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Exhibit 2.7
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), made as of the 23rd day of
January, 2000, by and among (i) BLOOMINGTON BROADCASTING HOLDINGS, INC., a
Delaware corporation ("BBH"); (ii) the Persons listed on Schedule 1 hereto
(collectively, the "Stockholders"); and (iii) CITADEL BROADCASTING COMPANY, a
Nevada corporation ("Citadel").
RECITALS:
A. The Company (as herein defined) is the licensee of and owns and
operates 19 radio stations serving the Grand Rapids, Michigan market (four
stations), the Columbia, South Carolina market (four stations), the Johnson
City-Kingsport-Bristol, Tennessee market (four stations), the Chattanooga,
Tennessee market (four stations), and the Bloomington, Illinois market (three
stations), as more particularly identified on Schedule 2 hereto (collectively,
the "Stations"), and has agreed to acquire one additional station in the Johnson
City-Kingsport-Bristol, Tennessee market.
B. The Stockholders own all of the issued and outstanding shares of
capital stock of BBH.
C. Citadel desires to purchase from the Stockholders, and the
Stockholders desire to sell to Citadel, all of the Stockholders' shares of
capital stock of BBH, on the terms and 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:
SECTION 1
DEFINITIONS
The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Accounts Receivable" means the accounts receivable of the Company,
exclusive of Trade Receivables, existing as of the Closing.
"Act" means the Communications Act of 1934, as amended.
"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
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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.
"Assets" means all of the property of every kind or nature of the
Company, including without limitation the Real Property, the Real Property
Leases, the Intellectual Property, the Personal Property, the Trade Receivables,
the Accounts Receivable and the Cash, and all books, records and accounts of the
Company.
"BBC" means Bloomington Broadcasting Corporation, a Delaware
corporation.
"BBH Common Stock" means common stock, par value $0.01 per share, of
BBH.
"BBH Preferred Stock" means the Series A Convertible Participating
Preferred Stock, par value $0.01 per share, of BBH.
"Broker" means First Union Securities, Inc.
"Business" means the business in which the Company is engaged as of the
date hereof.
"Cash" means the cash and cash equivalents of the Company existing as
of the Closing.
"Chattanooga Sub" means Radio Chattanooga, Inc., a Tennessee
corporation.
"Citadel's Disclosure Schedule" means Schedule 3 to this Agreement.
"Closing" means the consummation of the transactions contemplated by
this Agreement in accordance with the provisions of Section 11.
"Closing Certificate" means the certificate of the Company dated the
Closing Date and delivered to Citadel, which sets forth a true and correct
calculation, including supporting documentation, of (i) the Net Working Capital,
(ii) the Indebtedness for Borrowed Money of the Company as of the Closing and
(iii) the WODJ Amount.
"Closing Date" has the meaning specified in Section 11.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Columbia Sub" means Radio South Carolina, Inc., a South Carolina
corporation.
"Company" means, collectively, BBH, BBC and the Operating Subsidiaries,
taken as a whole.
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"Company's Disclosure Schedule" means Schedule 4 to this Agreement.
"Company's Disclosure Supplement" has the meaning specified in
Section 15.3.
"Confidential Information" has the meaning specified in Section 10.7.
"Contracts" means all (a) contracts, agreements, licenses, leases,
arrangements and other documents to which the Company is a party or by which the
Company or the assets of the Company 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) creating an
obligation of $15,000 or more on an individual basis; (b) uncompleted orders for
the purchase by the Company of materials, supplies, equipment and services
existing as of the date hereof and with respect to which the remaining
obligation of the Company is $15,000 or more on an individual basis; and (c)
contingent contractual obligations and liabilities of the Company known to the
Company existing as of the date hereof and constituting an obligation of $15,000
or more on an individual basis; provided, however, that for purposes of the
first and last sentences of Section 3.16, all references in this definition to
$15,000 shall be changed to $50,000.
"Credit Agreement" means that certain Credit Agreement dated as of June
30, 1998 by and among BBC, First Union National Bank, as Administrative Agent,
Fleet National Bank, as Documentation Agent, and the lenders party thereto, as
modified, amended or supplemented from time to time.
"Damages" has the meaning specified in Section 14.1.
"Draw Condition" has the meaning specified in Section 15.2(a).
"Environmental Claims" means and includes, without limitation: (a)
claims, demands, suits, and causes of action for personal injury or lost use of
property, to the extent any of the foregoing arise out of Environmental
Conditions; (b) claims for 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 pursuant to Environmental Laws; (f) fines, penalties or
Liens against property under any Environmental Laws; and (g) claims for
injunctive relief or other orders or notices of violation from Governmental
Authorities with respect to Environmental Conditions.
"Environmental Conditions" means conditions of the environment,
including natural resources (including flora and fauna), soil, surface water,
ground water, any present 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 the Company
or by a Person for whom the Company shall be liable pursuant to applicable laws.
With respect to claims by current or former employees of the
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Company, Environmental Conditions also includes the exposure of Persons to
Hazardous Materials within work places on any real estate owned or occupied by
the Company.
"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 a Person of any
Hazardous Materials into the environment, any storm drain, sewer, septic system
or publicly owned treatment works, in violation of any effluent emission
limitations, standards or other criteria established by any Environmental Law;
(b) any facility or operations which do not conform to the requirements of
applicable Environmental Laws; and (c) any condition noted in any environmental
site assessments, studies, tests or reports performed for the Real Property or
Leaseholds which is concluded therein to create or cause to exist a recognized
environmental condition or to pose an environmental risk.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Equity Percentage Letter" 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 license for each Station,
together with each of the other consents, rights, licenses, permits and other
authorizations issued by the FCC and held by the Company in connection with, or
pertaining to, the conduct of the 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 the Company
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 requests have
been filed and are pending for administrative or judicial review, rehearing,
reconsideration, appeal or stay, and the time period for filing any such
requests 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.
"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.
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"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.
"Grand Rapids Sub" means Michigan Media, Inc., a Michigan corporation.
"Hazardous Materials" means hazardous wastes, hazardous substances,
hazardous constituent or toxic substances, 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 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 rules, regulations or ordinances adopted pursuant to the
preceding laws or other similar laws, regulations, rules or ordinances now in
effect (collectively, the "Environmental Laws").
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended from time to time.
"HSR Filing" has the meaning specified in Section 10.6.
"Indebtedness for Borrowed Money" means, without duplication, (a) all
indebtedness of a Person 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 a Person evidenced by a promissory
note, bond or similar written obligation to pay money, (c) all indebtedness
guaranteed by a Person or for which a Person is 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 a Person under any lease
or similar arrangement, which obligations would be classified and accounted for
as capital obligations on a balance sheet of such Person under GAAP.
"Indemnitee" has the meaning specified in Section 14.3.
"Indemnitor" has the meaning specified in Section 14.3.
"Intellectual Property" means the call letters of each Station and all
of the copyrights, service marks, trademarks, trade names, patents and other
similar rights, including applications and registrations therefor, in which the
Company has any right, title or interest.
"Interim Balance Sheet" has the meaning specified in Section 3.10.
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"Knowledge of the Company", or words of similar meaning, means the
actual knowledge of Kenneth H. Maness, Richard D. Johnson and the Stations'
general managers.
"Leaseholds" has the meaning specified in Section 3.15(e).
"Letter of Credit" has the meaning specified in Section 2.3.
"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.
"Mandatory Consents" has the meaning specified in Section 6.12.
"Markets" means, collectively, the Grand Rapids, Michigan market, the
Columbia, South Carolina market, the Johnson City-Kingsport-Bristol, Tennessee
market, the Chattanooga, Tennessee market and the Bloomington, Illinois market.
"Material Adverse Effect" means any material adverse effect on the
business, assets, properties, liabilities, results of operations or financial
condition of the Company.
"Net Working Capital" means the current assets of the Company
(including without limitation Accounts Receivable, prepaid expenses and other
current assets, but excluding Cash and Trade Receivables) as of the Closing Date
minus the current liabilities of the Company (including without limitation
accounts payable and accrued liabilities, but excluding Trade Liabilities and
the current portion of, and accrued interest on, Indebtedness for Borrowed
Money) as of the Closing Date, determined in accordance with GAAP.
"Net Working Capital Shortfall" means the amount, if any, by which
$3,000,000 exceeds Net Working Capital.
"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 a Person assures 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 a Person, (e) obligations under capitalized leases in respect of
which obligations a Person is 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 a Person, (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
a Person of any nature, whether or not currently payable, and (l) other
liabilities or obligations of a Person, 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.
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"Operating Subsidiaries" means, collectively, the Chattanooga Sub, the
Columbia Sub, the Grand Rapids Sub, the Tri-Cities Sub and the Twin Cities Sub.
"Pending Acquisition" has the meaning specified in Section 10.10.
"Permits" means all FCC Licenses applicable to the Stations, and all
other permits, licenses, approvals, franchises, notices and authorizations
applicable to the Stations issued by any Governmental Authorities.
"Permitted Encumbrances" means (a) Liens in favor of the Senior Lenders
which secure the Senior Debt; (b) Liens for Taxes, assessments or governmental
charges, or landlords' mechanics', workmen's, materialmen's or similar Liens, in
each case that are not delinquent or which are being contested in good faith;
and (c) with respect to the Real Property, those certain title exceptions which
do not or could not, individually or in the aggregate, interfere with the
current use of the Real Property in any material respect.
"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" means all of the tangible personal property,
improvements and fixtures of every kind of the Company.
"Pre-Closing Damages" has the meaning specified in Section 15.3.
"Purchase Price" has the meaning specified in Section 2.2.
"Real Property" means all of the right, title and interest of the
Company in and to real property owned by the Company.
"Real Property Leases" means all of the leasehold interests of the
Company pursuant to real property leases.
"Recipient" has the meaning specified in Section 10.7.
"Senior Debt" means the Company's Indebtedness for Borrowed Money under
the Credit Agreement.
"Senior Lenders" means the lenders under the Credit Agreement.
"Shares" has the meaning specified in Section 2.1.
"Stations" has the meaning set forth in the recitals to this Agreement.
"Stockholder Documents" means, collectively, (a) that certain
Shareholders Agreement dated June 30, 1998 among BBH and the Stockholders, (b)
that certain Bloomington
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Broadcasting Holdings, Inc. 1998 Stock Option and Grant Plan and (c) those six
certain Restricted Stock Purchase Agreements dated June 30, 1998 between BBH and
each of Kenneth H. Maness, Richard D. Johnson, William L. McElveen, Dan Brown,
Donald Raines and Barclay A. Brandmiller.
"Stockholder Rep" means Media/Communications Partners III Limited
Partnership, as representative of the Stockholders.
"Subordinated Debt" means the Company's Indebtedness for Borrowed Money
to the Stockholders.
"Supplemental Financial Statements" has the meaning specified in
Section 6.9.
"Taxes" means all taxes, charges, fees, levies, or other assessments,
including income, gross receipts, excise, property, sales, transfer, license,
payroll and franchise taxes, and any taxes required by law to be withheld, which
taxes are imposed by any Governmental Authority; and such term shall include any
interest, penalties, or additions to tax attributable to such assessments.
"Threshold" has the meaning specified in Section 14.5(a).
"Trade Agreements" means and includes those agreements entered into by
the Company for the sale of advertising time on the Stations for consideration
other than cash, which agreements are in effect as of the Closing.
"Trade Liabilities" means the fair market value of the Company's
liability as of the Closing for unperformed time under the Trade Agreements.
"Trade Receivables" means the fair market value of goods and services
to be received by the Company after the Closing under the Trade Agreements.
"Tri-Cities Sub" means Tri-Cities Radio Corp., a Tennessee corporation.
"Twin Cities Sub" means Twin Cities Broadcasting Corp., an Illinois
corporation.
"WGOC" has the meaning specified in Section 10.10.
"WGOC Agreement" has the meaning specified in Section 10.10.
"WGOC Owner" has the meaning specified in Section 10.10.
"WGOC TBA" has the meaning specified in Section 10.10.
"WODJ Amount" means, to the extent not paid prior to the Closing by the
Company, all liabilities and obligations of the Company pursuant to that certain
Option Agreement between
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BBC and Clear Channel Communications, Inc. relating to the Company's acquisition
of substantially all of the assets of WODJ-FM licensed to Greenville, Michigan.
SECTION 2
PURCHASE AND SALE OF SHARES; PURCHASE PRICE
2.1 Purchase and Sale of Shares. 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, each Stockholder agrees to sell, assign and convey to Citadel, and
Citadel agrees to purchase, acquire and accept from each Stockholder, the number
of shares of BBH Common Stock and BBH Preferred Stock owned by such Stockholder
as set forth on Schedule 1 hereto (collectively, the "Shares").
2.2 Purchase Price. The aggregate purchase price to be paid to the
Stockholders for the purchase of the Shares shall be $175,000,000, plus, if the
Pending Acquisition is consummated prior to the Closing Date, the lesser of (x)
$850,000 or (y) the purchase price actually paid by the Company to consummate
the Pending Acquisition, minus (i) the aggregate amount of Indebtedness for
Borrowed Money of the Company as of the Closing Date (including without
limitation Senior Debt, Subordinated Debt and any prepayment penalty or premium
payable with respect thereto), (ii) the Net Working Capital Shortfall and (iii)
the WODJ Amount (such net amount, the "Purchase Price"). The Purchase Price
shall be paid at the Closing as follows: (a) $2,000,000 of the Purchase Price
shall be delivered to the Stockholder Rep (for the purpose of the payment of
professional fees and other costs and expenses incurred by the Stockholders in
connection with the transactions contemplated hereby), on behalf of the
Stockholders, in cash or by wire transfer of immediately available funds to an
account designated by the Stockholder Rep in writing to Citadel at least three
days prior to the Closing Date, and (b) the remainder of the Purchase Price
shall be paid to the Stockholders, in accordance with their percentage ownership
of BBH as of the Closing Date as set forth in the Equity Percentage Letter, in
cash or by wire transfer of immediately available funds to the respective
accounts designated by the Stockholders in writing to Citadel at least three
days prior to the Closing Date. Not later than the date which is three days
prior to the Closing Date, the Stockholder Rep shall deliver to Citadel a letter
(the "Equity Purchase Letter") setting forth each Stockholder's ownership
percentage of BBH. In the event that the Stockholder Rep fails to deliver such
letter, Citadel shall pay the Purchase Price to an account designated by the
Stockholder Rep, and the Stockholder Rep shall be solely responsible for the
delivery of the Purchase Price to the Stockholders. The Stockholders hereby (x)
irrevocably appoint the Stockholder Rep as their representative for purposes of
receiving the payment described in clause (a) of third preceding sentence and
(y) acknowledge and agree that, upon payment of the Purchase Price as described
herein, Citadel shall have no further obligation to the Stockholders in respect
of the payment of the Purchase Price.
2.3 Letter of Credit. Simultaneously with the execution of this
Agreement, Citadel shall deliver to BBH an irrevocable letter of credit in favor
of BBH, issued by Credit Suisse First Boston, in the amount of $15,000,000 which
shall be in the form attached as Exhibit A hereto (the "Letter of Credit"). The
Letter of Credit shall provide that the issuing bank shall make
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payment on the Letter of Credit upon such bank's receipt of a joint certificate
from the Chief Executive Officer of Citadel and from the President of BBH
certifying that a Draw Condition has occurred. At the Closing, BBH shall return
the original Letter of Credit to Citadel for cancellation.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF BBH
In connection with the purchase and sale of the Shares and in order to
induce Citadel to enter into and consummate the transactions contemplated by
this Agreement, BBH makes the representations and warranties set forth in this
Section 3 to Citadel, as of the date of this Agreement and as of the Closing
Date (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). For purposes of this Agreement, to
the extent that any disclosure made by the Company would be required to be made
in more than one section of Company's Disclosure Schedule, such disclosure may
be made by a cross-reference to information set forth in any other sections of
Company's Disclosure Schedule.
3.1 BBH.
(a) Organization and Qualification; Authority. BBH is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full power and authority to own its assets and
properties and to conduct the Business. BBH is qualified to do business as a
foreign corporation in, and is in good standing under the laws of, the State of
Illinois and the Commonwealth of Massachusetts, and is not required to be
qualified to do business as a foreign corporation in any other state. BBH has
full power, authority and legal right and all necessary approvals, permits,
licenses and authorizations to own its properties and to conduct the Business as
currently conducted.
(b) Capitalization. The authorized capital stock of BBH
consists solely of (i) 300,000 shares of BBH Common Stock, of which 11,477.40
shares are issued and outstanding and all of which are owned, beneficially and
of record, by the Stockholders as set forth on Schedule 1 hereto, (ii) 300,000
shares of BBH Preferred Stock, of which 109,890 shares are issued and
outstanding and all of which are owned, beneficially and of record, by the
Stockholders as set forth on Schedule 1 hereto, (iii) 400,000 shares of Series B
Redeemable Preferred Stock, par value $0.01 per share, of which no shares are
issued and outstanding, and (iv) 1,000,000 shares of undesignated preferred
stock, par value $0.01 per share, of which no shares are issued and outstanding.
The issued and outstanding shares of BBH Common Stock and BBH Preferred Stock
have been duly authorized and validly issued, and are fully paid and
nonassessable. Other than the BBH Preferred Stock, BBH does not have outstanding
any options, warrants, stock or other securities convertible or exchangeable for
any stock or other securities of BBH.
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(c) Repurchase and Other Obligations. Except as set forth in
Section 3.1 of Company's Disclosure Schedule, BBH is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its stock or other securities. Except as set forth in Section 3.1
of Company's Disclosure Schedule, no Person is entitled to any preemptive right,
right of first refusal or similar right with respect to any stock or other
securities of BBH. Except as set forth in Section 3.1 of Company's Disclosure
Schedule, there are no agreements, arrangements or trusts between or for the
benefit of BBH or the Stockholders with respect to the voting or transfer of
stock or other securities, or with respect to any other aspect of BBH's affairs.
BBH has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its stock or other
securities.
(d) Subsidiaries. BBH does not own, of record or beneficially,
any capital stock or equity interest or investment in any Person other than BBC,
which is a wholly owned subsidiary of BBH. Except as set forth in Section 3.1 of
Company's Disclosure Schedule, BBH owns, beneficially and of record, all of the
issued and outstanding shares of capital stock of BBC, free and clear of all
Liens.
3.2 BBC.
(a) Organization and Qualification; Authority. BBC is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full power and authority to own its assets and
properties and to conduct the Business. BBC is qualified to do business as a
foreign corporation in, and is in good standing under the laws of, the State of
Illinois, and is not required to be qualified to do business as a foreign
corporation in any other state. BBC has full power, authority and legal right
and all necessary approvals, permits, licenses and authorizations to own its
properties and to conduct the Business as currently conducted.
(b) Capitalization. The authorized capital stock of BBC
consists solely of 1,000 shares of common stock, par value $0.01 per share, of
which 100 shares are issued and outstanding and all of which are owned,
beneficially and of record, by BBH. The issued and outstanding shares of common
stock of BBC have been duly authorized and validly issued, and are fully paid
and nonassessable. BBC does not have outstanding any options, warrants, stock or
other securities convertible or exchangeable for any stock or other securities
of BBC.
(c) Repurchase and Other Obligations. BBC is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its stock or other securities. No Person is entitled to any
preemptive right, right of first refusal or similar right with respect to any
stock or other securities of BBC. There are no agreements, arrangements or
trusts between or for the benefit of BBC or BBH with respect to the voting or
transfer of stock or other securities, or with respect to any other aspect of
BBC's affairs. BBC has not violated any applicable federal or state securities
laws in connection with the offer, sale or issuance of any of its stock or other
securities.
(d) Subsidiaries. BBC does not own, of record or beneficially,
any capital stock or equity interest or investment in any Person other than the
Operating Subsidiaries, which
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are wholly owned subsidiaries of BBC. Except as set forth in Section 3.2 of
Company's Disclosure Schedule, BBC owns, beneficially and of record, all of the
issued and outstanding shares of capital stock of each Operating Subsidiary,
free and clear of all Liens.
3.3 Chattanooga Sub.
(a) Organization and Qualification; Authority. The Chattanooga
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the State of Tennessee and has full power and authority to own its
assets and properties and to conduct the Business. The Chattanooga Sub is not
required to be qualified to do business as a foreign corporation in any state.
The Chattanooga Sub has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business as currently conducted.
(b) Capitalization. The authorized capital stock of the
Chattanooga Sub consists solely of 1,000 shares of common stock, no par value
per share, of which 200 shares are issued and outstanding and all of which are
owned, beneficially and of record, by BBC. The issued and outstanding shares of
common stock of the Chattanooga Sub have been duly authorized and validly
issued, and are fully paid and nonassessable. The Chattanooga Sub does not have
outstanding any options, warrants, stock or other securities convertible or
exchangeable for any stock or other securities of the Chattanooga Sub.
(c) Repurchase and Other Obligations. The Chattanooga Sub is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its stock or other securities. No Person is
entitled to any preemptive right, right of first refusal or similar right with
respect to any stock or other securities of the Chattanooga Sub. There are no
agreements, arrangements or trusts between or for the benefit of the Chattanooga
Sub, BBH or BBC with respect to the voting or transfer of stock or other
securities, or with respect to any other aspect of the Chattanooga Sub's
affairs. The Chattanooga Sub has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any of its
stock or other securities.
(d) Subsidiaries. The Chattanooga Sub does not own, of record
or beneficially, any capital stock or equity interest or investment in any
Person.
3.4 Columbia Sub.
(a) Organization and Qualification; Authority. The Columbia
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the State of South Carolina and has full power and authority to own
its assets and properties and to conduct the Business. The Columbia Sub is not
required to be qualified to do business as a foreign corporation in any state.
The Columbia Sub has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business as currently conducted.
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(b) Capitalization. The authorized capital stock of the
Columbia Sub consists solely of 1,000 shares of common stock, no par value per
share, of which 200 shares are issued and outstanding and all of which are
owned, beneficially and of record, by BBC. The issued and outstanding shares of
common stock of the Columbia Sub have been duly authorized and validly issued,
and are fully paid and nonassessable. The Columbia Sub does not have outstanding
any options, warrants, stock or other securities convertible or exchangeable for
any stock or other securities of the Columbia Sub.
(c) Repurchase and Other Obligations. The Columbia Sub is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any of its stock or other securities. No Person is entitled to
any preemptive right, right of first refusal or similar right with respect to
any stock or other securities of the Columbia Sub. There are no agreements,
arrangements or trusts between or for the benefit of the Columbia Sub, BBH or
BBC with respect to the voting or transfer of stock or other securities, or with
respect to any other aspect of the Columbia Sub's affairs. The Columbia Sub has
not violated any applicable federal or state securities laws in connection with
the offer, sale or issuance of any of its stock or other securities.
(d) Subsidiaries. The Columbia Sub does not own, of record or
beneficially, any capital stock or equity interest or investment in any Person.
3.5 Grand Rapids Sub.
(a) Organization and Qualification; Authority. The Grand
Rapids Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Michigan and has full power and
authority to own its assets and properties and to conduct the Business. The
Grand Rapids Sub is not required to be qualified to do business as a foreign
corporation in any state. The Grand Rapids Sub has full power, authority and
legal right and all necessary approvals, permits, licenses and authorizations to
own its properties and to conduct the Business as currently conducted.
(b) Capitalization. The authorized capital stock of the Grand
Rapids Sub consists solely of 10,000 shares of common stock, no par value per
share, of which 10,000 shares are issued and outstanding and all of which are
owned, beneficially and of record, by BBC. The issued and outstanding shares of
common stock of the Grand Rapids Sub have been duly authorized and validly
issued, and are fully paid and nonassessable. The Grand Rapids Sub does not have
outstanding any options, warrants, stock or other securities convertible or
exchangeable for any stock or other securities of the Grand Rapids Sub.
(c) Repurchase and Other Obligations. The Grand Rapids Sub is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its stock or other securities. No Person is
entitled to any preemptive right, right of first refusal or similar right with
respect to any stock or other securities of the Grand Rapids Sub. There are no
agreements, arrangements or trusts between or for the benefit of the Grand
Rapids Sub, BBH or BBC with respect to the voting or transfer of stock or other
securities, or with respect to any other aspect of the Grand Rapids Sub's
affairs. The Grand Rapids Sub has not violated any
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applicable federal or state securities laws in connection with the offer, sale
or issuance of any of its stock or other securities.
(d) Subsidiaries. The Grand Rapids Sub does not own, of record
or beneficially, any capital stock or equity interest or investment in any
Person.
3.6 Tri-Cities Sub.
(a) Organization and Qualification; Authority. The Tri-Cities
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the State of Tennessee and has full power and authority to own its
assets and properties and to conduct the Business. The Tri-Cities Sub is not
required to be qualified to do business as a foreign corporation in any state.
The Tri-Cities Sub has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business as currently conducted.
(b) Capitalization. The authorized capital stock of the
Tri-Cities Sub consists solely of 1,000 shares of common stock, no par value per
share, of which 100 shares are issued and outstanding and all of which are
owned, beneficially and of record, by BBC. The issued and outstanding shares of
common stock of the Tri-Cities Sub have been duly authorized and validly issued,
and are fully paid and nonassessable. The Tri-Cities Sub does not have
outstanding any options, warrants, stock or other securities convertible or
exchangeable for any stock or other securities of the Tri-Cities Sub.
(c) Repurchase and Other Obligations. The Tri-Cities Sub is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its stock or other securities. No Person is
entitled to any preemptive right, right of first refusal or similar right with
respect to any stock or other securities of the Tri-Cities Sub. There are no
agreements, arrangements or trusts between or for the benefit of the Tri-Cities
Sub, BBH or BBC with respect to the voting or transfer of stock or other
securities, or with respect to any other aspect of the Tri-Cities Sub's affairs.
The Tri-Cities Sub has not violated any applicable federal or state securities
laws in connection with the offer, sale or issuance of any of its stock or other
securities.
(d) Subsidiaries. The Tri-Cities Sub does not own, of record
or beneficially, any capital stock or equity interest or investment in any
Person.
3.7 Twin Cities Sub.
(a) Organization and Qualification; Authority. The Twin Cities
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the State of Illinois and has full power and authority to own its
assets and properties and to conduct the Business. The Twin Cities Sub is not
required to be qualified to do business as a foreign corporation in any state.
The Twin Cities Sub has full power, authority and legal right and all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct the Business as currently conducted.
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(b) Capitalization. The authorized capital stock of the Twin
Cities Sub consists solely of 10,000 shares of common stock, no par value per
share, of which 1,000 shares are issued and outstanding and all of which are
owned, beneficially and of record, by BBC. The issued and outstanding shares of
common stock of the Twin Cities Sub have been duly authorized and validly
issued, and are fully paid and nonassessable. The Twin Cities Sub does not have
outstanding any options, warrants, stock or other securities convertible or
exchangeable for any stock or other securities of the Twin Cities Sub.
(c) Repurchase and Other Obligations. The Twin Cities Sub is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its stock or other securities. No Person is
entitled to any preemptive right, right of first refusal or similar right with
respect to any stock or other securities of the Twin Cities Sub. There are no
agreements, arrangements or trusts between or for the benefit of the Twin Cities
Sub, BBH or BBC with respect to the voting or transfer of stock or other
securities, or with respect to any other aspect of the Twin Cities Sub's
affairs. The Twin Cities Sub has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any of its
stock or other securities.
(d) Subsidiaries. The Twin Cities Sub does not own, of record
or beneficially, any capital stock or equity interest or investment in any
Person.
3.8 Authority. The execution and delivery of this Agreement by
BBH, the performance by BBH of its covenants and agreements hereunder and the
consummation by BBH of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of BBH. This Agreement has been
duly executed and delivered by BBH and constitutes the valid and legally binding
agreement of BBH, enforceable against it in accordance with its terms.
3.9 No Legal Bar; Conflicts. Neither the execution and delivery of
this Agreement by BBH, nor the consummation of the transactions contemplated
hereby by BBH, (a) violates or will violate any provision of any organizational
document of BBH; (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 the Company is a party or by which the Company or any of the
Assets is bound. Except for the FCC Approval, compliance with the HSR Act and
the consents disclosed in Section 3.9 of Company's Disclosure Schedule, no
consents, approvals or authorizations of, or filings with, any Governmental
Authority or any other Person are required on the part of the Company in
connection with the execution and delivery of this Agreement by BBH and the
consummation of the transactions contemplated hereby by BBH.
3.10 Financial Statements. BBH has delivered to Citadel the
following financial statements of the Company: (a) the audited balance sheets as
of December 31, 1997 and December 31, 1998 and the related statements of income
and cash flows for each of the years
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then ended; and (b) the unaudited balance sheet as of November 30, 1999 and the
related statements of income and cash flows for the 11 months then ended (the
"Interim Balance Sheet"). 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 the Company (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 the Company in accordance with
GAAP (subject to (i) the lack of footnote disclosure and (ii) other than with
respect to year-end financial statements, changes resulting from normal year-end
audit adjustments), consistently applied, as of the dates and for the periods
set forth therein.
3.11 Absence of Certain Changes. Since the date of the Interim
Balance Sheet, except as set forth in Section 3.11 of Company's Disclosure
Schedule or as does not, individually or in the aggregate, have a Material
Adverse Effect with respect to clause (a) of this Section 3.11 or as does not,
individually or in the aggregate, have a Material Adverse Effect with respect to
clauses (b) through (f) of this Section 3.11, there has not been any of the
following with respect to the Company: (a) change in the financial condition or
in the results of operations, assets, liabilities or business (other than a
change resulting solely from general economic conditions affecting the radio
broadcasting industry as a whole); (b) damage or destruction, whether or not
insured, affecting business operations; (c) actual or threatened dispute with
any material provider of software, hardware or services; (d) except in the
ordinary course of business, sale or transfer of any tangible or intangible
asset used or useful in the operation of any Station, mortgage, pledge or
imposition of any Lien (other than a Permitted Encumbrance) on any such asset,
lease of real property, machinery, equipment or buildings with respect to any
Station entered into or modification, amendment or cancellation of any of its
existing leases relating to any Station, or cancellation of any debt or claim;
(e) 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; or (f) dividend or
other distribution (of Cash or any other asset of the Company) declared, paid or
made to the Stockholders in respect of their equity in the Company.
3.12 Taxes. The Company has 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 it as of the date hereof and has paid all Taxes
(including without limitation 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, or pursuant to any assessment received by it
in connection with such returns, reports or declarations. All returns, reports
and declarations filed by or on behalf of the Company correctly state the
Company's liability for Taxes for the respective periods to which such returns,
reports and declarations relate. No deficiency in payment of any Taxes for any
period has been asserted against the Company by any taxing authority which
remains unsettled at the date hereof, and no written inquiries have been
received by the Company from any taxing authority with respect to possible
claims for Taxes. Except as set forth in Section 3.12 of Company's Disclosure
Schedule, since the date of the Interim Balance Sheet, the Company has not
incurred any liability for Taxes other than in the ordinary course of business.
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3.13 Personal Property and Stations. Section 3.13 of Company's
Disclosure Schedule contains a complete and accurate listing of each item of
Personal Property with an initial cost of $50,000 or more. Section 3.13 of
Company's Disclosure Schedule also contains a complete and accurate list of all
of the Stations, and specifies which Operating Subsidiary owns the Assets used
in connection with, and operates, each Station.
3.14 Debt. Section 3.14 of Company's Disclosure Schedule contains a
complete and accurate list of all of the Company's Indebtedness for Borrowed
Money as of the date of this Agreement and includes the names of the holders of
such debt and a list of all material documents governing or related to such
debt. Upon the payment in full of such debt, all Liens secured in connection
therewith will be released.
3.15 Title to and Condition of Property.
(a) Title. The Company will as of the Closing have good and
marketable title to and undisputed possession of all of the Assets, other than
the FCC Licenses (which are licensed by the Company), the Leaseholds (which are
leased by the Company), any leased Personal Property as described in Section
3.15(a) of Company's Disclosure Schedule (which are leased by the Company) and
the Real Property (which is discussed specifically below). Except as set forth
in Section 3.15(a) of Company's Disclosure Schedule, such Assets are owned by
the Company free and clear of all Liens other than Permitted Encumbrances. Such
Assets will, as of the Closing, be owned by the Company free and clear of all
Liens other than Permitted Encumbrances.
(b) Condition. The Personal Property is in good condition,
ordinary wear and tear excepted, adequate and suitable for the operation of each
Station as it is currently being operated, and in such condition and repair so
that such Station can operate according to the FCC Licenses, the rules,
regulations and policies of the FCC and in all other respects in compliance with
the Act and all other applicable federal and state laws.
(c) [Intentionally Omitted]
(d) Sufficiency of Assets. The Assets include all of the
assets, which are sufficient in nature, condition and quantity, necessary to
permit the operation of each Station in a manner consistent with the past
practices of the Company. The Company has not, since the date of the Interim
Balance Sheet, removed, or permitted the removal of, any material item of
Personal Property from any Station other than removals in the ordinary course of
business which were not done in contemplation of the transactions contemplated
by this Agreement.
(e) Real Property Leases.
(i) Section 3.15(e) of Company's Disclosure Schedule
contains a complete and accurate list 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. The Company has a valid leasehold interest
in each of the Leaseholds subject only to the landlord's right of reversion as
provided in the Real Property Leases.
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(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 in
Section 3.9 of Company's Disclosure Schedule required of the landlords under the
Real Property Leases. The Company's right, title and interest in and to the
Leaseholds will at the Closing be held by the Company free and clear of all
Liens other than the Permitted Encumbrances and the interest of the mortgagee of
the landlord under such leases, if any.
(iii) The use for which the Leaseholds are zoned
permits the use thereof for the Business consistent with past practices, either
as an as of right use, by variance or special permit, or as a pre-existing,
non-conforming use. The use and occupancy of the Leaseholds by the Company are
in compliance in all material respects with all regulations (other than zoning
regulations, which are addressed in the immediately preceding sentence), codes,
ordinances and statutes applicable to the Company and the Business, and the
Company has not received any written notice asserting any material violation of
sanitation laws and regulations, occupational safety and health regulations, or
electrical codes.
(iv) There are no facts relating to the Company, and,
to the Knowledge of the Company, no facts relating to any other party, that
would prevent the Leaseholds from being occupied and used by 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 the Company or any condition that with notice or the passage
of time or both would constitute such a default, and the Company has not
received any written 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 the Company, and to the Knowledge of the
Company, as to each other party thereto, and except as disclosed in Section
3.15(e) of Company's Disclosure Schedule, has not been amended or otherwise
modified.
(vii) The Leaseholds constitute all of the real
property (other than the Real Property) in which the Company 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) Section 3.15(f) of Company's Disclosure Schedule
contains a complete and accurate list of each parcel of the Real Property and
the use of such parcel. The Company will as of the Closing have good and
marketable title to the Real Property, in fee simple, subject only to the
Permitted Encumbrances.
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(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. The Company's right, title and interest
in and to the Real Property will at the Closing be held by the Company free and
clear of all Liens except the Permitted Encumbrances.
(iii) The use for which the Real Property is zoned
permits the use thereof for the Business consistent with past practices, either
as an as of right use, by variance or special permit, or as a pre-existing,
non-conforming use. The use and occupancy of the Real Property by the Company
are in compliance in all material respects with all regulations (other than
zoning regulations, which are addressed in the immediately preceding sentence),
codes, ordinances and statutes applicable to the Company and the Business, and
the Company has not received any written 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 the Company,
threatened against the Real Property.
(v) All of the Real Property is occupied under a
valid and current certificate of occupancy or similar permit. 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.
(vi) The Real Property constitutes all of the real
property which is owned by the Company and which is or will prior to Closing be
used in the operation of the Stations, other than the real property to be
acquired in the Pending Acquisition.
3.16 Contractual and Other Obligations. Set forth in Section 3.16
of Company's Disclosure Schedule is a complete and accurate list of all
Contracts. Except as set forth in Section 3.16 of Company's Disclosure Schedule,
neither the Company, nor, to the Knowledge of the Company, any other Person, is
in material default in the performance of any covenant or condition under any
Contract, and no written 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 set
forth in Section 3.16 of Company's Disclosure Schedule, the Company is not 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 Contracts have been
provided or made available to Citadel as of the date of this Agreement.
3.17 Compensation. Set forth in Section 3.17 of Company's
Disclosure Schedule is a list of (a) all agreements between the Company and its
employees or other Persons providing services for compensation with regard to
the Stations, whether individually or collectively, and (b) all employees of the
Company or other Persons providing services for the Company with respect to the
Stations entitled to receive annual compensation in excess of $35,000 and their
respective positions, job categories and salaries. Except as set forth in
Section 3.17 of Company's Disclosure Schedule, the transactions contemplated by
this Agreement will not result
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in any liability for severance pay to any such employee or other Person. The
Company has not informed any such employee or other Person that such Person will
receive any increase in compensation or benefits or any ownership interest in
the Company, Citadel, the Business or Citadel's business. Except as disclosed in
Section 3.17 of Company's Disclosure Schedule, all current employees of the
Company are "at will" employees and may be terminated by the Company upon notice
of 30 days or less, without liability or obligation except the payment of normal
compensation accrued up to the time of termination of employment.
3.18 Employee Benefit Plans.
(a) The Company does not maintain or sponsor, nor is it
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 plan which
affects the employees working, or who formerly worked, at any Station, except as
set forth in Section 3.18 of Company's Disclosure Schedule. None of the plans,
funds, policies, programs, arrangements or understandings of the Company is a
"multiemployer plan" (within the meaning of Section 3(37) of ERISA). Neither the
Company nor any ERISA affiliate of the Company has, within the last five years,
contributed to or had the obligation to contribute to any multiemployer plan.
Section 3.18 of Company's Disclosure Schedule fully discloses all of the plans,
funds, policies, programs or arrangements sponsored or maintained by the Company
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) life
insurance, death or survivor's benefits; or (7) 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. 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 timely paid by the Company;
(B) all material requirements of law have been observed with respect to the
establishment, operation and, if applicable, the termination thereof, and all
material 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; and (D) any such
plan represented by the Company to a "qualified" retirement plan satisfies, in
both form and operation, the applicable requirements of Section 401(a) of the
Code.
(b) The Company has no obligation to provide health or other
welfare benefits to any of its former, retired or terminated employees, except
as specifically required under Section 4980B of the Code. The Company has
complied with any applicable notice and continuation requirements of Section
4980B of the Code and the regulations thereunder.
(c) Each of the trusts relating to the deferred compensation
plans listed in Section 3.18 of Company's Disclosure Schedule holds assets equal
to its liabilities through the date hereof, and will hold assets equal in value
to its liabilities through the Closing Date.
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3.19 Labor Relations. Except as set forth in Section 3.19 of
Company's Disclosure Schedule, 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, or the terms and conditions of
employment, wages (including overtime compensation) and hours of, the Company.
Except as set forth in Section 3.19 of Company's Disclosure Schedule, the
Company is not engaged in any unfair labor practice or other unlawful employment
practice, there are no pending labor disputes and there are no charges of unfair
labor practices or other employee-related complaints pending or threatened
against the Company or any Station 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.
The Company is not bound by any collective bargaining agreement with respect to
its employees. There is no strike, picketing, slowdown or work stoppage or
organizational attempt pending, involving or, to the Knowledge of the Company,
threatened against any Station. No issue with respect to union representation is
pending or, to the Knowledge of the Company, threatened with respect to the
employees of the Company or any Station.
3.20 Increases in Compensation or Benefits. Subsequent to the date
of the Interim Balance Sheet, there have been no increases in the compensation
payable or to become payable to any of the employees of the Company, nor has the
Company 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) pursuant to currently existing contracts, plans, policies, programs or
arrangements set forth in Section 3.20 of Company's Disclosure Schedule or
otherwise in the ordinary course of business consistent with the Company's past
practices or (b) as was required from time to time by governmental legislation
affecting wages. The vacation policies of the Company are set forth in Section
3.20 of Company's Disclosure Schedule.
3.21 Insurance. The Company maintains insurance policies covering
all of its properties and assets and the various occurrences which may arise in
connection with the operation of the Stations, each of which policies is
identified in Section 3.21 of Company's Disclosure Schedule. Such policies
maintained by the Company are in full force and effect and all installments of
premiums due thereon have been paid in full. The Company has not received any
written notices of any pending or threatened termination or material premium
increases with respect to any of such policies maintained by the Company. There
has been no casualty loss or occurrence to the Company which may give rise to
any material claim of any kind not covered by insurance, and the Company is not
aware of any casualty occurrence to the Stations which may give rise to any
material claim of any kind not covered by insurance. No third party has filed
any claim against the Company 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 deductibles set forth in Section 3.21 of Company's
Disclosure Schedule. None of the Company's insurance policies will terminate or
be adversely affected by the consummation of the transactions contemplated by
this Agreement.
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3.22 Litigation; Disputes. Except as set forth in Section 3.22 of
Company's Disclosure Schedule, there are no claims, disputes, actions, suits,
investigations or proceedings pending or, to the Knowledge of the Company,
threatened against or affecting the Company, the Shares or any Station or that
is reasonably likely to prevent or hinder the consummation of the transactions
contemplated hereby and, to the Knowledge of the Company, there is no reasonable
basis for any such claim, dispute, action, suit, investigation or proceeding.
The Company has no knowledge of any default under any such action, suit or
proceeding. The Company is not in default in respect of any judgment, order,
writ, injunction or decree of any Governmental Authority with respect to the
Company or the operation of any Station.
3.23 Trade Receivables and Accounts Receivable. All Trade
Receivables and Accounts Receivable are reflected properly on the books and
records of the Company, are valid receivables subject to no setoffs or
counterclaims, are current and collectible, and will be collected in a manner
consistent with past practices at their recorded amounts, subject only to the
reserve for bad debts provided for in the financial statements of the Company.
3.24 [Intentionally Omitted]
3.25 Environmental.
(a) Prior to the execution of this Agreement, the Company has
provided to Citadel a true and correct copy of all environmental site
assessments, studies, tests and reports commissioned by or on behalf of the
Company or in the Company's possession, custody or control which relate to the
Real Property or the Leaseholds.
(b) Except as disclosed in Section 3.25 of Company's
Disclosure Schedule, to the Knowledge of the Company, (i) there are no
conditions, facts or circumstances that constitute Environmental Noncompliance
on the Real Property or any of the Leaseholds and (ii) there is no friable
asbestos-containing material present on any of the Real Property or any of the
Leaseholds that, if disturbed, threatens to release airborne asbestos fibers in
excess of applicable local, state and federal standards.
(c) Except as disclosed in Section 3.25 of Company's
Disclosure Schedule, to the Knowledge of the Company, no structure,
improvements, equipment, fixtures, activities or facilities located on the Real
Property or any of the Leaseholds uses Hazardous Materials except those used in
the ordinary course of the Business and in compliance with applicable
Environmental Laws.
(d) Except as disclosed in Section 3.25 of Company's
Disclosure Schedule, there are no underground storage tanks, or underground
piping associated with tanks, used for the management of Hazardous Materials,
and, to the Knowledge of the Company, no abandoned underground storage tanks at
the Real Property or any of the Leaseholds.
(e) The Company has not received notice of any Environmental
Claims, and no Environmental Claims have been threatened against the Company
nor, to the Knowledge of the Company, is there any reasonable basis for any such
Environmental Claims.
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3.26 Permits; Compliance with Applicable Law.
(a) General. The Company is not in default under any statutes,
ordinances, regulations, orders, judgments and decrees of any Governmental
Authority applicable to it or to the Business or the Assets as to which a
default or failure to comply might have, individually or in the aggregate, a
Material Adverse Effect. The Company has no knowledge of any reasonable 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. The Company has not received any written 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.
(b) Permits. Set forth in Section 3.26 of Company's Disclosure
Schedule is a complete and accurate list of all of the Permits held by the
Company and required or used in the operation of the Stations as currently
conducted. Each Station is operating in accordance with the Act and its FCC
Licenses and in compliance with the Act and the rules, regulations and policies
of the FCC. The Permits set forth in Section 3.26 of Company's Disclosure
Schedule are all of the Permits required for the conduct of the Business
conducted by the Stations. All of the Permits held by the Company are in full
force and effect, and the Company has not engaged in any activity which could
reasonably be expected to cause or permit revocation or suspension of any such
Permit, and to the Knowledge of the Company, 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 the Company or any other Person under any such Permit. Except as set
forth in Section 3.26 of Company's Disclosure Schedule, the Company is not
required to be licensed by, and is not subject to the regulation of, any
Governmental Authority by reason of the Business.
3.27 Intellectual Property. Section 3.27 of Company's Disclosure
Schedule lists all material Intellectual Property. The use of the Intellectual
Property in connection with the operation of the Stations or otherwise by the
Company does not infringe upon the proprietary rights of any other Person. No
director, officer or employee of the Company has any interest in any of the
Intellectual Property, all of which will, as of the Closing, be free and clear
of all Liens, other than Permitted Encumbrances. The Company has no knowledge of
any infringement by any Person upon the rights of the Company with respect to
the Intellectual Property. The Company has 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.
3.28 Books and Records. The books of account of the Company fairly
and accurately reflect in all material respects its income, expenses, assets and
liabilities and have been maintained in accordance with reasonable business
practices. All of such books and records will be located on the date of the
Closing on the business premises of the Stations. The Company's minute books and
stock ledgers accurately reflect all actions taken by the Company's board of
directors and stockholders, including all issuances and transfers of capital
stock of BBH, BBC and the Operating Subsidiaries. Section 3.28 of Company's
Disclosure Schedule lists all of the
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current officers and directors of the Company. At the Closing, the Company's
minute books and stock ledgers shall be delivered to Citadel.
3.29 Related Party Obligations. Except as set forth in Section 3.29
of Company's Disclosure Schedule, no officer, director, shareholder or Affiliate
of the Company, or any individual related by blood or marriage to any such
Person, or any entity in which any such Person or individual owns any beneficial
interest is a party to any agreement, contract, commitment, promissory note,
loan, any other actual or proposed transaction with the Company or has any
material interest in any material property used by the Company which is material
to the operation of the Stations.
3.30 Year 2000 Compliance. To the Knowledge of the Company, all
hardware and software constituting part of the Assets is able to accurately
process date/time data (including, but not limited to, calculating, comparing
and sequencing) from, into, and between the twentieth and twenty-first
centuries, and the years 1999 and 2000 and leap year calculations to the extent
that other information technology, used in combination with the information
technology being acquired, properly exchanges date/time data with it.
3.31 Disclosure. To the Knowledge of the Company, no representation
or warranty made under this Section 3 and none of the information furnished by
the Company 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, in light of the
circumstances under which such representations and warranties are made.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
In connection with the purchase and sale of the Shares and in order to
induce Citadel to enter into and consummate the transactions contemplated by
this Agreement, each Stockholder, as to itself or himself only, makes the
representations and warranties set forth in this Section 4 to Citadel, as of the
date of this Agreement and as of the Closing Date (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).
4.1 Authority. Each Stockholder (other than individuals) is an
entity duly organized or formed, validly existing and in good standing under the
laws of the state of its organization or formation and has full power and
authority (a) to own its assets and properties and to conduct its business as
currently conducted and (b) to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Stockholders, the performance by the Stockholders of their covenants and
agreements hereunder and the consummation by the Stockholders of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Stockholders. This Agreement has been duly executed
and delivered by the Stockholders and constitutes the valid and legally
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binding agreement of the Stockholders, enforceable against each of them in
accordance with its terms.
4.2 No Legal Bar; Conflicts. Neither the execution and delivery of
this Agreement by the Stockholders, nor the consummation of the transactions
contemplated hereby by the Stockholders, (a) violates or will violate any
provision of any organizational document of any Stockholder; (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 Stockholder is
a party or by which any Stockholder or any of the Shares is bound. Except for
the FCC Approval, compliance with the HSR Act and the consents disclosed in
Section 3.9 of Company's Disclosure Schedule, no consents, approvals or
authorizations of, or filings with, any Governmental Authority or any other
Person are required on the part of the Stockholders in connection with the
execution and delivery of this Agreement by the Stockholders and the
consummation of the transactions contemplated hereby by the Stockholders.
4.3 Share Ownership. Each Stockholder owns, beneficially and of
record, Shares as indicated on Schedule 1 hereto, free and clear of all Liens.
4.4 Litigation. There is no litigation, proceeding or
investigation pending or, to the knowledge of the Stockholders, threatened
against or affecting the Stockholders or the Shares that is reasonably likely to
prevent or hinder the consummation of the transactions contemplated by this
Agreement.
4.5 Disclosure. To the knowledge of the Stockholders, no
representation or warranty made under this Section 4 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, in light of the circumstances under which such
representations and warranties are made.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF CITADEL
In connection with the purchase and sale of the Shares and in order to
induce the Stockholders to enter into and consummate the transactions
contemplated by this Agreement, Citadel makes the representations and warranties
set forth in this Section 5 to the Stockholders as of the date of this Agreement
and as of the Closing Date (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).
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5.1 Organization; Authority. Citadel is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has full power and authority (a) to own its assets and properties and
to conduct its business as currently conducted and (b) to enter into this
Agreement and to consummate the transactions contemplated hereby. 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
action on the part of Citadel. This Agreement has been duly executed and
delivered by Citadel and constitutes the valid and legally binding agreement of
Citadel, enforceable against it in accordance with its terms.
5.2 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 its assets is bound. Except for the FCC Approval, compliance with the HSR Act
and the consents disclosed in Citadel's Disclosure Schedule, no consents,
approvals or authorizations of, or filings 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.
5.3 Litigation. There is no litigation, proceeding or
investigation pending or, to Citadel's knowledge, threatened against or
affecting Citadel that is reasonably likely to prevent or hinder the
consummation of the transactions contemplated by this Agreement.
5.4 FCC Qualifications. There are no facts currently known to
Citadel which under the Act or the rules, regulations, policies and practices
promulgated thereunder, would (a) disqualify Citadel from becoming the holder of
the FCC Licenses or an owner or operator of the Stations; (b) disqualify Citadel
from consummating the transactions contemplated hereby within the time period
contemplated hereby; or (c) otherwise impede in any material respect the
consummation of such transactions. As of the date hereof, Citadel does not own,
and has not entered into any agreement (other than this Agreement) to acquire,
any radio stations in any of the Markets.
5.5 HSR Matters. There are no facts currently known to Citadel
which, under the HSR Act or the rules, regulations, policies and practices
promulgated thereunder, would (a) disqualify Citadel from becoming the holder of
the FCC Licenses; (b) disqualify Citadel from consummating the transactions
contemplated hereby within the time period contemplated hereby; or (c) otherwise
impede in any material respect the consummation of such transactions.
5.6 Availability of Funds. At the Closing, Citadel will have
sufficient immediately available funds to purchase the Shares, pay the Purchase
Price and pay and discharge in full the
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Senior Debt and the Subordinated Debt on the terms and conditions contemplated
by this Agreement. Citadel acknowledges and agrees that Citadel's performance of
its obligations under this Agreement is not in any way contingent upon the
availability of financing to Citadel.
SECTION 6
AFFIRMATIVE COVENANTS OF BBH
From and after the date of this Agreement and until the earlier of the
Closing or the termination of this Agreement in accordance with its terms, BBH
hereby covenants and agrees 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. Discharge the Obligations of the
Company (including without limitation Indebtedness for Borrowed Money and other
long-term debt and capitalized lease obligations) in the ordinary course of
business consistent with past practices so that (a) the Obligations of the
Company existing as of the Closing Date consist solely of (i) current
liabilities and obligations under executory contracts and commitments which are
reasonable and customary in the radio broadcasting industry, (ii) Senior Debt,
(iii) Subordinated Debt and (iv) items listed in Section 6.2 of Company's
Disclosure Schedule; (b) the sum of (i) the aggregate amount of Indebtedness for
Borrowed Money of the Company as of the Closing Date, (ii) the Net Working
Capital Shortfall and (iii) the WODJ Amount, does not exceed $175,000,000; and
(c) the Company does not have any capitalized lease obligations, or any
obligations to Dan Keister pursuant to his consulting agreement with the
Company. Not less than two business days before the Closing Date, the
Stockholders shall deliver to Citadel payoff letters from the Senior Lenders
with respect to the Senior Debt and from the Stockholders with respect to the
Subordinated Debt. Such payoff letters shall be in form and substance reasonably
satisfactory to Citadel and shall include (x) the amount of Senior Debt or
Subordinated Debt, as applicable, due as of the Closing Date, (y) wire
instructions for the payment thereof and (z) with respect to the Senior Debt, a
statement that all Permitted Encumbrances in favor of the Senior Lenders will be
released immediately upon the payment in full of such Senior Debt (and a copy of
all release documents shall be attached to the payoff letter).
6.3 Access. Afford Citadel and its authorized representatives,
upon reasonable notice, 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 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. Operate the Business and the
Stations in the ordinary course, consistent with past practices, and exercise
its commercially reasonable efforts
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to preserve in all material respects the business organization of the Stations
intact and the present relationships of the Stations with employees, suppliers,
advertisers and customers and others having material business relationships with
the Stations; provided, however, that nothing contained in this Agreement shall
(a) require the Company to expend money in fulfillment of the obligations set
forth in this Section 6.4 other than those expenditures that the Company would
have made in the ordinary course of the business of the Stations and consistent
with past practices or (b) prohibit the Company from using substantially all of
the Cash to pay down Senior Debt prior to the Closing.
6.5 Books and Records. Maintain the books and records of the
Company in accordance with reasonable business practices, on a basis consistent
with past practices, and make available to Citadel the books, records, tax
returns, leases, contracts and other documents or agreements material to the
Stations as Citadel or 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, in accordance with the Company's past practices, any amounts owed by
the Company to its 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 comply in all material respects with
all other laws, ordinances, regulations, rules and orders of any Governmental
Authority applicable to the Company or to any Station.
6.8 Taxes. File all federal, state and municipal tax returns,
reports and declarations required to be filed by the Company prior to the
Closing, and satisfy all Taxes reflected as due on such returns, reports and
declarations related thereto, other than any Taxes being contested in good faith
and for which adequate reserves have been made on the books and records of the
Company.
6.9 Supplemental Financial Statements. Provide Citadel with copies
of (a) the reviewed balance sheet of the Company as of September 30, 1999 and
the related statements of income and cash flows for the nine-month period then
ended and (b) the monthly unaudited income statements and balance sheets
applicable to the Stations prepared by the Company in the ordinary course of
business commencing with the month ended December 31, 1999 until Closing
(collectively, the "Supplemental Financial Statements"). BBH shall provide such
Supplemental Financial Statements to Citadel promptly upon such Supplemental
Financial Statements becoming available to the Company. The Supplemental
Financial Statements shall be subject to the representations and warranties as
set forth in Section 3.10.
6.10 Further Information. Furnish to Citadel such financial
(including tax), legal and other information with respect to the Company, the
Business and the Stations as Citadel or its representatives may from time to
time reasonably request.
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6.11 Notice. Promptly notify Citadel in writing 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 made by BBH in this Agreement.
6.12 Consents. Exercise all commercially reasonable efforts to
obtain, prior to the Closing, the consent and approval (in a form reasonably
approved by 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 Real Property Leases and Contracts which require such
consent. If any such consent or approval is not obtained, the Company will use
commercially reasonable efforts (not involving the payment of money to any
Person) to secure an arrangement reasonably satisfactory to Citadel intended to
provide for Citadel following the Closing the benefits under each Real Property
Leases and Contract for which such consent or approval is not obtained;
provided, however, that Citadel shall have the right to terminate this Agreement
as a result of any failure by the Company to obtain any such consent or approval
for each Real Property Lease and Contract marked with an asterisk in Section 3.9
of Company's Disclosure Schedule (collectively, the "Mandatory Consents"), if
alternative arrangements are not reasonably satisfactory to Citadel.
Nothing in this Agreement will constitute a transfer or an attempted
transfer of any 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.
6.13 Trade Schedule. Deliver to Citadel at the Closing a schedule
accurate in all material respects of Trade Liabilities and Trade Receivables
existing as of a date not more than five days prior to the Closing. As of the
Closing Date, the Trade Liabilities shall not exceed the Trade Receivables.
6.14 Phase I Site Assessments and Other Reports. Cooperate with
Citadel in performing or commissioning Phase I Site Assessments of the Real
Property and such other studies, tests or reports of the Real Property and
Leaseholds as Citadel may reasonably require and provide copies of the written
reports and/or results to Citadel promptly after they become available to the
Company. Such assessments, studies, tests and reports shall be performed by an
environmental company reasonably acceptable to BBH and Citadel. The cost and
expense of such assessments, studies, tests and reports shall be split equally
between Citadel, on the one hand, and the Company, on the other. If any of the
assessments, studies, tests or reports indicate that any Real Property contains
one or more conditions of Environmental Noncompliance, the Company shall
promptly take such actions as are necessary pursuant to applicable Environmental
Laws and shall use its commercially reasonable efforts, prior to the Closing, in
connection with the closure or remediation of such conditions as required by
applicable Environmental Laws.
6.15 Title Insurance and Surveys. Use its commercially reasonable
efforts to cooperate with Citadel in causing each parcel of the Real Property to
be surveyed by a registered professional surveyor (who shall be reasonably
acceptable to BBH and Citadel) and in causing
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such 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 or prior to the Closing. The cost and expense of such
surveys shall be split equally between Citadel, on the one hand, and the
Stockholders, on the other. Citadel shall be responsible for the cost of all
title insurance premiums. In addition, the Company shall use its commercially
reasonable efforts to 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.
6.16 Profit Sharing Plan. Terminate the Bloomington Broadcasting
Corporation Profit Sharing Plan effective no later than the day prior to the
Closing (contingent on the occurrence of the Closing) and submit to the Internal
Revenue Service a determination letter application on the termination. BBH shall
deliver evidence, reasonably acceptable to Citadel, of such termination and
submission. No distributions shall be made from such plan until receipt of a
favorable determination letter from the Internal Revenue Service.
SECTION 7
NEGATIVE COVENANTS OF BBH
From and after the date of this Agreement and until the earlier to
occur of the Closing or the termination of this Agreement in accordance with its
terms, BBH shall not take, or cause or permit to be taken, any of the following
actions without the prior approval of Citadel, 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 Assets, except in the ordinary course of business and
which do not materially interfere with the operations of the Stations, and
which, in the case of a sale, transfer or assignment, is replaced with a
comparable asset, and, in the case of a conveyance, mortgage, hypothecation,
encumbrance or other Lien, is released at or prior to the Closing (unless it
constitutes a Permitted Encumbrance).
7.2 Contracts. Other than in the ordinary course of business
consistent with past practices, amend, terminate, renew or fail to renew any of
the Contracts or Real Property Leases (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
Contracts or Real Property Leases).
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 except as would not, individually or in the
aggregate, have a Material Adverse Effect.
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7.4 Obligations. Incur any Obligations (including without
limitation any additional Indebtedness for Borrowed Money) except in the
ordinary course of business in a manner consistent with past practices or
pursuant to the Credit Agreement.
7.5 Salary Increases. Increase any salary, other payments,
disbursement or distributions in any manner or form to any employees of the
Company 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
the Company or any of the Stations in whole or in part, including without
limitation an acquisition of all or substantially all of the assets of the
Company or any equity in the Company (including the Shares). Prior to the
Closing, (a) BBH shall not sell, assign, pledge or otherwise transfer any of the
capital stock of BBC and (b) BBC shall not sell, assign, pledge or otherwise
transfer any of the capital stock of any of the Operating Subsidiaries, except
for the existing pledge of such stock pursuant to the Credit Agreement.
7.7 Issuance of Securities. Issue any shares of capital stock or
any other securities of BBH, BBC or any of the Operating Subsidiaries.
7.8 Dividends. Declare or pay any dividend or make any other
distribution (of Cash or any other asset of the Company) to the Stockholders in
respect of their equity in the Company.
SECTION 8
COVENANTS OF THE STOCKHOLDERS
From and after the date of this Agreement and until the earlier of the
Closing or the termination of this Agreement in accordance with its terms, each
of the Stockholders (as to itself or himself only) covenants and agrees with
Citadel as follows:
8.1 Compliance with Law. The Stockholders shall comply with all
applicable laws and regulations required for the valid and effective
consummation of the transactions contemplated hereby.
8.2 Notice. The Stockholders shall promptly notify Citadel in
writing 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 made by the
Stockholders in this Agreement.
8.3 Non-Solicitation. The Stockholders shall not directly or
indirectly solicit or negotiate with any Person (other than a party hereto) or
accept any proposal to acquire the
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Company or any of the Stations in whole or in part, including without limitation
an acquisition of all or substantially all of the assets of the Company or any
equity in the Company (including the Shares). Prior to the Closing, the
Stockholders shall not sell, assign, pledge or otherwise transfer any of the
Shares.
SECTION 9
COVENANTS OF CITADEL
From and after the date of this Agreement and until the earlier of the
Closing or the termination of this Agreement in accordance with its terms,
Citadel covenants and agrees with the Stockholders to:
9.1 Compliance with Law. Comply with all applicable laws and
regulations required for the valid and effective consummation of the
transactions contemplated hereby.
9.2 Notice. Promptly notify the Stockholders in writing 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 made by Citadel in this Agreement.
SECTION 10
ADDITIONAL COVENANTS OF THE PARTIES
10.1 Application for Transfer of Control. As promptly as
practicable after the date of this Agreement, and in no event later than 10 days
after the date of this Agreement, the Company and Citadel shall file
applications (collectively, the "FCC Applications") with the FCC to approve the
transfer of control of the Stations from the Company to Citadel (the "FCC
Approval"). Citadel shall have primary responsibility for filing the FCC
Applications. The parties agree that they shall jointly prosecute the FCC
Applications (and shall cooperate with each other in the timely prosecution
thereof), in good faith and with due diligence, and within the time allowed
therefor by the rules and regulations of the FCC. The Company and Citadel shall
each promptly take all necessary actions on its or their part to obtain the FCC
Approval. Citadel shall advance the filing fee for the FCC Applications, and the
Stockholders shall reimburse Citadel for one-half of such filing fee at the
Closing (or upon the earlier termination of this Agreement). Subject to Section
16.7, all other costs and expenses 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.
10.2 Brokerage. Each of the parties hereto represents and warrants
to each other that, except for Broker, no Person has provided services as a
broker, agent or finder in connection with the transactions contemplated by this
Agreement. As between the parties hereto, the
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Stockholders are fully responsible for the payment of, and shall pay at the
Closing, the entire broker's fee due to Broker in connection with the
transactions contemplated hereby. Each of the parties hereto shall each
indemnify and hold harmless the other parties hereto for any and all claims or
expenses, including attorneys' fees, asserted by any Person other than Broker
purporting to act on behalf of the respective indemnitor as a broker, agent or
finder in connection with the transactions contemplated by this Agreement.
10.3 [Intentionally Omitted]
10.4 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 parties hereto in writing of such occurrence and shall thereafter promptly
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.
10.5 Cooperation. During the seven-year period immediately after
the Closing, Citadel shall cooperate with the Stockholders in providing them all
information reasonably requested and permitting them access to all records
relating to the period of ownership of the Stations prior to the Closing. The
cost and expense in providing or permitting access to information hereunder
shall be borne by the Stockholders. The Stockholders, 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 reasonably acceptable
to Citadel in its reasonable discretion. Citadel may discard any such records
after such seven-year period if (i) Citadel notifies the Stockholders of
Citadel's intent to discard such records and (ii) the Stockholders do not,
within 30 days after receipt of such notice, make arrangements to take
possession of such records from Citadel.
10.6 HSR Filing. As promptly as practicable after the date of this
Agreement, and in no event later than 15 business days after the date of this
Agreement, the parties hereto shall complete and submit any filing that may be
required pursuant to the HSR Act (the "HSR Filing"). The parties hereto shall
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested, in order to
comply with the requirements of the HSR Act and to secure the expiration or
termination of all applicable waiting periods under the HSR Act. The parties
hereto shall use their best efforts to resolve objections, if any, that may be
asserted under the HSR Act or any other antitrust law in connection with the
transactions contemplated hereby. Citadel shall advance the filing fee
applicable to any HSR Filing, and the Stockholders shall reimburse Citadel for
one-half of such filing fee at the Closing (or upon the earlier termination of
this Agreement). Subject to Section 16.7, 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 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
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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.
10.8 Public Announcements. Citadel and the Company 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
statements 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 heretofore
agreed to by the parties.
10.9 No Inconsistent Action. No party hereto shall take any action
(a) inconsistent with his or its obligations under this Agreement or (b) that
would hinder or delay the consummation of the transactions contemplated by this
Agreement. In furtherance of the foregoing, from and after the date of this
Agreement and until the earlier to occur of the Closing or the termination of
this Agreement in accordance with its terms, Citadel shall not acquire, or enter
into any agreement to acquire, any radio station in any of the Markets unless
Citadel has obtained the prior written consent of the Stockholder Rep, which
consent shall not be unreasonably withheld or delayed.
10.10 Pending Acquisition. Tri-Cities Sub is a party to an Asset
Purchase Agreement dated as of January 10, 2000 (the "WGOC Agreement") with J.
T. Parker Broadcasting Corporation (the "WGOC Owner"), pursuant to which
Tri-Cities Sub has agreed to acquire substantially all of the assets of WGOC(AM)
licensed to Blountville, Tennessee ("WGOC") for approximately $850,000.00 (the
"Pending Acquisition"). Tri-Cities Sub and the WGOC Owner are also parties to a
Time Brokerage Agreement dated January 10, 2000 (the "WGOC TBA"), pursuant to
which Tri-Cities Sub has agreed to provide various services to the WGOC Owner
relating to WGOC. The Company shall use commercially reasonable efforts to
consummate the Pending Acquisition prior to the Closing in accordance with and
subject to the terms and conditions of the WGOC Agreement. In the event the
Pending Acquisition has been consummated prior to the Closing, from and after
the date on which the Pending Acquisition is consummated, the term "Stations"
and "Assets" shall include, respectively, WGOC and all of the assets relating
thereto; provided, however, for purposes of such inclusion, Citadel acknowledges
that the Company intends to operate WGOC consistent with the Company's past
practices.
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10.11 Stockholder Documents. The Company and the Stockholders hereby
(a) irrevocably waive any redemption rights, conversion rights, rights of first
offer, call rights, put rights, go-along rights and other similar rights and
restrictions (but excluding any vesting rights) set forth in the Stockholder
Documents or BBH's certificate of incorporation, as amended, solely with respect
to and solely to the extent arising as a result of the execution, delivery
and/or performance of this Agreement; and (b) agree that, effective as of the
Closing and without the need for any further action, each of the Stockholder
Documents shall automatically and irrevocably terminate, and any rights and
obligations thereunder shall be deemed extinguished.
SECTION 11
THE CLOSING
11.1 Closing Date. The Closing shall occur on a date mutually
selected by the Company and Citadel which is within 10 business days following
the later of (a) the date on which the FCC Approval has become a Final Order or
(b) 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 Eckert Seamans
Cherin & Mellott, LLC, 600 Grant Street, 44th Floor, Pittsburgh, Pennsylvania
15219, counsel for Citadel, or on such other date and at such other time and
place as the parties may agree in writing.
11.2 Actions to be Taken at the Closing. The following actions
shall be taken at the Closing:
(a) Delivery of Purchase Price. Citadel shall deliver to the
Stockholders the Purchase Price in accordance with Section 2.2.
(b) Payment of Senior Debt and Subordinated Debt. Citadel
shall pay and discharge in full the Senior Debt and the Subordinated Debt.
(c) Delivery of Documents. Each of the parties shall deliver
to the other parties all agreements, certificates and other documents required
to be delivered by it or him pursuant to the terms of this Agreement or as a
condition precedent to the other parties' obligations under this Agreement,
including without limitation the following:
(i) The Company shall execute and deliver the Closing
Certificate.
(ii) The Stockholders shall deliver stock
certificates evidencing the Shares, together with duly executed stock powers.
(iii) The Company shall deliver resignations of each
officer and director of BBH, BBC and the Operating Subsidiaries.
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SECTION 12
CONDITIONS TO THE OBLIGATION OF BBH AND THE STOCKHOLDERS
The obligation of BBH and the 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 them in
their sole discretion (other than those set forth in Sections 12.6 and 12.7):
12.1 Opinion of Citadel's Counsel. The Stockholders shall have
received an opinion of counsel for Citadel, dated the Closing Date, in form and
substance reasonably satisfactory to the Stockholders, as to the matters set
forth on Exhibit B hereto.
12.2 Representations, Warranties and Covenants. The representations
and warranties of Citadel contained herein shall be true and correct in all
material respects at and as of the Closing with the same effect as though all
such representations and warranties were made at and as of the Closing (except
for representations and warranties expressly and specifically relating to a time
or times other than the Closing, which shall be true and correct in all material
respects at and as of the time or times specified); provided, however, that to
the extent any of such representations or warranties is modified by a
materiality standard or by reference to Material Adverse Effect, such
representation or warranty shall be true and correct as set forth therein as of
the date hereof and as of the Closing Date. Citadel shall have complied in all
material respects with all of its covenants, undertakings and agreements
contained herein to be complied with at or prior to the Closing; provided,
however, that to the extent any of such covenants, undertakings or agreements is
modified by a materiality standard or by reference to Material Adverse Effect,
such covenant, undertaking or agreement shall have been complied with in all
respects. Citadel shall have delivered to the Stockholders a certificate
confirming the matters set forth in this Section 12.2, which certificate shall
be dated the Closing Date and signed by an officer of Citadel.
12.3 No Litigation. No injunction relating to any action, suit or
proceeding against Citadel, the Company or the Stockholders prohibiting the
consummation of any of the transactions contemplated by this Agreement or any
action by any Governmental Authority shall have been issued and remain in
effect.
12.4 Other Certificates. The Stockholders shall have received a
certificate as to the good standing of Citadel in the State of Nevada, as of a
date not more than 20 days before the Closing, and such other certificates,
instruments and other documents, in form and substance reasonably satisfactory
to the Stockholders, as the Stockholders shall have reasonably requested in
connection with the transactions contemplated hereby.
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 the Stockholders certified copies
of the resolutions of Citadel's board of directors authorizing the
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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.
12.6 FCC Approval. The FCC Approval shall have been obtained and
shall have become a Final Order.
12.7 HSR Clearance. All applicable waiting periods under the HSR
Act shall have expired or been terminated.
SECTION 13
CONDITIONS TO THE OBLIGATION OF CITADEL
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 13.7 and 13.8):
13.1 Opinion of the Company's and the Stockholders' Counsel.
Citadel shall have received one or more opinions of counsel for the Company and
the Stockholders dated the Closing Date, in form and substance reasonably
satisfactory to Citadel, as to the matters set forth on Exhibit C hereto.
13.2 Representations, Warranties and Covenants. The representations
and warranties of BBH and the Stockholders contained herein shall be true and
correct in all material respects at and as of the Closing with the same effect
as though all such representations and warranties were made at and as of the
Closing (except for representations and warranties expressly and specifically
relating to a time or times other than the Closing, which shall be true and
correct in all material respects at and as of the time or times specified);
provided, however, that to the extent any of such representations or warranties
is modified by a materiality standard or by reference to Material Adverse
Effect, such representation or warranty shall be true and correct as set forth
therein as of the date hereof and as of the Closing Date. BBH and the
Stockholders shall have complied in all material respects with all of their
covenants, undertaking and agreements contained herein to be complied with at or
prior to the Closing; provided, however, that to the extent any of such
covenants, undertakings or agreements is modified by a materiality standard or
by reference to Material Adverse Effect, such covenant, undertaking or agreement
shall have been complied with in all respects . BBH and the Stockholders shall
have delivered to Citadel a certificate confirming the matters set forth in this
Section 13.2, which certificate shall be dated the Closing Date and signed by or
on behalf of each Stockholder and BBH.
13.3 No Litigation. No injunction relating to any action, suit or
proceeding against the Company, the Stockholders or Citadel prohibiting the
consummation of any of the transactions contemplated by this Agreement or any
action by any Governmental Authority shall have been issued and remain in
effect.
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13.4 Other Certificates. Citadel shall have received a certificate
as to the good standing of BBH, BBC and each of the Operating Subsidiaries as a
corporation in each state where organized and qualified, 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 reasonably satisfactory to Citadel,
as Citadel shall have reasonably requested in connection with the transactions
contemplated by this Agreement.
13.5 Corporate Action. All action necessary to authorize the
execution, delivery and performance by BBH and each Stockholder (other than
individuals) of this Agreement and the transactions contemplated hereby shall
have been duly and validly taken by BBH and such Stockholders, and BBH and such
Stockholders shall have delivered to Citadel certified copies of the resolutions
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 Mandatory Consents. All Mandatory Consents shall have been
obtained (except as otherwise provided in Section 6.12).
13.7 FCC Approval. The FCC Approval shall have been obtained and
shall have become a Final Order.
13.8 HSR Clearance. All applicable waiting periods under the HSR
Act shall have expired or been terminated.
SECTION 14
INDEMNIFICATION
14.1 Indemnification by the Stockholders. Subject to the
limitations and procedures set forth in this Section 14 and in Section 15.3,
each Stockholder, severally to the extent of such Stockholder's percentage
ownership of BBH as of the Closing Date as set forth in the Equity Percentage
Letter (or in accordance with Schedule 1 hereto if the Equity Percentage Letter
is not delivered), and not jointly, shall indemnify and hold harmless Citadel
and its stockholders, officers, directors and employees 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
BBH or such Stockholder in this Agreement, (b) the breach of any of the
representations or warranties made by BBH or such Stockholder in this Agreement,
(c) any inaccuracy in the Closing Certificate or any other document delivered by
BBH or such Stockholder at the Closing pursuant to this Agreement, (d) the
matters set forth in Section 3.22 of Company's Disclosure Schedule, net of (i)
insurance proceeds actually received by Citadel and (ii) amounts actually
received by Citadel from escrow, with respect to such matters, or (e) item no. 3
set forth in Section 3.25 of Company's Disclosure
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Schedule (provided, however, that the indemnification obligation pursuant to
this clause (e) shall survive for a period of 36 months after the Closing Date).
14.2 Indemnification by Citadel. Subject to the limitations and
procedures set forth in this Section 14, Citadel shall indemnify and hold
harmless the Stockholders and their respective partners, stockholders, officers,
directors and employees from and against any and all Damages sustained or
incurred by them, 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 or (b) the breach of any of the representations or warranties
made by Citadel in this Agreement.
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) The Stockholders. Each of the representations and
warranties made by BBH and the Stockholders in this Agreement shall survive for
a period of 18 months after the
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Closing Date, notwithstanding any investigation at any time made by or on behalf
of Citadel, and upon the expiration of such 18-month period such representations
and warranties shall expire except as follows: (i) the representations and
warranties contained in Sections 3.1 through 3.9, 3.12, 3.15(a), 3.15(f)(i),
3.18, 3.25, 3.26, 4.1 and 4.2 shall expire upon the earlier to occur of (x) the
date which is 36 months after the Closing Date and (y) the expiration of the
statute of limitations applicable to the pertinent claim; and (ii) the
representations and warranties contained in Section 4.3 shall not expire but
shall continue indefinitely. No claim for the recovery of Damages may be
asserted by Citadel against the Stockholders after such representations and
warranties shall thus expire; provided, however, that claims for Damages first
asserted in writing 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 18 months after the
Closing Date, notwithstanding any investigation at any time made by or on behalf
of the Stockholders, and upon the expiration of such 18-month period such
representations and warranties shall expire, except that the representations and
warranties of Citadel contained in Sections 5.1 and 5.2 shall expire upon the
earlier to occur of (x) the date which is 36 months after the Closing Date and
(y) the expiration of the statute of limitations applicable to the pertinent
claim. No claim for the recovery of Damages may be asserted by the 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 within the applicable period shall not thereafter be barred.
14.5 Limitation of Stockholders' Liability. Notwithstanding
anything in this Agreement to the contrary (other than Section 15.3), the
obligation of the Stockholders to indemnify Citadel shall be subject to the
following:
(a) Threshold. Citadel shall not be entitled to recover
Damages pursuant to clause (b) or (e) of Section 14.1 (other than Damages
arising by reason of a breach of the representations and warranties made in
Section 4.3) until the aggregate of all such Damages suffered by Citadel
(excluding Pre-Closing Damages of $500,000 or less) exceeds $500,000 (the
"Threshold"); provided, however, that once such aggregate exceeds the Threshold,
Citadel may recover all such Damages (excluding Pre-Closing Damages of $500,000
or less) suffered since the Closing Date without regard to the Threshold.
(b) Ceiling. Citadel shall not be entitled to recover Damages
pursuant to Section 14.1 in excess of $40,000,000; provided, however, that with
respect to Damages arising by reason of a breach of the representations and
warranties made in Section 4.3, Citadel shall not be entitled to recover Damages
in excess of the Purchase Price.
(c) Exclusive Remedy. Except as provided in Section 15 and
except with respect to any claim for Damages relating to any fraudulent breach
of a representation, warranty or covenant of BBH or the 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.
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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 fraudulent
breach of a representation, warranty or covenant of BBH or the Stockholders, nor
shall there be any survival limitation for any such claim.
14.6 Limitation of Citadel's Liability. Notwithstanding anything in
this Agreement to the contrary, the obligation of Citadel to indemnify the
Stockholders shall be subject to the following:
(a) Threshold. The Stockholders shall not be entitled to
recover Damages pursuant to clause (b) of Section 14.2 until the aggregate of
all such Damages suffered by the Stockholders exceeds the Threshold; provided,
however, that once such aggregate exceeds the Threshold, the Stockholders may
recover all such Damages suffered since the Closing Date without regard to the
Threshold.
(b) Ceiling. The Stockholders shall not be entitled to recover
Damages pursuant to Section 14.2 in excess of $40,000,000.
(c) Exclusive Remedy. Except as provided in Section 15 and
except with respect to any claim for Damages relating to any 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 the
Stockholders with respect to any legal, equitable or other claim for relief
based upon this Agreement.
(d) Exceptions. The limitations set forth in this Section 14.6
shall not apply with respect to any claim for Damages relating to any fraudulent
breach of a representation, warranty or covenant of Citadel, nor shall there be
any survival limitation for any such claim.
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, BBH and the
Stockholders;
(b) by either Citadel, BBH or the Stockholders upon providing
written notice to the other party at any time after the first anniversary of 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 BBH and the
Stockholders, if as of the Closing Date any of the conditions in Section 13
(except Section 13.7 or 13.8) has not been satisfied or waived by Citadel in
writing, provided (i) Citadel is not then in material breach
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of this Agreement and (ii) BBH and the Stockholders have not cured the breach or
default giving rise to such failed condition within 15 days after delivery of
such written notice;
(d) by BBH and the Stockholders, upon providing written notice
to Citadel, if as of the Closing Date any of the conditions in Section 12
(except Section 12.6 or 12.7) has not been satisfied or waived by BBH and the
Stockholders in writing, provided (i) BBH and the Stockholders are not then in
material breach of this Agreement and (ii) Citadel has not cured the breach or
default giving rise to such failed condition within 15 days after delivery of
such written notice;
(e) by BBH and the Stockholders, upon providing written notice
to Citadel, if Citadel fails to consummate the transactions contemplated hereby
after all conditions in Section 13 have been satisfied, provided BBH and the
Stockholders are not then in material breach of this Agreement;
(f) by Citadel, upon providing written notice to BBH and the
Stockholders, if BBH or the Stockholders fail to consummate the transactions
contemplated hereby after all conditions in Section 12 have been satisfied,
provided Citadel is not then in material breach of this Agreement;
(g) by Citadel, BBH or the Stockholders upon denial by the FCC
of the FCC Applications; or
(h) by Citadel, BBH or the Stockholders 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.
15.2 Additional Remedies.
(a) In the event of the termination of this Agreement by BBH
and the Stockholders pursuant to Section 15.1(d) or 15.1(e) (any such event
being a "Draw Condition"), BBH shall be entitled to draw upon and receive the
proceeds of the Letter of Credit; provided, however, that such proceeds shall
not constitute liquidated damages and BBH and the Stockholders shall be entitled
to recover only actual damages (including not only the costs incurred by BBH or
any Stockholder but any losses suffered by reason of realizing less than the
Purchase Price upon any subsequent sale of the Company (i.e., the so-called
"benefit of the bargain" or expectancy damages)) they suffer as a result of such
termination and the breach relating to such damages. In the event of any other
termination of this Agreement pursuant to any other provision of Section 15.1,
Citadel shall be entitled to a return of, and BBH shall return to Citadel, the
original Letter of Credit for cancellation.
(b) The parties recognize and agree that Citadel has relied on
this Agreement and expended considerable effort and resources related to the
transactions contemplated hereby, that the rights and benefits conferred upon
Citadel herein are unique, and that damages may not
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be adequate to compensate Citadel in the event BBH or the Stockholders
improperly refuse to consummate the transactions contemplated hereby. 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 in addition
all other remedies available at law or in equity; provided, however, that
Citadel may not specifically enforce this Agreement if Citadel has previously
terminated this Agreement and received the original Letter of Credit.
15.3 Pre-Closing Damages. Notwithstanding anything in this
Agreement to the contrary, prior to the Closing, the Company shall deliver to
Citadel in writing a supplement (the "Company's Disclosure Supplement") which
shall set forth (x) inaccuracies in, or other breaches of, the representations
and warranties of the Company and the Stockholders contained herein as of the
date hereof and as of immediately prior to the Closing, (y) the failure of the
Company or the Stockholders to comply with their respective covenants,
undertakings and agreements contained herein and (z) the aggregate amount of
Damages (collectively, "Pre-Closing Damages") which Citadel could reasonably be
expected to incur as a result of the matters described in clauses (x) and (y)
above. The Stockholders shall not have any liability to Citadel or its
stockholders, officers, directors or employees with respect to Pre-Closing
Damages which are equal to or less than $500,000 in the aggregate, and from and
after the Closing, Citadel shall be liable for such Pre-Closing Damages (to the
extent less than or equal to $500,000). The parties hereto acknowledge and agree
that this Section 15.3 shall function independently of the Threshold under
Section 14.5 and Pre-Closing Damages for which Citadel becomes liable hereunder
shall not be included in any calculation of the Threshold pursuant to Section
14.5.
SECTION 16
GENERAL
16.1 Survival of Representations and Warranties. Each
representation and warranty herein contained shall survive the Closing for the
periods described 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 Nevada.
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
7201 West Lake Mead Boulevard
Suite 400
Las Vegas, Nevada 89128
Attn: Donna L. Heffner
Fax: (702) 804-5936
With 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 the Stockholders: Media/Communications Partners III Limited Partnership
One Liberty Square
13th Floor
Boston, Massachusetts 02109
Attn: Stephen F. Gormley
Fax: (617) 790-9401
With copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attn: David F. Dietz, P.C.
Fax: (617) 523-1231
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 by
this Agreement. Except as otherwise set forth in this Agreement, there are no
other representations, warranties or covenants of any party hereto with respect
to the subject matter of this Agreement.
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 and 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 or his own costs and
expenses incurred by it or him in connection with the transactions contemplated
by this Agreement; provided, however,
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that the Stockholders shall bear all of the costs and expenses incurred by the
Company in connection with the transactions contemplated hereby.
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 any party without the prior
written consent, in its or his sole discretion, of each other party. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, and no other
Person shall have any right, benefit or obligation under this Agreement.
16.11 Prior Control. Until the Closing, the Company shall maintain
control of each Station.
16.12 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.
16.13 Company Obligations. Prior to the earlier of the Closing or
the termination of this Agreement in accordance with its terms, BBH shall be
responsible for all representations, warranties, obligations, undertakings and
agreements of the Company herein.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
BLOOMINGTON BROADCASTING HOLDINGS, INC.
By: /s/ Ken Maness
----------------------------------------
Title: President
-------------------------------------
MEDIA/COMMUNICATIONS PARTNERS III
LIMITED PARTNERSHIP
By: M/C III L.L.C., General Partner
By: /s/ Stephen F. Gormley
------------------------------------
Title: Manager
---------------------------------
M/C INVESTORS L.L.C.
By: /s/ Stephen F. Gormley
----------------------------------------
Title: Manager
-------------------------------------
FIRST UNION CAPITAL PARTNERS
By: /s/ Scott Perper
----------------------------------------
Title: Senior Vice President
-------------------------------------
BLOOMINGTON BROADCASTING CORP.
EMPLOYEES PROFIT SHARE 401(k)
By: /s/ Chris Ralb, Trustee
---------------
By: IAA Trust Company
------------------------------------
Title: Assistant Trust Officer
---------------------------------
[Signatures continued on next page]
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[Signatures continued from previous page]
/s/ Kenneth H. Maness
-------------------------------------------
Kenneth H. Maness
/s/ Richard D. Johnson
-------------------------------------------
Richard D. Johnson
/s/ William L. McElveen
-------------------------------------------
William L. McElveen
/s/ Donald G. Munson
-------------------------------------------
Donald G. Munson
/s/ Dan Brown
-------------------------------------------
Dan Brown
/s/ Donald Raines
-------------------------------------------
Donald Raines
/s/ Barclay A. Brandmiller
-------------------------------------------
Barclay A. Brandmiller
CITADEL BROADCASTING COMPANY
By: /s/ Lawrence R. Wilson
----------------------------------------
Title: Chief Executive Officer
-------------------------------------
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Index of Schedules and Exhibits
Schedule 1 - Stockholders
Schedule 2 - Stations
Schedule 3 - Citadel's Disclosure Schedule
Schedule 4 - Company's Disclosure Schedule
Exhibit A - Letter of Credit
Exhibit B - Form of Opinion of Counsel for Citadel
Exhibit C - Form of Opinion of Counsel for the Company and the Stockholders
[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.]