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EXHIBIT 10.6
EXECUTION COPY
JOINT SALES AGREEMENT
between
POURTALES RADIO PARTNERSHIP;
POURTALES HOLDINGS, INC.;
SPRINGS RADIO, INC.;
KVUU/KSSS, INC.;
AND
CITADEL BROADCASTING COMPANY
December 15, 1995
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TABLE OF CONTENTS
PAGE
1. Certain Definitions.................................................1
Additional Station..............................................1
Additional Station Acquisition..................................2
Change of Control...............................................2
Citadel Colorado Springs Stations...............................2
Citadel Spokane Stations........................................2
Citadel Stations................................................2
Collection Period...............................................2
Colorado Springs Market.........................................2
Commencement Date...............................................2
Delinquent Accounts.............................................2
FCC.............................................................2
FCC Laws........................................................2
Foreclosure.....................................................2
Independent Third Party.........................................3
Initial Term....................................................3
JSA Fee.........................................................3
Lender..........................................................3
Liquidation.....................................................3
Permitted Designee..............................................3
Person..........................................................3
Pourtales Colorado Springs Station..............................3
Pourtales Existing Accounts Receivable..........................3
Pourtales Future Accounts Receivable............................3
Pourtales Spokane Stations......................................3
Pourtales Stations..............................................4
Reorganizing Transaction........................................4
Sale of a Station...............................................4
Spokane Market..................................................4
Station.........................................................4
Station Collateral..............................................4
Term............................................................4
Termination Date................................................4
Trade Agreements................................................4
Trade Expenses..................................................4
Trade Imbalance.................................................5
Trade Liabilities...............................................5
Trade Receivables...............................................5
Trade Revenue...................................................5
Trade Schedule..................................................5
Triathlon Agreement.............................................5
2. Exclusive Right to Sell Advertising.................................5
3. Term................................................................5
4. Certain Matters Relating to Citadel Sales Functions.................6
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5. Traffic; Invoicing..................................................7
6. Trade...............................................................8
7. Accounts Receivable.................................................9
8. JSA Fee............................................................10
9. Termination........................................................11
10. Acquisitions and Transfers.........................................12
11. Representations and Warranties.....................................14
12. Additional Covenants of the Parties................................15
13. Triathlon Agreement Consummation...................................16
14. Relationship of Parties............................................17
15. General Provisions.................................................18
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JOINT SALES AGREEMENT
This Joint Sales Agreement (the "Agreement") is made and entered
into as of the 15th day of December, 1995, by and between Pourtales Radio
Partnership, a Colorado partnership ("Pourtales"); Pourtales Holdings, Inc., a
Colorado corporation ("PHI"); Springs Radio, Inc., a Colorado corporation
("SRI") and KVUU/KSSS, Inc., a Colorado corporation ("KKI"), on the one hand;
and Citadel Broadcasting Company, a Nevada corporation ("Citadel"), on the
other hand, with agreement by Triathlon Broadcasting Company, a Delaware
corporation ("Triathlon"), for purposes of Section 13. Pourtales, PHI, SRI and
KKI and sometimes referred to herein collectively as the "Pourtales Entities,"
and individually as a "Pourtales Entity."
PREAMBLE
Citadel is the licensee of the Citadel Stations (as such term is
defined below). Pourtales is the licensee of the Pourtales Spokane Stations (as
such term is defined below), SRI is the licensee of radio stations KVOR-AM and
KSPZ-FM, each licensed to Colorado Springs, Colorado and KKI is the licensee of
radio stations KTWK-AM and KUVV-FM, each licensed to Colorado Springs,
Colorado. PHI owns all of the outstanding capital stock of SRI. The Pourtales
Entities and Citadel desire to enter into an arrangement whereby Citadel will
provide certain sales and services to Pourtales with respect to the Pourtales
Stations (as such term is defined below), and the parties are entering into
this Agreement for that purpose.
The Pourtales Entities and Triathlon intend to enter into an
Amended and Restated Purchase and Sale Agreement dated as of August 12, 1995,
which will be amended and restated after the date hereof, under which Triathlon
will agree to purchase, among others, all of the Pourtales Stations. The
parties to this Agreement intend that if Triathlon becomes the licensee of any
of the Pourtales Stations, Triathlon will, with respect to such radio stations,
be entitled to the benefits and be subject to the obligations of the Pourtales
Entities under this Agreement as and to the same extent as if Triathlon were an
original party hereto in place of the Pourtales Entities.
Therefore, for and in consideration of the foregoing and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings ascribed to them below:
"Additional Station" means a radio station acquired, programmed or
marketed by a party pursuant to an Additional Station Acquisition.
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"Additional Station Acquisition" means the purchase of, or the
entering into of an agreement to program or market, a radio station, directly
or indirectly, by a party to this Agreement, which radio station is licensed to
either the Colorado Springs Market or the Spokane Market; provided, however,
that the purchase of any of the Pourtales Stations by Triathlon pursuant to the
Triathlon Agreement shall not be deemed an Additional Station Acquisition.
"Change of Control" with respect to a party to this Agreement
means (a) the sale of such party to an Independent Third Party or group of
Independent Third Parties pursuant to which the Independent Third Party or
group of Independent Third Parties acquires capital stock of such party
possessing the voting power under normal circumstances to elect a majority of
such party's board of directors (whether by merger, consolidation or sale or
transfer of such party's capital stock) or (b) the sale or other transfer of
all or substantially all of such party's assets determined on a consolidated
basis; provided, however, that a Change of Control shall not be deemed to occur
with respect to any of the Pourtales Entities solely by reason of the purchase
of any of the Pourtales Stations by Triathlon pursuant to the Triathlon
Agreement.
"Citadel Colorado Springs Stations" means radio stations KKFM-FM
and KKMG-FM, each licensed to Citadel.
"Citadel Spokane Stations" means radio stations KGA-AM, KJRB-AM,
KDRK-FM and KEZE-FM (application pending to change call sign to KAEP-FM), each
licensed to Citadel.
"Citadel Stations" means the Citadel Colorado Springs Stations and
the Citadel Spokane Stations.
"Collection Period" has the meaning provided in Section 7(a).
"Colorado Springs Market" means the Arbitron Metro Survey Area
that includes Colorado Springs, Colorado, as published by The Arbitron Company
from time to time.
"Commencement Date" means January 1, 1996.
"Delinquent Accounts" has the meaning provided in Section 7(b).
"FCC" means the Federal Communications Commission.
"FCC Laws" has the meaning provided in Section 9(d).
"Foreclosure" means and includes a foreclosure by a lender on its
security interest, an assignment of collateral to a
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lender in lieu of foreclosure, or any other realization on collateral by a
lender.
"Independent Third Party" with respect to any party to this
Agreement means any Person who, immediately prior to the contemplated
transaction, does not own (assuming the conversion, exchange or exercise of all
outstanding options, warrants, convertible securities and similar rights held
by such Person, regardless of whether currently exercisable) in excess of 5% of
the common stock on a fully diluted basis of such party (a "5% Owner"), who is
not controlling, controlled by or under common control with any such 5% Owner
and who is not the spouse or descendant (by birth or adoption) of any such 5%
Owner or a trust for the benefit of such 5% Owner and/or any of such other
Persons.
"Initial Term" has the meaning provided in Section 3.
"JSA Fee" has the meaning provided in Section 8.
"Lender" means any Person holding a security interest in or to any
of the Station Collateral.
"Liquidation" of a party to this Agreement means the dissolution
of such party in accordance with applicable law and the liquidation of such
party's assets following dissolution.
"Permitted Designee" has the meaning provided in Section 10(d).
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization or governmental entity or any
department, agency or political subdivision thereof.
"Pourtales Colorado Springs Stations" means radio stations
KTWK-AM, KVOR-AM, KVUU-FM and KSPZ-FM, each licensed to Pourtales Entities as
set forth in the Preamble.
"Pourtales Existing Accounts Receivable" means the accounts
receivable, other than Trade Receivables, of the Pourtales Stations existing as
of the Commencement Date.
"Pourtales Future Accounts Receivable" means the accounts
receivable, other than Trade Receivables, of the Pourtales Stations, and all
other revenue from the sale of advertising time on any of the Pourtales
Stations, arising from and after the Commencement Date.
"Pourtales Spokane Stations" means radio stations KEYF-AM/FM,
KUDY-AM and KKZX-FM, each licensed to Pourtales.
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"Pourtales Stations" means the Pourtales Colorado Springs Stations
and the Pourtales Spokane Stations.
"Reorganizing Transaction" with respect to a party to this
Agreement means any assignment, sale or other transfer by such party to any
Person other than an Independent Third Party (a) of capital stock of such party
possessing the voting power under normal circumstances to elect a majority of
such party's board of directors (whether by merger, consolidation or sale or
transfer of directors (whether by merger, consolidation or sale or transfer of
such party's capital stock) or (b) of all or substantially all of such party's
assets determined on a consolidated basis; provided, however, that a
Reorganizing Transaction shall not be deemed to occur by reason of the
distribution of assets of any party pursuant to the Liquidation of such party,
or (c) with respect to which the parties to the transaction would be entitled
to obtain required FCC approval pursuant to a "pro forma" transfer or
assignment application (FCC Form 316).
"Sale of a Station" means and includes (a) the sale of, or the
entering into of an agreement with another Person to program, a Station by any
party to this Agreement, other than (i) pursuant to a Change of Control, (ii) a
Foreclosure or (iii) a sale of any of the Pourtales Stations to Triathlon
pursuant to the Triathlon Agreement, and (b) the distribution or other transfer
of any Station pursuant to the Liquidation of a party.
"Spokane Market" means the Arbitration Metro Survey Area that
includes Spokane, Washington, as published by The Arbitron Company from time to
time.
"Station" means one of the Citadel Stations or the Pourtales
Stations, as required by the context.
"Station Collateral" has the meaning provided in Section 10(b).
"Term" has the meaning provided in Section 3.
"Termination Date" has the meaning provided in Section 9(c).
"Trade Agreements" of a radio station means all barter agreements,
arrangements, commitments or understandings, whether written or oral, requiring
the licensee of such radio station to provide advertising time on such radio
station.
"Trade Expenses" of a radio station means expenses of such radio
station which have been paid through the use of goods or services received by
such radio station pursuant to a Trade Agreement.
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"Trade Imbalance" of a radio station means, at any point in time,
the amount by which the Trade Receivables of the radio station exceed the
amount of its Trade Liabilities.
"Trade Liabilities" of a radio station means the unperformed
obligation of the radio station to run advertising time pursuant to one or more
Trade Agreements, valued in accordance with the historical practices of the
radio station.
"Trade Receivables" of a radio station means the value of the
goods and services received or to be received but not yet used by the radio
station in exchange for advertising that has been or is required to be run on
the radio station pursuant to a Trade Agreement, which value is determined in
accordance with historical practices of the radio station.
"Trade Revenue" of a radio station means revenue of the radio
station received pursuant to a Trade Agreement.
"Trade Schedule" has the meaning provided in Section 6(a).
"Triathlon Agreement" means that certain Amended and Restated
Purchase and Sale Agreement dated as of August 12, 1995 among Triathlon and the
Pourtales Entities to be entered into by such parties.
2. Exclusive Right to Sell Advertising. The Pourtales Entities
hereby grant Citadel the exclusive right to sell advertising on their
respective Pourtales Stations, as sales agent for the Pourtales Entities,
during the Term to local, regional or national advertisers pursuant to the
terms and conditions set forth herein. Citadel agrees at all times during the
Term to exercise the same efforts it historically has exercised for the Citadel
Stations to sell advertising on the Pourtales Stations to local, regional and
national advertisers. The Pourtales Entities agree to exercise reasonable
efforts at all times during the Term to program and promote their respective
Pourtales Stations so as to enhance their ratings.
3. Term. The term of this Agreement (the "Initial Term") shall
commence on the Commencement Date and, unless sooner terminated or extended in
accordance with any of the remaining provisions of this Agreement, shall expire
on December 31, 2000. The Initial Term may be extended for up to two additional
consecutive five year terms by Citadel or the Pourtales Entities upon written
notice to the other prior to expiration of the then existing term. Such
extension or consent thereto by any of the Pourtales Entities shall bind all of
the Pourtales Entities. The Initial Term, as so extended, if applicable, is
referred to herein as the "Term." Notwithstanding any provision contained in
this Agreement to the contrary, either Citadel or the Pourtales Entities may,
upon written notice to the other parties hereto, terminate
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this Agreement prior to the Commencement Date, in which event none of the
parties hereto shall have any further liability or obligation to any other
party, unless, prior to such date, (a) Citadel has approved the Triathlon
Agreement as contemplated by Section 13(b) and (b) each of the parties hereto
has obtained the consent of their lender as contemplated by Section 10(c). Such
a termination by any of the Pourtales Entities shall be deemed a termination by
all of the Pourtales Entities.
4. Certain Matters Relating to Citadel Sales Functions.
(a) Citadel shall have the right to offer advertising spots
on the Pourtales Stations to advertisers individually and in combination with
advertising on any or all of the Citadel Stations.
(b) The Pourtales Entities shall prepare a rate card for
their respective Pourtales Stations presenting the rates of each such Station
for all classes of time and day-parts it makes available to advertisers and
provide such rate cards to Citadel. Citadel shall be entitled to rely on the
rates contained on such rate cards in offering to sell advertising on the
Pourtales Stations. When offering the rates of any of the Pourtales Stations
in combination with any or all of the Citadel Stations, Citadel may offer a
discount of not more than 25% from the stated rates. The Pourtales Entities
shall have the right to change the rates listed on their respective rate cards,
but shall promptly provide written notice of all such changes to Citadel. Such
rate changes shall be effective only after Citadel has received written notice
thereof. The Pourtales Entities agree to honor all advertising arranged by
Citadel that is based on rates in effect prior to any changes for 30 days
following the date such rate change becomes effective.
(c) In offering to sell advertising on any of the Pourtales
Stations, Citadel shall have the right, in its sole discretion, to determine
the particular spot packages that shall be offered to advertisers and to decide
on a case-by-case basis whether to offer a particular spot packages that shall
be offered to advertisers and to decide on a case-by-case basis whether to
offer a particular potential advertiser the opportunity to purchase time on any
of the Pourtales Stations in combination with any of the Citadel Stations;
provided, however, that the parties agree that all advertisers offered the
opportunity to purchase spots in combination will also be provided the
opportunity to purchase time on the Pourtales Stations individually. Upon
request of any of the Pourtales Entities, Citadel shall provide the requesting
party with information concerning the packages Citadel is offering or has
offered for sale to any advertisers. The Pourtales Entities agree to provide
Citadel with any information in their possession with respect to the
programming, demographics and ratings of the Pourtales Stations to assist
Citadel in its efforts to solicit advertising sales.
(d) All advertising placed on the Pourtales Stations by
Citadel shall be governed by this Agreement. Citadel
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shall be permitted to solicit advertising for the Pourtales Stations directly
from current clients of and agencies customarily dealing with the Pourtales
Stations. Citadel shall have full authority to handle all advertising sales for
such accounts unless the advertiser or agency with which Citadel is dealing
subsequently instructs Citadel that accounts must be handled by one of the
Pourtales Entities.
(e) Citadel and the Pourtales Entities agree that any
advertising offer to any candidates for political office to air on the
Pourtales Stations will be handled in strict accordance with the Communications
Act of 1934, as amended, and the rules and regulations of the FCC, and will be
supported by documentation as required by the FCC and the Pourtales Entities.
Citadel shall promptly provide all required related documentation to the
Pourtales Entities for inclusion in their respective public inspection files at
the Pourtales Stations. The parties acknowledge that although the appropriate
Pourtales Entities, under applicable FCC laws, have sole authority and
responsibility to assure that all candidate advertising on their respective
Pourtales Stations complies with FCC rules and regulations, it shall be
Citadel's responsibility to conduct itself at all times in a manner that will
permit the Pourtales Entities to be and remain in compliance with such rules
and regulations.
(f) During the term of this Agreement, Citadel shall maintain
books and records relating to its activities hereunder in accordance with
commercially reasonable practices, and afford any of the Pourtales Entities or
Triathlon, at their sole cost and expense and at a mutually convenient time,
the right to review and inspect such books and records; provided, that such
inspection shall be conducted in a manner that does not disrupt the normal
business operations of the Stations.
5. Traffic; Invoicing.
(a) Citadel shall perform all traffic functions for the
Pourtales Stations. All orders sold by Citadel shall be run unless the relevant
Pourtales Entity has previously sold out all of the inventory of the relevant
Pourtales Stations for a day-part that is included in a particular advertising
buy; provided, however, that each Pourtales Entity shall at all times have the
right to reject any advertising spot containing matter which, in its sole
opinion, is unsatisfactory, unsuitable, contrary to the public interest or
violative of any federal, state or local law, including, without limitation,
the rules and regulations of the FCC.
(b) Citadel shall be responsible for sending in a timely
manner invoices and billing statements to clients and agencies for all
advertising run on the Pourtales Stations, and copies of all invoices shall be
provided to the Pourtales Entities along with weekly pacing reports, monthly
account summaries and
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other billing information reasonably requested by the Pourtales Entities.
(c) Citadel shall use commercially reasonable efforts to
ensure that advertisers and agencies pay the Pourtales Entities separately from
Citadel for advertising purchased to air on the Pourtales Stations, whether
such advertising is carried independently on the Pourtales Stations or in
combination with one or more Citadel Stations. Citadel shall collect and hold
such payments, as agent for the Pourtales Entities, pursuant to Section 7(b).
(d) Citadel will ensure that the Pourtales Stations receive
individual tapes and traffic orders from all advertisers on their respective
Stations, including providing copies of such tapes and orders from other
Stations that may be involved in combination buys in the event that the
Station's copies do not arrive on schedule. The Pourtales Entities and Citadel
shall keep each other informed as to the status of all production materials for
advertising sold by Citadel to air on the Pourtales Stations.
6. Trade.
(a) The Pourtales Entities shall exercise reasonable efforts
between the date hereof and the Commencement Date to eliminate any Trade
Imbalance existing at any of the Pourtales Stations. On or before the
Commencement Date, the Pourtales Entities shall deliver to Citadel a schedule
(the "Trade Schedule"), certified by the chief financial officer of the
appropriate Pourtales Entities as true and correct, setting forth, as of the
Commencement Date, (i) a description of each of the Trade Agreements then in
effect with respect to each of the Pourtales Stations, (ii) the Trade
Receivables of each of the Pourtales Stations and (iii) the Trade Liabilities
of each of the Pourtales Stations. The Trade Liabilities set forth on the Trade
Schedule shall be run in accordance with the terms of the applicable Trade
Agreement set forth on the Trade Schedule. Citadel shall be entitled to all the
Trade Receivables of the Pourtales Stations existing as of the Commencement
Date for use in satisfying its obligations under this Agreement and otherwise
operating the Citadel Stations.
(b) Citadel may in its discretion enter into Trade Agreements
during the Term which require advertising time to be run on the Pourtales
Stations; provided, however, that Citadel shall obtain the prior written
approval of the Pourtales Entities before entering into any Trade Agreements
that will result in Trade Receivables that will not be used by Citadel for the
sole purpose of satisfying its obligations under this Agreement or otherwise
operating the Citadel Stations. Trade Liabilities resulting from such Trade
Agreements shall be run on the Pourtales Stations, as appropriate, in
accordance with the terms of the applicable Trade Agreements. Citadel shall be
entitled to all of the resulting
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Trade Receivables for use in satisfying its obligations under this Agreement
and otherwise operating the Citadel Stations.
7. Accounts Receivable.
(a) On or before the Commencement Date, the Pourtales
Entities shall deliver to Citadel a list of the Pourtales Existing Accounts
Receivable. Citadel, for a period of 120 days commencing with the Commencement
Date (the "Collection Period", as agent for the Pourtales Entities, shall
collect the Pourtales Existing Accounts Receivable in accordance with Citadel's
normal collection processes and procedures. In no event shall Citadel be
required to institute litigation or to retain third parties to institute
litigation or to retain third parties to institute collection procedures with
respect to the Pourtales Existing Accounts Receivable. All remittances will be
applied first to the oldest Pourtales Existing Accounts Receivable.
One-half of the remittances on the Pourtales Existing
Accounts Receivable collected by Citadel on behalf of the Pourtales Entities
shall be remitted to the appropriate Pourtales Entities on or before the
expiration of each 15-day period during the Collection Period, and the balance
of all remittances on Pourtales Existing Accounts Receivable collected by
Citadel on behalf of the Pourtales during the Collection Period shall be
remitted to the appropriate Pourtales Entities within five days after
termination of the Collection Period. Citadel shall be under no obligation to
segregate any remittances prior to their payment to the Pourtales Entities, and
Citadel may commingle and otherwise use such funds in its sole discretion.
During the Collection Period, at the option of the Pourtales Entities, the
Pourtales Entities shall be permitted to collect their respective Pourtales
Existing Accounts Receivable that remain outstanding after 60 days, or are
disputed in writing by the relevant account debtor. Each remittance by Citadel
to the Pourtales Entities shall be accompanied by a written report by Citadel
setting forth the aggregate amount of the Pourtales Existing Accounts
Receivable during the period for which payment is made, along with a breakdown
by account debtor. At the end of the Collection Period, Citadel shall account
for all collected Pourtales Existing Accounts Receivable and provide the
Pourtales Entities with all documentation relating to their respective
uncollected Pourtales Existing Accounts Receivable. Citadel shall have no
obligation with respect to Pourtales Existing Accounts Receivable that it is
unable to collect. After the end of the Collection Period, the Pourtales
Entities shall be entitled to collect any of their respective Pourtales
Existing Accounts Receivable that remain uncollected.
(b) The Pourtales Entities hereby grant Citadel the exclusive
right, as agent for the Pourtales Entities, to collect the Pourtales Future
Accounts Receivable. Citadel shall make such collections in accordance with
Citadel's normal collection processes and procedures. In no event shall Citadel
be required to
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institute litigation or to retain third parties to institute collection efforts
with respect to the Pourtales Future Accounts Receivable. All remittances will
be applied first to the oldest Pourtales Future Accounts Receivable.
Citadel shall be entitled to deduct from all remittances on
Pourtales Future Accounts Receivable collected on behalf of the Pourtales
Entities the JSA Fee payable to Citadel. All remittances on Pourtales Future
Accounts Receivable collected by Citadel on behalf of their appropriate
Pourtales Entities net of the JSA Fee shall be remitted to the appropriate
Pourtales Entities in accordance with Exhibit A annexed hereto. Citadel shall
be under no obligation to segregate any remittances prior to their payment to
the Pourtales Entities, and Citadel may commingle and otherwise use such funds
in its sole discretion. During the Term, at option of the Pourtales Entities,
the Pourtales Entities shall be permitted to collect their respective Pourtales
Future Accounts Receivable that remain outstanding after 60 days, or are
disputed in writing by the relevant account debtor ("Delinquent Accounts". Each
remittance by Citadel to the Pourtales Entities shall be accompanied by a
written report from Citadel setting forth the aggregate amount of the Pourtales
Future Accounts Receivable and the aggregate amount of cash collections of such
Pourtales Future Accounts Receivable during the period for which payment is
made, along with a breakdown by account debtor. Promptly after the end of the
Term, Citadel shall account for all collected Pourtales Future Accounts
Receivable and provide the Pourtales Entities with all documentation relating
to their respective uncollected Pourtales Future Accounts Receivable. Citadel
shall have no obligation with respect to any Pourtales Future Accounts
Receivable that it is unable to collect.
8. JSA Fee. In consideration for its services under this
Agreement, Citadel shall be entitled to a fee (the "JSA Fee"), calculated in
accordance with Exhibit A. The parties acknowledge and agree that (a) Citadel,
as the joint sales agent for both the Citadel Stations and the Pourtales
Stations, will possess certain discretionary authority in directing advertising
opportunities to the Stations, (b) it would be impracticable for the Pourtales
Entities to monitor each of the discretionary decisions of Citadel in making
such allocations and (c) to ensure that advertising opportunities of the
Stations are allocated to the Citadel Stations and the Pourtales Stations
equitably, the parties have established the formula set forth on Exhibit A for
determining the JSA Fee. The parties acknowledge and agree that the formula set
forth on Exhibit A fairly reflects the apportionment of advertising among the
Stations that could reasonably be expected in light of the relative market
positions of the Citadel Stations and the Pourtales Stations. The JSA Fee shall
be payable within ten days after the end of each calendar month during the Term
(the first payment to commence in February 1996), and within ten days after
termination of the Agreement, except where a different time is permitted by the
provisions of Exhibit A.
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9. Termination.
(a) Subject to clause (c) below, the Pourtales Entities on
one hand, and Citadel on the other hand, may terminate this Agreement upon the
occurrence of any of the following events:
(i) The breach by the non-terminating party of any
material provision in this Agreement, other than a payment breach of the type
described in clause (b) below, which remains uncured as of the expiration of
the 30-day period following written notice of breach to the non-terminating
party by the terminating party;
(ii) Any representation or warranty by the
non-terminating party herein shall be incorrect in any material respect; or
(iii) The non-terminating party shall (A) make a general
assignment for the benefit of its creditors, (B) have filed against it a
petition in bankruptcy which is not dismissed within 60 days after the filing
thereof, (C) be adjudicated as bankrupt or insolvent, (D) have appointed a
receiver or other custodian (permanent or temporary) of the assets of its
company or property, or any portion thereof, by any court of competent
jurisdiction, (E) have filed against it any proceedings for a composition with
creditors under any state or federal law, which proceedings are not dismissed
within 60 days after the filing thereof, or (F) file a petition under any
federal or state bankruptcy law or similar law affording protection with
respect to its creditors.
(b) Subject to clause (c) below, any of the Pourtales
Entities may terminate this Agreement upon the breach by Citadel of its
remittance obligations under Section 7 of this Agreement or Exhibit A, which
breach remains uncured as of the expiration of the five-day period following
written notice of breach to Citadel by any of the Pourtales Entities.
(c) Termination of this Agreement by any party pursuant to
Sections 9(a) or 9(b) shall be effective as of a date ("Termination Date")
specified in a written notice by the terminating party to the other; provided,
however, that in the event of any termination pursuant to Section 9(a), the
Termination Date shall be a date not sooner than 180 days after the date of
such written notice. Such termination right may be exercised in addition to and
not in lieu of any other right or remedy to which the terminating party may be
entitled, at law or in equity.
(d) If for any reason this Agreement or the parties'
relationship contemplated hereunder is determined to be in violation of the
Communications Act of 1934, as amended, or the rules, regulations or policies
of the FCC (collectively, the "FCC Laws"), this Agreement shall promptly
terminate without further
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obligation on the part of any party except as provided in Section 9(h).
(e) This Agreement shall be terminated automatically and
without notice to or further action by any party upon the consummation of
Citadel's purchase of the Pourtales Stations pursuant to Section 13(b).
(f) In the event of the termination of this Agreement by any
party pursuant to this Section 9 (other than Section 9(e)), or the expiration
of the Term, Citadel shall exercise commercially reasonable efforts to
encourage its then existing sales staff for the Pourtales Stations to accept
employment offers from the Pourtales Entities, if any.
(g) Any termination of this Agreement by any of the Pourtales
Entities pursuant to this Section 9 shall effect a termination of this
Agreement by all of the Pourtales Entities. Any termination of this Agreement
by Citadel with respect to any of the Pourtales Entities shall constitute a
termination of this Agreement by Citadel with respect to all of the Pourtales
Entities.
(h) Upon termination of this Agreement pursuant to this
Section 9, no further rights, obligations or liabilities shall accrue from and
after the date of termination with respect to any party, except (i) to the
extent permitted by FCC Laws, the parties shall perform those obligations
arising through and including the date of termination, (ii) the obligation of
each party to cooperate reasonably and in good faith to effect the transfer to
the other, as appropriate, of the obligations theretofore undertaken by such
party pursuant to this Agreement, (ii) the obligations imposed upon Citadel by
Section 9(f) and (iv) the obligation of the Pourtales Entities to collect the
Pourtales Future Accounts Receivable existing as of the date of termination and
the obligation of the parties to make post-termination payments pursuant to
Exhibit A, each of which obligations shall survive the termination of this
Agreement notwithstanding any other provision contained herein to the contrary.
10. Acquisitions and Transfers.
(a) In the event any party to this Agreement effects an
Additional Station Acquisition, the Additional Station shall be subject to all
of the provisions of this Agreement. In such event, the parties agree to
negotiate in good faith any modifications to this Agreement required to
preserve for the parties, following the addition of the Additional Station to
this Agreement, the relative benefits and obligations of the parties
contemplated hereby.
(b) In the event of a Foreclosure on any of the Stations, any
of the assets related thereto, or any interest in this Agreement (the "Station
Collateral") by any Lender, such
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Lender shall be bound by each of the provisions of this Agreement, from and
after the date of Foreclosure, as and to the same extent as if an original
party hereto in place of the party against whom such Foreclosure was effected.
If such Lender, in effecting a Foreclosure, elects to take possession of or
title to any of the Station Collateral through a trust or other entity, such
Lender shall cause such other entity, prior to taking possession or title and
as a condition thereto, to execute a written agreement to be bound by the
provisions of this Agreement, in form and substance reasonably acceptable to
the party against whom the Foreclosure has not been effected.
(c) Citadel and the Pourtales Entities shall exercise
commercially reasonable efforts to obtain prior to the Commencement Date, and
shall at all times thereafter maintain in full force and effect, for the
benefit of each of the other parties to this Agreement, a written agreement
executed by each of the Lenders of such party (including both existing and
future Lenders) to comply with the provisions of clause (b) above, such
agreement to be in form and substance reasonably acceptable to each of the
parties to this Agreement.
(d) If any party to this Agreement desires to effect a Sale
of a Station, the selling party shall first deliver to the other party (the
"Other Party") a written offer to sell to the Other Party the Station on the
terms and conditions set forth in the written offer. The Other Party shall have
the right, exercisable by written notice delivered to the selling party within
45 days from the date of delivery of such offer to the Other Party, to purchase
the Station for the price and on the terms and conditions contained in such
written offer. If the Other Party is at the time of such written action
prohibited by the ownership limitations imposed by the FCC Laws from purchasing
the Station, the Other Party may designate another Person (a "Permitted
Designee") to accept the written offer in place of the Other Party. If the
Other Party or a Permitted Designee accepts the offer, the parties shall
promptly negotiate and execute a definitive purchase agreement and file the
appropriate applications with the FCC for transfer of the Station. The
definitive purchase agreement shall include customary representations and
warranties for transactions of this type.
If the Other Party or a Permitted Designee does not accept
the written offer within the foregoing time, the selling party may sell the
Station to a third party pursuant to and on the terms contained in such written
offer; provided that if an agreement is not entered into within 120 days after
delivery of the written offer to the Other Party, or if there is a material
change in the terms of sales from those contained in the written offer, the
selling party shall again offer the Other Party the right to purchase the
Station, within the foregoing time periods and subject to the foregoing terms,
before effecting any Sale of a Station to another party. Upon the Sale of a
Station to a third party in
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accordance with the provisions of this Section 10(d), such third party shall be
subject to each of the provisions of this Agreement as and to the same extent
if an original party hereto in place of the selling party. In the event of a
sale to a third party permitted by this Section 10(d), as a condition to the
consummation thereof, such third party shall, at the request of the Other
Party, provide written assurance, in form and substance reasonably acceptable
to the Other Party, that the provisions of this Agreement shall be binding upon
such third party effective upon its purchase of the Station.
(e) For purposes of this Section 10, the Pourtales Entities
shall be treated as a single party, and unless otherwise agreed in a writing
executed by all of the Pourtales Entities and delivered to Citadel, Pourtales
shall act as the representative of all of the Pourtales Entities, with full
power and authority to bind them with respect to any actions taken under this
Section 10.
(f) This Agreement shall be binding upon the parties and
their successors and assigns notwithstanding any Change of Control or
Reorganizing Transaction with respect to any party hereto. Any party effecting
a Change of Control or Reorganizing Transaction shall provide written notice
thereof to the other party at least 30 days prior to the consummation of such
transaction and prior to such consummation shall provide written assurance, in
form and substance reasonably acceptable to the other party, that the
provisions of this Agreement shall remain binding upon the party effecting a
Change of Control or Reorganizing Transaction and/or its successor
notwithstanding the consummation thereof.
11. Representations and Warranties. Citadel represents and
warrants to the Pourtales Entities and Triathlon, and the Pourtales Entities
and Triathlon each represent and warrant to Citadel, as follows:
(a) Such Person is duly organized, validly existing and in
good standing under the laws of the state of its formation, with all requisite
power to own all of its property and assets and to carry on its business as it
is now being conducted, and to execute, perform and deliver this Agreement and
related agreements, documents and instruments referred to herein. The
execution, performance and delivery of this Agreement have been duly and
validly authorized by all necessary action on the part of such Person, all
requisite stockholder or partner consents and approvals have been obtained by
such Person to the execution and such related agreements, documents and
instruments are and will be the valid and binding obligations of such Person,
enforceable against such Person in accordance with the terms hereof.
(b) The execution, performance and delivery of this Agreement
in accordance with the terms hereof by such Person will not, as of the date
hereof or as of the Commencement Date (i) violate any existing provision of any
law or violate any existing
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term or provision of any order, writ, judgment, injunction or decree applicable
to such Person, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of the formation or organizational documents of such
Person or any other material agreement or instrument to which such Person is a
party by which such Person is bound or subject, (iii) constitute a breach or
default of or an acceleration under, or an event that with the passing of time
or the giving of notice or both would constitute a breach or default of or
acceleration under, any material agreement or instrument to which such Person
is a party or by which such Person is bound or (iv) result in a creation or
imposition of any lien, charge, security interest, encumbrance or claim upon or
in any of the Stations of such Person.
(c) The execution, performance and delivery by such Person of
this Agreement and the related agreements, instruments and documents referred
to herein do not require the consent, approval or action of, or any filing
with, or notice to, any Person except for consents or approvals previously
disclosed in writing by such Person to the other parties to this Agreement,
which consents shall, in any event, be obtained on or before the Commencement
Date.
12. Additional Covenants of the Parties.
(a) Each party shall, at all times during the Term, comply
with all federal, state and local laws, ordinances, requirements and
regulations, and all judgments, orders, injunctions and decrees applicable to
such party and its operations, the failure to comply with which would have a
material adverse effect on such party's ability to perform its obligations
under this Agreement.
(b) Each party shall, at all times during the Term, maintain
in full force and effect, and apply in a timely manner for the renewal of, all
licenses, trademarks, trade names and agreements necessary for the operation of
its business, the loss of any of which would have a material adverse effect on
such party's ability to perform its obligations under this Agreement.
(c) Each party shall keep confidential the terms and
conditions of this Agreement and all information obtained by it with respect to
the other in connection with the performance of this Agreement, except for
disclosures to such party's employees, investors, lenders, agents and other
representatives as may be necessary in connection with the business operations
of such party, and except for such disclosures as may be required on the part
of any party to comply with the disclosure requirements imposed upon such party
by applicable securities laws. Upon expiration or termination of this
Agreement, each Party shall return to the other, without retaining any copy
thereof, all confidential documents, correspondence and other information
relating to the other party.
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(d) All rights, powers and remedies herein may be exercised
only to the extent that the exercise thereof does not violate any applicable
law, and are intended to be limited to the extent necessary so they will not
render this Agreement invalid or unenforceable, in whole or in part, under
applicable law.
(e) Each party shall, at the request of the other, execute
and deliver to the other such further instruments and perform all such further
actions as may be reasonably requested in order to effectuate the purposes of
this Agreement.
13. Triathlon Agreement Consummation.
(a) Upon becoming a licensee of any of the Pourtales Stations
pursuant to consummation of the Triathlon Agreement, Triathlon shall, with
respect to such radio stations, be entitled to the benefits and be subject to
the obligations of the Pourtales Entities under this Agreement as and to the
same extent as if Triathlon were an original party hereto in place of the
Pourtales Entities. Upon becoming a licensee of any of the Pourtales Stations,
Triathlon shall, upon request of Citadel, deliver to Citadel a certificate in
form and substance satisfactory to Citadel setting forth (a) the
representations and warranties on behalf of the Pourtales Entities as set forth
in Section 11, dated as of the date Triathlon becomes the licensee of the
Pourtales Station, and (b) the written agreement of Triathlon to be bound by
this Agreement. In addition, Triathlon shall, prior to purchasing any of the
Pourtales Stations, deliver to Citadel the written consent of Triathlon's
Lenders, if any, as required by Section 10(c). At such time as Triathlon
becomes the licensee of all of the Pourtales Stations, the Pourtales Entities
shall automatically be released from any liability or obligation accruing under
this Agreement from and after such date, without notice to or further action by
any party hereto.
(b) Citadel shall have the right to review the Triathlon
Agreement promptly following its execution. Subject to Citadel's written
approval of such Triathlon Agreement, and to the occurrence of a "Law Change"
or the obtaining by Citadel of a "Waiver," as each of such terms is defined
below, in the event Triathlon for any reason fails to consummate the
acquisition of the Pourtales Stations in accordance with the provisions of the
Triathlon Agreement (a "Triathlon Breach"), the Pourtales Entities agree to
sell to Citadel, and Citadel agrees to purchase from the Pourtales Entities,
the Pourtales Stations on the terms and conditions set forth in the Triathlon
Agreement, except that (i) the date for the consummation thereof shall be
delayed for a commercially reasonable time in order to permit Citadel to obtain
the appropriate FCC approvals for such purchase and as further provided in
Section 13(d), (ii) the aggregate $18,500,000 purchase price payable under the
Triathlon Agreement shall be allocated $17.0 million to the Pourtales Stations
and the balance to assets unrelated to the Pourtales Stations and (iii) the
Pourtales
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Entities shall be entitled to retain any liquidated damages (and related
deposits and letter of credit proceeds) to which they are entitled from
Triathlon as a result of the Triathlon Breach. The Pourtales Entities shall
provide Citadel with written notice of a Triathlon Breach (the "Breach
Notice"), and Triathlon hereby agrees that Citadel shall be permitted to rely
conclusively upon such Breach Notice and may proceed in accordance with this
Section 13(b) and Section 13(c) without interference from Triathlon. The term
"Law Change" means a change in the Communications Act of 1934, as amended, or
the rules, regulations and policies of the FCC, which would permit Citadel to
own the Pourtales Stations in addition to the radio stations owned, marketed
and/or programmed by Citadel. The term "Waiver" means a waiver from the FCC
that would permit Citadel to own the Pourtales Stations in addition to the
other radio stations owned, marketed and/or Programmed by Citadel.
(c) If a Law Change has not occurred as of the date of a
Breach Notice, Citadel shall promptly and diligently attempt to obtain a
Waiver. If, despite such efforts, Citadel is unable to obtain a Waiver, and as
a result Citadel is unable to purchase the Pourtales Stations pursuant to
Section 13(b), Citadel shall have the right and the obligation to exercise
commercially reasonable efforts to identify a purchaser (a "Substitute
Purchaser") to purchase the Pourtales Stations pursuant to Section 13(b) in
place of Citadel. The Triathlon Entities agree to accept any Substitute
Purchaser so identified by Citadel.
(d) In the event Citadel or a Substitute Purchaser purchases
the Pourtales Stations pursuant to Sections 13(b) or 13(c), the purchaser and
the Pourtales Entities shall enter into an agreement in the form of the
Triathlon Agreement, modified only to reflect the substitution of parties and
any changes contemplated by this Section 13 (a "Substitute Purchase
Agreement"). If a Law Change has not occurred as of the date of a Breach
Notice, Citadel shall have a period of 180 days from the date of the Breach
Notice within which to enter into a Substitute Purchase Agreement, or to cause
a Substitute Purchaser to enter into a Substitute Purchase Agreement, and a
commercially reasonable time thereafter within which to obtain the appropriate
FCC approvals for such purchase.
14. Relationship of Parties. Citadel shall serve solely as an
independent contractor and agent for the sale of advertising time in the
performance of its duties hereunder, and except as expressly provided in this
Agreement, shall not be authorized to act as an agent of or otherwise represent
any of the Pourtales Entities in any capacity or manner. Nothing in this
Agreement shall constitute a partnership or joint venture between the Pourtales
Entities and Citadel. The parties acknowledge that the call letters, trademarks
and other intellectual property of each shall at all times remain the property
of the respective parties and that neither party shall obtain any ownership
interest in the other's intellectual property by virtue of this Agreement.
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15. General Provisions.
(a) No modification or waiver of any provision of this
Agreement shall in any event be effective unless such modification or waiver is
made in a writing signed by the party against whom such modification or waiver
is sought to be enforced, and then only in the specific instance and for the
specific purpose for which consent has been given.
(b) No failure or delay on the part of any party in
exercising any right or power under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the parties provided in this
Agreement are cumulative and are not exclusive of any right or remedy which
either may otherwise have under applicable law.
(c) This Agreement shall be construed in accordance with the
laws of the State of Arizona without regard to its principles of choice or
conflicts of laws.
(d) This Agreement and the obligations of the parties
hereunder shall at all times be subject to the FCC Laws and the parties shall
at all times operate under this Agreement so as to be and remain in compliance
with the FCC Laws.
(e) This Agreement may be signed in one or more counterparts,
each or which shall be deemed a duplicate original, binding on the parties
hereto notwithstanding that the parties are not signatory to the same original
or the same counterpart.
(f) Any notice, demand, consent, approval or request required
or permitted to be given under the provisions of this Agreement shall be in
writing, addressed to the following addresses, or to such other addresses as
any party may request in writing:
To Citadel: Citadel Broadcasting Company
1015 Eastman Drive
Bigfork, Montana 59911
Attn: Lawrence R. Wilson
With copy to: Donna L. Heffner
1839 South Alma School Road
Suite 264
Mesa, Arizona 85210
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With copies to: Michael J. Ahearn, Esq.
GALLAGHER & KENNEDY, P.A.
2600 North Central Avenue
Phoenix, Arizona 85004-3020
and
Peter D. O'Connell, Esq.
REED, SMITH, SHAW & McCLAY
1301 K Street, N.W.
Suite 1100-East Tower
Washington, DC 20005-3317
To the Pourtales c/o Pourtales Radio Partnership
Entities: 205 East Cheyenne Mountain Boulevard
Suite 100
Colorado Springs, Colorado 80906
Attn: C. T. Robinson
With copy to: HOGAN & HARTSON, L.L.P.
Two North Cascade Avenue
Suite 1300
Colorado Springs, Colorado 80903
Attn: Scott A. Blackmun, Esq.
To Triathlon: Triathlon Broadcasting Company
750 B Street, Suite 1920
San Diego, California 92101
Attn: Norman Feuer
With copy to: Howard J. Tytel, Esq.
The Sillerman Companies, Inc.
150 East 58th Street, 19th Floor
New York, New York 10155
All notices shall be deemed to have been duly delivered and received on the
date of personal delivery, on the date of receipt if mailed by registered or
certified mail, postage prepaid and return receipt requested, or on the date of
the signed receipt if sent by a nationally recognized overnight delivery
service.
(g) Subject to the provisions of Section 10, this Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the parties.
(h) Exhibit A annexed hereto is hereby incorporated herein by
this reference.
(i) This Agreement embodies the complete and entire agreement
and understanding of the parties with respect to the subject matter hereof. No
alteration, modification or change of
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this Agreement shall be valid unless made in writing and signed by all parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date above first written.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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[SIGNATURE PAGE TO JOINT SALES AGREEMENT]
CITADEL BROADCASTING COMPANY
By: /s/ Lawrence R. Wilson
---------------------------
Its: President
POURTALES RADIO PARTNERSHIP
By: /s/ Terry Robinson
---------------------------
Its: General Partner
POURTALES HOLDINGS, INC.
By: /s/ Terry Robinson
---------------------------
Its: ______________________
SPRINGS RADIO, INC.
By: /s/ Terry Robinson
---------------------------
Its: ______________________
KVUU/KSSS, INC.
By: /s/ Terry Robinson
---------------------------
Its: ______________________
TRIATHLON BROADCASTING COMPANY
(for purposes of Section 13)
By: /s/ Norman Fever
---------------------------
Its: President
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EXHIBIT A
The JSA Fee payable to Citadel shall be determined as follows:
1. Incorporation By Reference. The provisions of the Joint
Sales Agreement (the "Agreement") of even date, to which this Exhibit A is
annexed, are incorporated herein by this reference in their entirety, with the
same force and effect as if fully set forth herein.
2. Certain Definitions. For purposes of this Exhibit A, the
following terms will have the meanings set forth below:
"Applicable Multiplier" means, for each calendar month
during the Term through and including June 1997, 55%, and for each calendar
month during the Term from and after July 1997, 60%.
"Broadcast Cash Flow" for a specified period means (a) the
aggregate revenue of the Citadel Stations and the Pourtales Stations for the
period, inclusive of Trade Revenues, reduced by (b) the aggregate Citadel
Operating Expenses and Pourtales Operating Expenses for the period.
"Citadel Accounts Receivable" means (a) the accounts
receivable of the Citadel Stations, including Trade Receivables, and all other
revenue from the sale of advertising time on any of the Citadel Stations,
arising from and after the Commencement Date and (b) the Trade Receivables of
the Pourtales Stations arising from and after the Commencement Date.
"Citadel Operating Expenses" means (a) the aggregate
expenses, whether cash expenses or Trade Expenses, incurred by Citadel directly
in connection with the operation of the Citadel Stations and in the performance
of its functions for the Pourtales Stations as contemplated by the Agreement,
excluding (b) Citadel's Corporate Overhead.
"Corporate Overhead" of a Person means (a) costs and
expenses of such Person not incurred solely and directly in connection with the
operation of one or more of the Stations and (b) the compensation expense of
any employees of such Person not employed for the exclusive purpose of
rendering services to one or more of the Stations in connection with its
operations.
"Monthly BCF Report" has the meaning set forth in Section
3.
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"Monthly Receivable Collections" means the total
collections by Citadel of the Pourtales Future Accounts Receivable and the
Citadel Accounts Receivable during a calendar month within the Term.
"Pourtales Operating Expenses" means (a) the aggregate
expenses, whether cash expenses or Trade Expenses, incurred by Pourtales
directly in connection with the operation of the Pourtales Stations, including
programming costs, music license fees, rating service, promotion expenses,
occupancy costs, broadcast tower leases, engineering costs, telephone and power
costs and compensation expenses to Pourtales for a general manager/program
director, engineer and receptionist/office manager in each of the Colorado
Springs Market and the Spokane Market, excluding (b) Pourtales' Corporate
Overhead and any severance expenses incurred by Pourtales in connection with
the termination of any of its employees resulting from the commencement of the
Agreement.
"Pourtales Operating Report" has the meaning set forth in
Section 3.
3. Calculation and Payment of JSA Fee.
(a) Promptly (and in any event within five days) after the
last day of each month during the Term, the Pourtales Entities shall deliver to
Citadel a statement setting forth in reasonable detail the Pourtales Operating
Expenses for the month most recently ended and any revenue of the Pourtales
Stations received directly by the Pourtales Entities during such month
(including any revenue resulting from the collection of any Delinquent
Accounts) (the "Pourtales Operating Report"). Citadel shall prepare and deliver
to the Pourtales Entities, on or before five days after Citadel's receipt of
the Pourtales Operating Report, a statement (the "Monthly BCF Report") setting
forth in reasonable detail the Broadcast Cash Flow for such month. Each
Pourtales Operating Report and Monthly BCF Report shall be prepared in
accordance with generally accepted accounting principles consistently applied.
The Pourtales Entities and Citadel, by signature of their respective chief
financial officers, shall certify that each Pourtales Operating Report and
Monthly BCF Report delivered by such Person pursuant to this Agreement is true
and correct in all material respects and prepared in conformity with this
Section 3(a).
(b) Citadel shall be entitled, as its JSA Fee, to an
amount equal to the Broadcast Cash Flow for the period covered by each Monthly
BCF Report, as reported thereon, multiplied by the Applicable Multiplier in
effect during the month covered by such Monthly BCF Report.
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(c) The Pourtales Operating Expenses and the Broadcast
Cash Flow included in the initial Pourtales Operating Report and the initial
Monthly BCF Report shall reflect the results of operations of the Stations
beginning on the Commencement Date and continuing through the last day of the
first month of the Term, and the parties shall appropriately prorate, as of the
Commencement Date, all expenses included in the Broadcast Cash Flow calculation
for such period.
4. Payment of Pourtales Operating Expenses. Citadel shall
remit payment to the Pourtales Entities, on the 15th day and on the last day of
each calendar month during the Term, in an amount equal to one-half of the
Pourtales Operating Expenses incurred and to be incurred for such calendar
month, as estimated by the Pourtales Entities in good faith.
5. Additional Payments. Subject to the adjustments
contemplated by Section 6:
(a) Contemporaneously with Citadel's preparation of each
Monthly BCF Report. Citadel shall determine the Monthly Receivable Collections
for such month and set forth the amount of such Monthly Receivable Collections
on such Monthly BCF Report. Contemporaneously with Citadel's delivery of each
Monthly BCF Report, (i) Citadel shall deliver to the Pourtales Entities, from
such Monthly Receivable Collections, an amount equal to the Pourtales Operating
Expenses reflected on the Pourtales Operating Report for such month which have
not already been advanced to Pourtales pursuant to Section 4 and (ii) Citadel
shall retain from such Monthly Receivable Collections, an amount equal to the
Pourtales Operating Expenses reflected on the Pourtales Operating Report for
such month equal to the amount advanced by Citadel for such month pursuant to
Section 4.
(b) Upon making the payments described in Section 5(a),
Citadel shall deduct from the Monthly Receivable Collections an amount equal to
the Citadel Operating Expenses for such month as reflected on the Monthly BCF
Report.
(c) Upon making the payments described in Sections 5(a)
and 5(b), (i) Citadel shall deduct from the remaining Monthly Receivable
Collections an amount equal to its JSA Fee for such month and (ii) Citadel
shall remit to the Pourtales Entities an amount equal to the Broadcast Cash
Flow for such month as reflected on the Monthly BCF Report, reduced by the JSA
Fee payable to Citadel for such month.
(d) If the Monthly Receivable Collections for any month
are insufficient to pay the amounts described in Sections 5(a), 5(b) and 5(c)
for such month, the Monthly Receivable Collections shall be applied in the
following order of priority: (i) first, to the payments required by Section
5(a), (ii) second,
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to the payments required by Section 5(b) and (iii) third, to the payments
described in Section 5(c), on a pro rata basis based upon the relative amounts
owed to the parties.
(e) If, as a result of the application of the provisions
of Section 5(d), the amounts owed to any of the parties pursuant to Sections
5(a), 5(b) and 5(c) are not fully paid out of Monthly Receivable Collections
during any calendar month (the "Unpaid Amounts"), the Unpaid Amounts shall be
paid from the Monthly Receivable Collections during the immediately following
month after the payments required to be made for such following month described
in Sections 5(a) and 5(b) and prior to the payments required to be made for
such following month described in 5(c).
6. Notwithstanding any provision contained in Section 5 to
the contrary:
(a) If in any month during the Term any of the Pourtales
Entities receives directly any revenue from any of the Pourtales Stations, the
amounts otherwise payable to any of the Pourtales Entities under Section 5
shall be reduced by the amount of such payment.
(b) If the Pourtales Entities receive payment pursuant to
Section 4 for any month in an amount which exceeds the Pourtales Operating
Expenses actually incurred by the Pourtales Entities for such month, such
excess shall be deducted from the payment otherwise due to the Pourtales
Entities for such month pursuant to Section 5(c)(ii).
(c) If Monthly Receivable Collections for any month are
insufficient to permit Citadel to make the payments required by Section
5(a)(i), Citadel shall nevertheless make such payment directly to the Pourtales
Entities (a "Citadel Expense Payment"). Citadel shall be entitled to recover
any Citadel Expense Payment from available Monthly Receivable Collections, and
prior to making any further payments under Section 5.
7. Promptly (and in any event within five days) after
termination of the Agreement, the Pourtales Entities shall deliver to Citadel a
Pourtales Operating Report covering any period during the Term for which
Citadel has not previously been paid a JSA Fee (the "Termination Period").
Within five days after receiving the Pourtales Operating Report, Citadel shall
prepare and deliver to the Pourtales Entities a Monthly BCF Report covering the
Termination Period. Notwithstanding the termination of the Agreement, the
Pourtales Entities shall continue to collect the Pourtales Future Accounts
Receivable existing as of the date of termination and each of the parties shall
remain obligated to pay to the other, from their collection of the Pourtales
Future Accounts Receivable and Citadel Accounts Receivable, respectively,
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the payments to which the parties are entitled for the Termination Period
pursuant to Section 5.
8. Within 20 days of the date of execution of the Agreement,
the Pourtales Entities shall deliver to Citadel a budget setting forth their
budgeted Pourtales Operating Expenses for calendar year 1996, and Citadel shall
deliver to the Pourtales Entities a budget setting forth the budgeted Broadcast
Cash Flow, exclusive of the Pourtales Operating Expenses, for the calendar year
1996. Commencing in 1996 and continuing during each successive year within the
Term, the Pourtales Entities shall deliver to Citadel, on or before November 15
of such year, a budget setting forth the budgeted Pourtales Operating Expenses
for the immediately following year, and on or before December 1 of such year,
Citadel shall deliver to the Pourtales Entities a budget setting forth the
budgeted Broadcast Cash Flow (incorporating the budget provided by the
Pourtales Entities) for the immediately following year. Each party shall
prepare its budget reasonably and in good faith. The parties shall exercise
commercially reasonable efforts to perform their respective obligations under
the Agreement so as to achieve the results set forth in their respective
budgets, subject to the right of any party to deviate from its budget as it
reasonably deems appropriate to respond to competitive conditions.
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