjustment List, which notice shall state the adjustments
proposed by Sellers (the "Sellers' Adjustment Amount"). Citadel shall have 15
days from receipt of a Notice of Disagreement to accept or reject the Sellers'
Adjustment Amount. If Citadel rejects the Sellers' Adjustment Amount and the
amount in dispute exceeds $5,000, within 10 days thereafter the dispute shall be
submitted for determination by the Arbitrator (as specified in Section 3.4(d)),
with instructions that such determination shall be made within 30 days after
submission to the Arbitrator, and the Arbitrator's determination shall be final,
conclusive and binding on Sellers and Citadel. Citadel and Sellers agree to
share equally the cost and expenses of the Arbitrator, but each party shall bear
its own legal and other expenses, if any. If the amount in dispute is equal to
or less than $5,000, such amount shall be divided equally between Citadel and
Sellers. Payment by Citadel or Sellers, as the case may be, of the Adjustment
Amount determined pursuant to this Section 10.2 shall be made by wire transfer
within 15 days after the last to occur of (i) Sellers' acceptance of the
Adjustment List or failure to give Citadel a timely Notice of Disagreement; (ii)
Citadel's acceptance of the Sellers' Adjustment Amount or failure to reject the
Sellers' Adjustment Amount within 15 days of receipt of a Notice of
Disagreement; (iii) Sellers' rejection of the Adjustment Amount in the event the
amount in dispute equals or is less than $5,000; and (iv) notice to Sellers and
Citadel of the resolution of the disputed amount by the Arbitrator in the event
that the amount in dispute exceeds $5,000.
10.3 Brokerage. Sellers, Stockholders and Citadel represent and warrant
to each other that no Person has provided services as a broker, agent or finder
in connection with the transactions contemplated by this Agreement. Sellers,
Stockholders and Citadel shall each indemnify and hold harmless the other for
any and all claims or expenses, including attorneys' fees, asserted by any
Person purporting to act on behalf of the respective indemnitor as a broker,
agent or finder in connection with the transactions contemplated by this
Agreement.
10.4 Risk of Loss. If any loss or damage to any of the Purchased Assets
occurs prior to the Closing (i) which has a material adverse effect on the
Stations and (ii) such loss or damage is not susceptible of repair, replacement
or restoration with sufficient, collectible insurance proceeds available for
such purposes or by Sellers at their sole cost and expense to substantially the
same condition as existed before such loss or damage, then the parties shall
adjust the Purchase Price to reflect the diminution in value of the Stations
attributable to the impairment of such assets.
10.5 Actions With FCC. In the event any investigation, order to show
cause, notice of violation, notice of apparent liability or a forfeiture,
material complaint, petition to deny or informal objection is instituted or
filed against any party hereto (whether in connection with the proceedings to
approve the FCC Applications or otherwise), such party shall promptly notify the
other party hereto in writing of such occurrence and shall thereafter
immediately take all reasonable measures to contest the same in good faith and
seek the removal or favorable resolution of such action, order, notice or
complaint.
10.6 HSR Filing. Each party shall use reasonable best efforts to
prepare and, no later than 10 Business Days after the signing of this Agreement,
file with the United States Federal
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Trade Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice (the "DOJ") any materials and information required to be
filed with or provided to the FTC or the DOJ pursuant to the HSR Act with
respect to the sale and purchase contemplated by this Agreement. Citadel and
Sellers shall promptly supply any additional information which reasonably may be
required or requested by the FTC or the DOJ. Citadel and Sellers shall take all
such actions, and shall file and use reasonable best efforts to have declared
effective or approved, all documents and notifications with any Governmental
Authorities, as may be necessary or may reasonably be requested under federal
antitrust laws for the consummation of the transactions contemplated by this
Agreement, including expiration of the waiting period under the HSR Act.
Sellers, on the one hand, and Citadel, on the other, shall share equally the
payment of the filing fees associated with any such filing. All other costs and
expenses incurred by each party in connection with the filing and prosecution of
any HSR filing shall be paid by the party incurring the cost or expense.
10.7 Other Governmental Consents. Promptly following the execution of
this Agreement, the parties shall prepare and file with the appropriate
Governmental Authorities any other requests for approval or waiver that are
required from such Governmental Authorities in connection with the transactions
contemplated hereby and shall diligently and expeditiously prosecute, and shall
cooperate fully with each other in the prosecution of, such requests for
approval or waiver and all proceedings necessary to secure such approvals and
waivers.
10.8 Confidentiality. Each of the parties hereto will hold in
confidence, and will cause its respective directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
Affiliates to hold in confidence, all non-public information received from
another party hereto (collectively, "Confidential Information "); provided,
however, that the term "Confidential Information" does not include any
information which (a) at the time of disclosure or thereafter is generally
available to and known by the public (other than as a result of a disclosure
directly or indirectly by the party hereto which received such information (the
"Recipient")), (b) was available to the Recipient from a source other than the
other parties hereto or (c) has been independently acquired or developed by the
Recipient without violating any of its obligations under this Agreement. The
obligation to keep Confidential Information confidential shall not apply to any
information that is required to be disclosed pursuant to any court action or any
proceeding before a Governmental Authority. In the event this Agreement is
terminated for any reason, each party hereto, upon the request of another party
hereto, shall promptly return to the requesting party all copies of Confidential
Information in its possession and shall destroy all analysis, studies and
documents prepared by it which contain any Confidential Information.
10.9 Cooperation. During the seven-year period immediately following
the Closing, Citadel shall cooperate with Sellers in providing Sellers all
information reasonably requested and permitting Sellers access to all records
relating to the period of ownership of the Stations by Sellers prior to the
Closing. The cost and expense in providing or permitting access to information
hereunder shall be borne by Sellers. Sellers, as a condition to being provided
with access to information hereunder, shall, at the request of Citadel, execute
a confidentiality agreement in form and substance acceptable to Citadel in its
reasonable discretion, which agreement shall not impair Sellers' right to
discuss such matters with Governmental Authorities in connection with required
filings, tax matters and litigation. Notwithstanding the foregoing,
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Citadel may discard any such records during such seven-year period if (i)
Citadel notifies Sellers of Citadel's intent to discard such records and (ii)
Sellers do not, within 30 days after receipt of such notice, retrieve such
records from Citadel's premises.
10.10 Public Announcements. Citadel, on the one hand, and Sellers and
Stockholders, on the other, will consult with each other before issuing, and
provide each other the opportunity to review, comment upon and concur with, any
press release or other public statement with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or the National
Association of Securities Dealers, Inc. The parties agree that the initial press
release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form agreed to by the parties and at such time.
10.11 No Inconsistent Action. No party hereto shall take any action (a)
inconsistent with its obligations under this Agreement or (b) that would hinder
or delay the consummation of the transactions contemplated by this Agreement.
10.12 Audited Financial Statements. Sellers and Stockholders recognize
that Citadel and its parent, Citadel Communications Corporation, are public
reporting companies and agree that Citadel shall be entitled at its expense to
cause audited and unaudited financial statements of the Stations to be prepared
for such periods and filed with the Securities and Exchange Commission, and
included in a prospectus distributed to prospective investors, as required by
laws and regulations applicable to Citadel and Citadel Communications
Corporation as public reporting companies or registrants. Sellers and
Stockholders agree to cooperate with Citadel and the auditing accountants as
reasonably required by Citadel in connection with the preparation and filing of
such financial statements, including providing a customary management
representation letter in the form prescribed by GAAP.
10.13 COBRA Matters. To the extent (a) Citadel is required to provide
COBRA benefits to any employee (whether current, former or future) of Sellers or
the Stations who does not become an employee of Citadel and (b) the benefits or
reimbursement paid to, for or on behalf of each such employee under the COBRA
benefits exceeds the premiums paid by each such employee for the COBRA benefits,
Sellers and Stockholders shall reimburse Citadel in an amount equal to any such
excess upon written demand therefor.
10.14 Continued Employment of Station Employees.
(a) On the Closing Date, all active employees of Sellers at
the Stations who are either identified on Sellers' Disclosure Schedule or are
employed following the date hereof by Sellers in the ordinary course of business
for the Stations consistent with past practice shall be offered employment by
Citadel ("Transferred Employees"). The terms and conditions of Citadel's
employment of the Transferred Employees shall be at will employment with such
benefits as Citadel deems appropriate; provided, that Citadel shall comply with
the terms of any Assigned Contract relating to any Transferred Employee listed
on Sellers' Disclosure Schedule and assumed by Citadel.
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(b) Except for the amount of accrued but unused vacation
expense of Transferred Employees as of the Closing Date allocated against
Sellers and for any severance payments due to Transferred Employees whose
employment is terminated by Citadel after the Closing Date and for which Citadel
will assume responsibility as of the Closing Date, Sellers shall be solely
responsible for all wages, salaries and benefits (including all accrued vacation
and sick days) which will or may become payable to any Transferred Employee in
respect of any period of employment by Sellers prior to the Closing Date, and
Citadel shall be solely responsible for any wages, salaries and benefits
(including all accrued vacation and sick days) which will or may become payable
to any Transferred Employee in respect of any period on and after the Closing
Date.
(c) For purposes of determining the amount of any entitlement
of any Transferred Employee under Citadel's vacation policy, Citadel will take
into account and credit such Transferred Employee's length of service with
Sellers and their predecessors, as well as with Citadel. With respect to all
Transferred Employees, to the extent required by law, Citadel shall cause to be
waived all limitations on benefits relating to any pre-existing conditions and
recognize, for purposes of annual deductible and out-of-pocket limits under its
medical and dental plans, deductible and out-of-pocket expenses paid by such
Transferred Employees and their dependents under the medical and dental plans in
which they participate in the calendar year in which the Closing occurs.
(d) No provisions of this Agreement shall create any third
party beneficiary rights of any employee or former employee (including any
beneficiary or dependent thereof) of Sellers in respect of continued employment
(or resumed employment) with Sellers or with Citadel.
(e) Sellers will cooperate with Citadel in all reasonable
respects in connection with Citadel's employment of the Transferred Employees.
10.15 Non-Solicitation of Employees. Sellers shall not, and shall not
permit any of their Affiliates to, beginning on the Closing Date and continuing
for a period of two years thereafter, without the prior written approval of
Citadel, directly or indirectly, hire, solicit, encourage, entice or induce any
Transferred Employee to terminate his or her employment with Citadel. Sellers
agree that any remedy at law for any breach by them of this Section 10.15 would
be inadequate, and Citadel would be entitled to injunctive relief in such a
case. If it is ever held that the restrictions placed on Sellers and their
Affiliates by this Section 10.15 are too onerous and are not necessary for the
protection of Citadel, the parties hereto agree that any court of competent
jurisdiction may reduce the duration or scope hereof, or delete specific words
or phrases, and in its reduced form such provision will then be enforceable and
will be enforced.
10.16 WYSF-FM Transmitter Site. The main transmitter site for Station
WYSF-FM ("WYSF") is currently located on leased premises at Red Mountain,
Homewood, Alabama, pursuant to a lease which has expired and is currently
month-to-month (the "WYSF Transmitter Lease"). Prior to the Closing, Sellers
shall fully complete the relocation of the WYSF transmitter site and related
equipment from its current leased site to Sellers' owned transmitter
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site which is used for Station WZRR-FM and located at 108 Industrial Drive,
Birmingham, Alabama. Such relocation shall be at Sellers' sole cost and expense,
including without limitation any equipment, engineering, moving, testing, FCC
compliance and filing and proof of performance costs relating thereto. Such
relocation shall be completed in a good and workmanlike manner, in accordance
with all applicable laws, and such that WYSF's signal after the relocation is
comparable to or better than its signal prior to the relocation. The WYSF
Transmitter Lease shall not be an Assigned Contract at the Closing.
10.17 WGFX-FM Tower Site.
(a) The main tower site for Station WGFX-FM ("WGFX") is
currently located on leased premises at 3201 Dickerson Pike, Nashville,
Tennessee. Sellers are parties to a letter agreement dated December 16, 1999
with Richland Towers (the "Richland Towers Agreement") regarding the proposed
development of a broadcast tower located on the Real Property at Blevans Road,
Interstate 24, Lickton, Tennessee (the "Lickton Property"). Pursuant to the
Richland Towers Agreement, Sellers were considering allowing Richland Towers to
construct a multi-use tower on the Lickton Property. Sellers shall notify
Richland Towers that Sellers intend to build their own tower on the Lickton
Property. The Richland Towers Agreement shall not be an Assigned Contract at the
Closing. Sellers shall fully complete (i) construction of a broadcast tower
facility, including a tower of not less than 1,281 feet and a transmitter
building of not less than 1,000 square feet, on the Lickton Property for the
purpose of broadcasting WGFX's signal from such facility and (ii) relocation of
the WGFX tower site and related equipment from its current leased site to the
new facility at the Lickton Property. Such construction and relocation shall be
at Sellers' sole cost and expense, including without limitation any structures,
equipment, engineering, moving, testing, FCC compliance and filing and proof of
performance costs relating thereto. Such construction and relocation shall be
completed in a good and workmanlike manner, in accordance with all applicable
laws, and such that WGFX's signal after the construction and relocation is
comparable to or better than its signal prior to the construction and
relocation. To the extent that such construction and relocation cannot
reasonably be completed by Sellers prior to the Closing, Sellers shall continue
to bear, after the Closing, the costs and expenses contemplated by Section
10.17(a), unless at the Closing Citadel and Sellers can reasonably agree on the
aggregate amount of such post-Closing costs and expenses, in which event such
aggregate amount shall be deducted from the Purchase Price and forever retained
by Citadel in lieu of Sellers' obligation pursuant to this sentence.
(b) In Citadel's sole discretion, Citadel may elect, by
written notice delivered to Sellers not later than 30 days after the date
hereof, to upgrade the new facility to be constructed on the Lickton Property
(in terms of size, structure, strength, design, etc...) to accommodate tenants
other than WGFX on and at such facility. In such event, (i) Citadel and Sellers
shall work together to complete the plans for such construction to their
reasonable satisfaction, (ii) Citadel shall be entitled to participate in the
supervision of the construction and (iii) Citadel shall bear the incremental
costs associated with such upgrade.
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SECTION 11
THE CLOSING
11.1 Closing Date. The Closing shall occur on a date mutually selected
by Sellers and Citadel which is within 10 Business Days following the later of
(i) the date on which the FCC Approval as it applies to the last of the Stations
to receive such FCC Approval, has become a Final Order or (ii) the date on which
all applicable waiting periods under the HSR Act have expired or been
terminated. The Closing shall begin at 10:00 a.m., local time, on the date of
the Closing (the "Closing Date") at the offices of Egerton, McAfee, Armistead &
Davis, P.C. in Knoxville, Tennessee, or at such place and time as the parties
may mutually agree.
11.2 Closing Documents. At the Closing:
(a) Sellers and Stockholders shall deliver to Citadel the
following:
(i) instruments, in form and substance reasonably
satisfactory to Citadel and its counsel, pursuant to which the
Purchased Assets are conveyed to Citadel and the Assigned
Contracts are assigned to Citadel (including without
limitation bills of sale, assignments, general warranty deeds
and vehicle titles);
(ii) the original Letter of Credit and Additional
Letter of Credit (if applicable);
(iii) the opinion of Egerton, McAfee, Armistead &
Davis, P.C. as provided in Section 13.1;
(iv) the certificate of Sellers and Stockholders as
provided in Section 13.2;
(v) the certificates of existence of Sellers as
provided in Section 13.4;
(vi) the certificates of Sellers as provided in
Section 13.5;
(vii) the Mandatory Consents and other third party
consents obtained by Sellers; and
(viii) such other documents as may reasonably be
requested by Citadel or its counsel in connection with the
Closing of the transactions contemplated hereby.
(b) Citadel shall deliver to Sellers and Stockholders the
following:
(i) the Purchase Price shall be paid to DBC of
Tennessee, as agent for Sellers, in immediately available
wire-transferred federal funds, less the Escrow
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Amount (unless previously returned to Citadel), which shall be
paid to DBC of Tennessee, as agent for Sellers, pursuant to
the Escrow Agreement;
(ii) instruments, in form and substance reasonably
satisfactory to Sellers and their counsel, pursuant to which
Citadel assumes the Assumed Obligations;
(iii) the opinion of Eckert Seamans Cherin & Mellott,
LLC as provided in Section 12.1;
(iv) the officer's certificate of Citadel as provided
in Section 12.2;
(v) the good standing certificate and certificates of
existence of Citadel as provided in Section 12.4;
(vi) the secretary's certificate of Citadel as
provided in Section 12.5; and
(vii) such other documents as may reasonably be
requested by Sellers or their counsel in connection with the
Closing of the transactions contemplated by this Agreement.
SECTION 12
CONDITIONS TO SELLERS' AND STOCKHOLDERS' OBLIGATION TO CLOSE
The obligation of Sellers and Stockholders to consummate the
transactions contemplated by this Agreement at the Closing is subject to the
following conditions precedent, any or all of which may be waived by Sellers and
Stockholders in their sole discretion (other than those set forth in Sections
12.7 and 12.8):
12.1 Opinion of Citadel's Counsel. Sellers and Stockholders shall have
received an opinion of counsel for Citadel, dated the date of the Closing, in
form and substance reasonably satisfactory to Sellers and Stockholders, to the
effect that:
(a) Citadel is a corporation validly existing under the laws
of the State of Nevada.
(b) Citadel is duly qualified to do business as a foreign
corporation under the law of the States of Tennessee and Alabama.
(c) Citadel has the corporate power and authority to execute
and deliver this Agreement and each of the other documents and instruments
required to be executed or delivered by Citadel in connection with the
transactions contemplated hereby (collectively with this Agreement, the "Citadel
Transaction Documents") and to perform its obligations hereunder and thereunder.
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(d) Citadel has duly authorized, by all necessary corporate
action, the execution and delivery of the Citadel Transaction Documents and the
performance of its obligations thereunder.
(e) Each of the Citadel Transaction Documents has been duly
executed and delivered by Citadel, and constitutes a valid and binding
obligation of Citadel, enforceable against Citadel in accordance with the terms
thereof, except as such enforceability may be limited by bankruptcy, insolvency
or other laws affecting generally the enforceability of creditors' rights and by
limitations on the availability of equitable remedies.
(f) Neither the execution and delivery of the Citadel
Transaction Documents by Citadel, nor the consummation of the transactions
contemplated thereby by Citadel, (i) violates or will violate any provision of
the Articles of Incorporation or Bylaws of Citadel; (ii) violates or will
violate any law, rule or regulation or, to the Knowledge of such counsel, any
writ, judgment, injunction, decree, determination, award or other order of any
Governmental Authority; or (iii) to the Knowledge of such counsel, violates or
will violate, or conflicts with or will conflict with or will result in any
breach of any of the terms of, or constitutes or will constitute a default
under, or results or will result in the termination of or the creation or
imposition of any Lien pursuant to, the terms of any contract, commitment,
agreement, understanding or arrangement of any kind to which Citadel is a party
or by which Citadel or any of the assets of Citadel is bound and which is set
forth on Citadel's Disclosure Schedule.
Nothing contained in this Section 12.1 shall require an opinion by such counsel
with respect to FCC matters.
12.2 Representations, Warranties and Covenants. The representations and
warranties of Citadel contained herein shall be true and correct in all respects
(in the case of any representation or warranty containing any materiality
qualification) or in all material respects (in the case of any representation or
warranty without any materiality qualification) at and as of the date hereof and
shall be repeated and shall be true and correct in all respects (in the case of
any representation or warranty containing any materiality qualification) or in
all material respects (in the case of any representation or warranty without any
materiality qualification) on and as of the Closing Date with the same effect as
though made on and as of the Closing Date, and Citadel shall have complied with
all of its covenants and agreements contained herein which were to be complied
with at or prior to the Closing; and Citadel shall have delivered to Sellers and
Stockholders a certificate to that effect, dated the Closing Date, signed by an
officer of Citadel.
12.3 No Litigation. No injunction relating to any action, suit or
proceeding against any Seller or any Stockholder relating to the consummation of
any of the transactions contemplated by this Agreement or any action by any
Governmental Authority shall have been issued.
12.4 Other Certificates. Sellers and Stockholders shall have received
certificates as to the good standing or existence of Citadel in the States of
Nevada, Tennessee and Alabama, each as of a date not more than 20 days before
the Closing, and such other certificates, instruments and other documents, in
form and substance satisfactory to Sellers and Stockholders, as Sellers and
Stockholders shall have reasonably requested in connection with the transactions
contemplated hereby.
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12.5 Corporate Action. All corporate action necessary to authorize the
execution, delivery and performance by Citadel of this Agreement and the
transactions contemplated hereby shall have been duly and validly taken by
Citadel, and Citadel shall have delivered to Sellers and Stockholders certified
copies of the resolutions of Citadel's board of directors authorizing the
execution and performance of this Agreement and authorizing or ratifying the
acts of its officers and employees in carrying out the terms and provisions of
this Agreement.
12.6 Acts to be Performed. Each of the covenants, acts and undertakings
of Citadel to be performed on or before the Closing Date pursuant to the terms
hereof shall have been duly performed.
12.7 FCC Approval. The FCC Approval shall have been obtained and shall
have become a Final Order.
12.8 HSR Clearance. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
12.9 Deliveries. Citadel shall have made or stand willing to make all
of the deliveries required under Section 11.2(b).
SECTION 13
CONDITIONS TO CITADEL'S OBLIGATION TO CLOSE
The obligation of Citadel to consummate the transactions contemplated
by this Agreement at the Closing is subject to the following conditions
precedent, any or all of which may be waived by Citadel in its sole discretion
(other than those set forth in Sections 13.9 and 13.10):
13.1 Opinion of Sellers' and Stockholders' Counsel. Citadel shall have
received an opinion of counsel for Sellers and Stockholders, dated the date of
the Closing, in form and substance reasonably satisfactory to Citadel, to the
effect that:
(a) DBC of Tennessee is a corporation duly organized and
validly existing under the laws of the State of Tennessee.
(b) DBC of Alabama is a corporation duly organized and validly
existing under the laws of the State of Tennessee and is duly qualified as a
foreign corporation in and under the laws of the State of Alabama.
(c) Knoxville R/P Holder is a general partnership duly formed
and existing under the laws of the State of Tennessee.
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(d) Alabama R/P Holder is a limited liability company duly
organized and validly existing under the laws of the State of Tennessee. Alabama
R/P Holder is duly qualified to do business as a foreign limited liability
company in and under the laws of the State of Alabama.
(e) Each Seller has the corporate, partnership or limited
liability company (as applicable) power and authority to own its assets and
properties and to conduct the Business and has all necessary approvals, permits,
licenses and authorizations to own its properties and to conduct the Business in
the manner and in the locations presently owned and conducted.
(f) Each Seller has the corporate, partnership or limited
liability company (as applicable) power and authority to execute and deliver
this Agreement and each of the other documents and instruments required to be
executed or delivered by such Seller in connection with the transactions
contemplated hereby (collectively with this Agreement, the Sellers' Transaction
Documents") and to perform its obligations hereunder and thereunder.
(g) Each Seller has duly authorized, by all necessary
corporate, partnership or limited liability company (as applicable) action, the
execution and delivery of the Sellers' Transaction Documents and the performance
of its obligations thereunder.
(h) Each of the Sellers' Transaction Documents has been duly
executed and delivered by Sellers and Stockholders (to the extent a party
thereto), and constitutes a valid and binding obligation of Sellers and
Stockholders (to the extent a party thereto), enforceable against Sellers and
Stockholders (to the extent a party thereto) in accordance with the terms
thereof, except as such enforceability may be limited by bankruptcy, insolvency
or other laws affecting generally the enforceability of creditors' rights and by
limitations on the availability of equitable remedies.
(i) Neither the execution and delivery of the Sellers'
Transaction Documents by Sellers or Stockholders, nor the consummation of the
transactions contemplated thereby by Sellers or Stockholders, (i) violates or
will violate any provision of the organizational documents of any Seller; (ii)
violates or will violate any law, rule or regulation or, to the Knowledge of
such counsel, any writ, judgment, injunction, decree, determination, award or
other order of any Governmental Authority; or (iii) to the Knowledge of such
counsel, violates or will violate or conflicts with or will conflict with or
will result in any breach of any of the terms of, or constitutes or will
constitute a default under or results in or will result in the termination of or
the creation or imposition of any Lien pursuant to the terms of any contract,
commitment, agreement, understanding or arrangement of any kind to which any
Seller or any Stockholder is a party or by which any Seller, any Stockholder or
any of the assets of any Seller or any Stockholder is bound and which is set
forth on Sellers' Disclosure Schedule. Except for the FCC Approval, compliance
with the HSR Act and the consents disclosed on Sellers' Disclosure Schedule, no
consents, approvals or authorizations of, or filings with, any Governmental
Authority or any other Person are required on the part of Sellers and
Stockholders in connection with the execution and delivery of the Sellers'
Transaction Documents and the consummation of the transactions contemplated
thereby.
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(j) To the Knowledge of such counsel, except as disclosed on
Sellers' Disclosure Schedule, there are no claims, disputes, actions, suits or
proceedings pending or threatened against Sellers or the Stations.
(k) The Mergers were effected in accordance with all
applicable laws.
Nothing contained in this Section 13.1 shall require an opinion of such counsel
with respect to FCC matters.
13.2 Representations, Warranties and Covenants. The representations and
warranties of Sellers and Stockholders contained herein shall be true and
correct in all respects (in the case of any representation or warranty
containing any materiality qualification) or in all material respects (in the
case of any representation or warranty without any materiality qualification) at
and as of the date hereof and shall be repeated and shall be true and correct in
all respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) on and as of
the Closing Date with the same effect as though made on and as of the Closing
Date, and Sellers and Stockholders shall have complied with all of their
respective covenants and agreements contained herein which were to be complied
with at or prior to the Closing; and Sellers and Stockholders shall have
delivered to Citadel a certificate to that effect, dated the Closing Date,
signed by an officer of each Seller and by each Stockholder.
13.3 No Litigation. No injunction relating to any action, suit or
proceeding against any Seller, any Stockholder or Citadel relating to the
consummation of any of the transactions contemplated by this Agreement shall
have been issued.
13.4 Other Certificates. Citadel shall have received certificates as to
the existence of DBC of Tennessee as a corporation in the States of Tennessee
and Alabama, as to the existence of DBC of Alabama as a corporation in the
States of Tennessee and Alabama, and as to the existence of Alabama R/P Holder
as a limited liability company in the States of Tennessee and Alabama, each as
of a date not more than 20 days before the Closing, and such other certificates,
instruments and other documents customary for transactions of the nature
provided for in this Agreement, in form and substance reasonably satisfactory to
Citadel, as Citadel shall have reasonably requested in connection with the
transactions contemplated by this Agreement.
13.5 Authorizing Action. All action necessary to authorize the
execution, delivery and performance by each Seller of this Agreement and the
transactions contemplated hereby shall have been duly and validly taken by each
Seller, and Sellers shall have delivered to Citadel certified copies of the
resolutions of the stockholders, partners, members and board of directors (as
applicable) of each Seller authorizing the execution and performance of this
Agreement and authorizing or ratifying the acts of their officers and employees
in carrying out the terms and provisions of this Agreement.
13.6 Acts to be Performed. Each of the covenants, acts and undertakings
of Sellers and Stockholders to be performed on or before the Closing Date
pursuant to the terms hereof shall have been duly performed.
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13.7 Lien Searches. Sellers shall have delivered to Citadel lien
(including UCC and tax) and judgment (including litigation) searches from the
appropriate county and state agencies showing all Liens on the Purchased Assets,
which searches shall be conducted not more than 30 days prior to the Closing.
Such searches shall include the names of each Seller, the call letters of the
Stations, predecessors of any of the foregoing during the past five years and
any other names under which each Seller has done business during the past five
years. Sellers may cause such searches to be prepared by a third party, in which
case Sellers shall not be responsible for any inaccuracies in such lien searches
unless Sellers have actual Knowledge of their inaccuracy. Notwithstanding the
foregoing, Sellers and Stockholders shall remain responsible for satisfying any
Lien on the Purchased Assets even if such searches are inaccurate.
13.8 Mandatory Consents. All Mandatory Consents shall have been
obtained.
13.9 FCC Approval. The FCC Approval shall have been obtained and shall
have become a Final Order.
13.10 HSR Clearance. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
13.11 Deliveries. Sellers and Stockholders shall have made or stand
willing to make all of the deliveries required under Section 11.2(a).
13.12 Mergers. The Mergers shall have been effected in accordance with
Section 2.4.
SECTION 14
INDEMNIFICATION
14.1 Indemnification by Sellers and Stockholders. Subject to the
limitations and procedures set forth in this Section 14, Sellers and
Stockholders shall jointly and severally indemnify and hold harmless Citadel
from and against all losses, claims, demands, damages, liabilities, obligations,
costs and/or expenses, including, without limitation, reasonable fees and
disbursements of counsel (hereinafter referred to collectively as "Damages"),
which are sustained or incurred by Citadel, to the extent that such Damages are
sustained or incurred by reason of (a) the breach of any of the obligations or
covenants of Sellers or Stockholders in this Agreement; (b) the breach of any of
the representations or warranties made by Sellers or Stockholders in this
Agreement; or (c) the operation of the Stations prior to the Closing.
14.2 Indemnification by Citadel. Subject to the limitations and
procedures set forth in this Section 14, Citadel shall indemnify and hold
harmless Sellers and Stockholders from and against any and all Damages which are
sustained or incurred by Sellers and Stockholders, to the extent that such
Damages are sustained or incurred by reason of (a) the breach of any of the
obligations or covenants of Citadel in this Agreement; (b) the breach of any of
the representations or warranties made by Citadel in this Agreement; or (c) the
operation of the Stations by Citadel following the Closing (except to the extent
such Damages relate to matters covered by Section 14.1).
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14.3 Procedure for Indemnification. In the event that any party to this
Agreement shall incur any Damages in respect of which indemnity may be sought by
such party pursuant to this Section 14 or any other provision of this Agreement,
the party indemnified hereunder (the "Indemnitee") shall notify the party
providing indemnification (the "Indemnitor") promptly. In the case of third
party claims, such notice shall in any event be given within 10 days of the
filing or assertion of any claim against the Indemnitee stating the nature and
basis of such claim; provided, however, that any delay or failure to notify any
Indemnitor of any claim shall not relieve it from any liability except to the
extent that the Indemnitor demonstrates that the defense of such action has been
materially prejudiced by such delay or failure to notify. In the case of third
party claims, the Indemnitor shall, within 10 days of receipt of notice of such
claim, notify the Indemnitee of its intention to assume the defense of such
claim. If the Indemnitor assumes the defense of the claim, the Indemnitor shall
have the right and obligation (a) to conduct any proceedings or negotiations in
connection therewith and necessary or appropriate to defend the Indemnitee, (b)
to take all other required steps or proceedings to settle or defend any such
claims, and (c) to employ counsel to contest any such claim or liability in the
name of the Indemnitee or otherwise. If the Indemnitor shall not assume the
defense of any such claim or litigation resulting therefrom, the Indemnitee may
defend against any such claim or litigation in such manner as it may deem
appropriate and the Indemnitee may settle such claim or litigation on such terms
as it may deem appropriate, and assert against the Indemnitor any rights or
claims to which the Indemnitee is entitled. Payment of Damages shall be made
within 10 days of a final determination of a claim.
A final determination of a disputed claim shall be (a) a judgment of
any court determining the validity of disputed claim, if no appeal is pending
from such judgment or if the time to appeal therefrom has elapsed, (b) an award
of any arbitration determining the validity of such disputed claim, if there is
not pending any motion to set aside such award or if the time within to move to
set such award aside has elapsed, (c) a written termination of the dispute with
respect to such claim signed by all of the parties thereto or their attorneys,
(d) a written acknowledgment of the Indemnitor that it no longer disputes the
validity of such claim, or (e) such other evidence of final determination of a
disputed claim as shall be acceptable to the parties.
14.4 Survival.
(a) Sellers and Stockholders. Each of the representations and
warranties made by Sellers and Stockholders in this Agreement shall survive for
a period of 12 months after the Closing Date, notwithstanding any investigation
at any time made by or on behalf of Citadel, and upon the expiration of such
12-month period such representations and warranties shall expire except as
follows: (i) the representations and warranties contained in Sections 4.6 and
4.11 shall expire at the time the period of limitations expires for the
assessment by the taxing authority of additional Taxes with respect to which the
representations and warranties relate; (ii) the representations and warranties
contained in Section 4.16 shall expire on the fifth anniversary of the Closing
Date; (iii) the representations and warranties contained in Section 4.17 shall
expire at
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the time the latest period of limitations expires for the enforcement by an
applicable Governmental Authority of any remedy with respect to which the
particular representation or warranty relates; and (iv) the representations and
warranties contained in Sections 4.1, 4.2, 4.3, 4.8(a) and 4.8(f)(ii) shall not
expire but shall continue indefinitely. No claim for the recovery of Damages may
be asserted by Citadel against Sellers, Stockholders or their successors in
interest after such representations and warranties shall thus expire; provided,
however, that claims for Damages first asserted in writing by notice in
accordance with Section 16.3 within the applicable period shall not thereafter
be barred.
(b) Citadel. Each of the representations and warranties made
by Citadel in this Agreement shall survive for a period of 12 months after the
Closing Date, notwithstanding any investigation at any time made by or on behalf
of Sellers and Stockholders, and upon the expiration of such 12-month period
such representations and warranties shall expire, except that the
representations and warranties contained in Sections 5.1, 5.2 and 5.3 shall not
expire but shall continue indefinitely. No claim for the recovery of Damages may
be asserted by Sellers or Stockholders against Citadel or its successors in
interest after such representations and warranties shall thus expire; provided,
however, that claims for Damages first asserted in writing by notice in
accordance with Section 16.3 within the applicable period shall not thereafter
be barred.
14.5 Limitation of Sellers' and Stockholders' Liability.
Notwithstanding anything in this Agreement to the contrary, Sellers' and
Stockholders' obligation to indemnify Citadel shall be subject to the following:
(a) Threshold. Citadel shall not be entitled to recover
Damages pursuant to clause (b) of Section 14.1 (other than Damages arising by
reason of a breach of the representations and warranties made in Sections 4.1,
4.2, 4.3, 4.6, 4.8(a) and 4.8(f)(ii)) until the aggregate of all such Damages
suffered by Citadel exceeds $750,000 (the "Threshold"); provided, however, that
once such aggregate exceeds the Threshold, Citadel may recover all such Damages
suffered since the Closing Date without regard to the Threshold.
(b) Ceiling. The aggregate liability of Sellers and
Stockholders for Damages arising from the breach of any representation or
warranty by Sellers or Stockholders in this Agreement shall be limited to
$65,000,000, except that (i) the aggregate liability of Sellers and Stockholders
for Damages arising from the breach of the representations and warranties
contained in Sections 4.1 and 4.2 shall be limited to an amount equal to the
Purchase Price and (ii) the aggregate liability of Sellers and Stockholders for
Damages arising from the breach of the representations and warranties contained
in Sections 4.6, 4.8(a), 4.8(f)(ii), 4.11 and 4.16 shall be limited to an amount
equal to (x) the Purchase Price until the first anniversary of the Closing Date,
(y) 80% of the Purchase Price from the first anniversary of the Closing Date
until the second anniversary of the Closing Date and (z) 60% of the Purchase
Price thereafter.
(c) Exclusive Remedy. Except as provided in Section 15 and
except with respect to any claim for Damages relating to any intentional or
fraudulent breach of a representation, warranty or covenant of Sellers or
Stockholders, subsequent to the Closing, indemnification under this Section 14
shall be the exclusive remedy of Citadel with respect to any legal, equitable or
other claim for relief based upon this Agreement or arising hereunder.
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(d) Exceptions. The limitations set forth in this Section 14.5
shall not apply with respect to any claim for Damages relating to any
intentional or fraudulent breach of a representation, warranty or covenant of
Sellers and Stockholders, nor shall there be any survival limitation for any
such claim except as provided by applicable law.
14.6 Limitation of Citadel's Liability. Notwithstanding anything in
this Agreement to the contrary, Citadel's obligation to indemnify Sellers and
Stockholders shall be subject to the following:
(a) Threshold. Sellers and Stockholders shall not be entitled
to recover Damages pursuant to clause (b) of Section 14.2 (other than Damages
arising by reason of a breach of the representations and warranties made in
Sections 5.1, 5.2 and 5.3) until the aggregate of all such Damages suffered by
Sellers and Stockholders exceeds the Threshold; provided, however, that once
such aggregate exceeds the Threshold, Sellers and Stockholders may recover all
such Damages suffered since the Closing Date without regard to the Threshold.
(b) Ceiling. The aggregate liability of Citadel for Damages
arising from the breach of any representation or warranty by Citadel in this
Agreement shall be limited to $65,000,000, except that the aggregate liability
of Citadel for Damages arising from the breach of the representations and
warranties contained in Sections 5.1 and 5.2 shall be limited to an amount equal
to the Purchase Price.
(c) Exclusive Remedy. Except as provided in Section 15 and
except with respect to any claim for Damages relating to any intentional or
fraudulent breach of a representation, warranty or covenant of Citadel,
subsequent to the Closing, indemnification under this Section 14 shall be the
exclusive remedy of Sellers and Stockholders with respect to any legal,
equitable or other claim for relief based upon this Agreement or arising
hereunder.
(d) Exceptions. The limitations set forth in this Section 14.6
shall not apply with respect to any claim for Damages relating to any
intentional or fraudulent breach of a representation, warranty or covenant of
Citadel, nor shall there be any survival limitation for any such claim except as
provided by applicable law.
14.7 Waiver of Non-Compensatory Damages. No Indemnitee shall be
entitled to recover from an Indemnitor for any Damages as to which
indemnification is provided under this Agreement any amount in excess of the
actual compensatory damages, court costs and reasonable attorneys' fees suffered
by such party; and Citadel, Sellers and Stockholders waive any right to recover
punitive, special, exemplary and consequential damages arising in connection
with or with respect to Damages under the indemnification provisions hereof.
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SECTION 15
TERMINATION OF AGREEMENT; ADDITIONAL REMEDIES
15.1 Manner. This Agreement and the transactions contemplated hereby
may be terminated prior to completion of the Closing:
(a) by mutual written consent of Citadel, Sellers and
Stockholders;
(b) by either Citadel, on the one hand, or Sellers and
Stockholders, on the other, upon providing written notice to the other party at
any time after the date which is 12 months after the date of this Agreement if
the FCC Approval has not been granted by the FCC, but only if the party
providing such notice is not then in material breach of this Agreement;
(c) by Citadel, upon providing written notice to Sellers and
Stockholders, if as of the time set for Closing any of the conditions in Section
13 (except Sections 13.9 and 13.10) has not been satisfied or waived by Citadel
in writing, provided Citadel is not then in material breach of this Agreement;
(d) by Sellers and Stockholders, upon providing written notice
to Citadel, if as of the time set for Closing any of the conditions in Section
12 (except Sections 12.7 and 12.8) has not been satisfied or waived by Sellers
and Stockholders in writing, provided Sellers and Stockholders are not then in
material breach of this Agreement;
(e) by Sellers and Stockholders, upon providing written notice
to Citadel, if Citadel fails to consummate the transactions contemplated
hereunder after all conditions in Section 13 have been satisfied, provided
Sellers and Stockholders are not then in material breach of this Agreement;
(f) by Citadel, upon providing written notice to Sellers and
Stockholders, if Sellers and Stockholders fail to consummate the transactions
contemplated hereunder after all conditions in Section 12 have been satisfied,
provided Citadel is not then in material breach of this Agreement;
(g) subject to Section 10.1, by either party upon denial by
the FCC of the FCC Applications; and
(h) by either party if any court of competent jurisdiction in
the United States or any other United States governmental body shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other actions shall have become final and
non-appealable (provided that such party is not then in material breach of this
Agreement).
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15.2 Additional Remedies.
(a) In the event of the termination of this Agreement by
Sellers and Stockholders pursuant to Section 15.1(d) or 15.1(e) (any such event
being a "Draw Condition"), Sellers and Stockholders shall be entitled to draw
upon and receive the proceeds of the Letter of Credit and the Additional Letter
of Credit (if applicable) and to receive the Escrow Amount (if applicable);
provided, however, that such aggregate amount received shall not constitute
liquidated damages and, in addition to the proceeds of the Letter of Credit, the
Additional Letter of Credit and the Escrow Amount (as applicable), Sellers and
Stockholders shall be entitled to recover the amount (if any) by which their
actual Damages resulting from such Draw Condition exceed $30,000,000. In the
event of termination of this Agreement pursuant to any other provision of
Section 15.1 not constituting a Draw Condition, Sellers shall return the
original Letter of Credit and, if applicable, the Additional Letter of Credit to
Citadel, and Citadel shall be entitled to receive the Escrow Amount (if
applicable). Citadel and Sellers shall execute and deliver any notice which is
required to be delivered to the Escrow Agent under the Escrow Agreement as a
result of (i) any termination of this Agreement and (ii) the occurrence of the
Closing.
(b) The parties recognize and agree that Citadel has relied on
this Agreement and expended considerable effort and resources related to the
transactions contemplated hereunder, that the rights and benefits conferred upon
Citadel herein are unique, and that damages may not be adequate to compensate
Citadel in the event any Seller or any Stockholder improperly refuses to
consummate the transactions contemplated hereunder. The parties therefore agree
that Citadel shall be entitled, at its option and in lieu of terminating this
Agreement pursuant to Section 15.1, to have this Agreement specifically enforced
by a court of competent jurisdiction; provided, however, that Citadel may not
specifically enforce this Agreement if it has previously terminated this
Agreement and received the original Letter of Credit, the Additional Letter of
Credit and the Escrow Amount (as applicable).
SECTION 16
GENERAL
16.1 Survival of Representations and Warranties. Each representation
and warranty herein contained shall survive the Closing as provided in Section
14.4, notwithstanding any investigation at any time made by or on behalf of any
party to this Agreement.
16.2 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws, and not the laws of conflicts, of the
State of Tennessee.
16.3 Notices. Any notices or other communications required or permitted
under this Agreement shall be delivered personally or sent by registered or
certified mail, postage prepaid, delivered by overnight delivery or sent by
facsimile, addressed as follows:
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To Citadel: Citadel Broadcasting Company
City Center West
7201 West Lake Mead Blvd.
Suite 400
Las Vegas, NV 89128
Attn: Donna L. Heffner
Fax: (702) 804-5936
With a copy to: Eckert Seamans Cherin & Mellott, LLC
600 Grant Street
44th Floor
Pittsburgh, Pennsylvania 15219
Attn: Gregory A. Weingart, Esq.
Fax: (412) 566-6099
To Sellers or Dick Broadcasting Company, Inc. of Tennessee
Stockholders: 192 Lewis Street
Greensboro, NC 27406
Attn: J. Allen Dick, Jr.
Fax: (336) 273-2728
With a copy to: Egerton, McAfee, Armistead & Davis, P.C.
507 S. Gay Street
Suite 500
Knoxville, TN 37902
Attn: William W. Davis, Esq.
Fax: (865) 525-5293
And to: Thompson Hine & Flory LLP
1920 N Street, NW
Suite 800
1920 N Street, NW
Washington, D.C. 20036
Attn: Barry A. Friedman, Esq.
Fax: (202) 331-8330
or such other addresses as shall be similarly furnished in writing by either
party. Such notices or communications shall be deemed to have been given as of
the date of personal delivery, or if mailed, the date the return receipt is
signed or the date on which delivery is refused, or if delivered by overnight
delivery or facsimile, on the date of receipt.
16.4 Entire Agreement. This instrument supersedes all prior
communications, understandings and agreements of or among the parties with
respect to the subject matter of this Agreement and contains the entire
agreement among the parties with respect to the transactions contemplated in
this Agreement.
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16.5 Headings. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement.
16.6 Schedules; Exhibits. All schedules and exhibits annexed to this
Agreement are hereby incorporated in this Agreement by this reference.
16.7 Expenses. Each party shall bear its own costs and expenses
incurred by it in connection with the transactions pursuant to this Agreement.
16.8 Amendment. This Agreement may be amended, modified or superseded,
and any of the terms, covenants, representations, warranties or conditions
hereof may be waived, only by a written instrument executed on behalf of all of
the parties or, in the case of a waiver, by the party waiving compliance.
16.9 Waiver. The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right to enforce that provision or any other provision of this Agreement at any
time thereafter.
16.10 Assignment. Neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by Sellers or Stockholders
without the prior written consent, in its sole discretion, of Citadel, or by
Citadel without the prior written consent, in their sole discretion, of Sellers
and Stockholders. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, and no other Person shall have any right, benefit or
obligation under this Agreement.
16.11 Prior Control. Until the Closing, Sellers shall maintain control
of the Stations (other than WOKI).
16.12 Attorneys' Fees. In the event of any action arising out of this
Agreement, the prevailing party shall be entitled to recover its costs, expenses
and reasonable attorney's fees incurred in connection with the dispute from the
other party.
16.13 Time of the Essence; Computation of Time. Time is of the essence
with respect to all dates and time periods contained in the covenants in this
Agreement. If after making computations of time provided for in this Agreement,
a time for action or notice falls on Saturday, Sunday or a Federal holiday, then
such time shall be extended to the next Business Day.
16.14 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer on any Person other than the parties and their
respective successors and permitted assigns any rights or remedies under or by
virtue of this Agreement.
16.15 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such
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provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Agreement.
16.16 No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties,
and no presumption or burden of proof will arise favoring or disfavoring any
Person by virtue of the authorship of any of the provisions of this Agreement.
16.17 LIMITATION OF WARRANTIES. THE EXPRESS REPRESENTATIONS OF SELLERS
CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE. EXCEPT AS SET FORTH IN THIS
AGREEMENT, SELLERS DO NOT MAKE OR PROVIDE, AND CITADEL HEREBY WAIVES, ANY
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE ASSETS AND THE
BUSINESS OF THE STATIONS AND AS TO THE QUALITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, CONFORMITY TO SAMPLES, OR CONDITION OF ANY OF THE ASSETS
COMPRISING THE BUSINESS OF THE STATIONS OR ANY PART THEREOF. SELLERS DISCLAIM
AND NEGATE, AND CITADEL HEREBY WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE
FACE OF THIS AGREEMENT.
16.18 Counterparts; Fax Signatures. This Agreement may be executed in
one or more counterparts, each of which together shall constitute a single
instrument. Signatures on this Agreement transmitted by facsimile shall be
deemed to be original signatures for all purposes of this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
May 9, 2000, effective as of April 30, 2000.
DICK BROADCASTING COMPANY, INC.
OF TENNESSEE
By: /s/ David Henderlight
---------------------------------
Its: Vice President
--------------------------------
DICK BROADCASTING COMPANY, INC.
OF ALABAMA
By: /s/ David Henderlight
---------------------------------
Its: Vice President
--------------------------------
DICK BROADCASTING COMPANY, INC.
OF NASHVILLE
By: /s/ David Henderlight
---------------------------------
Its: Vice President
--------------------------------
DICK RADIO ALABAMA, INC.
By: /s/ David Henderlight
---------------------------------
Its: Vice President
--------------------------------
DFT REALTY
By: THE ERIK DICK, IRREVOCABLE TRUST
DATED DECEMBER 30, 1989
By: /s/ James Allen Dick Jr.
----------------------------------
James Allen Dick, Jr., Trustee
[Signatures continued on the following page]
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<PAGE> 58
[Signatures continued from the previous page]
And THE HARRY McALISTER IRREVOCABLE
By: TRUST DATED DECEMBER 30, 1989
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And THE FRANK HUNDLEY IRREVOCABLE
By: TRUST DATED DECEMBER 30, 1989
By: /s/ Franklin Young Hundley, Trustee
--------------------------------------
Franklin Young Hundley, Trustee
And
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And THE JAMES HUNDLEY IRREVOCABLE
By: TRUST DATED DECEMBER 30, 1989
By: /s/ Franklin Young Hundley, Trustee
--------------------------------------
Franklin Young Hundley, Trustee
And
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And THE ALEX DICK IRREVOCABLE
By: TRUST DATED DECEMBER 10, 1990
By: /s/ James Allen Dick, Jr.
--------------------------------------
James Allen Dick, Jr., Trustee
[Signatures continued on the following page]
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<PAGE> 59
[Signatures continued from the previous page]
And THE DANIEL McALISTER IRREVOCABLE
By: TRUST DATED DECEMBER 10, 1990
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And THE KARL DICK IRREVOCABLE
By: TRUST DATED DECEMBER 31, 1992
By: /s/ James Allen Dick, Jr.
--------------------------------------
James Allen Dick, Jr., Trustee
And THE PETER GEORGES IRREVOCABLE TRUST
By: DATED NOVEMBER 14, 1992
By: /s/ Charles Arthur Dick, Trustee
--------------------------------------
Charles Arthur Dick, Trustee
And THE MATTHEW McALISTER IRREVOCABLE
By: TRUST DATED DECEMBER 20, 1993
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And THE CHARLES DICK IRREVOCABLE TRUST
By: DATED DECEMBER 22, 1993
By: /s/ Charles Arthur Dick, Trustee
--------------------------------------
Charles Arthur Dick, Trustee
[Signatures continued on the following page]
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[Signatures continued from the previous page]
And THE GINA AND MARILYN DICK
By: IRREVOCABLE TRUST DATED
DECEMBER 1, 1995
By: /s/ Charles Arthur Dick, Trustee
--------------------------------------
Charles Arthur Dick, Trustee
DFT REALTY II, LLC
By: THE JEANNETTE DICK HUNDLEY
IRREVOCABLE TRUST DATED
NOVEMBER 14, 1992
By: /s/ Franklin Young Hundley, Trustee
--------------------------------------
Franklin Young Hundley, Trustee
And
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And THE JAMES ALLEN DICK IRREVOCABLE
By: TRUST DATED MARCH 24, 1995
By: /s/ Emily Dick McAlister, Trustee
--------------------------------------
Emily Dick McAlister, Trustee
And
By: /s/ James Allen Dick, Jr., Trustee
--------------------------------------
James Allen Dick, Jr., Trustee
[Signatures continued on the following page]
59
<PAGE> 61
[Signatures continued from the previous page]
And
By: /s/ Charles Arthur Dick, Trustee
--------------------------------------
Charles Arthur Dick, Trustee
STOCKHOLDERS:
/s/ James Allen Dick, Sr.
----------------------------------
James Allen Dick, Sr.
/s/ James Allen Dick, Jr.
----------------------------------
James Allen Dick, Jr.
/s/ Charles Arthur Dick
----------------------------------
Charles Arthur Dick
/s/ Emily Dick McAlister
----------------------------------
Emily Dick McAlister
/s/ Jeanette Dick Hundley
----------------------------------
Jeannette Dick Hundley
CITADEL BROADCASTING COMPANY
By: /s/ Larry Wilson
-------------------------------
Its: Chairman and CEO
------------------------------
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INDEX OF SCHEDULES AND EXHIBITS
Schedule 2.1 - Asset Schedule
Schedule 2.2(f) - Excluded Personal Property
Schedule 2.3 - Assumed Obligations
Schedule 4.0 - Sellers' Disclosure Schedule
Schedule 5.0 - Citadel's Disclosure Schedule
Exhibit A - Escrow Agreement
Exhibit B - Letter of Credit
[Pursuant to Regulation S-K, Item 601(b)(2), Registrant agrees to furnish
supplementally a copy of these schedules and exhibits to the Securities and
Exchange Commission upon request.]
