Exhibit 10.1

EXECUTION COPY

December 16, 2009

To the Holders of Lender Claims

Referred to Below

Ladies and Gentlemen:

This letter agreement (the “Agreement”) sets forth certain terms and conditions
pursuant to which Citadel Broadcasting Corporation (“Citadel”) and certain of
its domestic subsidiaries (together with Citadel, collectively the “Debtors”)
will propose a joint chapter 11 plan of reorganization (a “Plan”) on a
consensual basis with the support of the undersigned, which are lenders (the
“Lenders”) party to that certain Credit Agreement dated as of June 12, 2007 (as
amended, modified or otherwise supplemented from time to time, the “Credit
Agreement”), among Citadel, the Lenders, JPMorgan Chase Bank, N.A., as
administrative agent thereunder (in such capacity, the “Agent”), and the other
parties signatory thereto.

Capitalized terms not defined herein shall have the meaning ascribed to such
terms in the Restructuring Term Sheet (as defined below).

The parties hereto hereby agree as follows:

1. Proposed Plan of Reorganization

Each of the Debtors proposes to commence voluntary, “pre-arranged” cases
(collectively, the “Chapter 11 Cases”) under chapter 11 of title 11 of the
United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court
for the Southern District of New York (the “Bankruptcy Court”), which Chapter 11
Cases the Debtors will seek to have jointly administered. As part of the Chapter
11 Cases, the Debtors intend to file a disclosure statement and related Plan,
which will provide for, among other things, certain distributions on account of
the claims of the Lenders under the Pre-Petition Senior Obligations (the “Lender
Claims”).

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2. Representations and Warranties of the Participating Lenders

Each Lender identified as a holder of Lender Claims on the signature pages
hereto (such Lenders, the “Participating Lenders”) represents and warrants to
the Debtors that, as of the date hereof:

(a) Such Participating Lender (i) either (A) is the sole beneficial owner of the
principal amount of Lender Claims set forth below under its signature hereto, or
(B) has sole investment or voting discretion with respect to the principal
amount of Lender Claims set forth below under its signature and has the power
and authority to bind the beneficial owner(s) of such Lender Claims to the terms
of this Agreement and (ii) has full power and authority to act on behalf of,
vote and consent to matters concerning such Lender Claims and to dispose of,
exchange, assign and transfer such Lender Claims. For the purposes of this
Agreement, “Participating Lenders” shall not include (A) a holder of Lender
Claims signatory hereto in its capacity or to the extent of its holdings as a
broker, dealer or market maker of Lender Claims or any other claim against or
security in the Debtors or (B) any subsidiary or affiliate of a holder of Lender
Claims signatory hereto (x) over which the holder of Lender Claims does not have
corporate authority or control or (y) whose credit decisions, including credit
decisions to be bound by agreements such as this Agreement, under the internal
policies or rules of such subsidiary or holder, are not subject to control by
such holder.

(b) Such Participating Lender has made no prior assignment, sale, participation,
grant, conveyance, or other transfer of, and has not entered into any other
agreement to assign, sell, participate, grant, convey or otherwise transfer, in
whole or in part, any portion of its right, title, or interests in any Lender
Claims that are subject to this Agreement that are inconsistent with the
representations and warranties of such Participating Lender herein or would
render such Participating Lender otherwise unable to comply with this Agreement
and perform its obligations hereunder.

(c) Such Participating Lender (i) has such knowledge and experience in financial
and business matters of this type that it is capable of evaluating the merits
and risks of entering into this Agreement and of making an informed investment
decision, and has conducted an independent review and analysis of the business
and affairs of the Debtors that it considers sufficient and reasonable for
purposes of entering into this Agreement and (ii) is an “accredited investor”
(as defined by Rule 501 of the Securities Act of 1933, as amended).

3. Support for a Qualified Plan

Subject to the terms and conditions hereof and for so long as no Support
Termination Event (as hereinafter defined) shall have occurred, and except as
Citadel may expressly release the Participating Lenders in writing from any of
the following obligations, each Participating Lender shall and shall cause each
of its affiliates, subsidiaries, managed funds, representatives, agents and
employees set forth on the signature page attached hereto for such Participating
Lender (in each case, except to the extent such affiliates, subsidiaries,
managed funds, representatives, agents and employees would be excluded from the
definition of “Participating Lender” under the last sentence of clause (a) of
Section 2 above) to: (a) (i) (A) vote its Lender Claims to accept any Plan
proposed by the Debtors incorporating the terms and conditions set forth on the
term sheet annexed hereto as Exhibit 1 (which term sheet is expressly
incorporated by reference herein and made a part of this Agreement as if fully
set forth herein (as such term sheet may be modified in accordance with
Section 9 hereof, the “Restructuring Term Sheet”)), which Plan shall be
consistent in all material respects with this Agreement and the Restructuring
Term Sheet and contain no other provisions materially adverse to the Lenders

 

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except as the Agent and the Requisite Participating Lenders may expressly
consent in writing (a “Qualified Plan”) and (B) deliver its duly executed and
completed ballot accepting such Qualified Plan on a timely basis following
commencement of the solicitation of acceptances of such Qualified Plan in
accordance with sections 1125 and 1126 of the Bankruptcy Code and (ii) not
change or withdraw such vote (or cause or direct such vote to be changed or
withdrawn) provided that such vote may be revoked or withdrawn immediately upon
occurrence of a Support Termination Event, (b) support, and take all reasonable
actions necessary or reasonably requested by the Debtors to facilitate, the
solicitation, confirmation and consummation of a Qualified Plan and the
transactions contemplated thereby, provided that no Participating Lender shall
be obligated to incur material out of pocket expenses pursuant to this paragraph
3, (c) not object to, or vote any of its Lender Claims to reject, a Qualified
Plan, support directly or indirectly any such objection or otherwise take any
action or commence any proceeding to oppose or to seek any modification of a
Qualified Plan, the related disclosure statement (which disclosure statement
shall be in form and substance reasonably satisfactory to the Debtors and
consistent in all material respects with this Agreement and the Restructuring
Term Sheet (the “Disclosure Statement”)) or any other reorganization documents
filed by any of the Debtors in connection with the Chapter 11 Cases and the
confirmation of a Qualified Plan, (d) not directly or indirectly seek, solicit,
support, encourage, vote its Lender Claims for, consent to, encourage, or
participate in any discussions regarding or the negotiation or formulation of
(i) any plan of reorganization, proposal, offer, dissolution, winding up,
liquidation, reorganization, merger, consolidation, business combination, joint
venture, partnership, sale of assets or restructuring for any of the Debtors
(each, an “Alternative Proposal”) other than a Qualified Plan or (ii) any other
action that is inconsistent with, or that would delay or obstruct the proposal,
solicitation, confirmation, or consummation of, a Qualified Plan, and
(e) support the release provisions in favor of the Debtors and its agents,
including their respective officers, directors and employees, as reflected in
the Restructuring Term Sheet.

Each Participating Lender agrees to permit disclosure in the Disclosure
Statement and any filings by the Debtors with the Securities and Exchange
Commission and any other regulatory agency to which the Debtors may be subject
of the contents of this Agreement, including, but not limited to, the aggregate
Lender Claims held by all Participating Lenders; provided that (i) the Debtors
shall provide a draft of such disclosure to the Agent (on behalf of the
Participating Lenders) and a reasonable amount of time to review such draft
prior to such disclosure being made and (ii) the Debtors shall not disclose the
amount of any individual Lender Claim, except as otherwise required by
applicable law.

4. Transfer of Lender Claims

Each Participating Lender agrees that so long as this Agreement has not been
terminated in accordance with its terms it shall not directly or indirectly
(a) grant any proxies to any person in connection with its Lender Claims to vote
on the Plan, or (b) sell, pledge, hypothecate or otherwise transfer or dispose
of, or grant, issue or sell any option, right to acquire, voting, participation
or other interest in (“Transfer”) any Lender Claims, except, in each case,
(i) in accordance with the terms of the Credit Agreement and the Restructuring
Term Sheet and (ii) to a party that agrees in writing to be subject to the terms
and conditions of this Agreement as a “Participating Lender”, which writing
shall be in form and substance reasonably satisfactory to the Agent and the
Debtors.1 Each

 

1

See attached joinder.

 

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Participating Lender agrees to notify the Debtors and the Agent of any Transfer
of its Lender Claims and to provide the Debtors and the Agent with a signed
agreement of the transferee agreeing to be subject to the terms and conditions
of this Agreement before such Transfer becomes effective. Any Transfer of any
Lender Claim that does not comply with the foregoing shall be deemed void ab
initio. This Agreement shall in no way be construed to preclude any Lender from
acquiring additional Lender Claims or any other interests in any Debtors;
provided, however, that any such additional Lender Claims or other interests in
such Debtor shall, upon acquisition, automatically be deemed to be subject to
all the terms of this Agreement.

5. The Debtors’ Covenants

As long as a Support Termination Event has not occurred, or has occurred but has
been duly waived in accordance with the terms hereof, the Debtors shall, to the
extent not inconsistent with the fiduciary obligations of any of the Debtors or
any of their respective subsidiaries, use their commercially reasonable efforts
to:

(a) file the Disclosure Statement and prosecute its approval by the Bankruptcy
Court within the time frame set forth herein;

(b) obtain from the Bankruptcy Court an order confirming a Qualified Plan (the
“Confirmation Order”) within the time frame set forth herein, which Confirmation
Order shall be in form and substance reasonably satisfactory to the Agent and
the Debtors and consistent in all material respects with this Agreement and the
Restructuring Term Sheet; and

(c) effectuate and consummate a Qualified Plan within the timeframe set forth
herein.

6. Termination of Obligations

(a) This Agreement shall terminate and, except as otherwise provided herein, all
obligations of the parties hereto shall immediately terminate and be of no
further force and effect as follows (each, a “Support Termination Event”),

 

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(i) upon termination of this Agreement by the mutual written consent of Citadel
and Participating Lenders holding more than 75% in amount of the Lender Claims
bound under this Agreement (the “Requisite Participating Lenders”);

(ii) on the date that is five (5) business days following the occurrence of any
of the events listed below, unless any such Support Termination Event is waived
by the Requisite Participating Lenders within such five (5) business day period:

(A) the Chapter 11 Cases shall not have been filed by December 21, 2009 (or such
later date as may be agreed by Citadel and the Requisite Participating Lenders);

(B) a Qualified Plan and the Disclosure Statement shall not have been filed
within 45 days after the filing date of the Chapter 11 Cases (the “Petition
Date”) (or such later date as may be agreed by Citadel and the Requisite
Participating Lenders);

(C) an order, in form and substance reasonably satisfactory to the Agent, shall
not have been entered approving the adequacy of the Disclosure Statement within
90 days after the Petition Date (or such later date as may be agreed by Citadel
and the Requisite Participating Lenders);

(D) the Confirmation Order shall not have been entered within 180 days after the
Petition Date (or such later date as may be agreed by Citadel and the Requisite
Participating Lenders);

(E) a Qualified Plan shall not have been consummated within 300 days after the
Petition Date (or such later date as may be agreed by Citadel and the Requisite
Participating Lenders);

(F) the Debtors shall have (1) materially breached the Debtors’ covenants set
forth in Section 5 above, (2) publicly announced their intention not to pursue a
Qualified Plan, or (3) proposed, accepted or filed a motion with the Bankruptcy
Court seeking approval of an Alternative Proposal;

(G) (1) an examiner with expanded powers or a trustee shall have been appointed
in any of the Chapter 11 Cases, or (2) any of the Chapter 11 Cases shall have
been converted to cases under Chapter 7;

(H) the Chapter 11 Case of any Debtor that is an obligor or guarantor under the
Credit Agreement shall have been dismissed;

(I) the Bankruptcy Court shall not have entered the Interim Cash Collateral
Order within 7 days after the Petition Date, or the Final Cash Collateral Order
within 75 days after the date of entry of the Interim Cash Collateral Order;

 

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(J) there shall have occurred a force majeure event (to be defined as a
significant global disruption in the financial markets caused by outbreak of
war, terrorism, or other incidents, but not changes in the financial, banking or
capital markets generally);

(K) any court (including the Bankruptcy Court) shall declare, in a final,
non-appealable order, this Agreement or a material part thereof to be
unenforceable; or

(L) the entry of an order by the Bankruptcy Court invalidating, disallowing,
subordinating, or limiting, in any respect, as applicable, the enforceability,
priority, or validity of the Lender Claims or liens securing them.

(iii) upon delivery of written notice of termination to the Agent by Citadel
following any material breach, in the aggregate, of the Participating Lenders’
representations, warranties, covenants or agreements set forth in this Agreement
if such breach would have a material adverse effect on Citadel’s ability to
obtain confirmation of, and achieve consummation of, a Qualified Plan.

(b) Upon occurrence of a Support Termination Event, this Agreement shall
forthwith become void and of no further force or effect, each party hereto shall
be released from its commitments, undertakings and agreements under or related
to this Agreement, and there shall be no liability or obligation on the part of
any party hereto; provided, however, that in no event shall any such termination
relieve a party hereto from (i) liability for its breach or non-performance of
its obligations hereunder prior to the date of such termination and
(ii) obligations under this Agreement which by their terms expressly survive any
such termination; and provided, further that, notwithstanding anything to the
contrary herein, any Support Termination Event may be waived in accordance with
the procedures established by Section 9 hereof, in which case the Support
Termination Event so waived shall be deemed not to have occurred, this Agreement
shall be deemed to continue in full force and effect, and the rights and
obligations of the parties hereto shall be restored, subject to any modification
set forth in such waiver. Upon termination of this Agreement, any and all votes
delivered by a Participating Lender prior to such termination shall be deemed,
for all purposes, to be null and void from the first instance and shall not be
considered or otherwise used in any manner by the Debtors.

7. Specific Performance

It is understood and agreed by the parties that money damages would not be a
sufficient remedy for any breach of this Agreement by any party and each
non-breaching party shall be entitled to seek specific performance and
injunctive or other equitable relief, including attorneys fees and costs, as a
remedy of any such breach, and each party agrees to waive any requirement for
the securing or posting of a bond in connection with such remedy, in addition to
any other remedy to which such non-breaching party may be entitled, at law or in
equity.

 

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8. Prior Negotiations

This Agreement supersedes all prior negotiations, and documents reflecting such
prior negotiations, between and among the Debtors and the Lenders (and their
respective advisors), with respect to the subject matter hereof.

9. Amendments

No amendment, modification, waiver or other supplement of the terms of this
Agreement or the Restructuring Term Sheet shall be valid unless such amendment,
modification, waiver or other supplement is in writing and has been signed by
the Debtors, the Agent and the Requisite Participating Lenders; provided,
however, that the written consent of the Agent and each Participating Lender
shall be required for any amendment, modification, waiver or other supplement of
this Agreement that amends or modifies in any way this Section 9 or the
definition of Requisite Participating Lenders as used in this Agreement;
provided, further that no amendment, waiver, modification or other supplement of
this Agreement or the Restructuring Term Sheet may impose less favorable
treatment of any Participating Lender’s Lender Claims or its rights and
obligations hereunder and under the Restructuring Term Sheet compared to those
of the Participating Lenders generally, without such Participating Lender’s
express written consent.

For the purposes hereof, immaterial changes to the Restructuring Term Sheet
shall not constitute a modification or amendment thereof or of this Agreement
and may be made upon agreement by the Debtors and the Agent.

10. Independent Analysis

Each Participating Lender hereby confirms that it has made its own decision to
execute this Agreement based upon its own independent assessment of documents
and information available to it, as it has deemed appropriate.

11. Governing Law

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New York. By its execution and delivery of this
Agreement, each of the parties hereto hereby irrevocably and unconditionally
agrees for itself that any legal action, suit or proceeding against it with
respect to any matter under or arising out of or in connection with this
Agreement or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding, may be brought in either a state or federal court of
competent jurisdiction in the State of New York. By execution and delivery of
this Agreement, each of the parties hereto hereby irrevocably accepts and
submits itself to the nonexclusive jurisdiction of each such court, generally
and unconditionally, with respect to any such action, suit or proceeding.
Notwithstanding the foregoing consent to jurisdiction in either a state or
federal court of competent jurisdiction in the State of New York, upon the
commencement of the Chapter 11 Cases, each of the parties hereto hereby agrees
that, if the petitions have been filed and the Chapter 11 Cases are pending, the
Bankruptcy Court shall have exclusive jurisdiction of all matters arising out of
or in connection with this Agreement. EACH PARTY HERETO UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO ABOVE.

 

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12. Effective Date

Upon delivery of its duly executed counterpart signature page, each
Participating Lender shall be bound to the terms of this Agreement, and this
Agreement shall become effective upon the Debtors giving notice to the Agent and
such Participating Lender of effectiveness (the date on which such notice is
provided, the “Effective Date”); provided, that if, as of the commencement of
the Chapter 11 Cases, the Debtors have not received signature pages to this
Agreement from Lenders holding more than 50% of the aggregate principal amount
of the Pre-Petition Senior Obligations, this Agreement shall become null and
void.

Upon the Effective Date, the Restructuring Term Sheet shall be deemed effective
for the purposes of this Agreement and thereafter the terms and conditions
therein may only be amended, modified, waived or otherwise supplemented as set
forth in Section 10 above.

13. Third-Party Beneficiary

This Agreement is intended for the benefit of the parties hereto and no other
person shall have any rights hereunder.

14. Counterparts

This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, and all of which together shall be deemed to be one
and the same agreement. Execution copies of this agreement may be delivered by
facsimile, electronic mail or otherwise, each of which shall be deemed to be an
original for the purposes of this paragraph.

15. Headings

The section headings of this Agreement are for convenience of reference only and
shall not, for any purpose, be deemed a part of this Agreement.

16. Acknowledgment

This Agreement is not and shall not be deemed to be a solicitation of consents
to the Plan. The acceptance of the Lenders will not be solicited until the
Lenders have received the Disclosure Statement and related ballot, as approved
by the Bankruptcy Court.

17. Settlement Discussions

This Agreement and the Restructuring Term Sheet are part of a proposed
settlement of matters that could otherwise be the subject of litigation among
the parties hereto. Nothing herein shall be deemed an admission of any kind.
Pursuant to Federal Rule of Evidence 408 and any applicable state rules of
evidence, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any proceeding other than to prove the existence of
this Agreement or in a proceeding to enforce the terms of this Agreement or to
enforce a Cash Collateral Order.

 

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18. No Waiver of Participation and Preservation of Rights

Except as expressly provided in this Agreement, nothing herein is intended to,
does or shall be deemed in any manner to waive, limit, impair or restrict the
ability of each of the Lenders to protect and preserve its rights, remedies and
interests, including, but not limited to, its claims against any of the Debtors
or other parties, any liens or security interests it may have in any assets of
any of the Debtors or other parties, or its full participation in the Chapter 11
Cases. Without limiting the foregoing sentence in any way, after a Support
Termination Event, the parties hereto each fully reserve any and all of their
respective rights, remedies and interests, subject to Section 6(b) in the case
of any claim for breach of this Agreement, arising prior to termination.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective duly authorized officers, solely in their
respective capacity as officers of the undersigned and not in any other
capacity, as of the date first set forth above.

 

CITADEL BROADCASTING CORPORATION By:  

 

  Name:     Title:   [OTHER DEBTORS] By:  

 

  Name:     Title:  

AGREED BY EACH OF THE FOLLOWING LENDERS

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JPMORGAN CHASE BANK, N.A.,

on behalf of its Special Credits group and its position in the Lender Claims

Claims under the Credit Agreement:        $                               
         

Authorized Signatory:

 

By:  

 

Name:   Title:  

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[OTHER PARTICIPATING LENDERS]

Claims under the Credit Agreement:        $                               
         

Authorized Signatory:

 

By:  

 

Name:   Title:  

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JOINDER

This Joinder to the Plan Support Agreement, dated as of December 16, 2009, by
and among Citadel Broadcasting Corporation and certain of its domestic
subsidiaries and the Participating Lenders signatory thereto (the “Agreement),
is executed and delivered by [                    ] (the “Joining Party”) as of
[            ], 20[    ]. Each capitalized term used herein but not otherwise
defined shall have the meaning set forth in the Agreement.

1. Agreement to be Bound. The Joining Party hereby agrees to be bound by all of
the terms of the Agreement, attached to this Joinder as Annex I (as the same may
be hereafter amended, restated or otherwise modified from time to time). The
Joining Party shall hereafter be deemed to be a “Participating Lender” and a
party for all purposes under the Agreement.

2. Representations and Warranties. With respect to the aggregate principal
amount of Lender Claims held by the Joining Party upon consummation of the
Transfer, the Joining Party hereby makes the representations and warranties of
the Participating Lenders set forth in the Agreement to each other party to the
Agreement.

3. Governing Law. This Joinder shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to any conflicts
off law provisions which would require the application of the law of any other
jurisdiction.

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IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.

 

 

Entity Name of Joining Party Authorized Signatory: By:  

 

Name:   Title:  

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ANNEX I

Plan Support Agreement

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EXHIBIT 1

CITADEL BROADCASTING CORPORATION

PLAN TERM SHEET

DECEMBER 16, 2009

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER WITH
RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS TO
ANY PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF
ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF SECURITIES,
BANKRUPTCY AND/OR OTHER APPLICABLE LAWS. THIS TERM SHEET DOES NOT ADDRESS ALL
MATERIAL TERMS THAT WOULD BE REQUIRED IN CONNECTION WITH ANY POTENTIAL FINANCIAL
RESTRUCTURING AND ANY DEFINITIVE AGREEMENT IS SUBJECT TO THE EXECUTION OF
DEFINITIVE DOCUMENTATION IN FORM AND SUBSTANCE CONSISTENT WITH THIS TERM SHEET
AND OTHERWISE ACCEPTABLE TO THE COMPANY, THE AGENT AND THE PARTICIPATING LENDERS
(EACH AS DEFINED BELOW). THIS TERM SHEET HAS BEEN PRODUCED FOR DISCUSSION AND
SETTLEMENT PURPOSES ONLY AND IS SUBJECT TO THE PROVISIONS OF RULE 408 OF THE
FEDERAL RULES OF EVIDENCE AND OTHER SIMILAR APPLICABLE STATE AND FEDERAL RULES.
THIS TERM SHEET AND THE INFORMATION CONTAINED HEREIN IS STRICTLY CONFIDENTIAL
AND SHALL NOT BE SHARED WITH ANY OTHER PARTY ABSENT THE PRIOR WRITTEN CONSENT OF
THE COMPANY.

This term sheet (the “Term Sheet”) sets forth the principal terms of a proposed
financial restructuring (the “Restructuring”) for the existing debt and other
obligations of Citadel Broadcasting Corporation (“Citadel” or the “Company”) and
each subsidiary of Citadel which files on or about the date hereof (the
“Petition Date”) a case under chapter 11 (“Chapter 11 Case(s)”) of title 11 of
the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy
Court for the Southern District of New York (the “Bankruptcy Court”) to pursue a
pre-negotiated chapter 11 plan of reorganization containing the terms set forth
herein (“Plan”) to be supported by the Agent and the Participating Lenders (each
as defined in the Plan Support Agreement to which this Term Sheet is attached
(“Plan Support Agreement”).

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Transaction Overview

 

Debtors:    Citadel and its subsidiaries identified in the footnote below
(collectively, “Debtors”).1 Creditors:   

•        Senior Secured Claims: of the (i) approximately $2,010,680,710 in
unpaid principal, plus accrued interest and fees2, arising under or in
connection with that certain Credit Agreement, dated as of June 12, 2007, among
Citadel, the Agent, the lenders from time to time party thereto, and the other
agents party thereto (as amended, restated, supplemented or otherwise modified
from time to time) (the “Pre-Petition Credit Facility”), (which includes
$136,000,000 in principal amount outstanding under the Revolving Credit Facility
(which amount does not include the Letters of Credit); $2,927,541 in letters of
credit (the “Letters of Credit”); $527,156,222 in principal amount outstanding
under the Tranche A Term Loan; $1,347,524,488 in principal amount outstanding
under the Tranche B Term Loan); and (ii) claims arising upon termination of (a)
the Interest Rate Swap Transaction Agreement between JPMorgan Chase Bank, N.A.
and Citadel Broadcasting Corporation, dated June 27, 2007 and (b) the ISDA 2002
Master Agreement between JPMorgan Chase Bank, N.A. and Citadel, dated June 26,
2007, in the notional amount of $970.0 million (the “Pre-Petition Hedges”;
together with the Pre-Petition Credit Facility, the “Pre-Petition Senior
Obligations” (it being understood that all Pre-Petition Hedges between Citadel
and any signatory (or any affiliate of a signatory) to the Plan Support

 

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The Debtors will include the following entities: Alphabet Acquisition Corp.;
Atlanta Radio, LLC; Aviation I, LLC; Chicago FM Radio Assets, LLC; Chicago
License, LLC; Chicago Radio Assets, LLC; Chicago Radio Holding, LLC; Chicago
Radio, LLC; Citadel Broadcasting Company; Citadel Broadcasting Corporation; DC
Radio Assets, LLC; DC Radio, LLC; Detroit Radio, LLC; International Radio, Inc.;
KLOS Radio, LLC; KLOS Syndications Assets, LLC; KLOS-FM Radio Assets, LLC; LA
License, LLC; LA Radio, LLC; Minneapolis Radio Assets, LLC; Minneapolis Radio,
LLC; Network License, LLC; NY License, LLC; NY Radio Assets, LLC; NY Radio, LLC;
Oklahoma Radio Partners, LLC; Radio Assets, LLC; Radio License Holding I, LLC;
Radio License Holding II, LLC; Radio License Holding III, LLC; Radio License
Holding IV, LLC; Radio License Holding V, LLC; Radio License Holding VI, LLC;
Radio License Holding VII, LLC; Radio License Holding VIII, LLC; Radio License
Holding IX, LLC; Radio License Holding X, LLC; Radio License Holding XI, LLC;
Radio License Holding XII, LLC; Radio Networks, LLC; Radio Today Entertainment,
Inc.; Radio Watermark, Inc.; San Francisco Radio Assets, LLC; San Francisco
Radio, LLC; SF License, LLC; WBAP-KSCS Acquisition Partner, LLC; WBAP-KSCS
Assets, LLC; WBAP-KSCS Radio Acquisition, LLC; WBAP-KSCS Radio Group, Ltd.; and
WPLJ Radio, LLC.

2

Note: Due to the fact that the amount of accrued interest and fees changes on a
daily basis, exact figures for these items are not provided herein.

 

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Agreement shall be terminated promptly following the Petition Date)) (which
termination claims were estimated as of November 18, 2009 to be approximately
$90,000,000)3, approximately $1,100,000,0004 shall be deemed, pursuant to
section 506(a) of the Bankruptcy Code and solely for purposes of, and in the
context of, the expeditious confirmation of the Plan, to be the amount supported
by the value of the collateral securing such obligations, which value shall be
allocated pro rata across all such obligations (the “Senior Secured
Obligations”). Each holder of Senior Secured Obligations is referred to herein
as a “Secured Lender.”

 

•        Unsecured Claims: all remaining pre-petition claims – (approximately
$1,000,000,0005 of Pre-Petition Senior Obligations; 8% Convertible Subordinated
Notes due February 15, 2011 ($47,835,000); 1.875% Convertible Subordinated Notes
due February 15, 2011 ($475,000); claims under leases and executory contracts
that are rejected in the Chapter 11 Cases; and outstanding trade and other
obligations related to the day to day operations of the Company (“Ordinary
Course Obligations”), to the extent such Ordinary Course Obligations are not
otherwise satisfied pursuant to an order of the Bankruptcy Court, including,
without limitation, any appropriate “first-day” order.

Transaction Summary:    It is expected that, pursuant to the Plan, Citadel will
directly or indirectly transfer all of its assets to one or more entities, the
stock of which, after the Effective Date, will be controlled by the Lenders
(“Reorganized Citadel”), or another structure agreeable to the Agent and the
Requisite Participating Lenders; provided that the entity issuing stock under
the Plan shall be a C corporation for U.S. income tax purposes.

 

3

Note: An exact amount cannot be determined until the swap is terminated and the
termination calculation is prepared.

4

Note: This number is an estimate for illustrative purposes only and shall be
adjusted to conform to the valuation being prepared by the Debtors’ financial
advisor, which valuation shall ultimately be included in the Debtors’ Disclosure
Statement.

5

Note: This number is an estimate for illustrative purposes only and shall be
adjusted to conform to the valuation being prepared by the Debtors’ financial
advisor, which valuation shall ultimately be included in the Debtors’ Disclosure
Statement.

 

3

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The Senior Secured Obligations will be exchanged on a pro rata6 basis for (i) a
new senior secured term loan to Reorganized Citadel in the initial principal
amount of $762.5 million and having the other terms and subject to the
conditions precedent specified in Annex A hereto (the “New Term Loan”), and (ii)
a combination of shares of Class A Common Stock in Reorganized Citadel, par
value $.001 per share, and limited-voting Class B Common Stock in Reorganized
Citadel, par value $.001 per share, which shall have the limited voting rights
and other material terms set forth in Annex B hereto (the Class A Common Stock
and Class B Common Stock, collectively, the “New Common Stock”) and/or warrants
(“Special Warrants”) to purchase shares (“Warrant Shares”) of Class B Common
Stock, which New Common Stock (inclusive of such Warrant Shares) will
constitute, in the aggregate, 90% of the New Common Stock of Reorganized Citadel
issued on the Effective Date (together with the Special Warrants corresponding
to such Warrant Shares, the “Secured Claim Equity Distribution”), with the
remaining 10% of the New Common Stock (also inclusive of Warrant Shares) issued
on the Effective Date to be allocated to the holders of unsecured claims
(together with the Special Warrants corresponding to such Warrant Shares, the
“Unsecured Claim Equity Distribution”; together with the Secured Claim Equity
Distribution, the “Equity Distribution”), in each case subject to (x) the
allocation mechanism described on Annex I hereto and (y) dilution for the Equity
Incentive Program described herein.

 

The “Special Warrants” shall have the material terms and conditions specified in
Annex C hereto.

 

The Debtors’ use of cash collateral pursuant to Section 363 of the Bankruptcy
Code shall be under the condition that such use shall be consistent with (i) a
13-week rolling cash flow projection acceptable to the Agent in consultation
with the Participating Lenders (the “Forecast”), (ii) with a budget based on the
Forecast acceptable to the Agent in consultation with the Participating Lenders,
and (iii) with an interim cash collateral order (the
“Interim Cash Collateral Order”) and a final cash collateral order (the “Final
Cash Collateral Order”; together with the Interim Cash Collateral Order, the
“Cash Collateral Order”) (a) providing for customary replacement liens and for
adequate protection payments in the form of (I) current cash

 

6

As used herein “pro rata” is the ratio of the principal amount of any holder’s
claim to the aggregate principal amount of all claims in such class.

 

4

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  payment of interest on the Pre-Petition Senior Obligations at the non-default
rate applicable to the Tranche B Term Loan (for the avoidance of doubt, the
Facility Fee shall not be paid during the chapter 11 cases) and of the
reasonable fees and costs of legal and financial advisors to the Agent under the
Pre-Petition Credit Facility and (II) payments to the Agent and the Lenders of
all funds on deposit in the Excess Cash Account under the Pre-Petition Credit
Facility, and (b) otherwise in form and substance acceptable to the Agent in
consultation with the Participating Lenders.

 

5

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Classification and Treatment of Claims and Interests

 

Administrative, Priority Tax, and Other Priority Claims:    On or as soon as
practicable after the Plan has been consummated (the “Effective Date”), each
holder of an administrative, priority tax or other priority claim shall be paid
in full in cash or otherwise receive treatment consistent with the provisions of
section 1129(a)(9) of the Bankruptcy Code. Senior Secured Claims:   

On or as soon as practicable after the Effective Date, in full satisfaction of
and in exchange for the Senior Secured Obligations, each holder of Senior
Secured Obligations shall receive its pro rata share of the New Term Loan and
the Secured Claim Equity Distribution; provided that for any Secured Lender to
receive New Common Stock, it must deliver to the Debtors and the Agent a
completed FCC worksheet by a date certain to be specified by the Agent (but no
earlier than the deadline fixed by the Bankruptcy Court for creditors to vote to
accept or reject the Plan and no later than 30 days before the anticipated
Effective Date of the Plan); provided that individual holders of Senior Secured
Claims may transfer their Secured Claim Equity Distributions to affiliates,
subsidiaries and/or trusts for tax, compliance or internal policy reasons.

 

The definitive documents for the New Term Loan shall also provide for the
maintenance of the Letters of Credit on a fully cash collateralized basis, as
well as participating interests therein and reimbursement obligations in respect
thereof.

 

All reasonable expenses, compensation and other such amounts owing to the Agent
in respect of the Pre-Petition Credit Facility (including all reasonable fees
and expenses of outside professionals) shall be paid in a timely fashion under
the Cash Collateral Order and, to the extent accrued but unpaid as of the
Effective Date, shall be paid in full by the Company, in cash, on the Effective
Date.

 

Notwithstanding the foregoing, nothing shall prevent holders of Senior Secured
Obligations from transferring as between themselves some or all of their
respective shares of the Secured Equity Claims Distributions or New Term Loan
obligations or the rights to receive such securities or indebtedness.

Other Secured Claims:    To the extent that any other secured claims exist, on
or as soon as practicable after the Effective Date, all such secured claims of
the Debtors allowed as of the Effective Date, if not previously, shall be
satisfied by either (i) payment in full in cash, (ii) reinstatement pursuant to
section 1124 of the Bankruptcy Code, or (iii) such other recovery necessary to
satisfy section 1129 of the Bankruptcy Code.

 

6

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Unsecured Claims:    On or as soon as reasonably practicable after the Effective
Date, each holder of Unsecured Claims will receive at its option, subject to the
Cash Cap as hereinafter defined, (x) its pro rata share of New Common Stock or
Special Warrants exercisable for Warrant Shares, with such New Common Stock and
Warrant Shares constituting 10% of the New Common Stock of Reorganized Citadel
issued on the Effective Date, subject to the allocation mechanism described on
Annex I hereto and dilution for the Equity Incentive Program described herein;
provided that for any holder of an Unsecured Claim to receive New Common Stock,
it must deliver to the Debtors and the Agent a completed FCC Worksheet by a date
certain to be specified by the Agent (but no earlier than the deadline fixed by
the Bankruptcy Court for creditors to vote to accept or reject the Plan and no
later than 30 days before the anticipated Effective Date of the Plan); or (y)
cash in an amount equal to 5% of the allowed amount of its Unsecured Claim,
provided that the aggregate amount of cash distributed pursuant to this clause
(y) shall not exceed $2,000,000 the (“Cash Cap”) and such cash shall be
distributed among electing holders in inverse order of the respective dollar
amounts of their allowed claims (i.e., first to the smallest in dollar amount of
any such claim and last to the largest in dollar amount of any such claim);
provided, further, that once the Cash Cap is exhausted, any electing holders
that did not receive cash shall be treated like all non-electing holders and
receive their pro rata share of the Unsecured Claims Equity Distribution
pursuant to clause (x) above. If the holders of Convertible Subordinated Notes
vote to accept the Plan and do not object to, or otherwise oppose, confirmation
of the Plan, the Agent and the Lenders will not enforce their contractual rights
to compel Debtors to turn the distribution to such holders over to the Agent for
pro rata distribution to the Lenders. Intercompany Claims:    All intercompany
claims will be paid, adjusted, reinstated or discharged to the extent reasonably
determined to be appropriate by the Company, subject to the consent of the Agent
and the Requisite Participating Lenders.

 

7

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Section 510(b) Claims:    Any holder of a claim against any of the Debtors that
is described in section 510(b) of the Bankruptcy Code shall not receive a
distribution under the Plan and such section 510(b) claims shall be
extinguished. Equity Interests:    On the Effective Date, all equity interests
in the Debtors, including common stock, preferred stock and any options,
warrants or rights to acquire any equity interests, shall be cancelled and
extinguished and the holders thereof shall not receive a distribution on account
of such equity interests under the Plan.    Other Principal Plan Terms Executory
Contracts and Unexpired Leases:    The Company intends to reject those executory
contracts and unexpired leases identified on Annex D hereto, on or soon after
the Petition Date. All talent and affiliate contracts not otherwise rejected on
the Petition Date shall be honored in the ordinary course of business. Executory
contracts and unexpired leases not otherwise addressed on the Petition Date (or
otherwise rejected postpetition), including affiliate and talent contracts not
otherwise rejected during the course of the Chapter 11 Cases, shall be assumed
at the time of confirmation of the Plan. Management Agreements:    The Agent, on
behalf of, but subject to approval of, the Requisite Participating Lenders, will
negotiate in good faith new agreements with the members of the current
management team, with the form of all such agreements to be included in the Plan
Supplement (to be filed at least 10 days before the hearing on confirmation of
the Plan) and acceptable to the Agent. No change-in-control provisions under
existing employment agreements shall be honored in respect of the transfer of
control to the Lenders under the Plan, without express written consent of the
Agent, which shall only be given with the approval of the Requisite
Participating Lenders. Equity Incentive Programs for Directors and Management:
   On or promptly after the Effective Date, no less than 7.5% and no more than
10.0% of the New Common Stock (on a fully diluted basis) shall be reserved for
issuance as options in connection with the reorganized Debtors’ management
equity incentive program and/or director equity incentive program (each, an
“Equity Incentive Program”). Three-quarters of such options shall have a per
share exercise price equal to the fair market value of a share of New Common
Stock on the Effective Date (which is expected to be equal to the Plan Share
Value (as defined below)), and shall vest ratably over a three-year period;

 

8

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the remaining quarter shall have a strike price set by the New Board (as
hereinafter defined) at a significant premium to such Effective Date value, and
shall vest over a three year period. The other material terms of each Equity
Incentive Program may be negotiated with the Agent and the Requisite
Participating Lenders prior to filing the Plan Supplement (and included therein)
or may be left to the discretion of the New Board.

 

As used herein “Plan Share Value” means the value of Reorganized Citadel as
prepared by the Debtors’ financial advisor and included in the Debtors’
Disclosure Statement minus the aggregate principal amount of the New Term Loans,
with such difference being divided by the total number of shares of New Common
Stock.

Director and Officer Liability Policy:   

As of the Effective Date, the Debtors shall assume (and assign to the
Reorganized Debtors if necessary to continue all insurance policies for
directors’, managers’, and officers’ liability maintained by the Debtors as of
the Petition Date (the “D&O Liability Insurance Policies”) in full force)
pursuant to section 365(a) of the Bankruptcy Code. Entry of the Confirmation
Order shall constitute the Bankruptcy Court’s approval of the Debtors’ foregoing
assumption of each of the D&O Liability Insurance Policies. Notwithstanding
anything to the contrary contained herein, Confirmation of the Plan shall not
discharge, impair, or otherwise modify any obligations assumed by the foregoing
assumption of the D&O Liability Insurance Policies, and each such obligation
shall be deemed and treated as an Executory Contract that has been assumed by
the Debtors under the Plan as to which no Proof of Claim need be Filed.

 

To the extent, if any, the Company plans to extend existing insurance coverage
or purchase new insurance coverage covering the Company, Reorganized Citadel,
the Estates, and the Company’s current and former officers and directors from
claims and causes of action of any third party (including without limitation any
holder of a claim) that remain unreleased as of the Effective Date, such
extended or newly purchased insurance shall be in such amounts, for such terms
or periods of time, and placed with such insurers as are determined by the Agent
to be reasonable under the circumstances or as specified and ordered by the
Bankruptcy Court in the Confirmation Order.

 

9

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Board of Directors:   

Reorganized Citadel shall have a seven-person board of directors (the “New
Board”), which shall consist of six independent directors recommended by the
Requisite Participating Lenders and Reorganized Citadel’s Chairman & Chief
Executive Officer. The Agent shall retain a nationally recognized executive
search firm (at the expense of the Debtors) to assist in the identification of
qualified candidates.7 Current directors will be included among the candidates
to be considered for the New Board.

 

No individual person or entity receiving an Equity Distribution under the Plan
shall have the right to appoint any director to the New Board.

 

All directors of the New Board shall meet the criteria set forth in the NYSE or
Nasdaq, as applicable, listing requirements and FCC requirements.

Charter; Bylaws:    The charter and bylaws of each of the Debtors shall have
been restated in a manner reasonably satisfactory to the Agent and the Requisite
Participating Lenders and consistent with section 1123(a)(6) of the Bankruptcy
Code. Company as a Public Reporting Company:   

For certain purposes, including requiring Reorganized Citadel to become a public
reporting company under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), the Plan shall require Reorganized Citadel as promptly as
practicable following the Effective Date to file with the SEC a registration
statement on Form 10 under the Exchange Act registering its Class A Common Stock
under the Exchange Act (the “Form 10”), and Reorganized Citadel shall use
reasonable best efforts to have such registration statement declared effective
by the SEC as promptly as reasonably practicable.

 

The Plan shall provide for Reorganized Citadel to use its reasonable best
efforts to obtain a listing for the Class A Common Stock on NYSE or Nasdaq as
soon as reasonably practicable following the effectiveness of the Form 10 (e.g.,
after listing requirements are satisfied).

FCC Matters:    The Company shall file with the FCC as soon as practicable the
requisite applications seeking FCC consent to the transfer of control of the
subsidiaries of the Company that hold FCC

 

7

This retention will be effectuated pre-petition and a retainer provided to the
search firm before the filing.

 

10

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   licenses (“FCC Applications”). After such filing is made, any person who
thereafter acquires Senior Secured Claims or Unsecured Claims may be treated, in
the judgment of the Company, as an alien owner for purposes of the distribution
of equity under the Plan, in which case such person shall be classified in Group
2 (as defined in Annex I hereto). In addition, the Company may, subject to the
consent of the Agent, in consultation with the Participating Lenders but
otherwise in its sole discretion, request the Bankruptcy Court to implement
restrictions on trading of claims that might adversely affect the FCC approval
process. The Company shall diligently prosecute the FCC Applications seeking the
FCC approval and shall promptly provide such additional documents or information
requested or needed by the FCC in connection with its review of the FCC
Applications. In the event that Citadel and the Agent determine that the FCC
approval process of the transfer of control to the Lenders is causing unwanted
delay in consummation of the Plan, they shall, subject to the consent of the
Requisite Participating Lenders, promptly establish and pursue diligently
approval of, an interim voting trust to hold the New Common Stock, of which the
trustees shall be the persons currently serving on Citadel’s existing Board of
Directors. Cancellation of Notes, Instruments, Certificates and Other Documents:
   On the Effective Date, all notes, instruments, certificates, and other
documents evidencing debt to, or equity interests in, the Company shall be
cancelled and obligations of the Company thereunder shall be discharged. Vesting
of Assets:    On the Effective Date, pursuant to sections 1141(b) and (c) of the
Bankruptcy Code, all operating assets of the Company’s estates shall vest in
Reorganized Citadel free and clear of all claims, liens, encumbrances, charges
and other interests, except as otherwise provided in the Plan. Compromise and
Settlement:    The Plan shall contain customary provisions for the compromise
and settlement of claims stating that, notwithstanding anything in the Plan to
the contrary, the allowance, classification and treatment of allowed claims and
equity interests and their respective distributions take into account and
conform to the relative priority and rights of such claims and interests.

 

11

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Releases:   

The Plan will contain language substantially to the effect of the following:

 

“Released Party” means each of: (a) the Secured Lenders; (b) the Agent, (c),
such entities’ subsidiaries, affiliates, managed accounts or funds, officers,
directors, principals, shareholders employees, agents, financial advisors,
attorneys, accountants, investment bankers, consultants, representatives,
management companies, fund advisors and other Professionals; and (d) the
Debtors’ and the Reorganized Debtors’ subsidiaries, affiliates, managed accounts
or funds, officers, directors, principals, shareholders, employees, agents,
financial advisors, attorneys, accountants, investment bankers, consultants,
representatives, management companies, fund advisors and other Professionals.

 

Releases by the Debtors. Pursuant to section 1123(b) of the Bankruptcy Code, and
except as otherwise specifically provided in the Plan or the Plan Supplement,
for good and valuable consideration, including the service of the
Released Parties to facilitate the expeditious reorganization of the Debtors and
the implementation of the restructuring contemplated by the Plan, on and after
the Effective Date, the Released Parties and the Debtors’ former officers and
directors are deemed released and discharged by the Debtors, the Reorganized
Debtors, and their estates from any and all claims, obligations, rights, suits,
damages, causes of action, remedies, and liabilities whatsoever, including any
derivative claims, asserted or assertable on behalf of the Debtors, whether
known or unknown, foreseen or unforeseen, existing or hereinafter arising, in
law, equity, or otherwise, that the Debtors, the Reorganized Debtors, their
estates, or their affiliates would have been legally entitled to assert in their
own right (whether individually or collectively) or on behalf of the holder of
any claim or interest or other entity, based on or relating to, or in any manner
arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the
purchase, sale, or rescission of the Debtors’ restructuring, the purchase or
sale of any security of the Debtors or the Reorganized Debtors, the subject
matter of, or the transactions or events giving rise to, any Claim or Interest
that is treated in the Plan, the business or contractual arrangements between
any Debtor and any Released Party, the restructuring of claims and interests
before or during the Chapter 11 Cases, the negotiation, formulation, or
preparation of the Plan and Disclosure Statement, or related agreements,
instruments, or other documents, upon any other act or omission, transaction,
agreement, event, or other occurrence taking place on or before the Confirmation
Date, other than claims or liabilities arising out of or relating to any act or
omission of a Released Party or a former officer or director of the Debtors that
constitutes willful misconduct (including fraud) or gross negligence.8

 

 

8

Capitalized terms used but not otherwise defined shall have the meanings
commonly associated with such terms in chapter 11 plans of reorganization.

 

12

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Releases by Holders of Claims and Interests. As of the Effective Date, each
holder of a claim or an interest shall be deemed to have conclusively,
absolutely, unconditionally, irrevocably, and forever, released and discharged
the Debtors, the Reorganized Debtors, and the Released Parties from any and all
claims, interests, obligations, rights, suits, damages, causes of action,
remedies, and liabilities whatsoever, including any derivative claims, asserted
on behalf of a Debtor, whether known or unknown, foreseen or unforeseen,
existing or hereafter arising, in law, equity or otherwise, that such entity
would have been legally entitled to assert (whether individually or
collectively), based on or relating to, or in any manner arising from, in whole
or in part, the Debtors, the Debtors’ restructuring, the Debtors’ Chapter 11
Cases, the purchase, sale, or rescission of the purchase or sale of any security
of the Debtors or the Reorganized Debtors, the subject matter of, or the
transactions or events giving rise to, any claim or interest that is treated in
the Plan, the business or contractual arrangements between any Debtor and any
Released Party, the restructuring of claims and interests before or during the
Chapter 11 Cases, the negotiation, formulation, or preparation of the Plan, the
Disclosure Statement, the Plan Supplement, or related agreements, instruments,
or other documents, upon any other act or omission, transaction, agreement,
event, or other occurrence relating to the Debtors taking place on or before the
Confirmation Date, other than claims or liabilities arising out of or relating
to any act or omission of a Released Party that constitutes willful misconduct
(including fraud) or gross negligence. Notwithstanding anything to the contrary
in the foregoing, the release set forth above does not release any
post-Effective Date obligations of any party under the Plan or any document,
instrument, or agreement (including those set forth in the Plan Supplement)
executed to implement the Plan.

 

Exculpation:   

The Plan will contain language substantially to the effect of the following:

 

“Exculpated Party” means each of: (a) the Debtors, the Reorganized Debtors and
their Affiliates, (b) the Secured Lenders; (c) the Agent; and (d) with respect
to each of the foregoing entities in clauses (a) through (c), such entities’

 

13

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subsidiaries, affiliates, managed accounts or funds, officers, directors,
principals, shareholders employees, agents, financial advisors, attorneys,
accountants, investment bankers, consultants, representatives, management
companies, fund advisors and other Professionals.

 

Exculpation. Except as otherwise specifically provided in the Plan or Plan
Supplement, no Exculpated Party shall have or incur, and each Exculpated Party
is hereby released and exculpated from any claim, obligation, cause of action,
or liability for any claim, except for gross negligence or willful misconduct,
but in all respects such entities shall be entitled to reasonably rely upon the
advice of counsel with respect to their duties and responsibilities pursuant to
the Plan. The Debtors and the Reorganized Debtors (and each of their respective
affiliates, agents, directors, officers, employees, advisors, and attorneys)
have participated in compliance with the applicable provisions of the Bankruptcy
Code with regard to the solicitation and distribution of the securities pursuant
to the Plan, and, therefore, are not, and on account of such distributions shall
not be, liable at any time for the violation of any applicable law, rule, or
regulation governing the solicitation of acceptances or rejections of the Plan
or such distributions made pursuant to the Plan, including the issuance of
securities thereunder.

 

14

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Discharge of Debtors:    Except as otherwise provided and effective as of the
Effective Date: (i) the rights afforded in the Plan and the treatment of all
claims and interests shall be in exchange for and in complete satisfaction,
discharge, and release of all claims and interests of any nature whatsoever,
including any interest accrued on such claims from and after the Petition Date,
against the Debtors or any of their assets, property, or estates; (ii) the Plan
shall bind all holders of claims and interests, notwithstanding whether any such
holders failed to vote to accept or reject the Plan or voted to reject the Plan;
(iii) all claims and interests shall be satisfied, discharged, and released in
full, and the Debtors’ liability with respect thereto shall be extinguished
completely, including any liability of the kind specified under section 502(g)
of the Bankruptcy Code; and (iv) all entities shall be precluded from asserting
against the Debtors, the Debtors’ estates, the reorganized Debtors, their
successors and assigns, and their assets and properties any other claims or
interests based upon any documents, instruments, or any act or omission,
transaction, or other activity of any kind or nature that occurred prior to the
Effective Date. Injunction:    From and after the Effective Date, all entities
are permanently enjoined from commencing or continuing in any manner, any suit,
action, or other proceeding, on account of or respecting any claim, demand,
liability, obligation, debt, right, cause of action, interest, or remedy
released or to be released pursuant to the Plan or the Confirmation Order.
Definitive Documents and Due Diligence:    This Term Sheet is indicative, and
any final agreement shall be subject to definitive agreements, pleadings, court
submissions, offering memoranda and other documents (“Definitive Documents”),
which Definitive Documents shall be substantially consistent with the terms of
this Term Sheet and the Plan Support Agreement and otherwise in form and
substance acceptable to the Agent and the Requisite Participating Lenders (as
defined in the Plan Support Agreement) in their sole discretion, except as
otherwise provided herein. The Definitive Documents shall contain terms,
conditions, representations, warranties, and covenants, each customary for the
transactions described herein consistent with the terms of this Term Sheet and
otherwise acceptable to the Agent and the Requisite Participating Lenders,
except as otherwise provided herein.

 

15

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Tax Structure:    The Company shall consult with the Agent and the Requisite
Participating Lenders on tax issues and matters of tax structure relating to the
Restructuring, and such matters shall be consistent herewith and otherwise
reasonably satisfactory to the Agent and the Requisite Participating Lenders.
Avoidance Actions:    Reorganized Citadel shall retain all rights to commence
and pursue any causes of action that are expressly preserved and not released
under the Plan. Retention of Jurisdiction:    The Plan shall provide for a broad
retention of jurisdiction by the Bankruptcy Court including for (a) resolution
of Claims, (b) allowance of compensation and expenses for pre-Effective Date
services, (c) resolution of motions, adversary proceedings, or other contested
matters, (d) entering such orders as necessary to implement or consummate the
Plan and any related documents or agreements, (e) entering and implementing such
orders as are necessary or appropriate to sell, dispose of, liquidate or abandon
any assets or properties of the FCC trust, to the extent applicable and subject
to the provisions of the New Term Loan documentation and (f) other purposes.
Resolution of Disputed Claims:    The Plan shall provide customary terms for the
resolution of disputed claims and any reserves therefor.

 

16

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Annex I to Exhibit 1

Mechanics of Allocation of New Common Stock and

Special Warrants on the Effective Date

The allocation of New Common Stock and Special Warrants among the Secured
Lenders and holders of Unsecured Claims on the Effective Date shall be based on
the results of the following exercise:

1. First, the Secured Claim Equity Distribution shall be deemed made pro rata
among the holders of Senior Secured Obligations and the Unsecured Claim Equity
Distribution shall be deemed made pro rata among the holders of Unsecured
Claims; provided that each Equity Distribution shall be deemed to have been made
initially in the form of Special Warrants.

2. Second, all deemed holders of Special Warrants that (i) have timely provided
an FCC Worksheet, and (ii) have provided therewith certification to the Debtors
and the Agent that their respective alien ownership, as calculated in accordance
with FCC rules, is at or below 20% (“Group 1”) shall be deemed to have exercised
their Special Warrants to the fullest extent possible for the corresponding
number of shares of Class B Common Stock; provided that any holder who has not
requested in writing at least 30 days prior to the Effective Date to receive
Class B Common Stock (the “Class B Election Notice”) shall be further deemed to
have immediately exchanged such shares of Class B Common Stock for a like number
of shares of Class A Common Stock, and provided, further, that, for any holder
that would be entitled to shares constituting more than 4.99% of the outstanding
Class A Common Stock, the number of shares exchanged by such holder shall be
limited so that such holder receives shares of Class A Common Stock constituting
no more than 4.99% of the outstanding Class A Common Stock. The alien ownership
certification requirement may result in a non-pro rata distribution of New
Common Stock.

3. Third, the aggregate alien ownership percentage of New Common Stock after
such deemed exercises shall be determined by the Debtors and the Agent. To the
extent such percentage is less than 20%, all holders of Special Warrants not in
Group 1 (“Group 2”) who timely provided an FCC Worksheet (“Eligible Group 2
Holders”) shall be deemed to exercise their Special Warrants, pro rata among all
such Eligible Group 2 Holders, to receive Class B Common Stock, up to the number
of shares that causes the aggregate alien ownership percentage of New Common
Stock to equal 20%; provided that any holder who has not timely provided a Class
B Election Notice shall be further deemed to have immediately exchanged such
shares of Class B Common Stock for a like number of shares of Class A Common
Stock, and provided, further, that, for any holder that would be entitled to
shares constituting more than 4.99% of the outstanding Class A Common Stock, the
number of shares exchanged by such holder shall be

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limited so that such holder receives shares of Class A Common Stock constituting
no more than 4.99% of the outstanding Class A Common Stock. Each member of Group
2 shall provide to Citadel and the Agent such information as requested by
Citadel or the Agent in order to evaluate alien ownership.

4. Steps 2 and 3 shall be repeated until the number of shares being issued
becomes de minimis in the judgment of Citadel and the Agent. Notwithstanding
anything to the contrary herein, a creditor may, by written notice to the
Company and the Agent at least 30 days prior to the Effective Date, receive its
Equity Distribution entirely in the form of Special Warrants and shall not be
deemed to have exercised any Special Warrants. Any such notice shall be binding
upon any transferee of the claims held by such creditor.

5. The distribution of Class A Common Stock, Class B Common Stock and Special
Warrants that results from the foregoing steps shall be the distribution made on
and as of the Effective Date.

6. Nothing in the above shall permit any holder to acquire more than 4.99% of
the outstanding Class A Common Stock nor shall cause Reorganized Citadel to
exceed an aggregate alien ownership percentage of 20% in either the Class A
Common Stock or in the New Common Stock. Any distribution in contravention of
the preceding sentence shall be adjusted to the minimum extent necessary to
comply with these limitations; such adjustments shall be pro rata among Eligible
Group 2 Holders to the extent legally permissible. In determining whether any
holder would hold more than 4.99% of the outstanding Class A Common Stock, such
holder will be attributed with any stock held by another holder under common
management or that otherwise would be aggregated under the FCC’s ownership
attribution rules.

 

2

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ANNEX A

REORGANIZED CITADEL BROADCASTING CORPORATION

SENIOR TERM FACILITY

Summary of Terms and Conditions

 

 

This Term Sheet sets forth the principal terms and conditions for the $762.5
million Senior Credit Agreement (the “Senior Credit Agreement”) to be executed
and delivered by reorganized Citadel Broadcasting Corporation (the “Borrower”)
on the effective date of the Borrower’s Plan of Reorganization (the “Plan”)
expected to be confirmed by the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”) in the Chapter 11 cases of the
Borrower and certain of its subsidiaries as contemplated by the Plan term sheet
to which this Term Sheet is attached (as amended or otherwise modified in
accordance with its terms, the “Plan Term Sheet”). The Senior Credit Agreement
will govern the $762.5 million senior secured term loan facility (the
“Facility”) and the treatment of existing letters of credit under the
Pre-Petition Credit Agreement (as defined below). The loans made pursuant to the
Facility shall be issued to the holders of Senior Secured Obligations (as
defined in the Plan Term Sheet) (the “Lenders”) pursuant to the Plan. This Term
Sheet is subject to ongoing review, is not binding on any party, and has been
prepared for discussion purposes only to facilitate preparation of definitive
documentation. A draft of the Senior Credit Agreement shall be filed with the
Bankruptcy Court in connection with the solicitation of acceptances to, and
confirmation of, the Plan, and the Senior Credit Agreement will be approved by
the Bankruptcy Court as part of confirmation of the Plan.

 

1.    PARTIES       Borrower:    Reorganized Citadel Broadcasting Corporation   
New Senior Credit Agreement:    Senior Credit Agreement governing (a) $762.5
million of term loans (the “Loans”) to be issued on the effective date of the
Plan to all holders of Senior Secured Obligations under the Plan (consisting of
(i) the lenders (the “Pre-Petition Lenders”) under the Credit Agreement, dated
as of June 12, 2007 (as amended prior to the filing of the Chapter 11 cases, the
“Pre-Petition Credit Agreement”), among the Borrower, the lenders from time to
time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent, and
(ii) the swap counterparties the claims of which are secured on a pari passu
basis with the claims arising under the Pre-Petition Credit Agreement), in each
case as set forth in the Plan Term Sheet and (b) the treatment of Existing
Letters of Credit (as defined below) and participating interests therein and
reimbursement obligations in respect thereof.    Guarantors:    Each of the
Borrower’s direct and indirect, existing and future, subsidiaries (excluding
foreign subsidiaries) (collectively, the “Guarantors”; the Borrower and the
Guarantors, collectively, the “Loan Parties”).    Sole Lead Arranger and Sole
Bookrunner:    J.P. Morgan Securities Inc. (in such capacity, the “Arranger”).

Term Sheet – Senior Term Facility

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   Administrative Agent:    JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”
and, in such capacity, the “Administrative Agent”).    Collateral Agent:   
JPMorgan Chase Bank (in such capacity, the “Collateral Agent”). 2.    THE
FACILITY      

A 5 year term loan facility in the amount of $762,500,000. The Loans shall be
repayable in equal quarterly installments of 0.25% of the initial aggregate
amount of the Loans beginning on the last day of the first full calendar quarter
completed after the Closing Date, with the balance being payable in full at the
fifth anniversary of the Closing Date.

 

In addition, letters of credit issued under the Pre-Petition Credit Agreement
outstanding on the Closing Date (“Existing Letters of Credit”) and participating
interests therein and reimbursement obligations in respect thereof shall be
continued pursuant the Senior Credit Agreement, with JPMorgan Chase Bank serving
as issuing lender with respect thereto (in such capacity, the “Issuing Lender”);
provided that the Borrower shall provide cash collateral in an amount equal to
105% of the obligations in respect of such Existing Letters of Credit (the “Cash
Collateral”). Drawings under any Existing Letter of Credit shall be reimbursed
by the Borrower on the same business day (or on the next business day if notice
of such drawing is received after 10:00 a.m. (New York City time)). In the event
that the Borrower does not so reimburse the Issuing Lender, the Issuing Lender
shall have the right to exercise any and all rights it may have with respect the
Cash Collateral. In case of any shortfall, or to the extent that any obligations
shall remain outstanding in respect of such Existing Letters of Credit, the
Lenders under the Revolving Credit Facility (as such term is defined under the
Pre-Petition Credit Agreement) shall be irrevocably and unconditionally
obligated to fund participations in reimbursement obligations on a pro rata
basis.

3.    CERTAIN PAYMENT PROVISIONS    Fees and Interest Rates:    As set forth on
Annex I.    Optional Prepayments:    Loans may be prepaid by the Borrower in
minimum amounts to be agreed upon, subject to a prepayment premium of 5%
applicable to any prepayments prior to the first anniversary of the Closing Date
and a prepayment premium of 2% applicable to any prepayment on or after the
first anniversary of the Closing Date and prior to the second anniversary of the
Closing Date. Optional prepayments of the Loans shall be applied to the
installments thereof in the order selected by the Borrower. Optional prepayments
of the Loans may not be reborrowed.

Term Sheet – Senior Term Facility

 

2

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   Mandatory Prepayments:    The following amounts shall be applied to prepay
the Loans:       (a) 50% of the net proceeds of any sale or issuance of equity
and 100% of the net proceeds of any incurrence of debt after the Closing Date by
the Borrower or any of its subsidiaries (subject to exceptions to be agreed).   
   (b) 100% of the net proceeds of any sale or other disposition (including as a
result of casualty or condemnation) by the Borrower or any of its subsidiaries
of any assets, except for sales of inventory or obsolete or worn-out property in
the ordinary course of business and subject to certain other exceptions to be
agreed upon (including capacity for reinvestment (subject to limitations on
reinvestment period and aggregate reinvestment amount to be agreed upon)).      
(c) 75% of excess cash flow (to be defined) for each fiscal year of the Borrower
(commencing with the 2010 fiscal year), provided, that no such prepayment shall
be required if the aggregate amount of cash on hand for the Borrower is less
than $50 million.       Mandatory prepayments of the Loans shall be applied to
scheduled installments thereof in inverse order of maturity. Mandatory
prepayments of the Loans may not be reborrowed. 4.    COLLATERAL    Collateral:
   The obligations of each Loan Party in respect of the Facility and any swap
agreements and cash management arrangements provided by any Lender thereunder
(or any affiliate of a Lender thereunder) on or after the Closing Date shall be
secured by a perfected first priority security interest (subject to certain
permitted liens) in substantially all of its tangible and intangible assets
(including, without limitation, cash, intellectual property, real property and
all of the capital stock of each direct and indirect domestic subsidiary of the
Borrower (and 65% of the capital stock of first tier foreign subsidiaries),
except for those assets as to which the Administrative Agent shall determine in
its reasonable discretion that the costs of obtaining a security interest
therein are excessive in relation to the value of the security to be afforded
thereby (the “Collateral”); provided that any swap agreement or cash management
arrangement provided to the Borrower by any Lender or any affiliate of a Lender
in the ordinary course on or after the Closing Date may (to the extent required
by the provider of the swap agreement or cash management arrangement, as
applicable) have super-priority over the Facility, in that the proceeds of the
Collateral shall be first applied to discharge all obligations under any such
swap

Term Sheet – Senior Term Facility

 

3

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      agreement or cash management arrangement. Except as otherwise agreed to by
the Administrative Agent, each such security interest shall be supported by
customary lien searches, title insurance, surveys and similar customary
documentation. 5.    CERTAIN CONDITIONS      

The availability of the Facility shall be conditioned upon (a) the accuracy in
all material respects of all representations and warranties in the documentation
(the “Senior Credit Documentation”) with respect to the Facility (including,
without limitation, the material adverse change and litigation representations),
(b) there being no default or event of default in existence at the time of, or
after giving effect to the making of, such extension of credit and (c) the
satisfaction of the conditions set forth in Annex II (the date upon which all
such conditions precedent shall be satisfied, the “Closing Date”).

 

As used herein and in the Senior Credit Documentation a “material adverse
change” shall mean any event, development or circumstance that has had or could
reasonably be expected to have a material adverse effect on (a) the business,
operations, property, condition (financial or otherwise) or prospects of the
Borrower and its subsidiaries taken as a whole or (b) the validity or
enforceability of any of the Senior Credit Documentation or the rights and
remedies of the Administrative Agent and the Lenders thereunder.

6.    CERTAIN DOCUMENTATION MATTERS       The Senior Credit Documentation shall
contain representations, warranties, covenants and events of default (in each
case, applicable to the Borrower and its subsidiaries) customary for financings
of this type and other terms deemed appropriate by the Lenders, including,
without limitation:    Representations and Warranties:    Financial statements
(including pro forma financial statements); absence of undisclosed liabilities;
no material adverse change; corporate existence; compliance with law; corporate
power and authority; enforceability of Senior Credit Documentation; no conflict
with law or contractual obligations; no material litigation; no default;
ownership of property; liens; intellectual property; taxes; Federal Reserve
regulations; labor matters; ERISA; Investment Company Act and other regulations;
subsidiaries; use of proceeds; environmental matters; accuracy of disclosure;
creation and perfection of security interests; solvency; Regulation H; and
delivery of certain documents.    Affirmative Covenants:    Delivery of
financial statements, reports, accountants’ letters, projections, officers’
certificates and other information requested by the Lenders; payment of taxes
and other

Term Sheet – Senior Term Facility

 

4

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      obligations; continuation of business and maintenance of existence and
material rights and privileges; compliance with laws and material contractual
obligations; maintenance of property and insurance; maintenance of books and
records; right of the Lenders to inspect property and books and records; notices
of defaults, litigation and other material events; compliance with environmental
laws; account control agreements; further assurances (including, without
limitation, with respect to security interests in after-acquired property); and,
at the Company’s option, in consultation with the Administrative Agent,
obtaining interest rate protection.    Financial Covenants:    Minimum interest
coverage ratio and maximum leverage ratio, with a cushion of 30% to the
Borrower’s model provided prior to the execution of the Plan Support Agreement
(as defined in the Plan Term Sheet), with a breakdown on a quarterly basis
reasonably acceptable to the Administrative Agent for the first year following
the Closing Date and a cushion of 25% for each year thereafter.    Negative
Covenants:   

Limitations on: indebtedness (including guarantee obligations) (with baskets to
be agreed); liens (with basket to be agreed regarding cash collateralization of
letters of credit); mergers, consolidations, liquidations and dissolutions;
sales of assets (with appropriate baskets); dividends and other payments in
respect of capital stock; capital expenditures; acquisitions, investments, loans
and advances (with baskets to be agreed on each of the foregoing); payments and
modifications of subordinated and other material debt instruments; transactions
with affiliates; sale-leasebacks; changes in fiscal year; hedging arrangements
(except as otherwise expressly permitted in the Affirmative Covenants above);
negative pledge clauses and clauses restricting subsidiary distributions;
limitations on the management of stations by third parties and the provision or
sale of substantially all of the stations’ programming or advertising by third
parties; limitations on the transfer or assignment of FCC licenses to third
parties, except as would not reasonably be expected to have a material adverse
effect (with an exception for those stations held in trust on the filing date of
the Chapter 11 cases of the Borrower); and changes in lines of business.

 

The negative covenants shall include appropriate exceptions to permit (a) asset
swaps, provided that no cash consideration is given by the Borrower or its
subsidiaries for the asset swap and the asset swap does not increase, on a pro
forma basis after giving effect to such asset swap, the consolidated total
leverage ratio of the Borrower (“Permitted Asset Swaps”); (b) the acquisition of
assets with the net proceeds of permitted asset sales (subject to a time period
and aggregate cap on such reinvestment purchases to be agreed); and (c) other
acquisitions or asset swaps which are not Permitted Asset Swaps, provided

Term Sheet – Senior Term Facility

 

5

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      that (i) the aggregate amount of acquisitions and asset swaps under this
clause (c) shall not exceed an amount equal to (x) $40,000,000 plus (y) 25% of
excess cash flow for each fiscal year of the Borrower (commencing with the 2010
fiscal year) ended since the Closing Date, (ii) the aggregate amount of cash and
cash equivalents of the Borrower, after giving pro forma effect to the
acquisition or asset swap, shall not be less than $25,000,000, (iii) the
consolidated total leverage ratio of the Borrower, after giving pro forma effect
to the acquisition or asset swap, shall be at least 0.50x lower than required
under the then applicable level under the “Financial Covenants” and (iv) the
acquisition or asset swap shall be subject to other customary requirements to be
agreed upon.    Events of Default:    Nonpayment of principal when due;
nonpayment of interest, fees or other amounts after a grace period to be agreed
upon; material inaccuracy of a representation or warranty when made; violation
of a covenant (subject, in the case of certain affirmative covenants, to a grace
period to be agreed upon); cross-default to material indebtedness; bankruptcy
events; certain ERISA events; material judgments; actual or asserted invalidity
of any guarantee, security document or subordination provisions or
non-perfection of security interest; a change of control (the definition of
which is to be agreed upon) or loss, termination or amendment of any FCC license
that would reasonably be expected to have a material adverse effect.    Voting:
   Amendments and waivers with respect to the Senior Credit Documentation shall
require the approval of Lenders holding more than 50% of the aggregate amount of
the Loans, except that (a) the consent of each Lender directly affected thereby
shall be required with respect to (i) reductions in the amount or extensions of
the scheduled date of any amortization or final maturity of any Loan,
(ii) reductions in the rate of interest or any fee or extensions of any due date
thereof and (iii) increases in the amount or extensions of the expiry date of
any Lender’s reimbursement or funding obligations (if any) and (b) the consent
of 100% of the Lenders shall be required with respect to (i) reductions of any
of the voting percentages, (ii) releases of all or substantially all the
collateral and (iii) releases of all or substantially all of the Guarantors.   
Assignments and Participations:    The Lenders shall be permitted to assign all
or a portion of their Loans with the consent, not to be unreasonably withheld,
of (a) the Borrower, unless (i) the assignee is a Lender, an affiliate of a
Lender or an approved fund or (ii) an event of default has occurred and is
continuing and (b) the Administrative Agent, unless a Loan is being assigned to
a Lender, an affiliate of a Lender or an approved fund. In the case of partial
assignments (other than to another Lender, an affiliate of a Lender or an
approved fund), the minimum assignment amount shall be

Term Sheet – Senior Term Facility

 

6

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      $1,000,000, unless otherwise agreed by the Borrower and the Administrative
Agent. The Administrative Agent shall receive a processing and recordation fee
of $3,500 in connection with all assignments. The Lenders shall also be
permitted to sell participations in their Loans. Participants shall have the
same benefits as the selling Lenders with respect to yield protection and
increased cost provisions subject to customary limitations. Voting rights of
participants shall be limited to those matters set forth in clause (a) under
“Voting” with respect to which the affirmative vote of the Lender from which it
purchased its participation would be required. Pledges of Loans in accordance
with applicable law shall be permitted without restriction.    Yield Protection:
   The Senior Credit Documentation shall contain customary provisions
(a) protecting the Lenders against increased costs or loss of yield resulting
from changes in reserve, tax, capital adequacy and other requirements of law and
from the imposition of or changes in withholding or other taxes and
(b) indemnifying the Lenders for “breakage costs” incurred in connection with,
among other things, any prepayment of a Eurodollar Loan (as defined in Annex I)
on a day other than the last day of an interest period with respect thereto.   
Expenses and Indemnification:    The Borrower shall pay (a) all reasonable
documented out-of-pocket expenses of the Administrative Agent and the Arranger
associated with the arrangement of the Facility and the preparation, execution,
delivery and administration of the Senior Credit Documentation and any amendment
or waiver with respect thereto (including the reasonable documented fees,
disbursements and other charges of counsel) and (b) all out-of-pocket expenses
of the Administrative Agent and the Lenders (including the fees, disbursements
and other charges of counsel) in connection with the enforcement of the Senior
Credit Documentation or any restructuring or workout of the Senior Credit
Documentation.       The Administrative Agent, the Arranger and the Lenders (and
their affiliates and their respective officers, directors, employees, advisors
and agents) will have no liability for, and will be indemnified and held
harmless against, any losses, claims, damages, liabilities or expenses incurred
in respect of the financing contemplated hereby or the use or the proposed use
of proceeds thereof, except to the extent they are found by a final,
non-appealable judgment of a court to arise from the gross negligence or willful
misconduct of the relevant indemnified person.    Governing Law and Forum:   
State of New York.    Counsel to the Administrative Agent and the Arranger:   
Simpson Thacher & Bartlett LLP.

Term Sheet – Senior Term Facility

 

7

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Annex I to Annex A

 

INTEREST AND CERTAIN FEES Interest Rate Options:   The Borrower may elect that
the Loans bear interest at a rate per annum equal to (a) the ABR plus the
Applicable Margin or (b) the Eurodollar Rate plus the Applicable Margin.   As
used herein:   “ABR” means the higher of (i) the rate of interest publicly
announced by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York City (the “Prime Rate”), (ii) the federal funds effective
rate from time to time plus 0.5% and (iii) the Eurodollar Rate for a one-month
interest period plus 1%. Notwithstanding the foregoing, the minimum ABR shall be
4.0%.   “Applicable Margin” means (a) 7.00% in the case of ABR Loans and
(b) 8.00% in the case of Eurodollar Loans.   “Eurodollar Rate” means the rate
(adjusted for any statutory reserve requirements for eurocurrency liabilities)
for eurodollar deposits for a period equal to one, two, three or six months (as
selected by the Borrower) appearing on the Reuters Screen LIBOR01 Page.
Notwithstanding the foregoing, the minimum Eurodollar Rate (before giving effect
to any adjustment for reserve requirements) shall be 3.0%. Interest Payment
Dates:   In the case of Loans bearing interest based upon the ABR (“ABR Loans”),
quarterly in arrears.   In the case of Loans bearing interest based upon the
Eurodollar Rate (“Eurodollar Loans”) on the last day of each relevant interest
period and, in the case of any interest period longer than three months, on each
successive date three months after the first day of such interest period.
Default Rate:   At any time when the Borrower is in default in the payment of
any amount of principal due under the Facility, all outstanding Loans shall bear
interest at 2% above the rate otherwise applicable thereto. Overdue interest,
fees and other amounts shall bear interest at 2% above the rate applicable to
the relevant ABR Loans. Rate and Fee Basis:   All per annum rates shall be
calculated on the basis of a year of 360 days (or 365/366 days, in the case of
ABR Loans the interest rate payable on which is then based on the Prime Rate)
for actual days elapsed.

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Annex II to Annex A

The availability of the Facility, in addition to the conditions set forth in
Exhibit A, shall be subject to the satisfaction of the following conditions.
Capitalized terms used but not defined herein have the meanings given in Exhibit
A.

(a) Each Loan Party shall have executed and delivered satisfactory Senior Credit
Documentation.

(b) The Bankruptcy Court shall have entered an order confirming the Plan, which
order shall (i) confirm a plan of reorganization that is consistent in all
material respects with the Plan Term Sheet, (ii) authorize the Facility and
(iii) be in full force and effect and shall not have been revised or modified
and shall not be stayed or subject to a motion to stay or subject to appeal or
petition for review, rehearing or certiorari, and the period for appealing the
confirmation order shall have elapsed. The effective date of the Plan shall have
occurred and all conditions precedent to the effectiveness of the Plan shall
have been achieved (or shall concurrently be achieved).

(c) The Lenders, the Administrative Agent and the Arranger shall have received
all fees and invoiced expenses required to be paid on or before the Closing
Date.

(d) All government and third party approvals necessary in connection with the
Senior Credit Agreement and the continuing operations of the Borrower shall have
been obtained on satisfactory terms. There shall not exist any action,
investigation, litigation or proceeding pending or threatened in any court or
before any arbitrator or governmental authority that could reasonably be
expected to have a material adverse effect on the Borrower, the Senior Credit
Agreement or any of the other transactions contemplated hereby. Borrower shall
not be in violation of the Communications Act of 1934, or any FCC rule or
regulation, such that a violation of which could reasonably be expected to have
a material adverse effect on the Borrower.

(e) The Lenders shall have received (i) as soon as available to
management, audited consolidated financial statements of the Borrower for the
most recent fiscal year, (ii) as soon as available to management, unaudited
consolidated financial statements of the Borrower for each fiscal quarter ended
after the latest fiscal year referred to in clause (i) above, and (iii) as soon
as available to management, monthly financial data generated by the Borrower’s
internal accounting systems for use by senior management for each month ended
after the latest fiscal quarter referred to in clause (ii) above.

(f) The Lenders shall have received a pro forma consolidated balance sheet of
the Borrower as at the date of the most recent balance sheet delivered pursuant
to the preceding paragraph and a pro forma statement of operations for the
12-month period ending on such date, in each case adjusted to give effect to the
effectiveness of the Plan and the financings contemplated hereby as if such
transactions had occurred on such date or on the first day of such period, as
applicable, consistent in all material respects with information previously
provided by the Borrower.

(g) The pro forma ratio of Adjusted EBITDA less capital expenditures for the LTM
Period (as defined below) to projected cash interest expense for the 12-month
period commencing on the Closing Date shall be no less than 1.5 to 1.0. As used
herein, “Adjusted EBITDA” means EBITDA of the Borrower for the 12-month period
ended on the date of the most recent available quarterly financial statements
(the “LTM Period”), subject to such adjustments as the Administrative Agent
reasonably determines reflect the pro forma financial condition of the Borrower.

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(h) The Lenders shall have received reasonably satisfactory projections through
the end of 2014.

(i) All actions necessary (including obtaining lien searches) to establish that
the Collateral Agent will have a perfected first priority security interest in
the collateral under the Facility shall have been taken, and, in connection with
any real estate collateral, the Collateral Agent shall have received
satisfactory title insurance policies, surveys and other customary documentation
to the extent reasonably requested by it.

(j) The Administrative Agent shall have received such legal opinions (including
opinions (i) from counsel to the Borrower and (ii) from such special counsel
(including FCC counsel and local counsel) as may be required by the
Administrative Agent), certificates, documents and other instruments as are
customary for transactions of this type or as it may reasonably request.

(k) The Borrower shall have used commercially reasonable efforts to obtain a
corporate family rating and a rating for the Facility from both Moody’s
Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”).

 

2

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ANNEX B

TERMS OF CLASS B COMMON STOCK

 

Issuance    As provided at Annex I of the Plan Term Sheet. Conversion    Limited
Voting Common Stock shall be convertible into Voting Common Stock at the written
request of the holder thereof, provided that no Limited Voting Common Stock
holder will be permitted to convert Limited Voting Common Stock to the extent
that such conversion would result in such holder holding more than 4.99% of the
Class A Common Stock outstanding following such conversion unless (i) prior to
such conversion the holder has provided assurance satisfactory in form and
substance to Reorganized Citadel that such holder does not have an attributable
interest in another entity that would cause Reorganized Citadel to violate
applicable FCC rules and regulations, (ii) prior to such conversion the holder
has obtained any necessary approvals from the FCC or the DOJ, if any, and (iii)
such conversion would not result in violations of the Communications Act of
1934, as amended, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, or rules or regulations promulgated under either Act. Voting Rights   

Class B Common Stock (the “Limited Voting Common Stock”) shall have the same
economic rights as the Class A Common Stock. Holders of Limited Voting Common
Stock shall have no right to vote any Limited Voting Common Stock beneficially
owned or held of record by such holder with respect to any matters submitted to
a vote of the stockholders of the Company other than as expressly provided below
and in no event shall any holder of Limited Voting Common Stock be entitled to
vote any Limited Voting Common Stock beneficially owned or held of record by it
with respect to any matters with respect to the board of directors. For the
avoidance of doubt, holders of Limited Voting Common Stock shall not have a
separate class vote on any matter submitted to a vote of the stockholders of the
Company, except that holders of Limited Voting Common Stock shall be entitled to
a separate class vote on any amendment or modification that adversely affects
any rights or privileges of the Limited Voting Common Stock and either (a) does
not adversely affect the Voting Common Stock or (b) disproportionately affects
the Limited Voting Common Stock as compared to the Voting Common Stock.

 

Except as otherwise provided, no holder of Limited Voting Common Stock shall be
entitled to vote any Limited Voting Common Stock beneficially owned by such
holder with respect to any matters submitted to a vote of the stockholders.
Notwithstanding the foregoing, if and only if any of the following actions are
submitted to a vote of the stockholders, holders of Limited Voting Common Stock
shall only be entitled to vote on the same basis as holders of Voting Common
Stock:

 

(i)      the retention or dismissal of outside auditors;

 

(ii)     any distributions to stockholders;

 

(iii)    material asset sales, recapitalization, merger, business combination,
consolidation, exchange or other similar reorganization involving the Company or
any of its subsidiaries, including a Drag-Along Transaction;

 

(iv)    the adoption of any new or amended certificate of incorporation of the
Company or any of its subsidiaries, other than any amendment that is ministerial
in nature;

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(v)     other than in connection with a management equity plan or similar plan,
any authorization or issuance of equity interests, or any security or instrument
convertible into or exchangeable for equity interests, in the Company or any of
its subsidiaries; and

 

(vi)    the liquidation of the Company or any of its subsidiaries.

Listing    The Limited Voting Common Stock shall not be listed on a securities
exchange.

 

2

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ANNEX C

TERMS OF WARRANTS

 

Exercise Price Per Warrant:    $0.001 Expiration:    Twentieth anniversary of
issuance. Exercise Date:    Exercisable, in whole or from time to time in part,
at any time after Effective Date, by any holder of Warrants (“Warrant Holder”)
provided that each exercising holder shall provide such certifications and other
information as Reorganized Citadel may request (but no greater disclosure shall
be required than in the FCC Worksheet) to ascertain the impact of such exercise
on its alien ownership and Reorganized Citadel may decline to honor a requested
exercise if it has a reasonable basis to believe, based on the most recent
information available to it, that the exercise would cause more than 20% of its
New Common Stock in the aggregate to be owned, directly or indirectly, by alien
owners; provided that Reorganized Citadel shall not be required to monitor the
alien ownership among its stockholders more often than required by federal
communications law. Anti-Dilution Provisions:    The number of shares of Class B
Common Stock issuable upon exercise of Warrants shall be subject to customary
adjustment upon the occurrence of common stock splits and reverse common stock
splits. Voting Rights:    None. Registration Rights:    None. Distributions:   

Distributions and purchases of outstanding equity securities will be made out of
available cash flow as approved by the Board of Directors of Reorganized Citadel
(the “Board”) in its sole discretion.

 

Any distributions on, or tender offers for, Class A Common Stock, Class B Common
Stock, or Warrants shall be made on a pro rata basis to all holders of Class A
Common Stock (“Class A Common Stock Holders”), Class B Common Stock
(“Class B Common Stock Holders”) and, subject to compliance with applicable FCC
rules and regulations and to the extent consistent with non-attributable status,
Warrant Holders based upon their respective ownership of Class B Common Stock on
an as-exercised basis.

 

All distributions shall be paid to Warrant Holders, Class A Common Stock Holders
and Class B Common Stock Holders concurrently, provided that no such
distribution shall be made to Warrant Holders, Class A Common Stock Holders and
Class B Common Stock Holders if (x) an FCC ruling prohibits such distribution to
Warrant Holders, or (y) Reorganized Citadel’s FCC’s counsel opines that such
distribution is reasonably likely to cause (i) the Company to violate any
applicable FCC rules or regulations or (ii) any such Warrant Holder to be deemed
to hold an attributable interest in the Company.

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Change of Control:    Except as provided in the next sentence, upon a Change of
Control or a Merger or a Consolidation, each Warrant will be exercisable solely
into the right to receive the kind and amount of consideration to which such
holder would have been entitled as a result of such Change of Control or Merger
or Consolidation had the Warrant been exercised immediately prior thereto. In
the event of a Change of Control or a Merger or a Consolidation in which the
only consideration payable to holders of Class B Common Stock is cash, each
Warrant shall be entitled to receive solely the cash consideration to which such
holder would have been entitled as a result of such Change of Control or Merger
or Consolidation, less the Exercise Price, had the Warrant been exercised
immediately prior thereto. Listing:    The Warrants shall not be listed on a
securities exchange. Transferability:    Warrants are freely transferable,
provided that if any change in federal law shall impose limitations on the
transferability of Warrants, a transfer shall be permitted to the extent that
such limitations have been satisfied. Successors:    Subject to the requirements
set forth above under “Transferability,” all the covenants and provisions of the
Warrant agreement by or for the benefit of the Company or the Warrant agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.

 

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