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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and between
CITADEL COMMUNICATIONS CORPORATION
and
FLCC HOLDINGS, INC.
dated as of January 15, 2001
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER; CLOSING
1.1. The Merger......................................................................................1
1.2. Directors and Officers..........................................................................2
1.3. Articles of Incorporation and Bylaws............................................................2
ARTICLE II
EFFECT OF THE MERGER ON SECURITIES OF THE COMPANY AND MERGER SUB
2.1. Conversion of Merger Sub Stock..................................................................2
2.2. Conversion of Company Common Stock..............................................................3
2.3. Surrender and Payment...........................................................................3
2.4. Options.........................................................................................4
2.5. Withholding Rights..............................................................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1. Organization and Good Standing; Organizational Documents........................................5
3.2. Capitalization..................................................................................6
3.3. Subsidiaries....................................................................................7
3.4. Authorization; Binding Agreement................................................................7
3.5. Governmental Approvals..........................................................................8
3.6. No Violations...................................................................................9
3.7. Securities Filings..............................................................................9
3.8. Litigation; Liabilities........................................................................10
3.9. Financial Statements...........................................................................10
3.10. Absence of Certain Changes.....................................................................11
3.11. Related Party Transactions.....................................................................11
3.12. Compliance with Laws; Permits..................................................................11
3.13. Finders and Investment Bankers.................................................................12
3.14. Material Contracts.............................................................................12
3.15. Employee Benefit Plans.........................................................................13
3.16. Taxes and Returns..............................................................................15
3.17. Fairness Opinion...............................................................................16
3.18. Takeover Statutes..............................................................................16
3.19. Company FCC Licenses; Operations of Company Licensed Facilities................................16
3.20. Intellectual Property..........................................................................18
3.21. Environmental Matters..........................................................................19
3.22. Property.......................................................................................21
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TABLE OF CONTENTS
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
4.1. Organization and Good Standing.................................................................21
4.2. Authorization; Binding Agreement...............................................................21
4.3. Governmental Approvals.........................................................................22
4.4. No Violations..................................................................................22
4.5. Financing......................................................................................22
4.6. Qualification..................................................................................23
4.7. Ownership of Company Common Stock..............................................................23
ARTICLE V
ADDITIONAL COVENANTS OF THE COMPANY
5.1. Conduct of Business of the Company and the Company Subsidiaries................................23
5.2. Notification of Certain Matters................................................................26
5.3. Access and Information.........................................................................27
5.4. Stockholder Approval...........................................................................28
5.5. Reasonable Best Efforts........................................................................28
5.6. Public Announcements...........................................................................29
5.7. Compliance.....................................................................................29
5.8. Company Benefit Plans..........................................................................29
5.9. No Solicitation................................................................................29
5.10. SEC and Stockholder Filings....................................................................32
5.11. Takeover Statutes..............................................................................32
5.12. Debenture and Preferred Stock Offers...........................................................32
ARTICLE VI
ADDITIONAL COVENANTS OF PARENT
6.1. Notification of Certain Matters................................................................33
6.2. Reasonable Best Efforts........................................................................33
6.3. Public Announcements...........................................................................34
6.4. Compliance.....................................................................................34
6.5. Director and Officer Liability.................................................................34
6.6. Formation and Actions of Merger Sub............................................................35
6.7. No Purchase of Company Common Stock............................................................35
ARTICLE VII
ADDITIONAL COVENANTS OF THE COMPANY AND PARENT
7.1. Proxy Statement................................................................................36
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TABLE OF CONTENTS
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ARTICLE VIII
CONDITIONS
8.1. Conditions to Each Party's Obligations.........................................................37
8.2. Conditions to Obligations of the Company.......................................................38
8.3. Conditions to Obligations of Parent............................................................38
ARTICLE IX
TERMINATION AND ABANDONMENT
9.1. Termination....................................................................................39
9.2. Effect of Termination..........................................................................41
ARTICLE X
MISCELLANEOUS
10.1. Confidentiality................................................................................42
10.2. Amendment and Modification.....................................................................43
10.3. Waiver of Compliance; Consents.................................................................43
10.4. Survival of Representations and Warranties.....................................................43
10.5. Notices........................................................................................43
10.6. Binding Effect; Assignment.....................................................................44
10.7. Expenses.......................................................................................45
10.8. Governing Law..................................................................................45
10.9. Counterparts...................................................................................45
10.10. Interpretation.................................................................................45
10.11. Entire Agreement...............................................................................45
10.12. Specific Performance...........................................................................46
10.13. Third Parties..................................................................................46
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INDEX OF DEFINED TERMS
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Acquisition Agreement...................................................................................31
Acquisition Transaction.................................................................................32
Affiliate...............................................................................................46
Agreement................................................................................................1
Articles of Merger.......................................................................................2
Benefit Plans...........................................................................................14
CBC.....................................................................................................10
Certificate of Incorporation.............................................................................6
Certificates.............................................................................................3
Closing..................................................................................................2
Closing Date.............................................................................................2
Code....................................................................................................14
Company..................................................................................................1
Company Common Stock.....................................................................................3
Company ERISA Affiliate.................................................................................14
Company FCC Licenses....................................................................................17
Company Group...........................................................................................15
Company Licensed Facilities.............................................................................17
Company Licenses Facility...............................................................................17
Company LMA Facilities..................................................................................17
Company LMA Facility....................................................................................17
Company Options..........................................................................................4
Company Permits.........................................................................................12
Company Preferred Stock..................................................................................6
Company Proposal........................................................................................28
Company Stockholders Meeting............................................................................28
Company Subsidiaries.....................................................................................5
Consent..................................................................................................8
Debenture Offer.........................................................................................33
Debentures..............................................................................................33
Effective Time...........................................................................................2
End Date................................................................................................40
Event...................................................................................................11
Exchange Act.............................................................................................7
Exchange Fund............................................................................................3
FCC......................................................................................................9
Financial Advisor.......................................................................................32
GAAP....................................................................................................11
Governmental Authority...................................................................................8
HSR Act..................................................................................................9
Indemnified Losses......................................................................................35
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INDEX OF DEFINED TERMS
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Indemnified Person......................................................................................35
Intellectual Property...................................................................................18
Law......................................................................................................9
Letter of Transmittal....................................................................................3
Liens....................................................................................................7
Litigation..............................................................................................10
LMA Facility FCC License................................................................................17
LMA Facility FCC Licenses...............................................................................17
Material Contract.......................................................................................12
Merger...................................................................................................1
Merger Consideration.....................................................................................3
Merger Sub...............................................................................................1
multi-employer plan.....................................................................................14
NASD.....................................................................................................9
Nevada Code..............................................................................................1
Notice..................................................................................................30
Parent...................................................................................................1
Parent Subsidiaries......................................................................................3
Paying Agent.............................................................................................3
person..................................................................................................46
Preferred Stock.........................................................................................33
Preferred Stock Offer...................................................................................33
Preferred Stock Solicitation............................................................................33
Proxy Statement.........................................................................................36
Representatives.........................................................................................30
Requisite Consents......................................................................................33
Requisite Preferred Stock Consents......................................................................33
SEC......................................................................................................9
Securities Act...........................................................................................7
Significant Contracts...................................................................................13
Significant Transaction.................................................................................13
Solicitation............................................................................................33
Station Acquisition Contract............................................................................25
subsidiary..............................................................................................46
Superior Proposal.......................................................................................32
Surviving Corporation....................................................................................1
Takeover Proposal.......................................................................................31
Takeover Statute........................................................................................17
Tax or Taxes............................................................................................16
Termination Fee.........................................................................................41
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and
entered into as of January 15, 2001, by and between FLCC Holdings, Inc., a
Delaware corporation ("Parent") and Citadel Communications Corporation, a Nevada
corporation (the "Company").
RECITALS
A. The Board of Directors of the Company has approved and adopted and
deems it advisable and in the best interests of the Company to consummate the
merger provided for herein (the "Merger"), pursuant to which Parent will acquire
all of the common stock of the Company through the merger of FLCC Acquisition
Corp., a to-be-formed wholly owned subsidiary of Parent incorporated in the
state of Nevada ("Merger Sub"), with and into the Company upon the terms and
subject to the conditions set forth in this Agreement. The Board of Directors of
Parent has approved and adopted and deems it advisable and in the best interests
of Parent and its stockholders to consummate the Merger upon the terms and
subject to the conditions set forth herein.
B. The parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING
1.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement:
(a) At the Effective Time, Merger Sub shall be merged with and
into the Company in accordance with the applicable provisions of Chapters 78 and
92A of the Nevada Revised Statutes (the "Nevada Code"). The Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") and shall
continue its existence as a corporation under the laws of the State of Nevada.
As a result of the Merger, the Company shall become a direct, wholly owned
subsidiary of Parent. After the Effective Time, the separate corporate existence
of Merger Sub shall cease. The Merger shall have the effects set forth in
Section 92A.250 of the Nevada Code.
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(b) The closing of the Merger (the "Closing") shall take place
(a) at the offices of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as soon as practicable (but not later than 5 business
days) after the last to be fulfilled or waived of the conditions set forth in
Article VIII (excluding conditions that, by their terms, cannot be satisfied
until the Closing Date, but subject to the fulfillment or waiver of such
conditions) shall be fulfilled or waived in accordance herewith, or (b) at such
other time, date or place as Parent and the Company may agree. The date on which
the Closing occurs is hereinafter referred to as the "Closing Date."
(c) On or before the Closing Date, the parties shall (i) file
articles of merger with respect to the Merger (the "Articles of Merger") in such
form as is required by and executed in accordance with the Nevada Code and (ii)
make all other filings or recordings required under the laws of Nevada. The
Merger shall become effective at the date and time of the filing of the Articles
of Merger (or such other date and time as may be agreed to by Parent and the
Company and specified in the Articles of Merger as may be permitted by the
Nevada Code). The time at which the Merger becomes effective is referred to in
this Agreement as the "Effective Time."
1.2. Directors and Officers. The directors of Merger Sub immediately
prior to the Effective Time shall be the directors of the Surviving Corporation,
as of and after the Effective Time and until their successors are duly appointed
or elected in accordance with the laws of Nevada or until their earlier death,
resignation or removal. The officers of the Company immediately prior to the
Effective Time shall continue as the officers of the Surviving Corporation as of
and after the Effective Time until such time as their successors shall be duly
elected or appointed in accordance with the laws of Nevada or until their
earlier death, resignation or removal.
1.3. Articles of Incorporation and Bylaws. The articles of
incorporation and bylaws of Merger Sub immediately prior to the Effective Time
shall be adopted as the articles of incorporation and bylaws of the Surviving
Corporation as of the Effective Time. Such bylaws shall include a provision that
the Nevada Control Share Act, Sections 78.378 to 78.3793 of the Nevada Code,
inclusive, does not apply to any holders of capital stock of the Surviving
Corporation or any successor entity as a result of such holders' acquisition of
shares of such capital stock.
ARTICLE II
EFFECT OF THE MERGER ON SECURITIES OF THE COMPANY
AND MERGER SUB
2.1. Conversion of Merger Sub Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of any of the parties, each
share of the common stock of Merger Sub outstanding immediately prior to the
Effective Time shall
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be converted into and shall become one fully paid and nonassessable share of
common stock of the Surviving Corporation.
2.2. Conversion of Company Common Stock. (a) Subject to the provisions
of this Agreement, at the Effective Time each issued and outstanding share of
common stock, par value $.001 per share, of the Company ("Company Common
Stock"), shall be converted into the right to receive in cash, without interest,
an amount equal to $26.00 (the "Merger Consideration").
(b) As a result of the Merger and without any action on the
part of any holder thereof, at the Effective Time all shares of Company Common
Stock shall cease to be outstanding and shall be canceled and retired and shall
cease to exist, and each holder of shares of Company Common Stock shall
thereafter cease to have any rights with respect to such shares of Company
Common Stock, except the right to receive, without interest, the Merger
Consideration upon the surrender of a certificate representing such shares of
Company Common Stock, together with a duly completed Letter of Transmittal (as
defined below), or a Letter of Transmittal with respect to shares of Company
Common Stock held in book-entry form (the "Certificates").
(c) Notwithstanding anything contained in this Section 2.2 to
the contrary, each share of Company Common Stock issued and held in the
Company's treasury or by any of the Company's subsidiaries immediately prior to
the Effective Time shall, by virtue of the Merger, cease to be outstanding and
shall be canceled and retired without payment of any consideration therefor.
(d) Notwithstanding the foregoing, each share of Company
Common Stock owned by Parent or any of its subsidiaries ("Parent Subsidiaries")
at the Effective Time shall, by virtue of the Merger, be canceled and retired
without payment of any consideration therefor.
(e) The Merger Consideration shall be subject to appropriate
adjustment in the event of a stock split, stock dividend or recapitalization
after the date of this Agreement and prior to the Closing applicable to Company
Common Stock.
2.3. Surrender and Payment. (a) Prior to the Effective Time, Parent
shall appoint an agent reasonably acceptable to the Company (the "Paying Agent")
for the purpose of exchanging the Certificates for the Merger Consideration.
Prior to or concurrently with the Effective Time, Parent shall deposit with or
make available to the Paying Agent the Merger Consideration to be paid in
respect of the shares of Company Common Stock (the "Exchange Fund"). Promptly
after the Effective Time, Parent will send, or will cause the Paying Agent to
send, to each record holder of shares of Company Common Stock, at the Effective
Time, a letter of transmittal and instructions (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the Certificates to the Paying Agent) for use in such
exchange (a "Letter of Transmittal").
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(b) Upon surrender to the Paying Agent of his Certificate
together with a properly completed Letter of Transmittal, each holder of shares
of Company Common Stock will be entitled to receive promptly the Merger
Consideration in respect of the shares of Company Common Stock represented by
his Certificate. Until so surrendered, each such Certificate shall represent
after the Effective Time, for all purposes, only the right to receive the Merger
Consideration.
(c) If any portion of the Merger Consideration is to be paid
to a person other than the person in whose name the Certificate so surrendered
is registered, it shall be a condition to such payment that such Certificate
shall be properly endorsed or otherwise be in proper form for transfer and that
the person requesting such payment shall pay to the Paying Agent any transfer or
other taxes required as a result of such payment to a person other than the
registered holder of such Certificate, or establish to the satisfaction of the
Paying Agent that such tax has been paid or is not payable.
(d) Any portion of the Exchange Fund made available to or
deposited with the Paying Agent pursuant to this Section 2.3 that remains
unclaimed by the holders of Company Common Stock six months after the Effective
Time shall be returned to Parent, upon demand, and any such holder who has not
exchanged his shares for the Merger Consideration in accordance with this
Section 2.3 prior to that time shall thereafter look only to Parent for payment
of such consideration without any interest thereon. Notwithstanding the
foregoing, Parent shall not be liable to any holder of Company Common Stock for
any amounts paid to a public official pursuant to applicable abandoned property,
escheat or similar laws. Any amounts remaining unclaimed by the holders of
Company Common Stock five years after the Effective Time (or such earlier date,
immediately prior to such time when the amounts would otherwise escheat to or
become property of any Governmental Authority) shall become, to the extent
permitted by applicable law, the property of Parent free and clear of any claims
or interest of any person previously entitled thereto.
2.4. Options. The Company shall use its reasonable best efforts to
cause: (i) each option granted by the Company to purchase shares of Company
Common Stock (the "Company Options") with an exercise price per share equal to
or greater than the Merger Consideration to be irrevocably cancelled with only
nominal consideration therefor; and (ii) each Company Option outstanding after
application of clause (i) to be fully vested and converted immediately prior to
the Effective Time into the right to receive an amount of cash, without
interest, equal to (x) the excess of the Merger Consideration over such exercise
price per share of Company Common Stock subject to such Company Option
multiplied by (y) the number of shares of Company Common Stock subject to such
option immediately prior to the Effective Time. The Company shall take all
action necessary to give effect to this Section 2.4 in full (including, without
limitation, obtaining consents from the holders of Company Options to the
cancellation or conversion thereof, as applicable, in accordance with this
Section 2.4). The Parent shall cause the Surviving
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Corporation to pay any amounts required to be paid under this Section 2.4 as
promptly as practicable following the Effective Time.
2.5. Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable to any holder of Company
Common Stock or Company Options pursuant to this Article II such amounts as it
is required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. If Parent so
withholds amounts and remits such amounts to the appropriate authorities, such
amounts shall be treated for all purposes as having been paid to the holder of
Company Common Stock or Company Options, as the case may be, in respect of which
Parent made such deduction and withholding.
2.6. Lost, Stolen or Destroyed Certificates. In the event that any
Certificate has been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by Parent, the posting by such person of a bond in
such reasonable amount as Parent may direct as indemnity against any claim that
may be made against it with respect to such certificate, Parent will, in
exchange for such lost, stolen or destroyed Certificate, pay or cause to be paid
the amounts deliverable in respect thereof pursuant to Section 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Securities Filings or in a separate
disclosure schedule, which has been delivered by the Company to Parent prior to
the execution of this Agreement (the "Company Disclosure Schedule") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant to the extent specified therein and such other
representations and warranties or covenants to the extent a matter in such
section is disclosed in such a way as to make its relevance to the information
called for by such other representation and warranty or covenant readily
apparent), the Company hereby represents and warrants as of the date hereof to
Parent as follows:
3.1. Organization and Good Standing; Organizational Documents. (a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada. Each of the Company's direct and indirect
subsidiaries (the "Company Subsidiaries") is a corporation or other business
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization. Each of the Company and
the Company Subsidiaries is qualified or licensed to do business as a foreign
corporation or other business entity, as applicable, and is in good standing, in
each jurisdiction where the character of its properties owned, operated or
leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified or licensed would not, individually
or in the aggregate, constitute a Company Material Adverse Effect. The term
"Company Material
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Adverse Effect" means any change, effect, circumstance or event that is or is
reasonably likely to (i) be materially adverse to the business, results of
operations or financial condition or prospects of the Company and its
subsidiaries taken as a whole, other than any change, effect, circumstance or
event relating to or resulting from (A) general changes in the radio industry or
the advertising markets, (B) changes in general economic conditions or
securities markets in general or (C) this Agreement or the transactions
contemplated hereby or the announcement thereof or (ii) materially adversely
effect the ability of the Company to perform its obligations under this
Agreement or timely consummate the transactions contemplated by this Agreement.
The Company and the Company Subsidiaries have all requisite corporate or similar
organizational power and all governmental licenses, authorizations, consents and
approvals required to carry on their respective businesses as they are now being
conducted and necessary to own, operate and lease their properties and assets,
except those licenses, authorizations, consents and approvals, the failure of
which to possess does not, individually, or in the aggregate, constitute a
Company Material Adverse Effect.
(b) The Company has furnished or otherwise made available to
Parent a complete and correct copy of the Company's Amended and Restated
Certificate of Incorporation and all amendments thereto, as currently in effect
("Articles of Incorporation"), and Bylaws. Such Articles of Incorporation and
Bylaws and all similar organizational documents of the Company Subsidiaries are
in full force and effect. The Company is not in violation of its Articles of
Incorporation or Bylaws and, except as does not, individually or in the
aggregate, constitute a Company Material Adverse Effect, none of the Company
Subsidiaries is in violation of any similar organizational documents of such
Company Subsidiary.
3.2. Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 200,000,000 shares of Company Common Stock,
19,033,122 shares of preferred stock, par value $.001 per share (the "Company
Preferred Stock") and 20,000,000 shares of undesignated preferred stock. Of such
authorized shares, as of the date hereof, there are issued and outstanding
37,006,138 shares of Company Common Stock, no shares of Company Common Stock are
issued and held in the treasury of Company, no shares of the Company Preferred
Stock or undesignated preferred stock are outstanding, and no other capital
stock of the Company is issued or outstanding. All issued and outstanding shares
of Company Common Stock are duly authorized, validly issued and outstanding,
fully paid and nonassessable and were issued free of preemptive rights in
compliance with applicable corporate and securities Laws. There are no
outstanding rights, including stock appreciation rights, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights, options or other
agreements of any kind relating to, or the value of which is tied to the value
of, any of the outstanding, authorized but not issued, unauthorized or treasury
shares of the capital stock or any other security of the Company, and there is
no authorized or outstanding security of any kind convertible into or
exchangeable for any such capital stock or other security. There are no
restrictions imposed by the Company upon the transfer of or otherwise pertaining
to the securities (including, but not limited to, the ability to pay dividends
thereon) or retained earnings of
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the Company and the Company Subsidiaries or the ownership thereof other than
those imposed by the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act"), the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the "Exchange Act"),
the Communications Act, applicable state securities Laws, applicable corporate
law or the Company's Articles of Incorporation.
3.3. Subsidiaries. The Company does not own, directly or indirectly,
any capital stock or other proprietary interest in any company, association,
trust, partnership, joint venture or other entity. Each Company Subsidiary is,
directly or indirectly, wholly owned by the Company and all of the capital stock
and other interests of the Company Subsidiaries so held by the Company are owned
by it, free and clear of any Lien. All of the outstanding shares of capital
stock in each of the Company Subsidiaries are duly authorized, validly issued
and outstanding, fully paid and nonassessable, and were issued free of
preemptive rights in compliance with applicable corporate and securities Laws.
There are no irrevocable proxies or similar obligations with respect to such
capital stock of the Company Subsidiaries held by the Company and no equity
securities or other interests of any of the Company Subsidiaries are or may
become required to be issued or purchased by reason of any options, warrants,
rights to subscribe to, puts, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock of any Company Subsidiary, and there are no
contracts, commitments, understandings or arrangements by which any Company
Subsidiary is bound to issue additional shares of its capital stock, or options,
warrants or rights to purchase or acquire any additional shares of its capital
stock or securities convertible into or exchangeable for such shares. The term
"Liens" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
3.4. Authorization; Binding Agreement. (a) The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including, but not limited to, the Merger,
have been duly and validly authorized by the Company's Board of Directors, and
no other corporate proceedings on the part of the Company or any Company
Subsidiary are necessary to authorize the execution and delivery of this
Agreement or to consummate the transactions contemplated hereby (other than the
approval and adoption of this Agreement and the transactions contemplated hereby
by the stockholders of the Company in accordance with the Nevada Code and the
Articles of Incorporation and Bylaws of the Company) and the filing and
recordation of appropriate merger documents as required by the Nevada Code. This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery of the Agreement by
Parent, constitutes the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
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(b) The affirmative vote of the holders of a majority of the
Company Common Stock entitled to vote at a duly called meeting of stockholders
at which a quorum is present is the only vote of the holders of any class or
series of capital stock of the Company or any of the Company Subsidiaries
required to approve the Merger and this Agreement. No other vote of the
stockholders or directors of the Company or any of the Company Subsidiaries is
required by law, the articles of incorporation or bylaws of the Company or any
of the Company Subsidiaries or otherwise in order for the Company to consummate
the Merger and the transactions contemplated hereby.
(c) As of the date hereof, the Board of Directors of the
Company, at a meeting duly called and held, has (i) determined that this
Agreement and the transactions contemplated hereby are advisable and are fair to
and in the best interests of the Company and has approved the same and (ii)
resolved to recommend that the Company's stockholders approve this Agreement and
the transactions contemplated herein.
(d) The Company has not adopted a shareholder rights plan or
any similar plan or instrument.
3.5. Governmental Approvals. No consent, approval, waiver or
authorization of, notice to or declaration or filing with ("Consent") any nation
or government, any state or other political subdivision thereof, any person,
authority or body exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government including, without
limitation, any governmental or regulatory authority, agency, department, board,
commission or instrumentality, any court, tribunal or arbitrator and any
self-regulatory organization ("Governmental Authority") on the part of the
Company or any of the Company Subsidiaries is required in connection with the
execution or delivery by the Company of this Agreement or the consummation by
the Company of the transactions contemplated hereby other than (i) the filing of
the Articles of Merger with the Secretary of State of the State of Nevada in
accordance with the Nevada Code, (ii) filings with the Securities and Exchange
Commission (the "SEC"), the National Association of Securities Dealers (the
"NASD") and the Nasdaq National Market, (iii) Consents from or with Governmental
Authorities set forth in Schedule 3.5 of the Company Disclosure Schedule, (iv)
Consents required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder (the "HSR
Act"), (v) any filings required or approvals necessary pursuant to any state
securities or "blue sky" laws, (vi) any filings with and approvals and
authorizations of the Federal Communications Commission or any successor entity
(the "FCC") as may be required under the Communications Act of 1934, as amended,
and the rules, regulations and policies of the FCC thereunder (collectively, the
"Communications Act"), including, without limitation, filings and approvals in
connection with the transfer of control of the Company FCC Licenses, and (vii)
those Consents that, if they were not obtained or made, would not, individually
or in the aggregate, constitute a Company Material Adverse Effect.
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3.6. No Violations. The execution and delivery of this Agreement, the
consummation by the Company of the transactions contemplated hereby and
compliance by the Company with any of the provisions hereof will not (i)
conflict with or result in any breach of any provision of the articles of
incorporation or bylaws or other organizational documents of the Company or any
of the Company Subsidiaries, (ii) require any Consent under or result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration of the performance required) under any of the terms, conditions
or provisions of any Material Contract or other material obligation to which the
Company or any Company Subsidiary is a party or by which any of them or any of
their properties or assets may be bound, (iii) result in the creation or
imposition of any Lien upon any of the assets of the Company or any Company
Subsidiary, or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in Section 3.5 above and the expiration of the HSR
waiting period, conflict with or violate any applicable provision of any
constitution, treaty, statute, law, code, rule, regulation, ordinance, policy or
order of any Governmental Authority or other matters having the force of law
including, but not limited to, any orders, decisions, injunctions, judgments,
awards and decrees of or agreements with any court or other Governmental
Authority ("Law") currently in effect to which the Company or any Company
Subsidiary or its or any of their respective assets or properties are subject,
except in the case of clauses (ii), (iii) and (iv) above, for any deviations
from the foregoing which do not, individually or in the aggregate, constitute a
Company Material Adverse Effect.
3.7. Securities Filings. As of their respective dates, or as of the
date of the last amendment thereof, if amended after filing, none of the
Securities Filings (including all schedules thereto and disclosure documents
incorporated by reference therein), contained or, as to Securities Filings
subsequent to the date hereof, will contain, any untrue statement of a material
fact or omitted or, as to Securities Filings subsequent to the date hereof, will
omit, to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Each of the Securities Filings was filed in a timely
manner and at the time of filing or as of the date of the last amendment
thereof, if amended after filing, complied or, as to Securities Filings
subsequent to the date hereof, will comply with the Exchange Act, the Securities
Act, the Communications Act or other applicable Law except those failures to
timely file or comply which do not or will not, individually or in the
aggregate, constitute a Company Material Adverse Effect. The term "Security
Filings" means (i) the Company's and Citadel Broadcasting Company's ("CBC")
Annual Reports on Form 10-K, as amended, for the years ended December 31, 1998
and 1999, as filed with the SEC, (ii) the Company's proxy statements relating to
all of the meetings of stockholders (whether annual or special) of the Company
since January 1, 1998, as filed with the SEC and (iii) all other reports,
statements and registration statements and amendments thereto (including,
without limitation, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as amended) filed by the Company or CBC, as applicable, with the SEC since
January 1, 1998, together with those reports or other documents of the
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type described in clauses (i) though (iii) above, subsequently provided or
required to be provided pursuant to this Agreement.
3.8. Litigation; Liabilities. (a) As of the date hereof, there is no
action, cause of action, claim, demand, suit, proceeding, citation, summons,
subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, by or before any court, tribunal, arbitrator,
the FCC or other Governmental Authority ("Litigation") pending or, to the
knowledge of the Company, threatened against the Company or any Company
Subsidiaries, any officer, director, employee or agent thereof, in his or her
capacity as such, or as a fiduciary with respect to any Benefit Plan of the
Company or any Company Subsidiaries or otherwise relating to the Company or any
Company Subsidiaries or the securities of any of them, or any properties or
rights of the Company or any Company Subsidiaries or any Benefit Plan of the
Company or any Company Subsidiaries, except as does not, individually or in the
aggregate, constitute a Company Material Adverse Effect.
(b) Neither the Company nor any of the Company Subsidiaries
has or is subject to any liabilities (absolute, accrued, contingent or
otherwise), except liabilities or obligations which do not, individually or in
the aggregate, constitute a Company Material Adverse Effect.
3.9. Financial Statements. (a) Each of the consolidated balance sheets
of the Company and the Company Subsidiaries (including all related notes)
included in the financial statements contained in the Securities Filings (or
incorporated therein by reference) present fairly, in all material respects, the
consolidated financial position of the Company and the Company Subsidiaries as
of the respective dates indicated, and each of the statements of consolidated
operations, statements of consolidated cash flows and statements of consolidated
common stock and other stockholders' equity of the Company and the Company
Subsidiaries (including all related notes) contained in such financial
statements present fairly, in all material respects, the consolidated results of
operations and cash flows of the Company and the Company Subsidiaries for the
respective periods indicated, in each case in conformity with U.S. generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except for changes in accounting principles disclosed in
the notes thereto) and the rules and regulations of the SEC, except that
unaudited interim financial statements are subject to normal and recurring
year-end adjustments and any other adjustments described therein and do not
include certain notes and other information which may be required by GAAP but
which are not required under the Exchange Act. The financial statements included
in the Securities Filings are in all material respects in accordance with the
books and records of the Company and the Company Subsidiaries.
(b) Each of the consolidated balance sheets of CBC and it subsidiaries
(including all related notes) included in the financial statements contained in
the Securities Filings (or incorporated therein by reference) present fairly, in
all material respects, the consolidated financial position of CBC and it
subsidiaries as of the respective dates
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indicated, and each of the statements of consolidated operations, statements of
consolidated cash flows and statements of consolidated common stock and other
stockholders' equity of CBC and it subsidiaries (including all related notes)
contained in such financial statements present fairly, in all material respects,
the consolidated results of operations and cash flows of CBC and it subsidiaries
for the respective periods indicated, in each case in conformity with GAAP
applied on a consistent basis throughout the periods involved (except for
changes in accounting principles disclosed in the notes thereto) and the rules
and regulations of the SEC, except that unaudited interim financial statements
are subject to normal and recurring year-end adjustments and any other
adjustments described therein and do not include certain notes and other
information which may be required by GAAP but which are not required under the
Exchange Act. The financial statements included in the Securities Filings are in
all material respects in accordance with the books and records of CBC and its
subsidiaries.
3.10. Absence of Certain Changes. Since September 30, 2000, there has
not been: (i) any event, occurrence, fact, condition, change, development or
effect ("Event") that, individually or in the aggregate, constitutes a Company
Material Adverse Effect; (ii) any declaration, payment or setting aside for
payment of any dividend (except to the Company or any Company Subsidiary wholly
owned by the Company) or other distribution or any redemption, purchase or other
acquisition of any shares of capital stock or securities of the Company or any
Company Subsidiary; (iii) any return of any capital or other distribution of
assets to stockholders of the Company or any Company Subsidiary (except to the
Company or any Company Subsidiary wholly owned by the Company); (iv) any
acquisition (by merger, consolidation, acquisition of stock or assets or
otherwise) of any person or business; or (v) any material change by the Company
to its accounting policies, practices, or methods, except, in the case of each
of the foregoing clauses (i) through (v), as expressly contemplated by this
Agreement.
3.11. Related Party Transactions. Since September 30, 2000, the Company
has not entered into any relationship or transaction of a sort that would be
required to be disclosed by the Company pursuant to Item 404 of Regulation S-K
of the Securities Act.
3.12. Compliance with Laws; Permits. (a)Neither the Company nor any of
the Company Subsidiaries is in conflict with, or in default or violation of any
Law in any jurisdiction, foreign or domestic, applicable to the Company or any
of the Company Subsidiaries or by which its or any of their respective assets or
properties is bound or affected, except for such conflicts, defaults or
violations which do not, individually or in the aggregate, constitute a Company
Material Adverse Effect.
(b) The Company and the Company Subsidiaries hold all permits,
licenses, easements, rights-of-way, variances, exemptions, consents,
certificates, orders and approvals which are material to the operation of the
businesses of the Company and the Company Subsidiaries (collectively, the
"Company Permits"), except where the failure to hold such Company Permits does
not, individually or in the aggregate, constitute a Company Material Adverse
Effect. The Company and the Company
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Subsidiaries are in compliance with the terms of the Company Permits except
where the failure to so comply, individually or in the aggregate, does not
constitute a Company Material Adverse Effect.
(c) None of the Company, any Company Subsidiary or, to the
knowledge of the Company, any director, officer, agent, employee or other person
acting on behalf of any of the foregoing has used any corporate funds for
unlawful contributions, payments, gifts or entertainment or for the payment of
other unlawful expenses relating to political activity, or made any direct or
indirect unlawful payments to governmental or regulatory officials or others,
which constitutes, individually or in the aggregate, a Company Material Adverse
Effect.
3.13. Finders and Investment Bankers. Neither the Company and the
Company Subsidiaries nor any of their respective officers or directors has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby other than pursuant to the agreements with Credit Suisse First Boston
Corporation, accurate and complete copies of which have been provided to Parent.
3.14. Material Contracts. (a) Neither the Company nor any Company
Subsidiary is a party or is subject to any note, bond, mortgage, indenture,
contract, lease, license, agreement, understanding, instrument, bid or proposal
that is required to be described in or filed as an exhibit to any Securities
Filing ("Material Contract") that is not so described in or filed as required by
the Securities Act or the Exchange Act, as the case may be.
(b) The Company Disclosure Schedule sets forth a true and
complete list of the following, true and complete copies of which have been
provided or made available to Parent:
(i) all contracts, agreements or other instruments related to
any Significant Transaction pursuant to which the Company or any
Company Subsidiary has any obligations (whether absolute, accrued,
asserted, unasserted or contingent or otherwise, and whether pursuant
to any earn-out or post-closing adjustment) to issue any shares of
capital stock or other securities of the Company or any securities of
any Company Subsidiary or deliver any other consideration as part of
any such Significant Transaction. For purposes of this Agreement,
"Significant Transaction" shall mean any acquisition or disposition of
(A) any business, limited liability company, association or other
business organization or division thereof or any material partnership
interest or material joint venture interest, (B) any material assets or
properties other than in the ordinary course of business or (C) any
radio broadcast station; and
(ii) each employment contract, agreement or other instrument
to which the Company or any Company Subsidiary is a party or by which
the Company or
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any Company Subsidiary otherwise is bound with any senior management
employee of the Company or any Company Subsidiary.
(c)(i) Each contract or agreement disclosed or required to be
disclosed in Schedule 3.14 of the Company Disclosure Schedule and each
Material Contract (collectively, the "Significant Contracts") is in full force
and effect and constitutes a legal, valid, binding and enforceable obligation
of the Company and each Company Subsidiary to the extent any such entity is a
party thereto and, to the knowledge of the Company, each other party thereto.
(ii) No Consent of any person is needed in order that each
such Significant Contract shall continue in full force and effect in
accordance with its terms without penalty, acceleration or rights of
early termination by reason of the consummation of the transactions
contemplated herein, except for Consents the absence of which do not,
individually or in the aggregate, constitute a Company Material Adverse
Effect.
(iii) Neither the Company nor any Company Subsidiary is in
violation or breach of or default under (nor does there exist any
condition which upon the passage of time or the giving of notice would
cause such violation or default under) any such Significant Contract;
nor to the Company's knowledge is any other party to any such
Significant Contract in violation or breach of or default under (nor
does there exist any condition which upon the passage of time or the
giving of notice would cause such violation or default under) any such
Significant Contract in each case where such violation or breach,
individually or in the aggregate, constitutes a Company Material
Adverse Effect.
3.15. Employee Benefit Plans. (a) Section 3.15 of the Company
Disclosure Schedule sets forth a complete list of all material "employee benefit
plans" (as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), bonus, pension, profit sharing, deferred
compensation, incentive compensation, excess benefit, stock, stock option,
severance, termination pay, change in control or other material employee benefit
plans, programs, arrangements or agreements currently maintained, or contributed
to, or required to be maintained or contributed to, by the Company or any
Company Subsidiary for the benefit of any current or former employees, officers,
directors or independent contractors of the Company or any Company Subsidiary
and with respect to which the Company or any Company Subsidiary has any
liability (collectively, the "Benefit Plans"). The Company has delivered or made
available to Parent true, complete and correct copies of each Benefit Plan.
(b) Each Benefit Plan has been administered in accordance with
its terms and in compliance with the applicable provisions of ERISA (including,
without limitation, the making of all contributions and payments), the Internal
Revenue Code of 1986, as amended (the "Code"), and other applicable law, except
where the failure to so administer or comply does not, individually or in the
aggregate, constitute a Company
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Material Adverse Effect. All Benefit Plans intended to be qualified under
Section 401(a) of the Code are so qualified and have been the subject of
favorable determination letters from the Internal Revenue Service, and, to the
knowledge of the Company, no circumstances exist that could result in the loss
of such qualified status.
(c) Neither the Company nor any Company Subsidiary, nor any
current or former "Company ERISA Affiliate," has incurred any material liability
under Title IV of ERISA or Section 412 of the Code that constitutes,
individually or in the aggregate, a Company Material Adverse Effect. For
purposes of this Agreement, a "Company ERISA Affiliate" is a person or entity
that is considered one employer with the Company under Section 4001(a)(15) of
ERISA or Section 414 of the Code. No Benefit Plan is subject to Title IV of
ERISA or Section 412 of the Code, and no Benefit Plan is a "multi-employer plan"
(as defined in Section 3(37) of ERISA).
(d) With respect to any Benefit Plan that is an employee
welfare benefit plan (as defined in Section 3(l) of ERISA), (i) no such Benefit
Plan provides benefits, including without limitation, death or medical benefits,
beyond termination of employment or retirement other than (A) coverage mandated
by statute or (B) death or retirement benefits under a Benefit Plan qualified
under Section 401(a) of the Code, and (ii) each such Benefit Plan (including any
such Plan covering retirees or other former employees) may be amended or
terminated without liability that would, individually or in the aggregate,
constitute a Company Material Adverse Effect.
(e) There is no pending or, to the Company's knowledge,
threatened litigation relating to employment, termination of employment,
compensation or employee benefits involving the Company or any Company
Subsidiary which, if determined adversely to the Company or any Company
Subsidiary, would, individually or in the aggregate, constitute a Company
Material Adverse Effect.
(f) In the event that any individual is classified by the
Company or any Company Subsidiary as a non-employee (such as an independent
contractor, leased employee, consultant or special consultant) and is later
reclassified as an employee upon governmental or judicial review,
notwithstanding such reclassification, no such individual shall be eligible to
participate in any Benefit Plan, except where such eligibility would,
individually or in the aggregate, constitute a Company Material Adverse Effect.
(g) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) (i) constitute an event under any Benefit
Plan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any employee
of the Company or any Company Subsidiary, or (ii) result in the triggering or
imposition of any restrictions or limitations on the right of the Company or
Parent to cause any such Benefit Plan to be amended or terminated (or which
would result in any materially adverse consequence for so doing). No payment or
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benefit that will or may be made by the Company, Parent, or any of their
respective subsidiaries or affiliates with respect to any employee of the
Company or any Company Subsidiary under any Benefit Plan in connection with the
transactions contemplated by this Agreement will be characterized as an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code.
(h) Neither the Company nor any Company Subsidiary is a party
to any collective bargaining agreement covering any current or former employees
of either of them. There are no union organizational efforts pending or, to the
Company's knowledge, threatened involving any employees of the Company or any
Company Subsidiary.
3.16. Taxes and Returns. (a) (i) All Tax Returns required to be filed
by or on behalf of the Company, each of the Company Subsidiaries, and each
affiliated, combined, consolidated or unitary group of which the Company or any
of the Company Subsidiaries is or has been a member (a "Company Group") have
been timely filed in the manner prescribed by law, and all such Tax Returns are
true, complete and accurate except to the extent any failures to file or
failures to be true, correct or accurate would not, individually or in the
aggregate, constitute a Company Material Adverse Effect; (ii) all Taxes due and
owing by the Company, any Company Subsidiary or any Company Group have been
timely paid, or adequately reserved for in accordance with GAAP, except to the
extent any failure to pay or reserve does not, individually or in the aggregate,
constitute a Company Material Adverse Effect; (iii) there are no claims or
assessments presently pending against the Company, any Company Subsidiary or any
Company Group, for any alleged Tax deficiency, and the Company does not know of
any threatened claims or assessments against the Company, any Company Subsidiary
or any Company Group for any alleged Tax deficiency, which in either case if
upheld would, individually or in the aggregate, constitute a Company Material
Adverse Effect; (iv) to the knowledge of the Company, no issues have been raised
in any audit or tax examination of the Company, any of the Company Subsidiaries
or any Company Group which, if determined adversely, would, individually or in
the aggregate, constitute a Company Material Adverse Effect; (v) there are no
Liens for Taxes on any asset of the Company or any Company Subsidiary, except
for Liens for Taxes not yet due and payable and Liens for Taxes that could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect; and (vi) the Company and each of the Company
Subsidiaries has complied in all respects with all rules and regulations
relating to the withholding of Taxes (including, without limitation,
employee-related Taxes), except for failures to comply that would not,
individually or in the aggregate, constitute a Company Material Adverse Effect.
(b) Except as set forth on Schedule 3.16(c) of the Company
Disclosure Schedule, (i) to the Company's knowledge, no taxing authority in any
jurisdiction where the Company or any Company Subsidiary does not file Tax
Returns has made a claim, assertion or threat that the Company or Company
Subsidiary is or may be subject to Tax in such jurisdiction and (ii) neither the
Company nor any Company Subsidiary has agreed
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to any adjustment under Section 481(a) of the Code (or analogous provisions of
state, local or foreign law), as a result of a change of accounting method or
otherwise, or has disposed of any assets under the installment method pursuant
to Section 453 of the Code, in each case under this clause (ii) which would
require the inclusion of a material amount in income after the Effective Date.
(c) The statutes of limitations for the federal income Tax
Returns of the Company and the Company Subsidiaries (including, without
limitation, any Company Group) have expired or otherwise have been closed for
all taxable periods ending on or before December 31, 1996.
(d) For purposes of this Agreement, (i) "Tax" or "Taxes" means
all taxes, levies or other like assessments, charges or fees (including
estimated taxes, charges and fees), including, without limitation, income,
corporation, advance corporation, gross receipts, transfer, excise, property,
sales, use, value-added, license, payroll, withholding, social security and
franchise or other governmental taxes or charges, imposed by the United States
or any state, county, local or foreign government or subdivision or agency
thereof, any liability for taxes, levies or other like assessments, charges or
fees of another person pursuant to Treasury Regulation Section 1.1502-6 or any
similar or analogous provision of applicable law or otherwise (including,
without limitation, under a tax sharing or other agreement) and such term shall
include any interest, penalties or additions to tax attributable to such taxes,
levies or other like assessments, charges or fees and (ii) "Tax Return" means
any report, return, statement, declaration or other written information required
to be supplied to a taxing or other Governmental Authority in connection with
Taxes.
3.17. Fairness Opinion. The Company's Board of Directors received from
Credit Suisse First Boston Corporation an opinion to the effect that the Merger
Consideration is fair to the holders of the shares of Company Common Stock from
a financial point of view.
3.18. Takeover Statutes. No "business combination," "fair price,"
"moratorium," "control share acquisition" or other similar antitakeover statute
or regulation enacted under state or federal laws in the United States,
including, without limitation, Sections 78.378 to 78.3793, inclusive, and 78.411
to 78.444, inclusive, of the Nevada Code (each a "Takeover Statute") applicable
to the Company or any of the Company Subsidiaries is applicable to the Merger,
this Agreement or the other transactions contemplated hereby.
3.19. Company FCC Licenses; Operations of Company Licensed Facilities.
The Company and the Company Subsidiaries have operated the radio stations for
which the Company and any of the Company Subsidiaries are the authorized legal
holders of licenses from the FCC, in each case which are owned or operated by
the Company and the Company Subsidiaries (each a "Company Licensed Facility" and
collectively the "Company Licensed Facilities"), in material compliance with the
terms of the licenses
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issued by the FCC to the Company and the Company Subsidiaries (the "Company FCC
Licenses"), and in material compliance with the Communications Act, except where
the failure to do so would not, individually or in the aggregate, constitute a
Company Material Adverse Effect. The Company FCC Licenses constitute all of the
licenses, permits and authorizations from the FCC that are necessary, required
for and/or used in the business and operations of the Company Licensed
Facilities as presently conducted. The Company Subsidiaries which are FCC
licensees are financially qualified, and are otherwise qualified, to be FCC
licensees. The Company's activities in connection with each broadcast radio
station for which the Company or any of the Company Subsidiaries provides
programming and advertising services pursuant to a local marketing agreement
(each a "Company LMA Facility" and collectively the "Company LMA Facilities")
have been in compliance with the Communications Act and the rules, regulations
and policies of the FCC, except where the failure to do so would not,
individually or in the aggregate, constitute a Company Material Adverse Effect.
The Company has, and each of the Company Subsidiaries has, timely filed or made
all applications, reports and other disclosures required by the FCC to be made
with respect to Company Licensed Facilities and has timely paid all FCC
regulatory fees with respect thereto, except where the failure to do so would
not, individually or in the aggregate, constitute a Company Material Adverse
Effect. The Company and each of the Company Subsidiaries have, and are the
authorized legal holders of, all Company FCC Licenses necessary, required or
used in the operation of the businesses of Company Licensed Facilities as
presently operated. To the knowledge of the Company, the third parties with
which the Company or the Company Subsidiaries have entered into local marketing
agreements with respect to Company LMA Facilities have, and are the authorized
legal holders of, the FCC licenses necessary or used in the operation of the
business of the respective Company LMA Facility (each an "LMA Facility FCC
License" and collectively the "LMA Facility FCC Licenses") to which such local
marketing agreement relates. All Company FCC Licenses and, to the knowledge of
the Company, LMA Facility FCC Licenses are validly held and are in full force
and effect, unimpaired by any act or omission of the Company, any of the Company
Subsidiaries (or, to the Company's knowledge, their respective predecessors) or
their respective officers, employees or agents, except where such impairments
would not, individually or in the aggregate, constitute a Company Material
Adverse Effect. No application, action or proceeding is pending for the renewal
of any Company FCC License or, to the knowledge of the Company, LMA Facility FCC
License as to which any petition to deny has been filed and, to the Company's
knowledge, there is not pending before the FCC any material complaint,
investigation, proceeding, notice of violation or order of forfeiture relating
to any Company Licensed Facility or Company LMA Facility that, if adversely
determined, would, individually or in the aggregate, constitute a Company
Material Adverse Effect, and the Company has no knowledge of any facts, events
or conditions that could reasonably be expected to cause the FCC (i) not to
renew or to revoke, rescind, suspend or adversely modify any of Company FCC
Licenses or the LMA Facility FCC Licenses (other than proceedings to amend FCC
rules or the Communications Act of general applicability to the radio
broadcasting industry) or (ii) impose any fines, forfeitures or administrative
sanctions which would, individually or in the aggregate, constitute a Company
Material Adverse Effect. There is not pending and,
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to Company's knowledge, there is not threatened, any action by or before the FCC
to revoke, suspend, cancel, rescind or modify in any material respect any of
Company FCC Licenses or, to the knowledge of the Company, any of the LMA
Facility FCC Licenses that, if adversely determined, would, individually or in
the aggregate, constitute a Company Material Adverse Effect (other than
proceedings to amend FCC rules or the Communications Act of general
applicability to the radio broadcast industry). There are no facts, conditions
or events relating to the Company or the Company Subsidiaries or any of the
Company Licensed Facilities Stations that could reasonably be expected to cause
the FCC to deny the transfer of control of any of the Company FCC Licenses to
Parent (assuming Parent is qualified to hold the Company FCC Licenses) or the
imposition of any materially adverse condition by the FCC in connection with
approval of the transfer of control of the Company FCC Licenses to Parent (other
than proceedings to amend FCC rules or the Communications Act of general
applicability to the radio broadcast industry).
3.20. Intellectual Property. Except to the extent that the inaccuracy
of any of the following, individually or in the aggregate, would not
individually or in the aggregate constitute a Company Material Adverse Effect:
(a) in each jurisdiction in which the Company has conducted, conducts or
proposes to conduct its business, the Company and each of the Company
Subsidiaries either (1) is the sole and exclusive owner of, with all right,
title and interest in and to, each item of Company Intellectual Property free
and clear of any Liens, or (2) has a valid and enforceable license to use each
item of Company Intellectual Property free and clear of any Liens (and, for each
of (a)(1) or (a)(2), the consummation of the transactions contemplated hereby
will not alter or impair any such rights); (b) the use of any Company
Intellectual Property does not infringe on, interfere with, misappropriate or
otherwise violate or come into conflict with the rights of any Person and is in
accordance with, and does not breach, any applicable license pursuant to which
the Company or any Company Subsidiary acquired the right to use any Company
Intellectual Property, and the Company or any Company Subsidiary has not
received any Notice so alleging (including any claim that the Company or any of
the Company Subsidiaries must license or refrain from using any Intellectual
Property of any other Person); (c) to the knowledge of the Company, no Person is
challenging, infringing on, interfering with, misappropriating or otherwise
violating or coming into conflict with any right of the Company or any of the
Company Subsidiaries with respect to any Company Intellectual Property; (d) the
Company and the Company Subsidiaries have taken all reasonable action to
maintain and protect the Company Intellectual Property and, to the knowledge of
the Company, no Company Intellectual Property is being used or enforced in a
manner that would result in the abandonment, cancellation or unenforceability of
such Intellectual Property; (e) the Company Intellectual Property is all the
Intellectual Property that is necessary for the conduct of the business of the
Company and the Company Subsidiaries as it has been, is, and is presently
proposed to be conducted; and (f) all employees, agents and contractors who have
contributed to or participated in the conception and development of the Company
Intellectual Property on behalf of the Company or any of the Company
Subsidiaries have (1) executed nondisclosure agreements, and (2) been a party to
enforceable and appropriate instruments of
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assignment (including work for hire agreements with respect to any copyrights)
in favor of the Company or one of the Company Subsidiaries in accordance with
applicable Law, that have conveyed to the Company or one of the Company
Subsidiaries full, effective, exclusive and original ownership in and to all
Company Intellectual Property arising from the efforts of such personnel.
For purposes of this Agreement, "Intellectual Property" shall mean all
(i) trademarks, service marks, brand names, trade dress, trade names, domain
names, and other indications of origin, all goodwill associated with the
foregoing and registrations and applications in connection with the foregoing in
any jurisdiction, including any extension, modification or renewal of any such
registration or application; (ii) inventions, discoveries and ideas, whether
patentable or not, in any jurisdiction; (iii) patents, applications for patents
(including, without limitation, divisions, continuations, continuations-in-part,
and renewal applications), and any renewals, extensions, revisions,
reexaminations or reissues thereof, in any jurisdiction; (iv) nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any Person; (v) writings
and other works, whether copyrightable or not, in any jurisdiction; (vi)
copyrights and copyrightable works, and all registrations, applications and any
renewals thereof; (vii) any similar intellectual property or proprietary rights;
(viii) all computer software (including data and related documentation); (ix)
all licenses, sublicenses, agreements, or permissions related to any of the
foregoing categories of intellectual property; and (x) any claims or causes of
action arising out of or relating to any infringement or misappropriation of any
of the foregoing. For the purposes of this Agreement, "Company Intellectual
Property" shall mean all Intellectual Property which is used or has been used in
connection with the business of the Company or any of the Company Subsidiaries.
3.21. Environmental Matters. Except with respect to clauses (i) through
(v) as would not, individually or in the aggregate, constitute a Company
Material Adverse Effect:
(i) The Company and the Company Subsidiaries (a) are
in compliance with all applicable Environmental Laws, and (b) have
obtained, and are in compliance with, all permits, licenses,
authorizations, registrations and other governmental consents required
by applicable Environmental Laws ("Environmental Permits"), and have
made all appropriate filings for issuance or renewal of such
Environmental Permits.
(ii) There is no contamination of, and there have
been no releases or threatened releases of Hazardous Materials at the
Facilities (or, to the knowledge of the Company, any real property
formerly owned, leased or operated by the Company or any of the Company
Subsidiaries (or any predecessor of the Company or any of the Company
Subsidiaries)).
(iii) There are no claims, notices (including,
without limitation,
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notices that the Company or any of the Company Subsidiaries (or, to the
Company's knowledge, any predecessor of the Company or any of the
Company Subsidiaries or any person whose liability has been retained or
assumed contractually by the Company or any of the Company
Subsidiaries) is or may be a potentially responsible person or
otherwise liable in connection with any site or other location
containing Hazardous Materials or used for the storage, handling,
treatment, processing, disposal, generation or transportation of
Hazardous Materials), civil, criminal or administrative actions, suits,
hearings, investigations, inquiries or proceedings pending or, to the
knowledge of the Company, threatened that are based on or related to
any Environmental Matters relating to the business of the Company or
any of the Company Subsidiaries.
(iv) To the Company's knowledge, there are no past
or present conditions, events, circumstances, facts, activities,
practices, incidents, actions, omissions or plans that may (a)
interfere with or prevent continued compliance by the Company or any of
the Company Subsidiaries with Environmental Laws and the requirements
of Environmental Permits or (b) give rise to any liability or other
obligation under any Environmental Laws.
(v) Neither the Facilities, nor (to the knowledge of
the Company) any property formerly owned, leased, or operated by the
Company or any of the Company Subsidiaries, nor (to the knowledge of
the Company) any site at or to which the Company or any of the Company
Subsidiaries has disposed of, transported, or arranged for the
transportation of, any Hazardous Materials, has been listed on, or
proposed for listing on, the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability
Information System ("CERCLIS") list, or any comparable state list of
properties to be investigated and/or remediated.
(vi) For the purposes of this Section, the following
terms shall have the meanings indicated:
"Environmental Laws" means any foreign, federal, state or
local law, statute, ordinance, rule or regulation governing Environmental
Matters, as the same have been or may be amended from time to time, including
any common law cause of action providing any right or remedy relating to
Environmental Matters, all indemnity agreements and other contractual
obligations (including leases, asset purchase and merger agreements) relating to
Environmental Matters, and all applicable judicial and administrative decisions,
orders, and decrees relating to Environmental Matters.
"Environmental Matter" means any matter arising out of,
relating to, or resulting from pollution, contamination, protection of the
environment, human health or safety, health or safety of employees, sanitation,
and any matters relating to emissions, discharges, disseminations, releases or
threatened releases, of Hazardous Materials into the air (indoor and outdoor),
surface water, groundwater, soil, land surface or subsurface,
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buildings, facilities, real or personal property or fixtures or otherwise
arising out of, relating to, or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, handling, release or
threatened release of Hazardous Materials.
"Facilities" means all real property owned, leased, or
operated by the Company or any of its Subsidiaries and any buildings,
facilities, machinery, equipment, furniture, leasehold and other improvements,
fixtures, vehicles, structures, any related capital items and other tangible
property located on, in, under, or above the real property of the Company or any
of its Subsidiaries.
"Hazardous Materials" means any pollutants, contaminants,
toxic or hazardous or extremely hazardous substances, materials, wastes,
constituents, compounds, chemicals, natural or man-made elements or forces
(including, without limitation, petroleum or any by-products or fractions
thereof, any form of natural gas, lead, asbestos and asbestos-containing
materials ("ACM"), building construction materials and debris, polychlorinated
biphenyls ("PCBs") and PCB-containing equipment, radon and other radioactive
elements, ionizing radiation, electromagnetic field radiation and other
non-ionizing radiation, sonic forces and other natural forces, infectious,
carcinogenic, mutagenic, or etiologic agents, pesticides, defoliants,
explosives, flammables, corrosives and urea formaldehyde foam insulation) that
are regulated by, or may now or in the future form the basis of liability under,
any Environmental Laws.
3.22. Property. As of the date hereof, the Company and the Company
Subsidiaries have good and marketable title to all real properties owned by them
except where the failure to have such title, individually or in the aggregate,
would not constitute a Company Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
The Parent hereby represents and warrants as of the date hereof, with
respect to Parent, and as of the Closing Date with respect to Merger Sub, to the
Company as follows:
4.1. Organization and Good Standing. Parent and Merger Sub are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware and Nevada, respectively. Each of Parent and
Merger Sub is qualified to do business as a foreign corporation in each
jurisdiction in which the failure to be so qualified would, individually or in
the aggregate, constitute a Parent Material Adverse Effect. The term "Parent
Material Adverse Effect" means any change, effect, circumstance or event that is
or is reasonably likely to materially adversely effect the
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ability of Parent and Merger Sub to perform their obligations set forth in this
Agreement or timely consummate the transactions contemplated by this Agreement.
4.2. Authorization; Binding Agreement. Parent and Merger Sub each have
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This
Agreement, the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
each of Parent's and Merger Sub's Board of Directors and by Parent in its
capacity as sole stockholder of Merger Sub, and no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions contemplated hereby
other than the filing and recordation of appropriate merger documents as
required by the Nevada Code. This Agreement has been duly and validly executed
and delivered by each of Parent and Merger Sub and, assuming the due
authorization, execution and delivery of this Agreement by the Company,
constitutes the legal, valid and binding agreements of both Parent and Merger
Sub, enforceable against Parent and Merger Sub in accordance with its terms.
4.3. Governmental Approvals. No Consent from or with any Governmental
Authority on the part of Parent or Merger Sub is required in connection with the
execution or delivery by each of Parent and Merger Sub of this Agreement or the
consummation by each of Parent and Merger Sub of the transactions contemplated
hereby other than (i) the filing of the Articles of Merger with the Secretary of
State of the State of Nevada in accordance with the Nevada Code, (ii) filings
with the SEC and state securities laws administrators, (iii) Consents under the
HSR Act, (iv) any filings with and approvals and authorizations of the FCC as
may be required under the Communications Act, including, without limitation,
filings and approvals in connection with the transfer of control of the Company
FCC Licenses and (v) those Consents that, if they were not obtained or made,
would not constitute a Parent Material Adverse Effect.
4.4. No Violations. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by each of
Parent and Merger Sub with any of the provisions hereof will not (i) conflict
with or result in any breach of any provision of the articles of incorporation
or bylaws or other governing instruments of Parent or Merger Sub, (ii) require
any Consent under or result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration or augment the performance
required) under any of the terms, conditions or provisions of any material
obligation to which Parent or Merger Sub is a party or by which any of them or
any of their properties or assets may be bound, (iii) result in the creation or
imposition of any Lien upon any of the assets of Parent or any Merger Sub, or
(iv) subject to obtaining the Consents from Governmental Authorities referred to
in Section 4.3 above and the expiration of the HSR waiting period, conflict with
or violate any applicable provision of any Law currently in effect to which
Parent or Merger Sub or its or any of their respective assets or properties are
subject, except in the case of clauses (ii), (iii) and (iv) above, for
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any deviations from the foregoing which would not, individually or in the
aggregate, constitute a Parent Material Adverse Effect.
4.5. Financing. Parent and/or Merger Sub will have available funds
sufficient to consummate the Merger and all of the other transactions
contemplated hereby.
4.6. Qualification. To the Parent's knowledge, Parent is qualified
under the Communications Act and the existing rules, regulations and policies of
the FCC to control the Company FCC Licenses.
4.7. Ownership of Company Common Stock. Neither Parent nor Merger Sub
nor any of their affiliates or associates (each as defined in Chapter 78 of the
Nevada Code) beneficially owns any shares of Company Common Stock.
ARTICLE V
ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
5.1. Conduct of Business of the Company and the Company Subsidiaries.
Except as expressly contemplated by this Agreement or as set forth in the
Company Disclosure Schedule, during the period from the date of this Agreement
to the Effective Time, the Company shall conduct, and it shall cause the Company
Subsidiaries to conduct, its or their respective businesses in the ordinary
course and consistent with past practice, subject to the limitations contained
in this Agreement, to maintain the validity of the Company FCC Licenses and
comply in all material respects with all requirements of the Company FCC
Licenses, the Communications Act and the rules and regulations of the FCC, and
the Company shall, and it shall cause the Company Subsidiaries to, use its or
their respective reasonable best efforts to preserve intact its or their
respective business organizations, to keep available the services of its or
their respective officers, agents and employees and to maintain satisfactory
relationships with all persons with whom any of them does business. Without
limiting the generality of the foregoing, and except as otherwise expressly
provided in this Agreement or disclosed in the Company Disclosure Schedule,
after the date of this Agreement and prior to the Effective Time, neither the
Company nor any Company Subsidiary will, without the prior written consent of
Parent (which will not be unreasonably withheld or delayed):
(i) amend or propose to amend its articles of incorporation,
certificates of designation or bylaws (or comparable governing
instruments);
(ii) authorize for issuance, issue, grant, sell, pledge,
dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any
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shares of, the capital stock or other securities of the Company or any
Company Subsidiary including, but not limited to, any securities
convertible into or exchangeable for shares of capital stock of any
class of the Company or any Company Subsidiary, except for the issuance
of shares of Company Common Stock pursuant to the exercise of the
Company Options outstanding on the date of this Agreement and described
in Schedule 5.1(ii) of the Company Disclosure Schedule in accordance
with their present terms;
(iii) split, combine or reclassify any shares of its capital
stock or declare, pay or set aside any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock, other than dividends or distributions to
the Company or a Company Subsidiary wholly owned by the Company, or
redeem, purchase or otherwise acquire or offer to acquire any shares of
its capital stock or other securities;
(iv) (a) create, incur, assume or suffer to exist any
Indebtedness, except refinancings of existing Indebtedness on terms and
conditions prevailing in the market; (b) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, indirectly,
contingently or otherwise) for the obligations of any person; (c) make
any capital expenditures or make any loans, advances or capital
contributions to, or investments in, any other person (other than to a
Company Subsidiary and customary travel, relocation or business
advances or loans to employees made in the ordinary course of business
consistent with past practice); provided that, the Company and Company
Subsidiaries may make capital expenditures that are in the ordinary
course of business consistent with past practice and in accordance in
all material respects with the current capital budget for the Company
previously furnished to Parent; (d) acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial portion
of the assets of, or by any other manner, (i) any business or any
corporation, limited liability company, partnership, joint venture,
association or other business organization or division thereof, (ii)
any assets that individually or in the aggregate are material to the
Company and the Company Subsidiaries taken as a whole or (iii) any
broadcast radio stations (except pursuant to a contract specified in
Schedule 5.1(iv)(iii) of the Company Disclosure Schedule (a "Station
Acquisition Contract")) unless the sole consideration paid by the
Company or any Company Subsidiaries for all such acquisitions is cash
not exceeding $5 million in the aggregate; or (e) or sell, transfer,
mortgage, pledge or otherwise dispose of, or encumber, or agree to
sell, transfer, mortgage, pledge or otherwise dispose of or encumber,
any assets or properties other than to secure debt permitted under (a)
of this clause (iv) and other than transfers in the ordinary course of
business consistent with past practice. The term "Indebtedness" means,
with respect to any person, without duplication, (A) all obligations of
such person for borrowed money, or with respect to deposits or advances
of any kind to such person, (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
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retention agreements relating to property purchased by such person, (D)
all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding obligations of such
person to creditors for raw materials, inventory, services and supplies
incurred in the ordinary course of such person's business), (E) all
capitalized lease obligations of such person, (F) all obligations of
such person under interest rate or currency hedging or swap
transactions (valued at the termination value thereof), (G) all
performance bonds or letters of credit issued for the account of such
person and (H) all guarantees and arrangements having the economic
effect of a guarantee of such person of any Indebtedness of any other
person.
(v) increase in any material respect the compensation of any
of its officers or employees or enter into, establish, amend or
terminate any employment, consulting, retention, management continuity,
change in control, collective bargaining, bonus or other incentive
compensation, profit sharing, health or other welfare, stock option or
other equity, pension, retirement, vacation, severance, deferred
compensation or other compensation or benefit plan, policy, agreement,
trust, fund or arrangement with, for or in respect of, any stockholder,
officer, director, other employee, agent, consultant or affiliate other
than (a) as required pursuant to the terms of agreements in effect on
the date of this Agreement, or (b) in the ordinary course of business
consistent with past practice;
(vi) enter into any material lease or amend any material lease
of real property other than in the ordinary course of business
consistent with past practice;
(vii) make or rescind any express or deemed election relating
to Taxes of the Company, unless required to do so by applicable Law;
(viii) settle or compromise any material Tax liability of the
Company or agree to an extension of a statute of limitations with
respect to the assessment or determination of Taxes;
(ix) file or cause to be filed any amended Tax Return with
respect to the Company or any Company Subsidiaries or file or cause to
be filed any claim for refund of Taxes paid by or on behalf of the
Company or any Company Subsidiaries;
(x) prepare or file any Tax Return of the Company inconsistent
with past practice in preparing or filing similar Tax Returns in prior
periods or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods, in each case except to the extent
required by Law;
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(xi) except in the ordinary course of business and as would
not constitute a Company Material Adverse Effect, modify, amend,
terminate or fail to renew (to the extent such contract or agreement
can be unilaterally renewed by the Company or any Company Subsidiary)
any contract or agreement to which the Company or any Company
Subsidiary is a party, or waive, release or assign any material rights
or claims thereunder; provided that neither the Company nor any Company
Subsidiary shall amend in any material respect any Station Acquisition
Contract or waive, release or assign any material rights or claims
thereunder without the prior written consent of Parent;
(xii) make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xiii) fail to use commercially reasonable efforts to maintain
the material assets of the Company and each of the Company Subsidiaries
in their current physical condition, except for ordinary wear and tear
and damage;
(xiv) pay, discharge, or satisfy any material (on a
consolidated basis for the Company and the Company Subsidiaries taken
as a whole) claim, liabilities, or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than in the
ordinary course of business consistent with past practice, or fail to
pay or otherwise satisfy (except if being contested in good faith) any
material (on a consolidated basis for the Company and the Company
Subsidiaries taken as a whole) accounts payable, liabilities, or
obligations when due and payable;
(xv) enter into any LMA, time brokerage agreement or JSA other
than in the ordinary course of and involving amounts not in excess of
$2 million in the aggregate or any non-compete agreement whereby the
Company or any Company Subsidiary agrees not to compete;
(xvi) enter into any Significant Contract, other than in the
ordinary course and involving amounts not in excess of $2 million in
the aggregate;
(xvii) adopt a shareholder rights plan or any similar plan or
instrument which would have the effect of impairing or delaying the
consummation of the Merger;
(xviii) waive any of its rights under, or release any other
party from such other party's obligations under, or amend any provision
of, any standstill agreement; or
(xix) authorize, or commit or agree to take, any of the
foregoing actions.
Furthermore, the Company covenants that from and after the date of this
Agreement, unless Parent shall otherwise expressly consent in writing, the
Company
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shall, and the Company shall cause each of the Company Subsidiaries to, use its
or their reasonable best efforts to comply in all material respects with all
Laws applicable to it or any of its properties, assets or business and maintain
in full force and effect all Permits necessary for, or otherwise material to,
such business.
5.2. Notification of Certain Matters. The Company shall give prompt
notice to Parent if any of the following occurs after the date of this
Agreement: (i) any notice of, or other communication relating to, a material
default or Event which, with notice or lapse of time or both, would become a
material default under any Material Contract; (ii) receipt of any notice or
other communication in writing from any person alleging that the Consent of such
person is or may be required in connection with the transactions contemplated by
this Agreement, other than a Consent disclosed pursuant to Section 3.5, 3.6 or
3.14(d)(ii) above or not required to be disclosed pursuant to the terms thereof;
(iii) receipt of any material notice or other communication from any
Governmental Authority (including, but not limited to, the NASD, any securities
exchange or the FCC) in connection with the transactions contemplated by this
Agreement; (iv) the occurrence of any Event or Events which individually or in
the aggregate, is reasonably likely to have a Company Material Adverse Effect;
(v) the commencement or threat of any Litigation involving or affecting the
Company or any Company Subsidiary, or any of their respective properties or
assets, or, to its knowledge, any employee, agent, director or officer of the
Company or any Company Subsidiary, in his or her capacity as such or as a
fiduciary under a Benefit Plan of the Company, which, if pending on the date
hereof, would have been required to have been disclosed in or pursuant to this
Agreement or which relates to the consummation of the Merger, or any material
development in connection with any Litigation disclosed by the Company in or
pursuant to this Agreement or the Securities Filings; (vi) the occurrence of any
Event that causes or is reasonably likely to cause a breach by the Company of
any provision of this Agreement, and (vii) the occurrence of any Event that, had
it occurred prior to the date of this Agreement without any additional
disclosure hereunder, would have constituted a Company Material Adverse Effect.
If the Company receives an administrative or other order or notification
relating to any violation or claimed violation of the rules and regulations of
the FCC, or of any other Governmental Entity, that could affect Parent's, Merger
Sub's or the Company's ability to consummate the transactions contemplated
hereby, or should the Company become aware of any fact (including any change in
law or regulations (or any interpretation thereof) by the FCC) that is
reasonably likely to cause the FCC to withhold its consent to the transfer of
control of the Company FCC Licenses contemplated hereunder, the Company shall
promptly notify the Parent and the Company shall use reasonable best efforts to
take such steps as may be necessary, to remove any such impediment of the
Company to consummate the transactions contemplated by this Agreement.
5.3. Access and Information. Between the date of this Agreement and the
Effective Time, the Company shall give, and shall cause each of the Company
Subsidiaries to give, and shall direct its financial advisors, accountants and
legal counsel to give, upon reasonable notice, Parent, its lenders, financial
advisors, accountants and
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legal counsel and their respective authorized representatives at all reasonable
times access to all offices and other facilities and to all contracts,
agreements, commitments, Tax Returns (and supporting schedules), books and
records of or pertaining to the Company and the Company Subsidiaries, shall
permit the foregoing to make such reasonable inspections as they may require and
will cause its officers promptly to furnish Parent with (a) such financial and
operating data and other information with respect to the business and properties
of the Company and the Company Subsidiaries as Parent may from time to time
reasonably request and (b) a copy of each material report, schedule and other
document filed or received by the Company or any of the Company Subsidiaries
pursuant to the requirements of applicable securities laws or the NASD. The
foregoing access will be subject to restrictions contained in confidentiality
agreements to which the Company is subject; provided that the Company shall use
its reasonable best efforts to obtain waivers of such restrictions.
5.4. Stockholder Approval. As soon as practicable, the Company will
take all steps necessary to duly call, give notice of, convene and hold a
meeting of its stockholders (the "Company Stockholders Meeting") for the purpose
of approving this Agreement and the Merger and the transactions contemplated
hereby and for such other purposes as may be consented to by Parent (whose
consent shall not be unreasonably withheld) and the Company in connection with
effectuating the transactions contemplated hereby (the "Company Proposal").
Except as otherwise contemplated by this Agreement and subject to the exercise
of the fiduciary duties of the Company's directors, the Board of Directors of
the Company (i) shall recommend to the stockholders of the Company that they
approve the Company Proposal, and (ii) shall use its reasonable best efforts to
obtain any necessary approval by the Company's stockholders of the Company
Proposal.
5.5. Reasonable Best Efforts. Subject to the terms and conditions
herein provided, the Company agrees to use its reasonable best efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the Merger and the other transactions contemplated by this Agreement
including, but not limited to (i) obtaining any third party Consent (excluding
any Consents the failure of which to obtain would have a de minimis effect)
required in connection with the execution and delivery by the Company of this
Agreement or the consummation by the Company of the transactions contemplated
hereby, (ii) the defending of any Litigation against the Company or any Company
Subsidiary challenging this Agreement or the consummation of the transactions
contemplated hereby (such as in connection with the transfer of control of the
FCC Licenses), including seeking to have any stay or temporary restraining order
entered by any court or Governmental Authority vacated or reversed, (iii)
obtaining all Consents from Governmental Authorities required for the
consummation of the Merger and the transactions contemplated hereby, (iv)
promptly making all necessary filings under the HSR Act, the Communications Act
and any other applicable Law, including any filing required to be made with the
SEC pursuant to the Securities Act or the Exchange Act and (v) providing all
necessary cooperation in connection with the arrangement by Parent and Merger
Sub of financing of the transaction, including without limitation, the executing
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and delivering of any commitment letters, underwriting or placement agreements,
pledge and security documents, other definitive financing documents, or other
requested certificates or documents, in each case, which will not be effective
until the Effective Time. Upon the terms and subject to the conditions hereof,
the Company agrees to use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary to
satisfy the conditions of the Closing set forth herein. The Company will consult
with counsel for Parent as to, and will permit such counsel to participate in,
at Parent's expense, any Litigation referred to in clause (ii) above brought
against or involving the Company or any Company Subsidiary. The Company further
covenants that from and after the date hereof until the Effective Time, without
the prior written consent of Parent, the Company shall not, and shall cause each
Company Subsidiary to not, take any action that is reasonably likely to (x)
impair or delay in any material respect obtaining the FCC Consent or complying
with or satisfying the terms thereof or (y) result in imposition of materially
adverse conditions in the FCC Consent.
5.6. Public Announcements. So long as this Agreement is in effect, the
Company shall not, and shall cause its affiliates not to, issue or cause the
publication of any press release or any other announcement with respect to the
Merger, the Company Proposal or the transactions contemplated by this Agreement
without the consent of Parent which shall not be unreasonably withheld or
delayed, except when such release or announcement is required by applicable Law
or any applicable listing agreement with, or rules or regulations of, the NASD
or any securities exchange, in which case the Company, to the extent
practicable, prior to making such announcement, shall consult with Parent
regarding the same.
5.7. Compliance. In consummating the Merger and the transactions
contemplated hereby, the Company shall comply, and cause the Company
Subsidiaries to comply or to be in compliance, in all material respects, with
all applicable Laws.
5.8. Company Benefit Plans. From the date of this Agreement through the
Effective Time, no discretionary award or grant under any Benefit Plan shall be
made without the consent of Parent (not to be unreasonably withheld or delayed);
nor shall the Company or a Company Subsidiary take any action or permit any
action to be taken to accelerate the vesting of any warrants or options
previously granted pursuant to any such Benefit Plan except as specifically
required pursuant to the terms thereof as in effect on the date of this
Agreement. Neither the Company nor any Company Subsidiary shall make any
amendment to any Benefit Plan or any awards thereunder which is not required by
Law without the consent of Parent (not to be unreasonably withheld or delayed).
The Company shall promptly notify Parent upon making any such amendment which is
required to be made by Law.
5.9. No Solicitation. (a) Neither the Company nor any Company
Subsidiary, nor any of their respective officers, directors, employees, agents,
affiliates, accountants, counsel, investment bankers, financial advisors or
other representatives (collectively, "Representatives") shall, (i) directly or
indirectly, initiate, solicit or encourage, or take
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any action to facilitate the making of, any Takeover Proposal, or (ii) directly
or indirectly engage in any discussions or negotiations with, or provide any
information or data to, or afford any access to the properties, books or records
of the Company or any Company Subsidiary to, or otherwise assist, facilitate or
encourage, any person (other than Parent or any affiliate or associate thereof)
relating to any Takeover Proposal; provided, however, that at any time prior to
the Company Stockholders Meeting, the Company may, in response to a Superior
Proposal (as defined below) which was not solicited by it and which did not
otherwise result from a breach of this Section 5.9(a), and subject to providing
prior written notice of its decision to take such action to Parent (the
"Notice") and compliance with Section 5.9(c), following delivery of the Notice
(x) furnish information with respect to the Company, or the Company Subsidiaries
to any person making a Superior Proposal pursuant to a customary confidentiality
agreement and (y) participate in discussions and negotiations regarding such
Superior Proposal but, in each case, only if the Company's Board of Directors
determines, after consultation with its outside counsel, that failure to furnish
such information or to participate in such discussions or negotiations would be
inconsistent with the compliance by the Company's Board of Directors with its
fiduciary duties to stockholders imposed by Law. The Company shall keep Parent
apprised of any such discussions and negotiations promptly after they occur.
(b) Except as set forth below, neither the Board of Directors
of the Company, nor any committee thereof, shall (x) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent, the Board of
Directors' approval or recommendation of the Merger or this Agreement, (y)
approve any letter of intent, agreement in principle, acquisition agreement or
similar agreement (other than a confidentiality agreement in connection with a
Superior Proposal which is entered into by the Company in accordance with
Section 5.9(a)) relating to any Takeover Proposal (each, an "Acquisition
Agreement"), or (z) approve or recommend, or propose to approve or recommend,
any Takeover Proposal. Notwithstanding the foregoing, in response to a Superior
Proposal which was not solicited by the Company, and which did not otherwise
result from a breach of Section 5.9(a), the Board of Directors of the Company
may, subject to the immediately following sentence, terminate this Agreement
pursuant to and subject to the terms of Section 9.1(f) and, concurrently with
such termination, cause the Company, to enter into an Acquisition Agreement with
respect to a Superior Proposal, but only if the Company's Board of Directors
determines, after consultation with its outside counsel, that failure to
terminate this Merger Agreement and accept the Superior Proposal would be
inconsistent with the compliance by the Company's Board of Directors with its
fiduciary duties to stockholders imposed by Law. Such actions may be taken by
the Company's Board of Directors only if it has delivered to Parent prior to or
on the 60th day following the date of this Merger Agreement written notice of
the intent of the Company's Board of Directors to take such actions, together
with a copy of the related Acquisition Agreement and a description of any terms
of the Takeover Proposal not contained therein. The Board of Directors shall not
take such actions until the fifth business day following such notice. If during
such five business day period Parent informs the Company that it may make an
alternative proposal, the Company's Board of
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Directors shall establish a bidding procedure pursuant to which Parent and the
person making the Superior Proposal shall have the opportunity to make their
respective bids to the Company's Board of Directors. The Company shall accept
Parent's offer unless the Company's Board of Directors shall have determined
that the competing bid is more favorable to the Company's stockholders from a
financial point of view as compared to Parent's bid, taking into account the
factors discussed in the definition of a Superior Proposal.
(c) The Company promptly shall advise the Parent orally and in
writing of any Takeover Proposal with respect to or that could reasonably be
expected to lead to any Takeover Proposal, the identity of the person making any
such Takeover Proposal and the material terms of any such Takeover Proposal. The
Company shall keep the Parent fully informed of the status and material terms of
any such Takeover Proposal.
(d) The Company and each Company Subsidiary and each of their
Representatives shall immediately cease and cause to be terminated all existing
discussions and negotiations, if any, with any other persons conducted
heretofore with respect to any Takeover Proposal.
For purposes of this Agreement, a "Takeover Proposal" means
any inquiry, proposal or offer from any person relating to (i) any direct or
indirect acquisition or purchase of a business that constitutes 50% or more of
the net revenues, net income or assets of the Company and the Company
Subsidiaries, taken as a whole, or 50% or more of the common stock or voting
power (or of securities or rights convertible into or exercisable for such
common stock or voting power) of the Company or CBC, (ii) any tender offer or
exchange offer that if consummated would result in any person beneficially
owning 50% or more of the common stock or voting power (or of securities or
rights convertible into or exercisable for such common stock or voting power) of
the Company or CBC, or (iii) any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company, or any of its Subsidiaries that constitutes 50% or more of the net
revenues, net income or assets of the Company, and its Subsidiaries taken as a
whole, in each case other than the transactions contemplated by this Agreement.
Each of the transactions referred to in clauses (i) - (iii) of the foregoing
definition of Takeover Proposal, other than the Merger proposed by this
Agreement, is referred to herein as an "Acquisition Transaction."
For purposes of this Agreement, a "Superior Proposal" means
any written proposal made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or securities, more than
50% of the combined voting power of the shares of Company Common Stock then
outstanding or more than 50% of the assets of the Company and its Subsidiaries,
taken together, with respect to which (x) the Board of Directors of the Company
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation (the "Financial Advisor") and such
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other matters as the Board of Directors of the Company deems relevant, which
shall include without limitation the likelihood of consummation, taking into
account the advice of FCC counsel, and the trading market and liquidity of any
securities offered in connection with the Superior Proposal) that the terms of
the proposal are more favorable to the Company's stockholders from a financial
point of view as compared to the Merger, and (y) if the proposal (1) is subject
to a financing condition or (2) involves consideration that is not entirely cash
or does not permit stockholders to receive the payment of the offered
consideration in respect of all shares at the same time, the Company's Board of
Directors has been furnished with a written opinion of the Financial Advisor to
the effect that (in the case of clause (1)) the proposal is readily financeable
and (in the case of clause (2)) that such proposal provides a higher value per
share than the consideration per share pursuant to the Merger.
(e) Nothing contained in this Agreement shall prohibit the
Company's Board of Directors from taking and disclosing to its stockholders a
position contemplated by Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act.
5.10. SEC and Stockholder Filings. The Company shall send to Parent a
copy of all public reports and materials as and when it sends the same to its
stockholders, the SEC or any state or foreign securities commission.
5.11. Takeover Statutes. If any Takeover Statute is or may become
applicable to the Merger or the transactions contemplated hereby, the Company
and the members of its Board of Directors will grant such approvals and will
take such other actions as are necessary so that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated hereby and will otherwise act to eliminate
or minimize the effects of any Takeover Statute on the Merger and any of the
transactions contemplated hereby.
5.12. Debenture and Preferred Stock Offers. (a) Following the approval
by the Company's stockholders of the Company Proposal pursuant to Section 5.4,
upon the written request of Parent, the Company shall cause CBC, at Parent's
expense, to commence (i) an offer (the "Debenture Offer") to purchase all of the
outstanding 10.25% guaranteed senior subordinated notes due 2007 and 9.25%
guaranteed senior subordinated notes due 2008 issued by it (collectively, the
"Debentures"), and (ii) a solicitation as part of the Debenture Offer (the
"Solicitation") of consents to amendments to the indentures relating to the
Debentures from the holders of not less than a majority in aggregate principal
amount of the Debentures outstanding (the consents from such holders, the
"Requisite Consents"). The Debenture Offer and Solicitation (including the
amendments) shall be on terms determined by Parent, provided that CBC shall not
be required to purchase the Debentures pursuant to the Debenture Offer, and the
proposed amendments, if approved, shall not become effective, unless the Merger
is consummated or being consummated simultaneously therewith. The Company agrees
that promptly following the date the Requisite Consents are obtained CBC will
execute supplemental
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indentures containing the proposed amendments that by their terms shall become
operative only upon consummation of the Debenture Offer.
(b) Following the approval by the Company's stockholders of
the Company Proposal pursuant to Section 5.4, upon the written request of
Parent, the Company shall cause CBC, at Parent's expense, to commence (i) an
offer (the "Preferred Stock Offer") to redeem all of the outstanding shares of
13.25% Exchangeable Preferred Stock issued by it (the "Preferred Stock") and
(ii) a solicitation as part of the Preferred Stock Offer (the "Preferred Stock
Solicitation") of consents to amendments to the terms of each series of the
Preferred Stock from the holders of not less than a majority of the outstanding
shares of each series of Preferred Stock (the consents from such holders, the
"Requisite Preferred Stock Consents"). The Offer and Preferred Stock
Solicitation (including the amendments) shall be on terms determined by Parent,
provided that the Company shall not be required to purchase the Preferred Stock
pursuant to the Preferred Stock Offer, and the proposed amendments, if approved,
shall not become effective, unless the Merger is consummated or being
consummated simultaneously therewith.
ARTICLE VI
ADDITIONAL COVENANTS OF PARENT
Parent covenants and agrees as follows:
6.1. Notification of Certain Matters. Parent shall give prompt notice
to the Company if any of the following occurs after the date of this Agreement:
(i) receipt of any notice or other communication in writing from any person
alleging that the Consent of such person is or may be required in connection
with the transactions contemplated by this Agreement, other than a Consent
disclosed pursuant to Section 4.3 or 4.4 above or not required to be disclosed
pursuant to the terms thereof; (ii) receipt of any material notice or other
communication from any Governmental Authority (including, but not limited to,
the NASD, any other securities exchange or the FCC) in connection with the
transactions contemplated by this Agreement; (iii) the occurrence of any Event
or Events which, individually or in the aggregate, is reasonably likely to have
a Parent Material Adverse Effect; (iv) the commencement or threat of any
Litigation involving or affecting Parent or Merger Sub, or any of their
respective properties or assets, or, to its knowledge, any employee, agent,
director or officer of Parent or Merger Sub, in his or her capacity as such or
as a fiduciary under a Benefit Plan of Parent, which relates to the consummation
of the Merger; and (v) the occurrence of any Event that is reasonably likely to
cause a breach by Parent of any provision of this Agreement.
6.2. Reasonable Best Efforts. Subject to the terms and conditions
herein provided, Parent agrees to use its reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the Merger and the other
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transactions contemplated by this Agreement including, but not limited to (i)
obtaining any third party Consent (excluding any Consents the failure of which
to obtain would have a de minimis effect) required in connection with the
execution and delivery by Parent and Merger Sub of this Agreement or the
consummation by Parent and Merger Sub of the transactions contemplated hereby,
(ii) the defending of any Litigation against Parent or Merger Sub challenging
this Agreement or the consummation of the transactions contemplated hereby (such
as in connection with the transfer of control of the Company FCC Licenses),
including seeking to have any stay or temporary restraining order entered by any
court or Governmental Authority vacated or reversed, (iii) obtaining all
Consents from Governmental Authorities required for the consummation of the
Merger and the transactions contemplated hereby, and (iv) promptly making all
necessary filings under the HSR Act, the Communications Act and any other
applicable Law, including any filing required to be made with the SEC pursuant
to the Securities Act or the Exchange Act. Upon the terms and subject to the
conditions hereof, Parent agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions of the Closing set forth herein.
6.3. Public Announcements. So long as this Agreement is in effect,
Parent shall not, and shall cause its affiliates not to, issue or cause the
publication of any press release or any other announcement with respect to the
Merger, or the transactions contemplated by this Agreement without the consent
of the Company which shall not be unreasonably withheld or delayed, except when
such release or announcement is required by applicable Law or any applicable
listing agreement with, or rules or regulations of, the NASD or any securities
exchange, in which case Parent, to the extent practicable, prior to making such
announcement, shall consult with the Company regarding the same.
6.4. Compliance. In consummating the Merger and the transactions
contemplated hereby, Parent shall comply, and cause the Merger Sub to comply or
to be in compliance, in all material respects, with all applicable Laws.
6.5. Director and Officer Liability. (a) The Surviving Corporation
shall indemnify and hold harmless and advance expenses to the present and former
officers and directors of the Company, and each person who prior to the
Effective Time becomes an officer or director of the Company (each an
"Indemnified Person"), in respect of acts or omissions by them in their
capacities as such occurring at or prior to the Effective Time (including,
without limitation, for acts or omissions occurring in connection with this
Agreement and the consummation of the Merger) to the fullest extent permissible
under applicable law (collectively, the "Indemnified Losses"). The Surviving
Corporation shall periodically advance or reimburse each Indemnified Person for
all reasonable fees and expenses of counsel constituting Indemnified Losses as
such fees and expenses are incurred; provided that such Indemnified Person shall
agree in writing to promptly repay to the Surviving Corporation the amount of
any such reimbursement if it shall be judicially determined by judgment or order
not subject to further appeal or discretionary
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review that such Indemnified Person is not entitled to be indemnified by the
Surviving Corporation in connection with such matter.
(b) For the six years following the Effective Time, the
Surviving Corporation shall provide officers' and directors' liability insurance
in respect of acts or omissions occurring prior to the Effective Time
(including, without limitation, for acts or omissions occurring in connection
with this Agreement and the consummation of the Merger) covering each
Indemnified Person currently covered by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and amount
(including with respect to the payment of attorney's fees) no less favorable
than those of such policy in effect on the date hereof (which policies have been
made available by the Company to Parent); provided that if the aggregate annual
premiums for such insurance during such period shall exceed 300% of the per
annum rate of premium paid by the Company as of the date hereof for such
insurance, then the Surviving Corporation shall provide a policy with the best
coverage as shall then be available at 300% of such rate.
(c) The rights of each Indemnified Person and his or her heirs
and legal representatives under this Section 6.5 shall be in addition to any
rights such Indemnified Person may have under the Articles of Incorporation or
Bylaws of the Company, any agreement providing for indemnification, or under the
laws of the State of Nevada or any other applicable Laws. These rights shall
survive consummation of the Merger and are intended to benefit, and shall be
enforceable by, each Indemnified Person.
6.6. Formation and Actions of Merger Sub. Parent shall take all
necessary actions in connection with the formation and qualification of Merger
Sub, and shall cause Merger Sub to take all actions required on its part for the
consummation of the Merger and the consummation of the transactions contemplated
hereby.
6.7. No Purchase of Company Common Stock. Except as otherwise provided
for in this Agreement, neither Parent, nor any of its subsidiaries, affiliates
or associates (each as defined in Chapter 78 of the Nevada Code), shall, prior
to the Effective Time, (i) beneficially acquire any shares of Company Common
Stock or (ii) enter into any agreement, arrangement or understanding, whether or
not in writing, with any person who beneficially owns, or whose affiliates or
associates beneficially own, directly or indirectly, any Company Common Stock,
for the purpose of acquiring, holding, voting or disposing of any Company Common
Stock.
6.8. Maintenance of Benefit Plans. For a period beginning at the
Effective Time and continuing for 12 months thereafter, Parent shall maintain or
cause to be maintained the employee pension and welfare benefit plans (as
defined in Section 3(3) of ERISA) maintained by the Company Subsidiaries
immediately prior to the Effective Time or shall maintain employee pension and
welfare benefit plans providing benefit levels substantially comparable in the
aggregate to those maintained by the Company immediately prior to the Effective
Time. Parent shall grant transferred employees credit
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for all service recognized by the Company or a Company Subsidiary immediately
prior to the Effective Time other than for purposes of benefit accrual.
ARTICLE VII
ADDITIONAL COVENANTS OF THE COMPANY AND PARENT
7.1. Proxy Statement. Parent and the Company shall cooperate and
promptly prepare and the Company shall file with the SEC as soon as practicable
a proxy statement with respect to the Company Stockholders Meeting (the "Proxy
Statement"). The Company will cause the Proxy Statement to comply as to form in
all material respects with the applicable provisions of the Exchange Act and the
rules and regulations thereunder. The Company shall use all reasonable efforts,
and Parent will cooperate with the Company, to have the Proxy Statement cleared
by the SEC as promptly as practicable. The Company shall, as promptly as
practicable, provide copies of any written comments (other than de minimis
comments) received from the SEC with respect to the Proxy Statement to Parent
and advise Parent of any verbal comments with respect to the Proxy Statement
received from the SEC. The Company agrees that the Proxy Statement and each
amendment or supplement thereto at the time of mailing thereof and at the time
of the Company Stockholders Meeting will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by the Company in reliance upon
and in conformity with written information concerning Parent furnished to the
Company by Parent specifically for use in the Proxy Statement. Parent agrees
that the written information provided by it for inclusion in the Proxy Statement
and each amendment or supplement thereto, at the time of mailing thereof and at
the time of the Company Stockholders Meeting, will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No amendment or
supplement to the Proxy Statement will be made by the Company without the
approval of Parent (not to be unreasonably withheld or delayed). The Company
will advise Parent promptly of any request by the SEC for amendment of the Proxy
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. Whenever any event or condition affecting the Company or
Parent occurs that is required to be set forth in an amendment or supplement to
the Proxy Statement, such party will promptly inform the other of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and in mailing to stockholders of the Company, such
amendment or supplement.
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ARTICLE VIII
CONDITIONS
8.1. Conditions to Each Party's Obligations. The respective obligations
of each party to effect the Merger shall be subject to the fulfillment or waiver
on or prior to the Closing Date of the following conditions:
8.1.1. Company Stockholder Approval. The Merger shall have
been approved at or prior to the Effective Time by the requisite vote of the
stockholders of the Company in accordance with the Nevada Code and the Company's
Articles of Incorporation.
8.1.2. No Injunction or Action. No order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction shall have
been enacted, entered, promulgated or enforced by any court or other
Governmental Authority, which prohibits or prevents the consummation of the
Merger and which has not been vacated, dismissed or withdrawn by the Effective
Time. Parent and the Company shall use their reasonable best efforts to have any
of the foregoing vacated, dismissed or withdrawn on or prior to the Effective
Time.
8.1.3. FCC Consent. The FCC shall have granted its consent
(the "FCC Consent") approving the transfers of control pursuant to the Merger of
the Company FCC Licenses for the operation of the Licensed Facilities without
the imposition of any conditions or restrictions that, individually or in the
aggregate, constitute a Company Material Adverse Effect, and which FCC Consent
has not been reversed, stayed, enjoined, set aside or suspended and with respect
to which no timely request for stay, petition for reconsideration or appeal has
been filed and as to which the time period for filing of any such appeal or
request for reconsideration or for any sua sponte action by the FCC with respect
to the FCC Consent has expired, or, in the event that such a filing or review
sua sponte has occurred, as to which such filing or review shall have been
disposed of favorably to the grant of the FCC Consent and the time period for
seeking further relief with respect thereto shall have expired without any
request for such further relief having been filed or review initiated.
8.1.4. Governmental Approvals. All waivers, consents,
approvals, orders and authorizations of, and notices, reports and filings with,
Governmental Authorities necessary for the consummation of the transactions
contemplated hereby (other than those matters addressed in Sections 8.1.3 and
8.1.5) shall have been obtained or made and shall be in full force and effect
without the imposition of any terms, conditions, restrictions or limitations,
except for the imposition of any terms, conditions, restrictions and limitations
in respect of, and failures to have obtained or made, or failures to be in full
force and effect of, such waivers, consents, approvals, orders, authorizations,
notices, reports or filings which, individually or in the aggregate, do not
constitute a Company Material Adverse Effect.
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8.1.5. HSR Act. The waiting period (or any extension thereof)
applicable to the Merger under the HSR Act shall have expired or been
terminated.
8.2. Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger shall be subject to the fulfillment on or prior to
the Closing Date of the following additional conditions, any one or more of
which may be waived by the Company:
8.2.1. Parent Representation and Warranties. The
representations and warranties of Parent contained in this Agreement shall be
true and correct when made, and as of the Closing Date as if made on and as of
such date (provided that such representations and warranties which are expressly
made as of a specific date need be true and correct only as of such specific
date), except to the extent that any failures of such representations and
warranties to be so true and correct, do not, individually or in the aggregate,
constitute a Parent Material Adverse Effect (disregarding for these purposes any
materiality, Parent Material Adverse Effect or corollary qualifications
contained therein).
8.2.2. Performance by Parent. Parent shall have performed and
complied in all material respects with all of the material covenants and
agreements required by this Agreement to be performed or complied with by Parent
on or prior to the Closing Date.
8.2.3. No Material Adverse Change. There shall not have
occurred after the date hereof any Event or Events that, individually or the
aggregate, constitute a Parent Material Adverse Effect.
8.2.4. Certificates and other Deliveries. Parent shall have
delivered to the Company a certificate executed on its behalf by its Chief
Executive Officer to the effect that the conditions set forth in Subsections
8.2.1, 8.2.2 and 8.2.3, above, have been satisfied.
8.3. Conditions to Obligations of Parent. The obligations of Parent to
effect the Merger shall be subject to the fulfillment on or prior to the Closing
Date of the following additional conditions, any one or more of which may be
waived by Parent:
8.3.1. Company Representations and Warranties. The
representations and warranties of the Company contained in this Agreement shall
be true and correct when made and as of the Closing Date as if made on and as of
such date (provided that such representations and warranties which are by their
express provisions made as of a specific date need be true and correct only as
of such specific date), except to the extent that any failures of such
representations and warranties to be so true and correct, do not, individually
or the aggregate, constitute a Company Material Adverse Effect (disregarding for
these purposes any materiality, Company Material Adverse Effect or corollary
qualifications contained therein).
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8.3.2. Performance by the Company. The Company shall have
performed and complied in all material respects with all the material covenants
and agreements required by this Agreement to be performed or complied with by
the Company on or prior to the Closing Date.
8.3.3. No Material Adverse Change. There shall have not
occurred after the date hereof any Event or Events that, individually or in the
aggregate, constitute a Company Material Adverse Effect.
8.3.4. Certificates and Other Deliveries. The Company shall
have delivered, or caused to be delivered, to Parent (i) a certificate executed
on its behalf by its Chief Executive Officer to the effect that the conditions
set forth in Subsections 8.3.1, 8.3.2 and 8.3.3, above, have been satisfied;
(ii) a certificate of good standing from the Secretary of State of the State of
Nevada stating that the Company is a validly existing corporation in good
standing; (iii) duly adopted resolutions of the Board of Directors of the
Company approving the execution, delivery and performance of this Agreement and
the instruments contemplated hereby and of the stockholders of the Company
approving the Company Proposal, certified by the Secretary or an Assistant
Secretary of the Company; and (iv) a true and complete copy of the Articles of
Incorporation of the Company certified by the Secretary of State of the State of
Nevada, and a true and complete copy of the Bylaws of the Company certified by
the Secretary or an Assistant Secretary of the Company.
8.3.5. Opinion of FCC Counsel. Parent shall have received an
opinion, addressed to it and dated as of the Closing Date, from Wiley, Rein &
Fielding, FCC counsel to the Company, in the form attached hereto as Exhibit I
provided that such opinions may be made subject to a Company Material Adverse
Effect qualification.
ARTICLE IX
TERMINATION AND ABANDONMENT
9.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of this Agreement and the
Merger by the stockholders of the Company:
(a) by mutual consent of the Company and Parent;
(b) (1) by the Company (provided that the Company is not then
in material breach of any representation, warranty, covenant or other agreement
contained herein), if there has been a breach by Parent of any of its
representations, warranties, covenants or agreements contained in this Agreement
that would cause the condition set forth in Section 8.2.1 or Section 8.2.2 not
to be satisfied and, in either such case, such breach or condition is not
curable or, if curable, has not been promptly cured within 30 days following
receipt by Parent of written notice of such breach; (2) by Parent (provided
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that Parent is not then in material breach of any representation, warranty,
covenant or other agreement contained herein), if there has been a breach by the
Company of any of its representations, warranties, covenants or agreements
contained in this Agreement, that would cause the condition set forth in Section
8.3.1 or Section 8.3.2 not to be satisfied and such breach or condition is not
curable or, or if curable, has not been promptly cured within 30 days following
receipt by the Company of written notice of such breach;
(c) by either Parent or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction, any arbitrator or any Governmental Authority preventing or
prohibiting consummation of the Merger shall have become final and nonappealable
(so long as the party seeking termination is not in breach of Section 5.5 or
Section 6.2 hereof);
(d) by either Parent or the Company if the Merger shall not
have been consummated before the "End Date", which shall be January 16, 2002;
provided that a party shall not be permitted to terminate this Agreement
pursuant to this paragraph (d) if the failure of the Effective Time to occur by
the End Date shall be due to the failure of such party to perform or observe in
all material respects the covenants and agreements of such party set forth
herein;
(e) by either Parent or the Company if the transactions
contemplated by this Agreement shall fail to receive the requisite vote for
approval and adoption by the stockholders of the Company at the Company
Stockholders Meeting or any adjournment or postponement thereof; provided that
the right to terminate this Agreement under this Section 9.1(e) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of such approval to
have been obtained;
(f) by the Company, in accordance with Section 5.9(b),
provided, however, in order for the termination of this Agreement pursuant to
this Section 9.1(f) to be deemed effective, the Company shall have complied with
all provisions contained in Sections 5.9(a), (b) and (c), including the notice
provisions therein, and with the applicable requirements of Section 9.2,
including the payment of the Termination Fee and Expenses; or
(g) by Parent, if the Board of Directors of the Company shall
have withdrawn, or modified or changed, in a manner adverse to Parent or Merger
Sub, its approval or recommendation of the Merger and/or the Company Proposal.
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9.2. Effect of Termination. (a) In the event of the termination of this
Agreement by either the Company or Parent pursuant to Section 9.1, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Parent or the Company, other than the provisions of
this Section 9.2, Section 10.1 and Section 10.7, and except to the extent that
such termination results from the material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
(b) The Company and Parent agree that in order to compensate
Parent and its affiliates, including Forstmann Little & Co. and its affiliates,
for incurring the costs and expenses related to the transactions contemplated
hereby and the foregoing by Forstmann Little & Co. or its affiliates of the
opportunity with respect to the Company in connection herewith, the Company
shall pay to Forstmann Little & Co. and its affiliates, in such manner as is
designated by Forstmann Little & Co., an aggregate amount equal to the Expenses
(as defined in Section 9.2(d) below), not to exceed $10 million, plus $20
million (the "Termination Fee"), as follows: (1) if the Company or Parent shall
terminate this Agreement pursuant to Section 9.1(e), at any time after the date
of this Agreement and prior to the date of the Company Stockholders Meeting an
Acquisition Proposal shall have been publicly announced, and within 12 months of
the termination of this Agreement the Company enters into a definite agreement
with respect to an Acquisition Transaction, (2) if Parent shall terminate this
Agreement pursuant to Section 9.1(b)(2) in connection with a willful and
material breach by the Company of any of its representatives, warranties,
covenants or agreements set forth in this Agreement and within 12 months of the
termination of this Agreement the Company enters into a definitive agreement
with respect to an Acquisition Proposal, (3) if the Company shall terminate this
Agreement pursuant to Section 9.1(f), or (4) if Parent shall terminate this
Agreement pursuant to Section 9.1(g).
(c) The Termination Fee and Expenses required to be paid
pursuant to clauses (1) or (2) of Section 9.2(b) shall be paid not later than
five business days after the Company enters into a definitive agreement with
respect to an Acquisition Proposal. The Termination Fee and Expenses to be paid
pursuant to clauses (3) or (4) of Section 9.2(b) shall be paid concurrently with
notice of termination of this Agreement by the Company.
(d) The term "Expenses" shall mean all out-of-pocket expenses
incurred by Parent and its affiliates in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, fees and
expenses of accountants, attorneys and financial advisors, all costs of Parent
and its affiliates relating to the financing of the Merger (including, without
limitation, advisory and commitment fees and reasonable fees and expenses of
counsel to potential lenders), costs and expenses otherwise borne by Parent and
its affiliates pursuant to Section 10.7 and costs incurred in connection with
the Preferred Stock Offer and Debenture Offer.
(e) All payments under this Section 9.2 shall be made by wire
transfer of immediately available funds to an account designated by the
recipient of such funds.
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(f) The Company acknowledges that the agreements contained in
this Section 9.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Parent would not enter into
this Agreement. Accordingly, if the Company fails to promptly pay any amounts
owing pursuant to this Section 9.2 when due, the Company shall in addition
thereto pay to the Parent and its affiliates all costs and expenses (including
fees and disbursements of counsel) incurred in collecting such amounts, together
with interest on such amounts (or any unpaid portion thereof) from the date such
payment was required to be made until the date such payment is received by the
Parent and its affiliates at the prime rate of Chase Manhattan as in effect from
time to time during such period.
ARTICLE X
MISCELLANEOUS
10.1. Confidentiality. Unless (i) otherwise expressly provided in this
Agreement, (ii) required by applicable Law, (iii) necessary to secure any
required Consents as to which the other party has been advised, or (iv)
consented to in writing by Parent and the Company, this Agreement and any
information or documents furnished in connection herewith shall be kept strictly
confidential by the Company and the Company Subsidiaries, Parent and the Parent
Subsidiaries, and their respective officers, directors, employees and agents.
Prior to any disclosure pursuant to the preceding sentence, the party intending
to make such disclosure shall consult with the other party to the extent
practicable regarding the nature and extent of the disclosure. Subject to the
preceding sentence, nothing contained herein shall preclude disclosures to the
extent necessary to comply with accounting, SEC and other disclosure obligations
imposed by applicable Law. To the extent required by such disclosure
obligations, Parent or the Company, after consultation with the other party to
the extent practicable, may file with the SEC any written communications
relating to the Merger and the transactions contemplated hereby pursuant to
Regulation 14A promulgated under the Securities Act. Parent and the Company
shall cooperate with the other and provide such information and documents as may
be required in connection with any such filings. In the event the Merger is not
consummated, Parent and the Company shall return to the other all documents
furnished by the other and all copies thereof made by such party and will hold
in absolute confidence all information obtained from the other party except to
the extent (i) such party is required to disclose such information by Law or
such disclosure is necessary in connection with the pursuit or defense of a
claim, (ii) such information was known by such party prior to such disclosure or
was thereafter developed or obtained by such party independent of such
disclosure, (iii) such party received such information on a non-confidential
basis from a source, other than the other party, which is not known by such
party to be bound by a confidentiality obligation with respect thereto or (iv)
such information becomes generally available to the public or is otherwise no
longer confidential. Prior to any disclosure of information pursuant to the
exception in clause (i) of the preceding sentence, the party intending to
disclose the same shall so notify the
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party which provided the same to the extent practicable in order that such party
may seek a protective order or other appropriate remedy should it choose to do
so.
10.2. Amendment and Modification. To the extent permitted by applicable
Law, this Agreement may be amended, modified or supplemented only by a written
agreement among the Company, Parent and Merger Sub, whether before or after
approval of this Agreement and the Merger by the stockholders of the Company,
except that following approval by the stockholders of the Company, there shall
be no amendment or change to the provisions hereof with respect to the Merger
Consideration without further approval by the stockholders of the Company, and
no other amendment shall be made which by law requires further approval by such
stockholders without such further approval.
10.3. Waiver of Compliance; Consents. Any failure of the Company on the
one hand, or Parent or Merger Sub on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent on
the one hand, or the Company on the other hand, only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 10.3.
10.4. Survival of Representations and Warranties. The respective
representations and warranties of the Company and Parent contained herein or in
any certificates or other documents delivered prior to or at the Closing shall
survive the execution and delivery of this Agreement, notwithstanding any
investigation made or information obtained by the other party, but shall
terminate at the Effective Time.
10.5. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by facsimile, receipt confirmed, or on the next business day when sent by
overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(i) if to Company, to:
Citadel Communications Corporation
City Center West, Suite 400
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
(ii) (a) if to Parent, to:
FLCC Holdings, Inc.
c/o Forstmann Little & Co.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Merger Sub, to:
FLCC Acquisition Corp.
c/o Forstmann Little & Co.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax : (▇▇▇) ▇▇▇-▇▇▇▇
In each case, with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
10.6. Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto prior to the Effective Time without the
prior written consent of the other parties hereto; provided, that any and all
rights of Parent and Merger Sub may be assigned to any person newly formed and
directly or indirectly wholly owned by Parent for the purpose of effectuating
the transactions contemplated hereby; provided, however, that no such assignment
shall
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be permitted if the effect thereof would be to require an additional consent of
the Company's stockholders.
10.7. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.
10.8. Governing Law. This Agreement shall be deemed to be made in, and
in all respects shall be interpreted, construed and governed by and in
accordance with the internal laws of, the State of New York, except that Nevada
law (including, without limitation, any Law related to any fiduciary duty, duty
of loyalty, or other duty or obligation of the Company's Board of Directors with
respect to the Merger or this Agreement) shall apply to the Merger; and the
parties hereto consent to the jurisdiction of the courts of or in the State of
New York in connection with any dispute or controversy relating to or arising
out of this Agreement and the transactions contemplated hereby.
10.9. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.10. Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. No rule of construction shall apply to this
Agreement which construes ambiguous language in favor of or against any party by
reason of that party's role in drafting this Agreement. As used in this
Agreement, (i) the term "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an association, an unincorporated organization, a Governmental Authority
and any other entity; (ii) the term "affiliate," with respect to any person,
shall mean and include any person controlling, controlled by or under common
control with such person; and (iii) the term "subsidiary" of any specified
person shall mean any corporation 50 percent or more of the outstanding voting
power of which, or any partnership, joint venture, limited liability company or
other entity 50 percent or more of the total equity interest of which, is
directly or indirectly owned by such specified person.
10.11. Entire Agreement. This Agreement and the other agreements,
documents or instruments referred to herein or executed in connection herewith
including, but not limited to, the Side Letter between the parties hereto dated
as of the date hereof and the Company Disclosure Schedule, which schedule is
incorporated herein by reference, embody the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and the understandings between the
parties with respect to such subject matter.
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10.12. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions in this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches hereof or
thereof and to enforce specifically the terms and provisions hereof or thereof
in any court of the United States or any state having jurisdiction, this being
in addition to any other right or remedy to which such party may be entitled
under this Agreement, at law or in equity.
10.13. Third Parties. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been
executed for the benefit of, any person that is not a party hereto or thereto,
or, a successor or permitted assign of such a party; provided, however, that the
parties hereto specifically acknowledge that the provisions of Section 6.5 above
are intended to be for the benefit of, and shall enforceable by, the officers
and directors of the Company and/or the Company Subsidiaries affected thereby
and their heirs and representatives; and provided further, that the parties
hereto specifically acknowledge that the provisions of Section 9.2 above are
intended to be for the benefit of, and shall be enforceable by, Forstmann Little
& Co. and its affiliates.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be signed and delivered by their respective duly authorized officers as of
the date first above written.
CITADEL COMMUNICATIONS CORPORTION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman, Chief Executive Officer and
President
FLCC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
54
LIST OF EXHIBITS AND SCHEDULES
Exhibit 1 - Form of FCC Opinion
Company Disclosure Schedule
[Pursuant to regulation S-K, Item 601(b)(2), Registrant agrees to furnish
supplementally a copy of these exhibits and schedules to the Securities and
Exchange Commission upon request.]
