(a) Financial Statements. The following financial statements were previously
reported on Citadel Communications Corporation's Current Report on Form 8-K
filed on December 10, 1999:
11
CARIBOU COMMUNICATIONS CO.
Independent Auditors' Report
Balance Sheets as of December 31, 1997 and 1998
Statements of Operations for the years ended December 31, 1997 and 1998
Statements of Changes in Partners' Equity for the years ended December 31, 1997
and 1998
Statements of Cash Flows for the years ended December 31, 1997 and 1998
Notes to Financial Statements
The following financial statements are included in this report pursuant to Item
7(a):
CARIBOU COMMUNICATIONS CO.
Balance Sheets as of September 30, 1999 and 1998 (unaudited)
Statements of Operations for the nine months ended September 30, 1999 and 1998
(unaudited)
Statements of Changes in Partners' Equity for the nine months ended September
30, 1999 and 1998 (unaudited)
Statements of Cash Flows for the nine months ended September 30, 1999 and 1998
(unaudited)
Notes to Unaudited Financial Statements
(b) Pro Forma Financial Information. The following pro forma financial
information of Citadel Communications Corporation and Subsidiary is included
herein pursuant to Item 7(b):
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30,
1999
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine
months ended September 30, 1999
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
twelve months ended December 31, 1998
(c) Exhibits. The following exhibits are filed as part of this report:
2.1 Purchase Agreement dated August 23, 1999 by and among Cat
Communications, Inc., Desert Communications III, Inc. and Citadel
Broadcasting Company.
2.2 Amendment to Purchase Agreement dated December 22, 1999 by and among
Cat Communications, Inc., Desert Communications III, Inc. and Citadel
Broadcasting Company.
4.1 Credit Agreement dated as of December 17, 1999 among Citadel
Broadcasting Company, Citadel Communications Corporation, Citadel
License, Inc., Credit Suisse First Boston, as lead Arranger,
Administrative Agent and Collateral Agent, FINOVA Capital Corporation,
as Syndication Agent, First Union Securities, Inc. and Fleet National
Bank, as Co-Documentation Agents, and the lenders named therein.
10.1 Parent Guarantee Agreement dated as of December 17, 1999 between
Citadel Communications Corporation and Credit Suisse First Boston, as
Collateral Agent.
12
BALANCE SHEETS (unaudited)
CARIBOU COMMUNICATIONS CO.
September 30
1999 1998
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 321,063 $ 69,062
Accounts receivable, net of allowance for doubtful
accounts of $68,047 for 1999 and $80,093 for 1998 1,905,990 1,758,802
Prepaid expenses and other current assets 130,935 277,307
Deposit in escrow -- 350,000
----------- -----------
TOTAL CURRENT ASSETS 2,357,988 2,455,171
NET PROPERTY AND EQUIPMENT 1,905,007 1,525,079
OTHER ASSETS
Deposits 9,061 8,961
Intangible assets 15,680,035 13,654,571
----------- -----------
15,689,096 13,663,532
$19,952,091 $17,643,782
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 183,748 $ 329,738
Accrued expenses 737,869 487,995
Payroll taxes payable 58,292 70,205
Current portion of long-term debt 12,729,750 610,000
----------- -----------
TOTAL CURRENT LIABILITIES 13,709,659 1,497,938
LONG-TERM DEBT -- 8,878,846
PARTNERS' EQUITY 6,242,432 7,266,998
----------- -----------
$19,952,091 $17,643,782
=========== ===========
See accompanying notes.
13
STATEMENTS OF OPERATIONS (unaudited)
CARIBOU COMMUNICATIONS CO.
Nine Months Ended
September 30
1999 1998
----------- -----------
REVENUES
KATT-FM $ 3,101,820 $ 2,779,905
KYIS-FM 1,706,260 1,600,832
KCYI-FM (formerly KTNT-FM) 604,868 764,035
KNTL-FM and WWLS-AM 1,601,347 616,866
Other revenue 140,967 154,185
----------- -----------
TOTAL REVENUES 7,155,262 5,915,823
OPERATING EXPENSES
Program expenses 2,171,603 1,968,709
Technical expenses 217,277 226,835
Sales expenses 1,563,369 1,484,962
Advertising and promotion 157,389 192,400
KATT products 15,701 15,796
Corporate expenses 564,030 493,545
General and administrative 733,150 640,062
Loan fees 150,678 150,678
Amortization expense 1,040,361 730,257
Depreciation expense 360,134 293,268
----------- -----------
6,973,692 6,196,512
----------- -----------
INCOME (LOSS) FROM OPERATIONS 181,570 (280,689)
OTHER EXPENSE
Interest expense 836,742 588,752
Miscellaneous expense 182,215 75,793
----------- -----------
1,018,957 664,545
----------- -----------
NET LOSS $ (837,387) $ (945,234)
=========== ===========
See accompanying notes.
14
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (unaudited)
CARIBOU COMMUNICATIONS CO.
CAT Desert
Communications, Communications
Inc. III, Inc. Total
--------------- -------------- -----------
Partners' equity at January 1, 1998 $ 2,443,095 $ 1,769,137 $ 4,212,232
Capital contribution 2,320,000 1,680,000 4,000,000
Net loss (548,236) (396,998) (945,234)
----------- ----------- -----------
Partners' equity at September 30, 1998 $ 4,214,859 $ 3,052,139 $ 7,266,998
=========== =========== ===========
Partners' equity at January 1, 1999 $ 4,106,295 $ 2,973,524 $ 7,079,819
Net loss (485,684) (351,703) (837,387)
----------- ----------- -----------
Partners' equity at September 30, 1999 $ 3,620,611 $ 2,621,821 $ 6,242,432
=========== =========== ===========
See accompanying notes.
15
STATEMENTS OF CASH FLOWS (unaudited)
CARIBOU COMMUNICATIONS CO.
Nine Months Ended
September 30
1999 1998
---------- ----------
OPERATING ACTIVITIES
Net loss (837,387) (945,234)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Bad debt expense 80,290 49,529
Depreciation 360,134 293,268
Amortization 1,040,361 730,257
Loan fees expense 150,678 150,678
Increase in accounts receivable (154,445) (514,742)
(Increase) decrease in prepaid expenses and other assets 78,230 (119,538)
Increase in accounts payable and accrued expenses 10,765 322,314
---------- ----------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 728,626 (33,468)
INVESTING ACTIVITIES
Purchases of property and equipment (288,742) (131,482)
Cash paid for the purchase of WWLS-AM net assets (3,461,686) (5,846,162)
Cash paid for intangible assets (10,000) --
Net receipt of earnest money from escrow agent -- 150,000
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (3,760,428) (5,827,644)
FINANCING ACTIVITIES
Proceeds from long-term debt 3,485,000 3,269,608
Payments on long-term debt (310,000) (1,359,608)
Capital contribution by partners -- 4,000,000
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,175,000 5,910,000
---------- ----------
INCREASE IN CASH 143,198 48,888
CASH AT BEGINNING OF PERIOD 177,865 20,174
---------- ----------
CASH AT END OF PERIOD $ 321,063 $ 69,062
========== ==========
See accompanying notes.
16
NOTES TO UNAUDITED FINANCIAL STATEMENTS
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the Company's Business: Caribou Communications Co. (the "Partnership")
is an Oklahoma General Partnership, organized to engage in the radio
broadcasting business through the control and operation of KATT-FM, KYIS-FM,
KCYI-FM (formerly KTNT-FM), KNTL-FM, and WWLS-AM radio stations in Oklahoma
City. The Partnership was organized on December 29, 1994 and started business on
January 1, 1995. The Partnership's corporate offices are located in Denver,
Colorado, and operations facilities are located in Oklahoma City, Oklahoma.
Financial Statement Presentation: The Partnership prepares its financial
statements in accordance with generally accepted accounting principles. The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Partnership Formation: The Partnership was formed through the contributions of
substantially all of the respective properties and assets at the appraised
values, subject to substantially all of the respective liabilities and
obligations of Cat Communications, Inc. ("CAT") and Desert Communications III,
Inc. ("DCI") to the capital account of the Partnership having an aggregate net
asset value of $6,769,378 on December 29, 1994. The Partnership equity was
divided $3,926,239 (58%) to CAT and $2,843,139 (42%) to DCI.
Earnings and losses of the Partnership are divided based on the aforementioned
percentages.
Property and Equipment: Property and equipment is recorded at cost and
depreciated by the straight-line method over the estimated useful life of the
assets. When assets are sold or retired, the costs and related accumulated
depreciation are removed from the accounts and any gain or loss is included in
operations.
Advertising Costs: All advertising costs of the Partnership are expensed as
incurred.
Income Taxes: No provision for income taxes is made in the financial statements
because, as a Partnership, any income or loss is included in the tax returns of
the partners. For income tax purposes, income or loss allocated to the partners
shall consider the effect of the difference in the basis of assets contributed
for income tax purposes and the amounts recorded for financial statement
purposes.
Concentration of Credit: Financial instruments which potentially subject the
Partnership to concentrations of credit risk consist primarily of trade
receivables. Such credit risk is considered by management to be limited due to
the large number of customers comprising the Partnership's customer base.
Generally, the Partnership does not require collateral or other security to
support customer accounts receivable.
The Partnership maintains its cash in bank deposit accounts which, at times, may
exceed federally insured limits. The Partnership does not believe there is a
significant risk of loss to these deposits.
17
NOTES TO UNAUDITED FINANCIAL STATEMENTS--Continued
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE B--PROPERTY AND EQUIPMENT
Property and equipment at September 30, 1999 and 1998 is summarized as follows:
1999 1998
---------- ----------
Land $ 180,000 $ 30,000
Buildings 257,200 167,200
Automobiles 40,806 40,806
Computers and office equipment 173,493 162,431
Furniture and fixtures 342,813 342,813
Leasehold improvements 509,665 508,635
Studio and technical equipment 1,019,189 843,099
Tower and transmitter equipment 1,024,746 688,410
Projects in-process 77,734 --
---------- ----------
3,625,646 2,783,394
Less accumulated depreciation 1,720,639 1,258,315
---------- ----------
$1,905,007 $1,525,079
========== ==========
NOTE C--INTANGIBLE ASSETS
Goodwill consists of: (1) the difference between the appraised fair market value
of the KATT-FM and KYIS-FM radio stations under a hypothetical scenario of the
stations operating as a duopoly in the Oklahoma City radio market and the fair
market values of the stations' assets at the date of the Partnership agreement,
(2) the excess of the purchase price over the net assets of the KCYI-FM,
KNTL-FM, and WWLS-AM stations, and (3) the entire purchase price of SportsTalk
Communications L.L.C.
Intangible assets at September 30, 1999 and 1998 are summarized as follows:
Total amortization provided for in 1999 and 1998 was $1,040,361 and $730,257,
respectively.
18
NOTES TO UNAUDITED FINANCIAL STATEMENTS--Continued
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE D--LONG-TERM DEBT
The following is a summary of long-term debt at September 30, 1999 and 1998:
1999 1998
----------- ----------
Notes payable to Finova Capital Corporation bearing interest at 1% above
the prime rate, interest payable monthly, secured by all assets of the
Partnership $11,830,000 $8,790,000
Accrued and unpaid loan fees, payable to Finova Capital Corporation, due
January 31, 2000, secured by all assets of the Partnership 899,750 698,846
----------- ----------
12,729,750 9,488,846
Less current maturities 12,729,750 610,000
----------- ----------
$ -- $8,878,846
=========== ==========
The notes payable (excluding the loan fees) are due in monthly installments as
follows:
June 1, 1997 to March 1, 1998 $35,000
April 1, 1998 to February 1, 1999 45,000
March 1, 1999 to January 1, 2000 55,000
January 31, 2000 Full payment of remaining principal
Loan fees of $950,000 are being accrued at $16,742 per month through December 1,
1999. Full payment is due January 31, 2000.
Final payment on all debt is due January 31, 2000; however, repayment of the
debt will be made at the time of closing of the proposed sale of the
Partnership, as discussed in Note J.
In addition, the Partnership will pay a "recapture amount" following the end of
each year upon the demand of the lender. The "recapture amount" is equal to 50%
of excess cash flows (as defined in the debt agreement) for the preceding year,
and reduces the principal payments due on the long-term debt. However, the
"recapture amount" will not be made or will be reduced to the extent necessary
so that the Partnership's cash on hand plus the outstanding amount available on
the line of credit will not be less than $300,000. There were no excess cash
flows at September 30, 1999 and 1998 and, therefore, no recapture amount is due.
The loan agreement, dated December 29, 1994 (as amended), requires the
Partnership to maintain certain financial ratios and other covenants.
19
NOTES TO UNAUDITED FINANCIAL STATEMENTS--Continued
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE D--LONG-TERM DEBT--Continued
Finova Capital Corporation is a related party in that it owns 100% of Desert
Communications III, Inc., which owns a 42% interest in the Partnership.
Interest payments for the nine months ended September 30, 1999 and 1998 totaled
$857,125 and $519,176, respectively.
NOTE E--OPERATING LEASES
As of September 30, 1999, the Partnership is leasing office space, certain
equipment, and computer software under various noncancelable operating leases.
Rental expense for the nine months ended September 30, 1999 and 1998 was
approximately $244,000 and $227,000, respectively.
Approximate future minimum lease payments required under these operating leases
are as follows:
In accordance with accounting practices in the broadcast industry, trade
transactions (the exchange of unsold advertising time for products or services)
are recorded at the Partnership's standard rates for air time at the time the
spot is broadcast, net of expenses of the same amount representing the value of
the products or services received. Such transactions approximated $430,000 and
$398,000 for the nine months ended September 30, 1999 and 1998, respectively.
20
NOTES TO UNAUDITED FINANCIAL STATEMENTS--Continued
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE G--RESERVED NET PROFITS AGREEMENT
On November 28, 1995, the Board of Managers approved a Reserved Net Profits
Agreement for key employees and consultants of the Partnership. The Reserved Net
Profit Amount would equal twenty-five percent of the difference on the
termination date of the Partnership between the value of the Partnership's
business and the capital invested by the Partners, including interest at the
rate of 6.4% per annum on such capital compounded annually from January 1, 1995,
up to $8 million plus twelve and one-half percent of any amounts over $8
million. The Board also authorized the President of the Partnership to allocate
the Reserved Net Profits among the key employees and consultants of the
Partnership as he, in his sole discretion, deems appropriate.
The term "value of the business" means the business sales price plus the net
current assets of the Partnership on the termination date less the legal and
brokerage expenses incurred from the sale of the assets and the Partnership's
long-term liabilities and deferred loan fees.
The Agreement also provides a means for calculating the Net Profit Amount if one
of the key employees or consultants dies, becomes permanently disabled, or
ceases to be an employee of the Partnership after December 31, 2004. In these
circumstances, the "value of the business" would be ten times the Partnership's
trailing twelve month's cash flow (as defined) less three percent for cost of
sale.
NOTE H--STATION AND OTHER ACQUISITIONS
On May 4, 1998, the Partnership acquired substantially all of the assets of the
KNTL-FM radio station ("KNTL") from Bott Communications, Inc ("Bott"). For
financial statement purposes, the acquisition was accounted for as a purchase
and, accordingly, KNTL's results of operations are included in the financial
statements since the date of acquisition. The aggregate purchase price was
approximately $5,890,000, which includes costs of acquisition. The aggregate
purchase price, which was financed primarily through capital contributions from
the partners and a note from Finova Capital Corporation, has been allocated to
the assets of KNTL, based on their respective estimated fair market values. The
excess of the purchase price over assets acquired approximated $5,050,000 and is
being amortized over fifteen years (see Note C).
On January 14, 1998, the Partnership signed an agreement with SportsTalk
Communications L.L.C. to acquire all of its assets, including its sports talk
format, for $530,000, plus incentives. This format began broadcasting on KNTL-FM
on January 17, 1998 through a time brokerage agreement with Bott. The
transaction closed on May 4, 1998. The total cost of $560,000 is considered
goodwill for financial statement purposes, and is being amortized over fifteen
years (see Note C).
21
NOTES TO UNAUDITED FINANCIAL STATEMENTS--Continued
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE H--STATION AND OTHER ACQUISITIONS--Continued
On July 22, 1998, the Partnership agreed to purchase WWLS-AM radio station
("WWLS") from Fox Broadcasting Co., Inc. In connection with this purchase, the
Partnership deposited earnest money with an escrow agent in the amount of
$350,000. At September 30, 1998, the purchase was awaiting approval of the
Federal Communications Commission, and approval was subsequently granted and
closing of the purchase occurred on January 7, 1999. The aggregate purchase
price of approximately $3,800,000, which includes costs of acquisition, was
financed through a note from Finova Capital Corporation and has been allocated
to the assets of WWLS, based on their respective estimated fair market values.
The excess of the purchase price over assets acquired approximated $3,280,000
and is being amortized over fifteen years (see Note C).
NOTE I--OTHER RELATED PARTY TRANSACTIONS
Effective January 1, 1997, the Partnership entered into a management agreement
with Caribou Broadcasting, L.P. ("Broadcasting") to manage three radio stations
in Honolulu, Hawaii. Under the five year agreement, the Partnership will earn
$100,000 each year. Desert Communications II, Inc. ("Desert II") is a 98.99%
limited partner in Broadcasting, and CAT Communications II, Inc. ("CAT II") is a
1.01% general partner in Broadcasting. Desert II and CAT II ownership is
primarily the same as that of DCI and CAT.
Effective August 1, 1998, the management agreement discussed above was
reassigned to New Wave Broadcasting, L.P. ("New Wave"). New Wave, also a debtor
of Finova Capital Corporation, operates an otherwise unrelated group of radio
stations.
The Partnership earned $50,000 in management fees for 1998. At September 30,
1998, $41,667 was due from Broadcasting and is included in prepaid expenses and
other current assets on the balance sheet. In accordance with the management
agreement, the Partnership is to be reimbursed by Broadcasting for expenses
incurred in managing these stations. At September 30, 1998, the Partnership was
due approximately $53,000 from Broadcasting for unreimbursed expenses, which is
included in prepaid expenses and other current assets on the balance sheet.
These amounts were received from Broadcasting in 1999.
The President of the Partnership earns a bonus each year based upon attaining
certain operating results. Bonus expense reflected in the financial statements
is $75,000 for 1999 and $50,000 for 1998.
22
NOTES TO UNAUDITED FINANCIAL STATEMENTS--Continued
CARIBOU COMMUNICATIONS CO.
September 30, 1999
NOTE J--SUBSEQUENT EVENTS
In August 1999, the Partnership entered into an agreement with Citadel
Broadcasting Company ("Citadel") to sell all of the equity interest in the
Partnership to Citadel for approximately $60 million. This amount includes
repayment of the debt listed in Note D that may be outstanding at the time of
closing. The transaction is expected to close in December 1999.
In connection with the sale, a key employee's contract was not assumed by
Citadel. The employee's employment agreement provides for a severance payment of
$100,000. This amount has been recorded at September 30, 1999 and is included in
accrued expenses.
In addition, approximately $350,000 of the sale proceeds will be set aside to
pay liabilities of the Partnership not assumed by Citadel. These include the
bonus discussed in Note I, the severance payment discussed above, lease and
other general expenses, and payments to certain officers and employees to
administer the closing of the Partnership's business.
23
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial
statements reflect the results of operations and balance sheet of Citadel
Communications Corporation after giving effect to:
(1) the following completed transactions (collectively, the "Completed
Transactions"):
o the March 26, 1998 acquisition of WCTP-FM, WCTD-FM and WKJN-AM serving
the Wilkes-Barre/Scranton market for the purchase price of
approximately $6.0 million (the "Wilkes-Barre/Scranton Acquisition"),
o the February 12, 1998 acquisition of Pacific Northwest Broadcasting
Corporation which owned KQFC-FM, KKGL-FM and KBOI-AM in Boise, Idaho
for the purchase price of approximately $14.4 million and the April 21,
1998 acquisition of KIZN-FM and KZMG-FM in Boise for the purchase price
of approximately $14.5 million (collectively, the "Boise
Acquisitions"),
o the November 17, 1998 acquisition of KAAY-AM in Little Rock, Arkansas
for the purchase price of approximately $5.1 million,
o the February 9, 1999 acquisition of WKQZ-FM, WYLZ-FM, WILZ-FM, WIOG-FM,
WGER-FM and WSGW-AM in Saginaw/Bay City, Michigan for the purchase
price of approximately $35.0 million (the "Saginaw/Bay City
Acquisition"),
o the February 17, 1999 acquisition of WHYL-FM and WHYL-AM in
Harrisburg/Carlisle, Pennsylvania for the purchase price of
approximately $4.5 million (the "Carlisle Acquisition"),
o the March 17, 1999 acquisition of Citywide Communications, Inc., which
owned KQXL-FM, WEMX-FM, WCAC-FM, WXOK-AM and WIBR-AM serving the Baton
Rouge, Louisiana market and KFXZ-FM, KNEK-FM, KRRQ-FM and KNEK-AM
serving the Lafayette, Louisiana market for the purchase price of
approximately $31.5 million (the "Baton Rouge/Lafayette Acquisition"),
o the April 30, 1999 acquisition of KSPZ-FM serving the Colorado Springs,
Colorado market in exchange for KKLI-FM in Colorado Springs, the April
30, 1999 acquisition of KVOR-AM and KTWK-AM serving the Colorado
Springs, Colorado market and KEYF-FM and KEYF-AM serving the Spokane,
Washington market for the purchase price of approximately $10.0 million
and the April 30, 1999 termination of a joint sales agreement under
which Citadel Communications operated certain other radio stations in
Colorado Springs and in Spokane (collectively, the "Capstar
Transactions"),
o the June 30, 1999 acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM,
WNKT-FM, WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, South Carolina,
WHWK-FM, WYOS-FM, WAAL-FM, WNBF-AM and WKOP-AM in Binghamton, New York,
WMDH-FM and WMDH-AM in Muncie, Indiana and WWKI-FM in Kokomo, Indiana
for the purchase price of approximately $77.0 million (the
"Charleston/Binghamton/Muncie/Kokomo Acquisition"),
o the August 31, 1999 acquisition of Fuller-Jeffrey Broadcasting
Companies, Inc. which owned WOKQ-FM, WPKQ-FM, WXBB-FM and WXBP-FM
serving the Portsmouth/Dover/Rochester, New Hampshire market and
WBLM-FM, WCYI-FM, WCYY-FM, WHOM-FM, WJBQ-FM and WCLZ-FM serving the
Portland, Maine market for the purchase price of approximately $65.3
million, which amount includes the repayment of certain indebtedness of
Fuller-Jeffrey Broadcasting and approximately $1.8 million in
consulting and noncompetition payments payable over a seven-year period
(the "Portsmouth/Dover/Rochester/Portland Acquisition"),
o the November 1, 1999 acquisition of KOOJ-FM in Baton Rouge, Louisiana
for the purchase price of approximately $9.5 million,
o the December 23, 1999 acquisition of Caribou Communications Co. which
owned KATT-FM, KYIS-FM, KCYI-FM, KNTL-FM and WWLS-AM in Oklahoma City,
Oklahoma for a purchase price of approximately $61.5 million, which
amount includes the repayment of certain indebtedness of Caribou
Communications (the "Oklahoma City Acquisition"),
o the July 27, 1998 sale of WEST-AM in Allentown/Bethlehem, Pennsylvania
as a portion of the consideration for the 1997 acquisition of WLEV-FM
in Allentown/Bethlehem,
24
o the October 7, 1998 sale of WQCY-FM, WTAD-AM, WMOS-FM and WBJR-FM in
Quincy, Illinois for the sale price of approximately $2.3 million (the
"Quincy Sale"),
o the November 9, 1999 disposition of KKTT-FM, KEHK-FM and KUGN-AM in
Eugene, Oregon, KAKT-FM, KBOY-FM, KCMX-FM, KTMT-FM, KCMX-AM and KTMT-AM
in Medford, Oregon, KEYW-FM, KORD-FM, KXRX-FM, KTHT-FM and KFLD-AM in
Tri-Cities, Washington, KCTR-FM, KKBR-FM, KBBB-FM, KMHK-FM and KBUL-AM
in Billings, Montana, WQKK-AM and WGLU-FM in Johnstown, Pennsylvania
and WQWK-FM, WNCL-FM, WRSC-AM and WBLF-AM in State College,
Pennsylvania for the sale price of approximately $26.0 million (the
"Marathon Disposition"),
o the July 1998 initial public offering by Citadel Communications of
shares of its common stock and the use of net proceeds from that
offering,
o the November 1998 sale by Citadel Communications' subsidiary, Citadel
Broadcasting Company, of $115.0 million principal amount of its 9-1/4%
Senior Subordinated Notes due 2008 and the use of net proceeds from
that offering,
o the June 1999 public offering by Citadel Communications of shares of
its common stock and the use of net proceeds from that offering (the
"1999 Offering"),
o the August 1999 redemption of a portion of Citadel Broadcasting's
outstanding 13-1/4% Exchangeable Preferred Stock (the "Preferred
Redemption"), and
(2) the following pending acquisitions (collectively, the "Pending
Acquisitions'):
o the pending acquisition of WGRF-FM, WEDG-FM, WHIT-FM, WMNY-AM and
WHLD-AM in Buffalo, New York, WAQX-FM, WLTI-FM, WNSS-AM, and WNTQ-FM in
Syracuse, New York, WIII-FM and WKRT-AM in Ithaca, New York, WMME-FM,
WEZW-FM, WEBB-FM and WTVL-AM in Augusta-Waterville, Maine, WBPW-FM,
WOZI-FM and WQHR-FM in Presque Isle-Caribou, Maine, WCRQ-FM in
Dennysville-Calais, Maine, KMYY-FM, KYEA-FM, KZRZ-FM and KTJC-FM in
Monroe, Louisiana, KDOK-FM, KTBB-FM, KEES-AM, KYZS-AM and KGLD-AM in
Tyler-Longview, Texas, WFPG-AM, WFPG-FM and WPUR-FM in Atlantic City,
New Jersey, WFHN-FM and WBSM-AM in New Bedford, Massachusetts, WQGN-FM,
WSUB-AM and WVVE-FM in New London, Connecticut and the right to operate
WKOE-FM in Atlantic City under a program service and time brokerage
agreement for the aggregate purchase price of approximately $190.0
million (the "BPH Acquisition"),
o the pending acquisition of KSMB-FM, KDYS-AM, KVOL-FM and KVOL-AM in
Lafayette, Louisiana for the purchase price of approximately $8.5
million (the "Lafayette Acquisition"),
o the pending acquisition of WMMQ-FM, WJIM-FM, WFMK-FM, WITL-FM, WVFN-AM
and WJIM-AM in Lansing, Michigan, WHNN-FM and WTCF-FM in Saginaw,
Michigan and WFBE-FM in Flint, Michigan for the aggregate purchase
price of approximately $120.5 million, of which, subject to certain
conditions, approximately $10.1 million would be paid in shares of
Citadel Communications' common stock valued at $50.375 per share (the
"Michigan" Acquisition"), and
o the pending acquisitions of WXLO-FM, WORC-FM and WWFX-FM in Worcester,
Massachusetts for the aggregate purchase price of approximately $38.75
million (the "Worcester Acquisitions").
The unaudited pro forma condensed consolidated financial statements are
based on Citadel Communications' historical consolidated financial statements,
the financial statements of those entities acquired, or from which assets were
acquired, in connection with the Completed Transactions, and the financial
statements of those entities to be acquired, or from which assets will be
acquired, in connection with the Pending Acquisitions.
In the opinion of management, all adjustments necessary to fairly present
this pro forma information have been made. The interest rate applied to
borrowings under, and repayments of, Citadel Broadcasting's credit facility in
the pro forma consolidated statements of operations was 8.4375%, which
represents the interest rate in effect under the then existing credit facility
as of January 1, 1998. Pro forma financial information has been adjusted to
reflect the following, when applicable:
o Prior to the acquisition dates, Citadel Communications operated some of the
acquired stations under a joint sales agreement ("JSA") or local marketing
agreement ("LMA"). Citadel Communications receives or pays fees for such
services accordingly. Net revenue and station operating expenses for
stations operated under JSAs are included to reflect ownership of the
stations as of January 1, 1998. Net revenue and station operating expenses
for stations operated under LMAs are included in Citadel Communications'
historical consolidated financial statements. For those stations operated
under JSAs and LMAs and subsequently acquired, associated fees and
redundant expenses were eliminated and estimated occupancy costs were
included to adjust the results of the operations to reflect ownership of
the stations as of January 1, 1998.
o Elimination of revenue and operating expenses from the entities acquired,
or from which assets were acquired, in connection with the Completed
Transactions, and the entities to be acquired, or from which assets will be
acquired, in connection with the Pending Acquisitions, which would not have
been incurred if the acquisition had occurred on January 1, 1998. The
eliminated items were deemed redundant and therefore are not reflected as
of January 1, 1998.
Depreciation and amortization for the acquisitions are based upon
preliminary allocations of the purchase price to property and equipment and
intangible assets. Actual depreciation and amortization may differ depending on
the final allocation of the purchase price. However, management does not believe
these differences will be material.
For pro forma purposes, Citadel Communications' balance sheet as of
September 30, 1999 has been adjusted to give effect to the following
transactions as if each had occurred on September 30, 1999:
(1) the Marathon Disposition,
(2) the acquisition of KOOJ-FM,
(3) the Oklahoma City Acquisition, and
25
(3) the Pending Acquisitions.
The unaudited pro forma information is presented for illustrative purposes
only and does not indicate the operating results or financial position that
would have occurred if the transactions described above had been completed on
the dates indicated, nor is it indicative of future operating results or
financial position if the pending transactions described above are completed.
Citadel Communications cannot predict whether the completion of the Pending
Acquisitions will conform to the assumptions used in the preparation of the
unaudited pro forma condensed consolidated financial statements. Additionally,
consummation of each of the Pending Acquisitions is subject to certain
conditions. Although Citadel Communications believes these closing conditions
are generally customary for transactions of this type, there can be no assurance
that such conditions will be satisfied.
26
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1999
(DOLLARS IN THOUSANDS)
CITADEL
COMMUNICATIONS
AS ADJUSTED
FOR
ADJUSTMENTS OKLAHOMA CITY
FOR ACQUISITION,
MARATHON MARATHON ADJUSTMENTS
ACTUAL ADJUSTMENTS FOR DISPOSITION DISPOSITION FOR PRO FORMA
CITADEL OKLAHOMA CITY AND ACQUISITION AND ACQUISITION THE PENDING CITADEL
COMMUNICATIONS ACQUISITION(1) OF KOOJ-FM(2) OF KOOJ-FM ACQUISITIONS(3) COMMUNICATIONS
-------------- --------------- --------------- -------------- --------------- --------------
ASSETS
Cash and cash equivalents $ 8,798 $ 321 -- $ 9,119 $ -- $ 9,119
Restricted cash -- -- 26,000 26,000 -- 26,000
Accounts and notes receivable,
net 48,208 1,906 -- 50,114 -- 50,114
Prepaid expenses 3,808 131 (110) 3,829 -- 3,829
Assets held for sale 25,991 -- (25,991) -- -- --
-------- ------- -------- -------- -------- ----------
Total current assets 86,805 2,358 (101) 89,062 -- 89,062
Property and equipment, net 68,088 1,826 679 70,593 15,871 86,464
Intangible assets, net 480,431 59,462 8,572 548,465 341,879 890,344
Other assets 4,205 -- -- 4,205 -- 4,205
-------- ------- -------- -------- -------- ----------
TOTAL ASSETS $639,529 $63,646 $ 9,150 $712,325 $357,750 $1,070,075
======== ======= ======== ======== ======== ==========
LIABILITIES AND SHAREHOLDER'S
EQUITY
Accounts payable and accrued
liabilities $ 15,021 $ 980 $ -- $ 16,001 $ -- $ 16,001
Current maturities of other
long-term Obligations 994 250 -- 1,244 -- 1,244
-------- ------- -------- -------- -------- ----------
Total current liabilities 16,015 1,230 -- 17,245 -- 17,245
Notes payable, less current
maturities 57,500 61,416 9,500 128,416 347,675 476,091
10-1/4% Notes 210,401 -- -- 210,401 -- 210,401
9-1/4% Notes
Other long-term obligations,
less current Maturities 2,685 1,000 -- 3,685 -- 3,685
Deferred tax liability 46,964 -- -- 46,964 -- 46,964
Exchangeable preferred stock 82,526 -- -- 82,526 -- 82,526
Common stock and APIC 263,514 -- -- 263,514 10,075 273,589
Deferred compensation (3,329) -- -- (3,329) -- (3,329)
Accumulated other comprehensive
loss (12) -- -- (12) -- (12)
Accumulated deficit/retained
earnings (36,735) -- (350) (37,085) -- (37,085)
-------- ------- -------- -------- -------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S
EQUITY $639,529 $63,646 $ 9,150 $712,325 $357,750 $1,070,075
======== ======= ======== ======== ======== ==========
(1) Represents the net effect of the Oklahoma City Acquisition as if the
transaction had taken place on September 30, 1999.
(2) Represents the net effect of the Marathon Disposition and the acquisition
of KOOJ-FM as if each transaction had taken place on September 30, 1999.
(3) Represents the net effect of the Pending Acquisitions as if each transaction
had taken place on September 30, 1999.
27
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS)
CITADEL
COMMUNICATIONS
AS ADJUSTED ADJUSTMENTS
ACTUAL ADJUSTMENTS FOR FOR FOR PRO FORMA
CITADEL COMPLETED COMPLETED THE PENDING CITADEL
COMMUNICATIONS TRANSACTIONS (1) TRANSACTIONS ACQUISITIONS(2) COMMUNICATIONS
-------------- ---------------- ------------ --------------- --------------
Net revenue...................... $126,521 $19,382 $145,903 $ 50,690 $196,593
Station operating expenses....... 85,124 10,241 95,365 35,347 130,712
Depreciation and amortization.... 25,589 11,206 36,795 18,126 54,921
Corporate general and
administrative................ 4,921 (131) 4,790 -- 4,790
-------- ------- -------- -------- --------
Operating expenses............ 115,634 21,316 136,950 53,473 190,423
-------- ------- -------- -------- --------
Operating income (loss).......... 10,887 (1,934) 8,953 (2,783) 6,170
Interest expense................. 17,502 4,918 22,420 22,001 44,421
Other (income) expense, net...... (1,187) 350 (837) -- (837)
-------- ------- -------- -------- --------
Income (loss) before income
taxes......................... (5,428) (7,202) (12,630) (24,784) (37,414)
Income taxes (benefit)........... (1,376) (850) (2,226) -- (2,226)
Dividend requirement for
Exchangeable Preferred Stock.. (11,322) 2,812 (8,510) -- (8,510)
-------- ------- -------- -------- --------
Income (loss) from
continuing operations
applicable to common shares... $(15,374) $(3,540) $(18,914) $(24,784) $(43,698)
======== ======= ======== ======== ========
(1) Represents the net effect of the Completed Transactions that were
consummated after January 1, 1999 as if each transaction had taken place on
January 1, 1998. Dollars in the table below are shown in thousands.
PORTSMOUTH/ CHARLESTON/
DOVER/ BINGHAMTON
OKLAHOMA ROCHESTER/ MUNCIE/ BATON ROUGE/
CITY PORTLAND KOKOMO LAFAYETTE
ACQUISITION ACQUISITION ACQUISITION ACQUISITION
----------- ----------- ----------- ------------
Net revenue $ 7,155 $10,642 $ 9,543 $1,371
Station operating expenses 4,831 6,021 6,711 1,275
Depreciation and
amortization 3,292 3,628 2,685 628
Corporate general and
administrative -- -- -- --
------- ------- ------- ------
Operating expenses 8,123 9,649 9,396 1,903
------- ------- ------- ------
Operating income (loss) (968) 993 147 (532)
Interest expense 3,897 3,234 2,531 --
Other (income) expenses,
net -- -- -- --
------- ------- ------- ------
Income (loss) before
income taxes (4,865) (2,241) (2,384) (532)
Income taxes (benefit) (724) -- (126)
Dividend requirement for
Exchangeable Preferred
Stock -- -- -- --
------- ------- ------- ------
Income (loss) from
continuing operations $(4,865) $(1,517) $(2,384) $ (406)
======= ======= ======= ======
CARLISLE
ACQUISITION, ADJUSTMENTS
CAPSTAR FOR THE
TRANSACTIONS, 1999 OFFERING
SAGINAW/ KOOJ ACQUISITION AND THE
BAY CITY AND MARATHON PREFERRED THE COMPLETED
ACQUISITION DISPOSITION REDEMPTION TRANSACTIONS
----------- ----------- ---------- ------------
Net revenue $ 526 $(9,855) $ -- $19,382
Station operating expenses 486 (9,083) -- 10,241
Depreciation and
amortization 202 771 -- 11,206
Corporate general and
administrative -- (131) -- (131)
----- ------- ------- -------
Operating expenses 688 (8,443) -- 21,316
----- ------- ------- -------
Operating income (loss) (162) (1,412) -- (1,934)
Interest expense -- (1,044) (3,700) 4,918
Other (income) expenses,
net -- 350 -- 350
----- ------- ------- -------
Income (loss) before
income taxes (162) (718) 3,700 (7,202)
Income taxes (benefit) -- -- -- (850)
Dividend requirement for
Exchangeable Preferred
Stock -- -- 2,812 2,812
----- ------- ------- -------
Income (loss) from
continuing operations $(162) $ (718) $ 6,512 $(3,540)
===== ======= ======= =======
(2) Represents the net effect of the Pending Acquisitions as if each
transaction had taken place on January 1, 1998. Dollars in the table below
are shown in thousands.
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
CITADEL
COMMUNICATIONS ADJUSTMENTS
ACTUAL ADJUSTMENTS FOR AS ADJUSTED FOR THE PRO FORMA
CITADEL COMPLETED FOR COMPLETED PENDING CITADEL
COMMUNICATIONS TRANSACTIONS (1) TRANSACTIONS ACQUISITIONS(2) COMMUNICATIONS
-------------- ---------------- ------------ --------------- --------------
Net revenue....................... $135,426 $41,137 $176,563 $ 61,247 $237,810
Station operating expenses........ 93,485 25,056 118,541 42,689 161,230
Depreciation and amortization..... 26,414 21,591 48,005 23,211 71,216
Corporate general and
administrative.................. 4,369 (349) 4,020 -- 4,020
-------- ------- -------- -------- --------
Operating expenses.............. 124,268 46,298 170,566 65,900 236,466
-------- ------- -------- -------- --------
Operating income (loss)........... 11,158 (5,161) 5,997 (4,653) 1,344
Interest expense.................. 18,126 3,651 21,777 28,132 49,909
Other (income) expense, net....... (1,651) 350 (1,301) -- (1,301)
-------- ------- -------- -------- --------
Income (loss) before income
taxes........................... (5,317) (9,162) (14,479) (32,785) (47,264)
Income taxes (benefit)............ (1,386) (1,591) (2,977) -- (2,977)
Dividend requirement for --
Exchangeable Preferred Stock.... (14,586) 138 (14,448) -- (14,448)
-------- ------- -------- -------- --------
Income (loss) from continuing
operations applicable to common
shares.......................... $(18,517) $(7,433) $(25,950) $(32,785) $(58,735)
======== ======= ======== ======== ========
(1) Represents the net effect of the Completed Transactions as if each
transaction had taken place on January 1, 1998. Dollars in the table
below are shown in thousands.
PORTSMOUTH/ CHARLESTON/
DOVER/ BINGHAMTON/ BATON
OKLAHOMA ROCHESTER/ MUNCIE/ ROUGE/ SAGINAW/
CITY PORTLAND KOKOMO LAFAYETTE BAY CITY
ACQUISITION ACQUISITION ACQUISITION ACQUISITION ACQUISITION
----------- ----------- ----------- ----------- -----------
Net revenue $ 8,250 $13,642 $17,421 $7,331 $6,981
Station operating
expenses 6,240 8,676 12,100 5,170 4,447
Depreciation and
amortization 4,390 5,441 5,369 2,914 2,421
Corporate general and
administrative -- -- -- -- --
------- ------- ------- ------ ------
Operating expenses 10,630 14,117 17,469 8,084 6,868
Operating income (loss) (2,380) (475) (48) (753) 113
Interest expense 5,196 4,852 5,063 -- --
Other (income) expense,
net -- -- -- -- --
------- ------- ------- ------ ------
Income (loss) before
income taxes (7,576) (5,327) (5,111) (753) 113
Income taxes (benefit) -- (1,086) -- (505) --
Dividend requirement for
Exchangeable Preferred
Stock -- -- -- -- --
------- ------- ------- ------ ------
Income (loss) from
continuing
Operations $(7,576) $(4,241) $(5,111) $ (248) $ 113
======= ======= ======= ====== ======
ADJUSTMENTS
OTHER REPAYMENT FOR THE
ACQUISITIONS OF THE OFFERING 1999 OFFERING THE
AND CREDIT OF THE AND THE COMPLETED
DISPOSITIONS FACILITY 9-1/4% PREFERRED TRANS-
(a) (b) NOTES(c) REDEMPTION(d) ACTIONS
------------ ------- -------- ------------- -------
Net revenue $(12,488) $ -- $ -- $ -- $41,137
Station operating
expenses (11,577) -- -- -- 25,056
Depreciation and
amortization 1,056 -- -- -- 21,591
Corporate general and
administrative (349) -- -- -- (349)
-------- ------- ------- ------- -------
Operating expenses (10,870) -- -- -- 46,298
Operating income (loss) (1,618) -- -- -- (5,161)
Interest expense (947) (4,487) 1,374 (7,400) 3,651
Other (income) expense,
net 350 -- -- 350
-------- ------- ------- ------- -------
Income (loss) before
income taxes (1,021) 4,487 (1,374) 7,400 (9,162)
Income taxes (benefit) -- -- -- -- (1,591)
Divided requirement for
Exchangeable
Preferred Stock -- -- -- 138 138
-------- ------- ------- ------- -------
Income (loss) from
continuing
Operations $ (1,021) $ 4,487 $(1,374) $ 7,538 $(7,433)
======== ======= ======= ======= =======
(a) Represents the net effect of the Marathon Disposition, the Carlisle
Acquisition, the Capstar Transactions, the Boise Acquisitions, the
Wilkes-Barre/Scranton Acquisition, the acquisition of KOOJ-FM in Baton
Rouge, the disposition of WEST-AM in Allentown/Bethlehem, the acquisition
of KAAY-AM in Little Rock and the Quincy Sale.
(b) Represents the repayment of outstanding borrowings under Citadel
Broadcasting's credit facility with the proceeds from the Citadel
Communications' initial public offering.
(c) Reflects the recording of the net increase in interest expense and the
amortization of deferred financing costs of $3.5 million related to Citadel
Broadcasting's 9-1/4% Senior Subordinated Notes due 2008.
(d) Represents the use of proceeds from the 1999 Offering, including the
redemption of approximately 35% of Citadel Broadcasting's issued and
outstanding Exchangeable Preferred Stock.
29
(2) Represents the net effect of the Pending Acquisitions as if each transaction
had taken place on January 1, 1998. Dollars in the table below are shown in
thousands.
(a) Citadel Communications expects to sell one or more of its stations serving
the Saginaw market to comply with the ownership limits of the
Telecommunications Act of 1996. However, Citadel Communications is unable
to include the effect of the divestiture in this pro forma financial
information until it determines the station or stations required to
be sold.
(b) The current owner of WWFX-FM purchased the station in January 1999. Citadel
Communications is unable to provide operating results for the year ended
December 31, 1998 as the information is not currently available. In the
opinion of management, the 1998 operations are not significant to the pro
forma condensed consolidated statement of operations.
30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CITADEL COMMUNICATIONS
CORPORATION
Date: January 6, 1999 By: /s/ Lawrence R. Wilson
------------------ --------------------------------------
Lawrence R. Wilson
Chairman, Chief Executive Officer and
President
31
EXHIBIT INDEX
2.1 Purchase Agreement dated August 23, 1999 by and among Cat Communications,
Inc., Desert Communications III, Inc. and Citadel Broadcasting Company.
2.2 Amendment to Purchase Agreement dated December 22, 1999 by and among Cat
Communications, Inc., Desert Communications III, Inc. and Citadel
Broadcasting Company.
4.1 Credit Agreement dated as of December 17, 1999 among Citadel Broadcasting
Company, Citadel Communications Corporation, Citadel License, Inc.,
Credit Suisse First Boston, as lead Arranger, Administrative Agent and
Collateral Agent, FINOVA Capital Corporation, as Syndication Agent, First
Union Securities, Inc. and Fleet National Bank, as Co-Documentation
Agents, and the lenders named therein.
10.1 Parent Guarantee Agreement dated as of December 17, 1999 between Citadel
Communications Corporation and Credit Suisse First Boston, as Collateral
Agent.
32
Exhibit 2.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement"), made as of the 23rd day of
August, 1999, by and among (i) CAT COMMUNICATIONS, INC., an Oklahoma corporation
("CAT"); (ii) DESERT COMMUNICATIONS III, INC., a Delaware corporation
("Desert"); and (iii) CITADEL BROADCASTING COMPANY, a Nevada corporation
("Citadel").
RECITALS:
A. Caribou Communications Co., an Oklahoma general partnership (the
"Company"), is the licensee of and owns and operates five radio stations serving
the Oklahoma City, Oklahoma market and identified on Schedule 1 to this
Agreement (collectively, the "Stations").
B. CAT and Desert (collectively, the "Partners") own all of the
partnership interests in the Company.
C. Citadel desires to purchase from the Partners, and the Partners
desire to sell to Citadel, all of the partnership interests in the Company, on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
SECTION 1
DEFINITIONS
The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Accounts Receivable" means the accounts receivable of the Company,
exclusive of Trade Receivables, existing as of the Closing.
"Act" means the Communications Act of 1934, as amended.
"Affiliate" of any Person means any other Person (a) that directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with, the first Person, or (b) any interests of which are owned, in
whole or in part, directly or indirectly, by the first
Person. For purposes of this definition, the term "control" (including the
correlative meanings of the terms "controls," "controlled by," and "under direct
or indirect control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of the Person, whether through the
ownership of voting securities or by contract or otherwise.
"Arbitrator" has the meaning specified in Section 2.2(b).
"Asset Schedule" means Schedule 2 to this Agreement.
"Assets" means all of the property of every kind or nature of the
Company, including without limitation the Real Property, the Real Property
Leases, the Contracts, the Intellectual Property, the Personal Property, the
Trade Receivables, the Accounts Receivable and the Cash, and all books, records
and accounts of the Company.
"Broker" means Kalil & Co., Inc.
"Business" means the business in which the Company is now engaged.
"Cash" means the cash and cash equivalents of the Company existing as
of the Closing.
"CCC" means Citadel Communications Corporation, a Nevada corporation.
"Citadel's Certificate" has the meaning specified in Section 2.2(b).
"Citadel's Disclosure Schedule" means Schedule 3 to this Agreement.
"Closing" means the consummation of the transactions contemplated by
this Agreement in accordance with the provisions of Section 11.
"Closing Date" has the meaning specified in Section 11.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning specified in the recitals to this Agreement.
"Confidential Information" has the meaning specified in Section 10.7.
"Consulting Agreement" means that certain Consulting Agreement dated as
of the Closing Date between Citadel and J. Kent Nichols, substantially in the
form of Exhibit A attached hereto.
-2-
"Contracts" means all (a) contracts, agreements, licenses, leases,
arrangements and other documents to which the Company is a party or by which the
Company or the assets of the Company are bound (including, in the case of loan
agreements, a description of the amounts of any outstanding borrowings
thereunder and the collateral, if any, for such borrowings); (b) uncompleted
orders for the purchase by the Company of materials, supplies, equipment and
services existing as of the date hereof and with respect to which the remaining
obligation of the Company is in excess of $2,500; and (c) contingent contractual
obligations and liabilities of the Company known to the Company existing as of
the date hereof.
"Damages" has the meaning specified in Section 14.1.
"Debt Schedule" means Schedule 4 to this Agreement.
"Draw Condition" has the meaning specified in Section 15.2(a).
"Environmental Claims" means and includes (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) claims for 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 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 which relate to the
environment; (f) fines, penalties or Liens against property which relate to the
environment; (g) claims for injunctive relief or other orders or notices of
violation from Governmental Authorities which relate to the environment; and (h)
with regard to any present or former employees, claims for 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 a
Person. 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 a Person.
"Environmental Laws" has the meaning specified in the definition of
Hazardous Materials.
"Environmental Noncompliance" means and includes (a) the release or
threatened release as a result of the activities of a Person of any Hazardous
Materials into the environment, any storm drain, sewer, septic system or
publicly owned treatment works, in
-3-
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; (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; and (c) any condition noted in any
environmental site assessments, studies, tests or reports performed or
commissioned for the Real Property or Leaseholds which is concluded therein to
create or cause to exist a recognized environmental condition (or words of
similar import) or to pose an environmental risk.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Net Working Capital" means the Partners' good faith estimate
of Net Working Capital, as reflected in the Partners' Certificate.
"Excluded Assets" means, collectively, (a) the name "Caribou"; (b) the
assets located at the Company's office in Denver, Colorado, all of which are
identified on Schedule 5 attached hereto; (c) that certain Lease dated June 15,
1994 between Constellation Properties, Inc. and the Company, as amended, for the
Company's office in Denver, Colorado; (d) that certain Employment Agreement
dated as of September 1, 1996 between the Company and John Stevens, as amended;
and (e) that certain Lease Agreement (Contract No. 0709365202) dated March 12,
1997 between the Company and Xerox Corporation.
"FCC" means the Federal Communications Commission.
"FCC Application" has the meaning specified in Section 10.1.
"FCC Approval" has the meaning specified in Section 10.1.
"FCC Licenses" means the main station license for each Station,
together with each of the other consents, rights, licenses, permits and other
authorizations issued by the FCC and held by the Company in connection with, or
pertaining to, the conduct of the business and operation of the Stations,
together with any renewals and extensions thereof and any applications therefor
pending on the Closing Date, and any and all applications made by the Company
for such consents, rights, licenses, permits and other authorizations.
"Final Order" means a written action or order issued by the FCC or its
staff setting forth the FCC Approval (or a denial thereof), (a) which action or
order has not been vacated, reversed, stayed, enjoined, set aside, annulled or
suspended, and (b) with respect to which action or order (i) no requests have
been filed and are pending for administrative or judicial review, rehearing,
reconsideration, appeal or stay, and the time period for filing any such
requests and for the FCC to set aside the action on its own motion under the
provisions of the Act or the rules, regulations and policies of the FCC has
expired, or (ii) in the event of review, reconsideration or appeal, the time for
further review, reconsideration or appeal has expired.
-4-
"FINOVA" means FINOVA Capital Corporation.
"FINOVA Liens" means the Liens in favor of FINOVA as of the Closing
Date, which secure the Permitted Debt.
"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.
"Held Back Amount" means $250,000, to be retained by Citadel from the
Purchase Price in accordance with Section 2.2.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvement Act of
1976, as amended from time to time.
"HSR Filing" has the meaning specified in Section 10.6.
"Indebtedness for Borrowed Money" means (a) all indebtedness of a
Person in respect of money borrowed (including without limitation indebtedness
which represents the unpaid amount of the purchase price of any property), (b)
all indebtedness of a Person evidenced by
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a promissory note, bond or similar written obligation to pay money, (c) all
indebtedness guaranteed by a Person and (d) all monetary obligations of a Person
under any lease or similar arrangement, which obligations would be classified
and accounted for as capital obligations on a balance sheet of such Person under
GAAP.
"Indemnification Guaranty" has the meaning specified in Section 10.14.
"Indemnitee" has the meaning specified in Section 14.4.
"Indemnitor" has the meaning specified in Section 14.4.
"Intellectual Property" means the call letters of each Station and all
of the copyrights, service marks, trademarks, trade names, patents and other
similar rights, including applications and registrations therefor, in which the
Company has any right, title or interest, including without limitation those
items listed on the Asset Schedule.
"Leaseholds" has the meaning specified in Section 3.7(e).
"Letter of Credit" has the meaning specified in Section 2.3(a).
"Lien" means any mortgage, pledge, hypothecation, assignment,
encumbrance, claim, easement, transfer restriction, lien (statutory or
otherwise) or security interest of any kind or nature whatsoever.
"Mandatory Consents" has the meaning specified in Section 7.12.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise) or on the results of operations, assets,
liabilities or business of the Company or the Stations, taken as a whole.
"Net Profits Agreements" means, collectively, the six agreements
entitled "Net Profits Interests" between the Company and each of J. Kent
Nichols, John Stevens, Patricia York, Larry Bastida, Michael Gumb and Carol
Millwater.
"Net Profits Amount" means the aggregate amount due at the Closing
under the Net Profits Agreements, as specified in the Net Profits Certificate.
"Net Profits Certificate" has the meaning specified in Section 10.11.
"Net Working Capital" means the current assets of the Company
(including without limitation Cash, Accounts Receivable and Trade Receivables)
as of the Closing Date minus the current liabilities of the Company (including
without limitation Trade Liabilities but excluding the current portion of any
Indebtedness for Borrowed Money) as of the Closing Date, determined in
accordance with GAAP.
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"Obligations" means, without duplication, all (a) Indebtedness for
Borrowed Money, (b) accrued taxes, accounts payable, accrued liabilities and all
other liabilities and obligations of the type normally required by GAAP to be
reflected on a balance sheet, (c) commitments by which a Person assures a
creditor against loss, including the face amount of all letters of credit and,
without duplication, all drafts drawn thereunder, (d) obligations guaranteed in
any manner by a Person, (e) obligations under capitalized leases in respect of
which obligations a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations such Person assures a
creditor against loss, (f) obligations under acceptance facilities, (g)
obligations secured by a Lien on property of a Person, (h) obligations under
interest rate or currency exchange or swap agreements, (i) unsatisfied
obligations for "withdrawal liability" to a "multiemployer plan" as such terms
are defined under ERISA, (j) indebtedness issued or obligation incurred in
substitution or exchange for any Obligations, (k) costs or expenses incurred by
a Person of any nature, whether or not currently payable, and (l) other
liabilities or obligations of a Person, in each of the foregoing instances
whether absolute or contingent, known or unknown, and whether or not normally
required by GAAP to be reflected on a balance sheet.
"Partners" has the meaning specified in the recitals to this Agreement.
"Partners' Certificate" means the certificate of the Partners delivered
to Citadel at least three business days prior to the Closing, which sets forth a
true and correct calculation, including supporting documentation, of (i) the
Estimated Net Working Capital and (ii) the Indebtedness for Borrowed Money of
the Company as of the Closing.
"Partners' Disclosure Schedule" means Schedule 6 to this Agreement.
"Partnership Agreement" means that certain Partnership Agreement dated
December 29, 1994 between the Partners relating to the Company, as amended on
May 1, 1998.
"Partnership Interests" has the meaning specified in Section 2.1.
"Permits" means all FCC Licenses applicable to the Stations, and all
other permits, licenses, approvals, franchises, notices and authorizations
applicable to the Stations issued by any Governmental Authorities.
"Permitted Debt" means the Company's Indebtedness for Borrowed Money to
FINOVA, including any prepayment penalty, premium or other fees payable to
FINOVA upon repayment of such debt.
"Permitted Exceptions" means, collectively, (a) Liens for Taxes not yet
due and payable or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books and records of the Company in accordance with GAAP, (b) liens of carriers,
warehousemen, mechanics and materialmen
-7-
incurred in the ordinary course of business, that individually and in the
aggregate do not have Material Adverse Effect, provided that the underlying
obligations relating to such Liens are paid in the ordinary course of business,
or are being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books and records of the
Company in accordance with GAAP, (c) with respect to the Real Property only,
easements, rights of way, covenants, conditions, restrictions and other similar
charges and encumbrances listed on Schedule 7 to this Agreement that,
individually and in the aggregate, do not materially detract from or materially
interfere with the present use of the Asset or Assets affected thereby
(provided, however, that if the Closing occurs, all items listed on Schedule 7
shall constitute "Permitted Exceptions"), (d) the FINOVA Liens and (e) with
respect to the FCC Licenses only, provisions of the Act and the rules and
regulations promulgated thereunder.
"Person" means an individual, corporation, partnership, joint venture,
joint stock company, association, trust, business trust, unincorporated
organization, Governmental Authority, or any other entity of whatever nature.
"Personal Property" means all of the tangible personal property,
improvements and fixtures of every kind of the Company, including without
limitation the personal property described on the Asset Schedule.
"Purchase Price" has the meaning specified in Section 2.2.
"Real Property" means all of the right, title and interest of the
Company in and to any owned real property of the Company, including without
limitation the real property described on the Asset Schedule.
"Real Property Leases" means all of the leasehold interests of the
Company pursuant to real property leases, including without limitation those
described on the Asset Schedule.
"Recipient" has the meaning specified in Section 10.7.
"Stations" has the meaning set forth in the recitals to this Agreement.
"Supplemental Financial Statements" has the meaning specified in
Section 7.9.
"Taxes" means all taxes, charges, fees, levies, or other assessments,
including income, gross receipts, excise, property, sales, transfer, license,
payroll, and franchise taxes, any taxes required by law to be withheld, and any
taxes payable as a result of the consummation of the transactions contemplated
by this Agreement, which taxes are imposed by any Governmental Authority; and
such term shall include any interest, penalties, or additions to tax
attributable to such assessments.
"Threshold" has the meaning specified in Section 14.6(a).
-8-
"Trade Agreements" means and includes those agreements entered into by
the Company for the sale of advertising time on the Stations for consideration
other than cash, which agreements are in effect as of the Closing.
"Trade Liabilities" means the fair market value of the Company's
liability as of the Closing for unperformed time under the Trade Agreements.
"Trade Receivables" means the fair market value of goods and services
to be received by the Company after the Closing under the Trade Agreements.
SECTION 2
PURCHASE AND SALE OF PARTNERSHIP INTERESTS; PURCHASE PRICE
2.1 Purchase and Sale of Partnership Interests. 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, the Partners agree to sell, assign and convey to Citadel, and Citadel
agrees to purchase, acquire and accept from the Partners, all of the partnership
interests in the Company (collectively, the "Partnership Interests").
2.2 Purchase Price. The purchase price to be paid to the Partners for
the purchase of the Partnership Interests (the "Purchase Price") shall be
$60,000,000 minus (i) the aggregate amount of Indebtedness for Borrowed Money of
the Company as of the Closing Date (including any prepayment penalty, premium or
other fees payable to FINOVA upon repayment of the Permitted Debt), minus (ii)
the Net Profits Amount, plus (iii) the Net Working Capital.
(a) Payment. The Purchase Price, less the Held Back Amount,
shall be paid at the Closing to the Partners (58% to CAT and 42% to Desert) in
cash by wire transfer of immediately available funds to accounts designated by
the Partners in writing at least three days prior to the Closing Date. At the
Closing, the Partners shall direct Citadel to, and Citadel shall, pay the Net
Profits Amount in accordance with the instructions provided in the Net Profits
Certificate.
(b) Estimated Net Working Capital; Citadel's Certificate. For
purposes of calculating the Purchase Price on the Closing Date, it shall be
assumed that Net Working Capital is equal to Estimated Net Working Capital.
Within 60 days after the Closing Date, Citadel shall deliver to the Partners a
certificate which sets forth a true and correct calculation, including
supporting documentation, of Net Working Capital ("Citadel's Certificate"). The
Partners shall deliver to Citadel a statement of any objections relating to
Citadel's calculation of Net Working Capital as soon as practicable, but in any
event not later than 30 days, after the date of delivery of Citadel's
Certificate. In the event of any dispute or any failure to reach agreement with
respect to the objections of the Partners relating to
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Citadel's Certificate and the related calculation of Net Working Capital within
30 days after the date of delivery to the Partners of Citadel's Certificate, the
items in dispute will be submitted to, and the calculation of the Net Working
Capital will be determined by, arbitration by PricewaterhouseCoopers, LLP (the
"Arbitrator"), independent certified public accountants. The determination of
the Arbitrator shall in all respects be final, binding and conclusive on the
parties hereto.
(c) Final Settlement. If Net Working Capital is greater than
Estimated Net Working Capital, then Citadel shall pay to the Partners the amount
of such excess and shall pay to the Partners the Held Back Amount. If Net
Working Capital is less than Estimated Net Working Capital, then Citadel shall
permanently retain a portion of the Held Back Amount equal to such deficiency
and shall pay to the Partners the remainder, if any, of the Held Back Amount;
provided, however, that if such deficiency exceeds the Held Back Amount, then
Citadel shall permanently retain the entire Held Back Amount and the Partners
shall pay to Citadel the amount by which such deficiency exceeds the Held Back
Amount. To the extent that any amounts payable under this Section 2.2(c) are not
affected by objections of the Partners, such amounts shall be paid not more than
35 days after delivery of Citadel's Certificate to the Partners. To the extent
that any amounts payable under this Section 2.2(c) are affected by objections of
the Partners, such amounts shall be paid not more than five days after the
mutual agreement of the Partners and Citadel or the final determination of the
Arbitrator, as the case may be. Any payments due to or from the Partners
pursuant to this Section 2.2(c) shall be (i) paid by wire transfer of
immediately available funds and (ii) allocated between the Partners in
accordance with the percentages set forth in Section 2.2(a).
2.3 Letter of Credit.
(a) Simultaneously with the execution of this Agreement,
Citadel shall deliver to the Partners an irrevocable letter of credit in favor
of the Partners, issued by BankBoston, N.A., in the amount of $3,000,000 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 (i) a joint certificate from the
Chief Executive Officer of Citadel and the President of each of the Partners
certifying that a Draw Condition has occurred or (ii) a final non-appealable
order of a court of competent jurisdiction concluding that a Draw Condition has
occurred. At the Closing, the Partners shall return the original Letter of
Credit to Citadel for cancellation.
(b) In the event a good faith dispute exists as to whether a
Draw Condition has occurred and the Letter of Credit would, by its terms, expire
in seven days, Citadel shall take such action as is necessary to either, in
Citadel's discretion, (i) extend the expiration date of the Letter of Credit or
(ii) place $3,000,000 in escrow (pursuant to an escrow agreement reasonably
satisfactory to Citadel and the Partners), until such time as such dispute is
resolved. The parties agree that the Partners may, at their option, have
Citadel's obligations under this Section 2.3(b) specifically enforced by a court
of competent jurisdiction.
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SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE PARTNERS
In connection with the purchase and sale of the Partnership Interests
and in order to induce Citadel to enter into and consummate the transactions
contemplated by this Agreement, the Partners jointly and severally make the
following representations and warranties to Citadel as of the date of this
Agreement (except (i) for representations and warranties expressly and
specifically relating to a time or times other than the date hereof, which shall
be made as of the specified time or times, and (ii) with respect to any
representation and warranty, to the extent expressly and specifically disclosed
in the section of Partners' Disclosure Schedule which corresponds to such
representation and warranty):
3.1 Company.
(a) Formation and Qualification; Authority. The Company is a
general partnership duly formed and validly existing under the laws of the State
of Oklahoma and has full power and authority to own its assets and properties
and to conduct the Business. The Company has full power, authority and legal
right and all necessary approvals, permits, licenses and authorizations to own
its properties and to conduct the Business.
(b) Partnership Interests. The Partners are the sole partners
in the Company. CAT and Desert have a 58% and 42%, respectively, partnership
interest in the Company. The Company does not have outstanding any options,
warrants or other securities convertible or exchangeable for any partnership
interests in or other securities of the Company.
(c) Repurchase and Other Obligations. The Company is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any of its partnership interests or other securities. Neither
the Company, the Partners nor any other Person is entitled to any preemptive
right, right of first refusal or similar right with respect to any partnership
interests or other securities of the Company. Other than the Partnership
Agreement, there are no agreements, arrangements or trusts between or for the
benefit of the Company or the Partners with respect to the voting or transfer of
partnership interests or other securities, or with respect to any other aspect
of the Company's affairs. The Company has not violated any applicable federal or
state securities laws in connection with the offer, sale or issuance of any of
its partnership interests or other securities.
(d) Subsidiaries. The Company does not own, of record or
beneficially, any capital stock or equity interest or investment in any Person.
3.2 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 organizational documents of the Company (including
without limitation the Partnership
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Agreement), 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 the Company is a party or by
which the Company or any of the assets of the Company is bound. Except for the
FCC Approval and compliance with the HSR Act, no consents, approvals or
authorizations of, or filings with, any Governmental Authority or any other
Person are required on the part of the Company in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
3.3 Financial Statements. The Partners have delivered to Citadel the
following financial statements of the Company: (a) the audited balance sheet as
of December 31, 1997 and the related statements of income and cash flow for the
year then ended; (b) the audited balance sheet as of December 31, 1998 and the
related statements of income and cash flow for the year then ended; (c) the
unaudited balance sheet as of June 30, 1999 and the related statements of income
and cash flow for the six months then ended; and (d) the unaudited monthly
balance sheets and income statements for each month in 1998 and the first six
months of 1999. Each of the foregoing financial statements (including in all
cases the notes thereto, if any) (i) is accurate and complete in all material
respects, (ii) is consistent in all material respects with the books and records
of the Company (which, in turn, are accurate and complete in all material
respects), and (iii) fairly presents in all material respects the financial
condition and results of operations of the Company in accordance with GAAP
(subject to (i) the lack of footnote disclosure in the unaudited financial
statements and (ii) other than with respect to year-end financial statements,
changes resulting from normal year-end audit adjustments), consistently applied,
as of the dates and for the periods set forth therein.
3.4 Absence of Certain Changes. Since December 31, 1998, there has not
been any of the following with respect to the Company or the Stations, taken as
a whole: (a) change which had, or could reasonably be expected to have, a
Material Adverse Effect; (b) damage or destruction, whether or not insured,
affecting business operations; (c) labor dispute or threatened labor dispute
involving any employees; (d) actual or threatened dispute with any material
provider of software, hardware or services; (e) material change in the customary
methods of operations; (f) except in the ordinary course of business or to the
extent not material to the Business or financial condition of any Station, sale
or transfer of any tangible or intangible asset used or useful in the operation
of any Station, mortgage, pledge or imposition of any Lien on any such asset,
lease of real property, machinery, equipment or buildings with respect to any
Station entered into or modification, amendment or cancellation of any of its
existing leases relating to any Station, or cancellation of any debt or claim;
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.
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3.5 Taxes. The Company has filed or caused to be filed on a timely
basis all federal, state, local and other tax returns, reports and declarations
required to be filed by it and has paid all Taxes (including without limitation
income, franchise, sales, use, unemployment, withholding, social security and
workers' compensation taxes and estimated income and franchise tax payments,
penalties and fines) reflected as due on such returns, reports or declarations
(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 the
Company are true, complete and correct. No deficiency in payment of any Taxes
for any period has been asserted against the Company by any taxing authority
which remains unsettled at the date hereof, no written inquiries have been
received by the Company 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, 1998, the Company has not incurred
any liability for Taxes other than in the ordinary course of business.
3.6 Asset Schedule; Debt Schedule. Except for the Excluded Assets, the
Asset Schedule includes complete and accurate (a) listings of all Real Property;
(b) listings of all material Personal Property; (c) descriptions of all Real
Property Leases and Contracts (other than any advertising Contract for air time
entered into in the ordinary course and any Contract which (i) is not material,
(ii) involves future payments of less than $5,000 and (iii) may be terminated or
cancelled by the Company without penalty or other adverse consequences on 30
days or less notice), none of which requires any consent of third parties in
connection with the transactions contemplated hereby; (d) descriptions of all of
the material Intellectual Property; and (e) listings of all of the FCC Licenses.
Schedule 1 contains a complete and accurate list of all of the Stations. The
Debt Schedule is a complete and accurate list of all of the Company's
Indebtedness for Borrowed Money as of July 31, 1999 and includes the names of
the holders of such debt and a list of all documents governing or in any way
related to such debt (true and complete copies of which have been delivered to
Citadel). All of such debt can be prepaid on the terms described in the Debt
Schedule, including the terms of any prepayment penalties and premiums. Upon the
payment in full of such debt, all Liens secured in connection therewith will be
released.
3.7 Title to and Condition of Property.
(a) Title. The Company will as of the Closing have good,
marketable and exclusive title to and undisputed possession of all of the Assets
(other than the Real Property, the Real Property Leases, the Contracts, the
Permits and the Intellectual Property, which are covered by other
representations and warranties in this Agreement). The Assets are now owned by
the Company free and clear of all Liens other than the Permitted Exceptions. The
Assets will, as of the Closing, be owned by the Company free and clear of all
Liens other than the Permitted Exceptions.
(b) Condition. The Personal Property is in reasonably good
condition, ordinary wear and tear excepted, adequate and suitable for the
operation of each Station as it
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is currently being operated, and in proper condition and repair so that such
Station can operate according to the FCC Licenses, the rules, regulations and
policies of the FCC and in all other respects in compliance with the Act and all
other applicable federal and state laws.
(c) Insurance. The Assets are 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. Except for the Excluded Assets, the
Assets include all of the assets, which are sufficient in nature, condition and
quantity, necessary to permit Citadel to operate each Station immediately upon
the Closing in the ordinary course of business and consistent with the past
practices of the Company. The Company has not, since December 31, 1998, removed,
or permitted the removal of, any material item of Personal Property from any
Station other than removals in the ordinary course of business which were not
done in contemplation of the transactions contemplated by this Agreement.
(e) Real Property Leases.
(i) 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. The Company will as of the Closing have a valid leasehold interest
in each of the Leaseholds.
(ii) None of the Leaseholds is subject to any
covenant or restriction preventing or limiting in any respect the consummation
of the transactions contemplated hereby. The Company's right, title and interest
in and to the Leaseholds will at the Closing be held by the Company free and
clear of all Liens other than the Permitted Exceptions.
(iii) The use for which the Leaseholds are zoned
permits the use thereof for the Business consistent with past practices. The use
and occupancy of the Leaseholds by the Company are in compliance in all material
respects with all regulations, codes, ordinances and statutes applicable to the
Company and the Business, and the Company 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 the Company, and,
to the knowledge of the Partners, no facts relating to any other party, that
would prevent the Leaseholds from being occupied and used by Citadel after the
Closing Date in the same manner as immediately prior to the Closing.
(v) There is not under any Real Property Lease any
material default by the Company or any condition that with notice or the passage
of time or both would constitute such a default, and the Company has not
received any notice asserting the existence of any such default or condition.
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(vi) Each Real Property Lease is valid and binding
and in full force and effect as to the Company, and to the knowledge of the
Partners, 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 the Company has a leasehold interest or other non-fee interest
or right (whether as lessor or lessee) and which is or will prior to the Closing
be used in the operation of the Stations.
(f) Real Property.
(i) The Asset Schedule contains an accurate
description of the location of each parcel of the Real Property and the type of
facility located on each such parcel. The Company will as of the Closing have
good and marketable title to the Real Property, in fee simple, subject only to
the Permitted Exceptions.
(ii) None of the Real Property is subject to any
covenant or restriction preventing or limiting in any respect the consummation
of the transactions contemplated hereby. The Company's right, title and interest
in and to the Real Property will at the Closing be held by the Company free and
clear of all Liens except the Permitted Exceptions.
(iii) The use for which the Real Property is zoned
permits the use thereof for the Business consistent with past practices. The use
and occupancy of the Real Property by the Company are in compliance in all
material respects with all regulations, codes, ordinances and statutes
applicable to the Company and the Business, and the Company 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 condemnation proceedings or eminent
domain proceedings of any kind pending or, to the knowledge of the Partners,
threatened against the Real Property.
(v) All of the Real Property is occupied under a
valid and current certificate of occupancy or similar permit (to the extent
required by applicable law). To the knowledge of the Partners, there are no
facts that would prevent the Real Property from being occupied and used by
Citadel after the Closing Date in the same manner as immediately prior to the
Closing.
(vi) The Real Property constitutes all of the real
property which is owned by the Company and which is or will prior to Closing be
used in the operation of the Stations.
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3.8 Contractual and Other Obligations. Neither the Company, nor, to the
knowledge of the Partners, 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. Originals or true, correct and complete copies
of all written Contracts listed in the Asset Schedule have been provided to
Citadel as of the date of this Agreement.
3.9 Compensation. Set forth in Partners' Disclosure Schedule is a list
of (a) all agreements between the Company and its employees or other Persons
providing services for compensation with regard to the Stations, whether
individually or collectively, and (b) all employees of the Company or other
Persons providing services for the Company with respect to the Stations entitled
to receive annual compensation in excess of $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. The Company has not informed any such employee or
other Person that such Person will receive any increase in compensation or
benefits or any ownership interest in the Company, Citadel, the Business or
Citadel's business. All current employees of the Company are "at will" employees
and may be terminated by the Company at any time, without liability or
obligation except the payment of normal compensation accrued up to the time of
termination of employment.
3.10 Employee Benefit Plans.
(a) The Company does not maintain or sponsor, nor is it
required to make contributions to or to pay benefits from, any pension,
profit-sharing, savings, bonus, incentive or deferred compensation, severance
pay, medical, life insurance, welfare or other employee benefit plan which
affects the employees working, or who formerly worked, at any Station. None of
the plans, funds, policies, programs, arrangements or understandings of the
Company is a "multiemployer plan" (within the meaning of Section 3(37) of
ERISA). Neither the Company nor any ERISA affiliate of the Company has ever
contributed to or had the obligation to contribute to any multiemployer plan.
Partners' Disclosure Schedule fully discloses all of the plans, funds, policies,
programs, arrangements or understandings, whether oral or in writing, sponsored
or maintained by the Company pursuant to which any employee or former employee
of any Station (or any dependent or beneficiary of any such employee) might be
or become entitled to (1) retirement benefits; (2) severance or separation from
service benefits; (3) incentive, performance, stock, share appreciation or bonus
awards; (4) health care benefits; (5) disability income or wage continuation
benefits; (6) 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 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 with respect to
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each Station: (A) all amounts due as contributions, insurance premiums and
benefits to the date hereof have been fully paid by the Company; (B) all
applicable requirements of law have been observed with respect to the
establishment, operation and, if applicable, the termination thereof, and all
applicable reporting and disclosure requirements have been timely satisfied; (C)
no claim or demand has been made by any employee (or beneficiary or dependent of
any employee) for benefits (other than routine claims for benefits), or by any
taxing authority for taxes or penalties which has not been satisfied in full or
which may be or become subject to litigation or arbitration; (D) any such plan
represented by the Company to a "qualified" retirement plan satisfies, in both
form and operation, the applicable requirements of Section 401(a) of the Code;
and (E) any such plan may be terminated at any time without material liability
resulting from such action.
(b) The Company has no obligation to provide health or other
welfare benefits to any of its former, retired or terminated employees, except
as specifically required under Section 4980B of the Code. The Company has
complied with any applicable notice and continuation requirements of Section
4980B of the Code and the regulations thereunder.
3.11 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, or the terms and conditions of
employment, wages (including overtime compensation) and hours of, the Company.
The Company is not engaged in any unfair labor practice or other unlawful
employment practice and there are no charges of unfair labor practices or other
employee-related complaints pending or threatened against the Company or any
Station before the National Labor Relations Board, the Equal Employment
Opportunity Commission, the Occupational Safety and Health Review Commission,
the Department of Labor or any other Governmental Authority. The Company is not
bound by any collective bargaining agreement with respect to its employees.
There is no strike, picketing, slowdown or work stoppage or organizational
attempt pending against or, to the knowledge of the Partners, threatened against
or involving any Station. No issue with respect to union representation is
pending or, to the knowledge of the Partners, threatened with respect to the
employees of the Company or any Station.
3.12 Increases in Compensation or Benefits. Subsequent to December 31,
1998, there have been no increases in the compensation payable or to become
payable to any of the employees of the Company, nor has the Company paid or
provided for any awards, bonuses, stock options, loans, profit-sharing, pension,
retirement or welfare plans or similar or other payments or arrangements for or
on behalf of such employees in each case other than (a) pursuant to currently
existing plans or arrangements set forth in Partners' Disclosure Schedule or (b)
as was required from time to time by governmental legislation affecting wages.
The vacation policies of the Company are set forth in Partners' Disclosure
Schedule. No employee of the Company 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.
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3.13 Insurance. The Company maintains insurance policies covering all
of its properties and assets and the various occurrences which may arise in
connection with the operation of the Stations, each of which policies is
summarized in Partners' Disclosure Schedule. Such policies maintained by the
Company are in full force and effect and all installments of premiums due
thereon have been paid in full. There are no notices of any pending or
threatened termination or premium increases with respect to any of such policies
maintained by the Company. There has been no casualty loss or occurrence to the
Company which may give rise to any claim of any kind not covered by insurance,
and the Company is not aware of any casualty occurrence to the Stations which
may give rise to any claim of any kind not covered by insurance. No third party
has filed any claim against the Company for personal injury or property damage
of a kind for which liability insurance is generally available which is not
fully insured, subject only to the standard deductible.
3.14 Litigation; Disputes. There are no claims, disputes, actions,
suits, investigations or proceedings pending or, to the knowledge of the
Partners, threatened against or affecting the Company, the Partnership Interests
or any Station or that is reasonably likely to prevent or hinder the
consummation of the transactions contemplated hereby and, to the knowledge of
the Partners, there is no basis for any such claim, dispute, action, suit,
investigation or proceeding. The Company is not in default in respect of any
judgment, order, writ, injunction or decree of any Governmental Authority with
respect to the Company or the operation of any Station.
3.15 Trade Receivables and Accounts Receivable. All Trade Receivables
and Accounts Receivable are reflected properly on the books and records of the
Company, are valid receivables subject to no setoffs or counterclaims, are
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts provided for in the
financial statements of the Company.
3.16 Environmental.
(a) Prior to the execution of this Agreement, the Partners
have provided to Citadel a true and correct copy of all environmental site
assessments, studies, tests, reports and communications which the Company or the
Partners have received relating to the Real Property and Leaseholds.
(b) To the knowledge of the Partners, (i) there are no
conditions, facilities, procedures or any other facts or circumstances that
constitute Environmental Noncompliance on the Real Property or any of the
Leaseholds and (ii) there is not constructed, placed, deposited, stored,
disposed of, nor located on any of the Real Property or 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) To the knowledge of the Partners, no structure,
improvements, equipment, fixtures, activities or facilities located on the Real
Property or any of the
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Leaseholds uses Hazardous Materials except those used in the ordinary course of
the Business and in compliance with applicable Environmental Laws.
(d) There have been no releases or threatened releases of
Hazardous Materials into the environment, or which otherwise contribute to
Environmental Conditions, arising in whole or in part from the activities of the
Company or, to the knowledge of the Partners, arising from any other activities
relating to the Real Property or any of the Leaseholds, except to the extent
that such releases or threatened releases do not constitute a condition of
Environmental Noncompliance.
(e) There are no underground storage tanks, or underground
piping associated with tanks, used for the management of Hazardous Materials,
and no abandoned underground storage tanks at the Real Property or, to the
knowledge of the Partners, at any of the Leaseholds.
(f) The Company is not subject to any Environmental Claims,
and to the knowledge of the Partners no Environmental Claims have been
threatened against the Company nor, to the knowledge of the Partners, is there
any basis for any such Environmental Claims.
3.17 Permits; Compliance with Applicable Law.
(a) General. The Company is not in default under any statutes,
ordinances, regulations, orders, judgments and decrees of any Governmental
Authority applicable to it or to the Business or the Assets as to which a
default or failure to comply might result in any material adverse change in the
condition, financial or otherwise, of the Assets or the Business. The Partners
have 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. The Company 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 Partners' Disclosure Schedule is a
complete and accurate list of the FCC Licenses and all other material Permits
held by the Company and applicable to the Stations. Each Station is operating in
accordance with the Act and its FCC Licenses and in compliance with the Act and
the rules, regulations and policies of the FCC. The Permits set forth in
Partners' Disclosure Schedule are all of the material Permits required for the
conduct of the Business conducted by the Stations. All of the Permits held by
the Company are in full force and effect, and the Company has not engaged in any
activity which would cause or permit revocation or suspension of any such
Permit, and to the knowledge of the Partners, no action or proceeding looking to
or contemplating the revocation or suspension of any such Permit is pending or
threatened. There are no existing defaults or events of default or events or
state of facts which with notice or lapse of time or both would constitute a
default by the Company or any other Person under any such Permit.
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3.18 Intellectual Property. To the knowledge of the Partners, the use
of the Intellectual Property in connection with the operation of the Stations or
otherwise by the Company does not infringe upon the proprietary rights of any
other Person. To the knowledge of the Partners, Citadel will, upon consummation
of the transactions contemplated by this Agreement, possess adequate rights,
licenses and other authority to use the Intellectual Property used by the
Stations in the operation of the Stations following the Closing in the manner
now operated, without infringement or unlawful or improper use of any of the
Intellectual Property. No Partner, officer or employee of the Company has any
interest in any of the Intellectual Property, all of which will, as of the
Closing, be free and clear of all Liens. The Partners have no knowledge of any
infringement by any Person upon the rights of the Company with respect to the
Intellectual Property. The Company has not granted any outstanding licenses or
other rights to any of the call letters, copyrights, trademarks, trade names or
other similar rights with regard to any of the Intellectual Property.
3.19 Books and Records. The books of account of the Company fairly and
accurately reflect in all material respects its income, expenses, assets and
liabilities and have been maintained in accordance with good business practices.
All of such books and records will be located on the date of the Closing on the
business premises of the Stations. The Company's partnership books and records
accurately reflect in all material respects all actions taken by the Company's
partners, including all issuances and transfers of partnership interests in the
Company. Partners' Disclosure Schedule lists all of the current officers of the
Company.
3.20 Related Party Obligations. No officer, partner or Affiliate of the
Company, or any individual related by blood or marriage to any such Person, or
any entity in which any such Person or individual owns any beneficial interest,
is a party to any agreement, contract, commitment, promissory note, loan, any
other actual or proposed transaction with the Company or has any interest in any
property used by the Company which is material to the operation of the Stations.
3.21 Year 2000 Compliance. All hardware and software constituting part
of the Assets shall be able to accurately process date/time data (including, but
not limited to, calculating, comparing and sequencing) from, into, and between
dates within 1995 and 2005 inclusive and, to the knowledge of the Partners, leap
year calculations to the extent that other information technology, used in
combination with the information technology being acquired, properly exchanges
date/time data with it.
3.22 Disclosure. To the knowledge of the Partners, no representation or
warranty made under this Section 3 and none of the information furnished by the
Partners 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.
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SECTION 4
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF CAT
In connection with the purchase and sale of CAT's Partnership Interest
and in order to induce Citadel to enter into and consummate the transactions
contemplated by this Agreement, CAT makes the following representations and
warranties to Citadel as of the date of this Agreement (except (i) for
representations and warranties expressly and specifically relating to a time or
times other than the date hereof, which shall be made as of the specified time
or times, and (ii) with respect to any representation and warranty, to the
extent expressly and specifically disclosed in the section of Partners'
Disclosure Schedule which corresponds to such representation and warranty):
4.1 CAT. CAT is a corporation duly organized, validly existing and in
good standing under the laws of the State of Oklahoma and has full power and
authority (a) to own its assets and properties and to conduct its business and
(b) to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by CAT, the performance by
CAT of its covenants and agreements hereunder and the consummation by CAT of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of CAT. This Agreement has been duly executed and delivered
by CAT and constitutes the valid and legally binding agreement of CAT,
enforceable against it in accordance with its terms. Set forth in Partners'
Disclosure Schedule is a list of the current record and beneficial owners of
shares of capital stock of CAT, including their percentage ownership of CAT.
4.2 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 organizational documents of CAT, 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 CAT is a party or by which CAT or any of the assets of CAT
(including its Partnership Interest) is bound. Except for the FCC Approval and
compliance with the HSR Act, no consents, approvals or authorizations of, or
filings with, any Governmental Authority or any other Person are required on the
part of CAT in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.
4.3 Ownership of Partnership Interest. CAT owns, beneficially and of
record, its Partnership Interest (representing a 58% partnership interest in the
Company), free and clear of all Liens.
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4.4 Disclosure. To the knowledge of CAT, no representation or warranty
made under this Section 4 and none of the information furnished by CAT 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
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF DESERT
In connection with the purchase and sale of Desert's Partnership
Interest and in order to induce Citadel to enter into and consummate the
transactions contemplated by this Agreement, Desert makes the following
representations and warranties to Citadel as of the date of this Agreement
(except (i) for representations and warranties expressly and specifically
relating to a time or times other than the date hereof, which shall be made as
of the specified time or times, and (ii) with respect to any representation and
warranty, to the extent expressly and specifically disclosed in the section of
Partners' Disclosure Schedule which corresponds to such representation and
warranty):
5.1 Desert. Desert is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full power
and authority (a) to own its assets and properties and to conduct its business
and (b) to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Desert, the
performance by Desert of its covenants and agreements hereunder and the
consummation by Desert of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of Desert. This Agreement has
been duly executed and delivered by Desert and constitutes the valid and legally
binding agreement of Desert, enforceable against it in accordance with its
terms. FINOVA owns all of the issued and outstanding shares of capital stock of
Desert.
5.2 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 organizational documents of Desert, 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 Desert is a party or by which Desert or any of
the assets of Desert (including its Partnership Interest) is bound. Except for
the FCC Approval and compliance with the HSR Act, no consents, approvals or
authorizations of, or filings with, any Governmental Authority or any other
Person are required on the part of Desert in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
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5.3 Ownership of Partnership Interest. Desert owns, beneficially and of
record, its Partnership Interest (representing a 42% partnership interest in the
Company), free and clear of all Liens.
5.4 Disclosure. To the knowledge of Desert, no representation or
warranty made under this Section 5 and none of the information furnished by
Desert set forth in this Agreement or in the schedules or exhibits to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements in this Agreement or in the
schedules or exhibits to this Agreement not misleading.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF CITADEL
In connection with the purchase and sale of the Partnership Interests
and in order to induce the Partners to enter into and consummate the
transactions contemplated by this Agreement, Citadel makes the following
representations and warranties to the Partners as of the date of this Agreement
(except for representations and warranties expressly and specifically relating
to a time or times other than the date hereof, which shall be made as of the
specified time or times):
6.1 Organization and Qualification; Authority. Citadel is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has full power and authority (a) to own its assets and
properties and to conduct its business and (b) to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Citadel, the performance by Citadel of its covenants and
agreements hereunder and the consummation by Citadel of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of Citadel. This Agreement has been duly executed and delivered by Citadel
and constitutes the valid and legally binding agreement of Citadel, enforceable
against it in accordance with its terms.
6.2 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 any law, rule, regulation, writ, judgment, injunction,
decree, determination, award or other order of any Governmental Authority, or
violates or will violate, or conflicts with or will conflict with, or will
result in any breach of any of the terms of, or constitutes or will constitute a
default under or results in or will result in the termination of or the creation
or imposition of any Lien pursuant to the terms of, any contract, commitment,
agreement, understanding or arrangement of any kind to which Citadel is a party
or by which Citadel or any of its assets is bound. Except for the FCC Approval,
compliance with the HSR Act and the consents disclosed in Citadel's Disclosure
Schedule, no consents, approvals or authorizations of, or filings with, any
Governmental Authority or any other Person are required on the part of Citadel
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
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6.3 Litigation. There is no litigation, proceeding or investigation
pending or, to the knowledge of Citadel, threatened against or affecting Citadel
that is reasonably likely to prevent or hinder the consummation of the
transactions contemplated by this Agreement.
6.4 Qualifications. To the knowledge of Citadel, there is no fact that
would, under present law (including without limitation the Act) and the present
rules, regulations and policies of the FCC and the U.S. Department of Justice,
disqualify Citadel or Citadel License, Inc., a wholly owned subsidiary of
Citadel, from being the assignee of the FCC Licenses or the owner and operator
of the Stations.
6.5 Available Funds. Citadel has, or will have on the Closing Date,
sufficient funds available to pay the Purchase Price on the Closing Date.
6.6 Disclosure. To the knowledge of Citadel, no representation or
warranty made under this Section 6 and none of the information furnished by
Citadel set forth in this Agreement or in the schedules or exhibits to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements in this Agreement or in the
schedules or exhibits to this Agreement not misleading.
SECTION 7
AFFIRMATIVE COVENANTS OF THE PARTNERS
From and after the date of this Agreement and until the Closing, the
Partners jointly and severally covenant and agree to, and to cause the Company
to:
7.1 Compliance with Law. Comply with all applicable laws and
regulations required for the valid and effective consummation of the
transactions contemplated hereby.
7.2 Payment of Obligations. Fully discharge all Obligations of the
Company (including without limitation Indebtedness for Borrowed Money and other
long-term debt and capitalized lease obligations) on a timely basis so that (a)
the Obligations of the Company existing as of the Closing Date consist solely of
(i) current liabilities, obligations under Contracts listed on the Asset
Schedule and obligations under other executory contracts and commitments which
are reasonable and customary in the radio broadcasting industry, (ii) Permitted
Debt and (iii) the Net Profits Amount; (b) Permitted Debt does not exceed
$15,000,000; (c) the Net Profits Amount does not exceed $8,000,000; and (d) Net
Working Capital is not less than zero. Not less than five business days before
the Closing Date, the Partners shall deliver to Citadel a payoff letter from
FINOVA with respect to the Permitted Debt. Such payoff letter shall be in form
and substance satisfactory to Citadel and shall
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include (x) the amount of Permitted Debt due as of the Closing Date, (y) wire
instructions for the payment thereof and (z) a statement that all FINOVA Liens
will be released immediately upon the payment in full of such Permitted Debt
(and a copy of all release documents shall be attached to the payoff letter).
7.3 Access. Afford Citadel and its authorized representatives, upon
reasonable notice, reasonable access during normal business hours to the
Stations and the Stations' employees, and permit Citadel and its authorized
representatives to examine all operations, equipment, properties and other
assets, logs, books, relevant records, contracts and documents pertinent to the
Stations; provided, however, that in each instance mutually satisfactory
arrangements shall be made in advance in order to avoid interruption and to
minimize interference with the normal business and operations of the Stations.
7.4 Preservation of Organization. Operate the Business and the Stations
in the ordinary course, consistent with past practices, and exercise all
reasonable efforts to preserve the business organization of the Stations intact
and 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 the Company or the Partners to expend money in fulfillment of the
obligations set forth in this Section 7.4 other than those expenditures that the
Company would have made in the ordinary course of the business of the Stations
and consistent with past practices.
7.5 Books and Records. Maintain the books and records of the Company 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 or its counsel, accountants or other authorized
representatives may from time to time reasonably request.
7.6 Employees. Pay as and when the same shall become due and payable
any amounts owed by the Company to its employees who have performed services up
to the time of Closing, whether fixed or accrued, for wages, vacation pay, sick
pay, severance pay, employee benefits, damages and otherwise, except to the
extent such items constitute current liabilities reflected in Net Working
Capital.
7.7 Compliance with FCC Matters. Comply with the FCC Licenses
applicable to the Stations and with the provisions of the Act, the rules,
regulations and policies of the FCC, and comply in all material respects with
all other laws, ordinances, regulations, rules and orders of any Governmental
Authority applicable to the Company or to any Station.
7.8 Taxes. File all federal, state and municipal tax returns, reports
and declarations required to be filed by the Company prior to the Closing, and
satisfy all Taxes related thereto which are due on or before the Closing Date.
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7.9 Supplemental Financial Statements. Provide Citadel with copies of
the monthly unaudited income statements and balance sheets of the Company
prepared by the Company in the ordinary course of business commencing with the
month ended July 31, 1999 until Closing (collectively, the "Supplemental
Financial Statements"). The Partners shall provide such Supplemental Financial
Statements to Citadel promptly upon such Supplemental Financial Statements
becoming available to the Company. The Supplemental Financial Statements shall
be subject to the representations and warranties as set forth in Section 3.3.
7.10 Further Information. Furnish to Citadel such financial (including
tax), legal and other information with respect to the Company, the Business and
the Stations as Citadel or its representatives may from time to time reasonably
request.
7.11 Notice. Promptly notify Citadel in writing upon the occurrence or
the nonoccurrence of any event which does then, or which upon the passing of
time or the giving of notice would, constitute a breach of or default under, or
render misleading or untrue in any material respect, any agreement, covenant,
representation or warranty made by the Partners in this Agreement.
7.12 Consents. Exercise all reasonable efforts to obtain, prior to the
Closing, the consent and approval (in a form reasonably approved by Citadel) of
any third parties whose consent or approval is necessary in connection with the
consummation of the transactions contemplated hereby, with respect to the
Contracts set forth on Partners' Disclosure Schedule and requiring such consent.
If any such consent or approval is not obtained, the Partners will use
commercially reasonable efforts (not involving the payment of money to any
Person) to secure an arrangement satisfactory to Citadel intended to provide for
Citadel following the Closing the benefits under each Contract for which such
consent or approval is not obtained; provided, however, that Citadel shall have
the right to terminate this Agreement as a result of any failure by the Partners
to obtain a consent or approval for each of the Contracts marked with an
asterisk on Partners' Disclosure Schedule (collectively, the "Mandatory
Consents"), if alternative arrangements are not satisfactory to Citadel. The
Partners shall also execute a consent, in a form provided by Citadel, allowing
Citadel to assign all of its rights under this Agreement and any related
documents to one or more of Citadel's lenders upon default by Citadel under the
relevant loan documents.
Nothing in this Agreement will constitute a transfer or an attempted
transfer of any 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.
7.13 Trade Schedule. Deliver to Citadel at the Closing an accurate
schedule of Trade Liabilities and Trade Receivables existing as of the Closing.
The Partners shall exercise reasonable efforts to minimize the amount of
additional Trade Liabilities incurred after the date of this Agreement.
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7.14 Phase I Site Assessments and Other Reports. Permit Citadel to
perform or commission Phase I Site Assessments of the Real Property and such
other studies, tests or reports of the Real Property and Leaseholds as Citadel
and/or its lenders may reasonably require. Copies of the written reports and/or
results shall be delivered to the Partners and to Citadel promptly after they
become available to any party. Such assessments, studies, tests and reports
shall be performed by an environmental company reasonably acceptable to Citadel
and its lenders, and the cost and expense shall be paid by Citadel. If any of
the assessments, studies, tests or reports indicate that additional testing
should be done, such testing shall be done prior to the Closing at the cost and
expense of the Partners. If any of the assessments, studies, tests or reports
indicate that any Real Property contains one or more conditions of Environmental
Noncompliance, the Partners shall promptly commence remedial action to cure the
conditions, and shall cure the conditions, prior to Closing (at the cost and
expense of the Partners); provided, however, that if the estimated cost and
expense of such remedial action(s) exceed in the aggregate $500,000, then the
Partners shall not be obligated to commence such remedial action to cure the
conditions, and Citadel shall be permitted, at its option, to terminate this
Agreement (without any party having liability as a result of such termination).
7.15 Title Insurance and Surveys. Permit Citadel to cause each parcel
of the Real Property to be surveyed by a registered professional surveyor (who
shall be reasonably acceptable to Citadel). Such ALTA surveys (which shall be in
form satisfactory to remove the standard survey exception from the Owner's and
Mortgagee's title insurance policies) shall be delivered to Citadel and the
Partners at least 10 days prior to the Closing. The cost and expense of such
surveys shall be paid by Citadel. In addition, the Partners 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 and its lenders in their reasonable judgment. Prior to the Closing, the
Partners shall furnish to such title insurance company such documentation as may
be reasonably required by it to issue extended Owner's and Mortgagee's title
insurance policies which shall additionally be without exception as to the
capacity, authority and execution of instruments by the Company.
7.16 Real Property Expenses. Ensure that all matters of title clearance
(other than the Permitted Exceptions) are completed (at the cost and expense of
the Partners) to the reasonable satisfaction of Citadel. Citadel shall be
responsible for the cost of title insurance premiums. Any and all realty
transfer taxes and documentary stamps (if any) payable to the State of Oklahoma
or any other Governmental Authority in connection with the Real Property and
arising out of the transactions contemplated hereby shall be split equally by
the Partners, on the one hand, and Citadel, on the other.
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SECTION 8
NEGATIVE COVENANTS OF THE PARTNERS
From and after the date of this Agreement and until the Closing, the
Partners shall not take, or cause or permit to be taken, and shall cause the
Company not to take, or cause or permit to be taken, any of the following
actions without the prior approval of Citadel, which may not be unreasonably
withheld:
8.1 Sales, Transfers and Liens. Make any sale, transfer, assignment,
conveyance, mortgage, hypothecation, encumbrance or other placement of any Lien
on any of the Assets, except in the ordinary course of business and which do not
materially interfere with the operations of the Stations, and which, in the case
of a sale, transfer or assignment, is replaced with 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; provided, however, that the
Company shall be permitted to transfer the Excluded Assets.
8.2 Contracts. Amend, terminate or renew any of the Contracts listed on
Partners' Disclosure Schedule (including any renewal resulting from the failure
to provide, after the date of this Agreement, timely notice of nonrenewal as
required by the terms of any of such Contracts), other than in the ordinary
course of business (so long as notice is provided to Citadel).
8.3 Breaches; Defaults. Do any act or omit to do any act, or permit any
act or omission to occur, that will cause a breach of any contract, commitment
or obligation of it in any respect that would have a material adverse effect on
the Assets or the business operations of the Stations as presently conducted.
8.4 Obligations. Incur any Obligations (including without limitation
any additional Indebtedness for Borrowed Money) except in the ordinary course of
business in a manner consistent with past practices.
8.5 Salary Increases. Increase any salary, other payments, disbursement
or distributions in any manner or form to any employees of the Company except
(a) in the ordinary course of business consistent with past practices, (b) in
accordance with the existing terms of contracts entered into prior to the date
of this Agreement or (c) bonuses to be paid to certain employees as described in
Section 3.9 of Partners' Disclosure Schedule.
8.6 Non-Solicitation. Directly or indirectly solicit or negotiate with
any Person (other than a party hereto) or accept any proposal to acquire the
Company or any of the Stations in whole or in part, including without limitation
an acquisition of all or substantially all of the assets of the Company or any
equity in the Company (including the Partnership Interests). Prior to the
Closing, the Partners shall not sell, assign, pledge or otherwise transfer any
of the Partnership Interests.
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8.7 Issuance of Securities. Issue any partnership interests in or any
other securities of the Company.
SECTION 9
COVENANTS OF CITADEL
From and after the date of this Agreement and until the Closing,
Citadel covenants and agrees with the Partners as follows:
9.1 Compliance with Law. Citadel shall comply with all applicable laws
and regulations required for the valid and effective consummation of the
transactions contemplated hereby.
9.2 Notice. Citadel shall promptly notify the Partners in writing upon
the occurrence or the nonoccurrence of any event which does then, or which upon
the passing of time or the giving of notice would, constitute a breach of or
default under, or render misleading or untrue in any material respect, any
agreement, covenant, representation or warranty made by Citadel in this
Agreement.
9.3 Retention of Employees. Citadel currently anticipates retaining
substantially all of the employees of the Company from and after the Closing.
9.4 Non-Solicitation of Employees. In the event this Agreement is
terminated for any reason, Citadel shall not, for a period of one year after
such termination, solicit for employment, attempt to employ or actively assist
any other Person in employing or soliciting for employment any Person who is
employed by the Company at or within six months prior to the time of such
termination.
SECTION 10
ADDITIONAL COVENANTS OF THE PARTIES
10.1 Application for Transfer of Control. As promptly as practicable
after the date of this Agreement, and in no event later than 10 days after the
date of this Agreement, the Partners shall cause the Company to file, together
with Citadel, an application (the "FCC Application") with the FCC to approve the
transfer of control of the Stations from the Company to Citadel (the "FCC
Approval"). Citadel shall have primary responsibility for filing the FCC
Application. The parties agree that they shall jointly 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. The Partners and Citadel shall
each take all necessary actions on its part to
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obtain the FCC Approval. Citadel shall advance the filing fee for the FCC
Application, and the Partners shall reimburse Citadel for one-half of such
filing fee at the Closing (or upon the earlier termination of this Agreement).
Subject to Section 16.7, all other costs and expenses incurred by each party in
connection with the filing and prosecution of the FCC Application shall be paid
by the party incurring the cost or expense.
10.2 Brokerage. Each of the parties hereto represents and warrants to
each other that, except for Broker, no Person has provided services as a broker,
agent or finder in connection with the transactions contemplated by this
Agreement. As between the parties hereto, the Partners are fully responsible for
the payment of, and shall pay at the Closing, the entire broker's fee due to
Broker in connection with the transactions contemplated hereby. Each of the
parties hereto shall each indemnify and hold harmless the other parties hereto
for any and all claims or expenses, including attorneys' fees, asserted by any
Person purporting to act on behalf of the respective indemnitor as a broker,
agent or finder in connection with the transactions contemplated by this
Agreement.
10.3 Risk of Loss. If any loss or damage to any of the Assets occurs
prior to the Closing (i) which has a material adverse effect on any Station and
(ii) such loss or damage is not susceptible of repair, replacement or
restoration with sufficient, collectible insurance proceeds available for such
purposes or by the Partners at their sole cost and expense to substantially the
same condition as existed before such loss or damage, then the parties shall
adjust the Purchase Price to reflect the diminution in value of such Station
attributable to the impairment of such assets.
10.4 Actions With FCC. In the event any investigation, order to show
cause, notice of violation, notice of apparent liability or a forfeiture,
material complaint, petition to deny or informal objection is instituted or
filed against any party hereto (whether in connection with the proceedings to
approve the FCC Application or otherwise), such party shall promptly notify the
other parties 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.
10.5 Cooperation. During the seven-year period immediately following
the Closing, Citadel shall cooperate with the Partners in providing them all
information reasonably requested and permitting them access to all records
relating to the period of ownership of the Stations prior to the Closing. The
cost and expense in providing or permitting access to information hereunder
shall be borne by the Partners. The Partners, as a condition to being provided
with access to information hereunder, shall, at the request of Citadel, execute
a confidentiality agreement in form and substance acceptable to Citadel in its
reasonable discretion. Notwithstanding the foregoing, Citadel may discard any
such records during such seven-year period if (i) Citadel notifies the Partners
of Citadel's intent to discard such records and (ii) the Partners do not, within
10 days after receipt of such notice, retrieve such records from Citadel's
premises. Notwithstanding anything to the contrary herein, the Partners may
retain, subject to the confidentiality provisions set forth in Section 10.7,
copies of such books and records of the Company as are necessary for the
Partners' tax reporting purposes and to calculate Net Working Capital.
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10.6 HSR Filing. As promptly as practicable after the date of this
Agreement, and in no event later than 30 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 the
Partners shall reimburse Citadel for one-half of such filing fee at the Closing
(or upon the earlier termination of this Agreement). Subject to Section 16.7,
all other costs and expenses incurred by each party in connection with the
filing and prosecution of any HSR Filing shall be paid by the party incurring
the cost or expense.
10.7 Confidentiality. Each of the parties hereto will hold in
confidence, and will cause its respective directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
Affiliates to hold in confidence, all non-public information received from
another party hereto (collectively, "Confidential Information"); provided,
however, that the term "Confidential Information" does not include any
information which (a) at the time of disclosure or thereafter is generally
available to and known by the public (other than as a result of a disclosure
directly or indirectly by the party hereto which received such information (the
"Recipient")), (b) was available to the Recipient from a source other than the
other parties hereto or (c) has been independently acquired or developed by the
Recipient without violating any of its obligations under this Agreement. The
obligation to keep Confidential Information confidential shall not apply to any
information that is required to be disclosed pursuant to any court action or any
proceeding before a Governmental Authority. In the event this Agreement is
terminated for reason, each party hereto, upon the request of another party
hereto, shall promptly return to the requesting party all copies of Confidential
Information in its possession and shall destroy all analysis, studies and
documents prepared by it which contain any Confidential Information.
10.8 Public Announcements. Citadel and the Partners will consult with
each other before issuing, and provide each other the opportunity to review,
comment upon and concur with, any press release or other public statements with
respect to the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange or the National Association of Securities Dealers, Inc. The parties
agree that the initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties.
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10.9 No Inconsistent Action. No party hereto shall take any action (a)
inconsistent with its obligations under this Agreement or (b) that would hinder
or delay the consummation of the transactions contemplated by this Agreement.
10.10 Transfer of Excluded Assets. Immediately prior to the Closing,
the Partners shall cause the Company to transfer the Excluded Assets to CAT or
otherwise satisfy all obligations relating to the Excluded Assets, pursuant to
binding agreements in form and substance reasonably satisfactory to Citadel.
10.11 Net Profits Interest. At least three business days before the
Closing Date, the Partners shall deliver to Citadel a certificate of the
Partners (the "Net Profits Certificate") which sets forth a true and correct
calculation of the amount due at the Closing under each Net Profits Agreement.
At the Closing, the Partners shall deliver to Citadel an agreement (in form and
substance reasonably acceptable to Citadel) executed by each Person who is a
party to a Net Profits Agreement (other than the Company), which agreement,
effective immediately upon receipt by such Person of the payment specified in
the Net Profits Certificate, (a) terminates such Person's Net Profits Agreement
and (b) releases the Company and Citadel from any and all obligations and
liability relating to such Person's Net Profits Agreement.
10.12 Termination of Plans. Prior to the Closing, the Partners shall
cause the Company to terminate, effective no later than immediately prior to the
Closing, the Caribou Communications C.L. Employees 401(k) Plan. No distributions
shall be made from such plan until receipt of a favorable determination letter
from the Internal Revenue Service. In addition, prior to the Closing, the
Partners shall cause the Company to terminate, effective as of the Closing, all
"employee welfare benefit plans" as defined in Section 3(1) of ERISA and all
insurance contracts attendant to such plans. Such terminations shall be made in
accordance with the applicable plans and all applicable law.
10.13 Audited Financial Statements. The Partners recognize that Citadel
and its parent, CCC, are public reporting companies and agree that Citadel shall
be entitled at its expense to cause audited and unaudited financial statements
of the Stations to be prepared for such periods and filed with the Securities
and Exchange Commission, and included in a prospectus distributed to prospective
investors, as required by laws and regulations applicable to Citadel and CCC as
public reporting companies or registrants. The Partners agree to cooperate, and
to cause the Company to cooperate, with Citadel and the auditing accountants as
reasonably required by Citadel in connection with the preparation and filing of
such financial statements, including providing a customary management
representation letter in the form prescribed by GAAP.
10.14 CAT Distributions. From and after the Closing, CAT shall not
distribute to any Person all or any portion of the Purchase Price it receives
pursuant to this Agreement unless such Person (or a substitute Person acceptable
to Citadel in its reasonable discretion) agrees, in a written instrument in
favor of Citadel and in form and substance reasonably satisfactory to Citadel
(an "Indemnification Guaranty"), to unconditionally guarantee the
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payment when due of all of CAT's indemnification obligations under Section 14;
provided, however, such Person's (or, if applicable, such substitute Person's)
obligations under the Indemnification Guaranty shall not exceed the greater of
(a) the sum of (i) the aggregate amount distributed by CAT to such Person from
the Purchase Price and (ii) the Net Profits Amount received by such Person, if
any, or (b) an amount equal to such Person's current percentage ownership of CAT
as set forth on Partners' Disclosure Schedule, multiplied by 58%, multiplied by
the sum of the Purchase Price and the Net Profits Amount. Prior to Closing, CAT
shall obtain and deliver to Citadel an executed Indemnification Guaranty from
each of J. Kent Nichols, J. Larry Nichols, John W. Nichols and Betty Street. For
purposes of this Section 10.14, a "distribution" shall be deemed to include any
payment made by CAT, including without limitation a dividend, loan, advance,
return of capital and repayment of indebtedness.
SECTION 11
THE CLOSING
11.1 Closing Date. The Closing shall occur on the later of (a) January
6, 2000 or (b) a date mutually selected by the Partners and Citadel which is
within 10 business days following the later of (i) the date on which the FCC
Approval has become a Final Order or (ii) the date on which all applicable
waiting periods under the HSR Act have expired or been terminated. The Closing
shall begin at 10:00 a.m., local time, on the date of the Closing (the "Closing
Date") at the offices of Eckert Seamans Cherin & Mellott, LLC, 600 Grant Street,
44th Floor, Pittsburgh, Pennsylvania 15219, counsel for Citadel, or at such
other time and place as the parties may agree in writing.
11.2 Actions to be Taken at the Closing. The following actions shall be
taken at the Closing:
(a) Delivery of Purchase Price. Citadel shall deliver to the
Partners the Purchase Price in accordance with Section 2.2.
(b) Delivery of Documents. Each of the parties shall deliver
to the other parties all agreements, certificates and other documents required
to be delivered by it pursuant to the terms of this Agreement or as a condition
precedent to the other parties' obligations under this Agreement, including
without limitation the following:
(i) The Partners shall execute and deliver
assignments with respect to the Partnership Interests.
(ii) The Partners shall deliver the executed
resignation of each officer of the Company.
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SECTION 12
CONDITIONS TO THE OBLIGATION OF THE PARTNERS
The obligation of the Partners to consummate the transactions
contemplated by this Agreement at the Closing is subject to the following
conditions precedent, any or all of which may be waived by them in their sole
discretion (other than those set forth in Sections 12.7 and 12.8):
12.1 Opinion of Citadel's Counsel. The Partners shall have received an
opinion of counsel for Citadel, dated the Closing Date, in form and substance
reasonably satisfactory to the Partners, as to the matters set forth on Exhibit
C hereto.
12.2 Representations, Warranties and Covenants. The representations and
warranties of Citadel contained herein shall be true and correct in all material
respects (determined without regard to materiality qualifications within all
such representations and warranties) 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 (determined without regard to
materiality qualifications within all such representations and warranties) at
and as of the time or times specified), and Citadel shall have complied in all
material respects (determined without regard to materiality qualifications
within all such covenants) with all of its covenants contained herein; and
Citadel shall have delivered to the Partners a certificate to that effect, dated
the Closing Date, signed by an officer of Citadel.
12.3 Adverse Proceedings. No order, decree or judgment of any court,
agency or other Governmental Authority shall have been rendered against Citadel,
the Company or the Partners prohibiting the consummation of any of the
transactions contemplated by this Agreement in accordance with its terms.
12.4 Other Certificates. The Partners shall have received certificates
as to the good standing of Citadel in the States of Nevada and Oklahoma, each as
of a date not more than 20 days before the Closing, and such other certificates,
instruments and other documents, in form and substance reasonably satisfactory
to the Partners, as the Partners shall have reasonably requested in connection
with the transactions contemplated hereby.
12.5 Corporate Action. All corporate action necessary to authorize the
execution, delivery and performance by Citadel of this Agreement and the
transactions contemplated hereby shall have been duly and validly taken by
Citadel, and Citadel shall have delivered to the Partners certified copies of
the resolutions of Citadel's board of directors authorizing the execution and
performance of this Agreement and authorizing or ratifying the acts of their
officers and employees in carrying out the terms and provisions of this
Agreement.
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12.6 Acts to be Performed. Each of the covenants, acts and undertakings
of Citadel to be performed on or before the Closing Date pursuant to the terms
hereof shall have been duly performed in all material respects.
12.7 FCC Approval. The FCC Approval shall have been obtained and shall
have become a Final Order.
12.8 HSR Clearance. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
12.9 Consulting Agreement. Citadel shall have executed and delivered
the Consulting Agreement.
SECTION 13
CONDITIONS TO THE OBLIGATION OF CITADEL
The obligation of Citadel to consummate the transactions contemplated
by this Agreement at the Closing is subject to the following conditions
precedent, any or all of which may be waived by Citadel in its sole discretion
(other than those set forth in Sections 13.9 and 13.10):
13.1 Opinions of the Company's and the Partners' Counsel. Citadel shall
have received opinions of counsel for the Company and the Partners, dated the
Closing Date, in form and substance reasonably satisfactory to Citadel, as to
the matters set forth on Exhibit D hereto.
13.2 Representations, Warranties and Covenants. The representations and
warranties of the Partners contained herein shall be true and correct in all
material respects (determined without regard to materiality qualifications
within all such representations and warranties) 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 (determined without regard to
materiality qualifications within all such representations and warranties) at
and as of the time or times specified), and the Partners shall have complied in
all material respects (determined without regard to materiality qualifications
within all such covenants) with all of their covenants contained herein; and the
Partners shall have delivered to Citadel a certificate to that effect, dated the
Closing Date, signed by an officer of each of the Partners.
13.3 Adverse Proceedings. No order, decree or judgment of any court,
agency or other Governmental Authority shall have been rendered against Citadel,
the Company or the Partners prohibiting the consummation of any of the
transactions contemplated by this Agreement in accordance with its terms.
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13.4 Other Certificates. Citadel shall have received a certificate as
to the good standing of CAT as a corporation in the State of Oklahoma and a
certificate as to the good standing of Desert as a corporation in the State of
Delaware, each as of a date not more than 20 days before the Closing, and such
other certificates, instruments and other documents, in form and substance
reasonably satisfactory to Citadel, as Citadel shall have reasonably requested
in connection with the transactions contemplated by this Agreement.
13.5 Corporate Action. All corporate action necessary to authorize the
execution, delivery and performance by each of the Partners of this Agreement
and the transactions contemplated hereby shall have been duly and validly taken
by each of the Partners, and each of the Partners shall have delivered to
Citadel certified copies of the resolutions of the board of directors of each of
the Partners authorizing the execution and performance of this Agreement and
authorizing or ratifying the acts of their officers and employees in carrying
out the terms and provisions of this Agreement.
13.6 Acts to be Performed. Each of the covenants, acts and undertakings
of the Partners to be performed on or before the Closing Date pursuant to the
terms of this Agreement shall have been duly performed in all material respects.
13.7 Lien Searches. The Partners shall have delivered to Citadel lien
(including UCC and tax) and judgment (including litigation) searches from the
appropriate county and state agencies showing all Liens on the Assets, which
searches shall be conducted not more than 30 days prior to the Closing. Such
searches shall include the name of the Company, the Partners, the call letters
of each of the Stations, predecessors of any of the foregoing during the past
five years and any other names under which the Company has done business during
the past five years. The Partners may cause such searches to be prepared by a
third party, in which case the Partners shall not be responsible for any
inaccuracies in such searches unless the Partners have actual knowledge of their
inaccuracy. Notwithstanding the foregoing, the Partners shall remain responsible
for satisfying any Lien (other than Permitted Exceptions) on the Assets and the
Partnership Interests even if such searches are inaccurate.
13.8 Mandatory Consents. All Mandatory Consents shall have been
obtained.
13.9 FCC Approval. The FCC Approval shall have been obtained and shall
have become a Final Order.
13.10 HSR Clearance. All applicable waiting periods under the HSR Act
shall have expired or been terminated.
13.11 Consulting Agreement. J. Kent Nichols shall have executed and
delivered the Consulting Agreement.
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13.12 Net Profits Releases. The agreements of Persons party to the Net
Profit Agreements shall be executed and delivered as provided in Section 10.11.
13.13 Material Adverse Change. Between the date of this Agreement and
the Closing Date, there shall not have been any change which had a Material
Adverse Effect.
SECTION 14
INDEMNIFICATION
14.1 Indemnification by CAT. Subject to the limitations and procedures
set forth in this Section 14, CAT shall indemnify and hold harmless Citadel from
and against any and all losses, claims, demands, damages, liabilities,
obligations, costs and/or expenses, including without limitation reasonable fees
and disbursements of counsel (hereinafter referred to collectively as
"Damages"), which are sustained or incurred by Citadel, to the extent that such
Damages are sustained or incurred by reason of (a) the breach of any of the
obligations or covenants of CAT in this Agreement or (b) the breach of any of
the representations or warranties made by CAT in this Agreement.
14.2 Indemnification by Desert. Subject to the limitations and
procedures set forth in this Section 14, Desert shall indemnify and hold
harmless Citadel from and against any and all Damages sustained or incurred by
Citadel, to the extent that such Damages are sustained or incurred by reason of
(a) the breach of any of the obligations or covenants of Desert in this
Agreement or (b) the breach of any of the representations or warranties made by
Desert in this Agreement.
14.3 Indemnification by Citadel. Subject to the limitations and
procedures set forth in this Section 14, Citadel shall indemnify and hold
harmless the Partners from and against any and all Damages sustained or incurred
by them, to the extent that such Damages are sustained or incurred by reason of
(a) the breach of any of the obligations or covenants of Citadel in this
Agreement, (b) the breach of any of the representations or warranties made by
Citadel in this Agreement or (c) the failure by Citadel to satisfy obligations
of the Company from and after the Closing (except to the extent the Partners are
otherwise responsible for such obligations as provided herein).
14.4 Procedure for Indemnification. In the event that any party to this
Agreement shall incur any Damages in respect of which indemnity may be sought by
such party pursuant to this Section 14 or any other provision of this Agreement,
the party indemnified hereunder (the "Indemnitee") shall notify the party
providing indemnification (the "Indemnitor") promptly. In the case of third
party claims, such notice shall in any event be given within 10 days of the
filing or assertion of any claim against the Indemnitee stating the nature and
basis of such claim; provided, however, that any delay or failure to notify any
Indemnitor of any claim shall not relieve it from any liability except to the
extent that the Indemnitor
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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 20 days of receipt of notice of such claim, notify the
Indemnitee of its intention to assume the defense of such claim. If the
Indemnitor assumes the defense of the claim, the Indemnitor shall have the right
and obligation (a) to conduct any proceedings or negotiations in connection
therewith and necessary or appropriate to defend the Indemnitee, (b) to take all
other required steps or proceedings to settle or defend any such claims, and (c)
to employ counsel to contest any such claim or liability in the name of the
Indemnitee or otherwise. If the Indemnitor shall not assume the defense of any
such claim or litigation resulting therefrom, the Indemnitee may defend against
any such claim or litigation in such manner as it may deem appropriate and the
Indemnitee, subject to obtaining the consent of the Indemnitor (which consent
shall not be unreasonably withheld or delayed), may settle such claim or
litigation on such terms as it may deem appropriate, and assert against the
Indemnitor any rights or claims to which the Indemnitee is entitled. Payment of
Damages shall be made within 10 days of a final determination of a claim.
A final determination of a disputed claim shall be (a) a judgment of
any court determining the validity of disputed claim, if no appeal is pending
from such judgment or if the time to appeal therefrom has elapsed, (b) an award
of any arbitration determining the validity of such disputed claim, if there is
not pending any motion to set aside such award or if the time within to move to
set such award aside has elapsed, (c) a written termination of the dispute with
respect to such claim signed by all of the parties thereto or their attorneys,
(d) a written acknowledgment of the Indemnitor that it no longer disputes the
validity of such claim, or (e) such other evidence of final determination of a
disputed claim as shall be acceptable to the parties.
14.5 Survival.
(a) The Partners. Each of the representations and warranties
made by the Partners in this Agreement shall survive for a period of 18 months
after the Closing Date, notwithstanding any investigation at any time made by or
on behalf of Citadel, and upon the expiration of such 18-month period such
representations and warranties shall expire except as follows: (i) the
representations and warranties contained in Sections 3.5 and 3.10 shall expire
at the time the period of limitations expires for the assessment by the taxing
authority of additional Taxes with respect to which the representations and
warranties relate; (ii) the representations and warranties contained in Sections
3.16 and 3.17 shall expire on the fifth anniversary of the Closing Date; and
(iii) the representations and warranties contained in Sections 3.1, 3.2, 3.7(a),
3.7(f)(i), 4.1, 4.2, 4.3, 5.1, 5.2 and 5.3 shall not expire but shall continue
indefinitely. Each of the covenants of the Partners in this Agreement shall
survive for a period of 36 months after the Closing Date, notwithstanding any
investigation at any time made by or on behalf of Citadel, and upon the
expiration of such 36-month period, such covenants shall expire, except for the
covenants in Section 10.5 (which shall survive until the seventh anniversary of
the Closing Date) and Section 14 (which shall survive as provided in this
Section 14.5(a)). No claim for the recovery of Damages may be asserted by
Citadel
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against the Partners after such representations, warranties and covenants shall
thus expire; provided, however, that claims for Damages first asserted in
writing within the applicable period shall not thereafter be barred.
(b) Citadel. Each of the representations and warranties made
by Citadel in this Agreement shall survive for a period of 18 months after the
Closing Date, notwithstanding any investigation at any time made by or on behalf
of the Partners, and upon the expiration of such 18-month period such
representations and warranties shall expire, except that the representations and
warranties of Citadel contained in Sections 6.1 and 6.2 shall not expire but
shall continue indefinitely. Each of the covenants of Citadel in this Agreement
shall survive for a period of 36 months after the Closing Date, notwithstanding
any investigation at any time made by or on behalf of the Partners, and upon the
expiration of such 36-month period, such covenants shall expire, except for the
covenants in Section 10.5 (which shall survive until the seventh anniversary of
the Closing Date) and Section 14 (which shall survive as provided in this
Section 14.5(b), except for clause (c) of Section 14.3, which shall survive
indefinitely). No claim for the recovery of Damages may be asserted by the
Partners against Citadel or its successors in interest after such
representations, warranties and covenants shall thus expire; provided, however,
that claims for Damages first asserted in writing within the applicable period
shall not thereafter be barred.
14.6 Limitation of CAT's Liability. Notwithstanding anything in this
Agreement to the contrary, the obligation of CAT to indemnify Citadel shall be
subject to the following:
(a) Threshold. Citadel shall not be entitled to recover
Damages from CAT pursuant to clause (b) of Section 14.1 (other than Damages
arising by reason of a breach of the representations and warranties made in
Sections 3.1, 3.2, 3.7(a), 3.7(f)(i), 4.1, 4.2 and 4.3) until the aggregate of
all such Damages suffered by Citadel exceeds $150,000 (the "Threshold");
provided, however, that once such aggregate exceeds the Threshold, Citadel may
recover all such Damages suffered since the Closing Date without regard to the
Threshold.
(b) Ceiling. Citadel shall not be entitled to recover Damages
from CAT pursuant to Section 14.1 in excess of 58% of the sum of the Purchase
Price and the Net Profits Amount.
(c) Exclusive Remedy. Except with respect to any claim for
Damages relating to any fraudulent breach of a representation, warranty or
covenant of CAT, subsequent to the Closing, indemnification under this Section
14 shall be the exclusive remedy of Citadel against CAT with respect to any
legal, equitable or other claim for relief based upon this Agreement.
(d) Exceptions. The limitations set forth in Sections 14.5 and
14.6 shall not apply with respect to any claim for Damages relating to any
fraudulent breach of a representation, warranty or covenant of CAT.
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14.7 Limitation of Desert's Liability. Notwithstanding anything in this
Agreement to the contrary, the obligation of Desert to indemnify Citadel shall
be subject to the following:
(a) Threshold. Citadel shall not be entitled to recover
Damages from Desert pursuant to clause (b) of Section 14.2 (other than Damages
arising by reason of a breach of the representations and warranties made in
Sections 3.1, 3.2, 3.7(a), 3.7(f)(i), 5.1, 5.2 and 5.3) until the aggregate of
all such Damages suffered by Citadel exceeds the Threshold; provided, however,
that once such aggregate exceeds the Threshold, Citadel may recover all such
Damages suffered since the Closing Date without regard to the Threshold.
(b) Ceiling. Citadel shall not be entitled to recover Damages
from Desert pursuant to Section 14.2 in excess of 42% of the sum of the Purchase
Price and the Net Profits Amount.
(c) Exclusive Remedy. Except with respect to any claim for
Damages relating to any fraudulent breach of a representation, warranty or
covenant of Desert, subsequent to the Closing, indemnification under this
Section 14 shall be the exclusive remedy of Citadel against Desert with respect
to any legal, equitable or other claim for relief based upon this Agreement.
(d) Exceptions. The limitations set forth in Sections 14.5 and
14.7 shall not apply with respect to any claim for Damages relating to any
fraudulent breach of a representation, warranty or covenant of Desert.
14.8 Limitation of Citadel's Liability. Notwithstanding anything in
this Agreement to the contrary, the obligation of Citadel to indemnify the
Partners shall be subject to the following:
(a) Threshold. The Partners shall not be entitled to recover
Damages pursuant to clause (b) of Section 14.3 (other than as a result of a
breach of the representations and warranties made in Sections 6.1 and 6.2) until
the aggregate of all such Damages suffered by them exceeds the Threshold;
provided, however, that once such aggregate exceeds the Threshold, the Partners
may recover all such Damages suffered since the Closing Date without regard to
the Threshold. Notwithstanding anything to the contrary herein, the final
settlement of the Purchase Price in accordance with Sections 2.2(b) and 2.2(c),
and the application of the Held Back Amount, shall not be considered in
determining whether the Threshold has been reached.
(b) Ceiling. The Partners shall not be entitled to recover
Damages pursuant to Section 14.3 in excess of the sum of the Purchase Price and
the Net Profits Amount.
(c) Exclusive Remedy. Except with respect to any claim for
Damages relating to any fraudulent breach of a representation, warranty or
covenant of Citadel, subsequent to the Closing, indemnification under this
Section 14 shall be the exclusive remedy of the Partners with respect to any
legal, equitable or other claim for relief based upon this Agreement.
-40-
(d) Exceptions. The limitations set forth in Sections 14.5 and
14.8 shall not apply with respect to any claim for Damages relating to any
fraudulent breach of a representation, warranty or covenant of Citadel.
SECTION 15
TERMINATION OF AGREEMENT; ADDITIONAL REMEDIES
15.1 Manner. This Agreement and the transactions contemplated hereby
may be terminated prior to completion of the Closing:
(a) by mutual written consent of Citadel and the Partners;
(b) by either Citadel or the Partners upon providing written
notice to the other parties at any time after the first anniversary of the date
of this Agreement;
(c) by the Partners, if there has been a material
misrepresentation or breach on the part of Citadel in the representations,
warranties or covenants set forth in this Agreement and such material
misrepresentation or breach shall not have been cured or waived within 10 days
(or such longer period of time as may be reasonable in the circumstances) after
the occurrence thereof;
(d) by Citadel, if there has been a material misrepresentation
or breach on the part of the Partners in the representations, warranties or
covenants set forth in this Agreement and such material misrepresentation or
breach shall not have been cured or waived within 10 days (or such longer period
of time as may be reasonable in the circumstances) after the occurrence thereof;
(e) by Citadel or the Partners upon denial by the FCC of the
FCC Application; and
(f) by Citadel or the Partners 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.
Notwithstanding the foregoing, no party hereto may terminate this Agreement if
such party is in material default or breach of this Agreement.
-41-
15.2 Additional Remedies.
(a) In the event of the termination of this Agreement by the
Partners pursuant to Section 15.1(c) (any such event being a "Draw Condition"),
the Partners shall be entitled to recover any actual damages they suffer as a
result of such termination and the breach relating to such damages (up to a
maximum amount of $6,000,000) and, for such purpose, may draw upon the proceeds
of the Letter of Credit and retain such proceeds to the extent of such actual
damages (subject to such $6,000,000 cap); provided, however, such right to draw
upon the Letter of Credit shall not be construed as liquidated damages. In the
event of any other termination of this Agreement pursuant to any other provision
of Section 15.1, Citadel shall be entitled to a return of, and the Partners
shall return to Citadel, the original Letter of Credit for cancellation.
(b) The parties recognize and agree that Citadel has relied on
this Agreement and expended considerable effort and resources related to the
transactions contemplated hereby, that the rights and benefits conferred upon
Citadel herein are unique, and that damages may not be adequate to compensate
Citadel in the event the Partners improperly refuse to consummate the
transactions contemplated hereby. The parties therefore agree that Citadel shall
be entitled, at its option and in lieu of terminating this Agreement pursuant to
Section 15.1, to have this Agreement specifically enforced by a court of
competent jurisdiction in addition all other remedies available at law or in
equity; provided, however, that Citadel may not specifically enforce this
Agreement if Citadel has previously terminated this Agreement and received the
original Letter of Credit.
SECTION 16
GENERAL
16.1 Survival of Representations and Warranties. Each representation
and warranty herein contained shall survive the Closing for the periods
described in Section 14.5, 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 Oklahoma.
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:
-42-
To Citadel: Citadel Broadcasting Company
7201 West Lake Mead Boulevard
Suite 400
Las Vegas, Nevada 89128
Attn: Lawrence R. Wilson
Fax: (702) 804-5936
With copy to: Eckert Seamans Cherin & Mellott, LLC
600 Grant Street, 44th Floor
Pittsburgh, Pennsylvania 15219
Attn: Bryan D. Rosenberger, Esq.
Fax: (412) 566-6099
To the Partners: CAT Communications, Inc.
518 17th Street, Suite 980
Denver, Colorado 80202
Attn: J. Kent Nichols
Fax: (303) 436-1889
and
Desert Communications III, Inc.
311 S. Wacker Drive
Suite 600
Chicago, Illinois 60606-2556
Attn: Jeffrey S. Kilrea
Fax: (312) 322-3533
With copies to: Ireland Stapleton Pryor & Pascoe, P.C.
1675 Broadway
Suite 2600
Denver, Colorado 80202
Attn: William E. Tanis, Esq.
Fax: (303) 623-2062
and
Finova Financial Innovators
311 S. Wacker Drive
Suite 6000
Chicago, Illinois 60606-2556
Attn: Mike Rogers, Esq.
Fax: (312) 322-3533
-43-
or such other addresses as shall be similarly furnished in writing by either
party. Such notices or communications shall be deemed to have been given as of
the date of personal delivery, or if mailed, the date the return receipt is
signed or the date on which delivery is refused, or if delivered by overnight
delivery or facsimile, on the date of receipt.
16.4 Entire Agreement. This instrument supersedes all prior
communications, understandings and agreements of or among the parties with
respect to the subject matter of this Agreement and contains the entire
agreement among the parties with respect to the transactions contemplated by
this Agreement. There are no representations, warranties or covenants of any
party hereto with respect to the subject matter of this Agreement other than
those set forth 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 and Exhibits. All schedules and exhibits annexed to this
Agreement are hereby incorporated in this Agreement by this reference.
16.7 Expenses. Each party shall bear its own costs and expenses
incurred by it in connection with the transactions contemplated by this
Agreement; provided, however, that the Company may bear the costs and expenses
incurred by the Partners in connection with the transactions contemplated
hereby.
16.8 Amendment. This Agreement may be amended, modified or superseded,
and any of the terms, covenants, representations, warranties or conditions
hereof may be waived, only by a written instrument executed on behalf of all of
the parties or, in the case of a waiver, by the party waiving compliance.
16.9 Waiver. The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right to enforce that provision or any other provision of this Agreement at any
time thereafter.
16.10 Assignment. Neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by any party without the prior
written consent, in its sole discretion, of each other party. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, and no other Person
shall have any right, benefit or obligation under this Agreement.
16.11 Prior Control. Until the Closing, the Company shall maintain
control of each Station.
16.12 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.
-44-
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.
[Signatures appear on next page]
-45-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CAT COMMUNICATIONS, INC.
By: /s/ James Kent Nichols
---------------------------------
Title: President
------------------------------
DESERT COMMUNICATIONS III, INC.
By: /s/ Jeffrey S. Kilrea
---------------------------------
Title: Vice President
------------------------------
CITADEL BROADCASTING COMPANY
By: /s/ Donna L. Heffner
---------------------------------
Title: Vice President
------------------------------
-46-
JOINDER OF DESERT STOCKHOLDER
The undersigned, which owns all of the issued and outstanding shares of
capital stock of Desert, hereby joins in the foregoing Agreement for the sole
purpose of unconditionally guaranteeing the payment when due of all of Desert's
indemnification obligations under Section 14 of such Agreement.
FINOVA CAPITAL CORPORATION
By: /s/ Jeffrey S. Kilrea
---------------------------------
Title: Senior Vice President
------------------------------
-47-
Index of Schedules and Exhibits
Schedule 1 - Stations
Schedule 2 - Asset Schedule
Schedule 3 - Citadel's Disclosure Schedule
Schedule 4 - Debt Schedule
Schedule 5 - Excluded Assets
Schedule 6 - Partners' Disclosure Schedule
Schedule 7 - Permitted Exceptions
Exhibit A - Consulting Agreement
Exhibit B - Letter of Credit
Exhibit C - Form of Opinion of Counsel for Citadel
Exhibit D - Form of Opinion of Counsel for the Company and the Partners
[Pursuant to Regulation S-K, Item 601(b)(2), Registrant agrees to furnish
supplementally a copy of these schedules and exhibits to the Securities and
Exchange Commission upon request.]
Exhibit 2.2
AMENDMENT TO PURCHASE AGREEMENT
On this 22nd day of December, 1999, CAT COMMUNICATIONS, INC., an
Oklahoma corporation ("CAT"), DESERT COMMUNICATIONS III, INC., a Delaware
corporation ("Desert"), and CITADEL BROADCASTING COMPANY, a Nevada corporation
("Citadel"), herein amend the Purchase Agreement among them dated as of August
23, 1999 (the "Purchase Agreement").
RECITALS:
The parties hereto desire to amend the Purchase Agreement in certain
respects.
NOW, THEREFORE, the parties agree as follows:
1. Section 2.2(a) of the Purchase Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"(a) Payment. The Purchase Price, less the Held Back Amount,
shall be paid at the Closing to the Partners (58% to CAT and 42% to
Desert) in cash by wire transfer of immediately available funds to
accounts designated by the Partners in writing at least three days
prior to the Closing Date. In addition, the Partners hereby direct
Citadel to, and Citadel shall, pay the Net Profits Amount at the
Closing by delivery of six promissory notes, dated the Closing Date,
executed by Citadel in favor of each of the six holders of the Net
Profits Agreements, in the principal amount of the Net Profits Amount
for such holders as set forth on the Net Profits Certificate and in the
form of Exhibit E attached hereto."
2. Section 11.1 of the Purchase Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"11.1 Closing Date. The Closing shall occur on the later of
(a) December 23, 1999 or (b) a date mutually selected by the Partners
and Citadel in writing, provided that FCC Approval has become a Final
Order. The Closing shall begin at 10:00 a.m., local time, on the date
of the Closing (the "Closing Date") at the offices of Eckert Seamans
Cherin & Mellott, LLC, 600 Grant Street, 44th Floor, Pittsburgh,
Pennsylvania 15219, counsel for Citadel."
3. The Purchase Agreement is in all other respects unamended.
4. This Amendment to Purchase Agreement may be executed in one or more
counterparts, each of which together shall constitute a single instrument.
Signatures on this Amendment to Purchase Agreement transmitted by facsimile
shall be deemed to be original signatures for all purposes of this Amendment to
Purchase Agreement.
5. This Amendment to Purchase Agreement shall be governed by and
construed in accordance with the internal laws, and not the laws of conflicts,
of the State of Oklahoma.
[remainder of this page intentionally left blank]
2
IN WITNESS WHEREOF, the undersigned have executed this Amendment to
Purchase Agreement effective as of the date first written above.
CAT COMMUNICATIONS, INC.
By: /s/ Michael L. Gumb
---------------------------------
Name: Michael L. Gumb
-------------------------------
Title: Vice President
------------------------------
DESERT COMMUNICATIONS III, INC.
By: /s/ Jeffrey S. Kilrea
---------------------------------
Name: Jeffrey S. Kilrea
-------------------------------
Title: Vice President
------------------------------
CITADEL BROADCASTING COMPANY
By: /s/ Donna L. Heffner
---------------------------------
Name: Donna L. Heffner
-------------------------------
Title: Vice President
------------------------------
EXHIBIT E
FORM OF PROMISSORY NOTE
See attached.
[Pursuant to Regulation S-K, Item 601(b)(2), Registrant agrees to furnish
supplementally a copy of this exhibit to the Securities and Exchange Commission
upon request.]
Exhibit 4.1
CREDIT AGREEMENT
dated as of December 17, 1999,
among
CITADEL BROADCASTING COMPANY,
CITADEL COMMUNICATIONS CORPORATION,
THE LENDERS NAMED HEREIN
and
CREDIT SUISSE FIRST BOSTON,
as Lead Arranger, Administrative Agent and Collateral Agent
FINOVA CAPITAL CORPORATION,
Syndication Agent
FIRST UNION NATIONAL BANK,
and
FLEET NATIONAL BANK
Documentation Agents
[CS&M Ref No. 5865-055]
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Defined Terms..............................................................................2
SECTION 1.02. Terms Generally...........................................................................23
SECTION 1.03. Classification of Loans and Borrowings....................................................24
ARTICLE II
The Credits
SECTION 2.01. Commitments...............................................................................24
SECTION 2.02. Loans.....................................................................................24
SECTION 2.03. Borrowing Procedure.......................................................................26
SECTION 2.04. Evidence of Debt; Repayment of Loans......................................................26
SECTION 2.05. Fees......................................................................................27
SECTION 2.06. Interest on Loans.........................................................................28
SECTION 2.07. Default Interest..........................................................................28
SECTION 2.08. Alternate Rate of Interest................................................................29
SECTION 2.09. Termination and Reduction of Commitments..................................................29
SECTION 2.10. Conversion and Continuation of Borrowings.................................................29
SECTION 2.11. Repayment of Term Borrowings..............................................................31
SECTION 2.12. Prepayment................................................................................32
SECTION 2.13. Mandatory Prepayments.....................................................................32
SECTION 2.14. Reserve Requirements; Change in Circumstances.............................................33
SECTION 2.15. Change in Legality........................................................................35
SECTION 2.16. Indemnity.................................................................................35
SECTION 2.17. Pro Rata Treatment........................................................................36
SECTION 2.18. Sharing of Setoffs........................................................................36
SECTION 2.19. Payments..................................................................................37
SECTION 2.20. Taxes.....................................................................................37
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate.............................................................38
SECTION 2.22. Letters of Credit.........................................................................39
SECTION 2.23. Increase in Revolving Credit Commitments..................................................43
SECTION 2.24. Increase in Term Loan Commitments.........................................................44
SECTION 2.25. Extension of Maturity Date................................................................46
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers......................................................................46
SECTION 3.02. Authorization.............................................................................46
SECTION 3.03. Enforceability............................................................................47
SECTION 3.04. Governmental Approvals....................................................................47
SECTION 3.05. Financial Statements......................................................................47
2
SECTION 3.06. No Material Adverse Change................................................................47
SECTION 3.07. Title to Properties; Possession Under Leases..............................................47
SECTION 3.08. Subsidiaries..............................................................................47
SECTION 3.09. Litigation; Compliance with Laws..........................................................47
SECTION 3.10. Agreements and Licenses...................................................................49
SECTION 3.11. Federal Reserve Regulations...............................................................49
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act................................49
SECTION 3.13. Use of Proceeds...........................................................................49
SECTION 3.14. Tax Returns...............................................................................49
SECTION 3.15. No Material Misstatements.................................................................49
SECTION 3.16. Employee Benefit Plans....................................................................50
SECTION 3.17. Environmental Matters.....................................................................50
SECTION 3.18. Insurance.................................................................................51
SECTION 3.19. Security Documents........................................................................51
SECTION 3.20. Location of Real Property and Leased Premises.............................................52
SECTION 3.21. Labor Matters.............................................................................52
SECTION 3.22. Solvency..................................................................................52
SECTION 3.23. Year 2000.................................................................................52
SECTION 3.24. Ranking...................................................................................53
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events.........................................................................53
SECTION 4.02. First Credit Event........................................................................54
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties......................................................57
SECTION 5.02. Insurance.................................................................................57
SECTION 5.03. Obligations and Taxes.....................................................................58
SECTION 5.04. Financial Statements, Reports, etc........................................................59
SECTION 5.05. Litigation and Other Notices..............................................................60
SECTION 5.06. Employee Benefits.........................................................................61
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.................................61
SECTION 5.08. Use of Proceeds...........................................................................61
SECTION 5.09. Compliance with Environmental Laws........................................................61
SECTION 5.10. Preparation of Environmental Reports......................................................61
SECTION 5.11. Further Assurances........................................................................61
SECTION 5.12. Interest Rate Protection..................................................................62
3
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness..............................................................................66
SECTION 6.02. Liens.....................................................................................67
SECTION 6.03. Sale and Lease-Back Transactions..........................................................68
SECTION 6.04. Investments, Loans and Advances...........................................................68
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.................................69
SECTION 6.06. Dividends and Distributions; Restrictions on Ability
of Subsidiaries to Pay Dividends.............................................70
SECTION 6.07. Transactions with Affiliates..............................................................71
SECTION 6.08. Capital Expenditures......................................................................71
SECTION 6.09. Consolidated Interest Coverage Ratio......................................................72
SECTION 6.10. Consolidated Fixed Charge Coverage Ratio..................................................72
SECTION 6.11. Maximum Consolidated Leverage Ratio.......................................................72
SECTION 6.12. Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-laws and Certain Other
Agreements, etc..............................................................72
SECTION 6.13. Limitation on Creation of Subsidiaries....................................................73
SECTION 6.14. Hedging Agreements........................................................................73
SECTION 6.15. Internet Trade Out Transactions...........................................................73
SECTION 6.16. Business of Citadel, Borrower and Subsidiaries............................................73
SECTION 6.17. Fiscal Year...............................................................................73
ARTICLE VII
Events of Default.......................................................................................74
ARTICLE VIII
The Administrative Agent and the Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices...................................................................................79
SECTION 9.02. Survival of Agreement.....................................................................79
SECTION 9.03. Binding Effect............................................................................79
SECTION 9.04. Successors and Assigns....................................................................80
SECTION 9.05. Expenses; Indemnity.......................................................................83
SECTION 9.06. Right of Setoff...........................................................................84
SECTION 9.07. Applicable Law............................................................................84
SECTION 9.08. Waivers; Amendment........................................................................84
SECTION 9.09. Interest Rate Limitation..................................................................85
SECTION 9.10. Entire Agreement..........................................................................85
SECTION 9.11. WAIVER OF JURY TRIAL......................................................................85
SECTION 9.12. Severability..............................................................................86
4
SECTION 9.13. Counterparts..............................................................................86
SECTION 9.14. Headings..................................................................................86
SECTION 9.15. Jurisdiction; Consent to Service of Process...............................................86
SECTION 9.16. Confidentiality...........................................................................87
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Pending Acquisitions
Schedule 1.01(c) Mortgaged Properties
Schedule 2.01 Lenders and Commitments
Schedule 3.04 Government Approvals
Schedule 3.07(c) Title to Properties
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.10(b) FCC Licenses
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(d) Mortgage Offices
Schedule 3.20(a) Real Property Owned In Fee
Schedule 3.20(b) Leased Property
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E Form of Subsidiary Guarantee Agreement
Exhibit F Form of Parent Guarantee Agreement
Exhibit G Form of Pledge Agreement
Exhibit H Form of Security Agreement
Exhibit I-1 Form of Mortgage
Exhibit I-2 Form of Deed of Trust
Exhibit J-1 Form of Opinion of Eckert Seamans Cherin & Mellott, LLC, Special
Counsel for Citadel, the Borrower and CLI
Exhibit J-2 Form of Opinion of Lionel Sawyer & Collins, Nevada Counsel for
Citadel, the Borrower and CLI
Exhibit J-3 Form of Opinion of Local Counsel
5
CREDIT AGREEMENT dated as of
December 17, 1999, among CITADEL
BROADCASTING COMPANY, a Nevada corporation
(the "Borrower"), CITADEL COMMUNICATIONS
CORPORATION, a Nevada corporation
("Citadel"), the Lenders (as defined in
Article I), CREDIT SUISSE FIRST BOSTON, a
bank organized under the laws of
Switzerland, acting through its New York
branch, as issuing bank (in such capacity,
an "Issuing Bank") as administrative agent
(in such capacity, the "Administrative
Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the
Lenders, FINOVA Capital Corporation, as
syndication agent (in such capacity, the
"Syndication Agent") and First Union
National Bank and Fleet National Bank, as
documentation agents (in such capacity, the
"Documentation Agents").
The Borrower has requested the Lenders to extend credit in the form of
(a) Term Loans at any time during the Term Loan Availability Period, in an
aggregate principal amount not in excess of $250,000,000, and (b) Revolving
Loans at any time and from time to time prior to the Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
$150,000,000, in each case subject to increase in accordance with Sections 2.23
and 2.24. The Borrower has requested the Issuing Banks to issue letters of
credit, (a) in an aggregate face amount at any time outstanding not in excess of
$75,000,000 until March 31, 2000 and (b) thereafter in an aggregate face amount
at any time outstanding not in excess of $50,000,000, to support payment
obligations incurred in the ordinary course of business by the Borrower and its
Subsidiaries. The proceeds of the Term Loans will be used solely (a) to repay
all amounts due and owing under the Existing Loan Agreement, (b) to finance a
portion of the Pending Acquisitions, (c) in the case of Incremental Term Loans,
to finance future Permitted Acquisitions and (d) to pay related fees and
expenses. The proceeds of the Revolving Loans will be used solely for general
corporate purposes, including for working capital, Capital Expenditures, to
finance a portion of the Pending Acquisitions and to finance future Permitted
Acquisitions.
The Lenders are willing to extend such credit to the Borrower and the
Issuing Banks are willing to issue letters of credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
6
"Acquisition Agreements" shall mean any asset purchase agreement,
purchase agreement or exchange agreement entered into in connection with the
Pending Acquisitions.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified, provided that for purposes of Section 6.07, the term "Affiliate"
shall also include any person that directly or indirectly owns more than 5% of
any class of Equity Interests of the person specified or that is an officer or
director of the person specified.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) of the preceding sentence, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively. The term "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as being effective. The term "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan, or with respect to the Commitment Fees, as the case
may be, the applicable percentage set forth below under the caption "Eurodollar
Spread", "ABR Spread" or "Commitment Fee Percentage", as the case may be, based
upon the Consolidated Leverage Ratio as of the relevant date of determination:
7
CONSOLIDATED EURODOLLAR COMMITMENT
LEVERAGE RATIO SPREAD ABR SPREAD FEE PERCENTAGE
----------------------------- ----------------------- ---------------------- ------------------------
Category 1
2.500% 1.500% 0.500%
Greater than 7.00 to
1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 2
2.250% 1.250% 0.500%
Greater than 6.50 to
1.00 but less than or
equal to 7.00 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 3
2.000% 1.000% 0.500%
Greater than 6.00 to
1.00 but less than or
equal to 6.50 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 4
1.625% 0.625% 0.375%
Greater than 5.50 to
1.00 but less than or
equal to 6.00 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 5
1.500% 0.500% 0.375%
Greater than 5.00 to
1.00 but less than or
equal to 5.50 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 6
1.250% 0.250% 0.250%
Greater than 4.50 to
1.00 but less than or
equal to 5.00 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 7
1.000% 0.000% 0.250%
Greater than 4.00 to
1.00 but less than or
equal to 4.50 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Category 8
0.875% 0.000% 0.250%
Greater than 3.50 to
1.00 but less than or
equal to 4.00 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
8
Consolidated Eurodollar Commitment
Leverage Ratio Spread ABR Spread Fee Percentage
----------------------------- ----------------------- ---------------------- ------------------------
Category 9
0.750% 0.000% 0.250%
Less than or equal to
3.50 to 1.00
----------------------------- ----------------------- ---------------------- ------------------------
Each change in the Applicable Percentage resulting from a change in the
Consolidated Leverage Ratio shall be effective with respect to all Loans,
Commitments and Letters of Credit outstanding on and after the date of delivery
to the Administrative Agent of the financial statements and certificates
required by Section 5.04(a) or (b) and Section 5.04(d), respectively, indicating
such change until the date immediately preceding the next date of delivery of
such financial statements and certificates indicating another such change.
Notwithstanding the foregoing, until the Borrower shall have delivered the
financial statements and certificates required by Section 5.04(b) and Section
5.04(c), respectively, for the period ended June 30, 2000, the Consolidated
Leverage Ratio shall be deemed to be not lower than the Consolidated Leverage
Ratio corresponding to Category 3 for purposes of determining the Applicable
Percentage; provided, however, that (a) at any time during which the Borrower
has failed to deliver the financial statements and certificates required by
Section 5.04(a) or (b) and Section 5.04(d), respectively, or (b) at any time
after the occurrence and during the continuance of an Event of Default, the
Consolidated Leverage Ratio shall be deemed to be in Category 1 for purposes of
determining the Applicable Percentage.
"Asset Sale" shall mean the sale, transfer or other disposition (by way
of merger, casualty, condemnation or otherwise), other than any Asset Swap, by
Citadel or any of its subsidiaries to any person other than the Borrower or any
Subsidiary Guarantor of (a) any Equity Interests of the Borrower or any of the
Subsidiaries (other than directors' qualifying shares) or (b) any other assets
of Citadel or any of its subsidiaries (other than inventory, excess, damaged,
obsolete or worn out assets and Permitted Investments, in each case disposed of
in the ordinary course of business), provided that any asset sale or series of
related asset sales described in clause (b) above having a value not in excess
of $1,000,000 shall be deemed not to be an "Asset Sale" for purposes of this
Agreement.
"Asset Swap" shall mean any transfer of assets of the Borrower or any
Subsidiary to any person other than an Affiliate of Citadel or its subsidiaries
in exchange for assets of such person if such exchange would qualify, whether in
part or in full, as a like-kind exchange pursuant to Section 1031 of the Code.
Nothing in this definition shall require Citadel or its subsidiaries to elect
that Section 1031 of the Code be applicable to any Asset Swap.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made,
continued or converted on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
9
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent.
"BPH Acquisition" shall mean the acquisition by the Borrower of
substantially all of the assets, and the assumption of certain of the
liabilities, of Broadcast Partners Holdings, L.P. and its subsidiaries for
approximately $190,000,000.
"Broadcasting Business" shall mean (a) the business of owning and/or
operating a Station, including the operation of a Station pursuant to an LMA
Agreement, (b) the sale of advertising time for a Station pursuant to a JS
Agreement, (c) the business of owning and/or operating a Related Business and
(d) related ancillary activities.
"Broadcast Market" shall mean each of the Stations of the Borrower
serving a specific geographical area or market.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any period and with respect to
any person, all expenditures (other than any noncash expenses incurred in
connection with any Trade Out Transactions) during such period by such person
that would be classified as capital expenditures in accordance with GAAP, but
excluding any such expenditure made (a) to restore, replace or rebuild property
to the condition of such property immediately prior to any damage, loss,
destruction or condemnation of such property, to the extent such expenditure is
made with insurance proceeds, condemnation awards or indemnification or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation, (b) with proceeds from the sale or exchange of property to the
extent utilized to purchase functionally equivalent property or equipment or (c)
as the purchase price of any Permitted Acquisition.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Caribou Acquisition" shall mean the acquisition by the Borrower of all
of the general partnership interests in Caribou Communications Co. for
approximately $60,000,000.
"Caribou Seller Notes" shall mean any promissory notes due January 4,
2000 made by the Borrower in favor of CAT Communications, Inc. or Desert
Communications III, Inc. to finance the Caribou Acquisition.
"Certificate of Designation" shall mean the Certificate of Designation
filed on July 1, 1997, as amended on July 2, 1997, by the Borrower with the
Secretary of State of Nevada with respect to the Exchangeable Preferred Stock.
10
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934 as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests
of Citadel; (b) a majority of the seats (other than vacant seats) on the board
of directors of Citadel shall at any time be occupied by persons who were
neither (i) nominated by the board of directors of Citadel, nor (ii) appointed
by directors so nominated; (c) any change in control (or similar event, however
denominated) with respect to Citadel or the Borrower shall occur under and as
defined in any indenture or agreement in respect of Material Indebtedness to
which Citadel or the Borrower is a party; or (d) Citadel shall cease to own,
directly or indirectly, 100% of the issued and outstanding voting Equity
Interests of the Borrower.
"Change in Law" shall mean (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.14, by any lending office of
such Lender or by such Lender's or Issuing Bank's holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to (a) any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Term Loans or
Revolving Loans, and (b) any Commitment, refers to whether such Commitment is a
Term Loan Commitment or a Revolving Credit Commitment.
"CLI" shall mean Citadel License, Inc., a Nevada corporation and a
wholly owned subsidiary of the Borrower.
"Closing Date" shall mean December 17, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Communications Act" shall mean the Communications Act of 1934 and the
rules and regulations issued thereunder, as amended from time to time.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated December 1999.
"Consolidated Cash Interest Expense" for any period shall mean the
interest expense, to the extent paid or payable in cash, of the Borrower and its
consolidated Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.
11
"Consolidated EBITDA" for any period shall mean Consolidated Net Income
for such period, to which shall be added back, to the extent deducted in
calculating Consolidated Net Income for such period, (a) the Consolidated
Interest Expense for such period, (b) all charges against income for Federal,
state, local and foreign income taxes and assessments of the Borrower and its
consolidated Subsidiaries for such period, (c) the aggregate depreciation
expense of the Borrower and its consolidated Subsidiaries for such period, (d)
losses from sales, transactions, exchanges and other dispositions of property
not in the ordinary course of business, (e) the aggregate amortization expense
of the Borrower and its consolidated Subsidiaries for such period, (f) noncash
expenses during such period incurred in connection with Trade Out Transactions,
(g) noncash nonrecurring charges for such period and (h) noncash compensation,
minus (i) revenue during such period in connection with Trade Out Transactions,
(ii) gains during such period from sales, transactions, exchanges and other
dispositions of property not in the ordinary course of business and (iii) any
noncash gain to the extent included in determining Consolidated Net Income, all
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" for any period shall mean the sum, without
duplication, of (a) Consolidated Cash Interest Expense for such period, (b) the
amount of all Capital Expenditures made by the Borrower and its Subsidiaries
during such period, (c) all cash payments in respect of income taxes made during
such period (net of any cash refund in respect of income taxes actually received
during such period), (d) the scheduled principal amount of all amortization
payments on all Indebtedness (including the principal component of all Capital
Lease Obligations) of the Borrower and its Subsidiaries for such period and (e)
the amount of cash dividends paid by the Borrower and its Subsidiaries during
such period to persons other than the Borrower or a Subsidiary, all as
determined on a consolidated basis in accordance with GAAP
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Cash
Interest Expense for such period.
"Consolidated Interest Expense" for any period shall mean the total
interest expense of the Borrower and its consolidated Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio" shall mean, at any date of determination,
the ratio of Total Debt on such date to Consolidated EBITDA for the period of
four consecutive fiscal quarters of the Borrower most recently ended on or prior
to such date. Solely for purposes of this definition, if at any time the
Consolidated Leverage Ratio is being determined the Borrower or any Subsidiary
shall have completed a Permitted Acquisition or an Asset Sale since the
beginning of the relevant four fiscal quarter period, the Consolidated Leverage
Ratio shall be determined on a pro forma basis as if such Permitted Acquisition
or Asset Sale, and any related incurrence or repayment of Indebtedness, had
occurred at the beginning of such period and taking into account any
identifiable cost savings documented to the reasonable satisfaction of the
Administrative Agent.
"Consolidated Net Income" shall mean, for any period, net income or
loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Subsidiary to the extent that the
12
declaration or payment of dividends or similar distributions by the Subsidiary
of that income is prohibited by operation of the terms of its charter or any
agreement, instrument, judgment, decree, statute, rule or governmental
regulation applicable to the Subsidiary, and (b) the income (or loss) of any
person accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any of the Subsidiaries or the date that
person's assets are acquired by the Borrower or any of the Subsidiaries.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Credit Event" shall have the meaning assigned to such term in
Section 4.01.
"Current Assets" shall mean, at any time, the consolidated current
assets (other than cash and Permitted Investments) of the Borrower and its
consolidated Subsidiaries.
"Current Liabilities" shall mean, at any time, the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries at such time, but
excluding, without duplication, (a) the current portion of any long-term
Indebtedness and (b) outstanding Revolving Loans.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"Engagement Letter" shall mean the Engagement Letter dated December 10,
1999, between the Borrower and the Administrative Agent.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface, soils
or subsurface strata, the workplace or any building, structure, facility or
fixture or as otherwise defined in any Environmental Law.
"Environmental Claim" shall mean any accusation, allegation, notice of
violation, claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any Governmental Authority or any person for
damages, injunctive or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or intangible property
damage, natural resource damages, nuisance, pollution, any adverse effect on the
environment caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon (a) the existence, or the
continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases) or a threatened Release, (b) exposure to
any Hazardous Material, (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material or (d) any
non-compliance or alleged non-compliance with any Environmental Law or
Environmental Permit.
13
"Environmental Law" shall mean any and all applicable present and
future treaties, laws, rules, regulations, codes and ordinances, and all orders,
decrees, judgments, injunctions, notices or agreements which are binding on a
Loan Party and issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections
9601 et seq. (collectively "CERCLA"), the Solid Waste Disposal Act, as amended
by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid
Waste Amendments of 1984, 42 U.S.C. Sections 6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C.
Sections 1251 et seq., the Clean Air Act of 1970, as amended 42 U.S.C. Sections
7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. Sections 2601
et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
Sections 651 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Sections 11001 et seq., the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. Sections 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 5101 et seq., and any similar or
implementing state, local or foreign law, and all amendments or regulations
promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Interests" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a person.
"Equity Issuance" shall mean any issuance or sale by Citadel, the
Borrower or any Subsidiary of any Equity Interests of Citadel, the Borrower or
any Subsidiary, as applicable, or any obligations convertible into or
exchangeable for, or giving any person a right, option or warrant to acquire
such Equity Interests or such convertible or exchangeable obligations, except in
each case for (a) any issuance or sale to Citadel, the Borrower or any
Subsidiary, (b) any issuance of directors' qualifying shares and (c) sales or
issuances of common stock of Citadel to management or employees of Citadel, the
Borrower or any Subsidiary under any employee stock option or stock purchase
plan or employee benefit plan in existence from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the
14
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by the Borrower or
any of its ERISA Affiliates from the PBGC or a plan administrator of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any of its ERISA Affiliates of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" shall mean, for any fiscal year of the Borrower, the
excess of (a) the sum, of (i) Consolidated EBITDA for such fiscal year and (ii)
reductions to noncash working capital of the Borrower and its consolidated
Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current Assets
minus Current Liabilities from the beginning to the end of such fiscal year)
over (b) the sum, without duplication, of (i) the amount of any cash income
taxes payable by the Borrower and its consolidated Subsidiaries with respect to
such fiscal year, (ii) cash interest paid (net of cash interest received) by the
Borrower and its consolidated Subsidiaries during such fiscal year, (iii)
Capital Expenditures made in cash in accordance with Section 6.08 during such
fiscal year, except to the extent financed with the proceeds of Indebtedness,
casualty proceeds or condemnation proceeds, (iv) permanent repayments of
Indebtedness made by the Borrower and its consolidated Subsidiaries during such
fiscal year, but only to the extent that such prepayments by their terms cannot
be reborrowed or redrawn and do not occur in connection with a refinancing of
all or any portion of such Indebtedness, and (v) additions to noncash working
capital for such fiscal year (i.e., the increase, if any, in Current Assets
minus Current Liabilities from the beginning to the end of such fiscal year);
provided that to the extent otherwise included therein, the Net Cash Proceeds of
Asset Sales shall be excluded from the calculation of Excess Cash Flow.
"Exchange Indenture" shall mean the Indenture dated as of July 1, 1997,
among the Borrower, CLI and The Bank of New York, as trustee, relating to the
Exchangeable Debentures.
"Exchangeable Debentures" shall mean any Exchangeable Debentures due
2009 issued in exchange for Exchangeable Preferred Stock.
"Exchangeable Debt Instruments" shall mean the Exchange Indenture and
the Exchangeable Debentures.
"Exchangeable Preferred Stock" shall mean the 13-1/4% Series A
Exchangeable Preferred Stock issued by the Borrower on July 1, 1997, any
exchangeable preferred stock issued in exchange therefor pursuant to the
Preferred Stock Registration Rights Agreement, and any exchangeable preferred
stock issued by the Borrower as dividends thereon in accordance with the
Certificate of Designation.
15
"Excluded Taxes" shall mean, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.20(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.20(a).
"Existing Loan Agreement" shall mean the Amended and Restated Loan
Agreement dated as of July 3, 1997, as further amended, among the Borrower, CLI,
the lenders from time to time party thereto, and FINOVA Capital Corporation, as
agent.
"Existing Letter of Credit" shall mean each Letter of Credit previously
issued for the account of the Borrower that (a) is outstanding on the Closing
Date and (b) is listed on Schedule 1.01(a).
"FCC" shall mean the Federal Communications Commission or any
Governmental Authority succeeding to its functions.
"FCC Licenses" shall mean the Licenses issued by the FCC.
"Fees" shall mean the Commitment Fee, the Administrative Agent Fees,
the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any person shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such person.
"Foreign Lender" shall mean any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting
principles applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Granting Lender" shall have the meaning assigned to such term in
Section 9.04(i).
16
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business.
"Guarantee Agreements" shall mean the Parent Guarantee Agreement and
the Subsidiary Guarantee Agreement.
"Guarantors" shall mean Citadel and the Subsidiary Guarantors.
"Hazardous Material" shall mean all hazardous, toxic, explosive or
radioactive substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls ("PCBs") or PCB-containing materials or equipment,
radon gas, infectious or medical wastes and all other substances or wastes of
any nature regulated pursuant to any Environmental Law.
"Hedging Agreement" shall mean any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, foreign exchange
contract, currency swap agreement or other similar agreement or arrangement.
"Incremental Facility Cutoff Date" shall mean December 17, 2002.
"Incremental Revolving Facility Amount" shall mean, at any time, the
lesser of (a) $100,000,000 and (b) the excess, if any, of (i) $300,000,000 over
(ii) the sum of (x) the aggregate amount of all Incremental Term Loan
Commitments established at or prior to such time pursuant to Section 2.24 and
(y) the aggregate increase in the Revolving Credit Commitments established prior
to such time pursuant to Section 2.23.
"Incremental Term Lender" shall mean a Lender with an Incremental Term
Loan Commitment or an outstanding Incremental Term Loan.
"Incremental Term Loan Amount" shall mean, at any time, the excess, if
any, of (a) $300,000,000 over (b) the sum of (i) the aggregate increase in the
Revolving Credit Commitments established at or prior to such time pursuant to
Section 2.23 and (ii) the aggregate amount of all Incremental Term Loan
Commitments established prior to such time pursuant to Section 2.24.
"Incremental Term Loan Assumption Agreement" shall mean an Incremental
Term Loan Assumption Agreement in form and substance reasonably satisfactory to
the Administrative Agent, among the Borrower, the Administrative Agent and one
or more Incremental Term Lenders.
"Incremental Term Loan Commitment" shall mean the commitment of any
Lender, established pursuant to Section 2.24, to make Incremental Term Loans to
the Borrower.
17
"Incremental Term Loans" shall mean Term Loans made by one or more
Lenders to the Borrower pursuant to clause (b) of Section 2.01.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
under conditional sale or other title retention agreements relating to property
or assets purchased by such person, (d) all obligations of such person issued or
assumed as the deferred purchase price of property or services (excluding trade
accounts payable and accrued obligations incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (f) all Guarantees by such person
of Indebtedness of others, (g) all Capital Lease Obligations of such person, (h)
all obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit and (i) all obligations, contingent or otherwise,
of such person in respect of bankers' acceptances. The Indebtedness of any
person shall include the Indebtedness of any partnership in which such person is
a general partner.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Guarantors and the Collateral
Agent.
"Indentures" shall mean the Exchange Indenture, the 1997 Note Indenture
and the 1998 Note Indenture.
"Interest Payment Date" shall mean, (a) with respect to any ABR Loan,
the last Business Day of each March, June, September and December, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months' duration been applicable to such Borrowing, and, in addition, the
date of any prepayment of a Eurodollar Borrowing or conversion of a Eurodollar
Borrowing to an ABR Borrowing.
"Interest Period" shall mean, as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months (or, with the consent of
all Lenders participating in such Borrowing, 9 or 12 months) thereafter, as the
Borrower may elect; provided, however, that if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
18
"Internet Company" shall mean a business in which the majority of its
revenues arise out of its activities selling goods and/or services over the
internet.
"Internet Trade Out Transaction" shall mean a Trade Out Transaction in
which the Borrower or any Subsidiary exchanges unused and preemptible
advertising time for Equity Interests or any obligations convertible into or
exchangeable for, or giving any person a right, option or warrant to acquire
such Equity Interests or such convertible or exchangeable obligations, of an ISP
or any other Internet Company.
"ISP" shall mean a business in which the majority of its revenues arise
out of its activities as an internet service provider.
"Issuing Bank" shall mean, as the context may require, (a) Credit
Suisse First Boston, with respect to Letters of Credit issued by it, (b) Bank
Boston, N.A., with respect to each Existing Letter of Credit, (c) any other
Lender that may become an Issuing Bank pursuant to Section 2.22(i) or 2.22(k),
with respect to Letters of Credit issued by such Lender or (d) collectively, all
of the foregoing.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"JS Agreement" shall mean an agreement in which (a) two or more
licensees of Stations join to market air time or (b) a licensee of a Station
sells air time to a broker.
"L/C Commitment" shall mean, with respect to any Issuing Bank, the
commitment of such Issuing Bank to issue Letters of Credit pursuant to Section
2.22.
"L/C Disbursement" shall mean a payment or disbursement made by an
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at any
time shall mean its Pro Rata Percentage of the aggregate L/C Exposure at such
time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance.
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.22 and any Existing Letter of Credit.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Administrative Agent
at approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of the relevant Interest Period by reference to the
British Bankers' Association Interest Settlement Rates for deposits in dollars
(as set
19
forth by the Bloomberg Information Service or any successor thereto or any other
service selected by the Administrative Agent that has been nominated by the
British Bankers' Association as an authorized information vendor for the purpose
of displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the "LIBO Rate" shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the Administrative Agent at approximately 11:00 a.m. (London time) on the
date that is two Business Days prior to the beginning of such Interest Period.
"Licenses" shall mean all licenses, permits, consents, approvals and
authorities issued by any Governmental Authority that authorize a person to
operate a Station.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Liggett Acquisition" shall mean the acquisition by the Borrower of
substantially all of the assets of Liggett Broadcast, Inc. and certain of its
affiliates for approximately $120,500,000.
"LMA Agreement" shall mean a local marketing arrangement, sale
agreement, time brokerage agreement, management agreement or similar arrangement
pursuant to which a person, subject to customary preemption rights and other
limitations, (a) obtains the right to sell at least a majority of the
advertising inventory of a radio station of which another person is a licensee,
(b) obtains the right to exhibit programming and sell advertising time during a
majority of the air time of a Station or (c) manages the selling operations of a
Station with respect to at least a majority of the advertising inventory of such
Station.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreements, the Security Documents, each Incremental Term Loan
Assumption Agreement and the Indemnity, Subrogation and Contribution Agreement.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans and the Term Loans.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, (b) material
impairment of the ability of the Borrower or any other Loan Party to perform any
of its obligations under any Loan Document to which it is or will be a party or
(c) material impairment of the rights of or benefits available to the Lenders
under any Loan Document.
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"Material Indebtedness" shall mean Indebtedness (other than the Loans
and Letters of Credit) or obligations in respect of one or more Hedging
Agreements of any one or more of Citadel and its subsidiaries in an aggregate
principal amount exceeding $5,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of Citadel or any
subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that Citadel or such
subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"Maturity Date" shall mean March 31, 2007, subject to extension as
provided in Section 2.25.
"Mortgaged Properties" shall mean (a) the owned real properties of the
Borrower specified on Schedule 1.01(c) and (b) any other real property of any
Loan Party that is subject to a Mortgage after the Closing Date pursuant to
Section 5.11.
"Mortgages" shall mean the mortgages, deeds of trust, modifications and
other security documents delivered pursuant to clause (i) of Section 4.02(j) or
pursuant to Section 5.11, each substantially in the form of Exhibit I.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received), net of (i)
selling expenses (including reasonable broker's fees or commissions, legal fees,
transfer and similar taxes and the Borrower's good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash Proceeds) and
(iii) the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money which is secured by the asset
sold in such Asset Sale and which is repaid with such proceeds (other than any
such Indebtedness assumed by the purchaser of such asset); provided, however,
that, if (x) the Borrower shall deliver a certificate of a Financial Officer to
the Administrative Agent at the time of receipt thereof setting forth the
Borrower's intent to reinvest such proceeds in productive assets of a kind then
used or usable in the business of the Borrower and the Subsidiaries within 330
days of receipt of such proceeds and (y) no Default or Event of Default shall
have occurred and shall be continuing at the time of such certificate or at the
proposed time of the application of such proceeds, such proceeds shall not
constitute Net Cash Proceeds except to the extent that at least $5,000,000 of
such proceeds are not so used or contractually committed to be used at the end
of such 330-day period, at which time all such proceeds shall be deemed to be
Net Cash Proceeds; and (b) with respect to any issuance or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all taxes
and customary fees, commissions, costs and other expenses incurred in connection
therewith. Any "boot" or other nonlike-kind assets received in connection with
an Asset Swap shall be considered proceeds from the sale of an asset.
"1997 Note Indenture" shall mean the indenture dated as of July 1,
1997, among the Borrower, CLI and The Bank of New York, as trustee, as in effect
on the Closing Date and as
21
thereafter amended from time to time in accordance with the requirements thereof
and of this Agreement.
"1997 Notes Registration Rights Agreement" shall mean the Registration
Rights Agreement entered into on July 1, 1997 among the Borrower, CLI and the
initial purchasers of the 1997 Senior Subordinated Notes.
"1997 Senior Subordinated Debt Instruments" shall mean the 1997 Senior
Subordinated Notes, the 1997 Note Indenture and the 1997 Notes Registration
Rights Agreement.
"1997 Senior Subordinated Notes" shall mean the Borrower's 10-1/4%
Senior Subordinated Notes due 2007 issued pursuant to the 1997 Note Indenture
and any notes issued by the Borrower in exchange for, and as contemplated by,
the 1997 Notes Registration Rights Agreement.
"1998 Note Indenture" shall mean the indenture dated as of November 19,
1998, among the Borrower, CLI and The Bank of New York, as trustee, as in effect
on the Closing Date and as thereafter amended from time to time in accordance
with the requirements thereof and of this Agreement
"1998 Notes Registration Rights Agreement" shall mean the Registration
Rights Agreement entered into on November 19, 1998, among the Borrower, CLI and
the initial purchasers of the 1998 Senior Subordinated Notes.
"1998 Senior Subordinated Debt Instruments" shall mean the 1998 Senior
Subordinated Notes, the 1998 Note Indenture and the 1998 Notes Registration
Rights Agreement.
"1998 Senior Subordinated Notes" shall mean the Borrower's 9-1/4%
Senior Subordinated Notes due 2008 issued pursuant to the 1998 Note Indenture
and any notes issued by the Borrower in exchange for, and as contemplated by,
the 1998 Notes Registration Rights Agreement.
"Notes Registration Rights Agreements" shall mean, collectively, the
1997 Notes Registration Rights Agreement and the 1998 Notes Registration Rights
Agreement.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee Agreements and the Security Documents.
"Operating Agreement" shall mean any tower site lease, tower license,
office lease, studio lease, equipment lease, network affiliation agreement,
programming agreement, time brokerage agreement or other similar agreement
relating to the operation of a Station.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Parent Guarantee Agreement" shall mean the Parent Guarantee Agreement,
substantially in the form of Exhibit F, made by Citadel in favor of the
Collateral Agent for the benefit of the Secured Parties.
22
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"Pending Acquisitions" shall mean those acquisitions listed on
Schedule 1.01(b).
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"Permitted Acquisition" shall have the meaning assigned to such term in
Section 6.04(c).
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard &
Poor's Ratings Service or from Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any Lender or of any commercial bank organized under the laws of the
United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria of
clause (c) above.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in
the form of Exhibit G, between the Borrower, Citadel, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"Preferred Stock Registration Rights Agreement" shall mean the
Preferred Stock Registration Rights Agreement entered into on July 1, 1997 among
the Borrower, CLI and the initial purchasers of the Exchangeable Preferred
Stock.
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"Pro Rata Percentage" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.
"Pro Rata Term Percentage" of any Term Lender at any time shall mean a
fraction (expressed as a percentage) (a) the numerator of which is equal to the
sum of (i) the aggregate principal amount of the Term Loans of such Lender
outstanding at such time and (ii) the unused and available Term Loan Commitment
of such Lender at such time and (b) the denominator of which is the sum of (i)
the aggregate outstanding principal amount of all Term Loans at such time and
(ii) the total unused and available Term Loan Commitments at such time.
"Properties" shall have the meaning assigned to such term in
Section 3.17(a).
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Related Business" shall mean (a) any business ancillary to the
ownership or operation of a Station or (b) any business that is an ISP or
ancillary to the business of an ISP.
"Related Fund" shall mean, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto, within or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, abate or in any other way address any Hazardous Material
in the environment; (ii) prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Material so it does not migrate or endanger
or threaten to endanger public health, welfare or the environment; (iii) resolve
any non-compliance with Environmental Law or any Environmental Permit; or (iv)
perform studies and investigations in connection with, or as a precondition to,
(i), (ii) or (iii) above.
"Repayment Date" shall have the meaning given such term in
Section 2.11.
"Required Lenders" shall mean, at any time, Lenders having Loans, L/C
Exposure and unused Revolving Credit Commitments and Term Loan Commitments
representing at least a
24
majority of the sum of all Loans outstanding, L/C Exposure and unused Revolving
Credit Commitments and Term Loan Commitments at such time.
"Responsible Officer" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09, (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04 and (c) increased from time to time pursuant to Section 2.23.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's L/C Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment or, if the Revolving Credit Commitments have terminated or expired, a
Lender with Revolving Credit Exposure.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to clause (c) of Section 2.01. Each Revolving Loan shall
be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" shall mean the Security Agreement, substantially
in the form of Exhibit H, among the Borrower, the Subsidiaries party thereto and
the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Mortgages, the Security Agreement,
the Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"SPC" shall have the meaning assigned to such term in Section 9.04(i).
"Station" shall mean a radio station operated to transmit over airwaves
radio signals within a geographic area for the purpose of providing commercial
broadcasting radio programming.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or
25
other fronting office making or holding a Loan) is subject. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein referred to
as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit E, made by the Subsidiary
Guarantors in favor of the Collateral Agent for the benefit of the Secured
Parties.
"Subsidiary Guarantor" shall mean each Subsidiary that is or becomes a
party to a Subsidiary Guarantee Agreement.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Lender" shall mean a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"Term Loan Availability Period" shall mean the period from and
including the Closing Date to and including December 15, 2000.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Term Loan Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial aggregate amount of the Term Loan Commitments is $250,000,000. Unless
the context shall otherwise require, after the effectiveness of any Incremental
Term Loan Commitments the term "Term Loan Commitments" shall include such
Incremental Term Loan Commitment.
"Term Loans" shall mean the term loans made by the Lenders to the
Borrower pursuant to Section 2.01. Each Term Loan shall be a Eurodollar Term
Loan or an ABR Term Loan. Unless the context shall otherwise require, the term
"Term Loans" shall include any Incremental Term Loans.
"Total Debt" at any time shall mean the total Indebtedness of the
Borrower and its Subsidiaries at such time (excluding Indebtedness of the type
described in clause (h) of the definition of such term, except to the extent of
any unreimbursed drawings thereunder).
26
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such time.
The initial Total Revolving Credit Commitment is $150,000,000.
"Trade Out Transaction" shall mean an exchange by the Borrower or any
Subsidiary of advertising time for non-cash consideration, such as goods,
services or program material.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall include
the Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned Subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article
VI or any related definition to eliminate the effect of any change in GAAP
occurring after the date of this Agreement on the operation of such covenant (or
if the Administrative Agent notifies the Borrower that the Required Lenders wish
to amend Article VI or any related definition for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.
SECTION 1.03. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings may also be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
27
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a) to make Term Loans to the Borrower on no
more than six occasions during the Term Loan Availability Period, in an
aggregate principal amount not to exceed its Term Loan Commitment, (b) if such
Lender has so committed pursuant to Section 2.24, to make Incremental Term Loans
to the Borrower on or prior to the Incremental Facility Cutoff Date, in an
aggregate principal amount not to exceed its Incremental Term Loan Commitment,
and (c) to make Revolving Loans to the Borrower, at any time and from time to
time on or after the date hereof, and until the earlier of the Maturity Date and
the termination of the Revolving Credit Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time outstanding
that will not result in such Lender's Revolving Credit Exposure exceeding such
Lender's Revolving Credit Commitment. Within the limits set forth in clause (c)
of the preceding sentence and subject to the terms, conditions and limitations
set forth herein, the Borrower may borrow, pay or prepay and reborrow Revolving
Loans. Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. LOANS. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). Except for Loans deemed made pursuant to Section
2.02(f), the Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $1,000,000 and not less than
$5,000,000 (except with respect to any Incremental Term Borrowing, to the extent
otherwise provided in the related Incremental Term Loan Assumption Agreement) or
(ii) equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.08, 2.15 and 2.24(d), each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than ten Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 11:00 a.m.,
New York City time, and the Administrative Agent shall by 12:00 (noon), New York
City time, credit the amounts so received to an account or accounts designated
by the Borrower in the applicable Borrowing Request or, if a Borrowing shall not
occur on such date because any
28
condition precedent herein specified shall not have been met, return the amounts
so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
(f) If the applicable Issuing Bank shall not have received from the
Borrower the payment required to be made by Section 2.22(e) within the time
specified in such Section, such Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent will
promptly notify each Revolving Credit Lender of such L/C Disbursement and its
Pro Rata Percentage thereof. Each Revolving Credit Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., New York City time, on such date (or, if such Revolving Credit
Lender shall have received such notice later than 12:00 (noon), New York City
time, on any day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day), an amount equal to such Lender's Pro Rata
Percentage of such L/C Disbursement (it being understood that such amount shall
be deemed to constitute an ABR Revolving Loan of such Lender and such payment
shall be deemed to have reduced the L/C Exposure), and the Administrative Agent
will promptly pay to the applicable Issuing Bank amounts so received by it from
the Revolving Credit Lenders. The Administrative Agent will promptly pay to the
applicable Issuing Bank any amounts received by it from the Borrower pursuant to
Section 2.22(e) prior to the time that any Revolving Credit Lender makes any
payment pursuant to this paragraph (f); any such amounts received by the
Administrative Agent thereafter will be promptly remitted by the Administrative
Agent to the Revolving Credit Lenders that shall have made such payments and to
the applicable Issuing Bank, as their interests may appear. If any Revolving
Credit Lender shall not have made its Pro Rata Percentage of such L/C
Disbursement available to the Administrative Agent as provided above, such
Lender and the Borrower severally agree to pay interest on such amount, for each
day from and including the date such amount is required to be paid in accordance
with this paragraph to but excluding the date such amount is paid, to the
Administrative Agent for the account of the applicable Issuing Bank at (i) in
the case of the Borrower, a rate per annum equal to the interest rate applicable
to Revolving Loans pursuant to
29
Section 2.06(a), and (ii) in the case of such Lender, for the first such day,
the Federal Funds Effective Rate, and for each day thereafter, the Alternate
Base Rate.
SECTION 2.03. BORROWING PROCEDURE. In order to request a Borrowing
(other than a deemed Borrowing pursuant to Section 2.02(f), as to which this
Section 2.03 shall not apply), the Borrower shall hand deliver or fax to the
Administrative Agent a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a Term
Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day), (iii) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary specification in
any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing
is specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Administrative Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.03 (and the contents thereof), and of each Lender's portion of
the requested Borrowing.
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the principal amount of each Term Loan of such Lender
as provided in Section 2.11 and (ii) the then unpaid principal amount of each
Revolving Loan of such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) above shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with their terms.
(e) Any Lender may request that Loans made by it hereunder be evidenced
by a promissory note. In such event, the Borrower shall execute and deliver to
such Lender a promissory note
30
payable to such Lender and its registered assigns and in a form and substance
reasonably acceptable to the Administrative Agent and the Borrower.
Notwithstanding any other provision of this Agreement, in the event any Lender
shall request and receive such a promissory note, the interests represented by
such note shall at all times (including after any assignment of all or part of
such interests pursuant to Section 9.04) be represented by one or more
promissory notes payable to the payee named therein or its registered assigns.
SECTION 2.05. FEES. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December in each year and on each date on which any Commitment of
such Lender shall expire or be terminated as provided herein, a commitment fee
(a "Commitment Fee") equal to the Applicable Percentage per annum in effect from
time to time on the daily unused amount of the Commitments of such Lender during
the preceding quarter (or other period commencing with the date hereof or ending
with the date on which the Commitments of such Lender shall expire or be
terminated). All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Commitment Fee due to each
Lender shall commence to accrue on the date hereof and shall cease to accrue on
the date on which the Commitment of such Lender shall expire or be terminated as
provided herein.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Engagement Letter at the times
and in the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C Participation Fee") calculated on such Lender's Pro Rata Percentage of
the daily aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter period
commencing with the date hereof or ending with the Maturity Date or the date on
which all Letters of Credit have been canceled or have expired and the Revolving
Credit Commitments of all Lenders shall have been terminated) at a rate equal to
the Applicable Percentage from time to time used to determine the interest rate
on Revolving Credit Borrowings comprised of Eurodollar Loans pursuant to Section
2.06, and (ii) to the applicable Issuing Bank with respect to each Letter of
Credit on the last Business Day of March, June, September and December of each
year and on the Maturity Date, a fronting fee equal to 1/8 of 1% per annum on
the aggregate outstanding face amount of such Letter of Credit and the standard
issuance and drawing fees specified from time to time by such Issuing Bank (the
"Issuing Bank Fees"). All L/C Participation Fees and Issuing Bank Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the applicable Issuing Bank. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when the Alternate Base Rate is
31
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by
the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.07. DEFAULT INTEREST. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the rate that would be applicable to an
ABR Revolving Loan plus 2.00%.
SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or fax notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The Term
Loan Commitments (other than any Incremental Term Loan Commitments) shall
automatically terminate at 5:00 p.m., New York City time, on the last day of the
Term Loan Availability Period. Unless terminated earlier pursuant to the
applicable Incremental Term Loan Assumption Agreement, the Incremental Term Loan
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
the Incremental Facility Cutoff Date. The Revolving Credit Commitments and the
L/C Commitments shall automatically terminate on the Maturity Date.
Notwithstanding the foregoing, all the Commitments shall automatically terminate
at 5:00 p.m., New York City time, on February 29, 2000, if the initial Credit
Event shall not have occurred by such time.
32
(b) Upon at least three Business Days' prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the Term
Loan Commitments or the Revolving Credit Commitments; provided, however, that
(i) each partial reduction of the Term Loan Commitments or the Revolving Credit
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $10,000,000 and (ii) the Total Revolving Credit Commitment shall not
be reduced to an amount that is less than the Aggregate Revolving Credit
Exposure at the time.
(c) If any prepayment of Term Loans would be required pursuant to
Section 2.13 but cannot be made because there are no Term Loans outstanding, or
because the amount of the required prepayment exceeds the outstanding amount of
Term Loans, then, on the date that such prepayment is required, the Revolving
Credit Commitments shall be reduced by an aggregate amount equal to the amount
of the required prepayment or the excess of such amount over the outstanding
amount of Term Loans, as the case may be, on the day any such prepayment of Term
Loans is, or would be, required by Section 2.13.
(d) Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the Lenders in accordance with
their respective applicable Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Lenders, on the date of
each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 10:00 a.m., New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 10:00 a.m.,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and 2.02(b) regarding the principal amount and maximum number of
Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the
new Loan of such Lender resulting from such conversion and reducing the
Loan (or portion thereof) of such Lender being converted by an
equivalent principal amount; accrued interest on any Eurodollar Loan
(or portion thereof) being converted shall be paid by the Borrower at
the time of conversion;
33
(iv) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.16;
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as
a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Borrowing;
(vii) no Interest Period may be selected for any Eurodollar
Term Borrowing that would end later than a Repayment Date occurring on
or after the first day of such Interest Period if, after giving effect
to such selection, the aggregate outstanding amount of (A) the
Eurodollar Term Borrowings with Interest Periods ending on or prior to
such Repayment Date and (B) the ABR Term Borrowings would not be at
least equal to the principal amount of Term Borrowings to be paid on
such Repayment Date; and
(viii) upon notice to the Borrower from the Administrative
Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of Default,
no outstanding Loan may be converted into, or continued as, a
Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be converted into an ABR Borrowing.
SECTION 2.11. REPAYMENT OF TERM BORROWINGS. (a) Subject to paragraph
(c) below, the Borrower shall pay to the Administrative Agent, for the account
of the Lenders, on the dates set forth below, or if any such date is not a
Business Day, on the next preceding day (each a "Repayment Date") a principal
amount of the Term Loans (as adjusted from time to time pursuant to Sections
2.12(b) and 2.13(f)) equal to the percentage set forth below for such date of
the aggregate amount of the Term Loans outstanding on the Incremental Facility
Cutoff Date:
34
Repayment Date Percentage
-------------- ----------
March 31, 2003 3.750%
June 30, 2003 3.750%
September 30, 2003 3.750%
December 31, 2003 3.750%
March 31, 2004 5.000%
June 30, 2004 5.000%
September 30, 2004 5.000%
December 31, 2004 5.000%
March 31, 2005 5.000%
June 30, 2005 5.000%
September 30, 2005 5.000%
December 31, 2005 5.000%
March 31, 2006 5.000%
June 30, 2006 5.000%
September 30, 2006 5.000%
December 31, 2006 5.000%
March 31, 2007 6.250%
June 30, 2007 6.250%
September 30, 2007 6.250%
December 31, 2007 6.250%
(b) Each payment of Term Borrowings pursuant to this Section 2.11 shall
be accompanied by accrued interest on the principal amount paid to but excluding
the date of payment.
(c) To the extent not previously paid, all Term Loans shall be due and
payable on the Maturity Date, together with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of payment.
(d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. PREPAYMENT. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon at
least three Business Days' prior written or fax notice (or telephone notice
promptly confirmed by written or fax notice) in the case of Eurodollar Loans, or
written or fax notice (or telephone notice promptly confirmed by written or fax
notice) at least one Business Day prior to the date of prepayment in the case of
ABR Loans, to the Administrative Agent before 11:00 a.m., New York City time;
provided, however, that each partial prepayment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000.
(b) Optional prepayments of Term Loans shall be applied pro rata
against the remaining scheduled installments of principal due in respect of the
Term Loans.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All
35
prepayments under this Section 2.12 shall be subject to Section 2.16 but
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.13. MANDATORY PREPAYMENTS. (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall, on the
date of such termination, repay or prepay all its outstanding Revolving Credit
Borrowings and replace all outstanding Letters of Credit and/or deposit an
amount equal to the L/C Exposure in cash in a cash collateral account
established with the Collateral Agent for the benefit of the Secured Parties. In
the event of any partial reduction of the Revolving Credit Commitments, then (i)
at or prior to the effective date of such reduction, the Administrative Agent
shall notify the Borrower and the Revolving Credit Lenders of the Aggregate
Revolving Credit Exposure after giving effect thereto and (ii) if the Aggregate
Revolving Credit Exposure would exceed the Total Revolving Credit Commitment
after giving effect to such reduction or termination, then the Borrower shall,
on the date of such reduction or termination, repay or prepay Revolving Credit
Borrowings and/or replace or cash collateralize outstanding Letters of Credit in
an amount sufficient to eliminate such excess. Upon the reduction of the L/C
Exposure on April 1, 2000 pursuant to Section 2.22(b), if and to the extent that
the L/C Exposure exceeds $50,000,000 on such date, the Borrower shall cash
collateralize outstanding Letters of Credit in an amount sufficient to eliminate
such excess.
(b) Not later than the third Business Day following the completion of
any Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received
with respect thereto to prepay outstanding Term Loans and/or permanently reduce
the Revolving Credit Commitments in accordance with Section 2.13(f).
(c) Following the termination of all Term Loan Commitments (other than
any Incremental Term Loan Commitments) pursuant to Section 2.09, in the event
and on each occasion that an Equity Issuance occurs, if the Consolidated
Leverage Ratio as of the date of such Equity Issuance is greater than 5.00 to
1.00, the Borrower shall, substantially simultaneously with (and in any event
not later than the third Business Day next following) the occurrence of such
Equity Issuance, apply the lesser of (i) 50% of the Net Cash Proceeds therefrom
and (ii) the amount of such Net Cash Proceeds as shall be necessary to reduce
the Consolidated Leverage Ratio as of such date to 5.00 to 1.00, to prepay
outstanding Term Loans and/or permanently reduce the Revolving Credit
Commitments in accordance with Section 2.13(f).
(d) No later than the earlier of (i) 90 days after the end of each
fiscal year of the Borrower, commencing with the fiscal year ending on December
31, 2000, and (ii) the date on which the finan cial statements with respect to
such period are delivered pursuant to Section 5.04(a), the Borrower shall prepay
outstanding Term Loans and/or permanently reduce the Revolving Credit
Commitments in accordance with Section 2.13(f) in an aggregate principal amount
equal to 50% of Excess Cash Flow for the fiscal year then ended; provided,
however, that such prepayment and/or reduction shall only apply if the
Consolidated Leverage Ratio at the end of such year shall have been greater than
5.00 to 1.00.
(e) In the event that any Loan Party or any subsidiary of a Loan Party
shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than Indebtedness for money borrowed permitted pursuant to Section
6.01), the Borrower shall, substantially simultaneously with (and in any event
not later than the third Business Day next following) the receipt of such Net
Cash Proceeds by such
36
Loan Party or such subsidiary, apply an amount equal to 100% of such Net Cash
Proceeds to prepay outstanding Term Loans and/or permanently reduce the
Revolving Credit Commitments in accordance with Section 2.13(f); provided,
however, that such prepayment and/or reduction shall only apply if the
Consolidated Leverage Ratio as of the date of such issuance or disposition is
greater than 5.00 to 1.00.
(f) Amounts required to be used to prepay Term Loans and/or permanently
reduce the Revolving Credit Commitments under this Agreement shall (i) be
applied pro rata against the remaining scheduled installments of principal due
in respect of the Term Loans under Section 2.11(a) until all such principal
shall have been paid in full and (ii) thereafter, be applied to permanently
reduce the Revolving Credit Commitments and, if necessary, prepay Revolving
Loans and/or cash collateralize Letters of Credit to the extent the L/C Exposure
would exceed the Total Revolving Credit Commitment after giving effect to any
such reduction.
(g) The Borrower shall deliver to the Administrative Agent, at the time
of each prepayment and/or reduction required under this Section 2.13, (i) a
certificate signed by a Financial Officer of the Borrower setting forth in
reasonable detail the calculation of the amount of such prepayment and/or
reduction and (ii) to the extent practicable, at least three days prior written
notice of such prepayment and/or reduction. Each notice of prepayment and/or
reduction shall specify the date therefor, the Type of each Loan, if any, being
prepaid and the principal amount of each Loan, if any, (or portion thereof) to
be prepaid. All prepayments of Borrowings under this Section 2.13 shall be
subject to Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.14. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or such Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
such Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or such Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or such Issuing Bank to be material, then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, upon
demand such additional amount or amounts as will compensate such Lender or
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or Issuing Bank shall have determined that any Change
in Law regarding capital adequacy has or would have the effect of reducing the
rate of return on such Lender's or Issuing Bank's capital or on the capital of
such Lender's or Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made or participations in Letters of Credit
purchased by such Lender pursuant hereto or the Letters of Credit issued by such
Issuing Bank pursuant hereto to a level below that which such Lender or Issuing
Bank or such Lender's or Issuing Bank's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or Issuing
Bank's policies and the policies of such Lender's or Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such Lender or
Issuing Bank to be material, then from time to time the Borrower shall pay to
such Lender or Issuing Bank, as the
37
case may be, such additional amount or amounts as will compensate such Lender or
Issuing Bank or such Lender's or Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or Issuing Bank or its holding
company, as applicable, as specified in paragraph (a) or (b) above shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or Issuing Bank the amount shown as due on any
such certificate delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or any Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or Issuing Bank's right to demand such compensation; provided that
the Borrower shall not be under any obligation to compensate any Lender or
Issuing Bank under paragraph (a) or (b) above with respect to increased costs or
reductions with respect to any period prior to the date that is 120 days prior
to such request if such Lender or Issuing Bank knew or could reasonably have
been expected to know of the circumstances giving rise to such increased costs
or reductions and of the fact that such circumstances would result in a claim
for increased compensation by reason of such increased costs or reductions;
provided further that the foregoing limitation shall not apply to any increased
costs or reductions arising out of the retroactive application of any Change in
Law within such 120-day period. The protection of this Section shall be
available to each Lender and Issuing Bank regardless of any possible contention
of the invalidity or inapplicability of the law, rule, regulation, agreement,
guideline or other change or condition that shall have occurred or been imposed.
SECTION 2.15. CHANGE IN LEGALITY. (a) Notwithstanding any other
provision of this Agreement, if any Change in Law shall make it unlawful for any
Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods and
ABR Loans will not thereafter (for such duration) be converted into
Eurodollar Loans), whereupon any request for a Eurodollar Borrowing (or
to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a
Eurodollar Borrowing for an additional Interest Period) shall, as to
such Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such or to convert a Eurodollar Loan into an
ABR Loan, as the case may be), unless such declaration shall be
subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
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(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. INDEMNITY. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal of
any Eurodollar Loan prior to the end of the Interest Period in effect therefor,
(ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of
the Interest Period with respect to any Eurodollar Loan, in each case other than
on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be
made pursuant to a conversion or continuation under Section 2.10) not being made
after notice of such Loan shall have been given by the Borrower hereunder (any
of the events referred to in this clause (a) being called a "Breakage Event") or
(b) any default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section 2.16 shall be
delivered to the Borrower and shall be conclusive absent manifest error.
SECTION 2.17. PRO RATA TREATMENT. Except as required under Section
2.15, each Borrowing of any Class, each payment or prepayment of principal of
any Borrowing of any Class, each payment of interest on the Loans of any Class,
each payment of the Commitment Fees, each reduction of the Commitments and each
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective Commitments of such Class (or, if such Commitments shall have
expired or been terminated, or with respect to payments of principal of and
interest on the Term Loans, in accordance with the respective principal amounts
of their outstanding Loans of such Class). Each Lender agrees that in computing
such Lender's portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender's percentage of such Borrowing
to the next higher or lower whole dollar amount.
SECTION 2.18. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans and L/C Exposure of such other Lender, so that the aggregate unpaid
principal amount of the Loans and L/C Exposure and participations in Loans and
L/C Exposure held
39
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans and L/C Exposure then outstanding as the principal amount of
its Loans and L/C Exposure prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Loans and L/C
Exposure outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.18 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrower and Citadel expressly consent to the foregoing arrangements and agree
that any Lender holding a participation in a Loan or L/C Disbursement deemed to
have been so purchased may exercise any and all rights of banker's lien, setoff
or counterclaim with respect to any and all moneys owing by the Borrower and
Citadel to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such participation.
SECTION 2.19. PAYMENTS. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 (noon), New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than Issuing Bank Fees, which shall be paid directly to the applicable
Issuing Bank,) shall be made to the Administrative Agent at its offices at
Eleven Madison Avenue, New York, New York 10010.
(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.20. TAXES. (a) Any and all payments by or on account of any
obligation of the Borrower or any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower or any Loan
Party shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or such Loan Party shall make such
deductions and (iii) the Borrower or such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were
40
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender, or by the Administrative Agent on its behalf or on behalf
of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower or any other Loan Party to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.21. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES;
DUTY TO MITIGATE. (a) In the event (i) any Lender or Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
Issuing Bank delivers a notice described in Section 2.15 or (iii) the Borrower
is required to pay any additional amount to any Lender or Issuing Bank or any
Governmental Authority on account of any Lender or Issuing Bank pursuant to
Section 2.20, the Borrower may, at its sole expense and effort (including with
respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender or Issuing Bank and the Administrative Agent, require
such Lender or Issuing Bank to transfer and assign, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
of its interests, rights and obligations under this Agreement to an assignee
that shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (x) such assignment
shall not conflict with any law, rule or regulation or order of any court or
other Governmental Authority having jurisdiction, (y) the Borrower shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Credit Commitment is being assigned, of the Issuing Banks), which
consent shall not unreasonably be withheld, and (z) the Borrower or such
assignee shall have paid to the affected Lender or Issuing Bank in immediately
available funds an amount equal to the sum of the principal of and interest
accrued to the date of such payment on the outstanding Loans or L/C
Disbursements of such Lender or Issuing Bank, respectively, plus all Fees and
other amounts accrued for the account of such Lender or Issuing Bank hereunder
(including any amounts under Section 2.14 and Section 2.16); provided further
that, if prior to any such transfer and assignment the circumstances or event
that resulted in such Lender's or Issuing Bank's claim for compensation under
Section 2.14 or notice under Section 2.15 or the amounts paid pursuant to
Section 2.20, as the case may be, cease to cause such Lender or Issuing Bank to
suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in
Section 2.15, or cease to result in amounts being payable under Section 2.20, as
the case may be (including as a result of any action taken by such Lender or
Issuing Bank pursuant to paragraph (b) below), or if such Lender or Issuing Bank
shall waive its right to claim further compensation under Section 2.14 in
respect of such circumstances or event or shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under Section 2.20 in
respect of such circumstances or event, as the case may be,
41
then such Lender or Issuing Bank shall not thereafter be required to make any
such transfer and assignment hereunder.
(b) If (i) any Lender or Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or Issuing Bank or any Governmental Authority on account of any
Lender or Issuing Bank, pursuant to Section 2.20, then such Lender or Issuing
Bank shall use reasonable efforts (which shall not require such Lender or
Issuing Bank to incur an unreimbursed loss or unreimbursed cost or expense or
otherwise take any action inconsistent with its internal policies or legal or
regulatory restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested in
writing by the Borrower or (y) to assign its rights and delegate and transfer
its obligations hereunder to another of its offices, branches or affiliates, if
such filing or assignment would reduce its claims for compensation under Section
2.14 or enable it to withdraw its notice pursuant to Section 2.15 or would
reduce amounts payable pursuant to Section 2.20, as the case may be, in the
future. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender or Issuing Bank in connection with any such filing or
assignment, delegation and transfer.
SECTION 2.22. LETTERS OF CREDIT. (a) General. The Borrower may request
the issuance of a Letter of Credit for its own account, in a form reasonably
acceptable to the Administrative Agent and the applicable Issuing Bank, at any
time and from time to time while the Revolving Credit Commitments remain in
effect. This Section shall not be construed to impose an obligation upon any
Issuing Bank to issue any Letter of Credit that is inconsistent with the terms
and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall hand deliver
or fax to the applicable Issuing Bank and the Administrative Agent (reasonably
in advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (i) the L/C Exposure shall not exceed
$75,000,000 prior to and including March 31, 2000, or exceed $50,000,000
thereafter and (ii) the Aggregate Revolving Credit Exposure shall not exceed the
Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Maturity Date, unless such Letter of Credit expires by its terms on an earlier
date.
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the applicable Issuing Bank or the Lenders,
the applicable Issuing Bank hereby grants to each Revolving Credit Lender, and
each Revolving Credit Lender hereby acquires from such Issuing Bank, a
participation in such Letter of Credit equal to such Revolving Credit Lender's
Pro Rata
42
Percentage of the aggregate amount available to be drawn under such Letter of
Credit, effective upon the issuance of such Letter of Credit. In addition, the
applicable Issuing Bank hereby grants to each Revolving Credit Lender, and each
Revolving Credit Lender hereby acquires from such Issuing Bank, a participation
in each Existing Letter of Credit equal to such Revolving Credit Lender's Pro
Rata Percentage of the aggregate amount available to be drawn under such
Existing Letter of Credit, effective on the Closing Date. In consideration and
in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the applicable Issuing Bank, such Lender's Pro Rata Percentage of each L/C
Disbursement made by such Issuing Bank and not reimbursed by the Borrower (or,
if applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(f). Each
Revolving Credit Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from such Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof
or any other person may at any time have against the beneficiary under
any Letter of Credit, any Issuing Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the applicable Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit; and
43
(vi) any other act or omission to act or delay of any kind of
any Issuing Bank, the Lenders, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of any Issuing Bank. However, the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such Issuing Bank's gross negligence or wilful misconduct whether in determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof or otherwise; it is understood that each Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) an Issuing Bank's exclusive reliance on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
an Issuing Bank.
(g) Disbursement Procedures. The applicable Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. Such Issuing Bank shall
as promptly as possible give telephonic notification, confirmed by fax, to the
Administrative Agent and the Borrower of such demand for payment and whether
such Issuing Bank has made or will make an L/C Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Credit Lenders with respect to any such L/C Disbursement. The Administrative
Agent shall promptly give each Revolving Credit Lender notice thereof.
(h) Interim Interest. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of such Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(f), at the rate per annum that would
apply to such amount if such amount were an ABR Revolving Loan.
(i) Resignation or Removal of an Issuing Bank. An Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent and
the Lenders. Subject to the next succeeding paragraph, upon the acceptance of
any
44
appointment as an Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Issuing Bank and
the retiring Issuing Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or resignation
shall become effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(c)(ii). The acceptance of any appointment as an Issuing
Bank hereunder by a successor Lender shall be evidenced by an agreement entered
into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and (ii)
references herein and in the other Loan Documents to the term "Issuing Bank"
shall be deemed to refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of an Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall be
made at the option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Administrative Agent to reimburse the Issuing Banks for L/C
Disbursements for which they have not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and from
time to time with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Lender, designate one or more additional
Lenders to act as an issuing bank under the terms of the Agreement. Any Lender
designated as an issuing bank pursuant to this paragraph (k) shall be deemed to
be an "Issuing Bank" (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters
of Credit, such term shall thereafter apply to the other Issuing Banks and such
Lender.
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SECTION 2.23. INCREASE IN REVOLVING CREDIT COMMITMENTS. (a) The
Borrower may, by written notice to the Administrative Agent from time to time,
request that the Total Revolving Credit Commitment be increased by an amount not
to exceed the Incremental Revolving Facility Amount at such time. Upon the
approval of such request by the Administrative Agent, the Administrative Agent
shall deliver a copy thereof to each Revolving Credit Lender. Such notice shall
set forth the amount of the requested increase in the Total Revolving Credit
Commitment (which shall be in minimum increments of $5,000,000 and a minimum
amount of $20,000,000 or equal to the remaining Incremental Revolving Facility
Amount) and the date on which such increase is requested to become effective
(which shall be not less than 10 Business Days nor more than 60 days after the
date of such notice and which, in any event, must be on or prior to the
Incremental Facility Cutoff Date), and shall offer each Revolving Credit Lender
the opportunity to increase its Revolving Credit Commitment by its Pro Rata
Percentage of the proposed increased amount. Each Revolving Credit Lender shall,
by notice to the Borrower and the Administrative Agent given not more than 10
days after the date of the Administrative Agent's notice, either agree to
increase its Revolving Credit Commitment by all or a portion of the offered
amount (each Revolving Credit Lender so agreeing being an "Increasing Revolving
Lender") or decline to increase its Revolving Credit Commitment (and any
Revolving Credit Lender that does not deliver such a notice within such period
of 10 days shall be deemed to have declined to increase its Revolving Credit
Commitment) (each Revolving Credit Lender so declining or being deemed to have
declined being a "Non-Increasing Revolving Lender"). In the event that, on the
10th day after the Administrative Agent shall have delivered a notice pursuant
to the second sentence of this paragraph, the Revolving Credit Lenders shall
have agreed pursuant to the preceding sentence to increase their Revolving
Credit Commitments by an aggregate amount less than the increase in the Total
Revolving Credit Commitment requested by the Borrower, the Borrower may arrange
for one or more banks or other financial institutions (any such bank or other
financial institution referred to in this clause (a) being called an "Augmenting
Revolving Lender"), which may include any Revolving Credit Lender, to extend
Revolving Credit Commitments or increase their existing Revolving Credit
Commitments in an aggregate amount equal to the unsubscribed amount; provided
that each Augmenting Revolving Lender, if not already a Revolving Credit Lender
hereunder, shall be subject to the approval of the Administrative Agent and the
Issuing Banks (which approvals shall not be unreasonably withheld) and the
Borrower and each Augmenting Revolving Lender shall execute all such
documentation as the Administrative Agent shall reasonably specify to evidence
its Revolving Credit Commitment and/or its status as a Revolving Credit Lender
hereunder. Any increase in the Total Revolving Credit Commitment may be made in
an amount which is less than the increase requested by the Borrower if the
Borrower is unable to arrange for, or chooses not to arrange for, Augmenting
Revolving Lenders.
(b) On the effective date (the "Increase Effective Date") of any
increase in the Total Revolving Credit Commitment pursuant to this Section 2.23
(the "Commitment Increase"), (i) the aggregate principal amount of the Revolving
Loans outstanding (the "Initial Loans") immediately prior to giving effect to
the Commitment Increase on the Increase Effective Date shall be deemed to be
paid, (ii) each Increasing Revolving Lender and each Augmenting Revolving Lender
that shall have been a Revolving Credit Lender prior to the Commitment Increase
shall pay to the Administrative Agent in same day funds an amount equal to the
difference between (A) the product of (1) such Revolving Credit Lender's Pro
Rata Percentage (calculated after giving effect to the Commitment Increase)
multiplied by (2) the amount of the Subsequent Revolving Borrowings (as
hereinafter defined) and (B) the product of (1) such Revolving Credit Lender's
Pro Rata Percentage (calculated without giving effect to the Commitment
Increase) multiplied by (2) the amount of the Initial Loans, (iii) each
Augmenting Revolving Lender that shall not have been a Revolving Credit Lender
prior to the Commitment Increase shall pay to Administrative Agent in same day
funds an
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amount equal to the product of (1) such Augmenting Revolving Lender's Pro Rata
Percentage (calculated after giving effect to the Commitment Increase)
multiplied by (2) the amount of the Subsequent Revolving Borrowings, (iv) after
the Administrative Agent receives the funds specified in clauses (ii) and (iii)
above, the Administrative Agent shall pay to each Non-Increasing Revolving
Lender the portion of such funds that is equal to the difference between (A) the
product of (1) such Non-Increasing Revolving Lender's Pro Rata Percentage
(calculated without giving effect to the Commitment Increase) multiplied by (2)
the amount of the Initial Loans, and (B) the product of (1) such Non-Increasing
Revolving Lender's Pro Rata Percentage (calculated after giving effect to the
Commitment Increase) multiplied by (2) the amount of the Subsequent Revolving
Borrowings, (v) after the effectiveness of the Commitment Increase, the Borrower
shall be deemed to have made new Revolving Credit Borrowings (the "Subsequent
Revolving Borrowings") in an aggregate principal amount equal to the aggregate
principal amount of the Initial Loans and of the Types and for the Interest
Periods specified in a Borrowing Request delivered to the Administrative Agent
in accordance with Section 2.03, (vi) each Non-Increasing Revolving Lender, each
Increasing Revolving Lender and each Augmenting Revolving Lender shall be deemed
to hold its Pro Rata Percentage of each Subsequent Revolving Borrowing (each
calculated after giving effect to the Commitment Increase) and (vii) the
Borrower shall pay each Increasing Revolving Lender and each Non-Increasing
Revolving Lender any and all accrued but unpaid interest on the Initial Loans.
The deemed payments made pursuant to clause (i) above in respect of each
Eurodollar Loan shall be subject to indemnification by the Borrower pursuant to
the provisions of Section 2.16 if the Increase Effective Date occurs other than
on the last day of the Interest Period relating thereto.
(c) Notwithstanding the foregoing, no increase in the Total Revolving
Credit Commitment (or in the Revolving Credit Commitment of any Revolving Credit
Lender) or addition of a new Revolving Credit Lender shall become effective
under this Section 2.23 unless, (i) on the date of such increase, the conditions
set forth in paragraphs (b) and (c) of Section 4.01 shall be satisfied and the
Administrative Agent shall have received a certificate to that effect dated such
date and executed by a Financial Officer of the Borrower, and (ii) the
Administrative Agent shall have received (with sufficient copies for each of the
Revolving Credit Lenders) documents consistent with those delivered on the
Effective Date under clauses (a) and (c) of Section 4.02 as to the corporate
power and authority of the Borrower to borrow hereunder after giving effect to
such increase.
SECTION 2.24. INCREASE IN TERM LOAN COMMITMENTS. (a) The Borrower may,
by written notice to the Administrative Agent, request Incremental Term Loan
Commitments in an amount not to exceed the Incremental Term Loan Amount. Upon
the approval of such request by the Administrative Agent, the Administrative
Agent shall deliver a copy thereof to each Term Lender. Such notice shall set
forth the amount of the Incremental Term Loan Commitments being requested (which
shall be in minimum increments of $5,000,000 and a minimum amount of $20,000,000
or equal to the remaining Incremental Term Loan Amount) and the date on which
such Incremental Term Loan Commitments are requested to become effective (which
shall not be less than 10 Business Days nor more than 60 days after the date of
such notice), and shall offer each Term Lender the opportunity to make an
Incremental Term Loan Commitment in an amount equal to its Pro Rata Term
Percentage (without giving effect to the proposed Incremental Term Loan
Commitments) of the proposed Incremental Term Loan Commitments. Each Term Lender
shall, by notice to the Borrower and the Administrative Agent given not more
than 10 days after the date of the Administrative Agent's notice, either agree
to accept an Incremental Term Loan Commitment in an amount equal to all or a
portion of the offered amount or decline to accept an Incremental Term Loan
Commitment (and any Lender that does not deliver such a notice within such
period of 10 days shall be deemed to have declined to increase its Term Loan
Commitment). In the event that, on the 10th
47
day after the Administrative Agent shall have delivered a notice pursuant to the
second sentence of this paragraph, the Term Lenders shall have agreed pursuant
to the preceding sentence to accept Incremental Term Loan Commitments by an
aggregate amount less than the Incremental Term Loan Commitment requested by the
Borrower, the Borrower may arrange for one or more banks or other financial
institutions (any such bank or other financial institution referred to in this
clause (a) being called an "Augmenting Term Lender"), which may include any Term
Lender, to extend Incremental Term Loan Commitments in an aggregate amount equal
to the unsubscribed amount; provided that each Augmenting Term Lender, if not
already a Term Lender hereunder, shall be subject to the approval of the
Administrative Agent (which approval shall not be unreasonably withheld). Any
Incremental Term Loan Commitment may be made in an amount which is less than the
increase requested by the Borrower if the Borrower is unable to arrange for, or
chooses not to arrange for, Augmenting Term Lenders.
(b) The Borrower and each Incremental Term Lender shall execute and
deliver to the Administrative Agent an Incremental Term Loan Assumption
Agreement and such other documentation as the Administrative Agent shall
reasonably specify to evidence its Incremental Term Loan Commitment and/or its
status as a Term Lender hereunder. The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Incremental Term Loan
Assumption Agreement. Each of the parties hereto hereby agrees that, upon the
effectiveness of any Incremental Term Loan Assumption Agreement, this Agreement
shall be deemed amended to the extent (but only to the extent) necessary to
reflect the existence and terms of the Incremental Term Loan Commitment
evidenced thereby.
(c) Notwithstanding the foregoing, no Incremental Term Loan Commitment
shall become effective under this Section 2.24 unless (i) on the date of such
effectiveness, the conditions set forth in paragraphs (b) and (c) of Section
4.01 shall be satisfied and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by a Financial Officer
of the Borrower, and (ii) the Administrative Agent shall have received (with
sufficient copies for each of the Incremental Term Lenders) documents consistent
with those delivered on the Effective Date under clauses (a) and (c) of Section
4.02 as to the corporate power and authority of the Borrower to borrow hereunder
after giving effect to such Incremental Term Loan Commitment.
(d) Each of the parties hereto hereby agrees that the Administrative
Agent may take any and all action as may be reasonably necessary to ensure that
all Incremental Term Loans, when originally made, are included in each Borrowing
of outstanding Term Loans on a pro rata basis. This may be accomplished at the
discretion of the Administrative Agent by requiring each outstanding Eurodollar
Term Borrowing to be converted into an ABR Term Borrowing on the date of each
Incremental Term Loan, or by allocating a portion of each Incremental Term Loan
to each outstanding Eurodollar Term Borrowing on a pro rata basis, even though
as a result thereof such Incremental Term Loan may effectively have a shorter
Interest Period than the Term Loans included in the Borrowing of which they are
a part (and notwithstanding any other provision of this Agreement that would
prohibit such an initial Interest Period). Any conversion of Eurodollar Term
Loans to ABR Term Loans required by the preceding sentence shall be subject to
Section 2.16. If any Incremental Term Loan is to be allocated to an existing
Interest Period for a Eurodollar Term Borrowing then, subject to Section 2.07,
the interest rate applicable to such Incremental Term Loan for the remainder of
such Interest Period shall equal the Adjusted LIBO Rate for a period
approximately equal to the remainder of such Interest Period (as determined by
the Administrative Agent two Business Days before the date such Incremental Term
Loan is made) plus the Applicable Percentage.
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SECTION 2.25. EXTENSION OF MATURITY DATE. If on March 31, 2007, (a) the
conditions set forth in paragraphs (b) and (c) of Section 4.01 shall be
satisfied and the Administrative Agent shall have received a certificate to that
effect dated such date and executed by a Financial Officer of the Borrower, and
(b) the 1997 Senior Subordinated Notes shall have been paid in full, then the
Maturity Date shall automatically be extended to December 31, 2007. The
Administrative Agent shall promptly notify each Lender of any such extensions of
the Maturity Date and will deliver to each Lender a copy of the certificate
referred to in the preceding sentence.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Citadel and the Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Banks and each of the
Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of Citadel, the Borrower and
each of the Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect and (d) has the
power and authority to execute, deliver and perform its obligations under each
of the Loan Documents and each other agreement or instrument contemplated hereby
to which it is or will be a party and, in the case of the Borrower, to borrow
hereunder.
SECTION 3.02. AUTHORIZATION. The execution, delivery and performance by
each Loan Party of the Acquisition Agreements and each of the Loan Documents and
the consummation of the transactions contemplated by the Acquisition Agreements
and the Loan Documents (including, in the case of the Borrower, the borrowings
hereunder) (collectively, the "Transactions") (a) have been duly authorized by
all requisite corporate and, if required, stockholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of Citadel, the Borrower or any Subsidiary, (B) any order of any
Governmental Authority or (C) any provision of any indenture, agreement or other
instrument to which Citadel, the Borrower or any Subsidiary is a party or by
which any of them or any of their property is or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate
or to require the prepayment, repurchase or redemption of any obligation under
any such indenture, agreement or other instrument or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Citadel, the Borrower or any
Subsidiary (other than any Lien created hereunder or under the Security
Documents).
SECTION 3.03. ENFORCEABILITY. This Agreement has been duly executed and
delivered by Citadel and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting creditors' rights
generally and general equitable principles.
49
SECTION 3.04. GOVERNMENTAL APPROVALS. Except as set forth on Schedule
3.04, no action, consent or approval of, registration or filing with or any
other action by any Governmental Authority is or will be required in connection
with the Transactions, except for (a) the filing of Uniform Commercial Code
financing statements and filings with the United States Patent and Trademark
Office and the United States Copyright Office, (b) recordation of the Mortgages
and (c) such as have been made or obtained and are in full force and effect.
SECTION 3.05. FINANCIAL STATEMENTS. (a) The Borrower has delivered to
the Lenders its consolidated balance sheets and statements of income,
stockholder's equity and cash flows (i) as of and for the fiscal year ended
December 31, 1998, audited by and accompanied by the opinion of KPMG Peat
Marwick, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended September 30, 1999, certified
by its chief financial officer. Such financial statements present fairly in all
material respects the financial condition and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries as of such dates and for
such periods. Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP.
(b) The Borrower has delivered to the Lenders its unaudited pro forma
consolidated balance sheet as of September 30, 1999, prepared giving effect to
the Caribou Acquisition, the BPH Acquisition, the Liggett Acquisition and the
Borrowings contemplated in connection with such acquisitions, as if they had
occurred on such date. Such pro forma balance sheet has been prepared in good
faith by the Borrower based on the assumptions used to prepare the pro forma
financial information contained in the Confidential Information Memorandum
(which assumptions are believed in good faith by the Borrower on the Closing
Date to be reasonable), is based on the best information available to the
Borrower as of the Closing Date, accurately reflects all adjustments required to
be made to give effect to the Caribou Acquisition, the BPH Acquisition, the
Liggett Acquisition and the Borrowings contemplated in connection with such
acquisitions, and presents fairly in all material respects on a pro forma basis
the estimated consolidated financial position of the Borrower and its
consolidated Subsidiaries as of such date, assuming that the Caribou
Acquisition, the BPH Acquisition, the Liggett Acquisition and the Borrowings
contemplated in connection with such acquisitions, had actually occurred at such
date.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the business, assets, operations, prospects, condition,
financial or otherwise, or material agreements of Citadel, the Borrower and the
Subsidiaries, taken as a whole, since December 31, 1998.
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. (a) Each of
Citadel, the Borrower and the Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets (including
all Mortgaged Properties), except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.02.
(b) Each of Citadel, the Borrower and the Subsidiaries has complied in
all material respects with all obligations under all material leases to which it
is a party and all such leases are in full force and effect. Each of Citadel,
the Borrower and the Subsidiaries enjoys peaceful and undisturbed possession
under all such material leases.
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(c) Except as set forth on Schedule 3.07(c), neither Citadel nor the
Borrower has received any notice of, nor has any knowledge of, any pending or
contemplated condemnation proceeding affecting the Mortgaged Properties or any
sale or disposition thereof in lieu of condemnation.
(d) None of Citadel, the Borrower or any of the Subsidiaries is
obligated under any right of first refusal, option or other contractual right to
sell, assign or otherwise dispose of any Mortgaged Properties or any interest
therein.
SECTION 3.08. SUBSIDIARIES. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of Citadel
or the Borrower therein. The shares of capital stock or other ownership
interests so indicated on Schedule 3.08 are fully paid and non-assessable and
are owned by Citadel or the Borrower, directly or indirectly, free and clear of
all Liens (other than Liens created under the Security Documents).
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS. (a) Except as set forth
on Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Citadel or the Borrower, threatened against or affecting Citadel or
the Borrower or any Subsidiary or any business, property or rights of any such
person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) The Borrower has duly and timely filed all reports and other
filings which are required to be filed under the Communications Act or any other
applicable law, rule or regulation of any Governmental Authority, the non-filing
of which could reasonably be expected to have a Material Adverse Effect. All
information provided by or on behalf of the Borrower in any material filing with
the FCC was, at the time of filing, true, complete and correct in all material
respects when made, and the FCC has been notified of any substantial or
significant changes in such information as may be required in accordance with
applicable laws, rules and regulations.
(c) None of Citadel, the Borrower or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including the Communications
Act), or is in default with respect to any judgment, writ, injunction, decree or
order of any Governmental Authority, where such violation or default could
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. AGREEMENTS AND LICENSES. (a) None of Citadel, the
Borrower or any of the Subsidiaries is a party to any agreement or instrument or
subject to any corporate restriction that has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(b) Schedule 3.10(b) sets forth as of the Closing Date all FCC Licenses
which have been issued or assigned to CLI and which are being used by the
Borrower, and all such FCC Licenses are in full force and effect, except where
the failure to be so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
(c) None of Citadel, the Borrower or any of the Subsidiaries has
breached, or is in default in any manner under, any provision of any indenture
or other agreement or instrument evidencing Indebtedness, or any other material
agreement or instrument or License (including under any LMA
51
Agreement, JS Agreement, Operating Agreement or FCC License, where such breach
or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. FEDERAL RESERVE REGULATIONS. (a) None of Citadel, the
Borrower or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. None of Citadel, the Borrower or any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. USE OF PROCEEDS. The Borrower will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. TAX RETURNS. Each of Citadel, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed by it and has paid
or caused to be paid all taxes due and payable by it and all assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings and for which Citadel, the Borrower or such Subsidiary,
as applicable, shall have set aside on its books adequate reserves.
SECTION 3.15. NO MATERIAL MISSTATEMENTS. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Citadel or the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading.
SECTION 3.16. EMPLOYEE BENEFIT PLANS. Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. As of the Closing Date, the Borrower and each of
its ERISA Affiliates do not have any Plans or Multiemployer Plans that are
"defined benefit plans" within the meaning of ERISA.
SECTION 3.17. ENVIRONMENTAL MATTERS. Except as set forth in
Schedule 3.17:
(a) The properties owned, leased or operated by the Borrower and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could give rise
52
to liability under, Environmental Laws, which violations, Remedial Actions and
liabilities, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last six years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect,
provided that the representations in this paragraph (b) shall be limited to the
Borrower's knowledge with respect to the time periods during the last six years
during which the Borrower did not own the Properties;
(c) There have been no Releases or threatened Releases at, from, under
or, to the Borrower's knowledge, proximate to the Properties or otherwise in
connection with the operations of the Borrower or the Subsidiaries, which
Releases or threatened Releases, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect;
(d) None of Citadel, the Borrower or any of the Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the properties formerly owned, leased or operated by the Borrower and the
Subsidiaries (the "Former Properties") or the current or former operations of
the Borrower or the Subsidiaries or with regard to any person whose liabilities
for environmental matters Citadel, the Borrower or the Subsidiaries has retained
or assumed, in whole or in part, contractually, by operation of law or
otherwise, which, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, nor do Citadel, the Borrower or the Subsidiaries have
reason to believe that any such notice will be received or is being threatened;
and
(e) Hazardous Materials have not been transported from the Properties
or Former Properties, nor have Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of the Properties or Former Properties
in a manner that could give rise to liability under any Environmental Law, nor
have the Borrower or the Subsidiaries retained or assumed any liability,
contractually, by operation of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which transportation,
generation, treatment, storage or disposal, or retained or assumed liabilities,
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.18. INSURANCE. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and its Subsidiaries have insurance in such amounts
and covering such risks and liabilities as are in accordance with normal
industry practice.
SECTION 3.19. SECURITY DOCUMENTS. (a) The Pledge Agreement is effective
to create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgors thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral
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(as defined in the Security Agreement) and, when financing statements in
appropriate form are filed in the offices specified on Schedule 6 to the
Perfection Certificate, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in such Collateral (other than the Intellectual
Property, as defined in the Security Agreement), in each case prior and superior
in right to any other person, other than with respect to Liens expressly
permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in the Intellectual
Property (as defined in the Security Agreement), in each case prior and superior
in right to any other person (it being understood that subsequent recordings in
the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a lien on registered trademarks, trademark
applications and copyrights acquired by the grantors after the date hereof).
(d) The Mortgages are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Borrower's right, title and interest in and to
the Mortgaged Properties thereunder and the proceeds thereof, and when the
Mortgages are filed in the offices specified on Schedule 3.19(d), the Mortgages
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Borrower in such Mortgaged Properties and the proceeds
thereof, in each case prior and superior in right to any other person, other
than with respect to the rights of persons pursuant to Liens expressly permitted
by Section 6.02.
SECTION 3.20. LOCATION OF REAL PROPERTY AND LEASED PREMISES. (a)
Schedule 3.20(a) lists completely and correctly as of the Closing Date all real
property owned by the Borrower and the Subsidiaries and the addresses thereof.
The Borrower and the Subsidiaries own in fee all the real property set forth on
Schedule 3.20(a).
(b) Schedule 3.20(b) lists completely and correctly as of the Closing
Date all real property material to the business of the Borrower and leased by
the Borrower or the Subsidiaries and the addresses thereof. The Borrower and the
Subsidiaries have valid leases in all the real property set forth on Schedule
3.20(b).
SECTION 3.21. LABOR MATTERS. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against Citadel, the Borrower
or any Subsidiary pending or, to the knowledge of Citadel or the Borrower,
threatened. The hours worked by and payments made to employees of Citadel, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from Citadel, the Borrower or any
Subsidiary, or for which any claim may be made against Citadel, the Borrower or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of
Citadel, the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which Citadel,
the Borrower or any Subsidiary is bound.
SECTION 3.22. SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to
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the application of the proceeds of each Loan, (a) the fair value of the assets
of each of Citadel and the Borrower, at a fair valuation, will exceed its debts
and liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each of Citadel and the Borrower will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each of Citadel and
the Borrower will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each of Citadel and the Borrower will not have unreasonably
small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the Closing
Date.
SECTION 3.23. YEAR 2000. All disclosures contained in Citadel's Form
10-Q filed on November 12, 1999 under the caption "Year 2000 Matters" do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in the light of the circumstances under which such statements were
made, and such statements continue to be true and correct as of the Closing Date
(except to the extent that any additional compliance or remediation has occurred
since such filing).
SECTION 3.24. RANKING. The Obligations constitute "Specified Senior
Debt" under and as defined in each Indenture.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Banks
to issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. ALL CREDIT EVENTS. On the date of each Borrowing,
including on the date of each issuance, amendment, extension or renewal of a
Letter of Credit (each such event being called a "Credit Event"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the applicable Issuing
Bank and the Administrative Agent shall have received a notice requesting the
issuance, amendment, extension or renewal of such Letter of Credit as required
by Section 2.22(b).
(b) The representations and warranties set forth in Article III hereof
and in each other Loan Document shall be true and correct in all material
respects on and as of the date of such Credit Event with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Credit Event, no Event of
Default or Default shall have occurred and be continuing.
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Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower and Citadel on the date of such Credit Event as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Issuing Banks, a favorable written opinion
of each of Eckert Seamans Cherin & Mellott, LLC, special counsel for
Citadel, the Borrower and CLI, and Lionel Sawyer & Collins, Nevada
counsel for Citadel, the Borrower and CLI, substantially to the effect
set forth in Exhibit J-1 and Exhibit J-2, respectively, (A) dated the
Closing Date, (B) addressed to the Issuing Banks, the Administrative
Agent, the Collateral Agent and the Lenders, and (C) covering such
other matters relating to the Loan Documents and the Transactions as
the Administrative Agent shall reasonably request, and Citadel, the
Borrower and CLI hereby request such counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Loan
Documents shall be satisfactory to the Lenders, to the Issuing Banks
and to the Administrative Agent, in their commercially reasonable
judgment.
(c) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan
Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders, the Issuing Banks or the Administrative Agent may
reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of the Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(e) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
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(f) The Pledge Agreement shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in
full force and effect, and all of the outstanding capital stock of the
Subsidiaries and all of the outstanding common stock of the Borrower
shall have been duly and validly pledged thereunder to the Collateral
Agent for the ratable benefit of the Secured Parties and certificates
representing such shares, accompanied by instruments of transfer and
stock powers endorsed in blank, shall be in the actual possession of
the Collateral Agent .
(g) The Security Agreement shall have been duly executed by
the Loan Parties party thereto and shall have been delivered to the
Collateral Agent and shall be in full force and effect on such date and
each document (including each Uniform Commercial Code financing
statement) required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to
create in favor of the Collateral Agent for the benefit of the Secured
Parties a valid, legal and perfected first-priority security interest
in and lien on the Collateral (subject to any Lien expressly permitted
by Section 6.02) described in such agreement shall have been delivered
to the Collateral Agent.
(h) The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings)
made with respect to the Loan Parties in the states (or other
jurisdictions) in which the chief executive office of each such person
is located, any offices of such persons in which records have been kept
relating to accounts receivable and the other jurisdictions in which
Uniform Commercial Code filings (or equivalent filings) are to be made
pursuant to the preceding paragraph, together with copies of the
financing statements (or similar documents) disclosed by such search,
and accompanied by evidence satisfactory to the Collateral Agent that
the Liens indicated in any such financing statement (or similar
document) would be permitted under Section 6.02 or have been released.
(i) The Collateral Agent shall have received a Perfection
Certificate with respect to the Loan Parties dated the Closing Date and
duly executed by a Responsible Officer of the Borrower.
(j)(i) Each of the Mortgages and the other Security Documents,
in form and substance satisfactory to the Lenders, relating to each of
the Mortgaged Properties shall have been duly executed by the parties
thereto and delivered to the Collateral Agent and shall be in full
force and effect, (ii) each of such Mortgaged Properties shall not be
subject to any Lien other than those permitted under Section 6.02,
(iii) each of such Security Documents shall have been filed and
recorded in the recording office as specified on Schedule 3.19(d) (or a
lender's title insurance policy, in form and substance acceptable to
the Collateral Agent, insuring such Security Document as a first lien
on such Mortgaged Property (subject to any Lien permitted by Section
6.02) shall have been received by the Collateral Agent) and, in
connection therewith, the Collateral Agent shall have received evidence
satisfactory to it of each such filing and recordation and (iv) the
Collateral Agent shall have received such other documents, including a
policy or policies of title insurance issued by a nationally recognized
title insurance company, together with such endorsements, coinsurance
and reinsurance as may be requested by the Collateral Agent and the
Lenders, insuring the Mortgages as valid first liens on the Mortgaged
Properties, free of Liens other than those permitted under Section
6.02, together with such surveys, abstracts, appraisals and legal
opinions required
57
to be furnished pursuant to the terms of the Mortgages or as reasonably
requested by the Collateral Agent or the Lenders.
(k) Each of the Parent Guarantee Agreement and the Subsidiary
Guarantee Agreement shall have been duly executed by the parties
thereto, shall have been delivered to the Collateral Agent and shall be
in full force and effect.
(l) The Administrative Agent shall have received a copy of, or
a certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents,
each of which shall be endorsed or otherwise amended to include a
"standard" or "New York" lender's loss payable endorsement and to name
the Collateral Agent as additional insured, in form and substance
satisfactory to the Administrative Agent, provided, however, that with
respect to any flood insurance required by Section 5.02, the Borrower
shall have 30 days following the Closing Date to provide copies of such
insurance policies.
(m) The Lenders shall be satisfied as to the amount and nature
of any environmental and employee health and safety exposures to which
the Borrower and the Subsidiaries may be subject and the plans of the
Borrower with respect thereto.
(n) All principal, premium, if any, interest, fees and other
amounts due and owing under the Existing Loan Agreement shall have been
paid in full, the commitments thereunder terminated and all guarantees
and security in support thereof released, and the Agent shall have
received reasonably satisfactory evidence thereof, and after giving
effect to the Transactions and the other transactions contemplated
hereby, the Borrower and the Subsidiaries shall have outstanding no
Indebtedness or preferred stock other than (i) the Loans and Letters of
Credit hereunder and (ii) the Indebtedness listed on Schedule 6.01.
(o) All requisite Governmental Authorities and third parties
shall have approved or consented to the Transactions and the other
transactions contemplated hereby to the extent required, in each case
to the extent failure to obtain such consent or approval will or is
reasonably likely to have a Material Adverse Effect and there shall be
no governmental or judicial action, actual or threatened, that has or
would have, singly or in the aggregate, a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
Transactions or the other transactions contemplated hereby.
(p) The Administrative Agent shall have received a copy of
each Acquisition Agreement, including all amendments thereto, which
agreements shall be in form and substance reasonably satisfactory to
the Administrative Agent.
(q) The Administrative Agent shall have received the financial
statements required by Section 3.05.
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ARTICLE V
AFFIRMATIVE COVENANTS
Each of Citadel and the Borrower covenants and agrees with each Lender
that so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, each of Citadel and the
Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES. (a) Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair, working
order and condition (normal wear and tear excepted) and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. INSURANCE. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection with the use of
any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
(b) Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a "standard" or "New York" lender's loss payable
endorsement, in form and substance satisfactory to the Administrative Agent and
the Collateral Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the Administrative Agent or the Collateral Agent of the occurrence of an Event
of Default, the insurance carrier shall pay all proceeds otherwise payable to
the Borrower or the Loan Parties under such policies directly to the Collateral
Agent; cause all such policies to provide that neither the Borrower, the
Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a "Replacement Cost Endorsement", without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver original or certified copies of all such
policies to the Collateral Agent; cause each such policy to provide that it
shall not be
59
canceled, modified or not renewed (i) by reason of nonpayment of premium upon
not less than 10 days' prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent (giving the Administrative Agent
and the Collateral Agent the right to cure defaults in the payment of premiums)
or (ii) for any other reason upon not less than 30 days' prior written notice
thereof by the insurer to the Administrative Agent and the Collateral Agent;
deliver to the Administrative Agent and the Collateral Agent, prior to the
cancelation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent and the Collateral Agent)
together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.
(c) If at any time the area in which the Premises (as defined in the
Mortgages) are located is designated (i) a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), obtain flood insurance in such total amount as the
Administrative Agent, the Collateral Agent or the Required Lenders may from time
to time require, and otherwise comply with the National Flood Insurance Program
as set forth in the Flood Disaster Protection Act of 1973, as it may be amended
from time to time, or (ii) a "Zone 1" area, obtain earthquake insurance in such
total amount as the Administrative Agent, the Collateral Agent or the Required
Lenders may from time to time require.
(d) With respect to any Mortgaged Property, carry and maintain
comprehensive general liability insurance including the "broad form CGL
endorsement" and coverage on an occurrence basis against claims made for
personal injury (including bodily injury, death and property damage) and
umbrella liability insurance against any and all claims that is in each case
customary with companies of similar size in the same or similar businesses,
naming the Collateral Agent as an additional insured, on forms satisfactory to
the Collateral Agent.
(e) Notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or contributing
in the event of loss with that required to be maintained under this Section 5.02
is taken out by the Borrower; and promptly deliver to the Administrative Agent
and the Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. OBLIGATIONS AND TAXES. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided, however,
that such payment and discharge shall not be required with respect to any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien and,
in the case of a Mortgaged Property, there is no risk of forfeiture of such
property.
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SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year, its
consolidated balance sheet and related statements of income,
stockholders' equity and cash flows showing the financial condition of
the Borrower and its consolidated Subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of
such Subsidiaries during such year, all audited by KPMG Peat Marwick or
other independent public accountants of recognized national standing
and accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such consolidated
financial statements fairly present the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and
related statements of income and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the
close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then
elapsed portion of the fiscal year, all certified by one of its
Financial Officers as fairly presenting in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP, subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of the accounting firm
(in the case of paragraph (a)) or Financial Officer (in the case of
paragraph (b)) opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting
forth computations in detail reasonably satisfactory to the
Administrative Agent demonstrating compliance with the covenants set
forth in Sections 6.09, 6.10, and 6.11, and (iii) in the case of a
certificate delivered with the financial statements required by
paragraph (a) above, demonstrating compliance with the covenant set
forth in Section 6.08 and setting forth the Borrower's calculation of
Excess Cash Flow;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as the case
may be;
(e) promptly after the receipt thereof by Citadel or the
Borrower or any of their respective subsidiaries, but in no event later
than June 30 of any year, a copy of any "management letter" received by
any such person from its certified public accountants and the
management's response thereto;
(f) not later than January 1 of each year, a business plan for
such year setting forth in reasonable detail the projected operations
budget of each Broadcast Market and ISP of the Borrower for such year;
61
(g) each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause
(a) above, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer of the Borrower setting forth the
information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on
the Closing Date or the date of the most recent certificate delivered
pursuant to this Section; and
(i) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
Citadel, the Borrower or any Subsidiary, or compliance with the terms
of any Loan Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.05. LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent, each Issuing Bank and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse
Effect; and
(c) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.06. EMPLOYEE BENEFITS. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent as soon as possible after, and in any event within 10 days
after any Responsible Officer of the Borrower or any ERISA Affiliate knows or
has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event could reasonably be expected to result in liability
of the Borrower in an aggregate amount exceeding $1,000,000 in any year, a
statement of a Financial Officer of the Borrower setting forth details as to
such ERISA Event and the action, if any, that the Borrower proposes to take with
respect thereto.
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender (in the
case of any Lender, at such Lender's own cost) to visit and inspect the
financial records and the properties of Citadel, the Borrower or any Subsidiary
at reasonable times and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent or any Lender to discuss the affairs,
finances and condition of Citadel, the Borrower or any Subsidiary with the
officers thereof and independent accountants therefor, provided that reasonable
notice shall be given to the applicable Loan Party prior to any visit and
inspection and such visit and inspection shall not result in a material
disruption of such Loan Party's conduct of business.
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SECTION 5.08. USE OF PROCEEDS. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any Remedial Action in
accordance with Environmental Laws; provided, however, that none of Citadel, the
Borrower or any Subsidiaries shall be required to undertake any Remedial Action
to the extent that its obligation to do so is being contested in good faith and
by proper proceedings and appropriate reserves are being maintained with respect
to such circumstances.
SECTION 5.10. PREPARATION OF ENVIRONMENTAL REPORTS. If a Default caused
by reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such request, at the expense
of the Borrower, an environmental site assessment report for the Properties
which are the subject of such default prepared by an environmental consulting
firm reasonably acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or Remedial Action in connection with such Properties.
SECTION 5.11. FURTHER ASSURANCES. (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. The Borrower will cause any
subsequently acquired or organized Domestic Subsidiary to execute a Subsidiary
Guarantee Agreement, Indemnity Subrogation and Contribution Agreement and each
applicable Security Document in favor of the Collateral Agent. In addition, from
time to time, the Borrower will, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as the Administrative Agent or the Required Lenders shall designate (it being
understood that it is the intent of the parties that the Obligations shall be
secured by, among other things, substantially all the assets of the Borrower and
its Subsidiaries (including real and other properties acquired subsequent to the
Closing Date)). Such security interests and Liens will be created under the
Security Documents and other security agreements, mortgages, deeds of trust and
other instruments and documents in form and substance satisfactory to the
Collateral Agent, and the Borrower shall deliver or cause to be delivered to the
Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section. The Borrower agrees to provide
such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien.
(b) With respect to any property which becomes Mortgaged Property after
the Closing Date, cause local counsel to promptly deliver to the Administrative
Agent, on behalf of itself, the Lenders and the Issuing Banks, a favorable
written opinion of local counsel substantially to the effect set forth in
Exhibit J-3, (A) addressed to the Issuing Banks, the Administrative Agent, the
Collateral Agent
63
and the Lenders and (B) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request.
SECTION 5.12. INTEREST RATE PROTECTION. As promptly as practicable, and
in any event within 90 days after the Closing Date, enter into Hedging
Agreements, with counterparties and on terms and conditions reasonably
satisfactory to the Administrative Agent, pursuant to which the interest rate is
fixed with respect to a notional amount equal to at least 50% of the sum of (a)
the Term Loans and (b) the 1997 Senior Subordinated Notes, the 1998 Senior
Subordinated Notes and any additional long-term Indebtedness of Citadel, the
Borrower or any Subsidiary permitted hereunder that has a fixed interest rate
and is outstanding on such date, provided that at the time of calculation of
such amount, there will be no requirement to enter into Hedging Agreements
pursuant to this Section 5.12 if the amount required to be hedged shall be less
than $25,000,000. On the Closing Date, the amount required to be hedged pursuant
to this Section 5.12, without giving effect to the proviso, is $0.
ARTICLE VI
NEGATIVE COVENANTS
Each of Citadel and the Borrower covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, neither Citadel nor the Borrower
will, nor will they cause or permit any Subsidiaries to:
SECTION 6.01. INDEBTEDNESS. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, and any extensions, renewals or replacements of such
Indebtedness to the extent the principal amount of such Indebtedness is
not increased, the weighted average life to maturity of such
Indebtedness is not decreased, such Indebtedness, if subordinated to
the Obligations, remains so subordinated on terms not less favorable to
the Lenders than the terms of the original Indebtedness and the
original obligors in respect of such Indebtedness remain the only
obligors thereon;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) Indebtedness of the Borrower constituting Exchange
Debentures issued in exchange for the Exchangeable Preferred Stock
pursuant to the terms of the Exchange Indenture; provided that
Exchangeable Debentures shall not be issued unless no Event of Default
will exist after giving effect to such issuance (giving pro forma
effect to such issuance (i) in the case of the Consolidated Leverage
Ratio, on the last day of the most recent period of four consecutive
fiscal quarters for which there has been delivered to the
Administrative Agent the financial statements required pursuant to
Section 5.04(a) or (b) and
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(ii) in the case of the Consolidated Fixed Charge Ratio and
Consolidated Interest Coverage Ratio, on the first day of the most
recent period of four consecutive fiscal quarters for which there has
been delivered to the Administrative Agent the financial statements
required pursuant to Section 5.04(a) or (b).
(d) Indebtedness evidenced by Capital Lease Obligations to the
extent permitted pursuant to Section 6.08 or secured by Liens permitted
by Section 6.02(h); provided that in no event shall the aggregate
principal amount of the Indebtedness permitted by this paragraph (d)
exceed $2,000,000 at any time outstanding;
(e) unsecured Indebtedness assumed by the Borrower in
connection with any Permitted Acquisition in an aggregate amount not at
any time in excess of $10,000,000; provided that such Indebtedness
existed at the time of such Permitted Acquisition and was not created
in connection therewith or in contemplation thereof;
(f) prior to January 11, 2000, the Caribou Seller Notes in an
amount not to exceed $60,000,000; and
(g) other unsecured Indebtedness of the Borrower and its
Subsidiaries in an aggregate amount not at any time in excess of
$5,000,000.
SECTION 6.02. LIENS. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its
Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided that such Liens shall secure only those obligations
which they secure on the date hereof;
(b) any Lien created under the Loan Documents;
(c) Liens for taxes not yet due or which are being contested
in compliance with Section 5.03;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due and payable or which
are being contested in compliance with Section 5.03;
(e) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(g) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the
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aggregate, are not substantial in amount and do not materially detract
from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(h) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any Subsidiary;
provided that (i) such security interests secure Indebtedness permitted
by Section 6.01, (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within 90 days after such
acquisition (or construction), (iii) the Indebtedness secured thereby
does not exceed 85% of the lesser of the cost or the fair market value
of such real property, improvements or equipment at the time of such
acquisition (or construction) and (iv) such security interests do not
apply to any other property or assets of the Borrower or any
Subsidiary;
(i) Liens arising out of judgments or awards (other than any
judgment that is described in clause (i) of Article VII and constitutes
an Event of Default thereunder) in respect of which the Borrower shall
in good faith be prosecuting an appeal of or proceedings for review and
in respect of which it shall have secured a subsisting stay of
execution pending such appeal or proceeding for review, provided that
the Borrower shall have set aside on its books adequate reserves, in
accordance with GAAP, with respect to such judgment or award; and
(j) Liens of any seller which is a party to a proposed
acquisition by the Borrower with respect to any escrow deposits to be
maintained in connection with such proposed Acquisition; and
(k) Liens (other than Liens securing Indebtedness for money
borrowed), provided that such Liens do not secure obligations in excess
of $1,000,000 at any one time.
SECTION 6.03. SALE AND LEASE-BACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred, unless any Asset Sale,
Indebtedness or Liens resulting therefrom would be permitted under Sections
6.05, 6.01 and 6.02, respectively.
SECTION 6.04. INVESTMENTS, LOANS AND ADVANCES. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments by the Borrower existing on the date hereof in
the capital stock of the Subsidiaries;
(b) Permitted Investments;
(c) the Borrower may acquire all or substantially all the
assets of a person or line of business of such person, or not less than
100% of the Equity Interests of a person (such person being referred to
herein as an "Acquired Entity"); provided that (i) the acquisition is
of a Related Business or of one or more Stations; (ii) simultaneously
with the consummation
66
of any such acquisition, the applicable FCC Licenses shall be
transferred to the Borrower or CLI; (iii) at the time of such
transaction (A) both before and after giving effect thereto, no Event
of Default or Default shall have occurred and be continuing or shall
exist; (B) the Borrower would be in compliance with the covenants set
forth in Sections 6.09, 6.10 and 6.11 as of the most recently completed
period of four consecutive fiscal quarters ending prior to such
transaction for which the financial statements and certificates
required by Section 5.04(a) or 5.04(b) have been delivered or for which
comparable financial statements have been filed with the Securities and
Exchange Commission, after giving pro forma effect to such transaction
and to any other event occurring after such period as to which pro
forma recalculation is appropriate (including any other transaction
described in this Section 6.04(c) occurring after such period) as if
such transaction had occurred as of the first day of such period; (iv)
the Acquired Entity shall not be subject to any material pending
litigation or material contingent liabilities; and (v) if the Acquired
Entity is an ISP, the aggregate consideration for such acquisition
(regardless of the form of payment and including any assumed
Indebtedness), together with the aggregate consideration for all such
other acquisitions of ISPs during the term of this Agreement, shall not
exceed $10,000,000 (any acquisition meeting all the criteria of this
Section 6.04 being referred to herein as a "Permitted Acquisition").
All pro forma calculations required to be made pursuant to this Section
6.04(c) shall (i) include only those adjustments that (A) would be
permitted or required by Article 11 of Regulation S-X of the Securities
Act of 1933, as amended, and (B) are based on reasonably detailed
written assumptions reasonably acceptable to the Administrative Agent
and (ii) be certified to by a Financial Officer as having been prepared
in good faith based upon reasonable assumptions;
(d) Hedging Agreements required by Section 5.12 and permitted
by Section 6.14;
(e) the Borrower and the Subsidiaries may consummate the
Pending Acquisitions on substantially the terms provided for in the
Acquisition Agreements as in effect on the Closing Date;
(f) loans and advances in an aggregate principal amount
outstanding at any one time not to exceed $2,000,000 to management and
other employees of Citadel, the Borrower or any Subsidiary, provided
that such loans or advances to any one person shall not exceed $50,000
in an aggregate principal amount at any time outstanding;
(g) the Borrower and the Subsidiaries may acquire investments
in ISPs and Internet Companies in connection with Internet Trade Out
Transactions permitted by Section 6.15;
(h) the Borrower may establish Subsidiaries to the extent
permitted by Section 6.13; and
(i) other investments in an aggregate amount not to exceed
$2,000,000 at any time outstanding.
SECTION 6.05. MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND
ACQUISITIONS. (a) Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all the assets of the Borrower (whether now owned or hereafter
acquired) or any capital stock of any Subsidiary, or purchase, lease or
otherwise acquire (in one transaction or a series
67
of transactions) all or any substantial part of the assets of any other person,
except that (i) the Borrower and any Subsidiary may purchase and sell inventory
in the ordinary course of business and (ii) if at the time thereof and
immediately after giving effect thereto no Event of Default or Default shall
have occurred and be continuing (A) any wholly owned Subsidiary(including CLI)
may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (B) any wholly owned Subsidiary may merge into or
consolidate with any other wholly owned Subsidiary in a transaction in which the
surviving entity is a wholly owned Subsidiary and no person other than the
Borrower or a wholly owned Subsidiary receives any consideration of the Borrower
and (C) the Borrower and its Subsidiaries may make Permitted Acquisitions.
(b) Engage in any Asset Sale not otherwise prohibited by Section
6.05(a) unless all of the following conditions are met: (i) the consideration
received is at least equal to the fair market value of the assets sold; (ii) at
least 80% of the consideration received is cash or cash equivalents; and (iii)
to the extent applicable, the Net Cash Proceeds of such Asset Sale are applied
as required by Section 2.13(b).
(c) Engage in any Asset Swap not otherwise prohibited by Section
6.05(a) unless all of the following conditions are met: (i) such exchange
complies with the definition of Asset Swap, (ii) if the fair market value of the
assets transferred exceeds $1,000,000 but is less than $25,000,000, the board of
directors of the Borrower approves such exchange, (iii) if the fair market value
of the assets transferred exceeds $25,000,000, the board of directors of the
Borrower approves such exchange and the Borrower secures an appraisal given by
an unaffiliated third party in form and substance reasonably satisfactory to the
Administrative Agent, (iv) the fair market value of any property or assets
received is at least equal to the fair market value of the property or assets so
transferred and (v) to the extent applicable, any "boot" or other assets
received by the Borrower or any Subsidiary complies with the requirements of
paragraph (b) above and the Net Cash Proceeds of such boot or other assets are
applied as required by Section 2.13(b).
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS; RESTRICTIONS ON ABILITY OF
SUBSIDIARIES TO PAY DIVIDENDS. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any of its Equity Interests or directly or indirectly redeem, purchase, retire
or otherwise acquire for value (or permit any Subsidiary to purchase or acquire)
any of its Equity Interests or set aside any amount for any such purpose;
provided, however, that any Subsidiary may declare and pay dividends or make
other distributions to the Borrower. Notwithstanding the foregoing, the Borrower
and/or Citadel may make any of the following dividends or distributions:
(i) (A) the Borrower may pay cash dividends on or after July
1, 2002, with respect to the Exchangeable Preferred Stock so long as
(x) no Default shall have occurred and be continuing or would result
therefrom and (y) the Consolidated Leverage Ratio shall be less than
5.00 to 1.00 and (B) the Borrower may exchange Exchangeable Preferred
Stock for Exchangeable Debentures, to the extent permitted in Section
6.01(c);
(ii) so long as there shall exist no Default or Event of
Default (both before and after giving effect to the payment thereof),
Citadel may repurchase outstanding shares of its common stock (or
options to purchase such common stock) following the death, disability,
retirement or termination of employment of employees, officers or
directors of Citadel or any of its subsidiaries; provided that (A) all
amounts used to effect such repurchases are obtained by Citadel from a
substantially concurrent issuance of its common stock (or options to
68
purchase such common stock) to other employees, members of management,
executive officers or directors of Citadel or any of its subsidiaries
or (B) to the extent the proceeds used to effect any repurchase
pursuant to this clause (B) are not obtained as described in preceding
clause (A), the aggregate amount of such repurchases made by Citadel
pursuant to this paragraph (ii) (exclusive of amounts paid as described
pursuant to preceding clause (A)) shall not exceed $1,000,000 in any
fiscal year of Citadel;
(iii) the Borrower may pay cash dividends to Citadel (A) for
the purpose of paying, so long as all proceeds thereof are promptly
used by Citadel to pay, its operating expenses incurred in the ordinary
course of business and other corporate overhead costs and expenses
(including, without limitation, legal and accounting expenses and
similar expenses), provided that the aggregate amount of dividends paid
by the Borrower pursuant to this clause (iii)(A) shall not exceed
$500,000 in any fiscal year of Citadel and (B) for the purpose of
repurchasing, so long as all proceeds thereof are promptly used by
Citadel to repurchase, the common stock of Citadel as permitted by
clause (ii) above, provided that the aggregate amount of dividends paid
by the Borrower pursuant to this clause (iii)(B) shall not exceed
$1,000,000 in any fiscal year of Citadel;
(iv) the Borrower may pay cash dividends to Citadel for the
purpose of paying, so long as all proceeds thereof are promptly used by
Citadel to pay, franchise taxes and Federal, state and local income
taxes and interest and penalties with respect thereto, if any, payable
by Citadel; provided, however, that the amount of any such payment
shall not exceed the amount of taxes that the Borrower would have been
liable for on a stand-alone basis; provided further, however, that any
refund shall be promptly returned by Citadel to the Borrower; and
(v) the Borrower may pay dividends-in-kind to the holders of
its Exchangeable Preferred Stock on the terms, and subject to the
conditions, contained in the Certificate of Designation.
(b) Permit its subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to the Borrower or the parent of such
subsidiary. The foregoing limitations will not apply to restrictions (i) in
effect on the Closing Date, (ii) relating to Indebtedness of a Subsidiary and
existing at the time it became a Subsidiary if such restriction was not created
in connection with or in anticipation of the transaction or series of
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by the Borrower or any Subsidiary or (iii) which result from the
refinancing of Indebtedness incurred pursuant to an agreement referred to in the
immediately preceding clause (i) or (ii) above, provided that such restriction
is no less favorable to the Lenders than those under the agreement evidencing
the Indebtedness so refinanced.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. Except for transactions by
or among Loan Parties, sell or transfer any property or assets to, or purchase
or acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that the Borrower or any
Subsidiary may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties.
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SECTION 6.08. CAPITAL EXPENDITURES. Permit the aggregate amount of
Capital Expenditures made by the Borrower and the Subsidiaries, taken as a
whole, (a) in the fiscal year ending December 31, 2000, to exceed $10,000,000
and (b) in any fiscal year thereafter to exceed 7.5% of Consolidated EBITDA;
provided, however, that the amount of Capital Expenditures in any fiscal year
commencing after December 31, 2000, permitted to be incurred shall be increased
by an amount equal to the amount of unused Capital Expenditures permitted to be
incurred pursuant to this covenant for the immediately preceding fiscal year
(without giving effect to this proviso).
SECTION 6.09. CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters, in each case taken as one accounting period, ended during any period
set forth below to be less than the amount set forth opposite such period below:
Period Ratio
------ -----
January 1, 2000 through March 31, 2000 1.50x
April 1, 2000 through June 30, 2000 1.50x
July 1, 2000 through September 30, 2000 1.50x
October 1, 2000 through December 31, 2000 1.50x
January 1, 2001 through March 31, 2001 1.75x
April 1, 2001 through June 30, 2001 1.75x
July 1, 2001 through September 30, 2001 1.75x
October 1, 2001 through December 31, 2001 2.00x
January 1, 2002 through March 31, 2002 2.00x
April 1, 2002 through June 30, 2002 2.25x
July 1, 2002 through September 30, 2002 2.25x
Thereafter 2.50x
SECTION 6.10. CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit
the Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters, in each case taken as one accounting period, to be less than
1.25 to 1.00.
SECTION 6.11. MAXIMUM CONSOLIDATED LEVERAGE RATIO. Permit the
Consolidated Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:
Period Ratio
------ -----
January 1, 2000 through March 31, 2000 7.25x
April 1, 2000 through June 30, 2000 7.00x
July 1, 2000 through September 30, 2000 6.75x
October 1, 2000 through December 31, 2000 6.50x
January 1, 2001 through March 31, 2001 6.25x
April 1, 2001 through June 30, 2001 6.00x
July 1, 2001 through September 30, 2001 6.00x
October 1, 2001 through December 31, 2001 5.75x
January 1, 2002 through March 31, 2002 5.50x
April 1, 2002 through June 30, 2002 5.25x
July 1, 2002 through September 30, 2002 5.00x
October 1, 2002 through December 31, 2002 4.50x
Thereafter 4.00x
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SECTION 6.12. LIMITATION ON MODIFICATIONS OF INDEBTEDNESS;
MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN OTHER
AGREEMENTS, ETC. (a) Amend or modify, or permit the amendment or modification
of, any provision of existing Indebtedness or of any agreement (including any
purchase agreement, indenture, loan agreement or security agreement) relating
thereto other than any amendments or modifications to Indebtedness which do not
in any way materially adversely affect the interests of the Lenders, (b) make
(or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event of,
any 1997 Senior Subordinated Notes, 1998 Senior Subordinated Notes or
Exchangeable Debentures (c) amend or modify, or permit the amendment or
modification of, any 1997 Senior Subordinated Debt Instruments, 1998 Senior
Subordinated Debt Instruments or Exchangeable Debt Instruments other than
amendments or modifications which do not in any way adversely affect the
interests of the Lenders, (d) amend or modify, or permit the amendment or
modification of, any of the Acquisition Agreements or any tax sharing agreement,
in each case except for amendments or modifications which are not in any way
adverse in any material respect to the interests of the Lenders, or (e) amend,
modify or change its Certificate of Incorporation (including by the filing or
modification of any certificate of designation) or By-laws, or any agreement
entered into by it, with respect to its Equity Interests (including the
Certificate of Designation and any shareholders' agreement), or enter into any
new agreement with respect to its Equity Interests, other than any amendments,
modifications or changes pursuant to this clause (e) or any such new agreements
pursuant to this clause (e) which do not in any way materially adversely affect
the interests of the Lenders; provided that (i) nothing in this Section 6.12
shall prohibit the Borrower from refinancing any Indebtedness to the extent
permitted by Section 6.01(a), (ii) nothing in this clause (e) shall prevent the
Borrower or any of its Subsidiaries from amending its Certificate of
Incorporation or Bylaws to provide indemnification to any officer or director of
the Borrower or any such Subsidiary to the maximum extent permitted by the law
of its jurisdiction of incorporation and (iii) nothing in this Section 6.11
shall be construed to prohibit the merger of CLI into the Borrower.
SECTION 6.13. LIMITATION ON CREATION OF SUBSIDIARIES.
Establish or create any additional Subsidiaries; provided that a Borrower may
establish or create one or more Subsidiaries so long as (a) 100% of the Equity
Interests of such Subsidiary is owned by the Borrower or a wholly owned
Subsidiary, (b) such Equity Interests are upon the creation or establishment of
any such new Subsidiary pledged and delivered to the Collateral Agent for the
benefit of the Secured Parties under the Pledge Agreement (except that not more
than 65% of the voting Equity Interests of any Foreign Subsidiary owned by a
Loan Party shall be required to be so pledged) and (c) upon the creation or
establishment of any such new Subsidiary such Subsidiary becomes a party to the
applicable Security Documents in accordance with Section 5.11 and the other Loan
Documents.
SECTION 6.14. HEDGING AGREEMENTS. Enter into any Hedging
Agreement, other than (a) Hedging Agreements required by Section 5.12 and (b)
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 6.15. INTERNET TRADE OUT TRANSACTIONS. Engage in any
Internet Trade Out Transaction to the extent the value of all advertising time
exchanged by the Borrower and the Subsidiaries in connection therewith would
exceed $50,000,000 during the term of this Agreement.
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SECTION 6.16. BUSINESS OF CITADEL, BORROWER AND SUBSIDIARIES.
(a) In the case of the Borrower and its Subsidiaries, engage at any time in any
business or business activity other than the Broadcasting Business and Related
Businesses.
(b) In the case of Citadel, engage in any business or business
activity other than its ownership of the common Equity Interests of the Borrower
and activities incidental thereto.
SECTION 6.17. FISCAL YEAR. With respect to the Borrower or
Citadel, change its fiscal year end to a date other than December 31.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in any
Loan Document or in connection with the borrowings or issuances of Letters of
Credit hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made, deemed made
or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to any L/C Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or L/C Disbursement or any other amount (other than an
amount referred to in (b) above) due under any Loan Document, when and as the
same shall become due and payable, and such default shall continue unremedied
for a period of five Business Days;
(d) default shall be made in the due observance or performance
by Citadel, the Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance
by Citadel, the Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in (b), (c)
or (d) above) and such default shall continue unremedied for a period of 30 days
after notice thereof from the Administrative Agent or any Lender to the
Borrower;
(f) Citadel, the Borrower or any Subsidiary shall (i) fail to
pay any principal or interest, regardless of amount, due in respect of any
Material Indebtedness, when and as the same shall become due and payable, or
(ii) fail to observe or perform any other term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing any Material
72
Indebtedness if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Material Indebtedness or a
trustee on its or their behalf (with or without the giving of notice, the lapse
of time or both) to cause, such Material Indebtedness to become due prior to its
stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of Citadel, the Borrower or any Subsidiary, or of a
substantial part of the property or assets of Citadel, the Borrower or a
Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Citadel,
the Borrower or any Subsidiary or for a substantial part of the property or
assets of Citadel, the Borrower or a Subsidiary or (iii) the winding-up or
liquidation of Citadel, the Borrower or any Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) Citadel, the Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition described
in (g) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Citadel,
the Borrower or any Subsidiary or for a substantial part of the property or
assets of Citadel, the Borrower or any Subsidiary, (iv) file an answer admitting
the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 (to the extent not adequately covered
by insurance as to which the insurance company has acknowledged coverage
pursuant to a writing reasonably satisfactory to the Administrative Agent) shall
be rendered against Citadel, the Borrower, any Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 60 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of
Citadel, the Borrower or any Subsidiary to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Borrower and its
ERISA Affiliates in an aggregate amount exceeding $5,000,000;
(k) any Guarantee under any Guarantee Agreement for any reason
shall cease to be in full force and effect (other than in accordance with its
terms), or any Guarantor shall deny in writing that it has any further liability
under its Guarantee Agreement (other than as a result of the discharge of such
Guarantor in accordance with the terms of the Loan Documents);
(l) any security interest purported to be created by any
Security Document shall cease to be, or shall be asserted by the Borrower or any
other Loan Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
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security interest in the securities, assets or properties covered thereby,
except to the extent that any such loss of perfection or priority results from
the failure of the Collateral Agent to maintain possession of certificates
representing securities pledged under the Pledge Agreement and except to the
extent that such loss is covered by a lender's title insurance policy and the
related insurer promptly after such loss shall have acknowledged in writing that
such loss is covered by such title insurance policy; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to Citadel or
the Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Citadel or the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this
Agreement, Credit Suisse First Boston is hereby appointed to act as
Administrative Agent and Collateral Agent on behalf of the Lenders and the
Issuing Banks (for purposes of this Article VIII, the Administrative Agent and
the Collateral Agent are referred to collectively as the "Agents"). Each of the
Lenders and each assignee of any such Lender, hereby irrevocably authorizes the
Agents to take such actions on behalf of such Lender or assignee or Issuing Bank
and to exercise such powers as are specifically delegated to the Agents by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Banks,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Banks all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due to
the Lenders hereunder, and promptly to distribute to each Lender or Issuing Bank
its proper share of each payment so received; (b) to give notice on behalf of
each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower or any other Loan Party pursuant to this Agreement or the other Loan
Documents as received by the
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Administrative Agent. Without limiting the generality of the foregoing, the
Agents are hereby expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the rights of the
Secured Parties with respect thereto, as contemplated by and in accordance with
the provisions of this Agreement and the Security Documents.
Neither the Agents nor any of their respective directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower or any other Loan Party of any of the terms,
conditions, covenants or agreements contained in any Loan Document. The Agents
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or any other Loan
Documents, instruments or agreements. The Agents shall in all cases be fully
protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. Each Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. Neither the Agents nor any of
their respective directors, officers, employees or agents shall have any
responsibility to the Borrower or any other Loan Party on account of the failure
of or delay in performance or breach by any Lender or Issuing Bank of any of its
obligations hereunder or to any Lender or Issuing Bank on account of the failure
of or delay in performance or breach by any other Lender or Issuing Bank or the
Borrower or any other Loan Party of any of their respective obligations
hereunder or under any other Loan Document or in connection herewith or
therewith. Each of the Agents may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be
under any duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent
as provided below, either Agent may resign at any time by notifying the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a
bank with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations hereunder. After the Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in
its individual capacity and not as Agent shall have the same rights and powers
as any other Lender and may exercise the
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same as though it were not an Agent, and the Agents and their Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with Citadel, the Borrower or any Subsidiary or other Affiliate thereof as if it
were not an Agent.
Each Lender agrees (a) to reimburse the Agents and the Issuing
Banks, on demand, in the amount of its pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of any
expenses incurred for the benefit of the Lenders by the Agents or the Issuing
Bank, as the case may be, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, that shall not
have been reimbursed by the Borrower and (b) to indemnify and hold harmless each
Agent and each Issuing Bank and each of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against it in its
capacity as Agent or Issuing Bank or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Borrower or any other
Loan Party, provided that no Lender shall be liable to an Agent, an Issuing Bank
or any such other indemnified person for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements which are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Agent or Issuing Bank or any of its
directors, officers, employees or agents. For purposes of this Section, a
Lender's "pro rata share" shall be determined based upon its share of the sum
(without duplication) of the total Revolving Credit Exposures, outstanding Term
Loans and unused Commitments at the time.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
The Documentation Agents shall have no rights, powers,
obligations, liabilities, responsibilities or duties under this Agreement other
than those applicable to each as a Lender. Without limiting the foregoing
sentence, the Documentation Agents shall not have, or be deemed to have, any
fiduciary relationship with any other Lender. Each Lender acknowledges that it
has not relied, and will not rely, on the Documentation Agents in deciding to
enter into this Agreement or in taking or not taking any action hereunder.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
fax, as follows:
(a) if to the Borrower or Citadel, to it at City
Center West, 7201 West Lake Mead Boulevard, Suite 400, Las
Vegas, Nevada 89128 , Attention of Donna L. Heffner (Fax No.
(702) 804-5936);
(b) if to the Administrative Agent, to Credit Suisse
First Boston, Eleven Madison Avenue, New York, New York 10010,
Attention of Jessica Totarum (Fax No. (212) 325-8304), with a
copy to Credit Suisse First Boston, at Eleven Madison Avenue,
New York, New York 10010, Attention of Rupal Hirwe (Fax No.
(212) 325-8304); and
(c) if to a Lender, to it at its address (or fax
number) set forth on Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have become a
party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Borrower or Citadel
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and the Issuing Banks and
shall survive the making by the Lenders of the Loans and the issuance of Letters
of Credit by the Issuing Banks, regardless of any investigation made by the
Lenders or the Issuing Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any Fee or any other amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not been terminated. The provisions of Sections
2.14, 2.16, 2.20 and 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, any Lender or any Issuing Bank.
SECTION 9.03. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower, Citadel and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the
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signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrower, Citadel, the
Administrative Agent, the Issuing Banks or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate or Related Fund of such Lender, (x) the Borrower and the
Administrative Agent (and, in the case of any assignment of a Revolving Credit
Commitment, the Issuing Banks) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld); provided,
however, that the consent of the Borrower shall not be required to any such
assignment during the continuance of any Event of Default described in
paragraphs (b), (c), (f), (g) or (h) of Article VII, and (y) the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 (or, if
less, the entire remaining amount of such Lender's Commitment), (ii) the parties
to each such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500 and (iii) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.04, from and after the
effective date specified in each Assignment and Acceptance, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16,
2.20 and 9.05, as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
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Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05(a) or delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive and the Borrower, the Administrative Agent, the Issuing
Banks, the Collateral Agent and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Banks,
the Collateral Agent and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower,
the Issuing Banks and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders and the Issuing Banks. No assignment shall be
effective unless it has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may without the consent of the Borrower, the
Issuing Banks or the Administrative Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to
the same extent as if they were Lenders and (iv) the Borrower, the
Administrative Agent, the Issuing Banks and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans or L/C
Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or
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date fixed for the payment of interest on the Loans, increasing or extending the
Commitments or releasing any Guarantor or all or any substantial part of the
Collateral).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information that has not previously been disclosed in a document that is
available to the public, each such assignee or participant or proposed assignee
or participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information on terms no less restrictive than those applicable
to the Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement, including to any Federal Reserve Bank, to
secure extensions of credit to such Lender; provided that no such assignment
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
(i) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
9.04, any SPC may (i) with notice to, but without the prior written consent of,
the Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC.
(j) Neither Citadel nor the Borrower shall assign or delegate
any of its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Banks and each Lender, and any attempted
assignment without such consent shall be null and void.
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SECTION 9.05. EXPENSES; INDEMNITY. (a) The Borrower and
Citadel agree, jointly and severally, to pay all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent and the
Issuing Banks in connection with the syndication of the credit facilities
provided for herein and the preparation and administration of this Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated) or incurred by the
Administrative Agent, the Collateral Agent or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Administrative Agent
and the Collateral Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of any other counsel
(including the allocated cost of internal counsel) for the Administrative Agent,
the Collateral Agent or any Lender.
(b) The Borrower and Citadel agree, jointly and severally, to
indemnify the Administrative Agent, the Collateral Agent, each Lender and each
Issuing Bank, each Affiliate of any of the foregoing persons and each of their
respective directors, officers, employees and agents (each such person being
called an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees (including the allocated cost of internal counsel),
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby, (ii) the use of the proceeds of the
Loans or issuance of Letters of Credit, (iii) any actual or alleged presence or
Release of Hazardous Materials on, at or under any Properties or Former
Properties, or any Environmental Claim related in any way to the Borrower or the
Subsidiaries, or (iv) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or any Issuing Bank. All amounts due under this Section 9.05 shall be
payable on written demand therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, except to the extent prohibited by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower or Citadel against any of
and all the obligations of the Borrower or Citadel now or hereafter existing
under this Agreement and other Loan Documents held by such Lender, irrespective
of whether or not such Lender shall have made any demand under
81
this Agreement or such other Loan Document and although such obligations may be
unmatured. The rights of each Lender under this Section 9.06 are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER
LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. WAIVERS; AMENDMENT. (a) No failure or delay of
the Administrative Agent, the Collateral Agent, any Lender or any Issuing Bank
in exercising any power or right hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower or Citadel in
any case shall entitle the Borrower or Citadel to any other or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower, Citadel and the Required Lenders;
provided, however, that no such agreement shall (i) decrease the principal
amount of, or extend the maturity of or any scheduled principal payment date or
date for the payment of any interest on any Loan or any date for reimbursement
of an L/C Disbursement, or waive or excuse any such payment or any part thereof,
or decrease the rate of interest on any Loan or L/C Disbursement, without the
prior written consent of each Lender affected thereby, (ii) increase or extend
the Commitment or decrease or extend the date for payment of the Commitment Fees
of any Lender without the prior written consent of such Lender, (iii) amend or
modify the pro rata requirements of Section 2.17, the provisions of Section
9.04(j), the provisions of this Section, the definition of the term "Required
Lenders" or release any Guarantor or all or any substantial part of the
Collateral, without the prior written consent of each Lender or modify the
protections afforded to an SPC pursuant to the provisions of Section 9.04(i)
without the written consent of such SPC; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent or any Issuing Bank hereunder or
under any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent or such Issuing Bank.
82
SECTION 9.09. INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or participation in any L/C Disbursement, together with all fees,
charges and other amounts which are treated as interest on such Loan or
participation in such L/C Disbursement under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan or participation in accordance with applicable law, the rate of
interest payable in respect of such Loan or participation hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan or participation but were not payable as a
result of the operation of this Section 9.09 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or participations
or periods shall be increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.
SECTION 9.10. ENTIRE AGREEMENT. This Agreement, the Engagement
Letter and the other Loan Documents constitute the entire contract between the
parties relative to the subject matter hereof. Any other previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any party
other than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
SECTION 9.12. SEVERABILITY. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. COUNTERPARTS. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as
83
provided in Section 9.03. Delivery of an executed signature page to this
Agreement by fax transmission shall be as effective as delivery of a manually
signed counterpart of this Agreement.
SECTION 9.14. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a)
Each of Citadel and the Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower, Citadel or their
respective properties in the courts of any jurisdiction.
(b) Each of Citadel and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.16. CONFIDENTIALITY. The Administrative Agent, the
Collateral Agent, each Issuing Bank and each of the Lenders agrees to keep
confidential (and to use its best efforts to cause its respective agents and
representatives to keep confidential) in accordance with its customary practices
the Information (as defined below) and all copies thereof, extracts therefrom
and analyses or other materials based thereon, except that the Administrative
Agent, the Collateral Agent, any Issuing Bank or any Lender shall be permitted
to disclose Information (a) to such of its respective officers, directors,
employees, agents, affiliates and representatives as need to know such
Information, (b) to a potential assignee or participant of such Lender or any
direct or indirect contractual counterparty in any swap agreement relating to
the Loans or such potential assignee's or participant's or counterparty's
advisors who need to know such Information (provided that any such potential
assignee or participant or counterparty shall, and shall use commercially
reasonable efforts to cause its advisors to, keep confidential all such
Information on the terms set forth in this Section 9.16), (c) to the extent
requested by any regulatory authority, (d) to the extent otherwise required by
applicable laws and regulations or by any subpoena or similar legal process, (e)
in connection with any suit, action or proceeding relating to the enforcement of
its rights hereunder or under the other Loan Documents or (f) to the extent such
Information (i) becomes publicly available
84
other than as a result of a breach of this Section 9.16 or (ii) becomes
available to the Administrative Agent, any Issuing Bank, any Lender or the
Collateral Agent on a nonconfidential basis from a source other than the
Borrower or Citadel. For the purposes of this Section, "Information" shall mean
all financial statements, certificates, reports, agreements and information
(including all analyses, compilations and studies prepared by the Administrative
Agent, the Collateral Agent, any Issuing Bank or any Lender based on any of the
foregoing) and that are received from the Borrower or Citadel and related to the
Borrower or Citadel, any shareholder of the Borrower or Citadel or any employee,
customer or supplier of the Borrower or Citadel, other than any of the foregoing
that have been previously disclosed in a document that is available to the
public. The provisions of this Section 9.16 shall remain operative and in full
force and effect for three years after the expiration of this Agreement.
85
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CITADEL BROADCASTING COMPANY,
by /s/ Donna L. Heffner
------------------------------------------------
Name: Donna L. Heffner
Title: Vice President
CITADEL COMMUNICATIONS
CORPORATION,
by /s/ Donna L. Heffner
------------------------------------------------
Name: Donna L. Heffner
Title: Vice President
CREDIT SUISSE FIRST BOSTON, individually
and as Administrative Agent, Collateral Agent, and
Issuing Bank,
by /s/ Julia P. Kingsbury
------------------------------------------------
Name: Julia P. Kingsbury
Title: Vice President
by /s/ Jeffrey B. Ulmer
------------------------------------------------
Name: Jeffrey B. Ulmer
Title: Vice President
86
BANK OF AMERICA, N.A.,
by /s/ R. Drake
------------------------------------------------
Name: R. Drake
Title:
87
BANK OF MONTREAL,
by /s/ Yvonne Bos
------------------------------------------------
Name: Yvonne Bos
Title: Senior Vice President
88
THE BANK OF NEW YORK,
by /s/ Geoffrey C. Brooks
------------------------------------------------
Name: Geoffrey C. Brooks
Title: Vice President
89
BANK OF NOVA SCOTIA,
by /s/ Ian A. Hodgart
------------------------------------------------
Name: Ian A. Hodgart
Title: Authorized Signatory
90
THE CHASE MANHATTAN BANK,
by /s/ Joan M. Fitzgibbon
------------------------------------------------
Name: Joan M. Fitzgibbon
Title: Managing Director
91
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
by /s/ Anthony Rock
------------------------------------------------
Name: Anthony Rock
Title: Vice President
by /s/ Marcus Edward
------------------------------------------------
Name: Marcus Edward
Title: Vice President
92
FINOVA CAPITAL CORPORATION,
by /s/ Jeffrey S. Kilrea
------------------------------------------------
Name: Jeffrey S. Kilrea
Title: Senior Vice President
93
FIRST UNION NATIONAL BANK,
by /s/ Jeffrey M. Graci
------------------------------------------------
Name: Jeffrey M. Graci
Title: Vice President
PARENT GUARANTEE AGREEMENT dated as of
December 17, 1999, between CITADEL COMMUNICATIONS
CORPORATION, a Nevada corporation (the "Guarantor")
and CREDIT SUISSE FIRST BOSTON, a bank organized
under the laws of Switzerland, acting through its New
York branch ("CSFB"), as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
Reference is made to the Credit Agreement dated as of December 17, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Citadel Broadcasting Company, a Nevada corporation (the
"Borrower"), the Guarantor, the lenders from time to time party thereto (the
"Lenders"), the Lenders identified therein as issuing banks (the "Issuing
Banks"), CSFB, as administrative agent (in such capacity, the "Administrative
Agent") and as Collateral Agent for the Lenders, FINOVA Capital Corporation, as
syndication agent, and First Union National Bank and Fleet National Bank, as
documentation agents. Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Banks have agreed to issue Letters of Credit for the account of the Borrower,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. As the owner of all of the issued and outstanding capital
stock of the Borrower, the Guarantor acknowledges that it will derive
substantial benefit from the making of the Loans by the Lenders and the issuance
of the Letters of Credit by the Issuing Banks. The obligations of the Lenders to
make Loans and of the Issuing Banks to issue Letters of Credit are conditioned
on, among other things, the execution and delivery by the Guarantor of a
Guarantee Agreement in the form hereof. As consideration therefor and in order
to induce the Lenders to make Loans and the Issuing Banks to issue Letters of
Credit, the Guarantor is willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. The Guarantor unconditionally guarantees (the
"Guarantee"), as a primary obligor and not merely as a surety, (a) the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether such interest is
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether such monetary obligations are allowed or
allowable as a claim in such proceeding), of the Loan Parties to the Secured
Parties under the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Loan Parties under or pursuant to the Credit Agreement and the other Loan
Docu ments and (c) unless otherwise agreed upon in writing by the applicable
Lender party thereto, all obligations of the Borrower, monetary or otherwise,
under each Hedging Agreement entered into with a counterparty that was a Lender
at the time such Hedging Agreement was entered into (all the monetary and other
obligations referred to in the preceding clauses (a) through (c) being
collectively called the "Obligations"). The Guarantor further agrees that the
2
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, the Guarantor waives presentment to, demand of payment from and
protest to the Borrower of any of the Obligations, and also waives notice of
acceptance of the Guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of the Guarantor hereunder
shall not be affected by (a) the failure of the Collateral Agent or any other
Secured Party to assert any claim or demand or to enforce or exercise any right
or remedy against the Borrower or any other guarantor of the Obligations under
the provisions of the Credit Agreement, any other Loan Document or otherwise,
(b) any rescission, waiver, amendment or modification of, or any release from
any of the terms or provisions of this Agreement, any other Loan Document, any
Guarantee or any other agreement, including with respect to any other guarantor
of the Obligations or (c) the failure to perfect any security interest in, or
the release of, any of the security held by or on behalf of the Collateral Agent
or any other Secured Party.
SECTION 3. Security. The Guarantor authorizes the Collateral Agent and
each of the other Secured Parties to (a) take and hold security for the payment
of this Guarantee and the Obligations and exchange, enforce, waive and release
any such security, (b) apply such security and direct the order or manner of
sale thereof as they in their sole discretion may determine and (c) release or
substitute any one or more endorsees, other guarantors or other obligors.
SECTION 4. Guarantee of Payment. The Guarantor further agrees that the
Guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Collateral Agent or
any other Secured Party to any of the security held for payment of the
Obligations or to any balance of any deposit account or credit on the books of
the Collateral Agent or any other Secured Party in favor of the Borrower or any
other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations
of the Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of the Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Collateral Agent or any other Secured
Party to assert any claim or demand or to enforce any remedy under the Credit
Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Obligations, or by any other act
or omission that may or might in any manner or to any extent vary the risk of
the Guarantor or that would otherwise operate as a discharge of the Guarantor as
a matter of law or equity (other than the indefeasible payment in full in cash
of all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent permitted
by applicable law, the Guarantor waives any defense based on or arising out of
any defense of the Borrower or the unenforceability of the Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
the Borrower, other than the final and indefeasible payment in full in cash of
the Obligations. The Collateral Agent and the other Secured Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Obligations, make any
other accommodation with the Borrower or any other guarantor or exercise any
other right or remedy available to them against the Borrower or any other
guarantor, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. To the fullest extent
3
permitted by applicable law, the Guarantor waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of the Guarantor against the Borrower or any other guarantor, as the
case may be, or any security.
SECTION 7. Agreement to Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against the Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
or such other Secured Party as designated thereby in cash the amount of such
unpaid Obligations. Upon payment by the Guarantor of any sums to the Collateral
Agent or any Secured Party as provided above, all rights of the Guarantor
against the Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower now or hereafter held by the Guarantor is hereby subordinated in right
of payment to the prior payment in full of the Obligations. If any amount shall
erroneously be paid to the Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of the Borrower, such amount shall be held in trust for the benefit
of the Secured Parties and shall forthwith be paid to the Collateral Agent to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
SECTION 8. Information. The Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that the Guarantor
assumes and incurs hereunder, and agrees that none of the Collateral Agent or
the other Secured Parties will have any duty to advise the Guarantor of
information known to it or any of them regarding such circumstances or risks.
SECTION 9. Termination. The Guarantee made hereunder (a) shall
terminate when all the Obligations have been indefeasibly paid in full and the
Lenders have no further commitment to lend under the Credit Agreement, the L/C
Exposure has been reduced to zero and the Issuing Banks have no further
obligation to issue Letters of Credit under the Credit Agreement and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Secured Party or the Guarantor upon the bankruptcy or
reorganization of the Borrower, the Guarantor or otherwise.
SECTION 10. Binding Agreement; Assignments. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Guarantor that are contained in this
Agreement shall bind and inure to the benefit of each party hereto and their
respective successors and assigns. This Agreement shall become effective when a
counterpart hereof executed on behalf of the Guarantor shall have been delivered
to the Collateral Agent and a counterpart hereof shall have been executed on
behalf of the Collateral Agent, and thereafter shall be binding upon the
Guarantor and the Collateral Agent and their respective successors and assigns,
and shall inure to the benefit of the Guarantor, the Collateral Agent and the
other Secured Parties, and their respective successors and assigns, except that
the Guarantor shall not have the right to assign its rights or obligations
hereunder or any interest herein (and any such attempted assignment shall be
void).
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce
4
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Collateral
Agent hereunder and of the other Secured Parties under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Guarantor in any case shall entitle the
Guarantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantor and the Collateral Agent, with the prior written consent of the
Required Lenders (except as otherwise provided in the Credit Agreement).
SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 13. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to the Guarantor shall be given to it in
care of the Borrower.
SECTION 14. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Guarantors herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans and the issuance of the
Letters of Credit by the Issuing Banks regardless of any investigation made by
the Secured Parties or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or the L/C Exposure does not equal zero and as long as
the Commitments and the L/C Commitment have not been terminated.
SECTION 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provided in Section 10. Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of interpretation
specified in Section 1.02 of the Credit Agreement shall be applicable to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
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