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Exhibit 2.7
ASSET PURCHASE AGREEMENT
AMONG
CDB BROADCASTING CORPORATION,
CDB LICENSE CORPORATION
AND
CITADEL BROADCASTING COMPANY
JUNE 2, 1997
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT"), made as of the 2nd day of
June, 1997, by and among CDB BROADCASTING CORPORATION, an Arkansas corporation
("CDB BROADCASTING"), CDB LICENSE CORPORATION, an Arkansas corporation ("CDB
LICENSE" and together with CDB Broadcasting, "SELLERS"), and CITADEL
BROADCASTING COMPANY, a Nevada corporation ("CITADEL").
RECITALS:
A. Sellers are the licensees of and own and operate radio station
KESR-FM licensed to Sherwood, Arkansas (the "STATION").
B. Pursuant to the Natural State Intent Letter (as herein defined),
CDB Broadcasting has expressed its intention to acquire (the "NATURAL STATE
ACQUISITION") all of the issued and outstanding shares of capital stock of
Natural State (as herein defined), which owns and operates radio station
KYTN-FM licensed to Wrightsville, Arkansas (the "PENDING STATION").
X. Xxxxxxx desire to sell to Citadel and Citadel desires to purchase
from Sellers substantially all of the assets of Sellers and the Station
(including CDB Broadcasting's rights under the Natural State Intent Letter and
the Natural State Definitive Agreement, if any), on the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1
DEFINITIONS
The following terms when used in this Agreement shall have the
meanings assigned to them below:
"ACCOUNTS RECEIVABLE" has the meaning specified in Section 8.3.
"ACCOUNTS RECEIVABLE LIST" has the meaning specified in Section 8.3.
"ACCRUED TAXES" has the meaning specified in Section 4.6.
"ACT" means the Communications Act of 1934, as amended.
"AFFILIATE" of any Person means any other Person (a) that directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with, the first Person, or (b) any interests of which are owned, in
whole or in part, directly or indirectly, by the first Person.
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For purposes of this definition, the term "control" (including the correlative
meanings of the terms "controls," "controlled by," and "under direct or
indirect control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of the Person, whether through the
ownership of voting securities or by contract or otherwise.
"ASSET SCHEDULE" has the meaning specified in Section 2.1(a).
"ASSIGNED CONTRACTS" has the meaning specified in Section 2.1(d).
"ASSUMED OBLIGATIONS" has the meaning specified in Section 2.3.
"BROKER" means NationsBanc Capital Markets, Inc.
"BUSINESS" has the meaning specified in Section 4.1.
"CITADEL COLLECTION PERIOD" has the meaning specified in Section 8.3.
"CITADEL'S CAP EXEMPT DAMAGES" has the meaning specified in Section
13.5(b).
"CITADEL'S DISCLOSURE SCHEDULE" has the meaning specified in Section
5.3.
"CLOSING" means the consummation of the transactions contemplated in
this Agreement in accordance with the provisions of Section 10.
"CLOSING DATE" has the meaning specified in Section 10.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACTS" has the meaning specified in Section 4.9.
"CPR RULES" means the Center for Public Resources Rules for
Nonadministered Arbitration of Business Disputes.
"DAMAGES" has the meaning specified in Section 13.1.
"DRAW CONDITION" has the meaning specified in Section 14.2(a).
"ENVIRONMENTAL CLAIMS" means and includes, without limitation: (a)
claims, demands, suits, causes of action for personal injury or lost use of
property, or consequential damages, to the extent any of the foregoing arise
directly or indirectly out of Environmental Conditions; (b) actual or
threatened damages to natural resources; (c) claims for the recovery of
response costs, or administrative or judicial orders directing the performance
of investigations, response or remedial actions under CERCLA, RCRA or other
Environmental Laws; (d) a requirement
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to implement "corrective action" pursuant to any order or permit issued
pursuant to RCRA; (e) claims for restitution, contribution or equitable
indemnity from third parties or any governmental agency; (f) fines, penalties
or Liens against property; (g) claims for injunctive relief or other orders or
notices of violation from Governmental Authorities; and (h) with regard to any
present or former employees, exposure to or injury from Environmental
Conditions.
"ENVIRONMENTAL CONDITIONS" means conditions of the environment,
including the ocean, natural resources (including flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata or the ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation, transportation, release,
spilling, leaking, pumping, pouring, emptying, discharging, injecting,
escaping, leaching, disposal, dumping, or threatened release of Hazardous
Materials by either Seller. With respect to claims by employees, Environmental
Conditions also includes the exposure of Persons to Hazardous Materials within
work places on any real estate owned or occupied by either Seller.
"ENVIRONMENTAL LAWS" has the meaning specified in the definition of
Hazardous Materials.
"ENVIRONMENTAL NONCOMPLIANCE" means, but is not limited to: (a) the
release or threatened release as a result of the activities of either Seller of
any Hazardous Materials into the environment, any storm drain, sewer, septic
system or publicly owned treatment works, in violation of any effluent emission
limitations, standards or other criteria or guidelines established by any
federal, state or local law, regulation, rule, ordinance, plan or order; and
(b) any facility operations, procedures, designs, etc. which do not conform to
the statutory or regulatory requirements of the CAA, the CWA, the TSCA, the
RCRA or any other Environmental Laws intended to protect public health, welfare
and the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED ASSETS" has the meaning specified in Section 2.2.
"FCC" means the Federal Communications Commission.
"FCC APPLICATION" has the meaning specified in Section 9.1(a).
"FCC APPROVAL" has the meaning specified in Section 9.1(a).
"FCC LICENSES" means the main station license for the Station,
together with each of the other consents, rights, licenses, permits and other
authorizations issued by the FCC and held by Sellers in connection with, or
pertaining to, the conduct of the business and operation of the Station,
together with any renewals and extensions thereof and any applications therefor
pending on the Closing Date, and any and all applications made by Sellers for
such consents, rights, licenses, permits and other authorizations.
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"FINAL ORDER" means a written action or order issued by the FCC or its
staff setting forth the FCC Approval (or a denial thereof), (a) which action or
order has not been vacated, reversed, stayed, enjoined, set aside, annulled or
suspended, and (b) with respect to which action or order (i) no requests have
been filed and are pending for administrative or judicial review, rehearing,
reconsideration, appeal or stay, and the time period for filing any such
requests and for the FCC to set aside the action on its own motion under the
provisions of the Act or the rules, regulations and policies of the FCC has
expired, or (ii) in the event of review, reconsideration or appeal, the time
for further review, reconsideration or appeal has expired.
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time applied on a consistent basis during
the periods involved.
"GOVERNMENTAL AUTHORITY" means any government, whether federal, state
or local, or any other political subdivision thereof, or any agency, tribunal
or instrumentality of any such governmental or political subdivision, or any
other Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"HAZARDOUS MATERIALS" means hazardous wastes, hazardous substances,
hazardous constituents, toxic substances or related materials, whether solids,
liquids or gases including but not limited to substances defined as "PCBs,"
"hazardous wastes," "hazardous substances," "toxic substances," "pollutants,"
"contaminants," "radioactive materials," "petroleum," or other similar
designations in, or otherwise subject to regulation under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"), 42 U.S.C.
Section 9601 ET SEQ.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C.
Section 2601 ET SEQ.; the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 9601; the Clean Water Act ("CWA"), 33 U.S.C. Section 1251 ET
SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section 300f ET SEQ.; the Clean Air
Act ("CAA"), 42 U.S.C. Section 7401 ET SEQ.; or any similar state law; and in
the plans, rules, regulations or ordinances adopted, or other criteria and
guidelines promulgated pursuant to the preceding laws or other similar laws,
regulations, rules or ordinances now in effect (collectively, the "ENVIRONMENTAL
LAWS"); and any other substances, constituents or wastes subject to
environmental regulations under any applicable federal, state or local law,
regulation or ordinance.
"INDEBTEDNESS FOR BORROWED MONEY" means (a) all indebtedness of either
Seller in respect of money borrowed (including, without limitation,
indebtedness which represents the unpaid amount of the purchase price of any
property), (b) all indebtedness of either Seller evidenced by a promissory
note, bond or similar written obligation to pay money, (c) all indebtedness
guaranteed by either Seller or for which either Seller is contingently liable,
including, without limitation, guaranties in the form of an agreement to
repurchase or reimburse, and any commitment by which any such Person assures a
creditor against loss, including contingent reimbursement obligations with
respect to letters of credit, and (d) all monetary obligations of either Seller
under any lease or similar arrangement, which obligations
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would be classified and accounted for as capital obligations on a balance sheet
of either Seller under GAAP.
"INDEMNITEE" has the meaning specified in Section 13.3.
"INDEMNITOR" has the meaning specified in Section 13.3.
"INTELLECTUAL PROPERTY" has the meaning specified in Section 2.1(e).
"LEASEHOLDS" has the meaning specified in Section 4.8.
"LETTER OF CREDIT" has the meaning specified in Section 3.2.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
encumbrance, claim, easement, transfer restriction, lien (statutory or
otherwise) or security interest of any kind or nature whatsoever.
"LOCAL MARKETING AGREEMENT" has the meaning specified in Section 9.2.
"NATURAL STATE" means Natural State Communications Company, an
Arkansas corporation.
"NATURAL STATE ACQUISITION" has the meaning specified in the recitals
to this Agreement.
"NATURAL STATE CLOSING" has the meaning specified in Section 9.8.
"NATURAL STATE DEFINITIVE AGREEMENT" means a definitive Stock Purchase
Agreement, to be negotiated, executed and delivered by CDB Broadcasting
relating to the Natural State Acquisition, in form and substance satisfactory
to Citadel in its reasonable discretion.
"NATURAL STATE INTENT LETTER" means that certain Memorandum of Intent
dated April 30, 1997 among the stockholders of Natural State, Xxxxxx X. Xxxxxx,
Xxx X. Xxxxxx, Xx. and CDB Broadcasting.
"OBLIGATIONS" means, without duplication, all (a) Indebtedness for
Borrowed Money, (b) Accrued Taxes, accounts payable, accrued liabilities and
all other liabilities and obligations of the type normally required by GAAP to
be reflected on a balance sheet, (c) commitments by which either Seller assures
a creditor against loss, including the face amount of all letters of credit
and, without duplication, all drafts drawn thereunder, (d) obligations
guaranteed in any manner by either Seller, (e) obligations under capitalized
leases in respect of which obligations either Seller is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person assures a creditor against loss, (f) obligations under
acceptance facilities, (g) obligations secured by a Lien on property of either
Seller, (h) obligations under interest rate or currency exchange or swap
agreements, (i) unsatisfied
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obligations for "withdrawal liability" to a "multiemployer plan" as such terms
are defined under ERISA, (j) indebtedness issued or obligation incurred in
substitution or exchange for any Obligations, (k) costs or expenses incurred by
either Seller of any nature, whether or not currently payable, and (l) other
liabilities or obligations of either Seller, in each of the foregoing instances
whether absolute or contingent, known or unknown, and whether or not normally
required by GAAP to be reflected on a balance sheet.
"PARENT" means Citadel Communications Corporation, a Nevada
corporation.
"PENDING STATION" has the meaning specified in the recitals to this
Agreement.
"PERMITS" has the meaning specified in Section 4.17(b).
"PERSON" means an individual, corporation, partnership, joint venture,
joint stock seller, association, trust, business trust, unincorporated
organization, Governmental Authority, or any other entity of whatever nature.
"PERSONAL PROPERTY" has the meaning specified in Section 2.1(a).
"PURCHASED ASSETS" has the meaning specified in Section 2.1.
"PURCHASE PRICE" has the meaning specified in Section 3.1.
"REAL ESTATE PURCHASE AGREEMENT" means that certain Agreement of Sale
dated as of the date hereof among Xxx X. Xxxxxx, Xx., Xxxx X. Xxxxxx and
Citadel.
"REAL PROPERTY" has the meaning specified in Section 2.1(b)
"REAL PROPERTY LEASES" has the meaning specified in Section 2.1(c).
"SELLERS' DISCLOSURE SCHEDULE" has the meaning specified in Section
4.3.
"XXXXXX BROADCASTING AGREEMENT" means that certain Stock Purchase
Agreement dated as of the date hereof among Xxxxxx Broadcasting Corporation,
the stockholders of Xxxxxx Broadcasting Corporation, Parent and Citadel.
"XXXXXX CORPORATION AGREEMENT" means that certain Merger Agreement
dated as of the date hereof among Xxxxxx Corporation, the stockholders of
Xxxxxx Corporation, Parent and Citadel.
"STATION" has the meaning specified in the recitals to this Agreement.
"SUPPLEMENTAL FINANCIAL STATEMENTS" has the meaning specified in
Section 6.10
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"TAXES" means all taxes, charges, fees, levies, or other assessments,
including income, gross receipts, excise, property, sales, transfer, license,
payroll, and franchise taxes, any taxes required by law to be withheld, and any
taxes payable as a result of the consummation of the transactions contemplated
by this Agreement, which taxes are imposed by any Governmental Authority; and
such term shall include any interest, penalties, or additions to tax
attributable to such assessments.
"THRESHOLD" has the meaning specified in Section 13.5(a).
"TRADE AGREEMENTS" has the meaning specified in Section 6.9.
"TRADE IMBALANCE" has the meaning specified in Section 6.9.
"TRADE LIABILITIES" has the meaning specified in Section 6.9.
"TRADE RECEIVABLES" has the meaning specified in Section 6.9.
"TRADE SCHEDULE" has the meaning specified in Section 6.9.
SECTION 2
PURCHASE AND SALE OF ASSETS
2.1 PURCHASE AND SALE OF PURCHASED ASSETS. Subject to the terms and
conditions of this Agreement, and on the basis of the representations,
warranties, covenants and agreements contained in this Agreement, at the
Closing, Sellers agree to sell, assign and convey to Citadel, and Citadel
agrees to purchase, acquire and accept from Sellers, all of the Purchased
Assets. The "PURCHASED ASSETS" consist of:
(a) All the tangible personal property, improvements and
fixtures of every kind or nature used in the operation of the Station in the
ordinary course of business and located at the Station (the "PERSONAL
PROPERTY"), including, without limitation, the personal property described on
SCHEDULE 2.1 to this Agreement (the "ASSET SCHEDULE")
(b) All of the right, title and interest of Sellers or any of
their Affiliates in and to any real property used in the operation of the
Station in the ordinary course of business which are described on the ASSET
SCHEDULE (the "REAL PROPERTY");
(c) The leasehold interests pursuant to the real property
leases described on the ASSET SCHEDULE (the "REAL PROPERTY LEASES");
(d) All of the right, title and interest of Sellers or any of
their Affiliates in and to those contracts, leases, licenses, memberships,
agencies, permits and agreements, other than Real Property Leases, to which
either Seller or any Affiliate thereof presently is a party
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or an assignee of a party which are described on the ASSET SCHEDULE (the
"ASSIGNED CONTRACTS"), which Assigned Contracts include (i) the employment
agreements listed on the ASSET SCHEDULE and (ii) the Natural State Intent Letter
and the Natural State Definitive Agreement, if any;
(e) The call letters of the Station and all of the
copyrights, trademarks, trade names and other similar rights, including
applications and registrations therefor, used in connection with the past or
present operation of the Station in which either Seller or any Affiliate
thereof has any right, title or interest, including, without limitation, those
items listed on the ASSET SCHEDULE (collectively, the "INTELLECTUAL PROPERTY");
(f) The FCC Licenses, a complete list of which is included on
the ASSET SCHEDULE;
(g) All books, records and accounts relating to the operation
of the Station, subject to the right of Sellers to make and retain photocopies
thereof for Sellers' personal use and reference and to obtain access to such
books, records and accounts in accordance with the provisions of Section
2.2(a); and
(h) All other assets owned by Sellers as of the date of this
Agreement which are used in connection with the operation of the Station as of
the date of this Agreement, real and personal, tangible and intangible.
2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, it is expressly understood and agreed that there
shall be excluded from the assets transferred or assigned to Citadel with
respect to the Station the following (collectively, the "EXCLUDED ASSETS"):
(a) Except to the extent included in Section 2.1(g), all of
Sellers' corporate books and records and other documents relating to the
internal corporate affairs of Sellers, and all other corporate records or files
of Sellers not relating to the business or operation of the Station;
(b) All cash, cash equivalents or similar type investments
held by Sellers, such as certificates of deposit, treasury bills and other
marketable securities on hand as of the Closing;
(c) All accounts receivable existing as of Closing;
(d) Corporate assets and assets not used in connection with
the Station;
(e) Any and all claims of Sellers with respect to
transactions occurring or arising prior to the Closing Date, including, without
limitation, claims for Tax refunds; and
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(f) Those additional assets identified on SCHEDULE 2.2 as
Excluded Assets.
Notwithstanding the foregoing, any asset which is described above but which is
actually listed on the ASSET SCHEDULE shall be a Purchased Asset and not an
Excluded Asset.
2.3 OBLIGATIONS. Citadel shall not assume, and shall purchase the
Purchased Assets free and clear of, any and all Obligations of Sellers, except
those Obligations of Sellers arising from and after the Closing Date (other
than any liability or obligation for breach or default which occurred prior to
the Closing Date) pursuant to each of (a) the Real Property Leases, (b) the
Assigned Contracts, (c) those items subject to proration pursuant to Section
9.3, (d) the Trade Liabilities and (e) those additional items expressly set
forth on SCHEDULE 2.3 to this Agreement (collectively, the "ASSUMED
OBLIGATIONS").
2.4 DELIVERY OF FCC LICENSES. At or prior to the Closing, Citadel may,
in its sole and absolute discretion, instruct Sellers to deliver the FCC
Licenses at the Closing to Citadel License, Inc., a wholly owned subsidiary of
Citadel.
2.5 TAX DEFERRED EXCHANGE. Sellers hereby acknowledge that it is the
intention of Citadel to complete a tax deferred exchange under Section 1031 of
the Code and that Citadel's rights and obligations under this Agreement may be
assigned to a qualified intermediary or qualified escrow agent (as such terms
are defined in the regulations under Section 1031 of the Code) for the purpose
of completing such exchange. Sellers agree to cooperate in any manner
reasonably necessary to complete such exchange and at no additional cost or
liability to Sellers.
SECTION 3
PURCHASE PRICE; LETTER OF CREDIT
3.1 PURCHASE PRICE. Subject to adjustment as provided in Sections 6.9
and 9.3, the purchase price for the Purchased Assets (the "PURCHASE PRICE") is
equal to (i) $7,500,000, MINUS (ii) the amount of cash actually paid by Citadel
to the stockholders of Xxxxxx Broadcasting Corporation pursuant to Section
2.4(a) of the Xxxxxx Broadcasting Agreement, MINUS (iii) the amount of
liabilities constituting Assumed Obligations pursuant to clause (e) of the
definition thereof. At the Closing, Citadel shall deliver to Sellers
immediately available funds in the amount of the Purchase Price.
3.2 LETTER OF CREDIT. Simultaneously with the execution of this
Agreement, Citadel shall deliver to Sellers an irrevocable letter of credit in
favor of Sellers, issued by a national banking association or other issuer
acceptable to Sellers, in the amount of $325,000, which shall be in the form
attached as EXHIBIT A hereto (the "LETTER OF CREDIT"). The Letter of Credit
shall provide that the issuing bank shall make payment on the Letter of Credit
upon such bank's receipt of a joint certificate from the President of each
Seller and Citadel certifying that a Draw Condition has occurred. Upon the
Closing, Sellers shall return the original Letter of Credit to Citadel for
cancellation.
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3.3 ALLOCATION OF THE PURCHASE PRICE. Citadel and Sellers shall report
the transactions contemplated by this Agreement for federal and state tax
purposes in a manner consistent with the allocation of the Purchase Price made
by Citadel at the Closing (which allocation shall be reasonably acceptable to
Sellers).
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
In connection with the purchase and sale of the Purchased Assets under
this Agreement and in order to induce Citadel to enter into and consummate the
transactions contemplated by this Agreement, Sellers jointly and severally make
the following representations and warranties to Citadel, as of the date of this
Agreement and as of the date of the Closing (except for representations and
warranties expressly and specifically relating to a time or times other than
the date hereof or thereof, which shall be made as of the specified time or
times):
4.1 ORGANIZATION AND QUALIFICATION. Each Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arkansas and has full power and authority to own its assets and properties and
to conduct the business in which it is now engaged (collectively, the
"BUSINESS"). Each Seller has full power, authority and legal right and all
necessary approvals, permits, licenses and authorizations to own its properties
and to conduct its Business.
4.2 AUTHORITY. The execution and delivery of this Agreement by
Sellers, the performance by Sellers of their covenants and agreements hereunder
and the consummation by Sellers of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of Sellers. This
Agreement constitutes the valid and legally binding agreement of Sellers,
enforceable against Sellers in accordance with its terms.
4.3 NO LEGAL BAR; CONFLICTS. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
violates or will violate any provision of the Articles of Incorporation or
Bylaws of either Seller, or any law, rule, regulation, writ, judgment,
injunction, decree, determination, award or other order of any Governmental
Authority, or violates or will violate, or conflicts with or will conflict
with, or will result in any breach of any of the terms of, or constitutes or
will constitute a default under or results in or will result in the termination
of or the creation or imposition of any Lien pursuant to, the terms of any
contract, commitment, agreement, understanding or arrangement of any kind to
which either Seller is a party or by which either Seller or any of the assets
of either Seller is bound. Except for the FCC Approval and the consents
disclosed in SCHEDULE 4.0 to this Agreement ("SELLERS' DISCLOSURE SCHEDULE"),
no consents, approvals or authorizations of, or filings with, any Governmental
Authority or any other Person are required in connection with the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
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4.4 FINANCIAL STATEMENTS. Sellers have delivered to Citadel the
following financial statements for the Station: (a) the audited balance sheet
as of December 31, 1996 and the related statements of income and cash flows for
the year then ended; (b) the unaudited balance sheet as of April 30, 1997 and
the related statements of income and cash flows for the four months then ended;
and (c) the monthly unaudited balance sheets and income statements for each
month in 1996 and the first four months of 1997. Each of the foregoing
financial statements (including in all cases the notes thereto, if any) (i) is
accurate and complete in all material respects, (ii) is consistent in all
material respects with the books and records of Sellers (which, in turn, are
accurate and complete in all material respects) and (iii) presents fairly in
all material respects the financial condition and results of operations of
Sellers in accordance with GAAP (subject in the case of unaudited financial
statements to the lack of footnote disclosure and changes resulting from normal
year-end audit adjustments), consistently applied, as of the dates and for the
periods set forth therein.
4.5 ABSENCE OF CERTAIN CHANGES. Between December 31, 1996 and the date
of this Agreement, there has not been any (a) material adverse change in the
condition of the Station, financial or otherwise, or in the results of
operations, assets, liabilities or business of the Station; (b) damage or
destruction, whether or not insured, affecting the business operations of the
Station; (c) labor dispute or threatened labor dispute involving any of the
employees of the Station; (d) actual or threatened dispute pertaining to the
Station with any material provider of software, hardware or services; (e)
material change in the customary methods of operations of the Station; (f)
except in the ordinary course of business or to the extent not material to the
Business or financial condition of the Station, sale or transfer of any
tangible or intangible asset used or useful in the operation of the Station,
mortgage, pledge or imposition of any Lien on any such asset, lease of real
property, machinery, equipment or buildings with respect to the Station, or
modification, amendment or cancellation of any of its existing leases relating
to the Station, or cancellation of any debt or claim; or (g) liability or
obligation (contingent or otherwise) incurred under agreements or otherwise,
except current liabilities entered into or incurred in the ordinary course of
business consistent with past practices and obligations under the Natural State
Intent Letter.
4.6 TAXES. Each Seller has filed or caused to be filed on a timely
basis all federal, state, local and other tax returns, reports and declarations
required to be filed by it with respect to the Station and has paid all Taxes
(including, but not limited to, income, franchise, sales, use, unemployment,
withholding, social security and workers' compensation taxes and estimated
income and franchise tax payments, penalties and fines) reflected as due on
such returns, reports or declarations (whether or not shown on such returns,
reports or declarations), or pursuant to any assessment received by it in
connection with such returns, reports or declarations. All returns, reports and
declarations filed by or on behalf of each Seller are true, complete and
correct in all material respects. Except as disclosed in SELLERS' DISCLOSURE
SCHEDULE no deficiency in payment of any Taxes for any period has been asserted
by any taxing authority which remains unsettled at the date hereof, no written
inquiries have been received by either Seller from any taxing authority with
respect to possible claims for taxes or assessments, and there is no basis for
any additional claims or assessments for Taxes.
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Since December 31, 1996, neither Seller has incurred any liability for
Taxes which materially affect the operation of the Station other than in the
ordinary course of business. All Taxes attributable to the Station or its
income, operations or properties accruing up to and including the Closing (the
"ACCRUED TAXES") have been or will be paid when due regardless of whether such
Taxes are due and payable as of the Closing.
4.7 ASSET SCHEDULE. The ASSET SCHEDULE includes complete and accurate
(a) listings of all Real Property used in the operation of the Station; (b)
listings of all Personal Property owned by Sellers and used in the operation of
the Station; (c) descriptions of all Real Property Leases and Assigned
Contracts, none of which requires any consent of third parties in connection
with the transactions contemplated hereby, except otherwise as indicated in
SELLERS' DISCLOSURE SCHEDULE; (d) descriptions of all of the Intellectual
Property; and (e) listings of all of the FCC Licenses, all of the foregoing of
which will, as of the Closing, be owned and held by Sellers as reflected in the
ASSET SCHEDULE.
4.8 TITLE TO AND CONDITION OF PROPERTY.
(a) TITLE. Sellers will as of the Closing have good,
marketable and exclusive title to and undisputed possession of all of the real,
personal and tangible property and improvements included in the Purchased
Assets. Except as set forth on SELLERS' DISCLOSURE SCHEDULE, the Purchased
Assets are now free and clear of all Liens. The Purchased Assets will, as of
the Closing, be free and clear of all Liens.
(b) CONDITION. The Personal Property is structurally sound,
in reasonably good condition, ordinary wear and tear excepted, adequate and
suitable for the operation of the Station as it is currently being operated,
and in proper condition and repair so that the Station can operate according to
its FCC Licenses, the rules, regulations and policies of the FCC and in all
other respects in compliance with the Act and all other applicable federal and
state laws.
(c) INSURANCE. The Personal Property included among the
Purchased Assets is and will be insured through the Closing Date in amounts
adequate to replace or repair any casualty or other insurable loss to any of
such property.
(d) SUFFICIENCY OF ASSETS. The Purchased Assets include all
of the assets, of a sufficient nature, condition and quantity, necessary to
permit Citadel to operate the Station immediately upon the Closing in the
ordinary course of business and consistent with the past practices of Sellers.
Sellers have not, since December 31, 1996, removed any material item of
Personal Property from the Station other than removals in the ordinary course
of business which were not done in contemplation of the transactions
contemplated hereby.
(e) REAL PROPERTY LEASES.
(i) The ASSET SCHEDULE contains accurate
descriptions of the Real Property Leases and the location of the real estate
leased thereunder (the "LEASEHOLDS") and the
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type of facility located on the Leaseholds. Each Seller will as of the Closing
have a valid leasehold interest in its respective Leaseholds.
(ii) None of the Leaseholds is subject to any
covenant or restriction preventing or limiting in any material respect the
consummation of the transactions contemplated hereby, except for any consent
listed on SELLERS' DISCLOSURE SCHEDULE required of the landlords under the Real
Property Leases. Sellers' right, title and interest in and to the Leaseholds
will at the Closing be held by Sellers free and clear of all Liens.
(iii) The use for which the Leaseholds are zoned
permits the use thereof for the business of the Station consistent with past
practices. The use and occupancy of the Leaseholds by Sellers are in compliance
in all material respects with all regulations, codes, ordinances and statutes
applicable to Sellers and Sellers have not received any notice asserting any
material violation of sanitation laws and regulations, occupational safety and
health regulations, or electrical codes.
(iv) There are no facts relating to Sellers, and to
the best of the knowledge of Sellers, no facts relating to any other party,
that would prevent the Leaseholds from being occupied and used by Citadel
and/or any assignee of Citadel after the Closing Date in the same manner as
immediately prior to the Closing.
(v) There is not under any Real Property Lease any
material default by Sellers or any condition that with notice or the passage of
time or both would constitute such a default, and Sellers have not received any
notice asserting the existence of any such default or condition.
(vi) Each Real Property Lease is valid and binding
and in full force and effect as to Sellers, and to the best of the knowledge of
Sellers, as to each other party thereto, and except as disclosed on the ASSET
SCHEDULE, has not been amended or otherwise modified.
(vii) The Leaseholds constitute all of the real
property in which either Seller has a leasehold interest or other interest or
right (whether as lessor or lessee) and which is or will prior to the Closing
be used solely in the operation of the Station.
4.9 CONTRACTUAL AND OTHER OBLIGATIONS. Set forth in the ASSET SCHEDULE
is a description of all (a) Real Property Leases to which either Seller is a
party; (b) all contracts, agreements, licenses, leases, arrangements and other
documents used solely in connection with the present operation of the Station
to which either Seller is a party or by which either Seller or any of the
assets of either Seller are bound (including, in the case of loan agreements, a
description of the amounts of any outstanding borrowings thereunder and the
collateral, if any, for such borrowings); (c) uncompleted orders for the
purchase by either Seller of materials, supplies, equipment and services for
the requirements of the Station existing as of the date hereof and with respect
to which the remaining obligation of either Seller is in excess of
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$2,500; and (d) contingent contractual obligations and liabilities of either
Seller known to Sellers existing as of the date hereof (all of the foregoing,
collectively, the "CONTRACTS"). Each of the Contracts is designated in the
ASSET SCHEDULE either as an Assigned Contract, or as a Contract that will not
be assigned to Citadel. Neither Seller nor, to the best of the knowledge of
Sellers, any other Person is in material default in the performance of any
covenant or condition under any Contract and no claim of such a default has
been made and no event has occurred which with the giving of notice or the
lapse of time would constitute such a default under any covenant or condition
under any Contract. Neither Seller is a party to any Contract which would
terminate or be materially adversely affected by the consummation of the
transactions contemplated by this Agreement. Originals or true, correct and
complete copies of all of the Assigned Contracts have been provided to Citadel
as of the date of this Agreement.
4.10 COMPENSATION. Set forth in SELLERS' DISCLOSURE SCHEDULE is a list
of (a) all agreements between either Seller and its respective employees or
other Persons providing services for compensation with regard to the Station,
whether individually or collectively, and (b) all employees of either Seller or
other Persons providing services for either Seller with respect to the Station
entitled to receive annual compensation in excess of $5,000 and their
respective positions, job categories and salaries. The transactions
contemplated by this Agreement will not result in any liability for severance
pay to any such employee or other Person. Sellers have not informed any such
employee or other Person that such Person will receive any increase in
compensation or benefits or any ownership interest in either Seller or its
Business. Except as disclosed in SELLERS' DISCLOSURE SCHEDULE, all of the
employees of Sellers are "at will" employees and may be terminated by Sellers
at any time, without liability or obligation except the payment of normal
compensation accrued up to the time of termination of employment.
4.11 EMPLOYEE BENEFIT PLANS.
(a) Neither Seller maintains or sponsors, and neither Seller
is required to make contributions to, any pension, profit-sharing, savings,
bonus, incentive or deferred compensation, severance pay, medical, life
insurance, welfare or other employee benefit plan which affects the employees
working at the Station, except as set forth in SELLERS' DISCLOSURE SCHEDULE.
SELLERS' DISCLOSURE SCHEDULE fully discloses all of the plans, funds, policies,
programs, arrangements or understandings sponsored or maintained by either
Seller pursuant to which any employee of the Station (or any dependent or
beneficiary of any such employee) might be or become entitled to (1) retirement
benefits; (2) severance or separation from service benefits; (3) incentive,
performance, stock, share appreciation or bonus awards; (4) health care
benefits; (5) disability income or wage continuation benefits; (6) supplemental
unemployment benefits; (7) life insurance, death or survivor's benefits; (8)
accrued sick pay or vacation pay; (9) any type of benefit offered under any
arrangement subject to characterization as an "employee welfare benefit plan"
within the meaning of section 3(3) of ERISA; or (10) benefits of any other type
offered through any arrangement that could be characterized as providing for
additional compensation or fringe benefits. As to any such plan, fund, policy,
program,
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arrangement or understanding, all of the following are true: (A) all
amounts due as contributions, insurance premiums and benefits to the date
hereof have been fully paid by Sellers; (B) all applicable material
requirements of law have been observed with respect to the operation thereof,
and all applicable reporting and disclosure requirements have been timely
satisfied; and (C) neither Seller is aware of any claim or demand by any
employee (or beneficiary or dependent of any employee) for benefits (other than
routine claims for benefits), or by any taxing authority for taxes or penalties
which has not been satisfied in full or which may be or become subject to
litigation or arbitration.
(b) Neither Seller has any obligation to provide health or
other welfare benefits to former, retired or terminated employees, except as
specifically required under Section 4980B of the Code. Sellers have
substantially complied with any applicable notice and continuation requirements
of Section 4980B of the Code and the regulations thereunder.
4.12 LABOR RELATIONS. There have been no material violations of any
federal, state or local statutes, laws, ordinances, rules, regulations, orders
or directives with respect to the employment of individuals by, or the
employment practices or work conditions of, Sellers, or the terms and
conditions of employment, wages (including overtime compensation) and hours.
The Station is not engaged in any unfair labor practice or other unlawful
employment practice and there are no charges of unfair labor practices or other
employee-related complaints pending or threatened against the Station before
the National Labor Relations Board, the Equal Employment Opportunity
Commission, the Occupational Safety and Health Review Commission, the
Department of Labor or any other Governmental Authority. There is no strike,
picketing, slowdown or work stoppage or organizational attempt pending,
threatened against or involving the Station. No issue with respect to union
representation is pending or threatened with respect to the employees of the
Station.
4.13 INCREASES IN COMPENSATION OR BENEFITS. Subsequent to December 31,
1996, there have been no increases in the compensation payable or to become
payable to any of the employees of either Seller who work solely at the
Station, nor has either Seller paid or provided for any awards, bonuses, stock
options, loans, profit-sharing, pension, retirement or welfare plans or similar
or other payments or arrangements for or on behalf of such employees in each
case other than (a) pursuant to currently existing plans or arrangements set
forth in SELLERS' DISCLOSURE SCHEDULE or (b) as was required from time to time
by governmental legislation affecting wages. The vacation policy of each Seller
is set forth in SELLERS' DISCLOSURE SCHEDULE. No employee of either Seller who
works solely at the Station is entitled to vacation time in excess of two weeks
(three weeks in the case of employees with 10 years or more of service) during
the current vacation year (fiscal May 1 through April 30) and no such employee
has any accrued vacation time with respect to any period prior to the current
calendar year except as set forth in SELLERS' DISCLOSURE SCHEDULE.
4.14 INSURANCE. Each Seller maintains insurance policies covering all
of its properties and assets and the various occurrences which may arise in
connection with the operation of the Station, each of which policies is
summarized in SELLERS' DISCLOSURE SCHEDULE. Such policies
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are in full force and effect and all installments of premiums due thereon have
been paid in full. Sellers have complied with the provisions of such policies.
There are no notices of any pending or threatened termination or premium
increases with respect to any of such policies. There has been no casualty loss
or occurrence which may give rise to any claim of any kind not covered by
insurance and neither Seller is aware of any casualty occurrence which may give
rise to any claim of any kind not covered by insurance. No third party has
filed any claim against either Seller for personal injury or property damage of
a kind for which liability insurance is generally available which is not fully
insured, subject only to the standard deductible. None of Sellers' insurance
policies will terminate or be adversely affected by the consummation of the
transactions contemplated by this Agreement.
4.15 LITIGATION; DISPUTES. Except as disclosed in SELLERS' DISCLOSURE
SCHEDULE, there are no claims, disputes, actions, suits, investigations or
proceedings pending or threatened against or affecting the Station, and, to the
best of the knowledge of Sellers, there is no basis for any such claim,
dispute, action, suit, investigation or proceeding. Neither Seller has
knowledge of any default under any such action, suit or proceeding. Neither
Seller is in default in respect of any judgment, order, writ, injunction or
decree of any Governmental Authority with respect to the operation of the
Station.
4.16 ENVIRONMENTAL.
(a) Prior to the execution of this Agreement, Sellers have
provided to Citadel a true and correct copy of all environmental site
assessments, studies, reports and communications relating to the Real Property.
(b) Except as disclosed on SELLERS' DISCLOSURE SCHEDULE, (i)
there are no conditions, facilities, procedures or any other facts or
circumstances that constitute Environmental Noncompliance on any of the
Leaseholds and (ii) there is not constructed, placed, deposited, stored,
disposed of, nor located on any of the Leaseholds any asbestos in any form that
has released or, unless disturbed, threatens to release airborne asbestos
fibers in excess of applicable local, state and federal standards.
(c) Except as disclosed on SELLERS' DISCLOSURE SCHEDULE, no
structure, improvements, equipment, fixtures, activities or facilities located
on the Leaseholds uses Hazardous Materials except those used in the ordinary
course of the Business and in compliance with applicable Environmental Laws.
(d) Except as specifically described on SELLERS' DISCLOSURE
SCHEDULE, there have been no releases or threatened releases of Hazardous
Materials into the environment, or which otherwise contribute to Environmental
Conditions arising solely from the activities of either Seller, or to the best
of the knowledge of Sellers arising from any other activities, except to the
extent that such releases or threatened releases do not constitute a condition
of Environmental Noncompliance relating to the Leaseholds.
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(e) Except as disclosed on SELLERS' DISCLOSURE SCHEDULE,
there are no underground storage tanks, or underground piping associated with
tanks, used for the management of Hazardous Materials at the Leaseholds and
there are no abandoned underground storage tanks at the Leaseholds which have
not been either abandoned in place or removed pursuant to a permit issued by a
Governmental Authority.
(f) Neither Seller is subject to any Environmental Claims
against Sellers, no Environmental Claims have been threatened, nor, to the best
of the knowledge of Sellers, is there any basis for any such Environmental
Claims.
4.17 PERMITS; COMPLIANCE WITH APPLICABLE LAW.
(a) GENERAL. Neither Seller is in default under any, and each
Seller has complied with all, statutes, ordinances, regulations, orders,
judgments and decrees of any Governmental Authority applicable to it or to the
Business or the assets and properties of each Seller as to which a default or
failure to comply might result in any material adverse change in the condition,
financial or otherwise, assets or properties of either Seller or its Business.
Neither Seller has knowledge of any basis for assertion of any violation of the
foregoing or for any claim for compensation or damages or otherwise arising out
of any violation of the foregoing. Neither Seller has received any notification
of any asserted present or past failure to comply with any of the foregoing
which has not been satisfactorily responded to in the time period required
thereunder.
(b) PERMITS. Set forth in SELLERS' DISCLOSURE SCHEDULE are
complete and accurate lists of all FCC Licenses applicable to the Station, and
all other permits, licenses, approvals, franchises, notices and authorizations
issued by any Governmental Authorities (collectively, the "PERMITS"), held by
either Seller and applicable to the Station. The Station is operating in
accordance with the Act and its FCC Licenses and is in compliance with the Act
and the rules, regulations and policies of the FCC. The Permits set forth in
SELLERS' DISCLOSURE SCHEDULE are all of the Permits required for the conduct of
the Business. All of the Permits set forth in SELLERS' DISCLOSURE SCHEDULE are
in full force and effect, and neither Seller has engaged in any activity which
would cause or permit revocation or suspension of any such Permit, and no
action or proceeding looking to or contemplating the revocation or suspension
of any such Permit is pending or threatened. There are no existing defaults or
events of default or events or state of facts which with notice or lapse of
time or both would constitute a default by either Seller under any such Permit.
There is no default or claimed or purported or alleged default or state of
facts which with notice or lapse of time or both would constitute a default on
the part of any party in the performance of any obligation to be performed or
paid by any party under any Permit set forth in SELLERS' DISCLOSURE SCHEDULE.
Except for (1) the FCC Approval and (2) as set forth in SELLERS' DISCLOSURE
SCHEDULE, the consummation of the transactions contemplated hereby will in no
way affect the continuation, validity or effectiveness of the Permits set forth
in SELLERS' DISCLOSURE SCHEDULE, or require the consent of any Person. Except
as set forth in SELLERS' DISCLOSURE SCHEDULE, neither Seller is required to
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be licensed by, and is not subject to the regulation of, any Governmental
Authority by reason of its Business.
(c) CDB LICENSE. CDB License owns no assets other than the
FCC Licenses and has no liabilities.
4.18 INTELLECTUAL PROPERTY. The use of the Intellectual Property in
connection with the operation of the Station and in a manner consistent with
past practices does not infringe upon the proprietary rights of any other
Person. Citadel will, upon consummation of the transactions contemplated by
this Agreement, possess adequate rights, licenses and other authority to use
the Intellectual Property used by the Station in the operation of the Station
following the Closing in the manner now operated, without infringement or
unlawful or improper use of any of the Intellectual Property. No director,
officer or employee of either Seller has any interest in any of the
Intellectual Property, all of which will, as of the Closing, be free and clear
of all Liens. Neither Seller has knowledge of any infringement by any Person
upon the rights of Sellers with respect to the Intellectual Property. Neither
Seller has granted any outstanding licenses or other rights to any of the call
letters, copyrights, trademarks, trade names or other similar rights with
regard to any of the Intellectual Property.
4.19 BOOKS AND RECORDS. The books of account of Sellers fairly and
accurately reflect its income, expenses, assets and liabilities and have been
maintained in accordance with good business practices. All of such books and
records, to the extent included within the Purchased Assets, will be located on
the date of the Closing on the business premises of the Station.
4.20 ACTS TO BE PERFORMED. Sellers shall perform each of the
covenants, acts and undertakings of Sellers to be performed on or before the
Closing Date pursuant to the terms of this Agreement.
4.21 RELATED PARTY OBLIGATIONS. Except as set forth on the ASSET
SCHEDULE, no officer, director, shareholder or Affiliate of either Seller, or
any individual related by blood or marriage to any such Person, or any entity
in which any such Person or individual owns any beneficial interest, is a party
to any agreement, contract, commitment, promissory note, loan, any other actual
or proposed transaction with either Seller, or has any material interest in any
material property used by either Seller which is material to the operation of
the Station.
4.22 NATURAL STATE INTENT LETTER. The Natural State Intent Letter is
in full force and effect and enforceable against each of the parties thereto in
accordance with the provisions thereof. The Natural State Intent Letter has not
been amended, modified or otherwise altered and a true and correct copy of the
Natural State Intent Letter has been delivered by Sellers to Citadel. A true
and correct copy of the current draft of the Natural State Definitive Agreement
has been delivered by Sellers to Citadel.
4.23 DISCLOSURE. To the best of Sellers' knowledge, no representation
or warranty made under this Section 4 and none of the information furnished by
Sellers set forth in this
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Agreement or in the schedules or exhibits to this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements in this Agreement or in the schedules or exhibits to this
Agreement not misleading.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF CITADEL
In connection with the purchase and sale of the Purchased Assets under
this Agreement and in order to induce Sellers to enter into and consummate the
transactions contemplated by this Agreement, Citadel makes the following
representations and warranties to Sellers, as of the date of this Agreement and
as of the date of the Closing (except for representations and warranties
expressly and specifically relating to a time or times other than the date
hereof or thereof, which shall be made as of the specified time or times):
5.1 ORGANIZATION AND QUALIFICATION. Citadel is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada, and has full corporate power and authority to own its assets and
properties, conduct its business and acquire the Purchased Assets. Citadel has
duly qualified to do business as a foreign corporation and is in good standing
under the laws of the State of Arkansas. Citadel has full power, authority and
legal right and all necessary approvals, permits, licenses and authorizations
to own its properties and to conduct its business.
5.2 AUTHORITY. Subject to the approval by Citadel's board of directors
of the transactions contemplated hereby, (a) the execution and delivery of this
Agreement by Citadel, the performance by Citadel of its covenants and
agreements hereunder and the consummation by Citadel of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action; and (b) this Agreement constitutes a valid and legally binding
agreement of Citadel, enforceable against Citadel in accordance with its terms.
5.3 NO LEGAL BAR: CONFLICTS. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
violates or will violate any provision of the Certificate of Incorporation or
Bylaws of Citadel, or any law, rule, regulation, writ, judgment, injunction,
decree, determination, award or other order of any Governmental Authority, or
violates or will violate, or conflicts with or will conflict with, or will
result in any breach of any of the terms of, or constitutes or will constitute
a default under or results in or will result in the termination of or the
creation or imposition of any Lien pursuant to the terms of, any contract,
commitment, agreement, understanding or arrangement of any kind to which
Citadel is a party or by which Citadel or any of the assets of Citadel is
bound. Except for the FCC Approval and the consents disclosed in SCHEDULE 5.0
("CITADEL'S DISCLOSURE SCHEDULE"), no consents, approvals or authorizations of,
or filings with, any Governmental Authority or any other Person are required on
the part of Citadel in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
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5.4 ACTS TO BE PERFORMED. Citadel shall perform each of the covenants,
acts and undertakings of Citadel to be performed on or before the Closing Date
pursuant to the terms of this Agreement.
5.5 LITIGATION. There is no litigation, proceeding or investigation
pending or, to the best of Citadel's knowledge, threatened against or affecting
Citadel that is reasonably likely to prevent or hinder the consummation of the
transactions contemplated by this Agreement.
5.6 DISCLOSURE. To the best of Citadel's knowledge, no representation
or warranty made under this Section 5 and none of the information furnished by
Citadel set forth in this Agreement or in the schedules or exhibits to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements in this Agreement or in the
schedules or exhibits to this Agreement not misleading.
SECTION 6
AFFIRMATIVE COVENANTS OF SELLERS
Sellers jointly and severally covenant and agree with Citadel to:
6.1 COMPLIANCE WITH LAW. Comply with all applicable laws and
regulations required for the valid and effective consummation of the
transactions contemplated hereby.
6.2 PAYMENT OF OBLIGATIONS. Fully discharge all Obligations of
Sellers, except the Assumed Obligations, on a timely basis.
6.3 ACCESS. Afford Citadel and its authorized representatives, upon
reasonable notice to Sellers, reasonable access during normal business hours to
the Station and the Station's employees, and permit Citadel and its authorized
representatives to examine all operations, equipment, properties and other
assets, logs, books, relevant records, contracts and documents of Sellers
pertinent to the Station; provided, however, that in each instance mutually
satisfactory arrangements shall be made in advance in order to avoid
interruption and to minimize interference with the normal business and
operations of the Station.
6.4 PRESERVATION OF ORGANIZATION. Exercise all reasonable efforts to
preserve the business organization of the Station intact, and assist Citadel,
as and when requested by Citadel, to preserve the present relationships of the
Station with employees, suppliers, advertisers and customers and others having
business relationships with the Station; provided, however, that nothing
contained in this Agreement shall require either Seller to expend money in
fulfillment of its obligations set forth in this Section 6.4 other than those
expenditures that Sellers would have made in the ordinary course of the
business of the Station and consistent with past practices.
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6.5 BOOKS AND RECORDS. Maintain the books and records of Sellers in
accordance with good business practices, on a basis consistent with past
practices, and promptly make available to Citadel the books, records, tax
returns, leases, contracts and other documents or agreements material to the
Station as Citadel, its counsel, accountants or other authorized
representatives may from time to time reasonably request.
6.6 EMPLOYEES. Pay as and when the same shall become due and payable,
any amounts owed by either Seller to its employees who have performed services
up to the time of Closing, whether fixed or accrued, for wages, vacation pay,
sick pay, severance pay, employee benefits, damages and otherwise.
6.7 COMPLIANCE WITH FCC MATTERS. Comply with the FCC Licenses
applicable to the Station and with the provisions of the Act, the rules,
regulations and policies of the FCC, and with all other laws, ordinances,
regulations, rules and orders of any Governmental Authority applicable to
either Seller or to the Station.
6.8 TAXES. File all federal, state and municipal tax returns, reports
and declarations required to be filed by Sellers prior to the Closing, and
satisfy all Taxes related thereto, and either pay in full on or before the
Closing or effect a proration pursuant to Section 9.3 for all Accrued Taxes
attributable to either Seller, or its income, operations or properties,
accruing through the Closing, regardless of whether such Taxes otherwise would
have been then due and payable.
6.9 TRADE-OUTS. Citadel shall assume as of the Closing the Trade
Agreements existing as of the Closing and that have not yet been performed. To
the extent that the aggregate liability of the Station as of the Closing for
unperformed time under the Trade Agreements (the "TRADE LIABILITIES") exceeds
the value of the goods and services to be received by the Station or Citadel
after the Closing under the Trade Agreements (the "TRADE RECEIVABLES"), the
Purchase Price payable at the Closing shall be reduced by the amount by which
the Trade Liabilities exceeds the Trade Receivables (the "TRADE IMBALANCE").
Sellers shall deliver to Citadel at the Closing a schedule of Trade Liabilities
and Trade Receivables existing as of the Closing (the "TRADE SCHEDULE").
Sellers shall exercise reasonable efforts to minimize the amount of additional
Trade Liabilities incurred after execution of this Agreement, and to prevent a
Trade Imbalance. For purposes hereof, the term "TRADE AGREEMENTS" means and
includes those agreements entered into by either Seller for the sale of
advertising time on the Station for consideration other than cash. For purposes
hereof, the value of Trade Receivables and the Trade Liabilities as of the
Closing shall be the fair market value thereof, as previously agreed to by
Sellers and the applicable vendor. Citadel shall assume Sellers' remaining
obligations under such contracts.
6.10 SUPPLEMENTAL FINANCIAL STATEMENTS. Sellers shall provide Citadel
with copies of the monthly unaudited income statements and balance sheets
applicable to the Station prepared by Sellers from the date hereof until
Closing in the ordinary course of business (collectively, the "SUPPLEMENTAL
FINANCIAL STATEMENTS"). Sellers shall provide such Supplemental Financial
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Statements to Citadel promptly upon such Supplemental Financial Statements
becoming available to Sellers. The Supplemental Financial Statements shall be
subject to the representations and warranties as set forth in Section 4.4.
6.11 CONSENTS. Exercise all reasonable efforts (not involving the
payment by either Seller of any money to any party to any Assigned Contract) to
obtain, prior to the Closing the consent and approval of any third parties
whose consent or approval is necessary in connection with the consummation of
the transactions contemplated hereby, with respect to the Assigned Contracts
set forth on SELLERS' DISCLOSURE SCHEDULE and requiring such consent. If any
such consent or approval is not obtained, Sellers will use commercially
reasonable efforts (not involving the payment of money to any Person) to secure
an arrangement satisfactory to Citadel intended to provide for Citadel
following the Closing the benefits under each Assigned Contract for which such
consent or approval is not obtained; provided, however, that Citadel shall have
the right to terminate this Agreement or to seek damages or other remedies from
Sellers as a result of any failure by Sellers to obtain any such consent or
approval set forth on SELLERS' DISCLOSURE SCHEDULE, if alternative arrangements
are not satisfactory to Citadel. Sellers shall also execute a consent in a form
provided by Citadel, allowing Citadel to assign all of its rights under this
Agreement and any related documents to one or more of Citadel's lenders upon
default by Citadel under the relevant loan documents.
Nothing in this Agreement will constitute a transfer or an attempted
transfer of any Assigned Contract which by its terms or under applicable law or
governmental rules or regulations requires the consent or approval of a third
party (including, without limitation, a Governmental Authority) unless such
consent or approval is obtained.
6.12 FURTHER INFORMATION. Furnish to Citadel prior to the Closing such
financial (including tax), legal and other information with respect to Sellers
and the Station as Citadel or its authorized representatives may from time to
time reasonably request.
6.13 NOTICE. Promptly notify Citadel in writing upon the occurrence or
the nonoccurrence of any event which does then, or which upon the passing of
time or the giving of notice would, constitute a breach of or default under, or
render misleading or untrue in any material respect, any agreement, covenant,
representation or warranty of Sellers set forth in this Agreement.
6.14 IMPACT OF LOCAL MARKETING AGREEMENT. From and after the effective
date of the Local Marketing Agreement, the covenants of Sellers relating to the
operation of the Station and the Purchased Assets from and after such date
shall be conditioned upon Citadel's performance, in all material respects, of
its obligations under the Local Marketing Agreement.
SECTION 7
NEGATIVE COVENANTS OF SELLERS
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From and after the date of this Agreement and until the Closing,
neither Seller shall take, or cause to be taken, any of the following actions
without Citadel's prior approval, which may not be unreasonably withheld:
7.1 SALES, TRANSFERS AND LIENS. Make any sale, transfer, assignment,
conveyance, mortgage, hypothecation, encumbrance or other placement of any Lien
on any of the Purchased Assets, except in the ordinary course of business,
which do not materially interfere with the operations of the Station, and which
in the case of a sale, transfer or assignment, is replaced with an asset of
equal or greater value, and, in the case of a conveyance, mortgage,
hypothecation, encumbrance or other Lien, is released at or prior to the
Closing.
7.2 ASSUMED OBLIGATIONS. Amend, terminate or renew any of the Assumed
Obligations (including any renewal or termination resulting from the failure to
provide, after the date of this Agreement, timely notice of nonrenewal or
termination as required by the terms of any of the Assumed Obligations).
7.3 BREACHES, DEFAULTS. Do any act or omit to do any act, or permit
any act or omission to occur, that will cause a breach of any contract,
commitment or obligation of it in any respect that would have a material
adverse effect on the Purchased Assets or the business operations of the
Station as presently conducted.
7.4 OBLIGATIONS. Incur any Obligations except in the ordinary course
of business in a manner consistent with past practices.
7.5 SALARY INCREASES. Increase any salary, other payments,
disbursement or distributions in any manner or form to any employees of either
Seller except (A) in the ordinary course of business consistent with past
practices or (B) in accordance with the existing terms of contracts entered
into prior to the date of this Agreement.
7.6 NON-SOLICITATION. Directly or indirectly solicit or negotiate with
any Person (other than a party hereto) or accept any proposal to acquire either
Seller or the Station in whole or in part.
SECTION 8
COVENANTS OF CITADEL
Citadel hereby covenants as follows:
8.1 COMPLIANCE WITH LAW. Citadel shall comply with all applicable laws
and regulations required for the valid and effective consummation of the
transactions contemplated by this Agreement.
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8.2 NOTICE. Citadel shall promptly notify Sellers in writing upon the
occurrence or the non-occurrence of any event which does then, or which upon
the passing of time or the giving of notice would, constitute a breach of or
default under, or render misleading or untrue in any material respect, any
agreement, covenant, representation or warranty of Citadel set forth in this
Agreement.
8.3 ACCOUNTS RECEIVABLE. Subject to Citadel's receipt from Sellers at
the Closing of a list (the "ACCOUNTS RECEIVABLE LIST") of accounts receivable
of the Station existing as of the Closing, exclusive of Trade Receivables, if
any (the "ACCOUNTS RECEIVABLE"), for a period of 120 days commencing with the
Closing Date (the "CITADEL COLLECTION PERIOD"), Citadel, as agent for Sellers,
shall collect the Accounts Receivable in accordance with Citadel's normal
collection processes and procedures. In no event shall Citadel be required to
institute litigation or to retain third parties to institute collection
procedures with respect to the Accounts Receivable. All remittances will be
applied first to the oldest Accounts Receivable, unless the client asserts that
a dispute exists with respect to a particular account or the client specifies
the particular invoice to which the payment is to be applied, in which case the
remittances shall be applied to the specific account and Citadel shall promptly
notify Sellers of any dispute. Remittances collected by Citadel on behalf of
Sellers shall be remitted to Sellers without offset of any kind within 10 days
after the end of each calendar month during the Citadel Collection Period, and
within five days after termination of the Citadel Collection Period. During the
Citadel Collection Period, at Sellers' option, Sellers shall be permitted to
collect the Accounts Receivable that remain outstanding after 60 days, or are
disputed in writing by the relevant account debtor. Each remittance by Citadel
to Sellers shall be accompanied by a written report from Citadel setting forth
the aggregate amount of the Accounts Receivable and the aggregate amount of
cash collections of such Accounts Receivable during the period for which
payment is made, along with a breakdown by account debtor. At the end of the
Citadel Collection Period, Citadel shall account for all collected Accounts
Receivable and provide Sellers with all documentation related to uncollected
Accounts Receivable, and Citadel shall have no further responsibilities with
respect to any uncollected Accounts Receivables except to remit promptly to
Sellers any amounts subsequently received by Citadel. Citadel shall have no
obligation with respect to any Accounts Receivable it is unable to collect.
After the end of the Citadel Collection Period, Sellers shall be entitled to
collect any Accounts Receivable that remain uncollected.
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8.4 PERFORMANCE OF LOCAL MARKETING AGREEMENT. From and after the
effective date of the Local Marketing Agreement, Citadel shall perform and
discharge, in all material respects, its obligations in connection with the
operation of the Station and the Purchased Assets from and after such date in
accordance with the terms of the Local Marketing Agreement.
SECTION 9
ADDITIONAL COVENANTS OF THE PARTIES
9.1 APPLICATION FOR TRANSFER OF CONTROL. As promptly as practicable
after the date of this Agreement, and in no event later than 10 days after the
date of this Agreement, Sellers and Citadel shall file an application (the "FCC
APPLICATION") with the FCC to approve the transfer of control of the Station
from Sellers to Citadel (or its designee pursuant to Section 2.4) (the "FCC
APPROVAL"). Citadel shall have primary responsibility for filing and
prosecuting the FCC Application. The parties agree that they shall prosecute
the FCC Application (and shall cooperate with each other in the timely
prosecution thereof), in good faith and with due diligence, and within the time
allowed therefor by the rules and regulations of the FCC. Sellers and Citadel
shall each take all necessary actions on its part to obtain the FCC Approval.
Citadel shall advance the filing fee for the FCC Application, and Sellers shall
reimburse Citadel for one-half of such filing fee at the Closing. All other
costs and expenses incurred by each party in connection with the filing and
prosecution of the FCC Application shall be paid by the party incurring the
cost or expense.
9.2 LOCAL MARKETING AGREEMENT. Concurrently with the execution of this
Agreement, Citadel and Sellers shall execute and deliver a Local Marketing
Agreement for the Station in the form of EXHIBIT B attached hereto (the "LOCAL
MARKETING AGREEMENT"); provided, however, that the Local Marketing Agreement
shall not be effective, and neither party shall have any obligations
thereunder, until the conditions set forth in Sections 11.8 and 12.10 have been
satisfied.
9.3 ADJUSTMENTS AT CLOSING. Without duplication, the following items
(in addition to similar items which are customarily prorated) shall be prorated
between Citadel and Sellers through and including the Closing Date, and the
Purchase Price appropriately increased or decreased as a result thereof:
(a) Amounts payable under the Real Property Leases and the
Assigned Contracts;
(b) Power, utility and telephone charges incurred in
connection with the Station;
(c) Accrued Taxes existing as of the Closing; and
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(d) FCC filing fees, as provided in Section 9.1.
Proration of real and personal property taxes shall be based upon the
most recent assessments available. Each of the parties shall duly cooperate
with the other in making the foregoing prorations, adjustments and payments.
If, for any reason beyond the reasonable control of the parties, information
necessary to calculate the required prorations is unavailable before the
Closing Date, such item shall be prorated after the Closing Date as soon as
such information is available, and Sellers and Citadel shall cooperate with
each other in regard thereto and shall pay, each to the other, any amounts
which may be owing as a result of such subsequent prorations. If, at any time
after the Closing Date, errors are discovered in any prorations made pursuant
to this Section 9.3, Sellers and Citadel shall correct such errors and pay,
each to the other, any sums owing as a result of such correction. All
prorations to the extent feasible shall be made on the Closing Date.
9.4 BROKERAGE. Sellers and Citadel represent and warrant to each other
that except for Broker and as disclosed in Section 9.8 with respect to the
Natural State Acquisition, no Person has provided services as a broker, agent
or finder in connection with the transactions contemplated by this Agreement.
As between Sellers and Citadel, Sellers are fully responsible for the payment
of any fee, commission, claim or expense of Broker, and Sellers shall indemnify
and hold harmless Citadel for any and all fees, commissions, claims or
expenses, including attorneys' fees asserted by Broker. Sellers and Citadel
shall each indemnify and hold harmless the other for any and all claims or
expenses, including attorneys' fees, asserted by any Person other than Broker
purporting to act on behalf of the respective indemnitor as a broker, agent or
finder in connection with the transactions contemplated by this Agreement.
9.5 RISK OF LOSS. If any loss or damage to any of the Purchased Assets
occurs prior to the Closing (i) which has a material adverse effect on the
Station and (ii) such loss or damage is not susceptible of repair, replacement
or restoration with sufficient, collectible insurance proceeds available for
such purposes or by Sellers at their sole cost and expense to substantially the
same condition as existed before such loss or damage, then the parties shall
adjust the Purchase Price to reflect the diminution in value of the Station
attributable to the impairment of such assets.
9.6 ACTIONS WITH FCC. In the event any investigation, order to show
cause, notice of violation, notice of apparent liability or a forfeiture,
material complaint, petition to deny or informal objection is instituted or
filed against any party hereto (whether in connection with the proceedings to
approve the FCC Application or otherwise), such party shall promptly notify the
other party hereto in writing of such occurrence and shall thereafter
immediately take all reasonable measures to contest the same in good faith and
seek the removal or favorable resolution of such action, order, notice or
complaint.
9.7 COOPERATION. During the seven-year period immediately following
the Closing, Citadel shall cooperate with Sellers in providing Sellers all
information reasonably requested and permitting Sellers access to all records
relating to the period of ownership of the Station
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by Sellers prior to the Closing. The cost and expense in providing or
permitting access to information hereunder shall be borne by Sellers. Sellers,
as a condition to being provided with access to information hereunder, shall,
at the request of Citadel, execute a confidentiality agreement in form and
substance acceptable to Citadel in its reasonable discretion. Notwithstanding
the foregoing, Citadel may discard any such records during such seven-year
period if (i) Citadel notifies Sellers of Citadel's intent to discard such
records and (ii) Sellers do not, within 10 days after receipt of such notice,
retrieve such records from Citadel's premises.
9.8 NATURAL STATE ACQUISITION. CDB Broadcasting shall comply with each
of its covenants under the Natural State Intent Letter and shall proceed, in
good faith, towards entering into the Natural State Definitive Agreement. From
and after the time, if any, at which the Natural State Definitive Agreement is
entered into, CDB Broadcasting shall comply with each of its covenants under
the Natural State Definitive Agreement and shall proceed towards closing the
Natural State Acquisition. Sellers and Citadel contemplate that (i) the Natural
State Definitive Agreement will be entered into promptly after the date of this
Agreement and (ii) the closing of the Natural State Acquisition (the "NATURAL
STATE CLOSING") will occur promptly following the Closing. In the event that
the Natural State Closing occurs prior to the Closing (and the Natural State
Acquisition is consummated in accordance with the Natural State Definitive
Agreement), (i) a copy of all deliveries made at the Natural State Closing
shall be delivered to Citadel; (ii) the Purchased Assets shall include the
capital stock of Natural State; (iii) for purposes of Sellers' representations,
warranties and covenants herein, the term "Station" shall be deemed to include
the Pending Station; (iv) the Purchase Price shall be increased by the cash
portion of the purchase price and non-competition payments actually paid by CDB
Broadcasting to the stockholders of Natural State at the Natural State Closing
and by the sum of (A) any commission paid by CDB Broadcasting to W.N. Xxxx and
Sunbelt Media and (B) reasonable closing costs paid by CDB Broadcasting in
connection therewith (which sum shall not exceed $65,000 in the aggregate); and
(v) the Assumed Obligations shall include (x) the promissory notes made by CDB
Broadcasting in favor of the stockholders of Natural State at the Natural State
Closing and (y) the non-competition agreements entered into by the stockholders
of Natural State in favor of CDB Broadcasting at the Natural State Closing.
Sellers shall keep Citadel apprised of the status of the Natural State
Definitive Agreement and the Natural State Acquisition and shall provide
Citadel with such information as it reasonably requests regarding Natural State
and the Natural State Acquisition. CDB Broadcasting, at its option, shall have
the right to assign its rights under the Natural State Definitive Agreement, if
any, to Citadel in exchange for (a) Citadel's assumption of CDB Broadcasting's
obligations thereunder and (b) Citadel granting CDB Broadcasting an option to
reacquire the capital stock of Natural State (on the same terms and conditions
as set forth in the Natural State Definitive Agreement) in the event this
Agreement is terminated; provided, however, that CDB Broadcasting shall not
make such assignment if it would delay the consummation of the Natural State
Acquisition or the transactions contemplated hereby.
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SECTION 10
THE CLOSING
10.1 CLOSING DATE. The Closing shall occur on a date mutually selected
by Sellers and Citadel which is within 10 business days following the date that
the FCC Approval has become a Final Order. The Closing shall begin at 10:00
a.m., local time, on the date of the Closing (the "CLOSING DATE") at the
offices of Friday, Xxxxxxxx & Xxxxx, 2000 First Commercial Building, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, counsel for Sellers, or at such
other time and place as the parties may agree in writing.
10.2 CLOSING DOCUMENTS. At the Closing:
(a) Sellers shall deliver to Citadel all certificates,
consents (including any third party consents required as to the Assumed
Obligations), estoppels and other documents (including bills of sale and
assignments) otherwise required to be delivered by Sellers pursuant to this
Agreement or as a condition precedent to Citadel's fulfillment of its
obligations hereunder.
(b) Citadel shall deliver to Sellers the following:
(i) immediately available funds in the aggregate
amount of the Purchase Price as required by the provisions of this Agreement;
and
(ii) all certificates and other documents (including
an assumption agreement relating to the Assumed Obligations) required to be
delivered by Citadel to Sellers pursuant to this Agreement or as a condition
precedent to Sellers' fulfillment of their obligations under this Agreement.
SECTION 11
CONDITIONS TO SELLERS' OBLIGATION TO CLOSE
The obligation of Sellers to consummate the transactions contemplated
by this Agreement at the Closing is subject to the following conditions
precedent, any or all of which may be waived by Sellers in their sole
discretion (other than those set forth in Section 11.7):
11.1 OPINION OF CITADEL'S COUNSEL. Sellers shall have received an
opinion of counsel for Citadel, dated the date of the Closing, in form and
substance satisfactory to Sellers, to the effect that:
(a) Citadel is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada.
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(b) Citadel is duly qualified and in good standing in the
State of Arkansas.
(c) Citadel has full corporate power and authority to own its
assets and properties and to conduct its business and has all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct its business in the manner and in the locations presently owned and
conducted.
(d) This Agreement, together with all other documents and
instruments required to be executed or delivered by Citadel in connection with
the transactions contemplated hereby, each has been duly authorized, executed
and delivered by Citadel to the extent Citadel is a party thereto and
constitutes a valid and legally binding obligation of Citadel to the extent
Citadel is a party thereto, enforceable against Citadel in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency
or other laws affecting generally the enforceability of creditors' rights and
by limitations on the availability of equitable remedies.
(e) Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, violates or will
violate any provision of the Certificate of Incorporation or Bylaws of Citadel
or, to the knowledge of such counsel, any law, rule, regulation, writ,
judgment, injunction, decree, determination, award or other order of any
Governmental Authority, or, to the knowledge of such counsel after due
investigation, violates or will violate, or conflicts with or will conflict
with or will result in any breach of any of the terms of, or constitutes or
will constitute a default under, or results or will result in the termination
of or the creation or imposition of any Lien pursuant to, the terms of any
contract, commitment, agreement, understanding or arrangement of any kind to
which Citadel is a party or by which Citadel or any of the assets of Citadel is
bound and which is known to Citadel's counsel, all as set forth on CITADEL'S
DISCLOSURE SCHEDULE.
Nothing contained in this Section 11.1 shall require an opinion by such counsel
with respect to FCC matters.
11.2 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Citadel contained herein shall be true and correct in all
material respects at and as of the Closing with the same effect as though all
such representations and warranties were made at and as of the Closing (except
for representations and warranties expressly and specifically relating to a
time or times other than the Closing, which shall be true and correct in all
material respects at and as of the time or times specified except for such
inaccuracies as do not, individually or in the aggregate, have a material
effect on Citadel's ability to consummate the transactions contemplated by this
Agreement) and Citadel shall have delivered to Sellers a certificate to that
effect, dated the date of the Closing, signed by the President of Citadel.
11.3 NO LITIGATION. No injunction relating to any action, suit or
proceeding against either Seller relating to the consummation of any of the
transactions contemplated by this Agreement or any action by any Governmental
Authority shall have been issued.
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11.4 OTHER CERTIFICATES. Sellers shall have received certificates as
to the good standing of Citadel in the States of Nevada and Arkansas, each as
of a date not more than 20 days before the Closing, and such other
certificates, instruments and other documents, in form and substance
satisfactory to Sellers, as Sellers shall have reasonably requested in
connection with the transactions contemplated hereby.
11.5 CORPORATE ACTION. All corporate action necessary to authorize the
execution, delivery and performance by Citadel of this Agreement and the
transactions contemplated hereby shall have been duly and validly taken by
Citadel, and Citadel shall have delivered to Sellers certified copies of the
resolutions of Citadel's board of directors authorizing the execution and
performance of this Agreement and authorizing or ratifying the acts of its
officers and employees in carrying out the terms and provisions of this
Agreement.
11.6 ACTS TO BE PERFORMED. Each of the covenants, acts and
undertakings of Citadel to be performed on or before the Closing Date pursuant
to the terms hereof shall have been duly performed.
11.7 FCC APPROVAL. The FCC Approval shall have been obtained.
11.8 OTHER TRANSACTIONS. The transactions contemplated by the Real
Estate Purchase Agreement, the Xxxxxx Corporation Agreement and the Xxxxxx
Broadcasting Agreement shall be consummated on the Closing Date.
SECTION 12
CONDITIONS TO CITADEL'S OBLIGATION TO CLOSE
The obligation of Citadel to consummate the transactions contemplated
by this Agreement at the Closing is subject to the following conditions
precedent, any or all of which may be waived by Citadel in its sole discretion
(other than those set forth in Sections 12.9):
12.1 OPINION OF SELLERS' COUNSEL. Citadel shall have received an
opinion of counsel for Sellers, dated the date of the Closing, in form and
substance satisfactory to Citadel, to the effect that:
(a) Each Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arkansas.
(b) Each Seller have full power and authority to own its
assets and properties and to conduct its Business and has all necessary
approvals, permits, licenses and authorizations to own its properties and to
conduct its Business in the manner and in the locations presently owned and
conducted.
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(c) This Agreement, together with all other documents and
instruments required to be executed or delivered by Sellers in connection with
the transactions contemplated by this Agreement, has been duly authorized,
executed and delivered by each Seller, to the extent it is a party thereto, and
constitutes a valid and legally binding obligation of each Seller to the extent
it is party thereto, enforceable against Sellers in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency or other
laws affecting generally the enforceability of creditors' rights and by
limitations on the availability of equitable remedies.
(d) Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, violates or will
violate any provision of the Articles of Incorporation or Bylaws of each Seller
or, to the knowledge of such counsel, any law, rule, regulation, writ,
judgment, injunction, decree, determination, award or other order of any
Governmental Authority, or, to the knowledge of such counsel after due
investigation, violates or will violate or conflicts with or will conflict with
or will result in any breach of any of the terms of, or constitutes or will
constitute a default under or results in or will result in the termination of
or the creation or imposition of any Lien pursuant to the terms of any
contract, commitment, agreement, understanding or arrangement of any kind to
which either Seller is a party or by which either Seller, or any of the assets
of either Seller, is bound and which is known to Sellers' counsel, all as set
forth on SELLERS' DISCLOSURE SCHEDULE. Except for (1) the FCC Approvals and (2)
the consents disclosed on SELLERS' DISCLOSURE SCHEDULE, no consents, approvals
or authorizations of, or filings with, any Governmental Authority or any other
Person are required on the part of Sellers, in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
(e) To the knowledge of such counsel, except as disclosed on
SELLERS' DISCLOSURE SCHEDULE, there are no claims, disputes, actions, suits or
proceedings pending or threatened against Sellers or any of the assets of
Sellers.
Nothing contained in this Section 12.1 shall require an opinion of such counsel
with respect to FCC matters.
12.2 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations
and warranties of Sellers contained herein shall be true and correct in all
material respects at and as of the Closing (except for representations and
warranties expressly and specifically relating to a time or times other than
the Closing, which shall be true and correct in all material respects at and as
of the time or times specified except for such inaccuracies as do not,
individually or in the aggregate, have a material effect on the Station,
Sellers' ability to consummate the transactions contemplated by this Agreement,
or the Business as a whole) with the same effect as though all such
representations and warranties were made at and as of the Closing and Sellers
shall have complied with all their covenants contained herein; and Sellers
shall have delivered to Citadel a certificate to that effect, dated the date of
the Closing, signed by the President of each Seller.
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12.3 NO LITIGATION. No injunction relating to any action, suit or
proceeding against either Seller or Citadel relating to the consummation of any
of the transactions contemplated by this Agreement shall have been issued.
12.4 OTHER CERTIFICATES. Citadel shall have received a certificate as
to the good standing of each Seller as a corporation in Arkansas as of a date
not more than 20 days before the Closing, and such other certificates,
instruments and other documents customary for transactions of the nature
provided for in this Agreement, in form and substance reasonably satisfactory
to Citadel, as Citadel shall have reasonably requested in connection with the
transactions contemplated by this Agreement.
12.5 CORPORATE ACTION. All corporate action necessary to authorize the
execution, delivery and performance by each Seller of this Agreement and the
transactions contemplated hereby shall have been duly and validly taken by each
Seller, and Sellers shall have delivered to Citadel certified copies of the
resolutions of Sellers' boards of directors authorizing the execution and
performance of this Agreement and authorizing or ratifying the acts of its
officers and employees in carrying out the terms and provisions of this
Agreement.
12.6 ACTS TO PERFORMED. Each of the covenants, acts and undertakings
of Sellers to be performed on or before the Closing Date pursuant to the terms
hereof shall have been duly performed.
12.7 UCC SEARCHES. Sellers shall have delivered to Citadel Uniform
Commercial Code judgment and lien searches from the appropriate county and
state agencies showing all Liens on the Purchased Assets, which searches shall
be conducted not more than 30 days prior to the Closing. Sellers may cause such
lien searches to be prepared by a third party, in which case Sellers shall not
be responsible for any inaccuracies in such lien searches unless Sellers have
actual knowledge of their inaccuracy. Notwithstanding the foregoing, Sellers
shall remain responsible for satisfying any Lien on the Purchased Assets even
if such searches are inaccurate.
12.8 FILINGS, CONSENTS, APPROVALS AND ESTOPPEL CERTIFICATES. All
filings, consents, approvals and estoppel certificates required by or
reasonably requested by Citadel pursuant to this Agreement, or necessary to
consummate the transactions contemplated under this Agreement, shall have been
obtained.
12.9 FCC APPROVAL. The FCC Approval shall have been obtained.
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12.10 OTHER TRANSACTIONS. The transactions contemplated by the Real
Estate Purchase Agreement, the Xxxxxx Corporation Agreement and the Xxxxxx
Broadcasting Agreement shall be consummated on the Closing Date.
12.11 AGREEMENT NOT TO COMPETE. Xxx X. Xxxxxx, Xx. and Xxxxxx X.
Xxxxxx shall each have executed and delivered an Agreement Not to Compete in
favor of Citadel, substantially in the form attached as EXHIBIT C hereto.
SECTION 13
INDEMNIFICATION
13.1 INDEMNIFICATION BY SELLERS. Subject to the limitations and
procedures set forth in this Section 13, Sellers shall jointly and severally
indemnify and hold harmless Citadel from and against all losses, claims,
demands, damages, liabilities, obligations, costs and/or expenses, including,
without limitation, reasonable fees and disbursements of counsel (hereinafter
referred to collectively as "DAMAGES"), which are sustained or incurred by
Citadel, to the extent that such Damages are sustained or incurred by reason of
(i) the breach of any of the obligations or covenants of either Seller in this
Agreement or (ii) the breach of any of the representations or warranties made
by either Seller in this Agreement.
13.2 INDEMNIFICATION BY CITADEL. Subject to the limitations and
procedures set forth in this Section 13, Citadel shall indemnify and hold
harmless Sellers from and against any and all Damages sustained or incurred by
Sellers, to the extent such Damages are sustained or incurred by Sellers by
reason of (i) the breach of any of the obligations or covenants of Citadel in
this Agreement or (ii) the breach of any of the representations or warranties
made by Citadel in this Agreement.
13.3 PROCEDURE FOR INDEMNIFICATION. In the event that any party to
this Agreement shall incur any Damages in respect of which indemnity may be
sought by such party pursuant to this Section 13 or any other provision of this
Agreement, the party indemnified hereunder (the "INDEMNITEE") shall notify the
party providing indemnification (the "INDEMNITOR") promptly. In the case of
third party claims, such notice shall in any event be given within 10 days of
the filing or assertion of any claim against the Indemnitee stating the nature
and basis of such claim; provided, however, that any delay or failure to notify
any Indemnitor of any claim shall not relieve it from any liability except to
the extent that the Indemnitor demonstrates that the defense of such action has
been materially prejudiced by such delay or failure to notify. In the case of
third party claims, the Indemnitor shall, within 10 days of receipt of notice
of such claim, notify the Indemnitee of its intention to assume the defense of
such claim. If the Indemnitor assumes the defense of the claim, the Indemnitor
shall have the right and obligation (a) to conduct any proceedings or
negotiations in connection therewith and necessary or appropriate to defend the
Indemnitee, (b) to take all other required steps or proceedings to settle or
defend any such claims, and (c) to employ counsel to contest any such claim or
liability in the name of the Indemnitee or otherwise. If the Indemnitor shall
not assume the
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defense of any such claim or litigation resulting therefrom, the Indemnitee may
defend against any such claim or litigation in such manner as it may deem
appropriate and the Indemnitee may settle such claim or litigation on such
terms as it may deem appropriate, and assert against the Indemnitor any rights
or claims to which the Indemnitee is entitled. Payment of Damages shall be made
within 10 days of a final determination of a claim.
A final determination of a disputed claim shall be (a) a judgment of
any court determining the validity of a disputed claim, if no appeal is pending
from such judgment or if the time to appeal therefrom has elapsed, (b) an award
of any arbitration determining the validity of such disputed claim, if there is
not pending any motion to set aside such award or if the time within to move to
set such award aside has elapsed, (c) a written termination of the dispute with
respect to such claim signed by all of the parties thereto or their attorneys,
(d) a written acknowledgment of the Indemnitor that it no longer disputes the
validity of such claim, or (e) such other evidence of final determination of a
disputed claim as shall be acceptable to the parties.
13.4 SURVIVAL.
(a) SELLERS. Each of the representations and warranties made
by Sellers in this Agreement shall survive for a period of 24 months after the
Closing Date, notwithstanding any investigation at any time made by or on
behalf of Citadel, and upon the expiration of such 24-month period such
representations and warranties shall expire except as follows: (i) the
representations and warranties of Sellers contained in Sections 4.6 and 4.11
shall expire at the time the period of limitations expires for the assessment
by the taxing authority of additional Taxes with respect to which the
representations and warranties relate; (ii) the representations and warranties
of Sellers contained in Sections 4.16 and 4.17 shall expire at the time the
latest period of limitations expires for the enforcement by an applicable
Governmental Authority of any remedy with respect to which the particular
representation or warranty relates; and (iii) the representations and
warranties of Sellers contained in Sections 4.1, 4.2, 4.3 and 4.8(a) shall not
expire but shall continue indefinitely. No claim for the recovery of Damages
may be asserted by Citadel against Sellers or their successors in interest
after such representations and warranties shall thus expire; provided, however,
that claims for Damages first asserted in writing within the applicable period
shall not thereafter be barred.
(b) CITADEL. Each of the representations and warranties made
by Citadel in this Agreement shall survive for a period of 24 months after the
Closing Date, notwithstanding any investigation at any time made by or on
behalf of Sellers, and upon the expiration of such 24-month period such
representations and warranties shall expire, except that the representations
and warranties of Citadel contained in Sections 5.1, 5.2 and 5.3 shall not
expire but shall continue indefinitely. No claim for the recovery of Damages
may be asserted by Sellers against Citadel or its successors in interest after
such representations and warranties shall thus expire; provided, however, that
claims for Damages first asserted in writing within the applicable period shall
not thereafter be barred.
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13.5 LIMITATION OF SELLERS' LIABILITY.
(a) THRESHOLD. Citadel shall not be entitled to recover
Damages pursuant to clause (ii) of Section 13.1 (other than Damages arising by
reason of a breach of the representations and warranties made in Sections 4.1,
4.2, 4.3, 4.6 and 4.8(a)) until the aggregate of all such Damages suffered by
Citadel exceeds $25,000 (the "THRESHOLD"); provided, however, that once such
aggregate exceeds the Threshold, Citadel may recover all such Damages suffered
since the Closing Date.
(b) CEILING. Citadel shall not be entitled to recover Damages
pursuant to clause (ii) of Section 13.1 (other than Damages arising by reason
of a breach of the representations and warranties made in Sections 4.6, 4.8(a),
4.11, 4.16 and 4.17 ("CITADEL'S CAP EXEMPT DAMAGES")) in excess of the Purchase
Price. No maximum limitation shall apply, however, to the right of Citadel to
recover Citadel's Cap Exempt Damages or Damages pursuant to clause (i) of
Section 13.1.
(c) EXCEPTIONS. Paragraphs (a) and (b) above shall not apply
with respect to any claim for Damages relating to any intentional or fraudulent
breach of a representation or warranty by Sellers, nor shall there be any
survival limitation for any such claim.
13.6 LIMITATION OF CITADEL'S LIABILITY.
(a) THRESHOLD. Sellers shall not be entitled to recover
Damages pursuant to clause (ii) of Section 13.2 (other than as a result of a
breach of the representations and warranties made in Sections 5.1, 5.2 and 5.3)
until the aggregate of all such Damages suffered by Sellers exceeds the
Threshold; provided, however, that once such aggregate exceeds the Threshold,
Sellers may recover all such Damages suffered since the Closing Date.
(b) CEILING. Sellers shall not be entitled to recover Damages
pursuant to clause (ii) of Section 13.2 in excess of the Purchase Price. No
maximum limitation shall apply, however, to the right of Sellers to recover
Damages pursuant to clause (i) of Section 13.2.
(c) EXCEPTIONS. Paragraphs (a) and (b) above shall not apply
with respect to any claim for Damages relating to any intentional or fraudulent
breach of a representation or warranty by Citadel, nor shall there be any
survival limitation for any such claim.
SECTION 14
TERMINATION OF AGREEMENT: ADDITIONAL REMEDIES
14.1 MANNER. This Agreement and the transactions contemplated hereby
may be terminated prior to completion of the Closing:
(a) by mutual written consent of Citadel and Sellers;
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(b) by either Citadel or Sellers upon providing written
notice to the other party at any time after December 31, 1997 if the FCC
Approval has not been granted by the FCC, but only if the party providing such
notice is not then in material breach of this Agreement;
(c) by Citadel, upon providing written notice to Sellers, if
as of the time set for Closing any of the conditions in Section 12 of this
Agreement (except Section 12.9) has not been satisfied or waived by Citadel in
writing, provided Citadel is not then in material breach of this Agreement;
(d) by Sellers, upon providing written notice to Citadel, if
as of the time set for Closing any of the conditions in Section 11 of this
Agreement (except Section 11.7) has not been satisfied or waived by Sellers in
writing, provided Sellers are not then in material breach of this Agreement;
(e) by Sellers, upon providing written notice to Citadel, if
Citadel fails to consummate the transactions contemplated hereunder after all
conditions in Section 12 of the Agreement have been satisfied, provided Sellers
are not then in material breach of this Agreement;
(f) by Citadel, upon providing written notice to Sellers, if
Sellers fail to consummate the transactions contemplated hereunder after all
conditions in Section 11 of this Agreement have been satisfied, provided
Citadel is not then in material breach of this Agreement;
(g) by either party upon denial by the FCC of the FCC
Application; and
(h) by either party if any court of competent jurisdiction in
the United States or any other United States governmental body shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other actions shall have become
final and non-appealable.
The foregoing notwithstanding, in the event any party hereto elects to
terminate this Agreement in accordance with paragraphs (a) through (h) above,
then any party hereto shall have the right to terminate, or cause its Affiliate
to terminate, the Real Estate Purchase Agreement, the Xxxxxx Corporation
Agreement and the Xxxxxx Broadcasting Agreement.
14.2 ADDITIONAL REMEDIES.
(a) In the event of the termination of this Agreement by
Sellers (i) pursuant to Section 14.1(d) or 14.1(e) (any such event being a
"DRAW CONDITION"), Sellers shall be entitled to draw upon and receive the
proceeds of the Letter of Credit, but shall not retain any rights to recover
any actual damages they suffer as a result of such termination and the breach
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relating to such damages. In the event of any other termination of this
Agreement pursuant to any other provision of Section 14.1, Citadel shall be
entitled to a return of, and Sellers shall return to Citadel, the original
Letter of Credit and, in that event, Sellers will no longer have any liability
under this Agreement.
(b) The parties recognize and agree that Citadel has relied
on this Agreement and expended considerable effort and resources related to the
transactions contemplated hereunder, that the rights and benefits conferred
upon Citadel herein are unique, and that damages may not be adequate to
compensate Citadel in the event Sellers improperly refuse to consummate the
transactions contemplated hereunder. The parties therefore agree that Citadel
shall be entitled, at its option and in lieu of terminating this Agreement
pursuant to Section 14.1, to have this Agreement specifically enforced by a
court of competent jurisdiction; provided, however, that Citadel may not
specifically enforce this Agreement if it has previously terminated this
Agreement and received the original Letter of Credit.
SECTION 15
GENERAL
15.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each representation
and warranty herein contained shall survive the Closing for the periods
described in Section 13.4, notwithstanding any investigation at any time made
by or on behalf of any party to this Agreement.
15.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws, and not the laws of conflicts, of the
State of Arkansas.
15.3 NOTICES. Any notices or other communications required or
permitted under this Agreement shall be delivered personally or sent by
registered or certified mail, postage prepaid, delivered by overnight delivery
or sent by facsimile, addressed as follows:
To Citadel: Citadel Broadcasting Company
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
With copy to: Citadel Broadcasting Company
000 Xxxxx Xxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
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With copy to: Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx, LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
To Sellers: CDB Broadcasting Corporation
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
With copy to: Friday, Xxxxxxxx & Xxxxx
2000 First Commercial Building
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Price X. Xxxxxxx, Esq.
Fax: (000) 000-0000
or such other addresses as shall be similarly furnished in writing by either
party. Such notices or communications shall be deemed to have been given as of
the date of personal delivery, or if mailed, the date the return receipt is
signed or the date on which delivery is refused, or if delivered by overnight
delivery or facsimile, on the date of receipt.
15.4 ENTIRE AGREEMENT. This instrument supersedes all prior
communications, understandings and agreements of or between the parties with
respect to the subject matter of this Agreement and contains the entire
agreement between the parties with respect to the transactions contemplated in
this Agreement. Except as otherwise set forth in this Agreement, there are no
other representations, warranties or covenants of any party hereto with respect
to the subject matter of this Agreement.
15.5 HEADINGS. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement.
15.6 SCHEDULES, EXHIBITS. All schedules and exhibits annexed to this
Agreement are hereby incorporated in this Agreement by this reference.
15.7 EXPENSES. Each party shall bear its own costs and expenses
incurred by it in connection with the transactions pursuant to this Agreement.
15.8 AMENDMENT. This Agreement may be amended, modified or superseded,
and any of the terms, covenants, representations, warranties or conditions
hereof may be waived,
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only by a written instrument executed on behalf of all of the parties or, in
the case of a waiver, by the party waiving compliance.
15.9 WAIVER. The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right to enforce that provision or any other provision of this Agreement at any
time thereafter.
15.10 ASSIGNMENT. Except as provided in Sections 2.4 and 2.5, neither
this Agreement nor any of the rights or obligations under this Agreement may be
assigned by Sellers without the prior written consent, in their sole
discretion, of Citadel, or by Citadel without the prior written consent, in
their sole discretion, of Sellers. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and no other person shall have any right,
benefit or obligation under this Agreement.
15.11 PRIOR CONTROL. Until the Closing, Sellers shall maintain control
of the Station.
15.12 ATTORNEYS' FEES. In the event of any action arising out of this
Agreement, the prevailing party shall be entitled to recover its costs,
expenses and reasonable attorney's fees incurred in connection with the dispute
from the other party.
15.13 COUNTERPARTS; FAX SIGNATURES. This Agreement may be executed in
one or more counterparts, each of which together shall constitute a single
instrument. Signatures on this Agreement transmitted by facsimile shall be
deemed to be original signatures for all purposes of this Agreement.
15.14 DISPUTE RESOLUTION. Except as provided below, any dispute
arising out of or relating to this Agreement or the breach, termination or
validity hereof shall be finally settled by arbitration conducted expeditiously
in accordance with the CPR Rules. The Center for Public Resources shall appoint
a neutral advisor from its National CPR Panel. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The place of arbitration shall be Little Rock,
Arkansas.
Such proceedings shall be administered by the neutral advisor in
accordance with the CPR Rules as he/she deems appropriate; provided, however,
such proceedings shall be guided by the following agreed upon procedures:
(a) mandatory exchange of all relevant documents, to be accomplished
within 45 days of the initiation of the procedure;
(b) no other discovery;
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(c) hearings before the neutral advisor which shall consist of a
summary presentation by each side of not more than three hours; such hearings
to take place on one or two days at a maximum; and
(d) decision to be rendered not more than 10 days following such
hearing.
The provisions of this Section 15.14 shall not apply with regard to any
equitable remedies to which a party may be entitled under this Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date above first written.
CDB BROADCASTING CORPORATION
By: /s/ Xxx Xxxxxx
------------------------------
Xxx X. Xxxxxx, Xx., President
CDB LICENSE CORPORATION
By: /s/ Xxx Xxxxxx
------------------------------
Xxx X. Xxxxxx, Xx., President
CITADEL BROADCASTING COMPANY
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Its: President
-----------------------------
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INDEX OF SCHEDULES AND EXHIBITS
Schedule 2.1 - Asset Schedule
Schedule 2.2 - Excluded Assets
Schedule 2.3 - Assumed Obligations
Schedule 4.0 - Sellers' Disclosure Schedule
Schedule 5.0 - Citadel's Disclosure Schedule
Exhibit A - Letter of Credit
Exhibit B - Local Marketing Agreement
Exhibit C - Agreement Not to Compete
[Pursuant to Regulation S-K, Item 601(b)(2), Registrant agrees to furnish
supplementally a copy of these schedules or exhibits to the Securities Exchange
Commission upon request.]
