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Exhibit 10.21
CITADEL BROADCASTING COMPANY
(a Nevada corporation)
$100,000,000 10-1/4% Senior Subordinated Notes due 2007
1,000,000 Shares of 13-1/4% Series A Exchangeable Preferred Stock
PURCHASE AGREEMENT
June 30, 1997
PRUDENTIAL SECURITIES INCORPORATED
NATIONSBANC CAPITAL MARKETS, INC.
BANCBOSTON SECURITIES INC.
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Dear Sirs:
Citadel Broadcasting Company, a Nevada corporation (the "Company") and
wholly-owned subsidiary of Citadel Communications Corporation ("Parent"),
proposes, subject to the terms and conditions set forth herein, to issue and
sell to Prudential Securities Incorporated, NationsBanc Capital Markets, Inc.
and BancBoston Securities Inc. (each an "Initial Purchaser" and collectively
the "Initial Purchasers") (i) $100,000,000 aggregate principal amount of its
10-1/4% Senior Subordinated Notes due 2007 (the "Notes") and (ii) 1,000,000
shares of 13-1/4% Series A Exchangeable Preferred Stock, liquidation preference
$100 per share (including additional shares payable in lieu of cash dividends,
the "Exchangeable Preferred Stock" and together with the Notes, the
"Securities"). The Notes are to be issued pursuant to an indenture to be dated
as of July 1, 1997 (the "Indenture") among the Company, Citadel License, Inc.
(the "Subsidiary") and the Bank of New York, trustee (the "Trustee"), and the
Exchangeable Preferred Stock is to be issued pursuant to a certificate of
designation (the "Certificate of Designation") of the Company with respect to
such stock. Subject to certain conditions, the Exchangeable Preferred Stock is
exchangeable in whole, but not in part, at the option of the Company, for the
Company's 13-1/4% Subordinated Exchange Debentures due 2009 (including
additional securities payable in lieu of cash interest, the "Exchange
Debentures") to be issued pursuant to an indenture to be dated as of July 1,
1997, (the "Exchange Indenture") among the Company, the Subsidiary and the Bank
of New York, trustee (the "Debenture Trustee" and together with the Trustee, the
"Trustees"). The Securities, the Indenture, the Certificate of Designation and
the Exchange Indenture are more fully described in the Offering Memorandum (as
hereinafter defined). Capitalized terms used herein and not otherwise defined
herein have the respective meanings specified in the Offering Memorandum.
The Securities will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance on an exemption from the registration requirements of the 1933 Act.
The Company has prepared a
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preliminary offering memorandum, dated June 11, 1997 (such preliminary offering
memorandum being hereinafter referred to as the "Preliminary Offering
Memorandum"), and is preparing a final offering memorandum, dated June 30, 1997
(such final offering memorandum, in the form first furnished to the Initial
Purchasers for use in connection with the offering of the Securities, being
hereinafter referred to as the "Offering Memorandum"), each setting forth
information regarding the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum
and the Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchasers in accordance with the terms hereof.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms set forth in the Offering Memorandum,
as soon as they deem advisable after this Agreement has been executed and
delivered, (i) to persons in the United States whom the Initial Purchasers
reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the 1933 Act, as such rule
may be amended from time to time ("Rule 144A"), in transactions under Rule 144A
and (ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under Regulation D ("Regulation D")
of the 1933 Act ("Accredited Investors")) in exempt private sales exempt from
registration under the 1933 Act.
The Initial Purchasers and other holders of Exchangeable Preferred Stock
(including subsequent transferees) will be entitled to the benefits of a
Registration Rights Agreement, in substantially the form attached hereto as
Exhibit A, with such changes as shall be agreed to by the parties hereto (the
"Preferred Stock Registration Rights Agreement"). In addition, the Initial
Purchasers and other holders of Notes (including subsequent transferees) will
be entitled to the benefits of a Registration Rights Agreement, in
substantially the form attached hereto as Exhibit B, with such changes as shall
be agreed to by the parties hereto (the "Notes Registration Rights Agreement"
and together with the Preferred Stock Registration Rights Agreement, the
"Registration Rights Agreements"). Pursuant to the Registration Rights
Agreements, the Company and the Subsidiary will agree that the Company shall
file with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein, either (i) a registration statement under the
1933 Act registering the New Notes and the New Preferred Stock (collectively,
the "New Securities") to be offered in exchange for the Securities and use its
best efforts to cause such registration statement to be declared effective or
(ii) under certain circumstances set forth therein, a shelf registration
statement pursuant to Rule 415 under the 1933 Act relating to the resale of the
New Securities, and use its best efforts to cause such shelf registration
statement to be declared effective.
Concurrently with the sale of the Securities, the Company will enter into an
amended and restated Credit Agreement (the "New Credit Facility"), to be dated
as of July 3, 1997, among the Company, FINOVA Capital Corporation, as
administrative agent and Lender thereunder, and other lending institution
parties thereto, which will provide for loans up to $150,000,000 and will
permit the issuance and sale of the Securities. In addition, as soon as
practicable following the Closing, but subject to FCC approval in the case of
all but
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the Tele-Media Acquisition, the Company expects to consummate its purchase of
(i) all of the issued and outstanding capital stock of Tele-Media, which
currently owns or operates 16 FM and 10 AM radio stations (the "Tele-Media
Acquisition"), (ii) four radio stations which the Company currently operates
under LMAs (the "In-Market Acquisitions"), (iii) two additional radio stations
in Providence, Rhode Island (the "Providence Acquisition"), and (iv) an
aggregate of five FM and two AM radio stations and one FM license in Little
Rock, Arkansas (the "Little Rock Acquisition" and together with the Tele-Media
Acquisition, the In-Market Acquisitions and the Providence Acquisition, the
"Pending Acquisitions").
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. (a) Each of the
Company and Parent jointly and severally represents and warrants to, and agrees
with, each of the Initial Purchasers that:
(i) As of their respective dates and as of the time (the "Closing Time")
of the Closing hereunder, (x) none of the Preliminary Offering Memorandum,
the Offering Memorandum or any amendment or supplement thereto includes or
will include an untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
(y) all reasonable inquiries have been made to ascertain such facts and to
verify the accuracy of all such information and statements and (z) any
opinions and intentions expressed in the Preliminary Offering Memorandum, the
Offering Memorandum or any amendment or supplement thereto with respect to
the Company are honestly held and are based on reasonable assumptions;
PROVIDED, HOWEVER, that the Company makes no representation or warranty as to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum, the Offering
Memorandum or any amendment or supplement thereto.
(ii) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business as now conducted and described in the Offering
Memorandum; and the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent that
the failure to so qualify or be in good standing would not have a material
adverse effect on the business, results of operations, financial condition or
properties of the Company and the Subsidiary (as defined below) taken as a
whole (a "Material Adverse Effect").
(iii) The Company's only subsidiary (either direct or indirect) as of the
date hereof is Citadel License, Inc. (the "Subsidiary"). The Subsidiary is
duly incorporated and validly existing and in good standing under the laws of
the State of Nevada, with corporate power and authority under such laws to
own, lease and operate its properties and to conduct its business as now
conducted and as described
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in the Offering Memorandum; and the Subsidiary is duly qualified to do
business as a foreign corporation in good standing in each other jurisdiction
in which it owns or leases property of a nature or transacts business of a
type that would make such qualification necessary, except to the extent that
the failure to be so qualified or in good standing would not have a Material
Adverse Effect.
(iv) The Company has a duly authorized, issued and outstanding
capitalization as of the date hereof of 136,300 shares of common stock, par
value $0.001 per share. All of the outstanding capital stock of the Company
is owned directly by Parent, has been duly authorized and validly issued, is
fully paid and nonassessable and was not issued in violation of any
preemptive or similar rights (whether provided contractually or pursuant to
any of its articles of incorporation, by-laws or other organizational
documents) free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability or voting of such capital stock, except as
set forth in the Offering Memorandum. All of the outstanding capital stock
of the Subsidiary is owned directly by the Company, has been duly authorized
and validly issued, is fully paid and nonassessable and was not issued in
violation of any preemptive or similar rights (whether provided contractually
or pursuant to any of its articles of incorporation, by-laws or other
organizational documents) free and clear of all liens, encumbrances, equities
and claims or restrictions on transferability or voting of such capital
stock, except as set forth in the Offering Memorandum. Immediately after the
filing of the Certificate of Designation, the Company will have a duly
authorized capitalization of 136,300 shares of common stock, par value $0.001
per share, and 4,000,000 shares of preferred stock, no par value, of which
2,000,000 shares shall be designated 13-1/4% Series A Exchangeable Preferred
Stock and 2,000,000 shares shall be designated 13-1/4% Series B Exchangeable
Preferred Stock.
(v) The execution and delivery of this Agreement have been duly
authorized by each of the Company and Parent and this Agreement has been duly
executed and delivered by each of them, and constitutes the valid and binding
agreement of each of them, enforceable against each of them in accordance
with its terms.
(vi) The execution and delivery of the Registration Rights Agreements have
been duly authorized by each of the Company and the Subsidiary and, on and as
of the Closing Time, the Registration Rights Agreements will have been duly
executed and delivered by the Company and the Subsidiary, and will be legal,
valid and binding obligations of the Company and the Subsidiary, enforceable
against them in accordance with their terms.
(vii) The execution and delivery of the Indenture have been duly
authorized by the Company and the Subsidiary, and, on and as of the Closing
Time, the Indenture will have been duly executed and delivered by the Company
and the Subsidiary, and when duly executed and delivered by the Company, the
Subsidiary and the Trustee, will constitute a valid and binding obligation
of the Company and the Subsidiary, enforceable against the Company and the
Subsidiary in accordance with its terms.
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(viii) The issuance, execution and delivery of the Notes and the New
Notes have been duly authorized by the Company. When executed,
authenticated, issued and delivered in the manner provided for in the
Indenture and sold and paid for as provided in this Agreement, the Notes will
constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance
with their terms. The New Notes, when executed, authenticated, issued and
delivered in exchange for the Notes, will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with the terms thereof. The
Notes conform to the description thereof in the Offering Memorandum.
(ix) The issuance and delivery of the Exchangeable Preferred Stock and the
New Preferred Stock have been duly authorized by the Company. The filing of
the Certificate of Designation relating to the Exchangeable Preferred Stock
and the New Preferred Stock has been duly authorized and, when issued and
delivered against payment therefor in accordance with the terms hereof or the
Certificate of Designation, the Exchangeable Preferred Stock will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights. As of the Closing, the Articles of Incorporation of the Company by
virtue of the Certificate of Designation will set forth the rights,
preferences and priorities of the Exchangeable Preferred Stock. The
certificates for the Exchangeable Preferred Stock that are being sold by the
Company are in due and proper form and the holders of such Exchangeable
Preferred Stock will not be subject to personal liability by reason of being
such holders.
(x) The execution and delivery of the Exchange Indenture have been duly
authorized by the Company and the Subsidiary, and, on and as of the Closing
Time, the Exchange Indenture will have been duly executed and delivered by
the Company and the Subsidiary, and when duly executed and delivered by the
Company, the Subsidiary and the Debenture Trustee, will constitute a valid
and binding obligation of the Company and the Subsidiary, enforceable against
the Company and the Subsidiary in accordance with its terms.
(xi) The Exchange Debentures have been duly authorized by the Company for
issuance, subject to further action by the Board with respect to the due
execution and delivery thereof. The Exchange Debentures, when executed by
the Company and authenticated by the Debenture Trustee in accordance with the
provisions of the Exchange Indenture and delivered upon the exchange of the
Exchangeable Preferred Stock, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Exchange Indenture and enforceable
against the Company in accordance with their terms.
(xii) The financial statements of the Company included in the
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Offering Memorandum, together with the related schedules and notes, present
fairly (1) the financial position of the Company and the Subsidiary on a
consolidated basis as of the dates indicated and (2) the results of operations
and cash flows of the Company and the Subsidiary on a consolidated basis for
the periods specified, subject, in the case of unaudited financial statements
of the Company, to normal year-end adjustments which shall not be materially
adverse to the business, results of operations, financial condition or
properties of the Company and the Subsidiary, taken as a whole. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved. The financial statement schedules of the Company, if any, included
in the Offering Memorandum present fairly the information required to be
stated therein. The selected financial data included in the Offering
Memorandum present fairly the information shown therein and have been compiled
on a basis consistent with that of the audited consolidated financial
statements included in the Offering Memorandum.
(xiii) KPMG Peat Marwick LLP ("KPMG"), which is reporting upon the
audited financial statements and related notes of the Company and Deschutes
(as defined below) included in the Offering Memorandum, is an independent
public accountant with respect to the Company and its subsidiaries within the
meaning of the 1933 Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
(xiv) The financial statements of Deschutes River Broadcasting, Inc. and
subsidiaries ("Deschutes") included in the Offering Memorandum, together with
the related schedules and notes, present fairly (1) the financial position of
Deschutes on a consolidated basis as of the dates indicated and (2) the
results of operations, stockholders' equity and cash flows of Deschutes on a
consolidated basis for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved. The financial
statement schedules of Deschutes, if any, included in the Offering Memorandum
present fairly the information required to be stated therein.
(xv) The financial statements of Tele-Media Broadcasting Company and its
partnership interests ("Tele-Media") included in the Offering Memorandum,
together with the related schedules and notes, present fairly (1) the
financial position of Tele-Media on a consolidated basis as of the dates
indicated and (2) the results of operations, deficiency in net assets and cash
flows of Tele-Media on a consolidated basis for the periods specified,
subject, in the case of unaudited financial statements of Tele-Media, to
normal year-end adjustments which shall not be materially adverse to the
condition (financial or otherwise), earnings, business affairs or business
prospects of Tele-Media. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the period involved. The financial statement
schedules of Tele-Media, if any, included in the Offering memorandum present
fairly the information required to be stated therein.
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(xvi) Deloitte & Touche LLP, which is reporting upon the audited
financial statements and related notes of Tele-Media included in the Offering
Memorandum, is an independent public accountant with respect to Tele-Media
within the meaning of the 1933 Act, the Exchange Act and the rules and
regulations promulgated thereunder.
(xvii) The financial statements of Snider Corporation ("Snider")
included in the Offering Memorandum, together with the related schedules and
notes, present fairly (1) the financial position of Snider as of the dates
indicated and (2) the statements of income, stockholders' equity and cash
flows of Snider for the periods specified, subject, in the case of unaudited
financial statements, to normal year-end adjustments which shall not be
materially adverse to the condition (financial or otherwise), earnings,
business affairs or business prospects of Snider. Such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved.
The financial statement schedules of Snider, if any, included in the Offering
Memorandum present fairly the information required to be stated therein.
(xviii) Erwin & Company, which is reporting upon the audited financial
statements and related notes of Snider and Snider Broadcasting (as defined
below) included in the Offering Memorandum, is an independent public
accountant with respect to Snider and Snider Broadcasting within the meaning
of the 1933 Act, the Exchange Act and the rules and regulations of the
Commission thereunder.
(xix) The financial statements of Snider Broadcasting Corporation and
Subsidiary and CDB Broadcasting Corporation (collectively "Snider
Broadcasting") included in the Offering Memorandum, together with the related
schedules and notes, present fairly (1) the financial position of Snider
Broadcasting on a combined consolidated basis as of the dates indicated and
(2) the results of operations, stockholders' deficit and cash flows of Snider
Broadcasting on a combined consolidated basis for the periods specified,
subject, in the case of unaudited financial statements of Snider
Broadcasting, to normal year-end adjustments which shall not be materially
adverse to the condition (financial or otherwise), earnings, business affairs
or business prospects of Snider Broadcasting. Such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved. The financial
statement schedules of Snider Broadcasting, if any, included in the Offering
Memorandum present fairly the information required to be stated therein.
(xx) The pro forma condensed consolidated financial statements and other
pro forma financial information (including the notes thereto) included in the
Offering Memorandum (1) present fairly in all material respects the
information shown therein; (2) have been prepared in accordance with the
applicable requirements of Regulation S-X promulgated under the 1933 Act; (3)
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements; and (4) have been properly
computed on the basis described
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therein. The assumptions used in the preparation of the pro forma financial
statements and other pro forma condensed consolidated financial information
included in the Offering Memorandum are reasonable and the adjustments used
therein are reasonably appropriate to give effect to the transactions or
circumstances referred to therein.
(xxi) Except as disclosed in the Offering Memorandum, there is no action,
suit or proceeding before or by any government, governmental instrumentality
or court, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against the Company or the Subsidiary or any of their
respective officers, in their capacity as such, that could result in a
Material Adverse Effect, or that could adversely affect the consummation of
the transactions contemplated in this Agreement or the Offering Memorandum;
the aggregate of all pending legal or governmental proceedings that are not
described in the Offering Memorandum to which the Company or the Subsidiary is
a party or which affect any of their respective properties, including ordinary
routine litigation incidental to the business of the Company or the
Subsidiary, could not reasonably be expected to have a Material Adverse
Effect.
(xxii) Except as disclosed in the Offering Memorandum, to the Company's
knowledge, there is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign, now pending or
threatened against Tele-Media or any of its respective officers, in their
capacity as such, that could result in a Material Adverse Effect, or that
could adversely affect the consummation of the transactions contemplated in
this Agreement or the Offering Memorandum; to the knowledge of the Company,
the aggregate of all pending legal or governmental proceedings that are not
described in the Offering Memorandum to which Tele-Media is a party or which
affect any of its respective properties, including ordinary routine litigation
incidental to the business of Tele-Media, could not reasonably be expected to
have a Material Adverse Effect.
(xxiii) No authorization, approval, consent or license of any government,
governmental instrumentality or court, domestic or foreign (including, without
limitation, the Federal Communications Commission (the "FCC") (other than
under the 1933 Act and the rules and regulations thereunder with respect to
the Registration Rights Agreements and the transactions contemplated
thereunder and the securities or "blue sky" laws of the various states) is
required for the valid authorization, issuance, sale and delivery of the
Securities, for the execution, delivery or performance by the Company, Parent
or the Subsidiary, as applicable, of this Agreement, the Registration Rights
Agreements, the Indenture, the Exchange Indenture and the transactions and
actions contemplated thereby (except as set forth in the last sentence of the
fifth paragraph of this Agreement). In addition, no consent, approval,
authorization or order of any court or governmental agency or body (except for
such consents, approvals or authorizations as are required by the FCC or under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976) is required for the
performance by the Company of the transactions contemplated by the Pending
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Acquisitions, and the Company has no reasonable basis to believe that the
transactions contemplated by the Pending Acquisitions will not be consummated
in accordance with their terms.
(xxiv) Except as disclosed in the Offering Memorandum, the Company and the
Subsidiary validly hold all material licenses, certificates, permits,
consents, authorizations and approvals for the Existing Stations (as defined
below) (collectively, "Licenses") from governmental authorities which are
necessary to the conduct of their businesses and operations in the manner and
to the full extent now operated or proposed to be operated as described in the
Offering Memorandum; such Licenses were issued and are in full force and
effect and no complaint, action, litigation or other proceeding has been
instituted or is pending or, to the knowledge of the Company, is threatened
which in any manner affects or questions the validity or effectiveness
thereof; such Licenses contain no materially burdensome conditions or
restrictions not customarily imposed by the FCC on radio stations of the same
class and type; the operation of the radio stations identified in the table
under "Existing Markets" in the Offering Memorandum under the caption
"Business -- General" (collectively, the "Existing Stations") in the manner
and to the full extent now operated or proposed to be operated as described in
the Offering Memorandum, is in compliance with the Communications Act of 1934,
as amended (the "Communications Act"), the Telecommunications Act of 1996, and
all orders, rules, regulations, and policies of the FCC, except for such
noncompliance as would not have a Material Adverse Effect; no event has
occurred which permits (nor has an event occurred which with notice or lapse
of time or both would permit) the revocation or termination of such Licenses
or the imposition of any material adverse restriction or condition thereon or
which might result in any other material impairment of the rights of the
Company or the Subsidiary therein; the Company and the Subsidiary are in
compliance with all statutes, orders, rules, and policies of the FCC relating
to or affecting the broadcasting operations of any of the Existing Stations,
except for such noncompliance as would not have a Material Adverse Effect.
(xxv) To the Company's knowledge, (i) Tele-Media validly holds all
material licenses, certificates, permits, consents, authorizations and
approvals for the Existing Tele-Media Stations (as defined below)
(collectively, "Tele-Media Licenses") from governmental authorities which are
necessary to the operation of the Existing Tele-Media Stations (as defined
below) in the manner and to the full extent now operated; such Licenses were
issued and are in full force and effect and no complaint, action, litigation
or other proceeding has been instituted or is pending or threatened which in
any manner affects or questions the validity or effectiveness thereof; (ii)
such Tele-Media Licenses contain no materially burdensome conditions or
restrictions not customarily imposed by the FCC on radio stations of the same
class and type; (iii) the operation of the radio stations identified in the
table under "Tele-Media Markets" in the Offering Memorandum under the caption
"Business -- General" (collectively, the "Existing Tele-Media Stations") in
the manner and to the full extent now operated is in compliance with the
Communications Act, the Telecommunications Act of 1996, and all orders, rules,
regulations, and policies of the FCC, except for such
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noncompliance as would not have a Material Adverse Effect; (iv) no event has
occurred which permits (nor has an event occurred which with notice or lapse
of time or both would permit) the revocation or termination of the Tele-Media
Licenses or the imposition of any material adverse restriction or condition
thereon or which might result in any other material impairment of the rights
of Tele-Media therein; and (v) Tele-Media is in compliance with all statutes,
orders, rules, and policies of the FCC relating to or affecting the
broadcasting operations of any of the Existing Tele-Media Stations, except for
such noncompliance as would not have a Material Adverse Effect.
(xxvi) Neither the Company nor the Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it may be
bound or to which any of its properties may be subject, except for such
defaults that would not have a Material Adverse Effect. Each of (i) the
execution and delivery by the Company, Parent and the Subsidiary, as
applicable, of this Agreement, the Registration Rights Agreements, the
Indenture and the Exchange Indenture, (ii) the issuance, sale and delivery of
the Securities by the Company, (iii) the consummation by the Company, Parent
and Subsidiary, as applicable, of the Pending Acquisitions, (iv) the
compliance by the Company, Parent and the Subsidiary, as applicable, with the
terms of this Agreement, the Registration Rights Agreements, the Indenture,
the Certificate of Designation, the Exchange Indenture and (v) the
transactions contemplated hereby and thereby, (A) have been duly authorized by
all necessary corporate action on the part of the Company, Parent and the
Subsidiary, as applicable, (B) do not and will not result in any violation of
the charter or by-laws of the Parent, Company and the Subsidiary, as
applicable and (C) except as would not have a Material Adverse Effect, do not
and will not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company, Parent and the Subsidiary, as applicable under, (I) any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company, Parent and the Subsidiary, as applicable, is
a party or by which they may be bound or to which any of their respective
properties may be subject or (II) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company, Parent and the Subsidiary, as applicable, or any of their respective
properties.
(xxvii) Except as disclosed in the Offering Memorandum, and other than with
respect to the Licenses and the Tele-Media Licenses, each of the Company and
the Subsidiary and to the knowledge of the Company, Tele-Media, owns,
possesses or has obtained all material governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations necessary
to own or lease, as the case may be, and to operate its properties and to
carry on its business as presently conducted, and neither the Company nor the
Subsidiary has any reason to believe that any governmental agency or body is
considering limiting, suspending or
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revoking any such approval, license, permit, certificate, franchise,
authorization or right.
(xxviii) Each of the Company and the Subsidiary has good and marketable
title to all properties and assets described in the Offering Memorandum as
owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as (A) are described in the Offering Memorandum or
(B) are neither material in amount nor materially significant in relation to
the business of the Company and the Subsidiary, considered as one enterprise;
all of the leases and subleases material to the business of the Company and
the Subsidiary, considered as one enterprise, and under which the Company or
the Subsidiary holds properties described in the Offering Memorandum, are in
full force and effect, and neither the Company nor the Subsidiary has received
any notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or the Subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of such
corporation to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xxix) Each of the Company and the Subsidiary carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and is customary for companies engaged in similar businesses in
similar industries.
(xxx) Each of the Company and the Subsidiary owns or possesses adequate
patents, patent licenses, trademarks, service marks and trade names necessary
to carry on its business as presently conducted, and neither the Company nor
the Subsidiary has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, patent licenses,
trademarks, service marks or trade names that in the aggregate, if the subject
of an unfavorable decision, ruling or finding, could have a Material Adverse
Effect.
(xxxi) No material event of default exists under any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to
which the Company or the Subsidiary is a party or to which the Company or the
Subsidiary is subject.
(xxxii) There are no contracts or documents of a character that would be
required to be described in the Offering Memorandum, if it were a prospectus
filed as part of a registration statement on Form S-1 under the 1933 Act, that
are not described as would be so required. All such contracts which are so
described in the Offering Memorandum to which the Company or the Subsidiary is
a party have been duly authorized, executed and delivered by the Company or
the Subsidiary, constitute valid and binding agreements of the Company or the
Subsidiary and are enforceable against the Company or the Subsidiary in
accordance with the terms thereof.
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(xxxiii) To the best knowledge of the Company, no labor problem exists with
its employees or with the employees of the Subsidiary or is imminent that
could materially adversely affect the Company and the Subsidiary, considered
as one enterprise, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of the Subsidiary's principal
suppliers, contractors or customers that could have a Material Adverse Effect.
(xxxiv) All United States federal income tax returns of the Company and the
Subsidiary required by law to be filed have been filed and all United States
federal income taxes which are due and payable have been paid, except
assessments against which appeals have been or will be promptly taken and as
to which adequate reserves have been provided. The Company and the Subsidiary
each has filed all other tax returns that are required to have been filed by
it pursuant to applicable foreign, state, local or other law except insofar as
the failure to file such returns would not have a Material Adverse Effect, and
has paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Company and the Subsidiary, except for such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to the
extent of any inadequacy that would not have a Material Adverse Effect.
(xxxv) Each of the Company and the Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company and the Subsidiary have not
made, and, to the knowledge of the Company, no employee or agent of the
Company or the Subsidiary has made, any payment of the Company's funds or the
Subsidiary's funds or received or retained any funds in violation of any
applicable law, regulation or rule or that would be required to be disclosed
in the Offering Memorandum if it were a prospectus filed as part of a
registration statement on Form S-1 under the 1933 Act.
(xxxvi) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (B) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as
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amended, including the regulations and published interpretations thereunder
(the "Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(xxxvii) The Company has been advised that the Securities have been
designated PORTAL securities in accordance with the rules and regulations of
the National Association of Securities Dealers, Inc. ("NASD").
(xxxviii) None of the Company or any affiliate of the Company (as defined
in Rule 501(b) under the 1933 Act) has directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect
of, any security (as defined in the 1933 Act) of the Company that is of the
same or similar class as the Securities (other than with respect to the
Exchange Securities) in a manner that would require the registration of the
Securities under the 1933 Act.
(xxxix) None of the Company or any affiliate of the Company or any person
acting on their behalf has (A) engaged, in connection with the offering of the
Securities, in any form of general solicitation or general advertising (as
those terms are used within the meaning of Regulation D) or (B) solicited
offers for, or offered or sold, such Securities by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the 1933 Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the 1933 Act.
(xxxx) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sold (except pursuant to this Agreement), bid for,
purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xxxxi) Assuming (A) the accuracy of the representations and warranties of
the Initial Purchasers in Section 2 hereof and (B) the due performance by the
Initial Purchasers of the covenants and agreements set forth in Section 2
hereof, it is not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers under, or in connection with the
initial resale of such Securities by the Initial Purchasers in accordance
with, this Agreement to register the Securities under the 1933 Act or to
qualify any indenture in respect of the Securities under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
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(xxxxii) No relationship, direct or indirect, exists between or among the
Company or the Subsidiary, on the one hand, and the directors, officers,
securityholders, customers or suppliers of the Company or the Subsidiary, on
the other hand, that is of a character that would be required to be described
in the Offering Memorandum if it were a prospectus filed as part of a
registration statement on Form S-1 under the 1933 Act, that is not described
as would be so required.
(xxxxiii) The Company is not an "investment company" or a company
controlled by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxxxiv) Neither the Company nor the Subsidiary, nor any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or the Subsidiary, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(xxxxv) All offers and sales by the Company of the Company's securities
which have taken place within the past three years were at all relevant times
exempt from the registration requirements of the 1933 Act or duly registered
under the 1933 Act, and were duly registered or the subject of an available
exemption from the requirements of applicable state securities laws.
(xxxxvi) Since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Company and the Subsidiary, considered as one enterprise, whether or not
arising in the ordinary course of business, (B) any transaction entered into
by the Company or the Subsidiary, other than in the ordinary course of
business, that is material to the Company and the Subsidiary, considered as
one enterprise, or (C) any dividend or distribution of any kind declared, paid
or made by the Company on its capital stock.
(xxxxvii) Except as disclosed in the Offering Memorandum and except as
would not individually or in the aggregate have a Material Adverse Effect, (A)
the Company and the Subsidiary are each in compliance with all applicable
Environmental Laws, (B) the Company and the Subsidiary have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending
or threatened Environmental Claims against the Company or the Subsidiary, and
(D) there are no circumstances with respect to any property or operations of
the Company or the Subsidiary that could reasonably be anticipated to form the
basis of an Environmental Claim against the Company or the Subsidiary.
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For purposes of this Agreement, the following terms shall have
the following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority. "Environmental
Claims" means any and all administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigations or proceedings relating in any way to any
Environmental Law.
(xxxxvi) The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources which the Company believes to
be reliable and accurate in all material respects or represents the Company's
good faith estimates that are made on the basis of data derived from such
sources.
(xxxxvii) The Subsidiary Merger (as defined in the Offering Memorandum) has
become effective under applicable law.
(b) Any certificate signed by any officer of the Company or the
Subsidiary and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the matters covered thereby.
Section 2. Purchase, Sale and Resale of the Securities;
Closing; Representations and Warranties of the Initial Purchasers. (a) On the
basis of the representations and warranties herein contained, and subject to the
terms and conditions herein set forth, the Company agrees to sell to each of the
Initial Purchasers, severally and not jointly, and each of the Initial
Purchasers, severally and not jointly, agrees to purchase from the Company (i)
at a purchase price of 97.250% of the principal amount thereof, the principal
amount of the Notes, and (ii) at a purchase price of $96.85 per share, the
number of shares of Exchangeable Preferred Stock set forth opposite its name on
Schedule I.
(b) Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of Schulte Roth & Zabel LLP, 900 Third
Avenue, New York, New York 10022, or at such other place as shall be agreed upon
by the Company and you, at 10:00 A.M., New York time, on July 3, 1997, or at
such other time not more than two business days thereafter as the Initial
Purchasers and the Company shall agree (such date and time of payment and
delivery being herein called the "Closing Time"). The Securities shall be in
such denominations and registered in such names as you may request in writing at
least two business days before the Closing Time. The Securities, which may be
in temporary form, will be made available in New York City for examination and
packaging by you not later than 10:00 A.M. on the last business day prior to the
Closing Time.
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(c) At the Closing Time, payment shall be made to the
Company in the aggregate amount of $194,100,000 immediately available funds
payable to the order of the Company against delivery of the Securities to you
and the Company shall promptly reimburse you for your costs in obtaining
immediately available funds.
(d) The Initial Purchasers have advised the Company that
they propose to offer the Securities for sale, upon the terms and conditions
set forth in this Agreement and in the Offering Memorandum. Each Initial
Purchaser hereby represents and warrants to the Company that it is a Qualified
Institutional Buyer as defined in Rule 144A and an "Accredited Investor" as
defined in Rule 501 of Regulation D. Each Initial Purchaser agrees with the
Company that it (i) has not solicited and will not solicit offers for, or offer
or sell, the Securities by means of any form of general solicitation or general
advertising or in any manner involving a public offering within the meaning of
Section 4(2) of the 1933 Act and (ii) has solicited and will solicit offers for
the Securities only from, and will offer, sell or deliver the Securities, as
part of its initial offering, only to (A) persons whom it reasonably believes
to be Qualified Institutional Buyers or, if any such person is buying for one
or more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in a
transaction under Rule 144A and (B) other institutional investors that it
reasonably believes to be Accredited Investors or, if any such person is buying
for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the relevant
Initial Purchaser that each such account is an Accredited Investor; provided
that, with respect to clause (B), each such transfer of Securities is effected
by the delivery to such purchaser of Securities in definitive form and
registered in its name (or its nominee's name) on the books maintained by the
Trustee or the Transfer Agent, as the case may be.
Section 3. Certain Covenants of the Company. The Company
covenants and agrees with each of the Initial Purchasers as follows:
(a) The Company will not at any time make any
amendment or supplement to the Offering Memorandum of which the Initial
Purchasers shall not have previously been advised and furnished a copy
for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchasers or their counsel
shall reasonably object.
(b) The Company will promptly deliver to the Initial
Purchasers, without charge, during the period from the date hereof to
the date of the completion of the distribution of the Securities by the
Initial Purchasers, such number of copies of the Offering Memorandum,
as it may then be amended or supplemented, or the Preliminary Offering
Memorandum, as it may then be amended or supplemented, as the Initial
Purchasers and their counsel may reasonably request.
(c) If, at any time prior to completion of the
distribution of the Securities by the Initial Purchasers, any event
shall occur or condition exist as a result
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of which it is necessary, in the opinion of their counsel or counsel
for the Company, to amend or supplement the Offering Memorandum in
order that the Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading or
if, in the opinion of counsel to the Initial Purchasers or counsel for
the Company, it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, the Company, at its own
expense, will promptly prepare such amendment or supplement as may be
necessary so that the statements in the Offering Memorandum as so
amended or supplemented will not, in the light of the circumstances
existing at the time it is delivered to a purchaser, be misleading or
so that such Offering Memorandum as so amended or supplemented will
comply with applicable law, as the case may be, and furnish the Initial
Purchasers such number of copies as they may reasonably request.
(d) The Company will endeavor, in cooperation with the
Initial Purchasers, to qualify the Securities for offering and sale
under the applicable securities laws of such states and other
jurisdictions as the Initial Purchasers may designate and to maintain
such qualifications in effect for as long as may be necessary to
complete the resale of the Securities by the Initial Purchasers;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Securities have
been qualified as above provided. The Company will also supply the
Initial Purchasers with such information as is necessary for the
determination of the legality of the Securities for investment under
the laws of such jurisdictions as the Initial Purchasers may request.
(e) Except following the effectiveness of the
Registration Statement, neither the Company nor any of its affiliates
(as such term is defined in Rule 501(b) of Regulation D) will solicit
any offer to buy or offer to sell the Securities by means of any form
of general solicitation or general advertising (within the meaning of
Rule 502(C) of Regulation D) or in any manner involving a public
offering within the meaning of Section 4(2) of the 1933 Act.
(f) Neither the Company nor any of its affiliates (as
such term is defined in Rule 501(b) of the 1933 Act) will offer, sell
or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) the offering of which security
could be integrated with the sale of the Securities in a manner that
would require the registration of any of the Securities under the 1933
Act.
(g) The Company will not be or become an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under the 1940 Act, and
will not be or become a closed-end
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investment company required to be registered thereunder.
(h) During the period from the Closing Time to the
earlier of (i) two years after the Closing Time or (ii) the date of
effectiveness of the Registration Statement, the Company will not, and
will not permit any of its affiliates (as such term is defined in Rule
144 under the 1933 Act) to, resell any of the Securities that have been
reacquired thereby, except for Securities purchased by the Company or
any of its affiliates and resold in a transaction registered under the
1933 Act.
(i) The Company will, so long as the Securities are
outstanding and are "restricted securities" within the meaning of Rule
144(a)(3) under the 1933 Act, either (i) file reports and other
information with the Commission under Section 13 or Section 15(d) of
the 1934 Act, or (ii) in the event the Company is not subject to
Section 13 or Section 15(d) of the 1934 Act, furnish to holders of the
Securities and prospective purchasers of the Securities designated by
such holders, upon request of such holders or such prospective
purchasers, the information required to be delivered pursuant to Rule
144A(d)(4) under the 1933 Act to permit compliance with Rule 144A in
connection with resale of the Securities. For a period of five years
after the Closing Time, the Company will make available to the Initial
Purchasers upon request copies of all such reports and information,
together with such other documents, reports and information as shall be
furnished by the Company to the holders of the Securities issued by it.
(j) If requested by the Initial Purchasers, the
Company will use its best efforts in cooperation with the Initial
Purchasers to permit the Securities sold in transactions described in
Section 2(d)(ii)(A) hereof to be eligible for clearance and settlement
through The Depository Trust Company.
(k) Each Security will bear the following legend
until such legend shall no longer be necessary or advisable because
such Security is no longer subject to the restrictions on transfer
described therein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE
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LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH CITADEL BROADCASTING COMPANY ("THE
COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE"),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT
TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IS COMPLETED AND DELIVERED BY THE TRANSFEROR
TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
(l) The Company will apply the net proceeds from
the sale of the Securities as set forth in the Offering Memorandum
under the heading "Use of Proceeds."
(m) Prior to the Closing Time, the Company will
not issue any press release or other communications directly or
indirectly or hold any press conference with respect to the Company,
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company, without the prior
written consent of Prudential Securities Incorporated, unless in the
judgment of the Company and its counsel, and after notification to the
Initial Purchasers, such press release or communication is required by
law.
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(n) During the period beginning from the date of
the Offering Memorandum and continuing to and including the date 180
days after the date of the Offering Memorandum, the Company will not
offer, sell, contract to sell or otherwise dispose of, without the
prior written consent of the Initial Purchasers, any securities of the
Company that are substantially similar to the New Securities, or any
securities of the Company convertible or exchangeable into securities
of the Company substantially similar to the New Securities; provided,
however, the foregoing shall not apply to (i) notes or preferred stock
issued in the Notes Exchange Offer or the Preferred Stock Exchange
Offer; (ii) Exchangeable Preferred Stock or New Preferred Stock issued
in lieu of cash dividends; or (iii) the Notes issued to the
Bondholders.
(o) Prior to the Closing Date, the Company will
furnish to the Initial Purchasers, as soon as they have been prepared
by or are available to the Company, a copy of any unaudited interim
consolidated financial statements of the Company for any period
subsequent to the period covered by the most recent financial
statements appearing in the Offering Memorandum.
Section 4. Payment of Expenses. (a) The Company will pay
all costs and expenses incident to the performance of its obligations under
this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 9 hereof,
including all costs and expenses incident to (i) the preparation and printing
or other production of documents with respect to the transactions, including
any costs of printing the Preliminary Offering Memorandum, the Offering
Memorandum and any amendments or supplements thereto, the Indenture, the
Certificate of Designation and the Exchange Indenture, this Agreement, the
Registration Rights Agreements, and any blue sky memoranda, (ii) all
arrangements relating to the delivery to the Initial Purchasers of copies of
the foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Initial Purchasers of any
certificates evidencing the Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Securities under state
securities and blue sky laws in accordance with Section 3(d), in each case
including filing fees and reasonable fees and disbursements of counsel for the
Initial Purchasers relating thereto and in connection with the preparation of
any "blue sky" or legal investment memoranda, (vi) the fees and disbursements
of the Trustees, including the fees and disbursements of counsel for the
Trustees, in connection with the Indenture, the Exchange Indenture and the
Securities, (vii) any meetings with prospective investors in the Securities
(other than as shall have been specifically approved by the Initial Purchasers
to be paid for by the Initial Purchasers), (viii) any fees charged by
investment rating agencies for the rating of Securities and (ix) the fees
associated with any listing of the Securities on any securities exchange,
including the cost of obtaining approval for the trading of the Securities
through PORTAL. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 5 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 9 (a)(i) hereof or because of any failure,
refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder other
than by reason of a default by any of the Initial Purchasers, the Company will
reimburse the Initial
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Purchasers severally upon demand for all out-of-pocket expenses (including fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. The Company
shall not in any event be liable to any of the Initial Purchasers for the loss
of anticipated profits from the transactions covered by this Agreement.
(b) In addition to its obligations under Section 6(a)
hereof, the Company agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any loss, claim, damage or liability described in Section 6(a)
hereof, it will reimburse the Initial Purchasers, and each of them, on a
monthly basis against submission of invoices and such additional information as
the Company reasonably may request for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
obligations of the Company to reimburse the Initial Purchasers for such
expenses and the possibility that such payments might later be held to have
been improper by a court of jurisdiction. To the extent that any portion, or
all, of any such interim reimbursement payments are so held to have been
improper, the Initial Purchasers receiving the same shall promptly return such
amounts to the party or parties who have paid such amounts together with
interest, compounded daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by Bankers Trust Company (the "Prime Rate"). Any such
interim reimbursement payments that are not made to the Initial Purchasers
within 30 days of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request until the date paid.
(c) In addition to their obligations under Section 6(a)
hereof, the Initial Purchasers agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any loss, claim, damage or liability described in
Section 6(b)(i) or 6(b)(ii) hereof, (in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by one or more of the Initial Purchasers
specifically for use in the Preliminary Offering Memorandum, the Offering
Memorandum and any amendments or supplements thereto), they will reimburse the
Company on a monthly basis, against submission of invoices and such additional
information as the Initial Purchasers reasonably may request, for all reasonable
legal or other expenses incurred by the Company in connection with investigating
or defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Initial Purchasers' obligation to reimburse the Company
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
portion, or all, of any such interim reimbursement payments are so held to have
been improper, the Company shall promptly return such amounts to the Initial
Purchasers together with interest, compounded daily, determined on the basis of
the Prime Rate. Any such interim reimbursement payments that are not made to the
Company within 30 days of a request for reimbursement shall bear
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interest at the Prime Rate from the date of such request until the date paid.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 4 (b)
and 4 (c) above, including the amounts of any requested reimbursement payments,
the method of determining such amounts and the basis on which such amounts
shall be apportioned among the indemnifying parties, shall be settled by
arbitration conducted pursuant to the Code of Arbitration Procedure of the
NASD. Any such arbitration must be commenced by service of a written demand
for arbitration or a written notice of intention to arbitrate, therein electing
the arbitration tribunal. If the party demanding arbitration does not make
designation of an arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the interpretation and obligations of the
parties under the interim reimbursement provisions contained in Sections 4(b)
and 4(c) hereof and will not resolve the ultimate propriety or enforceability
of the obligation to indemnify for expenses that is created by the provisions
of Section 6 hereof.
Section 5. Conditions of Initial Purchasers' Obligations.
The obligation of each Initial Purchaser to purchase and pay for the Securities
that it has severally agreed to purchase hereunder is subject to the accuracy
of the representations and warranties of the Company contained herein and in
certificates of any officer of the Company and the Subsidiary delivered
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(a) At the Closing Time, each of the Initial
Purchasers shall have received a signed opinion of Eckert Seamans
Cherin & Mellott, LLC, counsel for the Company, dated as of the
Closing Time, in substantially the form attached hereto as Exhibit
C-1. Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale of the
Securities pursuant to this Agreement as counsel for the Initial
Purchasers may reasonably request.
(b) At the Closing Time, each of the Initial
Purchasers shall have received a signed opinion of Reed Smith Shaw &
McClay, FCC counsel to the Company, dated as of the Closing Time, in
substantially the form attached hereto as Exhibit C-2. Such opinion
shall be to such further effect with respect to other legal matters
relating to this Agreement and the sale of the Securities pursuant to
this Agreement as counsel for the Initial Purchasers may reasonably
request.
(c) At the Closing Time, each of the Initial
Purchasers shall have received the favorable opinion of Schulte Roth &
Zabel LLP, counsel for the Initial Purchasers, dated as of the Closing
Time, to the effect that the opinions delivered pursuant to Sections
5(a) and 5(b) appear on their face to be appropriately responsive to
the requirements of this Agreement except, specifying the same, to the
extent waived by the Initial Purchasers, and with respect to the
incorporation and legal existence of the Company, the Securities, this
Agreement, the Indenture, the Exchange Indenture, the Registration
Rights Agreements, the Offering Memorandum and such other related
matters as the Initial Purchasers may require.
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(d) At the time that this Agreement is executed
by the Company and at the Closing Date, each of the Initial Purchasers
shall have received from KPMG, independent auditors for the Company, a
letter, dated respectively as of the date of this Agreement and as of
the Closing Time, in form and substance satisfactory to the Initial
Purchasers, confirming that they are independent public accountants
with respect to the Company within the meaning of the 1933 Act and the
applicable published rules and regulations thereunder, and setting
forth certain matters customarily included in accountants' "comfort
letters," in form and substance satisfactory to the Initial Purchasers
and counsel to the Initial Purchasers.
(e) The Company shall have furnished to the
Initial Purchasers a certificate, signed by the Chief Executive
Officer and the principal financial officer of the Company, dated as
of the Closing Time, to the effect that the signers of such
certificate have examined the Offering Memorandum, any amendment or
supplement to the Offering Memorandum, and this Agreement and that:
(i) the representations and warranties
of the Company in this Agreement are true and correct
in all material respects on and as of the Closing
Time with the same effect as if made at the Closing
Time, the Offering Memorandum, as it may then be
amended or supplemented, does not contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, and the Company has complied with all the
agreements and satisfied all the conditions under
this Agreement on its part to be performed or
satisfied at or prior to the Closing Time; and
(ii) since the respective dates as of
which information is given in the Offering Memorandum
(exclusive of any amendments or supplements thereto),
neither the Company nor the Subsidiary has sustained
any material loss or interference with its respective
business or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any
material adverse change, or any development involving
a prospective material adverse change, in the
business, results of operations, financial condition
or properties of the Company and the Subsidiary,
taken as a whole, except in each case as described in
or contemplated by the Offering Memorandum (exclusive
of any amendment or supplement thereto). As used in
this subparagraph, the term "Offering Memorandum"
means the Offering Memorandum in the form first used
to confirm sales of the Securities.
(f) The closing under the New Credit Facility shall
have occurred on or prior to the Closing Date.
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(g) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Time, there shall not have been any
downgrading, nor any notice given of any intended or potential
downgrading or of a possible change that does not indicate the
direction of the possible change, in the rating accorded the
Securities, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the 1933 Act.
(h) Subsequent to the date hereof or, if earlier, the
dates as of which information is given in the Offering Memorandum
(exclusive of any amendment or supplement thereto), there shall not
have been any change, or any development involving a prospective
change, in or affecting the business or properties of the Company the
effect of which is, in the sole judgment of the Initial Purchasers, so
material and adverse as to make it impractical or inadvisable to
proceed with the purchase and the delivery of the Securities as
contemplated by the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(i) On or before the Closing Time, the Securities
shall have been designated for trading on PORTAL.
(j) At the Closing Time, each of the Indenture
and the Exchange Indenture shall have been fully executed and shall be
in full force and effect.
(k) At the Closing Time, the Certificate of
Designation shall have been filed with the Secretary of the State of
the State of Nevada and shall be in full force and effect.
(l) At the Closing Time, the Registration Rights
Agreements shall have been fully executed and be in full force and
effect.
(m) The issuance and sale of the Securities
pursuant to this Agreement shall not be enjoined (temporarily or
permanently) and no restraining order or other injunctive order shall
have been issued or any action, suit or proceeding shall have been
commenced with respect to this Agreement before any Court or
governmental authority (including, without limitation, the FCC).
(n) On or before the Closing Time, counsel for
the Initial Purchasers shall have been furnished with all such
documents, certificates and opinions as they may have reasonably
requested from the Company.
(o) The FCC grant of the pro forma assignment of
the licenses of Tele-Media to the Subsidiary shall not have been
modified or set aside.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by the Initial Purchasers on notice to the Company at any time at
or prior to the Closing Time, and such termination shall be without liability
of any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections 4, 6, 7 and 14
shall remain in effect.
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Section 6. Indemnification and Contribution. (a) Each of
the Company and Parent jointly and severally agrees to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Initial Purchaser or such controlling person
may become subject under the 1933 Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue
statement made by the Company in Section 1 of this Agreement,
(ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Preliminary
Offering Memorandum or the Offering Memorandum or any amendments or
supplements thereto or (B) any application or other document, or any
amendments or supplements thereto, executed by the Company or based
upon written information furnished by or on behalf of the Company filed
in any jurisdiction in order to qualify the Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"),
or
(iii) the omission or alleged omission to state in
the Preliminary Offering Memorandum or the Offering Memorandum or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse, as incurred, each Initial Purchaser and each such
controlling person for any legal or other expenses reasonably incurred by such
Initial Purchaser or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by any Initial Purchaser
specifically for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have. The Company will not,
without the prior written consent of the Initial Purchaser or Initial
Purchasers purchasing, in the aggregate, more than fifty percent (50%) of the
Securities, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Initial
Purchaser or any person who controls any such Initial Purchaser within the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the Initial
Purchasers and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
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(b) Each Initial Purchaser, severally and not jointly,
will indemnify and hold harmless the Company, each of its directors, each of
its executive officers and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company, any
such director, officer or controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto or any Application or (ii) the omission or alleged omission
to state therein a material fact required to be stated in the Preliminary
Offering Memorandum, the Offering Memorandum or any amendment or supplement
thereto, or any Application or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by any Initial Purchaser specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any
action in respect thereof. This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Initial
Purchasers will not, without the prior written consent of the Parent or
Company, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not Parent, the Company or
any person who controls Parent or the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of all of the Parent, the Company and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 6. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel approved by such indemnified party (which approval will not be
unreasonably withheld); provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the
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indemnifying party, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified party or parties and
such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action (which approval will not be unreasonably
withheld), the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel, if any) in any one action or
separate but substantially similar actions arising out of the same general
allegations or circumstances, designated by the Initial Purchasers in the case
of paragraph (a) of this Section 6, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel approved by the indemnified
party (which approval will not be unreasonably withheld), or (iii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the written consent of the
indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 6 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchasers on the other shall be deemed
to be in the same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Initial Purchasers. The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Initial Purchasers, the parties' relative
intents, knowledge, access to
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information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances. The
Company and the Initial Purchasers agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Initial Purchasers were treated as one entity for such purpose) or
by any other method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Initial Purchaser shall be obligated
to make contributions hereunder that in the aggregate exceed the total offering
price of the Securities purchased by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions among
Initial Purchasers shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes of
this paragraph (d), each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Initial Purchaser, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of Sections 4(b), 4(c) and 4(d) hereof and this
Section 6, and are fully informed regarding said provisions. They further
acknowledge that the provisions of Sections 4(b), 4(c) and 4(d) hereof and this
Section 6 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Offering Memorandum as required by the 1933 Act.
Section 7. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers, and the several Initial Purchasers set forth in or made
pursuant to this Agreement, respectively, shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Initial Purchaser or any
person who controls the Company or the Initial Purchasers within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the Exchange Act and (ii)
delivery of and payment for the Securities. The respective agreements,
covenants, indemnities and other statements set forth in Sections 4, 6 and 14
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
Section 8. Default of Underwriters. If one of the Initial
Purchasers defaults in its obligation to purchase Securities hereunder and the
aggregate principal amount of such
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Securities that such defaulting Initial Purchaser agreed but failed to purchase
is ten percent or less of the aggregate principal amount of Securities to be
purchased by all of the Initial Purchasers at such time hereunder, the other
Initial Purchasers may make arrangements satisfactory to the Initial Purchaser
for the purchase of such Securities by other persons, but if no such
arrangements are made by the Closing Time, the other Initial Purchasers shall be
obligated to purchase the Securities that such defaulting Initial Purchaser
agreed but failed to purchase. If one of the Initial Purchasers so defaults
with respect to an aggregate principal amount of Securities that is more than
ten percent of the aggregate principal amount of Securities to be purchased by
all of the Initial Purchasers at such time hereunder, and if arrangements
satisfactory to the Initial Purchaser are not made within 36 hours after such
default for the purchase by other persons, of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Initial Purchaser or the Company other than as
provided in Section 7 hereof. In the event of any default by one of the Initial
Purchasers as described in this Section 8, the Initial Purchasers shall have the
right to postpone the Closing Time established as provided in Section 2 hereof
for not more than seven business days in order that any necessary changes may be
made in the arrangements or documents for the purchase and delivery of the
Securities. As used in this Agreement, the term "Initial Purchaser" includes
any person substituted for a Initial Purchaser under this Section 8. Nothing
herein shall relieve any defaulting Initial Purchaser from liability for its
default.
Section 9. Termination of Agreement. (a) This agreement may
be terminated with respect to the Securities in the sole discretion of the
Initial Purchasers by notice to the Company given prior to the Closing Time, in
the event that the Company shall have failed, refused or been unable to perform
all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder at or prior thereto or, if at or prior to the Closing Time,
(i) the Company or the Subsidiary shall have, in
the sole judgment of the Initial Purchasers, sustained any material
loss or interference with its respective business or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material adverse
change, or any development involving a prospective material adverse
change (including without limitation a change in management or control
of the Company), in the business, results of operations, financial
condition or properties of the Company and the Subsidiary, taken as a
whole, except in each case as described in or contemplated by the
Offering Memorandum (exclusive of any amendment or supplement
thereto);
(ii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iii) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political or
financial conditions having an effect on the financial markets or the
market for the
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Securities that, in the sole judgment of the Initial Purchasers, makes
it impractical or inadvisable to proceed with the public offering or
the delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party, except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6 and 7 shall remain in effect.
Section 10. Information Supplied by the Initial Purchasers.
The statements set forth in the fourth paragraph on page ii and the last
paragraph under the heading "Plan of Distribution" in the Preliminary Offering
Memorandum and the Offering Memorandum (to the extent such statements relate to
the Initial Purchasers) constitute the only information furnished by the
Initial Purchasers to the Company for the purposes of Sections 1(a)(i) and 6
hereof. The Initial Purchasers confirm that such statements (to such extent)
are correct.
Section 11. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication to the applicable party at the addresses indicated below:
If to the Initial Purchasers:
c/o Prudential Securities Incorporated
One New York Plaza-18th Floor,
New York, NY 10292-2018,
attention: Peter Horan
with copies to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
attention: Marc Weingarten
If to the Company or Parent:
Citadel Broadcasting Company
140 South Ash Street
Tempe, AZ 85281
attention: Donna Heffner
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with copies to:
Eckert Seamans Cherin & Mellott, LLC
600 Grant Street - 42nd Floor
Pittsburgh, PA 15219
attention: Bryan D. Rosenberger
Section 12. Parties. This Agreement is made solely for the
benefit of the Initial Purchasers, the Company and, to the extent expressed,
any person who controls the Company or any Initial Purchaser within the meaning
of Section 15 of the 1933 Act or Section 20 of the Exchange Act, and the
directors of the Company, its officers and their respective executors,
administrators, successors and assigns and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, as such purchaser, from the Initial
Purchasers of the Securities. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement shall be
governed by the laws of the State of New York applicable to contracts made and
to be performed entirely within such State. Specified times of the day refer
to New York City time.
Section 14. Counterparts. This Agreement may be executed in
one or more counterparts and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
Section 15. Severability of Provisions. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 16. Headings. The Section headings used or contained
in this Agreement are for convenience of reference only and shall not affect
the construction of this Agreement.
32
If the foregoing correctly sets forth our understanding,
please sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and the Initial Purchasers
in accordance with its terms.
Very truly yours,
CITADEL BROADCASTING COMPANY
By
----------------------------------
Name:
Title:
CITADEL COMMUNICATIONS CORPORATION
By
----------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By
----------------------------------------
Name:
Title:
NATIONSBANC CAPITAL MARKETS, INC.
By
----------------------------------------
Name:
Title:
BANCBOSTON SECURITIES INC.
By
----------------------------------------
Name:
Title:
33
SCHEDULE I
Principal Amount Number of Shares of
of Notes Exchangeable Preferred
Initial Purchasers to be Purchased Stock to be Purchased
------------------ --------------- ---------------------
Prudential Securities Incorporated
$ 85,000,000 850,000
NationsBanc Capital Markets, Inc.
$ 10,000,000 100,000
BancBoston Securities Inc. $ 5,000,000 50,000
Total $100,000,000 1,000,000