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Exhibit 2.2
ASSET PURCHASE AGREEMENT
AMONG
XXXXXX GROUP, LLC,
CITADEL BROADCASTING COMPANY
AND
CITADEL LICENSE, INC.
SEPTEMBER 29, 1997
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), made as of the 29th day
of September, 1997, by and among XXXXXX GROUP, LLC, an Idaho limited liability
company ("Seller"); CITADEL BROADCASTING COMPANY, a Nevada corporation
("Citadel"); and CITADEL LICENSE, INC., a Nevada corporation ("License Sub").
RECITALS:
A. Seller is the licensee of and owns and operates radio
stations KIZN(FM) and KZMG(FM) serving the Boise, Idaho market (collectively,
the "Stations").
B. Seller desires to sell to Citadel and License Sub, and Citadel and
License Sub desire to purchase from Seller, substantially all of the assets of
the Stations, 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. 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 director cause the direction of the management
policies of the Person, whether through the ownership of voting securities or
by contract or otherwise.
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"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.
"Business" has the meaning specified in Section 4.1.
"CCC" means Citadel Communications Corporation, a Nevada corporation.
"CCC Stock" has the meaning specified in Section 3.3.
"Citadel Collection Period" has the meaning specified in Section 8.3.
"Citadel Transaction Documents" has the meaning specified in Section
11.1.
"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.
"Consulting Agreement" means that certain Consulting Agreement dated
the Closing Date between Xxxxxx Properties, L.P. and Citadel, substantially in
the form of Exhibit A attached hereto.
"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 to
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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 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 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 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 stations license for each of the
Stations, together with each of the other consents, rights, licenses, permits
and other authorizations issued by the FCC and held by Seller in connection
with, or pertaining to, the conduct of the business and operation of the
Stations, together with any renewals and extensions thereof and any
applications therefor pending on the Closing Date, and any and all applications
made by Seller 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.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended from time to time.
"HSR Filing" has the meaning specified in Section 9.8.
"Indebtedness for Borrowed Money" means (a) all indebtedness of 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 Seller evidenced by a promissory note, bond or similar written
obligation to pay money, (c) all indebtedness guaranteed by Seller or for which
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
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assures a creditor against loss, including contingent reimbursement obligations
with respect to letters of credit, and (d) all monetary obligations of Seller
under any lease or similar arrangement, which obligations would be classified
and accounted for as capital obligations on a balance sheet of 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).
"IPO" has the meaning specified in Section 3.3.
"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 9.7.
"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 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 Seller, (e) obligations under capitalized leases in respect of
which obligations 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 Seller, (h) obligations under
interest rate or currency exchange or swap agreements, (i) unsatisfied
obligations for "withdrawal liability" to a "multiemployer plan" as such terms
are defined under ERISA, (j) indebtedness issued or obligation incurred in
substitution or exchange for any Obligations, (k) costs or expenses incurred by
Seller of any nature, whether or not currently payable, and (l) other
liabilities or obligations of 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.
"Pacific Northwest Agreement" means that certain Stock Purchase
Agreement dated as of the date hereof among Pacific Northwest Broadcasting
Corporation, the sole stockholder of Pacific Northwest Broadcasting
Corporation, and Citadel, as amended from time to time.
"Permits" has the meaning specified in Section 4.17(b).
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"Permitted Exceptions" means those certain title exceptions which do
not affect the Real Property in any material respect and which are acceptable
to Citadel in its reasonable discretion.
"Person" means an individual, corporation, partnership, joint venture,
joint stock 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 Property" has the meaning specified in Section 2.1(b)
"Real Property Leases" has the meaning specified in Section 2.1(c).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Transaction Documents" has the meaning specified in Section
12.1.
"Seller's Disclosure Schedule" has the meaning specified in Section
4.3.
"Stations" has the meaning specified in the recitals to this
Agreement.
"Supplemental Financial Statements" has the meaning specified in
Section 6.10
"Taxes" means 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.
"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.
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"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, Seller agrees to sell, assign and convey to Citadel (and, with respect
to clause (f) below, License Sub), and Citadel (and, with respect to clause (f)
below, License Sub) agrees to purchase, acquire and accept from Seller, all of
the Purchased Assets. The "Purchased Assets" consist of:
(a) All the tangible personal property, improvements and
fixtures of every kind or nature used in the operation of the Stations in the
ordinary course of business and located at the Stations (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 Seller or any of
its Affiliates in and to any real property used in the operation of the
Stations in the ordinary course of business which are described on the Asset
Schedule (the "Real Property");
(c) The leasehold interests pursuant to the real
property leases described on the Asset Schedule (the "Real Property Leases");
(d) All of the right, title and interest of Seller or any of
its Affiliates in and to those contracts, leases, licenses, memberships,
agencies, permits and agreements, other than Real Property Leases, to which
Seller or any Affiliate thereof presently is a party or an assignee of a party
which are described on the Asset Schedule (the "Assigned Contracts"), including
the employment agreements listed on the Asset Schedule;
(e) The call letters of the Stations and all of the
copyrights, trademarks, trade names and other similar rights, including
applications and registrations therefor, used in connection with the past or
present operation of the Stations in which Seller or any Affiliate thereof has
any right, title or interest, including, without limitation, those items listed
on the Asset Schedule (collectively, the "Intellectual Property");
(f) The FCC Licenses, a complete list of which is
included on the Asset Schedule;
(g) All books, records and accounts relating to the operation
of the Stations, subject to the right of Seller to make and retain photocopies
thereof for Seller's 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
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(h) All other assets owned by Seller as of the date of this
Agreement which are used in connection with the operation of the Stations as of
the date of this Agreement, real and personal, tangible and intangible.
2.2 Excluded Assets. Notwithstanding anything to the contrary
contained in this Agreement, it is expressly understood and agreed that there
shall be excluded from the assets transferred or assigned to Citadel and
License Sub with respect to Stations the following (collectively, the "Excluded
Assets"):
(a) Except to the extent included in Section 2.1(g), all of
Seller's limited liability company books and records and other documents
relating to the internal limited liability company affairs of Seller, and all
other limited liability company records or files of Seller not relating to the
business or operation of the Stations;
(b) All cash, cash equivalents or similar type investments
held by Seller, such as certificates of deposit, treasury bills and other
marketable securities on hand as of the Closing;
(c) All accounts receivable of Seller existing as of Closing;
(d) Assets not used in connection with the Stations;
(e) Any and all claims of Seller with respect to transactions
occurring or arising prior to the Closing Date, including, without limitation,
claims for Tax refunds; and
(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. Neither Citadel nor License Sub shall assume, and
they shall purchase the Purchased Assets free and clear of, any and all
Obligations of Seller, except that Citadel shall assume those Obligations of
Seller 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 9.2, (d) the Trade
Liabilities and (e) those additional items expressly set forth on Schedule 2.3
to this Agreement (collectively, the "Assumed Obligations").
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SECTION 3
PURCHASE PRICE; LETTER OF CREDIT
3.1 Purchase Price. The purchase price for the Purchased Assets shall
be $14,100,000, subject to adjustment as provided in Sections 6.9 and 9.2 (the
"Purchase Price"). Subject to Section 3.3, at the Closing, Citadel shall
deliver to Seller 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, or cause to be delivered, to Seller an
irrevocable letter of credit in favor of Seller, issued by Bank of Boston, in
the amount of $500,000, which shall be in the form attached as Exhibit B 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
certificate from Xxxxxxx X. Xxxxxx on behalf of Seller certifying that a Draw
Condition has occurred. Upon the Closing, Seller shall return the original
Letter of Credit to Citadel for cancellation.
3.3 CCC IPO. In the event that CCC has consummated an initial public
offering (the "IPO") of its Class A Common Stock (the "CCC Stock") on or prior
to the Closing Date, then the Purchase Price shall be paid as follows:
(a) cash in the amount of $12,675,000 (subject to adjustment as
provided in Sections 6.9 and 9.2) shall be paid to Seller by Citadel; and
(b) CCC shall issue to Seller a number of shares of CCC Stock
equal to $1,425,000 divided by the initial offering price to the public of the
CCC Stock in the IPO.
Seller agrees and acknowledges that nothing in this Section 3.3 (or elsewhere
in this Agreement) shall impose upon CCC, Citadel or License Sub any obligation
to consummate, or to expend any effort to consummate, the IPO.
3.4 Allocation of the Purchase Price. Citadel, License Sub and Seller
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 mutually agreed upon by Citadel, License Sub and Seller.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLER
In connection with the purchase and sale of the Purchased Assets under
this Agreement and in order to induce Citadel and License Sub to enter into and
consummate the transactions contemplated by this Agreement, Seller makes the
following representations and warranties to Citadel and License Sub, as of the
date of this Agreement and as of the date of the Closing
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(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. Seller is a limited liability
company duly formed, validly existing and in good standing under the laws of
the State of Idaho, and has full corporate power and authority (a) to own its
assets and properties and to conduct the business in which it is now engaged
(the "Business") and (b) to enter into this Agreement and to consummate the
transactions contemplated hereby. Seller has full power, authority and legal
right and all necessary approvals, permits, licenses and authorizations to own
its properties and to conduct the Business. Seller's principal place of
business is located in the State of Idaho.
4.2 Authority. The execution and delivery of this Agreement by Seller,
the performance by Seller of its covenants and agreements hereunder and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of Seller. This Agreement
constitutes the valid and legally binding agreement of Seller, enforceable
against Seller 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 organizational documents of
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 Seller is a party
or by which Seller or any of the assets of Seller is bound. Except for the FCC
Approval, compliance with the HSR Act and the consents disclosed in Schedule
4.0 to this Agreement ("Seller's 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.
4.4 Financial Statements. Seller has delivered to Citadel the
following financial statements with respect to the Stations: (a) the reviewed
balance sheets as of December 31, 1995 and December 31, 1996 and the related
statements of income and cash flows for each of the years then ended; (b) the
unaudited balance sheet as of August 31, 1997 and the related statements of
income and cash flows for the eight months then ended; and (c) the monthly
unaudited balance sheets and income statements for each month in 1996 and the
first eight 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 Seller (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 Seller in accordance with GAAP
(subject in the case of unaudited financial statements to the lack of footnote
disclosure and changes resulting from the adjustments
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which have been delivered to Citadel and are attached to Seller's Disclosure
Schedule), 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, except as disclosed in Seller's Disclosure Schedule, there
has not been any (a) material adverse change in the condition of any of the
Stations, financial or otherwise, or in the results of operations, assets,
liabilities or business of any of the Stations; (b) damage or destruction,
whether or not insured, affecting the business operations of any of the
Stations; (c) labor dispute or threatened labor dispute involving any of the
employees of any of the Stations; (d) actual or threatened dispute pertaining
to any of the Stations with any material provider of software, hardware or
services; (e) material change in the customary methods of operations of any of
the Stations; (f) except in the ordinary course of business or to the extent
not material to the Business or financial condition of the Stations, sale or
transfer of any tangible or intangible asset used or useful in the operation of
any of the Stations, mortgage, pledge or imposition of any Lien on any such
asset, lease of real property, machinery, equipment or buildings with respect
to the Stations entered into or modification, amendment or cancellation of any
of its existing leases relating to the Stations, or cancellation of any debt or
claim; or (g) liability or obligation (contingent or otherwise) incurred under
agreements or otherwise, except current liabilities entered into or incurred in
the ordinary course of business consistent with past practices.
4.6 Taxes. Except as disclosed in Seller's Disclosure Schedule, 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 Stations 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
Seller are true, complete and correct in all material respects. 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 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.
Since December 31, 1996, Seller has not incurred any liability for
Taxes which materially affect the operation of any of the Stations other than
in the ordinary course of business. All Taxes attributable to the Stations or
their income, operations or properties accruing up to and including the Closing
(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; (b) listings of all Personal
Property; (c) descriptions of all Real Property Leases and Assigned Contracts,
none of which requires any consent of third parties in connection
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with the transactions contemplated hereby, except otherwise as indicated in
Seller's 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 Seller as reflected in the
Asset Schedule.
4.8 Title to and Condition of Property.
(a) Title. Seller 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 Seller's 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 Stations as they are currently being
operated, and in proper condition and repair so that the Stations can operate
according to their FCC Licenses, the rules, regulations and policies of the FCC
and in all other respects in compliance with the Act and 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 and License Sub to operate the Stations immediately upon the
Closing in the ordinary course of business and consistent with the past
practices of Seller. Seller has not, since December 31, 1996, removed any
material item of Personal Property from the Stations other than removals in the
ordinary course of business which were not done in contemplation of the
transactions contemplated hereby.
(e) Real Property Leases.
(i) The Asset Schedule contains accurate
descriptions of the Real Property Leases and the location of the real
estate leased thereunder (the "Leaseholds") and the type of facility
located on the Leaseholds. 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 Seller's Disclosure Schedule required of the landlords
under the Real Property Leases. Seller's right, title and interest in
and to the Leaseholds will at the Closing be held by Seller free and
clear of all Liens.
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(iii) The use for which the Leaseholds are zoned
permits the use thereof for the business of the Stations consistent with
past practices. The use and occupancy of the Leaseholds by Seller are in
compliance in all material respects with all regulations, codes,
ordinances and statutes applicable to Seller and Seller has 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 Seller, and
to the best of the knowledge of Seller, 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 Seller or any condition that with notice or the
passage of time or both would constitute such a default, and Seller has
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 Seller, and to the best of
the knowledge of Seller, 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 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 Stations.
(f) Real Property.
(i) The Asset Schedule contains an accurate
description of the location of the Real Property and the type of
facility located on such Real Property. Seller will as of the Closing
have good and marketable title to the Real Property, in fee simple,
subject only to the Permitted Exceptions.
(ii) None of the Real Property is subject to any
covenant or restriction preventing or limiting in any material respect
the consummation of the transactions contemplated hereby. Seller's
right, title and interest in and to the Real Property will at the
Closing be held by Seller free and clear of all Liens except the
Permitted Exceptions.
(iii) The use for which the Real Property is
zoned permits the use thereof for the business of the Stations
consistent with past practices. The use and occupancy of the Real
Property by Seller are in compliance in all material respects with all
regulations, codes, ordinances and statutes applicable to Seller and
Seller has not received any notice asserting any material violation of
sanitation laws and regulations, occupational safety and health
regulations, or electrical codes.
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(iv) There are no condemnation proceedings or
eminent domain proceedings of any kind pending or, to the best of the
knowledge of Seller, threatened against the Real Property.
(v) All of the Real Property is occupied under
a valid and current certificate of occupancy or similar permit. There
are no facts that would prevent the Real Property from being occupied
and used by Citadel after the Closing Date in the same manner as
immediately prior to the Closing.
(vi) The Real Property constitutes all of the
real property which is owned by Seller and which is or will prior to
Closing be used in the operation of the Stations.
4.9 Contractual and Other Obligations. Set forth in the Asset Schedule
is a description of all (a) Real Property Leases to which Seller is a party;
(b) all contracts, agreements, licenses, leases, arrangements and other
documents used solely in connection with the present operation of the Stations
to which Seller is a party or by which Seller or any of the assets of 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 Seller of
materials, supplies, equipment and services for the requirements of the
Stations existing as of the date hereof and with respect to which the remaining
obligation of Seller is in excess of $2,500; and (d) contingent contractual
obligations and liabilities of Seller known to Seller 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 Seller, 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. Seller is not a party to any Contract which
would terminate or be materially adversely affected by the consummation of the
transactions contemplated by this Agreement. Originals or true, correct and
complete copies of all of the Assigned Contracts have been provided to Citadel
as of the date of this Agreement.
4.10 Compensation. Set forth in Seller's Disclosure Schedule is a list
of (a) all agreements between Seller and its respective employees or other
Persons providing services for compensation with regard to the Stations,
whether individually or collectively, and (b) all employees of Seller or other
Persons providing services for Seller with respect to the Stations entitled to
receive annual compensation in excess of $5,000 and their respective positions,
job categories and salaries. The transactions contemplated by this Agreement
will not result in any liability for severance pay to any such employee or
other Person. Seller has not informed any such employee or other Person that
such Person will receive any increase in compensation or benefits or any
ownership interest in Seller or its Business. Except as disclosed in Seller's
Disclosure Schedule, all of the employees of Seller are "at will" employees and
may be
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terminated by Seller 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) Seller does not maintain or sponsor, and is not 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 Stations, except as set forth in Seller's Disclosure Schedule. Seller's
Disclosure Schedule fully discloses all of the plans, funds, policies,
programs, arrangements or understandings sponsored or maintained by Seller
pursuant to which any employee of the Stations (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,
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 Seller; (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)
Seller is not 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) Seller has no obligation to provide health or other
welfare benefits to former, retired or terminated employees, except as
specifically required under Section 4980B of the Code. Seller has 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, Seller, or the terms and conditions
of employment, wages (including overtime compensation) and hours. The Stations
are not engaged in any unfair labor practice or other unlawful employment
practice and there are no charges of unfair labor practices or other
employee-related complaints pending or threatened against any of the Stations
before the National Labor Relations Board, the Equal Employment Opportunity
Commission, the Occupational Safety and Health Review Commission, the
Department of Labor or any other Governmental Authority. There is no strike,
picketing, slowdown or work stoppage or organizational attempt pending,
threatened against or involving
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any of the Stations. No issue with respect to union representation is pending
or threatened with respect to the employees of the Stations.
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 Seller who work solely at the Stations, nor
has 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
Seller's Disclosure Schedule or (b) as was required from time to time by
governmental legislation affecting wages. The vacation policy of Seller is set
forth in Seller's Disclosure Schedule. No employee of Seller who works solely
at the Stations is entitled to vacation time in excess of two weeks during the
current calendar year and no such employee has any accrued vacation time with
respect to any period prior to the current calendar year, except as set forth
in Seller's Disclosure Schedule.
4.14 Insurance. 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 Stations, each of which policies is
summarized in Seller's Disclosure Schedule. Such policies are in full force and
effect and all installments of premiums due thereon have been paid in full.
Seller has 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 Seller is not
aware of any casualty occurrence which may give rise to any claim of any kind
not covered by insurance. No third party has filed any claim against Seller for
personal injury or property damage of a kind for which liability insurance is
generally available which is not fully insured, subject only to the standard
deductible.
4.15 Litigation; Disputes. Except as set forth in Company's Disclosure
Schedule, there are no claims, disputes, actions, suits, investigations or
proceedings pending or threatened against or affecting the Stations, and, to
the best of the knowledge of Seller, there is no basis for any such claim,
dispute, action, suit, investigation or proceeding. Seller has no knowledge of
any default under any such action, suit or proceeding. Seller is not in default
in respect of any judgment, order, writ, injunction or decree of any
Governmental Authority with respect to the operation of the Stations.
4.16 Environmental.
(a) Prior to the execution of this Agreement, Seller has
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 Seller's 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,
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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 Seller's 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 Seller's 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 Seller, or to the best of the
knowledge of Seller 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.
(e) Except as disclosed on Seller's 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) Seller is not subject to any Environmental Claims against
Seller, no Environmental Claims have been threatened, nor, to the best of the
knowledge of Seller, is there any basis for any such Environmental Claims.
4.17 Permits, Compliance with Applicable Law.
(a) General. Seller is not in default under any, and 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 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 Seller or the Business. Seller has no
knowledge of any basis for assertion of any violation of the foregoing or for
any claim for compensation or damages or otherwise arising out of any violation
of the foregoing. Seller has not received any notification of any asserted
present or past failure to comply with any of the foregoing which has not been
satisfactorily responded to in the time period required thereunder.
(b) Permits. Set forth in the Asset Schedule are complete and
accurate lists of all FCC Licenses applicable to the Stations, and all other
permits, licenses, approvals, franchises, notices and authorizations issued by
any Governmental Authorities (collectively, the "Permits"), held by Seller and
applicable to the Stations. The Stations are operating in accordance with the
Act and their FCC Licenses and are in material compliance with the Act and the
rules, regulations and policies of the FCC. The Permits set forth in the Asset
Schedule
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are all of the Permits required for the conduct of the Business. All of the
Permits set forth in the Asset Schedule are in full force and effect, and
Seller has not engaged in any activity which would cause or permit revocation
or suspension of any such Permit, and no action or proceeding looking to or
contemplating the revocation or suspension of any such Permit is pending or
threatened. There are no existing defaults or events of default or events or
state of facts which with notice or lapse of time or both would constitute a
default by 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 the Asset Schedule. Except for (1) the FCC Approval, (2)
compliance with the HSR Act and (3) as set forth in Seller's 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 the Asset Schedule, or require the consent of any Person. Except as set
forth in Seller's Disclosure Schedule, Seller is not required to be licensed
by, and is not subject to the regulation of, any Governmental Authority by
reason of the Business.
4.18 Intellectual Property. The use of the Intellectual Property in
connection with the operation of the Stations and in a manner consistent with
past practices does not infringe upon the proprietary rights of any other
Person. Citadel and License Sub 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 Stations in the
operation of the Stations following the Closing in the manner now operated, to
the best knowledge of the Company, without infringement or unlawful or improper
use of any of the Intellectual Property. No director, officer or employee of
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. Seller has no knowledge of
any infringement by any Person upon the rights of Seller with respect to the
Intellectual Property. Seller has not granted any outstanding licenses or other
rights to any of the call letters, copyrights, trademarks, trade names or other
similar rights with regard to any of the Intellectual Property.
4.19 Books and Records. The books of account of Seller fairly and
accurately reflect its income, expenses, assets and liabilities and have been
maintained in accordance with good business practices. All of such books and
records, to the extent included within the Purchased Assets, will be located on
the date of the Closing on the business premises of the Stations.
4.20 Acts to be Performed. Seller shall perform each of the covenants,
acts and undertakings of Seller 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 Seller's
Disclosure Schedule, no officer, director, shareholder or Affiliate of 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,
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any other actual or proposed transaction with Seller, or has any material
interest in any material property used by Seller, which is material to the
operation of the Stations.
4.22 Disclosure. To the best of Seller's knowledge, no representation
or warranty made under this Section 4 and none of the information furnished by
Seller set forth in this Agreement or in the schedules or exhibits to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements in this Agreement or in the
schedules or exhibits to this Agreement not misleading.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF CITADEL AND LICENSE SUB
In connection with the purchase and sale of the Purchased Assets under
this Agreement and in order to induce Seller to enter into and consummate the
transactions contemplated by this Agreement, Citadel and License Sub make the
following representations and warranties to Seller, 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. Each of Citadel and License Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, and each has full corporate power and authority
(a) to own its assets and properties and to conduct its business and (b) to
enter into this Agreement and consummate the transactions contemplated hereby.
As of the Closing, Citadel will be duly qualified to do business as a foreign
corporation and will be in good standing under the laws of the State of Idaho.
Each of Citadel and License Sub has full power, authority and legal right and
all necessary approvals, permits, licenses and authorizations to own its
properties and to conduct its business.
5.2 Authority. The execution and delivery of this Agreement by Citadel
and License Sub, the performance by Citadel and License Sub of their respective
covenants and agreements hereunder and the consummation by Citadel and License
Sub of the transactions contemplated hereby have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and legally
binding agreement of Citadel and License Sub, enforceable against each of them
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 Articles of Incorporation
or Bylaws of Citadel or License Sub, 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
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of any kind to which Citadel or License Sub is a party or by which Citadel,
License Sub or any of the assets of Citadel or License Sub is bound. Except for
the FCC Approval, compliance with the HSR Act 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 or License Sub in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
5.4 Acts to be Performed. Citadel and License Sub shall perform each
of the covenants, acts and undertakings of Citadel and License Sub 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 or License Sub that is reasonably likely to prevent or hinder the
consummation of the transactions contemplated by this Agreement.
5.6 FCC Qualifications. To the best of Citadel's and License Sub's
knowledge, there are no facts which would disqualify Citadel or License Sub
from obtaining the FCC Approval.
SECTION 6
AFFIRMATIVE COVENANTS OF SELLER
Seller covenants and agrees with Citadel and License Sub 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
Seller, except the Assumed Obligations, on a timely basis.
6.3 Access. Afford Citadel and its authorized representatives, upon
reasonable notice to Seller, reasonable access during normal business hours to
the Stations and the Stations' employees, and permit Citadel and its authorized
representatives to examine all operations, equipment, properties and other
assets, logs, books, relevant records, contracts and documents of Seller
pertinent to the Stations; provided, however, that in each instance mutually
satisfactory arrangements shall be made in advance in order to avoid
interruption and to minimize interference with the normal business and
operations of the Stations.
6.4 Preservation of Organization. Exercise all reasonable efforts to
preserve the business organization of the Stations intact, and assist Citadel,
as and when requested by Citadel, to preserve the present relationships of the
Stations with employees, suppliers, advertisers and customers and others having
business relationships with the Stations; provided, however, that nothing
contained in this Agreement shall require Seller to expend money in fulfillment
of its
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obligations set forth in this Section 6.4 other than those expenditures that
Seller would have made in the ordinary course of the business of the Stations
and consistent with past practices.
6.5 Books and Records. Maintain the books and records of Seller in
accordance with good business practices, on a basis consistent with past
practices, and promptly make available to Citadel the books, records, tax
returns, leases, contracts and other documents or agreements material to the
Stations as Citadel, its counsel, accountants or other authorized
representatives may from time to time reasonably request.
6.6 Employees. Pay as and when the same shall become due and payable
any amounts owed by 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 Stations and with the provisions of the Act, the rules,
regulations and policies of the FCC, and with all other laws, ordinances,
regulations, rules and orders of any Governmental Authority applicable to
Seller or to the Stations.
6.8 Taxes. File all federal, state and municipal tax returns, reports
and declarations required to be filed by Seller 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 9.2 for all Accrued Taxes
attributable to 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 Stations 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 Stations, 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").
Seller shall deliver to Citadel at the Closing a schedule of Trade Liabilities
and Trade Receivables existing as of the Closing (the "Trade Schedule"). Seller
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 Seller for the sale of advertising time on the
Stations for consideration other than cash. For purposes hereof, the value of
Trade Receivables and the Trade Liabilities as of the Closing shall be the fair
market value thereof, as previously agreed to by Seller and the applicable
vendor. Citadel shall assume Seller's remaining obligations under such
contracts.
6.10 Supplemental Financial Statements. Seller shall provide
Citadel with copies of the monthly unaudited income statements and balance
sheets applicable to the Stations prepared by Seller from the date hereof until
Closing in the ordinary course of business (collectively, the
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"Supplemental Financial Statements"). Seller shall provide such Supplemental
Financial Statements to Citadel promptly upon such Supplemental Financial
Statements becoming available to Seller. 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 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 Seller's Disclosure Schedule and requiring such consent. If any
such consent or approval is not obtained, Seller will use commercially
reasonable efforts (not involving the payment of money to any Person) to secure
an arrangement reasonably satisfactory to Citadel intended to provide for
Citadel following the Closing the benefits under each 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 Seller as a result of any failure by Seller to obtain any such
consent or approval set forth on Seller's Disclosure Schedule, if alternative
arrangements are not reasonably satisfactory to Citadel. At Closing, Seller
shall also execute a consent in a form provided by Citadel, allowing Citadel to
collaterally 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 Seller
and the Stations 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 Seller set forth in this Agreement.
6.14 Phase I Site Assessments. Perform or commission Phase I Site
Assessments of the Real Property and provide copies of the written report for
such assessments to Citadel promptly upon such reports becoming available to
Seller. Such assessments shall be performed by an environmental company
reasonably acceptable to Citadel and at Citadel's cost and expense. If the
reports for the Phase I Site Assessments indicate that any Real Property
contains one or more conditions of Environmental Noncompliance, Seller shall
promptly commence remedial action to cure the conditions, and shall cure the
conditions, prior to Closing.
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6.15 Title Insurance and Surveys. Prior to Closing, Seller shall, at
its sole cost and expense, cause each parcel of the Real Property to be
surveyed by a registered professional surveyor (who shall be reasonably
acceptable to Citadel) and the legal, metes and bounds description of the Real
Property used in the deeds from Seller to Citadel shall be derived from such
surveys. In addition, Seller shall cooperate with Citadel in obtaining, at or
prior to Closing, title insurance on the Real Property from a nationally
recognized title insurance company acceptable to Citadel in its reasonable
judgment. Not later than 30 days prior to Closing, Seller shall furnish to such
title insurance company such documentation as may be reasonably required by it
to issue a title insurance policy without exception as to the capacity,
authority and execution of instruments by Seller.
6.16 Transfer Taxes and Expenses. Any and all realty transfer taxes
and documentary stamps payable to the State of Idaho or any other governmental
entity in connection with the transfer of the Real Property shall be shared
equally and paid in equal parts by Seller and Citadel. Seller shall be
responsible for the cost of (a) deed preparation, (b) all matters of title
clearance and (c) any necessary subdivisions. Citadel shall be responsible for
the cost of (a) recording the deeds and (b) title insurance premiums.
SECTION 7
NEGATIVE COVENANTS OF SELLER
From and after the date of this Agreement and until the Closing,
Seller shall not 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 Stations, and
which in the case of a sale, transfer or assignment, is replaced with an asset
of equal or greater value, and, in the case of a conveyance, mortgage,
hypothecation, encumbrance or other Lien, is released at or prior to the
Closing.
7.2 Assumed Obligations. Amend, terminate or renew any of the Assumed
Obligations (including any renewal or termination resulting from the failure to
provide, after the date of this Agreement, timely notice of nonrenewal or
termination as required by the terms of any of the Assumed Obligations).
7.3 Breaches, Defaults. Do any act or omit to do any act, or permit
any act or omission to occur, that will cause a breach of any contract,
commitment or obligation of it or them in any respect that would have a
material adverse effect on the Purchased Assets or the business operations of
the Stations as presently conducted.
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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 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 Seller
or any of the Stations in whole or in part.
SECTION 8
COVENANTS OF CITADEL AND LICENSE SUB
Citadel and License Sub hereby covenant as follows:
8.1 Compliance With Law. Citadel and License Sub shall comply
with all applicable laws and regulations required for the valid and effective
consummation of the transactions contemplated by this Agreement.
8.2 Notice. Citadel and License Sub shall promptly notify Seller 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 or
License Sub set forth in this Agreement.
8.3 Accounts Receivable. Subject to Citadel's receipt from Seller at
the Closing of a list (the "Accounts Receivable List") of accounts receivable
of the Stations existing as of the Closing, exclusive of Trade Receivables, if
any (the "Accounts Receivable"), for a period of 120 days commencing with the
Closing Date (the "Citadel Collection Period"), Citadel, as agent for Seller,
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 Seller of any dispute. Remittances collected by Citadel on behalf of
Seller shall be remitted to Seller 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 Seller's option, Seller shall be permitted to
collect the Accounts Receivable that remain
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outstanding after 60 days, or are disputed in writing by the relevant account
debtor. Each remittance by Citadel to Seller 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 Seller 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 Seller 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, Seller shall be entitled to collect any Accounts Receivable
that remain uncollected.
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 three business
days after the date of this Agreement, Seller, Citadel and License Sub shall
file an application (the "FCC Application") requesting FCC consent to
assignment of the licenses for the Stations from Seller to Citadel or License
Sub (the "FCC Approval"). 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. Seller, Citadel and License
Sub 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
Seller 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 Adjustments at Closing. Without duplication, the following items
(in addition to similar items which are customarily prorated) shall be prorated
between Citadel and Seller 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 Stations;
(c) Accrued Taxes existing as of the Closing; and
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(d) FCC and HSR Act filing fees, as provided in Sections
9.1 and 9.8, respectively.
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 Seller 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 9.2, Seller 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.
9.3 Brokerage. Seller, Citadel and License Sub represent and warrant
to each other that no Person has provided services as a broker, agent or finder
in connection with the transactions contemplated by this Agreement. Seller,
Citadel and License Sub shall each indemnify and hold harmless the other for
any and all claims or expenses, including attorneys' fees, asserted by any
Person purporting to act on behalf of the respective indemnitor as a broker,
agent or finder in connection with the transactions contemplated by this
Agreement.
9.4 Risk of Loss. If any loss or damage to any of the Purchased Assets
occurs prior to the Closing (i) which has a material adverse effect on any of
the Stations and (ii) such loss or damage is not susceptible of repair,
replacement or restoration with sufficient, collectible insurance proceeds
available for such purposes or by Seller at its sole cost and expense to
substantially the same condition as existed before such loss or damage, then
the parties shall adjust the Purchase Price to reflect the diminution in value
of the Stations attributable to the impairment of such assets.
9.5 Actions With FCC. In the event any investigation, order to show
cause, notice of violation, notice of apparent liability or a forfeiture,
material complaint, petition to deny or informal objection is instituted or
filed against any party hereto (whether in connection with the proceedings to
approve the FCC 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.
9.6 Cooperation. During the seven-year period immediately following
the Closing, Citadel shall cooperate with Seller in providing Seller all
information reasonably requested and permitting Seller access to all records
relating to the period of ownership of the Stations by Seller prior to the
Closing. The cost and expense in providing or permitting access to information
hereunder shall be borne by Seller. Seller, as a condition to being provided
with access to information hereunder, shall, at the request of Citadel, execute
a confidentiality
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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 Seller of Citadel's
intent to discard such records and (ii) Seller does not, within 10 days after
receipt of such notice, retrieve such records from Citadel's premises.
9.7 Local Marketing Agreement. Concurrently with the execution of this
Agreement, Citadel and Seller shall execute and deliver a Local Marketing
Agreement for the Stations in the form of Exhibit C 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 12:01 a.m., local time, on the date on which all applicable
waiting periods under the HSR Act shall have expired or been terminated.
9.8 HSR Filing. As promptly as practicable after the date of this
Agreement, and in no event later than 10 days after the date of this Agreement,
the parties hereto shall complete and submit any filing that may be required
pursuant to the HSR Act (the "HSR Filing"). The parties hereto shall diligently
take, or fully cooperate in the taking of, all necessary and proper steps, and
provide any additional information reasonably requested, in order to comply
with the requirements of the HSR Act. The parties hereto shall use their best
efforts to resolve objections, if any, that may be asserted under the HSR Act
or any other antitrust law in connection with the transactions contemplated
hereby. Citadel shall advance the filing fee applicable to any HSR Filing, and
Seller 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 any HSR Filing shall be paid by the party incurring
the cost or expense.
SECTION 10
THE CLOSING
10.1 Closing Date. The Closing shall occur on a date mutually selected
by Seller and Citadel which is within 10 business days following the later of
(a) date on which the FCC Approval has become a Final Order or (b) the date on
which all applicable waiting periods under the HSR Act have expired or been
terminated; provided, however, that in the event that (i) the FCC Approval has
become a Final Order prior to April 18, 1998 and (ii) all applicable waiting
periods under the HSR Act have expired or been terminated prior to April 18,
1998, then the Closing shall occur on April 18, 1998. The Closing shall begin
at 10:00 a.m., local time, on the date of the Closing (the "Closing Date") at
such place as the parties may mutually agree.
10.2 Closing Documents. At the Closing:
(a) Seller 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, deeds,
assignments and the Letter of Credit) otherwise required to be
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delivered by Seller pursuant to this Agreement or as a condition precedent to
Citadel's fulfillment of its obligations hereunder.
(b) Citadel shall deliver to Seller the following:
(i) 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 Seller pursuant to this Agreement or as a condition
precedent to Seller's fulfillment of its obligations under this Agreement.
SECTION 11
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
The obligation of Seller 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 Seller in its sole discretion
(other than those set forth in Sections 11.7 and 11.8):
11.1 Opinion of Citadel's and License Sub's Counsel. Seller shall
have received an opinion of counsel for Citadel and License Sub, dated the date
of the Closing, in form and
substance reasonably satisfactory to Seller, to the effect that:
(a) Each of Citadel and License Sub is a corporation validly
existing and in good standing under the laws of the State of Nevada.
(b) Citadel is duly qualified to do business as a
foreign corporation and is in good standing under the laws of the State of
Idaho.
(c) Each of Citadel and License Sub has the corporate power
and authority to execute and deliver this Agreement and each of the other
documents and instruments required to be executed or delivered by Citadel and
License Sub in connection with the transactions contemplated hereby
(collectively with this Agreement, the "Citadel Transaction Documents") and to
perform its obligations hereunder and thereunder.
(d) Each of Citadel and License Sub has duly authorized, by
all necessary corporate action, the execution and delivery of the Citadel
Transaction Documents to which it is a party and the performance of its
obligations thereunder.
(e) Each of the Citadel Transaction Documents has been duly
executed and delivered by Citadel and License Sub (to the extent a party
thereto), and constitutes a legal, valid and binding obligation of Citadel and
License Sub (to the extent a party thereto), enforceable
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against each of them in accordance with the terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency or other laws affecting
generally the enforceability of creditors' rights and by limitations on the
availability of equitable remedies.
(f) Neither the execution and delivery of the Citadel
Transaction Documents by Citadel or License Sub, nor the consummation of the
transactions contemplated thereby, (i) violates or will violate any provision
of the Articles of Incorporation or Bylaws of Citadel or License Sub; (ii) to
the knowledge of such counsel, violates or will violate any law, rule,
regulation, writ, judgment, injunction, decree, determination, award or other
order of any Governmental Authority; or (iii) to the knowledge of such counsel,
violates or will violate, or conflicts with or will conflict with or will
result in any breach of any of the terms of, or constitutes or will constitute
a default under, or results or will result in the termination of or the
creation or imposition of any Lien pursuant to, the terms of any contract,
commitment, agreement, understanding or arrangement of any kind to which
Citadel or License Sub is a party or by which Citadel, License Sub or any of
the assets of Citadel or License Sub is bound and which is 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 and License Sub 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 or License Sub's ability to consummate the
transactions contemplated by this Agreement) and Citadel and License Sub shall
have delivered to Seller a certificate to that effect, dated the date of the
Closing, signed by the President of Citadel and License Sub.
11.3 No Litigation. No injunction relating to any action, suit or
proceeding against 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.
11.4 Other Certificates. Seller shall have received certificates as to
the good standing of Citadel in the States of Nevada and Idaho and of License
Sub in the State of Nevada, 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 Seller, as Seller 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 and License Sub of
this Agreement and the transactions contemplated hereby shall have been duly
and validly taken by Citadel and License Sub, and
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Citadel and License Sub shall have delivered to Seller certified copies of the
resolutions of Citadel's and License Sub'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 and License Sub 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 and
shall have become a Final Order.
11.8 HSR Clearance. All applicable waiting periods under the HSR
Act shall have expired or been terminated.
11.9 Consulting Agreement. Citadel shall have executed and
delivered the Consulting Agreement.
11.10 Pacific Northwest Transaction. The transactions contemplated
by the Pacific Northwest Agreement shall have been consummated.
SECTION 12
CONDITIONS TO CITADEL'S AND LICENSE SUB'S OBLIGATION TO CLOSE
The obligation of Citadel and License Sub 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 and License Sub in their sole discretion (other than those set
forth in Sections 12.9 and 12.10):
12.1 Opinion of Seller's Counsel. Citadel and License Sub shall
have received an opinion of counsel for Seller, dated the date of the Closing,
in form and substance reasonably satisfactory to Citadel and License Sub, to
the effect that:
(a) Seller is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Idaho.
(b) Seller has the power and authority to own its assets and
properties and to conduct the Business and has all necessary approvals,
permits, licenses and authorizations to own its properties and to conduct the
Business in the manner and in the locations presently owned and conducted.
(c) Seller has the power and authority to execute and
deliver this Agreement and each of the other documents and instruments required
to be executed or delivered by Seller
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in connection with the transactions contemplated hereby (collectively with this
Agreement, the "Seller Transaction Documents") and to perform its obligations
hereunder and thereunder.
(d) Seller has duly authorized, by all necessary corporate
action, the execution and delivery of the Seller Transaction Documents and the
performance of its obligations thereunder.
(e) Each of the Seller Transaction Documents has been duly
executed and delivered by Seller, and constitutes a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with the terms
thereof, except as such enforceability may be limited by bankruptcy, insolvency
or other laws affecting generally the enforceability of creditors' rights and
by limitations on the availability of equitable remedies.
(f) Neither the execution and delivery of the Seller
Transaction Documents by Seller, nor the consummation of the transactions
contemplated thereby, (i) violates or will violate any provision of the
organizational documents of Seller; (ii) to the knowledge of such counsel,
violates or will violate any law, rule, regulation, writ, judgment, injunction,
decree, determination, award or other order of any Governmental Authority; or
(iii) to the knowledge of such counsel, violates or will violate or conflicts
with or will conflict with or will result in any breach of any of the terms of,
or constitutes or will constitute a default under or results in or will result
in the termination of or the creation or imposition of any Lien pursuant to the
terms of any contract, commitment, agreement, understanding or arrangement of
any kind to which Seller is a party or by which Seller or any of the assets of
Seller is bound and which is set forth on Seller's Disclosure Schedule. Except
for (1) the FCC Approval, (2) compliance with the HSR Act and (3) the consents
disclosed on Seller'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 Seller in connection with the execution and
delivery of the Seller Transaction Documents and the consummation of the
transactions contemplated thereby.
(g) To the knowledge of such counsel, except as disclosed on
Seller's Disclosure Schedule, there are no claims, disputes, actions, suits or
proceedings pending or threatened against Seller or any of the assets of
Seller.
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 Seller 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 any of the
Stations, Seller's ability to consummate the transactions contemplated by this
Agreement, or Seller's business as a whole) with the same effect as though all
such representations and warranties were made at and as of the Closing and
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Seller shall have complied with all its covenants contained herein; and Seller
shall have delivered to Citadel and License Sub a certificate to that effect,
dated the date of the Closing, signed by Xxxxxxx X. Xxxxxx on behalf of Seller.
12.3 No Litigation. No injunction relating to any action, suit or
proceeding against Seller, Citadel or License Sub relating to the consummation
of any of the transactions contemplated by this Agreement shall have been
issued.
12.4 Other Certificates. Citadel and License Sub shall have received a
certificate as to the good standing of Seller as a limited liability company in
the State of Idaho 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 and License Sub, as Citadel and
License Sub shall have reasonably requested in connection with the transactions
contemplated by this Agreement.
12.5 Authorizing Action. All action necessary to authorize the
execution, delivery and performance by Seller of this Agreement and the
transactions contemplated hereby shall have been duly and validly taken by
Seller, and Seller shall have delivered to Citadel and License Sub certified
copies of the resolutions of Seller's members authorizing the execution and
performance of this Agreement and authorizing or ratifying the acts of its
officers and employees in carrying out the terms and provisions of this
Agreement.
12.6 Acts to be Performed. Each of the covenants, acts and
undertakings of Seller to be performed on or before the Closing Date pursuant
to the terms hereof shall have been duly performed.
12.7 UCC Searches. Seller shall have delivered to Citadel and License
Sub 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. Seller
may cause such lien searches to be prepared by a third party, in which case
Seller shall not be responsible for any inaccuracies in such lien searches
unless Seller has actual knowledge of their inaccuracy. Notwithstanding the
foregoing, Seller 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 and License Sub pursuant to this Agreement, or
necessary to consummate the transactions contemplated by this Agreement, shall
have been obtained.
12.9 FCC Approval. The FCC Approval shall have been obtained and
shall have become a Final Order.
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12.10 HSR Clearance. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
12.11 Consulting Agreement. Xxxxxx Properties, L.P. shall have
executed and delivered the Consulting Agreement.
12.12 Pacific Northwest Transaction. The transactions contemplated
by the Pacific Northwest Agreement shall have been consummated.
SECTION 13
INDEMNIFICATION
13.1 Indemnification by Seller. Subject to the limitations and
procedures set forth in this Section 13, Seller shall indemnify and hold
harmless Citadel and License Sub 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 and
License Sub, to the extent that such Damages are sustained or incurred by
reason of (a) the breach of any of the obligations, covenants or provisions of,
or the breach of any of the representations or warranties made by, Seller in
this Agreement; or (b) any claim, dispute, action, suit, investigation or
proceeding set forth in Company's Disclosure Schedule.
13.2 Indemnification by Citadel and License Sub. Subject to the
limitations and procedures set forth in this Section 13, Citadel and License
Sub shall indemnify and hold harmless Seller from and against any and all
Damages sustained or incurred by Seller, to the extent such Damages are
sustained or incurred by Seller by reason of the breach of any of the
obligations, covenants or provisions of, or the breach of any of the
representations or warranties made by, Citadel or License Sub 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
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claims, and (c) to employ counsel to contest any such claim or liability in the
name of the Indemnitee or otherwise. If the Indemnitor shall not assume the
defense of any such claim or litigation resulting therefrom, the Indemnitee may
defend against any such claim or litigation in such manner as it may deem
appropriate and the Indemnitee may settle such claim or litigation on such
terms as it may deem appropriate, and assert against the Indemnitor any rights
or claims to which the Indemnitee is entitled. Payment of Damages shall be made
within 10 days of a final determination of a claim.
A final determination of a disputed claim shall be (a) a judgment of
any court determining the validity of disputed claim, if no appeal is pending
from such judgment or if the time to appeal therefrom has elapsed, (b) an award
of any arbitration determining the validity of such disputed claim, if there is
not pending any motion to set aside such award or if the time within to move to
set such award aside has elapsed, (c) a written termination of the dispute with
respect to such claim signed by all of the parties thereto or their attorneys,
(d) a written acknowledgment of the Indemnitor that it no longer disputes the
validity of such claim, or (e) such other evidence of final determination of a
disputed claim as shall be acceptable to the parties.
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, License Sub
and Seller;
(b) by either Citadel and License Sub, on the one hand, or
Seller, on the other, upon providing written notice to the other party at any
time after June 30, 1998 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 and License Sub, upon providing written notice
to Seller, if as of the time set for Closing any of the conditions in Section
12 of this Agreement (except Section 12.9 or 12.10) has not been satisfied or
waived by Citadel and License Sub in writing, provided Citadel and License Sub
are not then in material breach of this Agreement;
(d) by Seller, upon providing written notice to Citadel and
License Sub, if as of the time set for Closing any of the conditions in Section
11 of this Agreement (except Section 11.7 or 11.8) has not been satisfied or
waived by Seller in writing, provided Seller is not then in material breach of
this Agreement;
(e) by Seller, upon providing written notice to Citadel and
License Sub, if Citadel or License Sub fails to consummate the transactions
contemplated hereunder after all
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conditions in Section 12 of the Agreement have been satisfied, provided Seller
is not then in material breach of this Agreement;
(f) by Citadel and License Sub, upon providing written notice
to Seller, if Seller fails to consummate the transactions contemplated
hereunder after all conditions in Section 11 of this Agreement have been
satisfied, provided Citadel and License Sub are not then in material breach of
this Agreement;
(g) subject to Section 9.1, 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 (provided that such party is not then in material
breach of this Agreement).
14.2 Additional Remedies.
(a) In the event of the termination of this Agreement by
Seller pursuant to Section 14.1(d) or 14.1(e) (any such event being a "Draw
Condition"), Seller 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 it suffers as a result of such termination and the breach relating to
such damages. In the event of any other termination of this Agreement pursuant
to any other provision of Section 14.1, Citadel shall be entitled to a return
of, and Seller shall return to Citadel, the original Letter of Credit and, in
that event, Seller will no longer have any liability under this Agreement.
(b) The parties recognize and agree that Citadel and License
Sub have relied on this Agreement and expended considerable effort and
resources related to the transactions contemplated hereunder, that the rights
and benefits conferred upon Citadel and License Sub herein are unique, and that
damages may not be adequate to compensate Citadel and License Sub in the event
Seller improperly refuses to consummate the transactions contemplated
hereunder. The parties therefore agree that Citadel and License Sub shall be
entitled, at their 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 and License Sub may not
specifically enforce this Agreement if they have previously terminated this
Agreement and received the original Letter of Credit.
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SECTION 15
SECURITIES LAW MATTERS
15.1 Investor Representations. In connection with the possible
issuance of shares of CCC Stock to Seller (as provided in Section 3.3), Seller
represents and warrants as follows:
(a) Seller (i) will acquire and hold the CCC Stock solely for
its own account, as principal, for investment purposes only, and not with a
view to, or for resale, distribution or fractionalization of all or any part of
the CCC Stock and (ii) has no present intention, agreement or arrangement to
divide its participation with others or to resell, assign, transfer or
otherwise dispose of all or any part of the CCC Stock.
(b) In making its decision to receive the CCC Stock as part
of the Purchase Price, Seller has evaluated the risk of investing in the CCC
Stock and is acquiring the CCC Stock based only upon its independent
examination and judgment as to the prospects of CCC as determined from
information obtained directly by Seller from CCC or affiliates thereof. Seller
acknowledges receipt of all information requested of CCC and affiliates
thereof. The CCC Stock was not offered to Seller by means of publicly
disseminated advertisements or sales literature, nor is Seller aware of any
offers made to other Persons by such means.
(c) Seller has been given the opportunity (i) to ask
questions of, and receive answers from, CCC and its affiliates concerning the
terms and conditions of the issuance of the CCC Stock and other matters
pertaining to this investment and all such questions have been answered to the
satisfaction of Seller; and (ii) to obtain such additional information
necessary to verify the accuracy of the information or materials provided to
Seller, except such information which CCC has indicated it either does not
possess and cannot acquire without unreasonable effort or expense or which is
proprietary and confidential.
(d) Seller is an "accredited investor," as that term is
defined in Section 501(a) of Regulation D promulaged under the Securities Act.
15.2 Disposition of Shares. Seller represents and warrants that the
CCC Stock is being acquired and will be acquired for its own account and will
not be sold or otherwise disposed of except pursuant to (i) an exemption or
exclusion from the registration requirements under the Securities Act, which
does not require the filing by CCC with the SEC of any registration statement,
offering circular or other document, in which case Seller shall first supply to
CCC an opinion of counsel (which opinion of counsel shall be satisfactory to
CCC) that such exemption or exclusion is available, or (ii) a registration
statement filed by CCC with the SEC under the Securities Act (which Seller
acknowledges CCC is not obligated to file).
15.3 Legend. The certificates for the CCC stock received by
Seller shall bear the following legend:
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The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, transferred or otherwise disposed of by the
holder without an effective registration statement being
filed under and pursuant to said Act or receipt of an opinion
of counsel in form and substance satisfactory to the issuer
that an exemption from registration is available.
and CCC may, unless a registration statement covering such shares is in effect,
place stop transfer orders with its transfer agents with respect to such
certificates.
SECTION 16
GENERAL
16.1 Survival of Representations and Warranties. Each representation
and warranty herein contained shall survive the Closing, notwithstanding any
investigation at any time made by or on behalf of any party to this Agreement.
16.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws, and not the laws of conflicts,
of the State of Idaho.
16.3 Notices. Any notices or other communications required or
permitted under this Agreement shall be delivered personally or sent by
registered or certified mail, postage prepaid, delivered by overnight delivery
or sent by facsimile, addressed as follows:
To Citadel or Citadel Broadcasting Company License Sub:
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 a 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 Seller: Xxxxxx Group, LLC
0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxxx, Xxxxxx, Xxxxxxx, Xxxx & Xxxxxx
X.X. Xxx 000
Xxxxx, Xxxxx 00000-0000
Attn: Xxxxxx Xxxxxx, 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.
16.4 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 among the parties with respect to the transactions contemplated in
this Agreement.
16.5 Headings. The headings of this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement.
16.6 Schedules, Exhibits. All schedules and exhibits annexed to
this Agreement are hereby incorporated in this Agreement by this reference.
16.7 Expenses. Each party shall bear its own costs and expenses
incurred by it in connection with the transactions pursuant to this Agreement.
16.8 Amendment. This Agreement may be amended, modified or superseded,
and any of the terms, covenants, representations, warranties or conditions
hereof may be waived, only by a written instrument executed on behalf of all of
the parties or, in the case of a waiver, by the party waiving compliance.
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16.9 Waiver. The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right to enforce that provision or any other provision of this Agreement at any
time thereafter.
16.10 Assignment. Neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by Seller without the prior
written consent, in their sole discretion, of Citadel and License Sub, or by
Citadel or License Sub without the prior written consent, in its sole
discretion, of Seller. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and no other person shall have any right,
benefit or obligation under this Agreement.
16.11 Prior Control. Until the Closing, Seller shall maintain
control of each of the Stations.
16.12 Attorneys' Fees. In the event of any action arising out of this
Agreement, the prevailing party shall be entitled to recover its costs,
expenses and reasonable attorney's fees incurred in connection with the dispute
from the other party.
16.13 Counterparts; Fax Signatures. This Agreement may be executed in
one or more counterparts, each of which together shall constitute a single
instrument. Signatures on this Agreement transmitted by facsimile shall be
deemed to be original signatures for all purposes of this Agreement.
16.14 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 Boise, Idaho.
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;
(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
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(d) decision to be rendered not more than 10 days following such
hearing.
The provisions of this Section 16.14 shall not apply with regard to any
equitable remedies to which a party may be entitled under this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date above first written.
XXXXXX GROUP, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Its: Member
-----------------------------------------
CITADEL BROADCASTING COMPANY
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Its: Vice President
-----------------------------------------
CITADEL LICENSE, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Its: Vice President
-----------------------------------------
CITADEL JOINDER
In order to induce Seller to enter into the foregoing Asset Purchase
Agreement, and for other good and valuable consideration, Citadel
Communications Corporation, a Nevada corporation, hereby agrees to be bound by
Sections 3.3 and 15 of the foregoing Asset Purchase Agreement.
CITADEL COMMUNICATIONS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Its: Vice President
-----------------------------------------
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XXXXXX JOINDER
In order to induce Citadel and License Sub to enter into the foregoing
Asset Purchase Agreement, and for other good and valuable consideration, each
of Xxxxxxx X. Xxxxxx (a member of Seller) and XxXxxx X. Xxxxxx (a general
partner of a member of Seller) hereby unconditionally guarantees the full
payment and performance of the indemnification obligations of Seller pursuant
to Section 13 of the foregoing Asset Purchase Agreement.
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
/s/ XxXxxx X. Xxxxxx
--------------------------------------
XxXxxx X. Xxxxxx
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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 - Seller's Disclosure Schedule
Schedule 5.0 - Citadel's Disclosure Schedule
Exhibit A - Consulting Agreement
Exhibit B - Letter of Credit
Exhibit C - Local Marketing Agreement
[Pursuant to Regulation S-K, Item 601 (b)(2), Registrant agrees to furnish
supplementally a copy of these Schedules and Exhibits to the Securities and
Exchange and Commission upon request.]
