-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KAoW9jSGYtlhB5cV1Tc6voy46ZtqbNyD/BmJa1/dtlwRs6su1FgzRZC7011rA1hy XZMA+8IeU3X0kv5aUBmc1g== /in/edgar/work/20000911/0000950134-00-007806/0000950134-00-007806.txt : 20000922 0000950134-00-007806.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950134-00-007806 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000830 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000911 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAPSTAR BROADCASTING PARTNERS INC CENTRAL INDEX KEY: 0001026516 STANDARD INDUSTRIAL CLASSIFICATION: [4832 ] IRS NUMBER: 752672663 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-33015 FILM NUMBER: 720394 BUSINESS ADDRESS: STREET 1: 600 CONGRESS AVE STREET 2: SUITE 1400 CITY: AUSTIN STATE: TX ZIP: 78701 BUSINESS PHONE: 5123407800 MAIL ADDRESS: STREET 1: 1845 WOODALL RODGERS FREEWAY STREET 2: SUITE 1300 CITY: DALLAS STATE: TX ZIP: 75201 8-K 1 d77954e8-k.txt FORM 8-K 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 30, 2000 --------------------- CAPSTAR BROADCASTING PARTNERS, INC. (Exact name of Registrant as specified in its charter) - ---------------------------------------------------------------------------------------------------------------------- DELAWARE 333-33015 75-2672663 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification Number) - ---------------------------------------------------------------------------------------------------------------------- 1845 WOODALL RODGERS FREEWAY, SUITE 1300 DALLAS, TEXAS 75201 (Address of principal (Zip code) executive offices) - ----------------------------------------------------------------------------------------------------------------------
Registrant's telephone number, including area code: (214) 922-8700 NOT APPLICABLE (Former name or former address, if changed since last report) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On August 30, 2000, Clear Channel Communications, Inc. consummated its acquisition of AMFM Inc., indirect parent of Capstar Broadcasting Partners, Inc. (the "Company"), pursuant to a merger agreement under which AMFM stockholders will receive 0.94 Clear Channel shares for each AMFM share held in a tax-free exchange. In order to obtain antitrust and Federal Communications Commission approval for the merger, the Company has completed the divestiture of 58 radio stations in 22 markets for aggregate gross proceeds of approximately $2.8 billion, including the receipt of 36 radio stations. A further eight stations, valued at $0.2 billion, were put into trust until the eventual sale of these stations. Following is a list of the divestitures:
Date of Proceeds Buyer Divestiture (in thousands) Market Stations ----- ----------- -------------- ------ -------- Barnstable Broadcasting, Inc. 8/24/00 $ 45,160(1) Des Moines, IA KGGO-FM/KHKI-FM Greenville, SC WROQ-FM Blue Chip Broadcasting, Inc. 8/22/00 2,000 Cincinnati, OH WUBE-AM Chase Radio Partners(2) 8/24/00 12,704 Biloxi, MI WKNN-FM/WMJY-FM Waco, TX KBRQ-FM Cox Radio, Inc. 8/30/00 219,000 Richmond, VA WKHK-FM/WKLR-FM/WMXB-FM Houston, TX KKBQ-FM/KLDE-FM Cumulus Media, Inc. 8/30/00 75,870(3) Cedar Rapids, IA KDAT-FM/KHAK-FM/KRNA-FM Melbourne, FL WHKR-FM Shreveport, LA KMJJ-FM/KRMD-AM/KRMD-FM/KBED-FM Emmis Communications Corporation 8/24/00 107,000 Denver, CO KXPK-FM Phoenix, AZ KKFR-FM Infinity Broadcasting Corporation 8/24/00 1,368,635 Cincinnati, OH WUBE-FM Cleveland, OH WDOK-FM/WQAL-FM/WZJM-FM Denver, CO KDJM-FM/KIMN-FM/KXKL-FM Greensboro, NC WMFR-FM Orlando, FL WJHM-FM/WOCL-FM/WOMX-FM Phoenix, AZ KMLE-FM/KOOL-FM/KZON-FM San Diego, CA KPLN-FM/KYXY-FM Radio One, Inc. 8/25/00 661,017 Cleveland, OH WJMO-AM/WZAK-FM Dallas, TX KBFB-FM Los Angeles, CA KKBT-FM Miami, FL WVCG-AM Regent Communications, Inc. 8/24/00 169,396(4) Albany, NY WABT-FM/WGNA-AM/WGNA-FM Grand Rapids, MI WGRD-FM/WLHT-FM/WTRV-FM/WNWZ-AM
3 Saga Communications, Inc. 8/30/00 12,000 Springfield, MA WHMP-FM/WHMP-AM Salem Communications Corporation 8/24/00 150,600 Cincinnati, OH WBOB-AM/WYGY-FM Cleveland, OH WKNR-AM/WRMR-AM Dallas, TX KDGE-FM Denver, CO KALC-FM C. Giddens Trust(5) 8/29/00 N/A Denver, CO KVOD-AM Harrisburg, PA WNCE-FM/WNNK-FM/WTCY-AM/ WTPA-FM Houston, TX KQUE-AM Pensacola, FL WMEZ-FM/WXBM-FM
(1) Includes the receipt of radio stations WKDD-FM and WTOU-AM in Akron, Ohio. (2) Stations sold to Chase Radio Partners will continue to be operated by the Company under a joint sales agreement ("JSA"). (3) Includes the receipt of radio stations WQKL-FM, WIQB-FM, WTKA-AM and WYBN-AM in Ann Arbor, Michigan; WUSY-FM, WUUS-AM (formerly WLMX-AM), WRXR-FM (formerly WLMX-FM), WLOV-FM and WKXJ-FM in Chattanooga, Tennessee; WATQ-FM, WBIZ-AM/FM, WMEQ-AM/FM and WQRB-FM in Eau Claire, Wisconsin; KTEX-FM and KBFM-FM in McAllen, Texas; and WLVW-FM, WQHQ-FM, WTGM-AM, WAWR-AM, WOSC-FM, WJDY-AM, WWFG-FM, WLBW-FM and WSBY-FM in Salisbury/Ocean City, Maryland. (4) Includes the receipt of radio stations WYHT-FM, WSWR-FM and WMAN-AM in Mansfield, Ohio and KATJ-FM, KZXY-FM, KIXA-FM, KROY-AM and KIXW-AM in Victorville, California. (5) In order to comply with the Communications Act of 1934 and the consent decree entered into with the Department of Justice, eight stations have been placed into the C. Giddens Trust pending their eventual sale. While in trust, the Company cannot manage or operate these stations. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) UNAUDITED PRO FORMA FINANCIAL INFORMATION. Unaudited pro forma financial information required pursuant to Article 11 of Regulation S-X as of June 30, 2000 and for the year ended December 31, 1999 and the six months ended June 30, 2000 is filed herewith beginning on page P-1. (c) EXHIBITS. EXHIBIT NUMBER DESCRIPTION 2.1(1) Agreement and Plan of Merger dated as of October 2, 1999, among Clear Channel, CCU Merger Sub, Inc. and AMFM Inc. 10.1(2) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated March 3, 2000. 10.2(2) Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated March 14, 2000. 10.3(2) Second Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated July 10, 2000. 10.4(2) Third Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated July 17, 2000. 10.5(2) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Texas Broadcasting, LP and AMFM Texas Licenses Limited Partnership, (the "Seller") and Cox Radio, Inc. and CXR Holdings, Inc. (the "Buyer") dated March 3, 2000. 10.6(2) Asset Purchase Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp. (the "Buyer") dated March 5, 2000. 10.7(2) Asset Exchange Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp. (the "Exchange Party") dated March 5, 2000. 10.8(2) Amendment to Asset Exchange Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp. (the "Exchange Party") dated June 5, 2000. 10.9(2) Second Amendment to Asset Exchange Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc., Cumulus Licensing Corp. and Cumulus Wireless Services, Inc. (the "Exchange Party") dated July 17, 2000. 10.10(2) Asset purchase agreement between AMFM Houston, Inc., AMFM Ohio, Inc. and AMFM Radio Licenses, LLC, (the "Seller") and Emmis Communications Corporation, (the "Buyer") dated June 19, 2000. 10.11(2) Asset Purchase Agreement between Capstar TX Limited Partnership, (the "Seller") and Saga Communications of New England, Inc., (the "Buyer") dated March 6, 2000. 10.12(2) Asset Purchase Agreement between Capstar TX Limited Partnership and Salem Communications Corporation dated March 5, 2000. 10.13(2) Asset Exchange Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Barnstable Broadcasting, Inc., OBC Broadcasting, Inc. and Two Rivers Broadcasting Limited Partnership, (the "Buyer") dated March 7, 2000. 10.14(2) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar TX Limited Partnership, AMFM Ohio, Inc., Cleveland Radio Licenses LLC, AMFM San Diego, Inc., AMFM Houston, Inc., AMFM Radio Licenses, LLC and Zebra Broadcasting Corporation, (the "Seller") and CBS Radio, Inc. (the "Buyer") dated March 3, 2000. 10.15(3) Asset Purchase Agreement among AMFM Ohio, Inc., AMFM Radio Licenses LLC, Blue Chip Broadcasting, Ltd. and Blue Chip Broadcasting Licenses, Ltd. dated March 3, 2000. 10.16(3) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., AMFM Operating Inc., AMFM Ohio, Inc., AMFM Houston, Inc., AMFM Radio Licenses, LLC, Zebra Broadcasting Corporation, Cleveland Radio Licenses, LLC, Capstar TX Limited Partnership and Radio One, Inc. dated March 11, 2000. 10.17(3) Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., AMFM Operating Inc., AMFM Ohio, Inc., AMFM Houston, Inc., AMFM Radio Licenses, LLC, Zebra Broadcasting Corporation, Cleveland Radio Licenses, LLC, Capstar TX Limited Partnership and Radio One, Inc. dated August 24, 2000. 10.18(3) Asset Exchange Agreement among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. dated March 12, 2000. 10.19(3) Trust agreement between Clear Channel Communications, Inc., Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., AMFM Radio Licenses, L.L.C., AMFM Ohio, Inc., Capstar TX Limited Partnership, Capstar Radio Operating Company, and Charles E. Giddens (the "Trustee") dated August 28, 2000 and effective August 29, 2000. (1) Incorporated by reference to Exhibits to the Current Report on Form 8-K of Clear Channel Communications, Inc. filed on October 5, 1999. (2) Incorporated by reference to Exhibits to the Current Report on Form 8-K of Clear Channel Communications, Inc. filed on September 6, 2000. (3) Filed herewith. 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAPSTAR BROADCASTING PARTNERS, INC. (Registrant) By: /s/ ERIC C. SIMONTIS ------------------------------------------------ Eric C. Simontis Vice President and Controller Date: September 11, 2000 5 UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma combined condensed consolidated financial statements of Capstar Broadcasting Partners, Inc. (the "Company") give effect to the divestiture of 58 radio stations in 22 markets and the placement of a further eight radio stations into trust (the "Divestitures"), which were required in order to obtain antitrust and Federal Communications Commission approval for the merger between Clear Channel Communications, Inc. ("Clear Channel") and AMFM Inc. ("AMFM"), indirect parent of the Company, which was consummated on August 30, 2000. Additionally, the consent decree entered into by AMFM and Clear Channel required the Company to discontinue any and all control over the Company's approximate 30% ownership (11% voting) interest in Lamar Advertising Company ("Lamar"). The Company had previously accounted for this investment under the equity method. With the loss of control, the Company will now account for this investment under the cost method. The unaudited pro forma combined condensed consolidated balance sheet at June 30, 2000 was prepared based upon the historical balance sheet of the Company, adjusted for the Divestitures, the change in the accounting for the Company's investment in Lamar from the equity method to the cost method and certain charges related to AMFM's stock option plans, as if such transactions had occurred on June 30, 2000. The unaudited pro forma combined condensed consolidated statements of operations for the year ended December 31, 1999 and for the six months ended June 30, 2000 give effect to the Divestitures and the change in accounting for the Company's investment in Lamar from the equity method to the cost method as if such transactions had occurred on January 1, 1999, and were prepared based upon the historical statements of operations of the Company, adjusted to reflect the operations of Capstar Broadcasting Corporation, which was acquired by AMFM on July 13, 1999, the acquisition of KKFR-FM and KFYI-AM from The Broadcast Group, Inc., the disposition of WMVP-AM to ABC, Inc. and the disposition of the Company's outdoor advertising business to Lamar as if such transactions had occurred on January 1, 1999. The unaudited pro forma combined condensed financial statements do not give effect to purchase accounting adjustments, including goodwill, that will be recorded by Clear Channel and reflected in the Company's financial statements for periods subsequent to the merger. The unaudited pro forma combined condensed financial statements should be read in conjunction with the historical financial statements of the Company. The unaudited pro forma combined condensed financial statements are not necessarily indicative of the actual results of operations or financial position that would have occurred had the Divestitures and the above described acquisitions, dispositions and other transactions occurred on the dates indicated nor are they necessarily indicative of future operating results or financial position. P-1 6 CAPSTAR BROADCASTING PARTNERS, INC. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 30, 2000 (IN THOUSANDS OF DOLLARS)
OTHER COMPANY PRO FORMA COMPANY HISTORICAL DIVESTITURES(1) ADJUSTMENTS PRO FORMA ----------- --------------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents.... $ 40,577 $ -- $ -- $ 40,577 Accounts receivable, net..... 547,935 -- -- 547,935 Other current assets......... 61,789 175,067 -- 236,856 ----------- ----------- ----------- ----------- Total current assets....... 650,301 175,067 -- 825,368 Property and equipment, net.... 442,661 (63,377) -- 379,284 Intangible assets, net......... 9,902,702 (1,416,310) -- 8,486,392 Other assets: Investments in nonconsolidated affiliates................. 1,058,154 -- (1,046,176)(2) 11,978 Other assets................. 239,028 -- 1,046,176(2) 1,285,204 ----------- ----------- ----------- ----------- TOTAL ASSETS............... $12,292,846 $(1,304,620) -- $10,988,226 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable and accrued expenses................... $ 274,715 $ -- $ -- $ 274,715 Long-term debt................. 5,742,027 (1,886,993) -- 3,855,034 Deferred tax liabilities....... 1,635,903 (214,158) (28,742)(3) 1,393,003 Other liabilities.............. 49,052 -- -- 49,052 Stockholder's equity: Common stock................. 1 -- -- 1 Additional paid-in capital... 5,260,901 -- 82,119(3) 5,343,020 Retained earnings (accumulated deficit)...... (669,753) 796,531 (53,377)(3) 73,401 ----------- ----------- ----------- ----------- Total stockholder's equity................... 4,591,149 796,531 28,742 5,416,422 ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY..... $12,292,846 $(1,304,620) -- $10,988,226 =========== =========== =========== ===========
See accompanying notes to Unaudited Pro Forma Financial Information P-2 7 CAPSTAR BROADCASTING PARTNERS, INC. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS, EXCEPT PER SHARE DATA)
OTHER COMPANY AS LAMAR COMPANY PRO FORMA ADJUSTED FOR TRANSACTION HISTORICAL(4) DIVESTITURES(5) ADJUSTMENTS THE MERGER HISTORICAL(7) ------------- --------------- ----------- ------------ ------------- Net revenue................................ $1,977,888 $ (269,411) $ -- $1,708,477 $(156,627) Operating expenses......................... 1,048,711 (148,153) -- 900,558 (84,583) Depreciation and amortization.............. 731,514 (115,134) -- 616,380 (94,062) Noncash compensation expense............... 6,443 -- -- 6,443 -- Merger and non-recurring costs............. 63,719 -- -- 63,719 (2,154) Corporate expenses......................... 57,559 -- -- 57,559 (6,835) ---------- ---------- ---------- ---------- --------- Operating income (loss).................... 69,942 (6,124) -- 63,818 31,007 Interest expense........................... 426,681 (146,242) -- 280,439 (171) Interest income............................ 10,644 -- -- 10,644 -- Gain on disposition of assets.............. 221,312 -- -- 221,312 947 Gain on disposition of representation contracts................................ 18,173 -- -- 18,173 -- Other income (expense)..................... -- -- -- -- -- ---------- ---------- ---------- ---------- --------- Income (loss) before income taxes, equity in earnings (loss) of nonconsolidated affiliates and extraordinary item........ (106,610) 140,118 -- 33,508 32,125 Income tax (expense) benefit............... 1,064 (17,840) -- (16,776) (8,867) Dividends and accretion on preferred stock of subsidiaries.......................... 5,591 -- -- 5,591 -- ---------- ---------- ---------- ---------- --------- Income before equity in earnings (loss) of nonconsolidated affiliates and extraordinary item....................... (111,137) 122,278 -- 11,141 23,258 Equity in earnings (loss) of nonconsolidated affiliates............... (28,192) -- 23,008(6) (5,184) -- ---------- ---------- ---------- ---------- --------- Net income (loss) before extraordinary item..................................... (139,329) 122,278 23,008 5,957 23,258 Preferred stock dividends.................. 6,256 -- -- 6,256 -- ---------- ---------- ---------- ---------- --------- Income (loss) attributable to common shares outstanding.............................. $ (145,585) $ 122,278 $ 23,008 $ (299) $ 23,258 ========== ========== ========== ========== ========= PRO FORMA CAPSTAR AS PRO FORMA PRO FORMA ADJUSTMENTS ADJUSTED FOR ADJUSTMENTS ADJUSTMENTS FOR THE THE COMPLETED FOR THE FOR THE LAMAR CAPSTAR CAPSTAR OTHER COMPLETED COMPANY TRANSACTION TRANSACTIONS(11) MERGER TRANSACTIONS(17) PRO FORMA ------------ ---------------- ------------- --------------- ---------- Net revenue................................ $ -- $ 347,290 $(31,397)(12) $ (705) $1,867,038 Operating expenses......................... -- 207,000 (4,221)(12) (116) 1,018,638 Depreciation and amortization.............. -- 78,338 (26,832)(12) 2,839 723,640 146,977(13) Noncash compensation expense............... -- 20,284 -- -- 26,727 Merger and non-recurring costs............. -- 51,288 (47,510)(14) -- 65,343 Corporate expenses......................... -- 13,946 -- -- 64,670 --------- --------- -------- ------- ---------- Operating income (loss).................... -- (23,566) (99,811) (3,428) (31,980) Interest expense........................... (36,128)(8) 80,731 1,406(15) 3,009 329,286 Interest income............................ -- 98 (9,650)(12) -- 1,092 Gain on disposition of assets.............. (209,970)(9) -- -- -- 12,289 Gain on disposition of representation contracts................................ -- -- -- -- 18,173 Other income (expense)..................... -- (46) -- -- (46) --------- --------- -------- ------- ---------- Income (loss) before income taxes, equity in earnings (loss) of nonconsolidated affiliates and extraordinary item........ (173,842) (104,245) (110,867) (6,437) (329,758) Income tax (expense) benefit............... 60,845(10) 22,251 38,803(16) 2,253 98,509 Dividends and accretion on preferred stock of subsidiaries.......................... -- 8,365 -- -- 13,956 --------- --------- -------- ------- ---------- Income before equity in earnings (loss) of nonconsolidated affiliates and extraordinary item....................... (112,997) (90,359) (72,064) (4,184) (245,205) Equity in earnings (loss) of nonconsolidated affiliates............... (2,444) -- -- (7,628) --------- --------- -------- ------- ---------- Net income (loss) before extraordinary item..................................... (112,997) (92,803) (72,064) (4,184) (252,833) Preferred stock dividends.................. -- 9,025 -- -- 15,281 --------- --------- -------- ------- ---------- Income (loss) attributable to common shares outstanding.............................. $(112,997) $(101,828) $(72,064) $(4,184) $ (268,114) ========= ========= ======== ======= ==========
See accompanying notes to Unaudited Pro Forma Financial Information P-3 8 CAPSTAR BROADCASTING PARTNERS, INC. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2000 (IN THOUSANDS, EXCEPT PER SHARE DATA)
OTHER COMPANY PRO FORMA COMPANY HISTORICAL DIVESTITURES(5) ADJUSTMENTS PRO FORMA ---------- --------------- ----------- ------------- Net revenue................... $1,159,171 $(139,275) $ -- $1,019,896 Operating expenses............ 626,573 (75,239) -- 551,334 Depreciation an amortization................ 429,827 (55,771) -- 374,056 Noncash compensation expense..................... 35,835 -- -- 35,835 Merger and non-recurring costs....................... 18,946 -- -- 18,946 Corporate expenses............ 29,312 -- -- 29,312 --------- -------- --------- --------- Operating income (loss)....... 18,678 (8,265) -- 10,413 Interest expense.............. 243,805 (73,121) -- 170,684 Interest income............... 993 -- -- 993 Gain on disposition of assets...................... 31,104 -- -- 31,104 Gain on disposition of representation contracts.... 16,989 -- -- 16,989 --------- -------- --------- --------- Income (loss) before income taxes, equity in earnings (loss) of nonconsolidated affiliates and extraordinary item........................ (176,041) 64,856 -- (111,185) Income tax (expense) benefit..................... 18,583 (8,731) -- 9,852 --------- -------- --------- --------- Income (loss) before equity in earnings (loss) of nonconsolidated affiliates and extraordinary item...... (157,458) 56,125 -- (101,333) Equity in earnings (loss) of nonconsolidated affiliates.................. (47,591) -- 40,707(6) (6,884) --------- -------- --------- --------- Net income (loss) before extraordinary item.......... (205,049) 56,125 40,707 (108,217) Credit on exchange of preferred stock............. 3,310 -- -- 3,310 --------- -------- --------- --------- Income (loss) attributable to common shares outstanding... $(201,739) $ 56,125 $ 40,707 $(104,907) ========= ======== ========= =========
See accompanying notes to Unaudited Pro Forma Financial Information P-4 9 CAPSTAR BROADCASTING PARTNERS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS OF DOLLARS) ADJUSTMENTS TO THE UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET (1) Reflects the divestiture of 58 radio stations in 22 markets for aggregate gross proceeds of approximately $2.8 billion, including the receipt of 36 radio stations, and the placement of a further eight radio stations into trust. The divestitures were required in order to obtain antitrust and Federal Communications Commission approval for the merger between Clear Channel Communications, Inc. and AMFM Inc., indirect parent of the Company, which was consummated on August 30, 2000. Adjustments are as follows:
INCREASE (DECREASE) ----------- Increase in other current assets due to a reclassification of net assets transferred to trust....... $ 175,067 Decrease in property, plant and equipment, net of accumulated depreciation.................................. (63,377) Decrease in intangible assets, net of accumulated amortization ............................................. (1,416,310) Decrease in long-term debt resulting from the use of net proceeds.................................................. (1,886,993) Decrease in deferred income taxes........................... (214,158) Increase in retained earnings resulting from the gain on the sale of stations, net of tax at the Company's assumed tax rate of 39%............................................... 796,531
(2) As a condition for approval of the merger with Clear Channel from the Department of Justice, the Company is prohibited from exercising any governance rights over Lamar. Since the Company may no longer exercise significant influence over the operations of Lamar, the Company's investment in Lamar will be accounted for using the cost method instead of the equity method subsequent to the merger date. This adjustment reclassifies the Company's investment in Lamar from an equity method investment to a cost method investment. (3) Reflects the adjustments to record (1) estimated stock option compensation expense of $38,064, net of a tax benefit of $20,497, relating to certain executive stock options that became exercisable upon the Clear Channel merger and (2) estimated charges of $15,313, net of a tax benefit of $8,245, related to amendments made to AMFM's stock option plans on July 5, 2000 to provide that all unvested options will accelerate and vest for employees terminated as a result of the Clear Channel merger. P-5 10 CAPSTAR BROADCASTING PARTNERS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) ADJUSTMENTS TO THE UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (4) The Company began operating KKFR-FM and KFYI-AM in Phoenix under a time brokerage agreement effective November 5, 1998. Therefore, the results of operations of KKFR-FM and KFYI-AM are included in the Company's historical operations for the year ended December 31, 1999. The Company entered into a time brokerage agreement to sell substantially all of the broadcast time of WMVP-AM in Chicago effective September 10, 1998. Therefore, substantially all of the results of operations of WMVP-AM are excluded from the Company's historical operations for the year ended December 31, 1999. (5) Divestitures
INCREASE (DECREASE) TO INCOME ------------------------- 12/31/99 6/30/00 ---------- --------- Decrease in revenue................................................ $(269,411) $(139,275) Decrease in operating expenses..................................... 148,153 75,239 Decrease in depreciation and amortization, of which $94,376 and $42,468 for 12/31/99 and 6/30/00, respectively, results in a permanent difference and will not be deducted for federal income tax purposes............. 115,134 55,771 Decrease in interest expense associated with the reduction of long-term debt resulting from the use of net proceeds..................................................... 146,242 73,121 Increase in income tax expense associated with the pro forma adjustments at the Company's assumed tax rate of 39%........................................................... (17,840) (8,731)
An estimated pre-tax gain of approximately $1.3 billion, representing the gain from the sale of the divested radio stations partially offset by stock compensation charges directly attributable to the Divestitures, has not been included in the unaudited pro forma condensed consolidated statement of operations due to its non-recurring nature. (6) As a condition for approval of the merger with Clear Channel from the Department of Justice, the Company is prohibited from exercising any governance rights over Lamar. Since the Company may no longer exercise significant influence over the operations of Lamar, the Company's investment in Lamar will be accounted for using the cost method instead of the equity method subsequent to the merger date. This adjustment removes the historical equity in losses of Lamar of $23,008 for the year ended December 31, 1999 and $40,707 for the six months ended June 30, 2000. (7) On September 15, 1999, the Company completed the sale to Lamar of all of the outstanding common stock of the subsidiaries which held all of The Company's assets used in its outdoor advertising business. The Company received net cash proceeds of approximately $700,000 and 26,227,273 shares of class A common stock, par P-6 11 CAPSTAR BROADCASTING PARTNERS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) value $.01 per share, of Lamar. This adjustment removes the historical results of operations of the Company's outdoor advertising business. (8) Reflects the net decrease in interest expense of $36,128 for the year ended December 31, 1999 in connection with the additional bank borrowings related to the outdoor advertising acquisitions completed during 1999 and the paydown of debt resulting from the net proceeds of $700,000 received from Lamar. (9) Reflects the elimination of the nonrecurring gain of $209,970 incurred in connection with the Company's sale of its outdoor advertising business. (10) Reflects the tax effect of the pro forma adjustments. P-7 12 CAPSTAR BROADCASTING PARTNERS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (11) Reflects the historical operations of Capstar for the period from January 1 to July 13, 1999 and pro forma adjustments:
PERIOD FROM JANUARY 1 CAPSTAR PRO FORMA CAPSTAR TO JULY 13, 1999 HISTORICAL ADJUSTMENTS PRO FORMA - --------------------- ---------- ----------- --------- Net revenues.................................... $ 347,290 $ -- $ 347,290 Operating expenses.............................. 207,000 -- 207,000 Depreciation and amortization................... 78,338 -- 78,338 Noncash compensation expense.................... 20,284 -- 20,284 LMA fees........................................ 387 (387)(a) -- Merger and non-recurring costs.................. 51,288 -- 51,288 Corporate expenses.............................. 13,946 -- 13,946 --------- ----- --------- Operating income................................ (23,953) 387 (23,566) Interest expense................................ 80,731 -- 80,731 Interest income................................. 98 -- 98 Other income (expense).......................... (46) -- (46) --------- ----- --------- Income (loss) before income taxes............... (104,632) 387 (104,245) Income tax (expense) benefit.................... 22,386 (135)(b) 22,251 Dividends and accretion on preferred stock of subsidiary.................................... 8,365 -- 8,365 --------- ----- --------- Income (loss) before equity in net loss of nonconsolidated affiliates.................... (90,611) 252 (90,359) Equity in net loss of nonconsolidated affiliates.................................... (2,444) -- (2,444) --------- ----- --------- Net income (loss)............................... (93,055) 252 (92,803) Preferred stock dividends....................... 9,025 -- 9,025 --------- ----- --------- Income (loss) attributable to common shares outstanding............................ $(102,080) $ 252 $(101,828) ========= ===== =========
- --------------- (a) Reflects the elimination of $387 of time brokerage (LMA) fees paid by Capstar for the period from January 1 to July 13, 1999 related to acquired radio stations that were previously operated under time brokerage agreements. (b) Reflects the tax effect of the pro forma adjustments. ADJUSTMENTS TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS RELATED TO THE CAPSTAR MERGER. (12) Reflects the elimination of intercompany transactions between the Company and Capstar for the Company's media representation services provided to Capstar, Capstar's participation in The AMFM Radio Networks, fees paid by the Company to Capstar under time brokerage (LMA) agreements and interest income on Capstar's note payable to the Company of $150,000 for the period from January 1 to July 13, 1999. P-8 13 CAPSTAR BROADCASTING PARTNERS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (13) Reflects incremental amortization related to the Capstar merger and is based on the allocation of the total consideration as follows:
PERIOD FROM JANUARY 1 TO JULY 13, 1999 ------------- Amortization expense on $5,892,486 of intangible assets..... $210,602 Less: historical amortization expense....................... (63,625) -------- Adjustment for net increase in amortization expense......... $146,977 ========
Historical depreciation expense of Capstar as adjusted for the completed Capstar transactions is assumed to approximate depreciation expense on a pro forma basis. (14) Reflects the elimination of financial advisory and other expenses of Capstar in connection with the Capstar merger of $47,510 for the period from January 1 to July 13, 1999. (15) Reflects the adjustment to record interest expense of $1,406 for the year ended December 31, 1999 on additional bank borrowings related to estimated financial advisors, legal, accounting and other professional fees incurred by the Company and Capstar. (16) Reflects the tax effect of the pro forma adjustments. (17) Adjustments to Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations Related to the Other Completed Transactions On April 16, 1999, the Company sold WMVP-AM in Chicago to ABC, Inc. for $21,000 in cash. The Company entered into a time brokerage agreement to sell substantially all of the broadcast time of WMVP-AM effective September 10, 1998. On July 1, 1999, the Company acquired KKFR-FM and KFYI-AM in Phoenix from The Broadcast Group, Inc. for $90,000 in cash. The Company began operating KKFR-FM and KFYI-AM under a time brokerage agreement effective November 5, 1998. The combined condensed statement of operations for the other completed transactions for the year ended December 31, 1999 is summarized below:
CHICAGO PRO FORMA DISPOSITION ADJUSTMENTS FOR OTHER YEAR ENDED HISTORICAL THE OTHER COMPLETED COMPLETED DECEMBER 31, 1999 1/1-4/16 TRANSACTIONS TRANSACTIONS - ----------------- ----------- ------------------- ------------ Net revenues................................ $(705) $ -- $ (705) Operating expenses.......................... (116) -- (116) Depreciation and amortization............... -- 2,839(a) 2,839 ----- ------- ------- Operating loss.............................. (589) (2,839) (3,428) Interest expense............................ -- 3,009(b) 3,009 ----- ------- ------- Loss before income taxes.................... (589) (5,848) (6,437) Income tax benefit.......................... -- 2,253(c) 2,253 ----- ------- ------- Income (loss)............................... $(589) $(3,595) $(4,184) ===== ======= =======
P-9 14 CAPSTAR BROADCASTING PARTNERS, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - --------------- (a) Reflects incremental amortization related to the assets acquired in the Phoenix acquisition and is based on the allocation of the total consideration as follows:
INCREMENTAL INTANGIBLE HISTORICAL ADJUSTMENT YEAR ENDED AMORTIZATION ASSETS, AMORTIZATION AMORTIZATION FOR NET DECEMBER 31, 1999 PERIOD(I) NET EXPENSE(I) EXPENSE INCREASE ----------------- ------------ ---------- ------------ ------------ ---------- Phoenix acquisition..... 1/1-7/1 $85,160 $2,839 $ -- $2,839
(i) Intangible assets are amortized on a straight-line basis over an estimated average 15 year life. The incremental amortization period represents the period of the year that the acquisition was not completed. Historical depreciation expense for the Phoenix acquisition is assumed to approximate depreciation expense on a pro forma basis. (b) Reflects the adjustment to interest expense as follows:
YEAR ENDED DECEMBER 31, 1999 ----------------- Additional bank borrowings related to other completed transactions.............................................. $69,000 ------- Interest expense at 7.75%................................... 5,348 Less: historical interest expense recognized subsequent to the completed transaction............................................... 2,339 ------- Net increase in interest expense............................ $ 3,009 =======
(c) Reflects the tax effect of the pro forma adjustments. P-10 15 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 2.1(1) Agreement and Plan of Merger dated as of October 2, 1999, among Clear Channel, CCU Merger Sub, Inc. and AMFM Inc. 10.1(2) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated March 3, 2000. 10.2(2) Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated March 14, 2000. 10.3(2) Second Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated July 10, 2000. 10.4(2) Third Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Ohio, Inc., and AMFM Radio Licenses LLC, (the "Seller") and Chase Radio Properties, LLC, (the "Buyer") dated July 17, 2000. 10.5(2) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Citicasters Co., Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Texas Broadcasting, LP and AMFM Texas Licenses Limited Partnership, (the "Seller") and Cox Radio, Inc. and CXR Holdings, Inc. (the "Buyer") dated March 3, 2000. 10.6(2) Asset Purchase Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp. (the "Buyer") dated March 5, 2000. 10.7(2) Asset Exchange Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp. (the "Exchange Party") dated March 5, 2000. 10.8(2) Amendment to Asset Exchange Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc. and Cumulus Licensing Corp. (the "Exchange Party") dated June 5, 2000. 10.9(2) Second Amendment to Asset Exchange Agreement between Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Cumulus Broadcasting, Inc., Cumulus Licensing Corp. and Cumulus Wireless Services, Inc. (the "Exchange Party") dated July 17, 2000. 10.10(2) Asset purchase agreement between AMFM Houston, Inc., AMFM Ohio, Inc. and AMFM Radio Licenses, LLC, (the "Seller") and Emmis Communications Corporation, (the "Buyer") dated June 19, 2000. 10.11(2) Asset Purchase Agreement between Capstar TX Limited Partnership, (the "Seller") and Saga Communications of New England, Inc., (the "Buyer") dated March 6, 2000. 10.12(2) Asset Purchase Agreement between Capstar TX Limited Partnership and Salem Communications Corporation dated March 5, 2000. 10.13(2) Asset Exchange Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company and Capstar TX Limited Partnership, (the "Seller") and Barnstable Broadcasting, Inc., OBC Broadcasting, Inc. and Two Rivers Broadcasting Limited Partnership, (the "Buyer") dated March 7, 2000. 10.14(2) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar TX Limited Partnership, AMFM Ohio, Inc., Cleveland Radio Licenses LLC, AMFM San Diego, Inc., AMFM Houston, Inc., AMFM Radio Licenses, LLC and Zebra Broadcasting Corporation, (the "Seller") and CBS Radio, Inc. (the "Buyer") dated March 3, 2000. 10.15(3) Asset Purchase Agreement among AMFM Ohio, Inc., AMFM Radio Licenses LLC, Blue Chip Broadcasting, Ltd. and Blue Chip Broadcasting Licenses, Ltd. dated March 3, 2000. 10.16(3) Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., AMFM Operating Inc., AMFM Ohio, Inc., AMFM Houston, Inc., AMFM Radio Licenses, LLC, Zebra Broadcasting Corporation, Cleveland Radio Licenses, LLC, Capstar TX Limited Partnership and Radio One, Inc. dated March 11, 2000. 10.17(3) Amendment to Asset Purchase Agreement between Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., AMFM Operating Inc., AMFM Ohio, Inc., AMFM Houston, Inc., AMFM Radio Licenses, LLC, Zebra Broadcasting Corporation, Cleveland Radio Licenses, LLC, Capstar TX Limited Partnership and Radio One, Inc. dated August 24, 2000. 10.18(3) Asset Exchange Agreement among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. dated March 12, 2000. 10.19(3) Trust agreement between Clear Channel Communications, Inc., Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., AMFM Radio Licenses, L.L.C., AMFM Ohio, Inc., Capstar TX Limited Partnership, Capstar Radio Operating Company, and Charles E. Giddens (the "Trustee") dated August 28, 2000 and effective August 29, 2000.
(1) Incorporated by reference to Exhibits to the Current Report on Form 8-K of Clear Channel Communications, Inc. filed on October 5, 1999. (2) Incorporated by reference to Exhibits to the Current Report on Form 8-K of Clear Channel Communications, Inc. filed on September 6, 2000. (3) Filed herewith. EX-10.15 2 d77954ex10-15.txt ASSET PURCHASE AGREEMENT - MARCH 3, 2000 1 EXHIBIT 10.15 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 3, 2000, among the company or companies designated as Seller on the signature page hereto (collectively, "Seller") and the company or companies designated as Buyer on the signature page hereto (collectively, "Buyer"). Recitals A. Seller owns and operates the following radio broadcast station (the "Station") pursuant to certain authorizations issued by the Federal Communications Commission (the "FCC"): WUBE(AM) licensed to Cincinnati, Ohio B. Subject to the terms and conditions set forth herein, Buyer desires to acquire the Station Assets (defined below). C. Clear Channel Communications, Inc., CCU Merger Sub, Inc. and AMFM Inc. (Seller's parent) are parties to an Agreement and Plan of Merger dated October 2, 1999 (the "AMFM Agreement"). Agreement NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows: ARTICLE 1: PURCHASE OF ASSETS 1.1. Station Assets. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of the right, title and interest of Seller in and to all of the assets, properties, interests and rights of Seller of whatsoever kind and nature, real and personal, tangible and intangible, owned or leased (to the extent of Seller's leasehold interest), which are used exclusively in the operation of the Station and specifically described in this Section 1.1, but excluding the Excluded Assets as hereafter defined (the "Station Assets"): (a) all licenses, permits and other authorizations which are issued to Seller by the FCC with respect to the Station (the "FCC Licenses") and described on Schedule 1.1(a), including any renewals or modifications thereof between the date hereof and Closing; 2 (b) all equipment, electrical devices, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used exclusively in the operation of the Station and listed on Schedule 1.1(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Seller (the "Tangible Personal Property"); (c) all Time Sales Agreements and Trade Agreements (both defined in Section 2.1), Real Property Leases (defined in Section 7.7), and other contracts, agreements, and leases which are used in the operation of the Station and listed on Schedule 1.1(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Station, provided that Seller shall not enter into any new contracts, agreements, and leases in which any individual contract has a term in excess of 12 months or involves annual payments by Seller in excess of $15,000 without the prior consent of Buyer (such consent not to be unreasonably withheld), provided further, that this restriction shall not apply to renewals of existing contracts in the ordinary course of business (the "Station Contracts"); (d) all of Seller's rights in and to the Station's call letters and Seller's rights in and to the trademarks, trade names, service marks, franchises, copyrights, including registrations for any of the foregoing, computer software, programs and programming material, jingles, slogans, logos, and other intangible property which are used exclusively in the operation of the Station and listed on Schedule 1.1(d) (the "Intangible Property"); (e) Seller's rights in and to all the files, documents, records, and books of account (or copies thereof) relating exclusively to the operation of the Station, including the Station's local public files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, contracts to be assigned hereunder, records relating to employees hired by Buyer, and logs, but excluding records relating to Excluded Assets (defined below); and (f) any real property which is used exclusively in the operation of the Station (including any of Seller's appurtenant easements and improvements located thereon) and described on Schedule 1.1(f) (the "Real Property"). The Station Assets shall be transferred to Buyer free and clear of liens, claims and encumbrances ("Liens") except for (i) Assumed Obligations (defined in Section 2.1), (ii) liens for taxes not yet due and payable and for which Buyer receives a credit pursuant to Section 3.3, (iii) such liens, easements, rights of way, building and use restrictions, exceptions, reservations and limitations that do not in any material respect detract from the value of the property subject thereto or impair the present and continued use thereof in the ordinary course of the business of the Station, and (iv) any items listed on Schedule 1.1(b) (collectively, "Permitted Liens"). 3 1.2. Excluded Assets. Notwithstanding anything to the contrary contained herein, the Station Assets shall not include the following assets along with all rights, title and interest therein (the "Excluded Assets"): (a) all cash and cash equivalents of Seller, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; (b) all accounts receivable or notes receivable arising in the operation of the Station prior to Closing; (c) all tangible and intangible personal property of Seller disposed of or consumed in the ordinary course of business of Seller between the date of this Agreement and Closing; (d) all Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Seller, provided however, that Seller shall reasonably cooperate with Buyer with regard to the extension or renewal of any such contracts for which Buyer provides written notice to Seller that Buyer desires to extend or renew; (e) Seller's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Seller, duplicate copies of the records of the Station, and all records not relating exclusively to the operation of the Station; (f) contracts of insurance, and all insurance proceeds or claims made thereunder, except to the extent such proceeds are paid to Buyer pursuant to Section 17.1; (g) except as provided in Section 10.4, all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Seller; (h) certain of Seller's FM towers and FM tower sites described on Schedule 1.2(h), all other rights, properties and assets described on Schedule 1.2(h), and all rights, properties and assets not specifically described in Section 1.1; and (i) Seller's rights in the name "AMFM" or "Clear Channel" and variations thereof. 1.3. Lease Agreements. At Closing, Buyer and Seller shall enter into the lease agreements described on Schedule 1.2(h) pursuant to leases in the form of Exhibit A attached hereto. 4 ARTICLE 2: ASSUMPTION OF OBLIGATIONS 2.1. Assumed Obligations. On the Closing Date, Buyer shall assume the obligations of Seller (the "Assumed Obligations") arising after Closing under the Station Contracts, including without limitation all agreements for the sale of advertising time on the Station for cash at commercially reasonable rates and in the ordinary course of business ("Time Sales Agreements") and all agreements for the sale of advertising time on the Station for non-cash consideration arising in the ordinary course of business of Seller consistent with past practices ("Trade Agreements"). 2.2. Retained Obligations. Buyer does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Seller of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Buyer, other than the Assumed Obligations (the "Retained Obligations"). ARTICLE 3: PURCHASE PRICE 3.1. Purchase Price. In consideration for the sale of the Station Assets to Buyer, in addition to the assumption of the Assumed Obligations, Buyer shall at Closing (defined below) deliver to Seller by wire transfer of immediately available funds, Two Million and 00/100 Dollars ($2,000,000.00), less the Deposit (as defined below), subject to adjustment pursuant to Sections 3.3 (the "Purchase Price"). 3.2. Deposit. Within two (2) business days of the date of this Agreement (with no cure period), Buyer shall deposit an amount equal to 25% of the Purchase Price (the "Deposit") with NationsBank/Bank of America (the "Escrow Agent") pursuant to the Escrow Agreement (the "Escrow Agreement") of even date herewith among Buyer, Seller and the Escrow Agent. At Closing, the Deposit shall be applied to the Purchase Price and any interest accrued thereon shall be disbursed to Buyer. If this Agreement is terminated by Seller due to Buyer's failure to consummate the Closing on the Closing Date in accordance with this Agreement or if this Agreement is otherwise terminated by Seller pursuant to Section 16.1(c), the Deposit and any interest accrued thereon shall be disbursed to Seller as payment of liquidated damages pursuant to Section 16.3. If this Agreement is terminated for any other reason, the Deposit and any interest accrued thereon shall be disbursed to Buyer. 3.3. Prorations and Adjustments. Except as otherwise provided herein, all deposits, reserves and prepaid and deferred income and expenses relating to the Station Assets or the Assumed Obligations and arising from the conduct of the business and operations of the Station 5 shall be prorated between Buyer and Seller in accordance with generally accepted accounting principles as of 11:59 p.m. on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate and other property taxes (but excluding taxes arising by reason of the transfer of the Station Assets as contemplated hereby which shall be paid as set forth in Section 13.1), business and license fees, music and other license fees (including any retroactive adjustments thereof), utility expenses, amounts due or to become due under Station Contracts, rents, lease payments and similar prepaid and deferred items. Real estate taxes shall be apportioned on the basis of taxes assessed for the preceding year, with a reapportionment, if any, as soon as the new tax rate and valuation can be ascertained. Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days of the Closing Date. In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid at the time provided herein and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Seller and one-half by Buyer. 3.4. Allocation. The Purchase Price shall be allocated among the Station Assets in a manner as mutually agreed between the parties based upon an appraisal prepared by Bond & Pecaro (whose fees shall be paid one-half by Seller and one-half by Buyer). Seller and Buyer agree to use the allocations determined pursuant to this Section 3.4 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended. ARTICLE 4: CLOSING 4.1. Closing. The consummation of the sale and purchase of the Station Assets (the "Closing") shall occur on a date (the "Closing Date") and at a time and place designated solely by Seller after FCC Consent (defined below), subject to satisfaction or waiver of the conditions to Closing contained herein (other than those to be satisfied at Closing). Seller shall provide Buyer with notice of the Closing Date at least three (3) business days prior to Closing, however, Seller reserves the right to extend the Closing Date without penalty. If requested by Seller, prior to Closing the parties shall hold a pre-closing conference at a time and place designated by Seller, at which the parties shall provide (for review only) all documents to be delivered at Closing under this Agreement, each duly executed but undated, and otherwise confirm their ability to timely consummate the Closing. ARTICLE 5: GOVERNMENTAL CONSENTS Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC Consent") to the assignment of the FCC Licenses to Buyer, (ii) United States Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the transactions contemplated hereby, including without limitation any such approval as may be necessary to enable Seller to consummate the merger 6 under the AMFM Agreement, and (iii) expiration or termination of any applicable waiting period ("HSR Clearance") under the HSR Act (defined below). 5.1. FCC. On a date designated by Seller, Buyer and Seller shall file an application with the FCC (the "FCC Application") requesting the FCC Consent. Buyer and Seller shall diligently prosecute the FCC Application and otherwise use their best efforts to obtain the FCC Consent as soon as possible. If the FCC Consent imposes upon Buyer any condition (including without limitation any divestiture condition), Buyer shall timely comply therewith. 5.2. HSR. If not previously filed, then within five (5) business days after the execution of this Agreement, Buyer and Seller shall make any required filings with the Federal Trade Commission and the DOJ pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. 5.3. General. Buyer and Seller shall notify each other of all documents filed with or received from any governmental agency with respect to this Agreement or the transactions contemplated hereby. Buyer and Seller shall furnish each other with such information and assistance as such the other may reasonably request in connection with their preparation of any governmental filing hereunder. If Buyer becomes aware of any fact relating to it which would prevent or delay the FCC Consent, the DOJ Consent or HSR Clearance, Buyer shall promptly notify Seller thereof and take such steps as necessary to remove such impediment, including but not limited to divesting any Station and terminating any agreements to acquire or program or market any Station. ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYER Buyer hereby makes the following representations and warranties to Seller: 6.1. Organization and Standing. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and on the Closing Date will be qualified to do business in each jurisdiction in which the Station Assets are located. Buyer has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Buyer pursuant hereto (collectively, the "Buyer Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 6.2. Authorization. The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized and approved by all necessary action of Buyer and do not require any further authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary Agreement when executed and delivered by Buyer and the other parties thereto will be, a legal, valid and binding agreement of Buyer enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by 7 bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 6.3. No Conflicts. Neither the execution and delivery by Buyer of this Agreement and the Buyer Ancillary Agreements or the consummation by Buyer of any of the transactions contemplated hereby or thereby nor compliance by Buyer with or fulfillment by Buyer of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Buyer or any law, judgment, order or decree to which Buyer is subject; or (ii) require the approval, consent, authorization or act of, or the making by Buyer of any declaration, filing or registration with, any third party, or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and DOJ Consent, and, if applicable, HSR Clearance. 6.4. Qualification. Buyer is legally qualified to be the licensee of, acquire, own and operate the Station under the Communications Act of 1934, as amended (the "Communications Act") and the rules, regulations and policies of the FCC. There are no facts that would, under existing law and the existing rules, regulations, policies and procedures of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as the owner and operator of the Station. No waiver of any FCC rule or policy is necessary for the FCC Consent to be obtained. There is no action, suit or proceeding pending or threatened against Buyer which questions the legality or propriety of the transactions contemplated by this Agreement or could materially adversely affect Buyer's ability to perform its obligations hereunder. Buyer will have available on the Closing Date sufficient funds to enable it to consummate the transactions contemplated hereby. 6.5. No Finder. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Buyer or any party acting on Buyer's behalf. ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF SELLER Seller makes the following representations and warranties to Buyer: 7.1. Organization. Each Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Seller is qualified to do business in the applicable jurisdiction which its Station Assets are located. Each Seller has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Seller pursuant hereto (collectively, the "Seller Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 7.2. Authorization. The execution, delivery and performance of this Agreement and the Seller Ancillary Agreements by each Seller have been duly authorized and approved by all 8 necessary action of each Seller and do not require any further authorization or consent of any Seller. This Agreement is, and each Seller Ancillary Agreement when executed and delivered by each Seller, respectively, and the other parties thereto will be, a legal, valid and binding agreement of each Seller enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 7.3. No Conflicts. Neither the execution and delivery by any Seller of this Agreement and the Seller Ancillary Agreements or the consummation by any Seller of any of the transactions contemplated hereby or thereby nor compliance by any Seller with or fulfillment by any Seller of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of any Seller or any law, judgment, order, or decree to which any Seller is subject or, except as set forth on Schedule 1.1(c), any Station Contract; or (ii) require the approval, consent, authorization or act of, or the making by any Seller of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and DOJ Consent and, if applicable, HSR Clearance. 7.4. FCC Licenses. Seller (or one of the companies comprising Seller) is the holder of the FCC Licenses described on Schedule 1.1(a). The FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated and have not expired. There is not pending any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the FCC Licenses (other than proceedings to amend FCC rules of general applicability), and there is not now issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or notice of forfeiture against Seller with respect to the Station. The Station are operating in compliance in all material respects with the FCC Licenses, the Communications Act, and the rules, regulations and policies of the FCC. 7.5. Taxes. Seller has, in respect of the Station's business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and reports which are required to have been filed by it under applicable law and has paid all taxes which have become due pursuant to such returns or pursuant to any assessments which have become payable. 7.6. Personal Property. Schedule 1.1(b) contains a list of all material items of Tangible Personal Property included in the Station Assets. Seller has title to the Tangible Personal Property free and clear of Liens other than Permitted Liens. 7.7. Real Property. Schedule 1.1(f) contains a description of all Real Property included in the Station Assets. Seller has fee simple title to the owned Real Property ("Owned Real Property") free and clear of Liens other than Permitted Liens. Schedule 1.1(f) includes a description of each lease of Real Property or similar agreement included in the Station Assets (the 9 "Real Property Leases"). The Owned Real Property includes, and the Real Property Leases provide, access to the Station's facilities. To Seller's knowledge, the Real Property is not subject to any suit for condemnation or other taking by any public authority. 7.8. Contracts. Each of the Station Contracts (including without limitation each of the Real Property Leases) is in effect and is binding upon Seller and, to Seller's knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors' rights generally). Seller has performed its obligations under each of the Station Contracts in all material respects, and is not in material default thereunder, and to Seller's knowledge, no other party to any of the Station Contracts is in default thereunder in any material respect. 7.9. Environmental. Except as set forth in any environmental report delivered by Seller to Buyer prior to the date of this Agreement and except as set forth on Schedule 1.1(f), to Seller's knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to the Real Property included in the Station Assets. Except as set forth in any environmental report delivered by Seller to Buyer prior to the date of this Agreement and except as set forth on Schedule 1.1(f), to Seller's knowledge, Seller has complied in all material respects with all environmental, health and safety laws applicable to the Station. 7.10. Intangible Property. Schedule 1.1(d) contains a description of the material Intangible Property included in the Station Assets. Except as set forth on Schedule 1.1(d), Seller has received no notice of any claim that its use of the Intangible Property infringes upon any third party rights. Except as set forth on Schedule 1.1(d), Seller owns or has the right to use the Intangible Property free and clear of Liens other than Permitted Liens. 7.11. Compliance with Law. Seller has complied in all material respects with all laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or orders of any court or of any foreign, federal, state, municipal or other governmental authority which are applicable to the operation of the Station. There is no action, suit or proceeding pending or threatened against Seller in respect of the Station that will subject Buyer to liability or which questions the legality or propriety of the transactions contemplated by this Agreement. To Seller's knowledge, there are no governmental claims or investigations pending or threatened against Seller in respect of the Station (except those affecting the industry generally). 7.12. No Finder. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Seller or any party acting on Seller's behalf. 7.13. Financial Statements. Seller has delivered to Buyer copies of the unaudited results of operations of the Station for the twelve-month period ended December 31, 1999 prepared in accordance with the books and records of the Station, and such reports fairly represent the results of operations of the Station for the period indicated. 10 ARTICLE 8: ACCOUNTS RECEIVABLE 8.1. Accounts Receivable. All accounts receivable arising prior to the Closing Date in connection with the operation of the Station, including but not limited to accounts receivable for advertising revenues for programs and announcements performed prior to the Closing Date and other broadcast revenues for services performed prior to the Closing Date, shall remain the property of Seller (the "Accounts Receivable") and Buyer shall not acquire any right or interest therein. For a period of 180 days from Closing (the "Collection Period"), Buyer shall collect the Accounts Receivable in the normal and ordinary course of Buyer's business and shall apply all such amounts collected to the debtor's oldest account receivable first. Buyer's obligation shall not extend to the institution of litigation, employment of counsel or a collection agency or any other extraordinary means of collection. During the Collection Period, neither Seller or its agents shall make any direct solicitation of any such account debtor for collection purposes or institute litigation for the collection of amounts due. Any amounts relating to the Accounts Receivable that are paid directly to Seller shall be retained by Seller. Within ten calendar days after the end of each month, Buyer shall make a payment to Seller equal to the amount of all collections of Accounts Receivable during the preceding month. At the end of the Collection Period, any remaining Accounts Receivable shall be returned to Seller for collection. ARTICLE 9: COVENANTS OF SELLER 9.1. Seller's Covenants. Seller covenants and agrees with respect to the Station that, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Buyer, which shall not be unreasonably withheld, Seller shall: (a) operate the Station in the ordinary course of business consistent with past practice and in all material respects in accordance with FCC rules and regulations and with all other applicable laws, regulations, rules and orders; (b) not, other than in the ordinary course of business in accordance with past practice, sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets, or create, assume or permit to exist any Liens upon the Station Assets, except for Permitted Liens; and, (c) furnish Buyer with such information relating to the Station Assets as Buyer may reasonably request, and permit Buyer's on-site access to the Station Assets with Seller's prior approval after the FCC Application is filed, at Buyer's expense and provided such request and on-site visits do not interfere unreasonably with the business of the Station; (d) Seller will, upon Buyer's request and for each month following the date hereof, provide to Buyer copies of the unaudited results of operations of the Station for which such reports are generated for each month between the date hereof and the Closing Date prepared in accordance with the books and records of the Station. 9.2. Audit. Seller shall cooperate, and use its reasonable best efforts to cause its 11 independent auditors to reasonably cooperate, with Buyer in order to enable Buyer to have independent auditors selected by Buyer, and at Buyer's expense, prepare audited financial statements for the Station for the three most recently completed fiscal year-ends. Without limiting the generality of the foregoing, Seller agrees that it will consent to the use of such audited financial statements in any registration statement or other document filed by Buyer under Securities Act of 1933 and the Securities and Exchange Act of 1934. Seller shall give or cause the Station to give Buyer and Buyer's accountants, at Buyer's expense, and reasonable request and upon reasonable notice, full and reasonable access during normal business hours to Seller's financial records that Buyer may reasonably request. The rights of Buyer under this Section shall not be exercised in such a manner as to interfere unreasonably with the business of the Station. ARTICLE 10: JOINT COVENANTS Buyer and Seller hereby covenant and agree that between the date hereof and Closing: 10.1. Cooperation. Subject to express limitations contained elsewhere herein, each party (i) shall cooperate fully with one another in taking any reasonable actions (including without limitation, reasonable actions to obtain the required consent of any governmental instrumentality or any third party) necessary or helpful to accomplish the transactions contemplated by this Agreement, including but not limited to the prompt satisfaction of any condition to Closing set forth herein, and (ii) shall not take any action that conflicts with its obligations hereunder or that causes its representations and warranties to become untrue in any material respect. 10.2. Control of Station. Buyer shall not, directly or indirectly, control, supervise or direct the operations of the Station prior to Closing. Such operations, including complete control and supervision of all Station programs, employees and policies, shall be the sole responsibility of Seller. 10.3. Consents to Assignment. The parties shall use commercially reasonable efforts to obtain any third party consents necessary for the assignment of any Station Contract (which shall not require any payment to any such third party). To the extent that any Station Contract may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant hereto shall not constitute an assignment thereof, but to the extent permitted by law shall constitute an equitable assignment by Seller and assumption by Buyer of Seller's rights and obligations under the applicable Station Contract, with Seller making available to Buyer the benefits thereof and Buyer performing the obligations thereunder on Seller's behalf, provided, however, that Seller shall defend, indemnify and hold harmless Buyer from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses, incurred by Buyer during the first six (6) months following the Closing Date as a result of Seller's failure to have obtained a consent to assignment with respect to the lease for the main transmitter site listed on Schedule 1.1(f) from which the Station's signals are broadcast. Seller shall be released from all indemnification obligations with respect to Seller's failure to have obtained a consent to assignment with respect to any of the leases for the main transmitter sites from which the Station's signals are broadcast six (6) months after the Closing Date. 12 10.4. Employee Matters. (a) Prior to Closing, Seller shall deliver to Buyer a list of employees of the Station that Seller does not intend to retain after Closing. Buyer may interview and elect to hire such listed employees, but not any other employees of Seller. Buyer is obligated to hire only those employees that are under employment contracts (and assume Seller's obligations and liabilities under such employment contracts) which are included in the Station Contracts. With respect to employees hired by Buyer ("Transferred Employees"), to the extent permitted by law, Seller shall provide Buyer access to its personnel records and such other information as Buyer may reasonably request prior to Closing. With respect to such hired employees, Seller shall be responsible for the payment of all compensation and accrued employee benefits payable by it until Closing and thereafter Buyer shall be responsible for all such obligations payable by it. Buyer shall cause all employees it hires to be eligible to participate in its "employee welfare benefit plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA, respectively) in which similarly situated employees are generally eligible to participate; provided, however, that all such employees and their spouses and dependents shall be eligible for coverage immediately after Closing (and shall not be excluded from coverage on account of any pre-existing condition) to the extent provided under such plans. For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such plan for which such employees may be eligible after Closing, Buyer shall ensure that service with Seller shall be deemed to have been service with the Buyer. In addition, Buyer shall ensure that each such employee receives credit under any welfare benefit plan of Buyer for any deductibles or co-payments paid by such employees and dependents for the current plan year under a plan maintained by Seller. Notwithstanding any other provision contained herein, Buyer shall grant credit to each such employee for all unused sick leave accrued as of Closing as an employee of Seller. Buyer shall assume and discharge Seller's liabilities for the payment of all unused vacation leave accrued by such employees as of Closing. (b) From and after the Closing, Buyer shall cooperate with the reasonable requests of Seller to continue to withhold from the pay checks of Transferred Employees' who have outstanding loan balances in Seller's 401(k) Savings Plan and Buyer shall remit such withheld amounts to Seller in a timely fashion such that the outstanding loans do not go into default. 10.5. 1031 Exchange. At or prior to Closing, Seller may assign its rights under this Agreement (in whole or in part) to a qualified intermediary (as defined in Treasury regulation section 1.1031(k)-1(g)(4)) or similar entity or arrangement ("Qualified Intermediary"). Upon any such assignment, Seller shall promptly give written notice thereof to Buyer, and Buyer shall cooperate with the reasonable requests of Seller and any Qualified Intermediary in connection therewith. Without limiting the generality of the foregoing, if Seller gives notice of such assignment, Buyer shall (i) promptly provide Seller with written acknowledgment of such notice and (ii) at Closing, pay the Purchase Price (or any portion thereof designated by the Qualified 13 Intermediary) to or on behalf of the Qualified Intermediary (which payment shall, to the extent thereof, satisfy the obligations of Buyer to make such payment hereunder). Seller's assignment to a Qualified Intermediary will not relieve Seller of any of its duties or obligations herein. Except for the obligations of Buyer set forth in this Section, Buyer shall not have any liability or obligation to Seller for the failure of the contemplated exchange to qualify as a like-kind exchange under Section 1031 of the Internal Revenue Code unless such failure is the result of the material breach or default by Buyer under this Agreement. 10.6. Trust. Notwithstanding anything in this Agreement to the contrary, Seller may at it option assign this Agreement (in whole or part) and assign and transfer the Station Assets (in whole or in part) to a trustee to hold and operate pursuant to a trust agreement, provided such trustee assumes Seller's duties and obligations hereunder with respect to the Station Assets held in such trust. 10.7. Environmental Report. After the filing of the FCC Application and the public announcement of the execution of this Agreement, Seller will cooperate with Buyer or Buyer's independent contractor for full access to the Owned Real Property and Real Property Leases, and reasonable access to all documents and employees relating to, or who have knowledge of, environmental matters with respect to the Station. ARTICLE 11: CONDITIONS OF CLOSING BY BUYER The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 11.1. Representations, Warranties and Covenants. The representations and warranties of Seller made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Seller at or prior to Closing shall have been complied with or performed in all material respects. Buyer shall have received a certificate dated as of the Closing Date from Seller, executed by an authorized officer of Seller to the effect that the conditions set forth in this Section have been satisfied. 11.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if applicable, HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. ARTICLE 12: CONDITIONS OF CLOSING BY SELLER The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 12.1. Representations, Warranties and Covenants. The representations and warranties of Buyer made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the 14 covenants and agreements to be complied with and performed by Buyer at or prior to Closing shall have been complied with or performed in all material respects. Seller shall have received a certificate dated as of the Closing Date from Buyer, executed by an authorized officer of Buyer, to the effect that the conditions set forth in this Section have been satisfied. 12.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if applicable, HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. 12.3. AMFM Closing. The closing under the AMFM Agreement shall have been consummated. ARTICLE 13: EXPENSES 13.1. Expenses. Each party shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement, except that (i) all recordation, transfer and documentary taxes, fees and charges, and any excise, sales or use taxes, applicable to the transfer of the Station Assets shall be paid by Buyer, (ii) all FCC filing fees shall be paid equally by Buyer and Seller, and (iii) all HSR Act filing fees and expenses shall be paid by Buyer. ARTICLE 14: DOCUMENTS TO BE DELIVERED AT CLOSING 14.1. Seller's Documents. At Closing, Seller shall deliver or cause to be delivered to Buyer: (i) certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 11.1; (iii) the duly executed tower leases and subleases referred to in Section 1.3. hereof; and (iv) such bills of sale, assignments, special warranty deeds, documents of title and other instruments of conveyance, assignment and transfer as may be necessary to convey, transfer and assign the Station Assets to Buyer, free and clear of Liens, except for Permitted Liens. 14.2. Buyer's Documents. At Closing, Buyer shall deliver or cause to be delivered to Seller: (i) the certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; 15 (ii) the certificate described in Section 12.1; (iii) the duly executed tower leases and subleases referred to in Section 1.3 hereof; and (iv) such documents and instruments of assumption as may be necessary to assume the Assumed Obligations, and the Purchase Price in accordance with Section 3.1 hereof. ARTICLE 15: SURVIVAL; INDEMNIFICATION. 15.1. Survival. The covenants, agreements, representations and warranties in this Agreement shall survive Closing for a period of twelve (12) months from the Closing Date whereupon they shall expire and be of no further force or effect, except those under (i) this Article 15 that relate to Damages (defined below) for which written notice is given by the indemnified party to the indemnifying party prior to the expiration, which shall survive until resolved and (ii) Sections 2.1 (Assumed Obligations), 3.3 (Adjustments), 3.4 (Allocation), 8.1 (Accounts Receivable) and 13.1 (Expenses), and indemnification obligations with respect to such provisions, all of which shall survive until performed. 15.2. Indemnification. (a) From and after the Closing, Seller shall defend, indemnify and hold harmless Buyer from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses ("Damages") incurred by Buyer arising out of or resulting from: (i) any breach or default by Seller under this Agreement; (ii) the Retained Obligations; or (iii) the business or operation of the Station before Closing; provided that (i) Seller shall have no liability to Buyer hereunder until, and only to the extent that, Buyer's aggregate Damages exceed $75,000 and (ii) the maximum liability of Seller hereunder shall be $500,000. (b) From and after the Closing, Buyer shall defend, indemnify and hold harmless Seller from and against any and all Damages incurred by Seller arising out of or resulting from: (i) any breach or default by Buyer under this Agreement; (ii) the Assumed Obligations; or (iii) the business or operation of the Station after Closing. 15.3. Procedures. The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a "Claim"), but a failure to give such notice or delaying such notice shall not affect the indemnified party's right to indemnification and the indemnifying party's obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party's ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The 16 obligations and liabilities of the parties with respect to any Claim shall be subject to the following additional terms and conditions: (a) The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim. (b) In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within twenty (20) days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof). (c) Anything herein to the contrary notwithstanding: (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (ii) the indemnifying party shall not, without the indemnified party's written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim; and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim. (d) All claims not disputed shall be paid by the indemnifying party within thirty (30) days after receiving notice of the Claim. "Disputed Claims" shall mean claims for Damages by an indemnified party which the indemnifying party objects to in writing within thirty (30) days after receiving notice of the Claim. In the event there is a Disputed Claim with respect to any Damages, the indemnifying party shall be required to pay the indemnified party the amount of such Damages for which the indemnifying party has, pursuant to a final determination, been found liable within ten (10) days after there is a final determination with respect to such Disputed Claim. A final determination of a Disputed Claim shall be (i) a judgment of any court determining the validity of a Disputed Claim, if no appeal is pending from such judgment and if the time to appeal therefrom has elapsed; (ii) an award of any arbitration determining the validity of such disputed claim, if there is not pending any motion to set aside such award and if the time within which to move to set aside such award has elapsed; (iii) a written termination of the dispute with respect to such claim signed by the parties thereto or their attorneys; (iv) a written acknowledgment of the indemnifying party that it no longer disputes the validity of such claim; or (v) such other evidence 17 of final determination of a disputed claim as shall be acceptable to the parties. No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims. ARTICLE 16: TERMINATION 16.1. Termination. This Agreement may be terminated at any time prior to Closing as follows: (a) by mutual written consent of Buyer and Seller; (b) by written notice of Buyer to Seller if Seller (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below); (c) by written notice of Seller to Buyer if Buyer (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below); (d) by written notice of Buyer to Seller, or by Seller to Buyer, if the FCC denies the FCC Application; (e) by written notice of Seller to Buyer if the Closing shall not have been consummated on or before the date four months after the date of this Agreement; or (f) by written notice of Seller to Buyer if the AMFM Agreement is terminated or expires. The term "Cure Period" as used herein means a period commencing the date Buyer or Seller receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) days thereafter or (ii) the Closing Date; provided, however, that if the breach or default cannot reasonably be cured within such period but can be cured before the Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date. Except as set forth below, the termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. Notwithstanding anything contained herein to the contrary, Section 13.1 shall survive any termination of this Agreement. 18 16.2. Remedies. The parties recognize that if either party refuses to consummate the Closing pursuant to the provisions of this Agreement or either party otherwise breaches or defaults such that the Closing has not occurred ("Breaching Party"), monetary damages alone will not be adequate to compensate the non-breaching party ("Non-Breaching Party") for its injury. Such Non-Breaching Party shall therefore be entitled to obtain specific performance of the terms of this Agreement in lieu of, and not in addition to, any other remedies, including but not limited to monetary damages, that may be available to it; provided however, that Seller may elect to recover liquidated damages in lieu of obtaining specific performance. If any action is brought by the Non-Breaching Party to enforce this Agreement, the Breaching Party shall waive the defense that there is an adequate remedy at law. In the event of a default by the Breaching Party which results in the filing of a lawsuit for damages, specific performance, or other remedy, the Non-Breaching Party shall be entitled to reimbursement by the Breaching Party of reasonable legal fees and expenses incurred by the Non-Breaching Party, provided that the Non-Breaching Party is successful in such lawsuit. 16.3. Liquidated Damages. If Seller terminates this Agreement due to Buyer's failure to consummate the Closing on the Closing Date or if this Agreement is otherwise terminated by Seller pursuant to Section 16.1(c), then the Deposit and any interest accrued thereon shall be paid to Seller, and such payment shall constitute liquidated damages. It is understood and agreed that such liquidated damages amount represents Buyer's and Seller's reasonable estimate of actual damages and does not constitute a penalty. ARTICLE 17: MISCELLANEOUS PROVISIONS 17.1. Casualty Loss. In the event any loss or damage of the Station Assets exists on the Closing Date, Buyer and Seller shall consummate the Closing and Seller shall assign to Buyer the proceeds of any insurance payable to Seller on account of such damage or loss. If insurance proceeds payable with respect to the lost or damaged asset are insufficient to repair or replace such asset, Buyer shall receive a credit at Closing against the Purchase Price equal to the cost of repair or replacement less the amount of insurance proceeds assigned to Buyer. 17.2. Further Assurances. After the Closing, Seller shall from time to time, at the request of and without further cost or expense to Buyer, execute and deliver such other instruments of conveyance and transfer and take such other actions as may reasonably be requested in order to more effectively consummate the transactions contemplated hereby to vest in Buyer good title to the Station Assets, and Buyer shall from time to time, at the request of and without further cost or expense to Seller, execute and deliver such other instruments and take such other actions as may reasonably be requested in order more effectively to relieve Seller of any obligations being assumed by Buyer hereunder. 17.3. Assignment. Except as set forth in Sections 10.5 (1031 Exchange) and 10.6 (Trust), neither party may assign this Agreement without the prior written consent of the other party hereto, provided, however, that either party may assign this Agreement to one or more entities that control, are controlled by, or are under common control with, such party, so long as 19 (i) the assigning party remains liable hereunder, (ii) the assignment is made prior to any filings with the FCC, FTC, DOJ, including any HSR filing, and (ii) such assignment will not delay any consent required to be obtained hereunder, including but not limited to HSR Clearance, DOJ Consent and FCC Consent, or delay the Closing in any respect. With respect to any permitted assignment, the parties shall take all such actions as are reasonably necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other governmental authorities. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and permitted assigns of the parties hereto. 17.4. Amendments. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. 17.5. Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. 17.6. Governing Law. The construction and performance of this Agreement shall be governed by the laws of the State of Texas without giving effect to the choice of law provisions thereof. 17.7. Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, including by facsimile, and shall be deemed to have been received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery or when delivered by facsimile transmission, and shall be addressed as follows (or to such other address as any party may request by written notice): if to Seller: c/o Clear Channel Broadcasting, Inc. 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 Attention: President Facsimile: (210) 822-2299 with a copy (which shall not constitute notice) to: Graydon, Head & Ritchey 1900 Fifth Third Center 511 Walnut Street Cincinnati, Ohio 45202 Attention: John J. Kropp, Esq. Facsimile: (513) 651-3836 20 if to Buyer: Blue Chip Broadcasting, Ltd. 1821 Summit Road, Suite 401 Cincinnati, Ohio 45237 Attention: L. Ross Love, President Facsimile: (513) 679-6019 with a copy (which shall not constitute notice) to: Dinsmore & Shohl LLP 1900 Chemed Center 255 East Fifth Street Cincinnati, Ohio 45202 Attn: Calvin D. Buford , Esq. Facsimile: (513) 977-8141 17.8. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. 17.9. No Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns, any rights or remedies under or by reason of this Agreement. 17.10. Severability. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. 17.11. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto and supersedes any and all prior agreements, arrangements and understandings relating to the matters provided for herein. This Agreement does not supersede any confidentiality agreement relating to the Station. [SIGNATURE PAGE FOLLOWS] 21 SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. SELLER: AMFM Ohio, Inc. By: --------------------------------------------- Name: ---------------------------------------- Title: --------------------------------------- AMFM Radio Licenses LLC By: --------------------------------------------- Name: ---------------------------------------- Title: --------------------------------------- 22 BUYER: Blue Chip Broadcasting, Ltd. By: ---------------------------------------------- L. Ross Love, President Blue Chip Broadcasting Licenses, Ltd. By: ---------------------------------------------- L. Ross Love, President 23 Schedules 1.1(a) - FCC Licenses 1.1(b) - Tangible Personal Property 1.1(c) - Station Contracts 1.1(d) - Intangible Property 1.1(f) - Real Property 1.2(h) - Excluded Assets EX-10.16 3 d77954ex10-16.txt ASSET PURCHASE AGREEMENT - MARCH 11, 2000 1 EXHIBIT 10.16 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 11, 2000, among the company or companies designated as Seller on the signature page hereto (collectively, "Seller") and the company or companies designated as Buyer on the signature page hereto (collectively, "Buyer"). RECITALS A. Seller owns and operates the following radio broadcast stations (collectively, the "Stations" and each a "Station") pursuant to certain authorizations issued by the Federal Communications Commission (the "FCC"): KMJQ(FM), Houston, Texas KBXX(FM), Houston, Texas WVCG(AM), Coral Gables, Florida WZAK(FM), Cleveland, Ohio WJMO(AM), Cleveland Heights, Ohio KKBT(FM), Los Angeles (excluding the FCC licenses, transmitter/antenna equipment and transmitter/tower site) KCMG(FM), Los Angeles (FCC licenses (excluding call letters), transmitter/antenna equipment and transmitter/tower site only to be conveyed to Buyer) KBFB(FM), Dallas, Texas WJMZ-FM, Anderson, South Carolina WFXC-FM, Durham, North Carolina WFXK-FM, Tarboro, North Carolina WNNL-FM, Farquay-Varina, North Carolina WQOK-FM, South Boston, Virginia The definition of "Stations" with respect to KKBT(FM) does not refer to the FCC licenses, transmitter/antenna equipment and transmitter/tower site, and with respect to KCMG(FM) refers only to the FCC licenses (excluding call letters), transmitter/antenna equipment and transmitter/tower site. B. Subject to the terms and conditions set forth herein, Buyer desires to acquire the Station Assets (defined below). C. Clear Channel Communications, Inc. and AMFM Inc. (Seller's parents) and CCU Merger Sub, Inc. are parties to an Agreement and Plan of Merger dated October 2, 1999 (the "AMFM Agreement"). 2 AGREEMENT NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows: ARTICLE 1: PURCHASE OF ASSETS 1.1. Station Assets. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of the right, title and interest of Seller in and to all of the assets, properties, interests and rights of Seller of whatsoever kind and nature, real and personal, tangible and intangible, which are used or held for use exclusively in the operation of the Stations and specifically described in this Section 1.1, but excluding the Excluded Assets as hereafter defined (the "Station Assets"): (a) all licenses, permits and other authorizations which are issued to Seller by the FCC with respect to the Stations, other than the licenses, permits and other authorization issued to Seller by the FCC with respect to KKBT-FM, Los Angeles (except for the KKBT call letters which will be conveyed to Buyer) (the "FCC Licenses") and described on Schedule 1.1(a), including any renewals or modifications thereof between the date hereof and Closing; (b) all equipment, electrical devices, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used or held for use exclusively in the operation of the Stations and listed on Schedule 1.1(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Seller and any equipment, inventory and personal property located at the KKBT-FM tower and/or transmitter site (the "Tangible Personal Property"); (c) all Time Sales Agreements and Trade Agreements (both defined in Section 2.1), Real Property Leases (defined in Section 7.7), and other contracts, agreements, and leases which are used in the operation of the Stations and listed on Schedule 1.1(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Stations (the "Station Contracts"), provided that Seller will not enter into any new Station Contract(s) with a (i) term greater than one year, (ii) an individual aggregate value greater than $ 50,000 per market or (iii) total aggregate value greater than $250,000 for the Stations combined without obtaining Buyer's prior consent, or enter into any new Trade Agreements under which the aggregate barter payable exceeds the aggregate barter receivable on a per market basis without obtaining Buyer's prior consent; (d) all of Seller's rights in and to the Stations' call letters and Seller's rights in 2 3 and to the trademarks, trade names, service marks, franchises, copyrights, computer software, programs and programming material, jingles, slogans, logos, domain names, registrations, websites and other intangible property which are used or held for use exclusively in the operation of the Stations, other than the KCMG call letters and intellectual property associated with the current operation of KCMG, and listed on Schedule 1.1(d) (the "Intangible Property"); (e) Seller's rights in and to all the files, documents, records, and books of account (or copies thereof) relating exclusively to the operation of the Stations, including the Stations' local public files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to Excluded Assets (defined below), and access to records described in Section 1.2(e) that pertain to the Stations; and (f) any real property which is used exclusively in the operation of the Stations (including any of Seller's appurtenant easements and improvements located thereon) and described on Schedule 1.1(f) (the "Real Property"). The Station Assets shall be transferred to Buyer free and clear of liens, claims and encumbrances ("Liens") except for (i) Assumed Obligations (defined in Section 2.1), (ii) liens for taxes not yet due and payable and for which Buyer receives a credit pursuant to Section 3.3, (iii) such liens (not related to Seller's indebtedness), easements, rights of way, building and use restrictions, exceptions, reservations and limitations that do not in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Stations, and (iv) any items listed on Schedule 1.1(b) (collectively, "Permitted Liens"). 1.2. Excluded Assets. Notwithstanding anything to the contrary contained herein, the Station Assets shall not include the following assets along with all rights, title and interest therein (the "Excluded Assets"): (a) all cash and cash equivalents of Seller, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; (b) all accounts receivable or notes receivable arising in the operation of the Stations prior to Closing; (c) all tangible and intangible personal property of Seller disposed of or consumed in the ordinary course of business and consistent with past practices of Seller between the date of this Agreement and Closing; (d) all Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Seller, except which Seller is required to extend pursuant to Section 9.1(g); 3 4 (e) Seller's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Seller, duplicate copies of the records of the Stations, and all records not relating exclusively to the operation of the Stations; (f) contracts of insurance, and all insurance proceeds or claims made thereunder except to the extent such proceeds are paid to Buyer pursuant to Section 17.1; (g) except as provided in Section 10.4, all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Seller; (h) all Seller's owned FM towers and FM tower sites, all rights, properties and assets described on Schedule 1.2(h), and all rights, properties and assets not specifically described in Section 1.1; (i) all of Seller's right, title and interest in and to the call letters KCMG-FM and all intellectual property currently used in the operation of KCMG-FM by Seller; (j) all of Seller's right, title and interest in and to the KKBT tower and/or transmitter site; and (k) all of Seller's right, title and interest in the KKBT intellectual property as described on Schedule 1.2(h). 1.3. Lease Agreements. At Closing, Buyer and Seller shall negotiate in good faith and enter into the lease agreements described on Schedule 1.2(h) pursuant to leases substantially in the form of Exhibit A (tower lease), Exhibit A-1 (tower lease for WZAK) and Exhibit A-2 (Raleigh studio lease) attached hereto. 1.4. KKBT Intellectual Property. At Closing, Buyer and Seller to enter into a non- exclusive perpetual license agreement whereby Seller grants Buyer the non-exclusive right to use the KKBT intellectual property described on Schedule 1.2(h) ("KKBT I/P") for $1.00 per year in any market that Seller does not use or has not licensed the KKBT I/P to a third party. Seller may use or license the KKBT I/P for use in any market in which Buyer does not use the KKBT I/P, and such use or license for use by Seller will preclude Buyer's use of the KKBT I/P in such market, provided that Buyer shall have exclusive rights to the KKBT I/P in the Los Angeles market and in any other market where the KKBT I/P is licensed to Buyer. ARTICLE 2: ASSUMPTION OF OBLIGATIONS 2.1. Assumed Obligations. On the Closing Date, Buyer shall assume the obligations of Seller (the "Assumed Obligations") arising after Closing under the Station Contracts, including 4 5 without limitation all agreements for the sale of advertising time on the Stations for cash at commercially reasonable rates in the ordinary course of business ("Time Sales Agreements") and all agreements for the sale of advertising time on the Stations for non-cash consideration ("Trade Agreements"). 2.2. Retained Obligations. Buyer does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform any liabilities, obligations or commitments of Seller of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Buyer, other than the Assumed Obligations (the "Retained Obligations"). ARTICLE 3: PURCHASE PRICE 3.1. Purchase Price. In consideration for the sale of the Station Assets to Buyer, in addition to the assumption of the Assumed Obligations, Buyer shall at Closing (defined below) deliver to Seller by wire transfer of immediately available funds, ONE BILLION THREE HUNDRED TWO MILLION FIVE HUNDRED THOUSAND DOLLARS $1,302,500,000), subject to adjustment pursuant to Sections 3.3, 10.4 and 10.7 (the "Purchase Price"). 3.2. Deposit. Within one (1) business day from the date of this Agreement with no Cure Period as defined below, Buyer shall deposit an amount equal to 10% of the Purchase Price (the "Deposit") with NationsBank/Bank of America (the "Escrow Agent") pursuant to the Escrow Agreement, attached hereto as Exhibit C (the "Escrow Agreement") of even date herewith among Buyer, Seller and the Escrow Agent. At Closing, the Deposit shall be applied to the Purchase Price and any interest accrued thereon shall be disbursed to Buyer. If this Agreement is terminated by Seller due to Buyer's failure to consummate the Closing on the Closing Date or if this Agreement is otherwise terminated by Seller pursuant to Section 16.1(c), the Deposit and any interest accrued thereon shall be disbursed to Seller as partial payment of liquidated damages pursuant to Section 16.3. If this Agreement is terminated for any other reason, the Deposit and any interest accrued thereon shall be disbursed to Buyer. 3.3. Prorations and Adjustments. Except as otherwise provided herein, all deposits, reserves and prepaid and deferred income and expenses relating to the Station Assets or the Assumed Obligations and arising from the conduct of the business and operations of the Stations shall be prorated between Buyer and Seller in accordance with generally accepted accounting principles as of 11:59 p.m. on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate and other property taxes (but excluding taxes arising by reason of the transfer of the Station Assets as contemplated hereby which shall be paid as set forth in Section 13.1), business and license fees, music and other license fees (including any retroactive adjustments thereof), utility expenses, amounts due or to become due under Station Contracts, rents, lease payments and similar prepaid and deferred items. Real estate taxes shall be apportioned on the basis of taxes assessed for the preceding year, with a 5 6 reapportionment, if any, as soon as the new tax rate and valuation can be ascertained. Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days of the Closing Date. In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid at the time provided herein and such disputes shall be conclusively determined within thirty (30) days thereafter by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Seller and one-half by Buyer. 3.4. Allocation. The Purchase Price shall be allocated among the Station Assets in a manner as mutually agreed between the parties based upon an appraisal prepared by Bond & Pecaro (who shall be jointly retained by Seller and Buyer with respect to the Stations and whose fees shall be paid one-half by Seller and one-half by Buyer). Seller and Buyer agree to use the allocations determined pursuant to this Section 3.4 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended; such appraisal shall be completed on the earlier of (i) one hundred eighty (180) days following the Closing, or (ii) December 31, 2000. ARTICLE 4: CLOSING 4.1. Closing. The consummation of the sale and purchase of the Station Assets (the "Closing") shall occur on a date (the "Closing Date") and at a time and place designated solely by Seller after FCC Consent (defined below), subject to satisfaction or waiver of the conditions to Closing contained herein (other than those to be satisfied at Closing). Seller shall provide Buyer with notice of the Closing Date at least three (3) business days prior to Closing, however, Seller reserves the right to extend the Closing Date without penalty. If requested by Seller, prior to Closing the parties shall hold a pre-closing conference at a time and place designated by Seller, at which the parties shall provide (for review only) all documents to be delivered at Closing under this Agreement, each duly executed but undated, and otherwise review their ability to timely consummate the Closing. If Closing occurs prior to the FCC Consent becoming a final order (i.e., no longer subject to appeal), and prior to such finality the FCC Consent is reversed or otherwise set aside pursuant to a final order of the FCC (or court of competent jurisdiction), then the parties shall comply with such order in a manner that otherwise complies with applicable law and returns the parties to the status quo ante in all material respects (it being understood that in such event Buyer may designate one or more third parties as the transferees of the Stations). ARTICLE 5: GOVERNMENTAL CONSENTS Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC Consent") to the assignment of the FCC Licenses to Buyer, (ii) United States Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the transactions contemplated hereby, including without limitation any such approval as may be necessary to enable Seller to consummate the merger under the AMFM Agreement, and (iii) expiration or termination of any applicable waiting period ("HSR Clearance") under the HSR Act (defined below). 6 7 5.1. FCC. On a date designated by Seller, Buyer and Seller shall file an application with the FCC (the "FCC Application") requesting the FCC Consent. Buyer and Seller shall diligently prosecute the FCC Application and otherwise use their best efforts to obtain the FCC Consent as soon as possible. If the FCC Consent imposes upon Buyer any condition (including without limitation any divestiture condition), Buyer shall timely comply therewith. 5.2. HSR. If not previously filed, then within five (5) business days after the execution of this Agreement, Buyer and Seller shall make any required filings with the Federal Trade Commission and the DOJ pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. 5.3. General. Buyer and Seller shall notify each other of all documents filed with or received from any governmental agency with respect to this Agreement or the transactions contemplated hereby. Buyer and Seller shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder. If Buyer becomes aware of any fact relating to it which would prevent or delay the FCC Consent, the DOJ Consent or HSR Clearance, Buyer shall promptly notify Seller thereof and take such steps as necessary by the Closing Date to remove such impediment, including but not limited to divesting any stations and terminating any agreements to acquire or program or market any stations. ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYER Buyer hereby makes the following representations and warranties to Seller: 6.1. Organization and Standing. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and on the Closing Date will be qualified to do business in each jurisdiction in which the Station Assets are located. Buyer has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Buyer pursuant hereto (collectively, the "Buyer Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 6.2. Authorization. The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized and approved by all necessary action of Buyer and do not require any further authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary Agreement when executed and delivered by Buyer and the other parties thereto will be, a legal, valid and binding agreement of Buyer enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by 7 8 bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 6.3. No Conflicts. Neither the execution and delivery by Buyer of this Agreement and the Buyer Ancillary Agreements or the consummation by Buyer of any of the transactions contemplated hereby or thereby nor compliance by Buyer with or fulfillment by Buyer of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Buyer or any law, judgment, order or decree to which Buyer is subject; or (ii) require the approval, consent, authorization or act of, or the making by Buyer of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and DOJ Consent, and, if applicable, HSR Clearance. 6.4. Qualification. Buyer is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Stations under the Communications Act of 1934, as amended (the "Communications Act") and the rules, regulations and written policies of the FCC. There are no facts that would, under existing law and the existing rules, regulations, written policies and procedures of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as the owner and operator of the Stations. No waiver of any FCC rule or written policy on behalf of Buyer is necessary for the FCC Consent to be obtained. There is no action, suit or proceeding pending or threatened against Buyer which questions the legality or propriety of the transactions contemplated by this Agreement or could materially adversely affect Buyer's ability to perform its obligations hereunder. Buyer will have available on the Closing Date sufficient funds to enable it to consummate the transactions contemplated hereby. 6.5. No Finder. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Buyer or any party acting on Buyer's behalf for which Seller could become liable or obligated. ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF SELLER Seller makes the following representations and warranties to Buyer: 7.1. Organization. Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in the applicable jurisdiction in which its Station Assets are located. Seller has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Seller pursuant hereto (collectively, the "Seller Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 8 9 7.2. Authorization. The execution, delivery and performance of this Agreement and the Seller Ancillary Agreements by Seller have been duly authorized and approved by all necessary action of Seller and do not require any further authorization or consent of Seller. This Agreement is, and each Seller Ancillary Agreement when executed and delivered by Seller and the other parties thereto will be, a legal, valid and binding agreement of Seller enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 7.3. No Conflicts. Neither the execution and delivery by Seller of this Agreement and the Seller Ancillary Agreements or the consummation by Seller of any of the transactions contemplated hereby or thereby nor compliance by Seller with or fulfillment by Seller of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Seller or any law, judgment, order, or decree to which Seller is subject or, except as set forth on Schedule 1.1(c), any Station Contract; or (ii) require the approval, consent, authorization or act of, or the making by Seller of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and DOJ Consent and, if applicable, HSR Clearance. 7.4. FCC Licenses. Seller (or one of the companies comprising Seller) is the holder of the FCC Licenses described on Schedule 1.1(a). The FCC Licenses comprise all of those licenses from the FCC materially necessary to operate the Stations as currently operated, are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated and have not expired. There is not pending any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the FCC Licenses (other than proceedings to amend FCC rules of general applicability), and there is not now issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or notice of forfeiture against Seller with respect to the Stations. The Stations are operating in compliance in all material respects with the FCC Licenses, the Communications Act, and the rules, regulations and policies of the FCC. 7.5. Taxes. Seller has, in respect of the Stations' business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and reports which are required to have been filed by it under applicable law and has paid all taxes which have become due pursuant to such returns or pursuant to any assessments which have become payable. Seller agrees to indemnify Buyer for any costs or expenses assessed against or incurred by Buyer as a result of any tax payment or lien related to Stations' business. 7.6. Personal Property. Schedule 1.1(b) contains a list of all material items of Tangible Personal Property included in the Station Assets. Seller has title to the Tangible Personal Property free and clear of Liens other than Permitted Liens. The Tangible Personal Property is in good condition and working order, subject to normal wear and tear. 9 10 7.7. Real Property. Schedule 1.1(f) contains a description of all Real Property included in the Station Assets. Seller has fee simple title to the owned Real Property ("Owned Real Property") free and clear of Liens other than Permitted Liens. Schedule 1.1(f) includes a description of each lease of Real Property or similar agreement included in the Station Assets (the "Real Property Leases"). The Owned Real Property includes, and the Real Property Leases provide, access to the Stations' facilities. To Seller's knowledge, the Real Property is not subject to any suit for condemnation or other taking by any public authority. 7.8. Contracts. Each of the Station Contracts (including without limitation each of the Real Property Leases), as well as licenses with respect to the Intangible Property, is in effect and is binding upon Seller and, to Seller's knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors' rights generally). Seller has performed its obligations under each of the Station Contracts in all material respects, and is not in material default thereunder, and to Seller's knowledge, no other party to any of the Station Contracts is in default thereunder in any material respect. 7.9. Environmental. Except as set forth in any environmental report delivered by Seller to Buyer prior to the date of this Agreement and except as set forth on Schedule 1.1(f), to Seller's knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to the Real Property included in the Station Assets. Except as set forth in any environmental report delivered by Seller to Buyer prior to the date of this Agreement and except as set forth on Schedule 1.1(f), to Seller's knowledge, Seller has complied in all material respects with all environmental, health and safety laws applicable to the Stations. 7.10. Intangible Property. Schedule 1.1(d) contains a description of the material Intangible Property included in the Station Assets. Except as set forth on Schedule 1.1(d), Seller has received no notice of any claim that its use of the Intangible Property infringes upon any third party rights. Except as set forth on Schedule 1.1(d), Seller owns or has the right to use through valid licensing agreements the Intangible Property free and clear of Liens other than Permitted Liens. 7.11. Compliance with Law. Seller has complied in all material respects with all laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or orders of any court or of any foreign, federal, state, municipal or other governmental authority which are applicable to the operation of the Stations. There is no action, suit or proceeding pending or threatened against Seller in respect of the Stations that will subject Buyer to liability or which questions the legality or propriety of the transactions contemplated by this Agreement. To Seller's knowledge, there are no governmental claims or investigations pending or threatened against Seller in respect of the Stations (except those affecting the industry generally). 7.12. No Finder. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions 10 11 contemplated hereby as a result of any agreement or action of Seller or any party acting on Seller's behalf. 7.13. Financial Statements. Seller has delivered to Buyer copies of the unaudited results of operations of the Stations for the twelve months ended December 30, 1998 and 1999, prepared, to the best of Seller's knowledge, materially in accordance with Generally Accepted Accounting Principles. Seller will, each month following the date hereof, provide to Buyer copies of the unaudited results of operations of the Stations for each month between the date hereof and the Closing Date prepared in accordance with the books and records of the Stations, within thirty (30) days of the end of each month. 7.14. Collective Bargaining Agreements. Except as disclosed on Schedule 1.1(c) with respect to KKBT-FM, none of the Stations is a party to or bound by any collective bargaining agreements or relationships. To the best of Seller's knowledge, there are neither pending grievances with respect to the KKBT union agreement disclosed on Schedule 1.1(c) except for the wage grievance from Monica Dyson, nor are there union organizing efforts underway at the Stations. ARTICLE 8: ACCOUNTS RECEIVABLE 8.1. Accounts Receivable. All accounts receivable arising prior to the Closing Date in connection with the operation of the Stations, including but not limited to accounts receivable for advertising revenues for programs and announcements performed prior to the Closing Date and other broadcast revenues for services performed prior to the Closing Date, shall remain the property of Seller (the "Accounts Receivable") and Buyer shall not acquire any right or interest therein. For a period of six months from Closing (the "Collection Period"), Buyer shall collect the Accounts Receivable in the normal and ordinary course of Buyer's business and shall apply all such amounts collected to the debtor's oldest account receivable first, except that any such accounts collected by Buyer from persons who are also indebted to Seller may be applied to Buyer's account if so directed by the debtor if such debtor indicates there is a bona fide dispute between Seller and such account debtor with respect to such account and in which case the Buyer shall notify the Seller of such dispute and after such notification Seller shall have the right to pursue collection of such account and to avail itself of all legal remedies available to it. Buyer's obligation shall not extend to the institution of litigation, employment of counsel or a collection agency or any other extraordinary means of collection. During the Collection Period, neither Seller nor its agents shall make any direct solicitation of any such account debtor for collection purposes or institute litigation for the collection of amounts due. Any amounts relating to the Accounts Receivable that are paid directly to Seller shall be retained by Seller, with notice to Buyer. Within twenty calendar days after the end of each month, Buyer shall make a payment to Seller equal to the amount of all collections of Accounts Receivable during the preceding month less any commissions owing and paid to salespersons or agencies for ads to which such Accounts Receivable related. At the end of the Collection Period, any remaining Accounts Receivable shall be returned to Seller for collection. 11 12 ARTICLE 9: COVENANTS OF SELLER 9.1. Seller's Covenants. Seller covenants and agrees with respect to the Stations that, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Buyer, which shall not be unreasonably withheld, Seller shall: (a) operate the Stations in the ordinary course of business consistent with past practice and in compliance with Section 1.1(c) with respect to the Station Contracts, and in all material respects in accordance with FCC rules and regulations, in compliance with the Communications Act, and with all other applicable laws, regulations, rules and orders; (b) not, other than in the ordinary course of business in accordance with past practice, sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets, or create, assume or permit to exist any Liens upon the Station Assets, except for Permitted Liens, or apply for material modification of any FCC Licenses; (c) furnish Buyer with such information relating to the Station Assets as Buyer may reasonably request, and permit Buyer's on-site access to the Station Assets with Seller's prior approval after the FCC Application is filed, including access to conduct any environmental assessment or survey of the real property, at Buyer's expense and provided such request and on-site visits do not interfere unreasonably with the business of the Stations; (d) give or cause the Stations to give Buyer and Buyer's accountants, at Buyer's expense, and reasonable request and upon reasonable notice, full and reasonable access during normal business hours to Seller's financial records that Buyer may reasonably request. The rights of Buyer under this Section shall not be exercised in such a manner as to interfere unreasonably with the business of the Stations. Any investigation by Buyer in accordance with the foregoing shall not diminish or negate, in any way, any of the representations or warranties of Seller set forth in this Agreement or in connection herewith; (e) cooperate, and use its reasonable best efforts to cause its independent auditors to reasonably cooperate, with Buyer in order to enable Buyer to have independent auditors selected by Buyer, and at Buyer's expense, prepare audited financial statements for the Stations for the three (3) most recently completed fiscal year-ends and any quarter and related year to date period during the current fiscal year. Without limiting the generality of the foregoing, Seller agrees that it will: (i) consent to the use of and execute documents in support of such audited financial statements in any registration statement or other document filed by Buyer under Securities Act of 1933 and the Securities and Exchange Act of 1934 or any document relating to a private placement of Buyer's securities; (f) upon the written request of Buyer, promptly send notices of non-renewal or early termination in respect of any Station Contract in which such notice would not constitute a breach of such Station Contract; and (g) exercise any rights it has to renew the terms of the KBFB tower/transmitter 12 13 lease, the KCMG tower/transmitter lease and the KCMG translator lease as identified on Schedule 1.1(f). ARTICLE 10: JOINT COVENANTS Buyer and Seller hereby covenant and agree that between the date hereof and Closing: 10.1. Cooperation. Subject to express limitations contained elsewhere herein, each party (i) shall cooperate fully with one another in taking any reasonable actions (including without limitation, reasonable actions to obtain the required consent of any governmental instrumentality or any third party) necessary or helpful to accomplish the transactions contemplated by this Agreement, including but not limited to the prompt satisfaction of any condition to Closing set forth herein, and (ii) shall not take any action that conflicts with its obligations hereunder or that causes its representations and warranties to become untrue in any material respect. 10.2. Control of Stations. Buyer shall not, directly or indirectly, control, supervise or direct the operations of the Stations prior to Closing. Such operations, including complete control and supervision of all Station programs, employees and policies, shall be the sole responsibility of Seller. 10.3. Consents to Assignment. The parties shall use commercially reasonable efforts to obtain any third party consents necessary for the assignment of any Station Contract (which shall not require any payment to any such third party). To the extent that any Station Contract may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant hereto shall not constitute an assignment thereof, but to the extent permitted by law shall constitute an equitable assignment by Seller and assumption by Buyer of Seller's rights and obligations under the applicable Station Contract, with Seller making available to Buyer the benefits thereof and Buyer performing the obligations thereunder on Seller's behalf; provided, however, that Seller shall indemnify Buyer from and against all loss, costs, expenses and damages incurred by Buyer during the first twelve (12) months following the Closing Date as a result of Seller's failure to have obtained a consent to assignment with respect to any of the leases for the main transmitter sites listed on Schedule 1.1(f) from which the Stations' signals are broadcast. Seller shall be released from all indemnification obligations with respect to Seller's failure to have obtained a consent to assignment with respect to any of the leases for the main transmitter sites from which the Stations' signals are broadcast twelve (12) months after the Closing Date, except to the extent that written notice of such indemnification claim is given by Buyer to Seller within the twelve month time period. 10.4. Employee Matters. (a) Prior to Closing, Seller shall deliver to Buyer a list of: (i) all of the employees who work exclusively for the Stations including all employees as of the date of this Agreement, and (ii) pro rata distribution of certain "shared" employees selected by Seller. Buyer may interview and elect to hire such listed employees. Buyer is obligated to hire only those 13 14 employees that are under employment contracts (and assume Seller's obligations and liabilities under such employment contracts) which are included in the Station Contracts. With respect to employees hired by Buyer ("Transferred Employees"), to the extent permitted by law, Seller shall provide Buyer access to its personnel records and such other information as Buyer may reasonably request prior to Closing and transfer such records to Buyer at Closing. With respect to such hired employees, Seller shall be responsible for the payment of all compensation and accrued employee benefits payable by it until Closing and thereafter Buyer shall be responsible for all such obligations payable by it. Buyer shall cause all employees it hires to be eligible to participate in its "employee welfare benefit plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA, respectively) in which similarly situated employees are generally eligible to participate; provided, however, that all such employees and their spouses and dependents shall be eligible for coverage immediately after Closing (and shall not be excluded from coverage on account of any pre-existing condition) to the extent permitted under such plans. For purposes of any length of service requirements, waiting periods or vesting periods based on length of service in any such plan for which such employees may be eligible after Closing, Buyer shall ensure that service with Seller shall be deemed to have been service with the Buyer. In addition, Buyer shall ensure that each such employee receives credit under any insured or self-insured plan of Buyer for any deductibles or co-payments paid by such employees and dependents for the current plan year under a plan maintained by Seller to the extent permitted by such plans. Notwithstanding any other provision contained herein, Buyer shall grant credit to each such employee for all unused sick leave accrued as of Closing as an employee of Seller. Buyer shall receive a credit at Closing for the payment of all unused vacation leave accrued by such employees as of Closing. (b) At such time as the Seller can represent to the Buyer as to the tax-qualified status of the 401(k) savings plan(s) (as to form and operation) in which Transferred Employees retain account balances with the Seller or its subsidiaries (the "Saving Plan(s)") and furnish to Buyer a favorable Internal Revenue Service determination letter as to the tax-qualified status of such Savings Plan(s) under Section 401(a) of the Code (or an opinion of counsel that the form of the Savings Plan(s) is so qualified), Buyer and Seller to negotiate in good faith to enter into a 401(k) plan asset transfer agreement pursuant to which Buyer's existing 401(k) plan shall accept a transfer of assets from Seller's Savings Plan(s)attributable to the accounts of Transferred Employees provided that if the Savings Plan(s) have protected benefits under Section 411(d)(6) of the Code which are inconsistent with Buyer's existing 401(k) saving plan(s), then, in its sole discretion, Buyer need not agree to such transfer. (c) Following execution of the agreement contemplated in clause (b) above, Seller shall cause to be transferred from the Savings Plan(s) to the plan covering the Savings Plan Employees (the "Transferee Savings Plan") the liability for the account balances of the Savings Plan Employees (including outstanding loan balances of Savings Plan Employees), together with cash or other mutually acceptable property, the value of which on such transfer date is equal to such liability, and Buyer shall cause the Transferee Savings Plan to accept such transfer, all in accordance with the rules and regulations under Section 414(l) of the Code. (d) Pending completion of the transfers described in this Section, Seller and 14 15 Buyer shall make arrangements for distributions, if any, to the Savings Plan Employees from the Savings Plan(s). Seller and Buyer shall provide each other with access to information reasonably necessary in order to carry out the provisions of this paragraph. In addition, until the asset transfer is effectuated, Buyer shall cooperate with the reasonable requests of Seller to continue to withhold established loan payments from the pay checks of Transferred Employees' who have outstanding loan balances in the Savings Plan(s) and Buyer shall remit such withheld amounts to the Seller in a timely fashion such that the outstanding loans do not go into default. 10.5. 1031 Exchange. At or prior to Closing, Seller may assign its rights under this Agreement (in whole or in part) to a qualified intermediary (as defined in Treasury regulation section 1.1031(k)-1(g)(4)) or similar entity or arrangement ("Qualified Intermediary"). Upon any such assignment, Seller shall promptly give written notice thereof to Buyer, and Buyer shall cooperate with the reasonable requests of Seller and any Qualified Intermediary in connection therewith. Without limiting the generality of the foregoing, if Seller gives notice of such assignment, Buyer shall (i) promptly provide Seller with written acknowledgment of such notice and (ii) at Closing, pay the Purchase Price (or any portion thereof designated by the Qualified Intermediary) to or on behalf of the Qualified Intermediary (which payment shall, to the extent thereof, satisfy the obligations of Buyer to make such payment hereunder). Seller's assignment to a Qualified Intermediary will not relieve Seller of any of its duties or obligations herein. Except for the obligations of Buyer set forth in this Section, Buyer shall not have any liability or obligation to Seller for the failure of the contemplated exchange to qualify as a like-kind exchange under Section 1031 of the Internal Revenue Code unless such failure is the result of the material breach or default by Buyer under this Agreement. 10.6. Trust. Notwithstanding anything in this Agreement to the contrary, Seller may at it option assign this Agreement (in whole or part) and assign and transfer the Station Assets (in whole or in part) to a trustee to hold and operate pursuant to a trust agreement, provided such trustee assumes Seller's duties and obligations hereunder with respect to the Station Assets held in such trust. Seller shall provide Buyer with written notice of the assignment to such trust, and further provided that Seller shall perform the obligations described in Section 15 below. 10.7. KKBT Frequency Change. For one (1) year following the Closing, Buyer shall submit to Seller for reimbursement invoices totaling in the aggregate no more than Five Million Dollars ($5,000,000), such invoices must relate to promotional expenses related to the KKBT(FM), Los Angeles frequency change and at least twenty (20%) of the aggregate of invoices reimbursed to Buyer by Seller must be spent on promotional services provided by Eller Media at its standard competitive rates. At the end of the one year period, if Buyer has not submitted to Seller invoices, which in the aggregate equal or exceed Five Million Dollars, Seller shall pay to Buyer the difference between total invoices reimbursed by Seller and Five Million Dollars ($5,000,000). Buyer acknowledges that it will be operating Station KKBT on the frequency of 100.3 MHZ as of the Closing Date. Seller agrees that the operations of Station KKBT will only be moved to the new frequency in accordance with a transition plan developed by Buyer and Seller. 15 16 10.8. Eller Media Expenditure. At Closing, Buyer shall deposit three million dollars ($3,000,000) (the "Eller Deposit") into an escrow account established between Buyer, Seller and a mutually agreeable escrow agent. Buyer shall spend the Eller Deposit during the period fifteen (15) months from the Closing Date on promotional services provided by Eller Media nationwide at its standard competitive rates. At the end of the fifteen (15) month period, the balance of the Eller Deposit, if any, shall be returned to Seller. ARTICLE 11: CONDITIONS OF CLOSING BY BUYER The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 11.1. Representations, Warranties and Covenants. The representations and warranties of Seller made in this Agreement and any exhibit or schedule delivered pursuant thereto shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Seller at or prior to Closing shall have been complied with or performed in all material respects. Buyer shall have received a certificate dated as of the Closing Date from Seller, executed by an authorized officer of Seller to the effect that the conditions set forth in this Section have been satisfied. 11.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if applicable, HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. ARTICLE 12: CONDITIONS OF CLOSING BY SELLER The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 12.1. Representations, Warranties and Covenants. The representations and warranties of Buyer made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Buyer at or prior to Closing shall have been complied with or performed in all material respects. Seller shall have received a certificate dated as of the Closing Date from Buyer, executed by an authorized officer of Buyer, to the effect that the conditions set forth in this Section have been satisfied. 12.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if applicable, HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. 12.3. AMFM Closing. The closing under the AMFM Agreement shall have been consummated. 16 17 ARTICLE 13: EXPENSES 13.1. Expenses. Each party shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement, except that (i) all recordation, transfer and documentary taxes, fees and charges, and any excise, sales or use taxes, applicable to the transfer of the Station Assets shall be paid equally by Buyer and Seller, (ii) all FCC filing fees shall be paid equally by Buyer and Seller, and (iii) all HSR Act filing fees and expenses shall be paid by Buyer. ARTICLE 14: DOCUMENTS TO BE DELIVERED AT CLOSING 14.1. Seller's Documents. At Closing, Seller shall deliver or cause to be delivered to Buyer: (i) certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 11.1; (iii) such bills of sale, assignments, special warranty deeds, documents of title and other instruments of conveyance, assignment and transfer as may be necessary to convey, transfer and assign the Station Assets to Buyer, free and clear of Liens, except for Permitted Liens; (iv) a written opinion of Clear Channel Broadcasting, Inc.'s and Clear Channel Broadcasting Licenses, Inc.'s counsel in the form of Exhibit B, dated as of the Closing Date; (v) a written opinion of AMFM Operating, Inc., AMFM Ohio, Inc., AMFM Houston, Zebra Broadcasting Corporation, AMFM Radio Licenses, LLC, Cleveland Radio Licenses, LLC and Capstar TX Limited Partnership counsel in the form of Exhibit D, dated as of the Closing Date; and (vi) the leases described in Section 1.3. 14.2. Buyer's Documents. At Closing, Buyer shall deliver or cause to be delivered to Seller: (i) the certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 12.1; and 17 18 (iii) such documents and instruments of assumption as may be necessary to assume the Assumed Obligations, and the Purchase Price in accordance with Section 3.1 hereof. ARTICLE 15: SURVIVAL; INDEMNIFICATION. 15.1. Survival. The covenants, agreements, representations and warranties in this Agreement shall survive Closing for a period of twelve (12) months from the Closing Date whereupon they shall expire and be of no further force or effect, except those under (i) this Article 15 that relate to Damages (defined below) for which written notice is given by the indemnified party to the indemnifying party prior to the expiration, which shall survive until resolved, (ii) Sections 7.2 and 7.9 shall survive the Closing through the applicable statute of limitations period, and (iii) Sections 2.1 (Assumed Obligations), 2.2 (Retained Obligations), 3.3 (Adjustments), 3.4 (Allocation), 8.1 (Accounts Receivable) and 13.1 (Expenses), and indemnification obligations with respect to such provisions, which shall survive until performed. 15.2. Indemnification. (a) From and after the Closing, Seller shall defend, indemnify and hold harmless Buyer from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses ("Damages") incurred by Buyer arising out of or resulting from: (i) any breach or default by Seller under this Agreement; (ii) the Retained Obligations; or (iii) the business or operation of the Stations before Closing; provided, however, that (i) Seller shall have no liability to Buyer hereunder until, and only to the extent that, Buyer's aggregate Damages exceed $500,000 and (ii) the maximum liability of Seller hereunder shall be $25,000,000, except that such limitations in (i) and (ii) shall not apply to Seller's obligations under Section 10.3 with respect to consent to assignment for the transmitter site leases or Section 7.5 with respect to tax payments and liens. (b) From and after the Closing, Buyer shall defend, indemnify and hold harmless Seller from and against any and all Damages incurred by Seller arising out of or resulting from: (i) any breach or default by Buyer under this Agreement; (ii) the Assumed Obligations; or (iii) the business or operation of the Stations after Closing provided, however, that Buyer shall have no liability to Seller hereunder until, and only to the extent that, Seller's aggregate Damages exceed $500,000 and (ii) the maximum liability of Buyer hereunder shall be $25,000,000. 15.3. Procedures. The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a "Claim"), but a failure to give such notice or delaying such notice shall not affect the indemnified party's right to indemnification and the indemnifying party's obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party's ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The obligations and liabilities of the parties with respect to any Claim shall be subject to the following additional terms and conditions: 18 19 (a) The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim, except with respect to any Claim brought by Buyer pursuant to Section 10.3 above which Buyer shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim at its own expense. (b) In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within twenty (20) days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof). (c) Anything herein to the contrary notwithstanding and except as set forth in the exception of 15.3(a) above: (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (ii) the indemnifying party shall not, without the indemnified party's written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim; and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim. (d) All claims not disputed shall be paid by the indemnifying party within thirty (30) days after receiving notice of the Claim. "Disputed Claims" shall mean claims for Damages by an indemnified party which the indemnifying party objects to in writing within thirty (30) days after receiving notice of the Claim. In the event there is a Disputed Claim with respect to any Damages, the indemnifying party shall be required to pay the indemnified party the amount of such Damages for which the indemnifying party has, pursuant to a final determination, been found liable within ten (10) days after there is a final determination with respect to such Disputed Claim. A final determination of a Disputed Claim shall be (i) a judgment of any court determining the validity of a Disputed Claim, if no appeal is pending from such judgment and if the time to appeal therefrom has elapsed; (ii) an award of any arbitration determining the validity of such disputed claim, if there is not pending any motion to set aside such award and if the time within which to 19 20 move to set aside such award has elapsed; (iii) a written termination of the dispute with respect to such claim signed by the parties thereto or their attorneys; (iv) a written acknowledgment of the indemnifying party that it no longer disputes the validity of such claim; or (v) such other evidence of final determination of a disputed claim as shall be acceptable to the parties. No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims. ARTICLE 16: TERMINATION 16.1. Termination. This Agreement may be terminated at any time prior to Closing as follows: (a) by mutual written consent of Buyer and Seller; (b) by written notice of Buyer to Seller if Seller (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below); (c) by written notice of Seller to Buyer if Buyer (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below); (d) by written notice of Buyer to Seller, or by Seller to Buyer, if the FCC denies the FCC Application; (e) by written notice of Seller to Buyer if the Closing shall not have been consummated on or before the date four months after the date of this Agreement; (f) by written notice of Seller to Buyer if the AMFM Agreement is terminated or expires; or (g) by written notice of Buyer to Seller or Seller to Buyer if the Closing is not consummated on or before the date thirteen months after the date of this Agreement. The term "Cure Period" as used herein means a period commencing the date Buyer or Seller receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) days thereafter or (ii) the Closing Date; provided, however, that if the breach or default cannot reasonably be cured within such period but can be cured before the 20 21 Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date. Except as set forth below, the termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. Notwithstanding anything contained herein to the contrary, Section 13.1 shall survive any termination of this Agreement. 16.2. Remedies. The parties recognize that if either party refuses to consummate the Closing pursuant to the provisions of this Agreement or either party otherwise breaches or defaults such that the Closing has not occurred ("Breaching Party"), monetary damages alone will not be adequate to compensate the non-breaching party ("Non-Breaching Party") for its injury. Such Non-Breaching Party shall therefore be entitled to obtain specific performance of the terms of this Agreement in lieu of, and not in addition to, any other remedies, including but not limited to monetary damages, that may be available to it; provided however, that Seller may elect to recover liquidated damages as its sole remedy in lieu of obtaining specific performance. If any action is brought by the Non-Breaching Party to enforce this Agreement, the Breaching Party shall waive the defense that there is an adequate remedy at law. In the event of a default by the Breaching Party which results in the filing of a lawsuit for damages, specific performance, or other remedy, the Non-Breaching Party shall be entitled to reimbursement by the Breaching Party of reasonable legal fees and expenses incurred by the Non-Breaching Party, provided that the Non-Breaching Party is successful in such lawsuit. 16.3. Liquidated Damages. If Seller terminates this Agreement due to Buyer's failure to consummate the Closing on the Closing Date or if this Agreement is otherwise terminated by Seller pursuant to Section 16.1(c), then Buyer shall pay Seller as liquidated damages an amount equal to THREE HUNDRED TWENTY FIVE MILLION SIX HUNDRED TWENTY FIVE THOUSAND DOLLARS ($325,625,000). If elected by and paid to Seller, such liquidated damage payment shall be Seller's sole remedy hereunder. It is understood and agreed that such liquidated damages amount represents Buyer's and Seller's reasonable estimate of actual damages and does not constitute a penalty. ARTICLE 17: MISCELLANEOUS PROVISIONS 17.1. Casualty Loss. In the event any loss or damage of the Station Assets exists on the Closing Date, Buyer and Seller shall consummate the Closing and Seller shall assign to Buyer the proceeds of any insurance, including business interruption, payable to Seller on account of such damage or loss. If insurance proceeds payable with respect to the lost or damaged asset and/or lost revenue are insufficient to repair or replace such asset, or are insufficient to satisfy lost revenue, Buyer shall receive a credit at Closing against the Purchase Price equal to the cost of repair or replacement and lost revenue less the amount of insurance proceeds assigned to Buyer. 21 22 17.2. Further Assurances. (a) After the Closing, Seller shall from time to time, at the request of and without further cost or expense to Buyer, execute and deliver such other instruments of conveyance and transfer and take such other actions as may reasonably be requested in order to more effectively consummate the transactions contemplated hereby to vest in Buyer good title to the Station Assets, and Seller shall cooperate with Buyer and cause its independent accountant to cooperate, at Buyer's expense, to assist Buyer with its reporting requirements to governmental agencies, and Buyer shall from time to time, at the request of and without further cost or expense to Seller, execute and deliver such other instruments and take such other actions as may reasonably be requested in order to more effectively to relieve Seller of any obligations being assumed by Buyer hereunder. (b) Following the Closing, Buyer and Seller shall cooperate with each other in the event and for so long as any party is actively contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with this Agreement or any transaction contemplated under the Agreement all at the sole cost of the contesting or defending party (unless the contesting party or defending party is entitled to indemnification therefor under Article 15 above). 17.3. Assignment. Except as set forth in Sections 10.5 (1031 Exchange) and 10.6 (Trust), neither party may assign this Agreement without the prior written consent of the other party hereto; provided, however, that either party may assign this Agreement to one or more direct or indirect subsidiaries so long as (i) the assigning party remains liable hereunder, (ii) the assignment is made prior to any filings with the FTC or DOJ, including any HSR filing, and (ii) such assignment will not delay any consent required to be obtained hereunder, including but not limited to HSR Clearance, DOJ Consent and FCC Consent, or delay the Closing in any respect; and provided, further, after Closing Buyer may collaterally assign its rights hereunder to secure its obligations to institutional or bank lenders (a "Collateral Assignment") without consent of Seller. With respect to any permitted assignment, the parties shall take all such actions as are reasonably necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other governmental authorities. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind (except under a Collateral Assignment) and inure to the benefit of their respective successors and permitted assigns of the parties hereto. 17.4. Amendments. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. 17.5. Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. 17.6. Governing Law. The construction and performance of this Agreement shall be 22 23 governed by the laws of the State of Texas without giving effect to the choice of law provisions thereof. 17.7. Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, including by facsimile, and shall be deemed to have been received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery or when delivered by facsimile transmission, and shall be addressed as follows (or to such other address as any party may request by written notice): if to Seller: c/o Clear Channel Broadcasting, Inc. 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 Attention: President Facsimile: (210) 822-2299 with a copy (which shall not constitute notice) to: Graydon, Head & Ritchey 1900 Fifth Third Center 511 Walnut Street Cincinnati, Ohio 45202 Attention: John J. Kropp, Esq. Facsimile: (513) 651-3836 if to Buyer: Radio One, Inc. 5900 Princess Garden Parkway - 8th Floor Lanham, MD 20706 Attention: Alfred C. Liggins Facsimile: (301) 306-9694 with a copy (which shall not constitute notice) to: Radio One, Inc. 5900 Princess Garden Parkway - 8th Floor Lanham, MD 20706 Attention: Linda J. Eckard, Esq. Facsimile: (301) 306-9638 Kirkland & Ellis 655 Fifteenth Street, N.W. Washington, DC 20005 Attention: Terrance L. Bessey, Esq. Facsimile: (202) 879-5200 23 24 17.8. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. 17.9. No Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns, any rights or remedies under or by reason of this Agreement. 17.10. Severability. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. 17.11. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto and supersedes any and all prior agreements, arrangements and understandings relating to the matters provided for herein. This Agreement does not supersede any confidentiality agreement relating to the Stations, and any such confidentiality agreement is to expire at Closing. 17.12. No Liability. The parties agree that no past, present or future stockholder, director or officer of Seller or Buyer or of their respective affiliates shall have any personal or individual liability for the obligations of Seller or Buyer, as applicable, under this Agreement or any other agreement entered into in connection with this Agreement. [SIGNATURE PAGE FOLLOWS] SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. SELLER: CLEAR CHANNEL BROADCASTING, INC. By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- CLEAR CHANNEL BROADCASTING LICENSES, INC. By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- 24 25 AMFM OPERATING, INC. By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- AMFM OHIO, INC. By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- AMFM HOUSTON, INC. By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- AMFM RADIO LICENSES, LLC By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- ZEBRA BROADCASTING CORPORATION By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- CLEVELAND RADIO LICENSES, LLC By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- CAPSTAR TX LIMITED PARTNERSHIP By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- 25 26 BUYER: RADIO ONE, INC. By: ---------------------------------------- Name: ------------------------------------ Title: ----------------------------------- 26 27
Schedules 1.1(a) - FCC Licenses 1.1(b) - Tangible Personal Property 1.1(c) - Station Contracts 1.1(d) - Intangible Property 1.1(f) - Real Property 1.2(h) - Excluded Assets Exhibit A Tower Lease Exhibit A-1 WZAK Tower Lease Exhibit A-2 Studio Lease Exhibit B Clear Channel Opinion Letter Exhibit C Escrow Agreement Exhibit D AMFM Opinion Letter
27 EX-10.17 4 d77954ex10-17.txt AMENDMENT TO ASSET PURCHASE AGREEMENT 1 EXHIBIT 10.17 FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is made and entered on August 24, 2000, among the company or companies designated as Seller on the signature page hereto (collectively, "Seller") and the company or companies designated as Buyer on the signature page hereto (collectively, "Buyer"), under the following circumstances: A. Buyer and Seller entered into an Asset Purchase Agreement dated March 11, 2000 (the "Asset Purchase Agreement"). B. Buyer and Seller desire to amend the Asset Purchase Agreement as hereinafter provided. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise defined herein are used with the meaning set forth in the Asset Purchase Agreement. SECTION 2. DEFINITION OF "SELLER". AMFM LA, LLC, a Delaware limited liability company, is hereby substituted for AMFM Operating, Inc. in the definition of "Seller" as set forth in the Asset Purchase Agreement and all related schedules and exhibits, including the Escrow Agreement dated March 11, 2000 and Seller represents to Buyer that no assets being acquired by Buyer pursuant to the Asset Purchase Agreement are owned by AMFM Operating, Inc. SECTION 3. SECTIONS 10.4 (b), (c) AND (d). Sections 10.4(b), 10.4(c) and (d) of the Asset Purchase Agreement shall be deleted in their entirety and replaced with the following new Section 10.4(b): "As of the Closing Date, Buyer shall cause its 401(k) plan to permit Transferred Employees who participate in the Seller's 401(k) plan to elect to make direct rollovers of their account balances in Seller's 401(k) plan into the Buyer's 401(k) plan, including, the direct rollover of any outstanding loan balances such that they will continue to make payments under the terms of such loans under the Buyer's 401(k) plan; provided, that, such action is in full compliance with all applicable law and regulations, including the Code, as of the date of the proposed rollover." SECTION 4. WVCG(AM), CORAL GABLES, FLORIDA TOWER SITE. Notwithstanding any other provision in the Asset Purchase Agreement, including but not limited to Sections 15.1, Survival, and 15.2, Indemnification, from and after Closing, Seller covenants and agrees at all times to defend, 2 indemnify and hold harmless Buyer from, against, and in respect of all actions, losses, claims, costs, damages, liabilities and expenses relating to loss in fair market value of any physical assets, loss in fair market value of land, loss in fair market value of the radio station or its license, including such losses associated with diminished broadcast range, costs to move and/or reconstruct the radio tower(s), cost to acquire new land for the radio tower(s) and any associated reasonable attorney and consultant fees, that are incurred by Buyer arising out of any eminent domain, taking, condemnation or similar action or proceeding brought or threatened by any federal, state or local governmental or quasi-governmental authority or agency with respect to all or any portion of real property upon which the transmitting towers for Station WVCG (AM) are located, which action or proceeding arises from, or is related to the Corporate Offer to Sell Real Property for Tract 130-02 transmitted by letter dated December 9, 1998 from the United States Department of Interior, National Park Service to Chancellor Media Corp., a copy of which is attached hereto as Exhibit A ("Eminent Domain Action"); provided, however, that Buyer agrees to, in good faith, seek a settlement of, and as appropriate, vigorously contest and defend, any Eminent Domain Action, all in a manner subject to Seller's reasonable approval which such approval shall not be unreasonably conditioned, withheld or delayed, and provided further that Seller's liability hereunder shall be reduced by the amount received by Buyer from any settlement, judgment or final award of any such Eminent Domain Action (collectively, "Government Award"). Loss in fair market value, if any, will be determined at the time of loss by one or more qualified expert appraiser(s) agreed to by Buyer and Seller or pursuant to any procedure jointly agreed to by Buyer and Seller. Seller's total aggregate liability to Buyer under this Section 4 of this First Amendment to Asset Purchase Agreement, under the Asset Purchase Agreement or otherwise at law or in equity with respect to the Eminent Domain Action shall in no event exceed the following absolute limitations: (i) if Seller receives from Buyer written notice of a specific pending Eminent Domain Action ("Notice") prior to five (5) years after Closing, Fifteen Million Dollars ($15,000,000) less the amount of any Government Award ; (ii) if Seller receives Notice between five (5) and ten (10) years, inclusive, after Closing, Ten Million Dollars ($10,000,000) less the amount of any Government Award; (iii) if Seller receives Notice more than ten (10) but less than fifteen (15) years after Closing, Five Million Dollars ($5,000,000) less the amount of any Government Award and (iv) fifteen years after Closing and thereafter, Zero (0), provided that the specified amount to which Buyer is entitled shall be available past the expiration of the related time period should Seller receive a Notice within that related time period. So, for example, if Seller should receive a Notice in year four that an Eminent Domain Action has begun but that action is not concluded until year six, the Buyer shall be entitled to claim and Seller shall be obligated to pay up to $15,000,000 less the amount of any Government Award. Amounts paid by Seller hereunder shall not count against the limits set forth in Section 15.2(a) of the Asset Purchase Agreement. This indemnification will survive the termination of the Asset Purchase Agreement. SECTION 5. KMJQ TOWER SITE. Seller and Buyer shall no longer enter into a tower space lease as set forth on Exhibit 1.2(h), Excluded Assets, of the KMJQ-FM and KBXX-FM, Houston, Texas Disclosure Schedule (the "KMJQ Tower Lease"). Instead Seller shall assign to Buyer at Closing the following leases: (i) Indenture by and between Teletower and Amaturo Group, Inc. dated July 14, 1983, (ii) Agreement between Gulf Broadcast Group, Inc. and Amaturo Group, Inc. dated March 1,1983, and (iii) Lease Agreement by and between the University of Houston and Amagulf draft date of July 1, 1998. 3 SECTION 6. NO OTHER CHANGES. Except as expressly modified hereby, the Asset Purchase Agreement remains unaltered and in full force and effect. SECTION 7. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. [SIGNATURES ON NEXT PAGE] 4 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above written. SELLER: CLEAR CHANNEL BROADCASTING, INC. By: ---------------------------------------------- Jerome L. Kersting, Senior Vice President CLEAR CHANNEL BROADCASTING LICENSES, INC. By: ---------------------------------------------- Jerome L. Kersting, Senior Vice President AMFM LA, LLC By AMFM Operating, Inc. Its General Partner By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- AMFM OPERATING, INC. By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- AMFM OHIO, INC. By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- AMFM HOUSTON, INC. By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- 5 AMFM RADIO LICENSES, LLC By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- ZEBRA BROADCASTING CORPORATION By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- CLEVELAND RADIO LICENSES, LLC By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- CAPSTAR TX LIMITED PARTNERSHIP By Capstar Radio Operating Company Its General Partner By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- 6 BUYER: RADIO ONE, INC. By: ---------------------------------------------- Name: ----------------------------------------- Title: ---------------------------------------- EX-10.18 5 d77954ex10-18.txt ASSET EXCHANGE AGREEMENT 1 EXHIBIT 10.18 ASSET EXCHANGE AGREEMENT THIS ASSET EXCHANGE AGREEMENT (this "Agreement") is made as of March 12, 2000 among the company or companies designated as Clear Channel on the signature page hereto (collectively, "Clear Channel") and the company or companies designated as Exchange Party on the signature page hereto (collectively, "Exchange Party"). Recitals A. Clear Channel owns and operates the following radio broadcast stations (collectively, the "Clear Channel Stations") pursuant to certain authorizations issued by the Federal Communications Commission (the "FCC"): WABT-FM, WGNA-AM, WGNA-FM, WQBJ-FM, WQBK-FM and WTMM-AM licensed to Albany, New York; and WGRD-FM, WLHT-FM and WTRV-FM licensed to Grand Rapids, Michigan. B. Exchange Party owns and operates the following radio broadcast stations (collectively, the "Exchange Party Stations") pursuant to certain authorizations issued by the FCC: WYHT-FM, WSWR-FM and WMAN-AM, licensed to Mansfield/Shelby, Ohio; and KTPI-FM and KAVC-AM licensed to Mojave and Tehachapi (ie: Palmdale), California; and KATJ-FM, KZXY-FM, KIXA-FM, KROY-AM and KIXW-AM licensed to Victorville, California; and KOSS-FM, licensed to Lancaster, California. C. Subject to the terms and conditions set forth herein, the parties desire to exchange the Clear Channel Station Assets (defined below) and the Exchange Party Station Assets (defined below). The parties intend the transaction contemplated by this Agreement to be a like-kind exchange in accordance with the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"). D. Clear Channel Communications, Inc. and AMFM Inc. (Clear Channel's parent) and CCU Merger Sub, Inc. are parties to an Agreement and Plan of Merger dated October 2, 1999 (the "AMFM Agreement"). 2 Agreement NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows: ARTICLE 1: EXCHANGE OF ASSETS 1.1. Clear Channel Station Assets. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Clear Channel shall assign, transfer, convey and deliver to Exchange Party, and Exchange Party shall acquire from Clear Channel, all of the right, title and interest of Clear Channel in and to all of the assets, properties, interests and rights of Clear Channel of whatsoever kind and nature, real and personal, tangible and intangible, which are used in the operation of the Clear Channel Stations and described in this Section 1.1, but excluding the Clear Channel Excluded Assets as hereafter defined (the "Clear Channel Station Assets"): (1)1 all licenses, permits and other authorizations which are issued to Clear Channel by the FCC with respect to the Clear Channel Stations (the "Clear Channel FCC Licenses") and described on Schedule 1.1(a), including any renewals or modifications thereof between the date hereof and Closing; (1)2 all equipment, electrical devices, towers, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used in the operation of the Clear Channel Stations including but not limited to those listed on Schedule 1.1(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Clear Channel (the "Clear Channel Tangible Personal Property"); (1)3 all Clear Channel Time Sales Agreements and Clear Channel Trade Agreements (both defined in Section 2.3), Clear Channel Real Property Leases (defined in Section 6.7), and other contracts, agreements, and leases which are used in the operation of the Clear Channel Stations and listed on Schedule 1.1(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Clear Channel Stations (the "Clear Channel Station Contracts"); (1)4 all of Clear Channel's rights in and to the Clear Channel Stations' call letters and Clear Channel's rights in and to the trademarks, trade names, service marks, franchises, copyrights, computer software, programs and programming material, jingles, slogans, logos, and other intangible property which are used in the operation of the Clear Channel Stations and listed on Schedule 1.1(d) (the "Clear Channel Intangible Property"); (1)5 Clear Channel's rights in and to all the files, documents, records, and books of account (or copies thereof) relating to the operation of the Clear Channel Stations, including the Clear Channel Stations' local public files, programming information and studies, blueprints, 3 technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to the Clear Channel Excluded Assets (defined below); and (1)6 any real property which is used in the operation of the Clear Channel Stations (including any of Clear Channel's appurtenant easements and improvements located thereon) and described on Schedule 1.1(f) (the "Clear Channel Real Property"). The Clear Channel Station Assets shall be transferred to Exchange Party free and clear of all liens, claims and encumbrances ("Liens") except for (i) Exchange Party Assumed Obligations (defined below), (ii) liens for taxes not yet due and payable and for which Exchange Party receives a credit pursuant to Section 3.3, (iii) such liens (not related to Clear Channel indebtedness), easements, rights of way, building and use restrictions, exceptions, reservations and limitations common for properties of such nature that do not, and are unlikely to, in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Clear Channel Stations, and (iv) any items listed on Schedule 1.1(b) (collectively, "Clear Channel Permitted Liens"). 1.2. Clear Channel Excluded Assets. Notwithstanding anything to the contrary contained herein, the Clear Channel Station Assets shall not include the following assets along with all rights, title and interest therein (the "Clear Channel Excluded Assets"): (2)1 all cash and cash equivalents of Clear Channel, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; (2)2 all accounts receivable or notes receivable arising in the operation of the Clear Channel Stations prior to Closing; (2)3 all tangible and intangible personal property of Clear Channel disposed of or consumed in the ordinary course of business of Clear Channel between the date of this Agreement and Closing; (2)4 all Clear Channel Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Clear Channel; (2)5 Clear Channel's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Clear Channel, duplicate copies of the records of the Clear 3 4 Channel Stations, and all records not relating exclusively to the operation of the Clear Channel Stations; (2)6 contracts of insurance, and all insurance proceeds or claims made thereunder; (2)7 all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Clear Channel; (2)8 all assets of Clear Channel of the nature described in Section 1.1 above which are used exclusively in the operation of radio station WNWZ-AM ("Retained Michigan Station"); (2)9 all assets of Clear Channel of the nature described in Section 1.1 above which are used primarily in the operation of radio station WXCR-FM ("Retained Albany Station"). (2)10 all rights, properties and assets described on Schedule 1.2(h) which schedule shall include any Clear Channel FM tower and FM tower site not used exclusively by any of the Clear Channel Stations, and all rights, properties and assets not specifically described in Section 1.1. 1.3. Exchange Party Station Assets. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Exchange Party shall assign, transfer, convey and deliver to Clear Channel, and Clear Channel shall acquire from Exchange Party, all of the right, title and interest of Exchange Party in and to all of the assets, properties, interests and rights of Exchange Party of whatsoever kind and nature, real and personal, tangible and intangible, which are used in the operation of the Exchange Party Stations and described in this Section 1.3, but excluding the Exchange Party Excluded Assets as hereafter defined (the "Exchange Party Station Assets")(the parties acknowledge that the schedules referred to in this Section and Section 1.4 ("Exchange Party Schedules") are not attached to this Agreement. Exchange Party agrees to deliver to Clear Channel all of the Exchange Party Schedules within ten (10) days of the execution of this Agreement in form comparable to the schedules provided by Clear Channel and attached to this Agreement and reasonably acceptable to Clear Channel): (3)1 all licenses, permits and other authorizations which are issued to Exchange Party by the FCC with respect to the Exchange Party Stations (the "Exchange Party FCC Licenses") including but not limited to those described on Schedule 1.3(a), including any renewals or modifications thereof between the date hereof and Closing; (3)2 all equipment, electrical devices, towers, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used in the operation 4 5 of the Exchange Party Stations including but not limited to those listed on Schedule 1.3(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Exchange Party (the "Exchange Party Tangible Personal Property"); (3)3 all Exchange Party Time Sales Agreements and Exchange Party Trade Agreements (both defined in Section 2.1), Exchange Party Real Property Leases (defined in Section 7.7), and other contracts, agreements, and leases which are used in the operation of the Exchange Party Stations and listed on Schedule 1.3(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Exchange Party Stations (the "Exchange Party Station Contracts"); (3)4 all of Exchange Party's rights in and to the Exchange Party Stations' call letters and Exchange Party's rights in and to the trademarks, trade names, service marks, franchises, copyrights, computer software, programs and programming material, jingles, slogans, logos, and other intangible property which are used in the operation of the Exchange Party Stations including but not limited to those listed on Schedule 1.3(d) (the "Exchange Party Intangible Property"); (3)5 Exchange Party's rights in and to all the files, documents, records, and books of account (or copies thereof) relating to the operation of the Exchange Party Stations, including but not limited to the Exchange Party Stations' local public files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to the Exchange Party Excluded Assets (defined below); and (3)6 any real property which is used in the operation of the Exchange Party Stations (including any of Exchange Party's appurtenant easements and improvements located thereon) including but not limited to those described on Schedule 1.3(f) (the "Exchange Party Real Property"). The Exchange Party Station Assets shall be transferred to Clear Channel free and clear of all Liens except for (i) Clear Channel Assumed Obligations (defined below), (ii) liens for taxes not yet due and payable and for which Clear Channel receives a credit pursuant to Section 3.3, (iii) such liens (not related to Exchange Party indebtedness), easements, rights of way, building and use restrictions, exceptions, reservations and limitations common for properties of such nature that do not, and are unlikely to, in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Exchange 5 6 Party Stations, and (iv) any items listed on Schedule 1.3(b) (collectively, "Exchange Party Permitted Liens"). 1.4. Exchange Party Excluded Assets Notwithstanding anything to the contrary contained herein, the Exchange Party Station Assets shall not include the following assets along with all rights, title and interest therein (the "Exchange Party Excluded Assets"): (4)1 all cash and cash equivalents of Exchange Party, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; (4)2 all accounts receivable or notes receivable arising in the operation of the Exchange Party Stations prior to Closing; (4)3 all tangible and intangible personal property of Exchange Party disposed of or consumed in the ordinary course of business of Exchange Party between the date of this Agreement and Closing; (4)4 all Exchange Party Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Exchange Party; (4)5 Exchange Party's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Exchange Party, duplicate copies of the records of the Exchange Party Stations, and all records not relating exclusively to the operation of the Exchange Party Stations; (4)6 contracts of insurance, and all insurance proceeds or claims made thereunder; (4)7 all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Exchange Party; and (4)8 any rights, properties or assets described on Schedule 1.4(h), and all rights, properties and assets not specifically described in Section 1.3. 1.5. Shared Assets. The parties acknowledge and agree that a portion of the Clear Channel Assets with respect to the stations licensed to Albany, New York and Grand Rapids, Michigan are shared with the Retained Albany Station and Retained Michigan, respectively ("Shared Assets"). Clear Channel and Exchange Party shall review the equipment list for all of these stations and agree in good faith to make an equitable division of the Shared Assets in each asset category between the parties. Provided however, that this division shall be made such that the value of the Shared Assets that each party receives shall be equal. 6 7 ARTICLE 2: ASSUMPTION OF OBLIGATIONS 2.1. Clear Channel Assumed Obligations. On the Closing Date, Clear Channel shall assume the obligations of Exchange Party (the "Clear Channel Assumed Obligations") arising after Closing under the Exchange Party Station Contracts which have been referenced in writing to or delivered to Clear Channel or were entered into in the ordinary course of business and which (i) do not have a term of more than one (1) year, (ii) represent an obligation to the Exchange Party of not more than fifty thousand dollars ($50,000.00), and (iii) can be terminated by Exchange Party with no more than ninety (90) days notice, including without limitation all agreements for the sale of advertising time on the Exchange Party Stations for cash in the ordinary course of business ("Exchange Party Time Sales Agreements") and all agreements for the sale of advertising time on the Exchange Party Stations for non-cash consideration ("Exchange Party Trade Agreements"). 2.2. Exchange Party Retained Obligations. Clear Channel does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Exchange Party of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Clear Channel, other than the Clear Channel Assumed Obligations (the "Exchange Party Retained Obligations"). 2.3. Exchange Party Assumed Obligations. On the Closing Date, Exchange Party shall assume the obligations of Clear Channel (the "Exchange Party Assumed Obligations") arising after Closing under the Clear Channel Station Contracts, including without limitation all agreements for the sale of advertising time on the Clear Channel Stations for cash in the ordinary course of business ("Clear Channel Time Sales Agreements") and all agreements for the sale of advertising time on the Clear Channel Stations for non-cash consideration ("Clear Channel Trade Agreements"). 2.4. Clear Channel Retained Obligations. Exchange Party does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Clear Channel of any nature whatsoever whether accrued, absolute, contingent or 7 8 otherwise and whether or not disclosed to Exchange Party, other than the Exchange Party Assumed Obligations (the "Clear Channel Retained Obligations"). ARTICLE 3: CASH PAYMENT 3.1. Cash Payment. Exchange Party shall at Closing (defined below) deliver to Clear Channel by wire transfer of immediately available funds $67,000,000, subject to adjustment pursuant to Sections 3.3 (the "Cash Payment"). 3.2. Deposit. On the date of this Agreement, Exchange Party shall deposit $5,000,000 (the "Deposit") with NationsBank/Bank of America (the "Escrow Agent") pursuant to the Escrow Agreement (the "Escrow Agreement") of even date herewith among Clear Channel, Exchange Party and the Escrow Agent. At Closing, the Deposit shall be applied to the Cash Payment and any interest accrued on the Deposit thereon shall be disbursed to Exchange Party. If this Agreement is terminated by Clear Channel pursuant to Section 16.1(b) and Clear Channel is entitled to liquidated damages pursuant to Section 16.3, the Exchange Deposit and any interest accrued thereon shall be disbursed to Clear Channel as partial payment of liquidated damages pursuant to Section 16.3. If this Agreement is terminated for any other reason, the Deposit and any interest accrued thereon shall be disbursed to Exchange Party. 3.3. Prorations and Adjustments. Except as otherwise provided herein, all deposits, reserves and prepaid and deferred income and expenses arising from the conduct of the business and operations of the Clear Channel Stations and Exchange Party Stations shall be prorated in accordance with generally accepted accounting principles as of 11:59 p.m. on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate and other property taxes (but excluding transfer taxes which shall be paid as set forth in Section 13.1), business and license fees, music and other license fees (including any retroactive adjustments thereof), utility expenses, amounts due or to become due under contracts, rents, lease payments and similar prepaid and deferred items. Real estate taxes shall be apportioned on the basis of taxes assessed for the preceding year, with a reapportionment, if any, as soon as the new tax rate and valuation can be ascertained. Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days of the Closing Date. In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid at the time provided herein and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Clear Channel and one-half by Exchange Party. 3.4. Allocation. (4)1 Subject to Section 3.1, the values of the assets comprising the Clear Channel Station Assets and the Exchange Party Station Assets shall be determined by an appraisal 8 9 (the "Appraisal") prepared by Bond & Pecaro (whose fees shall be paid one-half by Clear Channel and one-half by Exchange Party). Prior to Closing, Clear Channel shall prepare and provide to Exchange Party schedules which, for each party to this Agreement, show the respective Clear Channel Station Assets and Exchange Party Station Assets to be conveyed and acquired and Cash Payment to be made and received at Closing under this Agreement. (4)2 Before or after Closing, Clear Channel shall prepare schedules (the "Exchange Group Schedules") which (i) divide the Exchange Party Station Assets and the Clear Channel Station Assets into both "exchange groups" (in accordance with the like-kind exchange rules covering exchanges of multiple properties under Treas. Reg. Section 1.1031(j)-1) and residual groups and (ii) set forth the total value of the assets making up each such exchange group and residual group (based upon the Appraisal). For tax purposes, the parties shall report the exchange of assets under this Agreement consistently with the Exchange Group Schedules and the Appraisal, including without limitation filing when due IRS Form 8594 and (if applicable) IRS Form 8824 on the basis of the Exchange Group Schedules and the Appraisal. ARTICLE 4: CLOSING 4.1. Closing. The consummation of the exchange of assets under this Agreement (the "Closing") shall occur on a date (the "Closing Date") and at a time and place designated solely by Clear Channel after FCC Consent (defined below)(which date may be before, but shall be not later than, five business days after the Closing under the AMFM Agreement), subject to satisfaction or waiver of the conditions to Closing contained herein (other than those to be satisfied at Closing). Clear Channel shall provide Exchange Party with notice of the Closing Date at least three (3) business days prior to the Closing, however, Clear Channel reserves the right to extend the Closing Date without penalty, provided, however, the Closing Date shall not be extended beyond a date which is ninety (90) days after the satisfaction or waiver of all of the conditions to Closing contained herein, including without limitation that the closing under the AMFM Agreement shall have been consummated (other than those to be satisfied at Closing). If requested by Clear Channel, prior to Closing the parties shall hold a pre-closing conference at a time and place designated by Clear Channel, at which the parties shall provide (for review only) all documents to be delivered at Closing under this Agreement, each duly executed but undated, and otherwise confirm their ability to timely consummate the Closing. If Closing occurs prior to the FCC Consent becoming a final order (i.e., no longer subject to appeal), and prior to such finality the FCC Consent is reversed or otherwise set aside pursuant to a final order of the FCC (or court of competent jurisdiction), then the parties shall comply with such order in a manner that otherwise complies with applicable law and returns the parties to the status quo ante in all material respects (it being understood that in such event Exchange Party may designate one or more third parties as the transferees of the Clear Channel Stations). 9 10 ARTICLE 5: GOVERNMENTAL CONSENTS Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC Consent") to the assignment of the Clear Channel FCC Licenses to Exchange Party and the Exchange Party FCC Licenses to Clear Channel, (ii) United States Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the transactions contemplated hereby, including without limitation any such approval as may be necessary to enable Clear Channel to consummate the merger under the AMFM Agreement, and (iii) expiration or termination of any applicable waiting period ("HSR Clearance") under the HSR Act (defined below). 5.1. FCC. On a date designated by Clear Channel, Clear Channel and Exchange Party shall file applications with the FCC (the "FCC Application") requesting the FCC Consent. Clear Channel and Exchange Party shall diligently prosecute the FCC Application and otherwise use their best efforts to obtain the FCC Consent as soon as possible. If the FCC Consent imposes upon Exchange Party any condition (including without limitation in any divestiture condition), Exchange Party shall timely comply therewith. If the FCC Consent imposes upon Clear Channel any condition that Clear Channel can satisfy by the payment of $100,000.00 or less, Clear Channel shall comply therewith, but only if such condition can be satisfied by the payment by Clear Channel of $100,000 or less. 5.2. HSR. If not previously filed, then within five (5) business days after the execution of this Agreement, Clear Channel and Exchange Party shall make any required filings with the Federal Trade Commission and the DOJ pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. 5.3. General. Clear Channel and Exchange Party shall notify each other of all documents filed with or received from any governmental agency with respect to this Agreement or the transactions contemplated hereby. Clear Channel and Exchange Party shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder. If Exchange Party becomes aware of any fact relating to it which would prevent or delay the FCC Consent, the DOJ Consent or HSR Clearance, Exchange Party shall promptly notify Clear Channel thereof and take such steps as necessary to remove such impediment, including but not limited to divesting any stations and terminating any agreements to acquire or program or market any stations. ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF CLEAR CHANNEL Clear Channel makes the following representations and warranties to Exchange Party: 6.1. Organization. Clear Channel is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in 10 11 each jurisdiction in which the Clear Channel Station Assets and the Exchange Party Station Assets are located. Clear Channel has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Clear Channel pursuant hereto (collectively, the "Clear Channel Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 6.2. Authorization. The execution, delivery and performance of this Agreement and the Clear Channel Ancillary Agreements by Clear Channel have been duly authorized and approved by all necessary action of Clear Channel and do not require any further authorization or consent of Clear Channel. This Agreement is, and each Clear Channel Ancillary Agreement when executed and delivered by Clear Channel and the other parties thereto will be, a legal, valid and binding agreement of Clear Channel enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 6.3. No Conflicts. Neither the execution and delivery by Clear Channel of this Agreement and the Clear Channel Ancillary Agreements or the consummation by Clear Channel of any of the transactions contemplated hereby or thereby nor compliance by Clear Channel with or fulfillment by Clear Channel of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Clear Channel or any law, judgment, order, or decree to which Clear Channel is subject or, except as set forth on Schedule 1.1(c), any Clear Channel Station Contract; or (ii) require the approval, consent, authorization or act of, or the making by Clear Channel of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and DOJ Consent, and, if applicable, HSR Clearance. 6.4. FCC Licenses. Clear Channel (or one of the companies comprising Clear Channel) is the holder of the Clear Channel FCC Licenses described on Schedule 1.1(a) which lists all of the material Clear Channel FCC Licenses for the Clear Channel Stations. The Clear Channel FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated and have not expired. Except as described on Schedule 1.1(a), to the actual knowledge of the station general managers of any of the Clear Channel Stations, (i) each Clear Channel Station is operating with maximum power and facilities specified in the respective Clear Channel License, (ii) none of the Clear Channel Stations is causing objectionable interference to the transmissions of any other broadcast station or communications facility and (iii) no other broadcast station or communications facility is causing objectionable interference to the transmissions of any Clear Channel Station. There is not pending any action by or before the 11 12 FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the Clear Channel FCC Licenses (other than proceedings to amend FCC rules of general applicability), and there is not now issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or notice of forfeiture against Clear Channel with respect to the Clear Channel Stations. The Clear Channel Stations are operating in compliance in all material respects with the Clear Channel FCC Licenses, the Communications Act of 1934, as amended (the "Communications Act"), and the rules, regulations and policies of the FCC. 6.5. Taxes. Clear Channel has, in respect of the Clear Channel Stations' business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and reports which are required to have been filed by it under applicable law and has paid all taxes which have become due pursuant to such returns or pursuant to any assessments which have become payable. 6.6. Personal Property. Schedule 1.1(b) contains a list of all material items of Clear Channel Tangible Personal Property included in the Clear Channel Station Assets. Clear Channel has title to the Clear Channel Tangible Personal Property free and clear of Liens other than Clear Channel Permitted Liens. The items of Clear Channel Tangible Personal Property listed on Schedule 1.1(b) are in all material respects in good working condition, ordinary wear and tear excepted. 6.7. Real Property. Schedule 1.1(f) contains a description of all material real property used by Clear Channel in the operation of the Clear Channel Stations. Clear Channel has fee simple title to the owned Clear Channel Real Property ("Clear Channel Owned Real Property") free and clear of Liens other than Clear Channel Permitted Liens. Schedule 1.1(f) includes a description of each material real property lease or similar agreement included in the Clear Channel Station Assets (the "Clear Channel Real Property Leases"). The Clear Channel Owned Real Property includes, and the Clear Channel Real Property Leases provide, access to the Clear Channel Stations' facilities. To Clear Channel's knowledge, the Clear Channel Real Property is not subject to any suit for condemnation or other taking by any public authority. Except as described on Schedule 1.1(f), to the actual knowledge of the station general managers of any of the Clear Channel Stations, none of the buildings, structures, improvements or fixtures constructed on any of the Clear Channel Owned Real Property encroach upon adjoining real property ("Clear Channel Encroachment Representation"). 6.8. Contracts. Schedule 1.1(c) contains a description of all material Clear Channel Station Contracts. Each of the Clear Channel Station Contracts (including without limitation each of the Clear Channel Real Property Leases) is in effect and is binding upon Clear Channel and, to Clear Channel's knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors' rights generally). Clear Channel has performed its obligations under each of the Clear Channel Station Contracts in all material respects, and is not in material default thereunder, and to Clear Channel's knowledge, no other party to any of the Clear Channel Station Contracts is in default thereunder in any material respect. 12 13 6.9. Environmental. Except as set forth in any environmental report delivered by Clear Channel to Exchange Party prior to the date of this Agreement and except as set forth on Schedule 1.1(f), to Clear Channel's knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to the Clear Channel Real Property included in the Clear Channel Station Assets. Except as set forth in any environmental report delivered by Clear Channel to Exchange Party prior to the date of this Agreement and except as set forth on Schedule 1.1(f), to Clear Channel's knowledge, Clear Channel has complied in all material respects with all environmental, health and safety laws applicable to the Clear Channel Stations. 6.10. Intangible Property. Schedule 1.1(d) contains a description of the material Clear Channel Intangible Property included in the Clear Channel Station Assets. Except as set forth on Schedule 1.1(d), Clear Channel has received no notice of any claim that its use of the Clear Channel Intangible Property infringes upon any third party rights. . Except as set forth on Schedule 1.1(d), Clear Channel owns or has the right to use the Clear Channel Intangible Property free and clear of Liens other than Clear Channel Permitted Liens. 6.11. Compliance with Law. Clear Channel has complied in all material respects with all laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or orders of any court or of any foreign, federal, state, municipal or other governmental authority which are applicable to the operation of the Clear Channel Stations. There is no action, suit or proceeding pending or threatened against Clear Channel in respect of the Clear Channel Stations that will subject Exchange Party to liability or which questions the legality or propriety of the transactions contemplated by this Agreement. To Clear Channel's knowledge, there are no governmental claims or investigations pending or threatened against Clear Channel in respect of the Clear Channel Stations (except those affecting the industry generally). 6.12. No Finder. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Clear Channel or any party acting on Clear Channel's behalf. 6.13. Qualification. Clear Channel is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Exchange Party Stations under the Communications Act and the rules, regulations and policies of the FCC. There are no facts that would, under existing law and the existing rules, regulations, policies and procedures of the FCC, disqualify Clear Channel as an assignee of the Exchange Party FCC Licenses or as the owner and operator of the Exchange Party Stations. No request by Clear Channel for waiver of any FCC rule or policy is necessary for the FCC Consent to be obtained. There is no action, suit or proceeding pending or 13 14 threatened against Clear Channel which could materially adversely affect Clear Channel's ability to perform its obligations hereunder. 6.14. Financial Statements. Clear Channel has delivered to Exchange Party copies of the unaudited results of operations of the Clear Channel Stations for the twelve months ended December 31, 1999. Such financial statements (and the monthly income statements to be supplied pursuant to Section 9.1(c)) were or will be prepared in accordance with the books and records of the Clear Channel Stations and present (or will present) fairly the results of operations for the period indicated. ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF EXCHANGE PARTY Exchange Party makes the following representations and warranties to Clear Channel: 7.1. Organization. Exchange Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Exchange Party Station Assets and the Clear Channel Station Assets are located. Exchange Party has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Exchange Party pursuant hereto (collectively, the "Exchange Party Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 7.2. Authorization. The execution, delivery and performance of this Agreement and the Exchange Party Ancillary Agreements by Exchange Party have been duly authorized and approved by all necessary action of Exchange Party and do not require any further authorization or consent of Exchange Party. This Agreement is, and each Exchange Party Ancillary Agreement when executed and delivered by Exchange Party and the other parties thereto will be, a legal, valid and binding agreement of Exchange Party enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 7.3. No Conflicts. Neither the execution and delivery by Exchange Party of this Agreement and the Exchange Party Ancillary Agreements or the consummation by Exchange Party of any of the transactions contemplated hereby or thereby nor compliance by Exchange Party with or fulfillment by Exchange Party of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Exchange Party or any law, judgment, order, or decree to which Exchange Party is subject or, except as set forth on Schedule 1.3(c), any Exchange Party Station Contract; or (ii) require the approval, consent, authorization or act of, or the making by Exchange Party of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and DOJ Consent and, if applicable, HSR Clearance. 14 15 7.4. 7.5. FCC Licenses. Exchange Party is the holder of the Exchange Party FCC Licenses described on Schedule 1.3(a) which lists all of the material Exchange Party FCC Licenses for the Exchange Party Stations. The Exchange Party FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated and have not expired. Except as described on Schedule 1.3(a), to the actual knowledge of the station general managers of any of the Exchange Party Stations, (i) each Exchange Party Station is operating with maximum power and facilities specified in the respective Exchange Party License, (ii) none of the Exchange Party Stations is causing objectionable interference to the transmissions of any other broadcast station or communications facility and (iii) no other broadcast station or communications facility is causing objectionable interference to the transmissions of any Exchange Party Station. There is not pending any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the Exchange Party FCC Licenses (other than proceedings to amend FCC rules of general applicability), and there is not now issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or notice of forfeiture against Exchange Party with respect to the Exchange Party Stations. The Exchange Party Stations are operating in compliance in all material respects with the Exchange Party FCC Licenses, the Communications Act, and the rules, regulations and policies of the FCC. 7.6. Taxes. Exchange Party has, in respect of the Exchange Party Stations' business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and reports which are required to have been filed by it under applicable law and has paid all taxes which have become due pursuant to such returns or pursuant to any assessments which have become payable. 7.7. Personal Property. Schedule 1.3(b) contains a list of all material items of Exchange Party Tangible Personal Property included in the Exchange Party Station Assets. Exchange Party has title to the Exchange Party Tangible Personal Property free and clear of Liens other than Exchange Party Permitted Liens. The items of Exchange Party Tangible Personal Property listed on Schedule 1.3(b) are in all material respects in good working condition, ordinary wear and tear excepted. 7.8. Real Property. Schedule 1.3(f) contains a description of all material real property used by Exchange Party in the operation of the Exchange Party Stations. Exchange Party has fee simple title to the owned Exchange Party Real Property ("Exchange Party Owned Real Property") free and clear of Liens other than Exchange Party Permitted Liens. Schedule 1.3(f) includes a description of each material real property lease or similar agreement included in the Exchange Party Station Assets (the "Exchange Party Real Property Leases"). The Exchange Party Owned Real Property includes, and the Exchange Party Real Property Leases provide, access to the 15 16 Exchange Party Stations' facilities. To Exchange Party's knowledge, the Exchange Party Real Property is not subject to any suit for condemnation or other taking by any public authority. Except as described in Schedule 1.3(f), to the actual knowledge of the station general managers of any of the Exchange Party Stations, none of the buildings, structures, improvements or fixtures constructed on any of the Clear Channel Owned Real Property encroach upon adjoining real property ("Exchange Party Encroachment Representation"). 7.9. Contracts. Schedule 1.3(c) contains a description of all material Exchange Party Station Contracts. Each of the Exchange Party Station Contracts (including without limitation each of the Exchange Party Real Property Leases) is in effect and is binding upon Exchange Party and, to Exchange Party's knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors' rights generally). Exchange Party has performed its obligations under each of the Exchange Party Station Contracts in all material respects, and is not in material default thereunder, and to Exchange Party's knowledge, no other party to any of the Exchange Party Station Contracts is in default thereunder in any material respect. 7.10. Environmental. Except as set forth in any environmental report delivered by Exchange Party to Clear Channel prior to the date of this Agreement and except as set forth on Schedule 1.3(f), to Exchange Party's knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to the Exchange Party Real Property included in the Exchange Party Station Assets. Except as set forth in any environmental report delivered by Exchange Party to Clear Channel prior to the date of this Agreement and except as set forth on Schedule 1.3(f), to Exchange Party's knowledge, Exchange Party has complied in all material respects with all environmental, health and safety laws applicable to the Exchange Party Stations. 7.11. Intangible Property. Schedule 1.3(d) contains a description of the material Exchange Party Intangible Property included in the Exchange Party Station Assets. Except as set forth on Schedule 1.3(d), Exchange Party has received no notice of any claim that its use of the Exchange Party Intangible Property infringes upon any third party rights. Except as set forth on Schedule 1.3(d), Exchange Party owns or has the right to use the Exchange Party Intangible Property free and clear of Liens other than Exchange Party Permitted Liens. 7.12. Compliance with Law. Exchange Party has complied in all material respects with all laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or orders of any court or of any foreign, federal, state, municipal or other governmental authority which are applicable to the operation of the Exchange Party Stations. There is no action, suit or proceeding pending or threatened against Exchange Party in respect of the Exchange Party Stations that will subject Clear Channel to liability or which questions the legality or propriety of the transactions contemplated by this Agreement. To Exchange Party's knowledge, there are no governmental claims or investigations pending or threatened against Exchange Party in respect of the Exchange Party Stations (except those affecting the industry generally). 16 17 7.13. No Finder. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Exchange Party or any party acting on Exchange Party's behalf. 7.14. Qualification. Exchange Party is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Clear Channel Stations under the Communications Act and the rules, regulations and policies of the FCC. There are no facts that would, under existing law and the existing rules, regulations, policies and procedures of the FCC, disqualify Exchange Party as an assignee of the Clear Channel FCC Licenses or as the owner and operator of the Clear Channel Stations. No request by Exchange Party for waiver of any FCC rule or policy is necessary for the FCC Consent to be obtained. There is no action, suit or proceeding pending or threatened against Exchange Party which could materially adversely affect Exchange Party's ability to perform its obligations hereunder. Exchange Party has and will have available on the Closing Date sufficient funds to enable it to consummate the transactions contemplated hereby. 7.15. Financial Statements. Exchange Party has delivered to Clear Channel copies of the unaudited results of operations of the Exchange Party Stations for the twelve months ended December 31, 1999. Such financial statements (and the monthly income statements to be supplied pursuant to Section 9.2(c)) prepared in accordance with the books and records of the Exchange Party Stations and present (or will present) fairly the results of operations for the period indicated. ARTICLE 8: ACCOUNTS RECEIVABLE 8.1. Clear Channel Accounts Receivable. All accounts receivable arising prior to the Closing Date in connection with the operation of the Clear Channel Stations, including but not limited to accounts receivable for advertising revenues for programs and announcements performed prior to the Closing Date and other broadcast revenues for services performed prior to the Closing Date, shall remain the property of Clear Channel (the "Clear Channel Accounts Receivable") and Exchange Party shall not acquire any right or interest therein. For a period of six months from Closing (the "Collection Period"), Exchange Party shall collect the Clear Channel Accounts Receivable in the normal and ordinary course of Exchange Party's business and shall apply all such amounts collected to the debtor's oldest account receivable first. Exchange Party's obligation shall not extend to the institution of litigation, employment of counsel or a collection agency or any other extraordinary means of collection. During the Collection Period, neither Clear Channel nor its agents shall make any direct solicitation of any such account debtor for collection purposes or institute litigation for the collection of amounts due. Any amounts relating 17 18 to the Clear Channel Accounts Receivable that are paid directly to Clear Channel shall be retained by Clear Channel (and it shall inform Exchange Party thereof). Within ten calendar days after the end of each month, Exchange Party shall make a payment to Clear Channel equal to the amount of all collections of Clear Channel Accounts Receivable during the preceding month. At the end of the Collection Period, any remaining Clear Channel Accounts Receivable shall be returned to Clear Channel for collection. 8.2. Exchange Party Accounts Receivable. All accounts receivable arising prior to the Closing Date in connection with the operation of the Exchange Party Stations, including but not limited to accounts receivable for advertising revenues for programs and announcements performed prior to the Closing Date and other broadcast revenues for services performed prior to the Closing Date, shall remain the property of Exchange Party (the "Exchange Party Accounts Receivable") and Clear Channel shall not acquire any right or interest therein. During the Collection Period, Clear Channel shall collect the Exchange Party Accounts Receivable in the normal and ordinary course of Clear Channel's business and shall apply all such amounts collected to the debtor's oldest account receivable first. Clear Channel's obligation shall not extend to the institution of litigation, employment of counsel or a collection agency or any other extraordinary means of collection. During the Collection Period, neither Exchange Party nor its agents shall make any direct solicitation of any such account debtor for collection purposes or institute litigation for the collection of amounts due. Any amounts relating to the Exchange Party Accounts Receivable that are paid directly to Exchange Party shall be retained by Exchange Party (and it shall inform Clear Channel thereof). Within ten calendar days after the end of each month, Clear Channel shall make a payment to Exchange Party equal to the amount of all collections of Exchange Party Accounts Receivable during the preceding month. At the end of the Collection Period, any remaining Exchange Party Accounts Receivable shall be returned to Exchange Party for collection. ARTICLE 9: COVENANTS 9.1. Clear Channel's Covenants. Clear Channel covenants and agrees with respect to the Clear Channel Stations that, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Exchange Party, which shall not be unreasonably withheld, Clear Channel shall: (1)1 operate the Clear Channel Stations in the ordinary course of business consistent with past practice, including retaining the current format and programming (including the content thereof) and spending for promotions, advertising and research at levels shown on budgets delivered to Exchange Party and in all material respects in accordance with FCC rules and regulations and with all other applicable laws, regulations, rules and orders; (1)2 not, other than in the ordinary course of business in accordance with past practice, (i) sell, lease or dispose of or agree to sell, lease or dispose of any of the Clear Channel Station Assets, (ii) create, assume or permit to exist any Liens upon the Clear Channel Station Assets, except for Clear Channel Permitted Liens, (iii) amend or terminate any Clear Channel 18 19 Station Contract or enter into any new contracts (except for Clear Channel Time Sales Agreements) which (x) have a term of more than one (1) year, (y) represent an obligation to Clear Channel of more than fifty thousand dollars ($50,000.00), and (z) can't be terminated by Clear Channel with no more than ninety (90) days notice, or (iv) except as provided for by the Clear Channel budgets delivered to Exchange Party, grant any increases in the compensation of its employees; (1)3 furnish Exchange Party with such information relating to the Clear Channel Station Assets as Exchange Party may reasonably request (including weekly sales projections and monthly income statements), at Exchange Party's expense and provided such request does not interfere unreasonably with the business of the Clear Channel Stations, and provide Exchange Party access to the Clear Channel Stations, Station Assets and personnel upon reasonable request and notice to Clear Channel. 9.2. Exchange Party's Covenants. Exchange Party covenants and agrees with respect to the Exchange Party Stations that, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Clear Channel, which shall not be unreasonably withheld, Exchange Party shall: (2)1 operate the Exchange Party Stations in the ordinary course of business consistent with past practice, including retaining the current format and programming (including the content thereof) and spending for promotions, advertising and research at levels shown on budgets delivered to Clear Channel and in all material respects in accordance with FCC rules and regulations and with all other applicable laws, regulations, rules and orders; (2)2 not, other than in the ordinary course of business in accordance with past practice, (i) sell, lease or dispose of or agree to sell, lease or dispose of any of the Exchange Party Station Assets, (ii) create, assume or permit to exist any Liens upon the Exchange Party Station Assets, except for Exchange Party Permitted Liens, (iii) amend or terminate any Exchange Party Station Contract or enter into any new contracts (except for Exchange Party Time Sales Agreements) which (x) have a term of more than one (1) year, (y) represent an obligation to Exchange Party of more than fifty thousand dollars ($50,000.00), and (z) can't be terminated by Exchange Party with no more than ninety (90) days notice, or (iv) except as provided for by the Exchange Party budgets delivered to Clear Chanel, grant any increases in the compensation of its employees; (2)3 furnish Clear Channel with such information relating to the Exchange Party Station Assets as Clear Channel may reasonably request including weekly sales projections and monthly income statements, at Clear Channel's expense and provided such request does not interfere unreasonably with the business of the Exchange Party Stations, and provide Clear 19 20 Channel access to the Exchange Party Stations, Station Assets and personnel upon reasonable request and notice to Exchange Party. ARTICLE 10: JOINT COVENANTS Clear Channel and Exchange Party hereby covenant and agree that between the date hereof and Closing: 10.1. Cooperation. Subject to express limitations contained elsewhere herein, each party (i) shall cooperate fully with one another in taking any reasonable actions (including without limitation, reasonable actions to obtain the required consent of any governmental instrumentality or any third party) necessary or helpful to accomplish the transactions contemplated by this Agreement, including but not limited to the prompt satisfaction of any condition to Closing set forth herein, and (ii) shall not take any action that conflicts with its obligations hereunder or that causes its representations and warranties to become untrue in any material respect. 10.2. Control of Stations. Neither party shall, directly or indirectly, control, supervise or direct the operations of the other party's stations prior to Closing. Such operations, including complete control and supervision of all programs, employees and policies, shall be the sole responsibility of the FCC licensee thereof. 10.3. Consents to Assignment. The parties shall use commercially reasonable efforts to obtain any third party consents necessary for the assignment of any Clear Channel Station Contract or Exchange Party Station Contract (which shall not require any payment to any such third party). To the extent that any such contract may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant hereto shall not constitute an assignment thereof, but to the extent permitted by law shall constitute an equitable assignment and assumption of rights and obligations thereunder, with the conveying party making available to the acquiring party the benefits thereof and the acquiring party performing the obligations thereunder on the conveying party's behalf; provided, however, the conveying party shall indemnify (pursuant to Article 15 of this Agreement) the acquiring party for Damages (as hereafter defined) as a result of the conveying party's failure to have obtained a consent to assignment with respect to any of the leases for the main transmitter sites and studio sites listed on Schedule 1.1(f) and included in Section 1.3(f) including but not limited to those listed on Schedule 1.3(f) respectively. 10.4. Employee Matters. Clear Channel has provided, and Exchange Party shall provide within three (3) days of the execution of this Agreement to the other party a list (with name, position and base salary) of all of their respective employees employed at the Clear Channel Stations and the Exchange Party Stations and who work primarily for those stations. Exchange Party may interview and elect to hire any or all of the Clear Channel employees on the list (i) employed at the Clear Channel Stations licensed to Grand Rapids, Michigan and (ii) employed at the Clear Channel Stations licensed to Albany, New York who work primarily for those Clear Channel Stations (including without limitation any member of the sales staff who primarily sells 20 21 for or represents radio station WQBJ-FM or WQBK-FM). Clear Channel may interview and elect to hire any or all of the Exchange Party employees on the list. The acquiring party is obligated to hire only those employees that are under employment contracts (and assume the obligations and liabilities under such employment contracts) which are included in the Clear Channel Station Contracts or Exchange Party Station Contracts. With respect to employees hired by the acquiring party ("Transferred Employees"), to the extent permitted by law the conveying party shall provide access to its personnel records and such other information as may be reasonably requested prior to Closing. For a period of twelve (12) months after Closing, neither party will hire, solicit or induce for hire or make any offer or attempt to hire, any of the Transferred Employees hired by the other party. Provided, however, either party may six (6) months after Closing (but not before) hire or solicit for hire any of its former employees who are not Transferred Employees. With respect to such hired employees, the conveying party shall be responsible for the payment of all compensation and accrued employee benefits payable by it until Closing and thereafter the acquiring party shall be responsible for all such obligations payable by it. The acquiring party shall cause all employees it hires to be eligible to participate in its "employee welfare benefit plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA, respectively) in which similarly situated employees are generally eligible to participate; provided, however, that all such employees and their spouses and dependents shall be eligible for coverage immediately after Closing (and shall not be excluded from coverage on account of any pre-existing condition) to the extent provided under such employee welfare benefit plans. For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such employee welfare benefit plans for which such employees may be eligible after Closing, the acquiring party shall ensure that service with the conveying party shall be deemed to have been service with the acquiring party. No such service credit must be granted with respect to participation or eligibility in any employee pension benefit plan. In addition, the acquiring party shall ensure that each such employee receives credit under any welfare benefit plan of the acquiring party for any deductibles or co-payments paid by such employees and dependents for the current plan year under a plan maintained by the conveying party. Notwithstanding any other provision contained herein, the acquiring party shall grant credit to each such employee for all unused sick leave accrued as of Closing as an employee of the conveying party. Notwithstanding any other provision contained herein, the acquiring party shall assume and discharge the conveying party's liabilities for the payment of all unused vacation leave accrued by such employees as of Closing. From and after the Closing, Exchange Party shall cooperate with the reasonable requests of Clear Channel to continue to withhold from the pay checks of Transferred Employees who have outstanding loan balances in Clear Channel's 401(k) Savings Plan, and Exchange Party shall remit such withheld amounts to Clear Channel in a timely fashion such that the outstanding loans do not go into default. 10.5. 1031 Exchange. At or prior to Closing, Clear Channel may assign its rights under this Agreement (in whole or in part) to a qualified intermediary (as defined in Treasury regulation 21 22 section 1.1031(k)-1(g)(4)) or similar entity or arrangement ("Qualified Intermediary"). Upon any such assignment, Clear Channel shall promptly give written notice thereof to Exchange Party and Exchange Party shall cooperate with the reasonable requests of Clear Channel and any Qualified Intermediary in connection therewith. Without limiting the generality of the foregoing, if Clear Channel gives notice of such agreement, Exchange Party shall (i) promptly provide Clear Channel with written acknowledgment of such notice and (ii) at Closing, convey all or part of the Exchange Party Station Assets and make all or part of the Cash Payment (each as designated in writing by the Qualified Intermediary) to or on behalf of the Qualified Intermediary (which payment and conveyance shall, to the extent thereof, satisfy the obligation of Exchange Party to make such conveyance and payment hereunder). Clear Channel's assignment to a Qualified Intermediary will not relieve Clear Channel of any of its duties or obligations herein. Except for the obligations of Exchange Party set forth in this Section, Exchange Party shall not have any liability or obligation to Clear Channel for the failure of such other exchange to qualify as a like kind exchange under Section 1031 of the Code unless such failure is the result of the material breach or default by Exchange Party under this Agreement. 10.6. Trust. Notwithstanding anything in this Agreement to the contrary, Clear Channel may at it option assign this Agreement (in whole or part) and assign and transfer the Clear Channel Station Assets (in whole or in part) to a trustee to hold and operate pursuant to a trust agreement, provided such trustee assumes Clear Channel's duties and obligations hereunder with respect to the Clear Channel Station Assets held in such trust. ARTICLE 11: CONDITIONS OF CLOSING BY CLEAR CHANNEL The obligations of Clear Channel hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 11.1. Representations, Warranties and Covenants. The representations and warranties of Exchange Party made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Exchange Party at or prior to Closing shall have been complied with or performed in all material respects. Clear Channel shall have received a certificate dated as of the Closing Date from Exchange Party, executed by an authorized officer of Exchange Party to the effect that the conditions set forth in this Section have been satisfied. 11.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if applicable, HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. 11.3. AMFM Closing. The closing under the AMFM Agreement shall have been consummated. 22 23 ARTICLE 12: CONDITIONS OF CLOSING BY EXCHANGE PARTY The obligations of Exchange Party hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 12.1. Representations, Warranties and Covenants. The representations and warranties of Clear Channel made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Clear Channel at or prior to Closing shall have been complied with or performed in all material respects. Exchange Party shall have received a certificate dated as of the Closing Date from Clear Channel, executed by an authorized officer of Clear Channel, to the effect that the conditions set forth in this Section have been satisfied. 12.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if applicable, HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. ARTICLE 13: EXPENSES 13.1. Expenses. Each party shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement, except that (i) all recordation, transfer and documentary taxes, fees and charges, and any excise, sales or use taxes, applicable to the transfer of the Clear Channel Station Assets and Exchange Party Station Assets shall be paid by the transferring party, (ii) all FCC filing fees shall be paid equally by Clear Channel and Exchange Party, and (iii) all HSR Act filing fees and expenses shall be paid equally by Exchange Party and Clear Channel. ARTICLE 14: DOCUMENTS TO BE DELIVERED AT CLOSING 14.1. Clear Channel's Documents. At Closing, Clear Channel shall deliver or cause to be delivered to Exchange Party: 14.2. (i) certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 12.1; (iii) such bills of sale, assignments, special warranty deeds, documents of title and other instruments of conveyance, assignment and transfer as may be necessary to convey, transfer and assign the Clear Channel Station Assets to Exchange Party, free and clear of Liens, except for Clear Channel Permitted Liens; and 23 24 (iv) such documents and instruments of assumption as may be necessary to assume the Exchange Party Assumed Obligations. 14.3. Exchange Party's Documents. At Closing, Exchange Party shall deliver or cause to be delivered to Clear Channel: (i) the certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 11.1; (iii) such bills of sale, assignments, special warranty deeds, documents of title and other instruments of conveyance, assignment and transfer as may be necessary to convey, transfer and assign the Exchange Party Station Assets to Clear Channel, free and clear of Liens, except for Exchange Party Permitted Liens; (iv) such documents and instruments of assumption as may be necessary to assume the Clear Channel Assumed Obligations; and (v) the Cash Payment in accordance with Section 3.1 hereof. ARTICLE 15: SURVIVAL; INDEMNIFICATION. 15.1. Survival. The covenants, agreements, representations and warranties in this Agreement shall survive Closing for a period of six (6) months from the Closing Date whereupon they shall expire and be of no further force or effect, except those under (i) this Article 15 that relate to Damages (defined below) for which written notice is given by the indemnified party to the indemnifying party prior to the expiration, which shall survive until resolved and (ii) Sections 2.1 and 2.3 (Assumed Obligations), 2.2 and 2.4 (Retained Obligations), 3.3 (Adjustments), 3.4 (Allocation), 8.1 and 8.2 (Accounts Receivable) and 13.1 (Expenses) (collectively, the "Payment Provisions"), and indemnification obligations with respect to such provisions, which shall survive until performed. 15.2. Indemnification. (2)1 From and after the Closing, Clear Channel shall defend, indemnify and hold harmless Exchange Party from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses ("Damages") incurred by Exchange Party arising out of or resulting from: (i) any breach or default by Clear Channel under this Agreement; (ii) the Clear Channel Retained Obligations or the business or operation of the Clear Channel Stations before Closing; or (iii) the Clear Channel Assumed Obligations or the business or operation of the Exchange Party Stations after Closing; provided, however, that for matters other than the Payment Provisions, Clear Channel shall have no liability to Exchange Party hereunder until, and only to the extent that, Exchange Party's aggregate Damages exceed $100,000, (except for Damages (x) for any Liens not in compliance with subsection (iii) of the last paragraph of 1.1 ("Clear Channel Lien Default") or (y) for breach of the Clear Channel Encroachment Representation ("Clear Channel Encroachment Default") for which Clear Channel 24 25 shall have liability for all such Damages under $500,000 and in excess of $600,000) and the maximum liability of Clear Channel in all cases of indemnification hereunder shall be $7,000,000. (2)2 From and after the Closing, Exchange Party shall defend, indemnify and hold harmless Clear Channel from and against any and all Damages incurred by Clear Channel arising out of or resulting from: (i) any breach or default by Exchange Party under this Agreement; (ii) the Exchange Party Retained Obligations or the business or operation of the Exchange Party Stations before Closing or (iii) the Exchange Party Assumed Obligations or the business or operation of the Clear Channel Stations after Closing; provided, however, that for matters other than the Payment Provisions and the Cash Payment, Exchange Party shall have no liability to Clear Channel hereunder until, and only to the extent that, Clear Channel's aggregate Damages exceed $100,000 (except for Damages (x) for any Liens not in compliance with subsection (iii) of the last paragraph of 1.3 ("Exchange Party Lien Default") or (y) for breach of the Exchange Party Encroachment Representation ("Exchange Party Encroachment Default") for which the Exchange Party shall have liability for all such Damages under $500,000 and in excess of $600,000) and (ii) the maximum liability of Exchange Party in all cases of indemnification hereunder shall be $7,000,000. Provided, however, the parties agree that before making a claim for Damages for Clear Channel Lien Default, Clear Channel Encroachment Default, Exchange Party Lien Default or Exchange Party Encroachment Default, respectively, they both shall use their reasonable best efforts to allow the breaching party to avoid or cure any such default and Damages through the use of lease, contract or any other reasonable arrangements. 15.3. Procedures. The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a "Claim"), but a failure to give such notice or delaying such notice shall not affect the indemnified party's right to indemnification and the indemnifying party's obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party's ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The obligations and liabilities of the parties with respect to any Claim shall be subject to the following additional terms and conditions: (3)1 The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim. (3)2 In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within twenty (20) days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such 25 26 Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof). (3)3 Anything herein to the contrary notwithstanding: (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (ii) the indemnifying party shall not, without the indemnified party's written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim; and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim. (3)4 All claims not disputed shall be paid by the indemnifying party within thirty (30) days after receiving notice of the Claim. "Disputed Claims" shall mean claims for Damages by an indemnified party which the indemnifying party objects to in writing within thirty (30) days after receiving notice of the Claim. In the event there is a Disputed Claim with respect to any Damages, the indemnifying party shall be required to pay the indemnified party the amount of such Damages for which the indemnifying party has, pursuant to a final determination, been found liable within ten (10) days after there is a final determination with respect to such Disputed Claim. A final determination of a Disputed Claim shall be (i) a judgment of any court determining the validity of a Disputed Claim, if no appeal is pending from such judgment and if the time to appeal therefrom has elapsed; (ii) an award of any arbitration determining the validity of such disputed claim, if there is not pending any motion to set aside such award and if the time within which to move to set aside such award has elapsed; (iii) a written termination of the dispute with respect to such claim signed by the parties thereto or their attorneys; (iv) a written acknowledgment of the indemnifying party that it no longer disputes the validity of such claim; or (v) such other evidence of final determination of a disputed claim as shall be acceptable to the parties. No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims. ARTICLE 16: TERMINATION 16.1. Termination. This Agreement may be terminated at any time prior to Closing as follows: 26 27 (1)1 by mutual written consent of Clear Channel and Exchange Party; (1)2 by written notice of Clear Channel to Exchange Party if Exchange Party (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date, including without limitation, the consummation of the Closing in accordance with the Agreement; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below) (1)3 by written notice of Exchange Party to Clear Channel if Clear Channel (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date, including without limitation, the consummation of the Closing in accordance with the Agreement; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below) (1)4 by written notice of either party to the other if the FCC denies the FCC Application; (1)5 by written notice of Clear Channel to Exchange Party if the FCC Consent, DOJ Consent and HSR Clearance have not been obtained before the date four months after the date of this Agreement; (1)6 by written notice of Clear Channel to Exchange Party or Exchange Party to Clear Channel if the Closing shall not have been consummated by March 31, 2001. (1)7 by written notice of Clear Channel to Exchange Party if the AMFM Agreement is terminated or expires. The term "Cure Period" as used herein means a period commencing the date a party receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) days thereafter or (ii) the Closing Date; provided, however, that if the breach or default cannot reasonably be cured within such period but can be cured before the Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date. Except as set forth below, the termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. 27 28 Notwithstanding anything contained herein to the contrary, Section 13.1 shall survive any termination of this Agreement. 16.2. Remedies. The parties recognize that if either party refuses to consummate the Closing pursuant to the provisions of this Agreement or either party otherwise breaches or defaults such that the Closing has not occurred ("Breaching Party"), monetary damages alone will not be adequate to compensate the non-breaching party ("Non-Breaching Party") for its injury. Such Non-Breaching Party shall therefore be entitled to obtain specific performance of the terms of this Agreement in lieu of, and not in addition to, any other remedies, including but not limited to monetary damages, that may be available to it; provided however, that Clear Channel may elect to recover liquidated damages in lieu of obtaining specific performance. If any action is brought by the Non-Breaching Party to enforce this Agreement, the Breaching Party shall waive the defense that there is an adequate remedy at law. In the event of a default by the Breaching Party which results in the filing of a lawsuit for damages, specific performance, or other remedy, the Non-Breaching Party shall be entitled to reimbursement by the Breaching Party of reasonable legal fees and expenses incurred by the Non-Breaching Party, provided that the Non-Breaching Party is successful in such lawsuit. 16.3. Liquidated Damages. If Clear Channel terminates this Agreement pursuant to Section 16.1(b), then Exchange Party shall pay Clear Channel as liquidated damages an amount equal to $28,000,000; provided however, Clear Channel shall not be entitled to liquidated damages in the event Clear Channel terminates this Agreement because of a failure of a condition to be satisfied if such failure is not caused by a failure of the Exchange Party to perform the obligations to be satisfied or performed by it under this Agreement. Provided further, Clear Channel shall not be entitled to liquidated damages unless all of the Exchange Party's conditions precedent to its obligation to close as provided for in Article 12 have been satisfied and Exchange Party fails to consummate the Closing on the Closing Date and Clear Channel is not in material default or breach of any of its obligations under the Agreement and has otherwise satisfied the conditions and has performed the obligations to be satisfied or performed by it pursuant to the Agreement in all material respects. It is understood and agreed that such liquidated damages amount represents Clear Channel's and Exchange Party's reasonable estimate of actual damages and does not constitute a penalty. On the date of this Agreement, Exchange Party shall execute and deliver to Clear Channel the liquidated damages agreement attached hereto as Exhibit C. ARTICLE 17: MISCELLANEOUS PROVISIONS 17.1. Casualty Loss. In the event any loss or damage of the Clear Channel Station Assets or the Exchange Party Station Assets exists on the Closing Date, the parties shall consummate the Closing and assign as appropriate the proceeds of any insurance payable on account of such damage or loss. 17.2. Further Assurances. After the Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments and take such other actions as may reasonably be requested in order to more 28 29 effectively consummate the transactions contemplated hereby to exchange assets and assume obligations as contemplated by this Agreement. 17.3. Assignment. Except as set forth in Sections 10.5 (1031 Exchange) and 10.6 (Trust), neither party may assign this Agreement without the prior written consent of the other party hereto, provided that any party may assign its right to acquire one or more of the radio stations covered by this Agreement to one or more 100% owned affiliates of such party if such assignment does not delay the governmental consents contemplated by Article 5 (or otherwise delay Closing), the representations made by it under this Agreement are true with respect to the assignee(s), and the assigning party gives the other party prior written notice thereof. No such assignment shall relieve the assigning party of any obligation or liability under this Agreement. With respect to any permitted assignment, the parties shall take all such actions as are reasonably necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other governmental authorities. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and permitted assigns of the parties hereto. 17.4. Amendments. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. 17.5. Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. 17.6. Governing Law. The construction and performance of this Agreement shall be governed by the laws of the State of Texas without giving effect to the choice of law provisions thereof. 17.7. Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, including by facsimile, and shall be deemed to have been received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery or when delivered by facsimile transmission, and shall be addressed as follows (or to such other address as any party may request by written notice): 29 30 if to Clear Channel: c/o Clear Channel Broadcasting, Inc. 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 Attention: President Facsimile: (210) 822-2299 with a copy (which shall not constitute notice) to: Graydon, Head & Ritchey 1900 Fifth Third Center 511 Walnut Street Cincinnati, OH 45202 Attention: John J. Kropp, Esq. Facsimile: (513) 651-3836 if to Exchange Party: c/o Regent Communications, Inc. 50 East River Center Blvd., Suite 180 Covington, KY 41011 Attention: Terry S. Jacobs Facsimile: (606) 292-0352 with a copy (which shall not constitute notice) to: Strauss & Troy The Federal Reserve Building 150 East Fourth Street Cincinnati, Ohio 45202 Attention: Alan C. Rosser, Esq. Facsimile: 513-241-8259 17.8. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. 17.9. No Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns, any rights or remedies under or by reason of this Agreement. 17.10. Severability. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. 30 31 17.11. Entire Agreement. This Agreement, and any other document executed by the parties pursuant or in connection with this Agreement of even date embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. This Agreement does not supersede any confidentiality agreement relating to the Clear Channel Stations or Exchange Party Stations. [SIGNATURE PAGE FOLLOWS] 31 32 SIGNATURE PAGE TO ASSET EXCHANGE AGREEMENT IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. CLEAR CHANNEL: CLEAR CHANNEL BROADCASTING, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ CLEAR CHANNEL BROADCASTING LICENSES, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ CAPSTAR RADIO OPERATING COMPANY By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ CAPSTAR TX LIMITED PARTNERSHIP By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ 32 33 EXCHANGE PARTY: REGENT BROADCASTING OF VICTORVILLE, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ REGENT LICENSEE OF VICTORVILLE, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ REGENT BROADCASTING OF PALMDALE, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ REGENT LICENSEE OF PALMDALE, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ REGENT BROADCASTING OF MANSFIELD, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ REGENT LICENSEE OF MANSFIELD, INC. By: ------------------------------------- Name: ------------------------------- Title: ------------------------------ 33 34 Clear Channel Schedules 1.1(a) - FCC Licenses 1.1(b) - Tangible Personal Property 1.1(c) - Station Contracts 1.1(d) - Intangible Property 1.1(f) - Real Property 1.2(h) - Excluded Assets Exchange Party Schedules 1.3(a) - FCC Licenses 1.3(b) - Tangible Personal Property 1.3(c) - Station Contracts 1.3(d) - Intangible Property 1.3(f) - Real Property 1.4(h) - Excluded Assets 34 EX-10.19 6 d77954ex10-19.txt TRUST AGREEMENT 1 EXHIBIT 10.19 TRUST AGREEMENT THIS TRUST AGREEMENT (the "Trust Agreement") is entered into as of August 28, 2000, and is effective at 12:01 a.m. local time on August 29, 2000, by and among Clear Channel Communications, Inc., a Texas corporation ("CCC"), Clear Channel Broadcasting, Inc., a Nevada corporation ("CCB"), Clear Channel Broadcasting Licenses, Inc., a Nevada corporation ("CCBL") (CCB and CCBL, collectively, the "Clear Channel Subs" and CCC and the Clear Channel Subs, collectively, "Clear Channel"), AMFM Radio Licenses, L.L.C., a Delaware limited liability company ("AMFM Radio"), AMFM Ohio, Inc., a Delaware corporation ("AMFM Ohio"), Capstar TX Limited Partnership, a Delaware limited partnership ("Capstar TX"), Capstar Radio Operating Company, a Delaware corporation ("Capstar Radio") (AMFM Radio, AMFM Ohio, Capstar TX and Capstar Radio, collectively, the "AMFM Subs" and the AMFM Subs and the Clear Channel Subs, collectively, the "Subs") and Charles E. Giddens (the "Trustee"). RECITALS A. Pursuant to the October 2, 1999 Agreement and Plan of Merger among CCC, CCU Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of CCC ("Merger Sub"), and AMFM Inc., a Delaware corporation ("AMFM") (the "Merger Agreement"), Merger Sub is to merge with and into AMFM (the "Merger"). Following the Merger, AMFM will be a wholly-owned subsidiary of CCC, and each of the AMFM Subs will be controlled by CCC. B. One or more Subs own the assets and hold the FCC licenses used in the operation of the radio broadcast stations listed in Attachment I to this Agreement, which stations are licensed to certain communities and located in certain areas as set forth in Attachment I. C. The stations listed in Attachment I shall be referred to collectively herein as the "Stations". D. The Communications Act of 1934, as amended, and the rules, regulations and policies of the FCC (collectively, the "Communications Act"), and/or concerns of the United States Department of Justice ("DOJ"), do not permit the common ownership of all of the radio stations controlled by AMFM and by Clear Channel in the areas served by the Stations (collectively, the "Relevant Areas"). E. Clear Channel and AMFM (or one or more subsidiaries thereof) have entered or intend to enter into one or more agreements to sell certain radio stations in the Relevant Areas in order to comply with the Communications Act and any requirements of DOJ. In the event that such sales cannot be consummated prior to or contemporaneously with consummation of the Merger, interim acquisition by the Trustee, for the benefit of Clear Channel, of the assets of the Stations would provide an appropriate mechanism to facilitate consummation of the Merger in a manner that complies with the laws and regulations relating to transactions of this type. In the event that Clear Channel decides instead to (i) request the Trustee to sell the Stations' Assets (defined below) relating to one, some or all of the Stations pursuant to Section 3(e), and the 2 Trustee concurs with the decision; or (ii) request the Trustee to reconvey the Stations' Assets relating to one, some or all of the Stations to Clear Channel pursuant to Section 3(h), then the Trustee agrees to use his best efforts promptly and diligently to apply to the FCC for consent to the assignment of the appropriate Stations' Assets and prosecute such applications. Therefore, the parties agree as follows: AGREEMENT 1. Creation and Purpose of The CCU/AMFM Trust I. Subject to the terms and conditions hereof, a trust in respect of the Stations' Assets is hereby created and established, to be known as the "The CCU/AMFM Trust I," and the Trustee hereby accepts the trust created hereby and agrees to serve as trustee hereunder. The trust created hereby shall be irrevocable until such time as the Communications Act is satisfied with respect to Clear Channel's ownership of multiple radio broadcast stations in the Relevant Areas. 2. Assets to be Conveyed; Assumption of Obligations. Upon the effectiveness of this Trust Agreement, the Subs will transfer and convey to Trustee, and Trustee shall acquire from the Subs, all of the assets, real, personal and mixed, tangible and intangible (including the business of the Stations as a going concern), owned or held by the Subs, and used, useful or necessary in the conduct of the business and operation of the Stations, including, but not limited to, the following: (a) all of the Subs' right, title and interest in and to the licenses, permits and other authorizations issued by any governmental authority and used, useful or necessary in the conduct of the business and operation of the Stations, including the Stations' call letters, and any applications for such licenses, permits and authorizations; (b) all of the Subs' right, title and interest in and to all real property, including leasehold interests and easements, used, useful or necessary in the conduct of the business and the operation of the Stations; (c) all equipment, office furniture and fixtures, office materials and supplies, inventory, spare parts, motor vehicles and other tangible personal property of every kind and description, owned, leased or held by the Subs and used, useful or necessary in the conduct of the business and operation of the Stations; (d) all cash in the Stations' operating bank accounts; (e) all accounts receivable arising out of the operation of the Stations; (f) all of the Subs' rights under and interest in all contracts relating to the conduct of the business of the Stations (but excluding any contract or agreement for the sale of the Stations' Assets following termination of the Trust created hereby). In those cases where any necessary consents, assignments, releases and/or waivers necessary for the assignment of such -2- 3 contracts have not been obtained at or prior to the date hereof, any assignment of such contracts pursuant hereto, to the extent permitted by law, shall constitute an equitable assignment by the applicable Sub to the Trustee of all of such Sub's rights, benefits, title and interest in and to any such contract, and where necessary or appropriate, the Trustee shall be deemed to be the applicable Sub's agent for the purpose of completing, fulfilling and discharging all of the applicable Sub's rights and liabilities arising from the date hereof under any such contract; (g) all programs and programming materials of whatever form or nature owned by the Subs and used or intended for use on or by the Stations; (h) all of the Subs' right, title and interest in and to the trademarks, trade names, service marks, franchises, copyrights, including registrations and applications for registration of any of them, jingles, logos, slogans, licenses, permits and privileges owned or held by the Subs and used, useful or necessary in the conduct of the business and operation of the Stations; (i) all files, records, books of account, computer programs and software and logs relating to the operation of the Stations, including, without limitation, payable records, receivable records, invoices, statements, traffic material, programming information and studies, technical information and engineering data, news and advertising studies and consultants' reports, ratings reports, marketing and demographic data, sales correspondence, lists of advertisers, promotional materials, credit and sales reports, budgets, financial reports and projections, sales, operating and business plans, filings with the FCC and original executed copies of all written contracts to be assigned hereunder; (j) all of the Subs' rights under manufacturers' and vendors' warranties relating to items included in the Stations' Assets (defined below) and all similar rights against third parties relating to items included in the Stations' Assets to the extent contractually assignable; and (k) all of the above whether now owned or contracted for by the Subs or hereafter acquired. The assets to be transferred to Trustee hereunder are hereinafter collectively referred to as the "Stations' Assets." The Trustee shall assume and undertake to pay, satisfy or discharge the liabilities, obligations and commitments of the Stations under all of their contracts, including time sales agreements and employment agreements. The Trustee shall retain and hold the Stations' Assets, and assume the Stations' obligations, only in accordance with, and subject to the terms and conditions set forth in, this Trust Agreement. 3. Management and Other Actions by Trustee. -3- 4 (a) During the term of this Trust Agreement, the right to manage and direct the management of the business of the Stations shall be solely vested in the Trustee, subject to the following: (i) The Trustee shall conduct the operations of the Stations as a radio broadcaster serving the Relevant Areas served by the Stations in the ordinary course of business consistent with past operations of the Stations. To the extent possible, the Trustee shall maintain the status quo of such operations as currently operating with a view to maximizing the value to be received by Clear Channel consistent with the Trustee's duties as a licensee of the FCC and as a fiduciary of Clear Channel. With respect to so conducting the operations and management of the Stations, Trustee shall provide CCC or its designee with financial reports in form and substance and in such time frames as are consistent with the practices established by Clear Channel for the Stations, together with such other financial information as may be reasonably requested by Clear Channel in order to meet its financial reporting requirements to its accountants, lenders, the SEC and any other authorities of competent jurisdiction. Trustee shall also provide CCC or its designee with monthly budgets and estimates (which shall be prepared in a manner and within such time frames as are consistent with the practices established by Clear Channel for the Stations). Clear Channel shall not use or attempt to use these financial materials to limit or restrict the Trustee's discretion to operate the Stations in the manner described in this subsection; (ii) to the extent that the Stations' operations generate cash accumulations in excess of the Stations' actual and projected expenses as determined by the Trustee in his sole discretion ("Excess Cash Flow"), such Excess Cash Flow shall be remitted to Clear Channel from time to time as the Trustee shall determine; (iii) to the extent that the Trustee determines in his discretion that management and operation of the Stations consistent with past practice or payment of the charges and other expenses set forth in Section 4(c) hereof requires funds in excess of the ordinary cash flow of the Stations (as diminished by any prior remittance of Excess Cash Flow), the Trustee may request in writing that Clear Channel advance to the Trustee funds in such amount as will make up the deficiency (an "Advance"). Clear Channel shall, within ten days of receipt of such request, provide such Advance to the Trustee in the amount requested. Any Advance shall be repayable from Excess Cash Flow with interest at prime plus one percent. Clear Channel shall not communicate directly or indirectly with the Trustee about, or participate with the Trustee in making, any decision to request an Advance or as to when or how the funds will be used. (iv) any employee hired by the Trustee who is not employed at the Stations as of the effective date of this Trust Agreement shall not be a 1% or greater shareholder, director, officer, or employee of Clear Channel or its affiliates, and may not have any business or familial relationship (as defined in the FCC Policy Statement in MM Docket No. 85-218, FCC 86-67 (March 17, 1986)) with Clear Channel or with any 1% or greater shareholder, director, officer, or employee of Clear Channel or its affiliates. -4- 5 (b) The Trustee shall cause any employee hired by him pursuant to Section 3(a)(iv), and any person previously employed by Clear Channel whom the Trustee elects to retain, to execute and deliver to the Trustee an agreement, in form and substance acceptable to the Trustee, pursuant to which such employee agrees to comply with the rules, regulations and policies of the FCC, including without limitation all rules, regulations and policies governing communications among such employee and Clear Channel or its officers, directors, employees, and affiliates (or any officer, director, or employee of any such affiliate), regarding the Stations and their management and operations. (c) No person other than the Trustee or managers designated by the Trustee shall have any authority with respect to the management of the Stations or the Stations' Assets for so long as this Trust Agreement is in effect. The Trustee shall have no beneficial interest in the Stations' Assets. (d) Except as expressly provided in this Trust Agreement, the Trustee shall not: incur any debt or guaranty obligation in favor of any other person; engage in any business other than as necessary in the Trustee's reasonable opinion to meet his fiduciary duties with respect to the operation of the Stations as a broadcast licensee serving the Relevant Areas served by the Stations; sell or otherwise transfer, assign or encumber all or any significant Stations' Assets, or enter into any agreement to do so; or enter into any merger, consolidation, or similar transaction or engage in any reclassification or similar transaction. (e) Clear Channel shall have the right to request the Trustee to sell the Stations' Assets relating to one, some or all of the Stations to an unaffiliated third party or parties. Within 24 hours of receipt of such a request from Clear Channel, the Trustee shall advise Clear Channel whether he concurs in such a sale. In the event the Trustee so concurs, the Trustee shall have the authority to take all actions necessary or appropriate to effectuate the transfer of title to the Stations' Assets relating to one, some or all of the Stations held by the Trustee pursuant to this Trust Agreement to (and the assumption of the liabilities, obligations and commitments of such Stations by) an unaffiliated third party or parties. In this regard, the Trustee shall enter into appropriate agreements, submit and fully prosecute appropriate applications to the FCC requesting approval to assign the appropriate Stations' Assets, and, following receipt of FCC consent and upon satisfaction of all closing conditions not otherwise waived, transfer the appropriate Stations' Assets to the approved assignee. To facilitate any sale or sales of the Stations' Assets to an unaffiliated third party or parties (a "Sale"), the Trustee may request in writing from Clear Channel such information, representations, warranties, and indemnifications regarding operation of the appropriate Station or Stations as may be needed to effectuate such Sale. During the time that the Trustee is attempting to sell the Stations' Assets relating to one, some or all of the Stations, the Trustee shall file monthly reports with Clear Channel (or more frequent reports, as the Trustee shall deem appropriate) setting forth the Trustee's efforts to sell such Stations' Assets. Within three (3) days following execution of a binding agreement for a Sale, the Trustee shall notify Clear Channel of the proposed Sale and provide Clear Channel with details of the proposed transaction. Notwithstanding any other provision of this Trust Agreement, Clear Channel shall have the right, with respect to any Sale: (i) to require that the entire purchase price be paid at the closing of such Sale; (ii) to require that -5- 6 all Stations' Assets relating to one, some or all of the Stations be sold together to a single purchaser and that such purchaser assume all of the liabilities, obligations and commitments relating to such Stations' Assets arising and accruing after the closing of such Sale; (iii) to establish a minimum purchase price for the Sale or an acceptable exchange of Stations' Assets for other assets; (iv) to require that any Sale include terms and conditions that are customary in the sale or exchange of assets of radio stations, including escrow arrangements, representations, covenants, indemnities, remedies and termination provisions; (v) to establish a date by which such Sale must be consummated; and (vi) to retain investment bankers to assist in locating buyers for the Stations' Assets relating to any Station or Stations; provided, however, that the Trustee shall be free to accept or reject any advice offered by such investment bankers and shall be privy to any instructions that Clear Channel may give to the investment bankers. Notwithstanding any other provision of this Trust Agreement, Clear Channel shall have the right, at any time prior to consummation of a Sale, to withdraw its request that the Trustee sell the Stations' Assets relating to such Station or Stations, subject to the independent concurrence of the Trustee with such withdrawal; provided, however, that the Trustee shall be indemnified in accordance with this Trust Agreement for any damages incurred by the Trustee as a result of such withdrawal. (f) If prior to the execution of this Trust Agreement, Clear Channel has entered into a binding agreement for a Sale (or Sales) of the Stations' Assets relating to one, some or all of the Stations to a third party, and Clear Channel so notifies the Trustee in writing and provides the Trustee with a copy of such binding agreement, then the Trustee, acting for the benefit of Clear Channel, shall sell such Stations' Assets as soon as practicable to such third party consistent with the terms of the binding agreement. (g) Unless the Trustee does not concur in a request described in Section 3(e) above, the Trustee shall use his best efforts promptly and diligently to facilitate a Sale in accordance with Section 3(e) or 3(f). (h) In connection with a change in the Communications Act or the disposition of a sufficient number of radio stations in one or more of the Relevant Areas or otherwise, such that attribution of a particular Station or Stations to Clear Channel would be permitted by the FCC, Clear Channel may request the Trustee to reassign and retransfer the Stations' Assets relating to a particular Station or Stations to Clear Channel or any direct or indirect subsidiary of Clear Channel. Upon such request, the Trustee and Clear Channel, to the extent necessary, shall submit and fully prosecute appropriate applications to the FCC requesting approval to assign the licenses relating to such Station or Stations to Clear Channel or such subsidiary, and, following receipt of FCC consent, the Trustee shall transfer the Stations' Assets relating to such Station or Stations, and the liabilities, obligations and commitments relating to such Stations' Assets, to the approved assignee. (i) The Trustee shall have any and all such further powers and shall take such further actions (including, but not limited to, taking legal action) as may be necessary to fulfill the Trustee's obligations under this Trust Agreement. -6- 7 4. Concerning the Trustee. (a) Subject to the provisions of this Trust Agreement, The CCU/AMFM Trust I created hereby and the operations of the Stations shall be managed by the Trustee, who shall comply in all material respects with the Communications Act. (b) The Trustee shall be entitled to receive compensation for his services hereunder as provided in the March 24, 2000 Engagement and Assignment Agreement among the parties hereto and other parties (the "Engagement Agreement"). The fee received by the Trustee pursuant to the first sentence of paragraph 6 of the Engagement Agreement shall be credited toward any amounts otherwise due hereunder, beginning with the initial invoice rendered pursuant to this Section 4(b). The Trustee agrees that in return for such compensation, he will devote such time to The CCU/AMFM Trust I as is necessary in the proper exercise of his fiduciary duties hereunder. Payment of the Trustee's monthly compensation shall be made by Clear Channel within 20 days after receipt of appropriately detailed invoices therefor. Such invoices shall be rendered on a monthly basis and upon the termination of this Trust Agreement under any of the provisions of Section 5 hereof. (c) The Trustee is expressly authorized to incur and pay, from the Stations' Assets held in trust, all reasonable charges and other expenses which the Trustee deems necessary and proper in the performance of his duties under this Trust Agreement, including fees and charges for legal counsel of his choosing and the cost of any necessary secretarial staff. Clear Channel hereby agrees to reimburse and to indemnify the Trustee against all claims, costs of defense of claims, expenses, and liabilities (including reasonable attorneys' fees, disbursements and taxes related to the CCU/AMFM Trust I, the Stations or the Stations' Assets other than taxes of the Trustee individually calculated on amounts paid hereunder) related to the CCU/AMFM Trust I, the Stations and the Stations' Assets incurred by the Trustee in connection with the performance of his duties under this Trust Agreement, except those incurred as a result of the Trustee's gross negligence, intentional wrongful action or willful misconduct. Payments to the Trustee pursuant to this Section 4(c) shall be made within 20 days of submission by the Trustee of an invoice or bill therefor, plus appropriate supporting documentation. The obligations of Clear Channel to the Trustee under this Section 4(c) shall survive the resignation, incapacity to act, death or insolvency of the Trustee and the termination or revocation of this Trust Agreement. (d) The Trustee shall be free from liability in acting upon any paper, document or signature believed by the Trustee to be genuine and to have been signed by the proper party. The Trustee shall not be liable for any error of judgment in any act done or omitted, or for any mistake of fact or law, or for anything which the Trustee may do or refrain from doing in good faith except for intentional wrongful actions or gross negligence. The Trustee may consult with legal counsel of his own choosing and any action under this Trust Agreement taken or suffered in good faith by the Trustee and in accordance with the opinion of the Trustee's counsel (if such opinion shall have been obtained by Trustee) shall be conclusive on the parties to this Trust Agreement, and the Trustee shall be fully protected and be subject to no liability in respect thereto. -7- 8 (e) Subject to Section 4(c) hereof, the rights and duties of the Trustee hereunder shall terminate upon the Trustee's incapacity to act, death or insolvency, and no interest in any of the Stations' Assets directly or indirectly held by the Trustee nor any of the rights and duties of a deceased or insolvent Trustee may be transferred by will, devise, succession or in any manner except as provided in this Trust Agreement. The heirs, administrators, executors or other representatives of an incapacitated, deceased or insolvent Trustee shall, however, have the right and duty to convey, subject to receipt of any necessary FCC approval, any Stations' Assets held by the Trustee to one or more successor Trustees designated by Clear Channel pursuant to Section 4(g) below. (f) The Trustee may resign by giving not less than 60 days' advance written notice of resignation to Clear Channel, provided that a successor Trustee has been appointed, such appointment has received all necessary approval from the FCC, and any order granting such approval has become a final order with respect to which no action, request for stay, petition for hearing or reconsideration, or appeal has been timely filed and is pending, and as to which the time for filing any such request, petition or appeal has expired. Clear Channel shall cooperate fully by prompt appointment of a successor Trustee and shall not unreasonably interfere with or delay the effectiveness of such resignation. (g) In the event of such resignation, incapacity to act, death or insolvency of the Trustee, he shall be succeeded, subject to such prior approval of the FCC as may be required, by a successor Trustee chosen by Clear Channel. Any successor Trustee shall succeed to all of the rights and obligations of the Trustee replaced hereunder upon execution by such successor Trustee of a counterpart of this Trust Agreement. (h) The Trustee and any successor Trustee designated pursuant to paragraphs (f) and (g) of this Section 4 shall not be a 1% or greater shareholder, officer, employee, director, or affiliate of Clear Channel, and may not have any business or familial relationship (as defined in the FCC Policy Statement in MM Docket No. 85-218, FCC 86-67 (March 17, 1986)) with any officer, employee, director, or 1% or greater shareholder or affiliate of Clear Channel, nor shall the Trustee or any successor Trustee serve as an officer, employee, or director of Clear Channel, its affiliates, or its successor companies following any assignment specified in Section 3(e), Section 3(f) or Section 3(h). (i) It is understood and agreed by the parties that the Trustee's principal business is as a media broker, which is separate from his duties as Trustee, and the parties hereto have no intention of interfering in any manner with the Trustee's media brokerage business. Thus, the Trustee may conduct his activities with respect to Media Venture Partners, Inc. ("MVP"), unhindered by this Trust Agreement and the Engagement Agreement. Nothing contained herein shall prohibit or restrict Trustee as a principal of MVP or MVP from acting as a broker, finder, consultant, or receiving compensation of any kind in connection with the transfer of ownership (by assignment of license or transfer of control of an existing entity) of any broadcast property in which Clear Channel or an affiliate of Clear Channel is involved as buyer. Subject to the provisions of Section 4(f) hereof, in the event MVP should be considered as a -8- 9 broker for the sale of a broadcast property or properties in which Clear Channel or an affiliate of Clear Channel is involved as a seller, the Trustee reserves the right to resign as Trustee, and thereafter, the Trustee may participate in the sale as a broker, finder, and/or consultant, and may receive compensation of any kind as if this Trust Agreement and the Engagement Agreement had never existed. 5. Termination of Trust Agreement; Distribution of Proceeds of Sale of Assets. (a) Subject to such FCC approval as may be required, and following the receipt of such FCC approval, this Trust Agreement and The CCU/AMFM Trust I created hereby shall terminate as to a Station or Stations, as the case may be, upon the first to occur of the following: (i) the assignment of such Stations' Assets as contemplated by Section 3(e) or Section 3(f) of this Trust Agreement; or (ii) the retransfer of such Stations' Assets to Clear Channel or one or more Clear Channel subsidiaries as contemplated by Section 3(h) of this Agreement. (b) Upon the termination of this Trust Agreement pursuant to Section 5(a)(i) hereof as to a Station or Stations, as the case may be, and consistent with the requirements of the FCC, the Trustee shall deliver to the assignee(s) those Stations' Assets contemplated by the assignment transaction that has been approved by the FCC. In the case of a Sale of all or substantially all of the Stations' Assets to an unaffiliated third party or parties pursuant to Section 3(e) or 3(f) of this Trust Agreement, the Trustee shall receive the money, securities, rights or property which are distributed or are distributable in respect of the Stations' Assets, and, after paying (or reserving for payment thereof) any expenses or liability incurred pursuant to this Trust Agreement, shall distribute or cause the distribution of such money, securities, rights or property to Clear Channel or its designee. (c) Upon termination of this Trust Agreement pursuant to Section 5(a)(ii) hereof as to a Station or Stations, as the case may be, and consistent with the requirements of the FCC, the Trustee shall, after paying (or reserving for payment thereof) any expenses or liability incurred pursuant to this Trust Agreement, deliver to CCC or the appropriate Clear Channel subsidiary or subsidiaries those Stations' Assets contemplated by the assignment transaction that has been approved by the FCC. -9- 10 (d) Upon completion of the deliveries and distributions set forth in Section 5(b) or Section 5(c), as the case may be, with respect to all of the Stations' Assets, the Trustee shall deliver all other property held by the Trustee pursuant to this Trust Agreement to Clear Channel or its designee, and, subject to Section 4(c) hereof, the rights and duties of the Trustee hereunder shall terminate. 6. Communications. (a) The Trustee may communicate with and provide reports (including specifically the financial reports provided for in Section 3(a)(i)) to Clear Channel concerning the implementation of The CCU/AMFM Trust I, but not concerning the management and operations of the Stations except as provided in Section 3(a)(i) above. (b) The Trustee may engage in the communications contemplated by Section 3(e), Section 3(f) and Section 3(h) hereof to facilitate a Sale of Stations' Assets to an unaffiliated third party (or parties) or a retransfer of Stations' Assets to Clear Channel or subsidiaries thereof. (c) Neither Clear Channel nor any of its officers, directors, employees, shareholders or affiliates (or any officer, director, employee or shareholder of any such affiliate) shall communicate with the Trustee regarding the operation or management of the Stations. Clear Channel may communicate with the Trustee as provided in Section 3(e), Section 3(f) and Section 3(h) hereof, and concerning the mechanics of implementing any Sale or retransfer of the Stations' Assets relating to one, some or all of the Stations. Existing programming contracts between the Stations and Clear Channel or any affiliate of Clear Channel for programming broadcast by the Stations may continue in force until their termination or may be renewed if renewal on the same terms is automatic upon notification. Ministerial written communications in connection with existing contracts may continue. (d) Any communications permitted by Section 6(a), 6(b) or 6(c) shall be evidenced in writing, and shall be retained by the Trustee for inspection upon request by the FCC. (e) All notices and other communications given under this Trust Agreement shall be deemed to have been duly given when delivered in person or by overnight express, mailed by first-class, registered or certified mail, postage prepaid, or transmitted by facsimile and addressed to the parties as follows: -10- 11 (i) If to Clear Channel: Clear Channel Broadcasting, Inc. Clear Channel Broadcasting Licenses, Inc. Clear Channel Communications, Inc. 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 Facsimile: (210) 822-2299 Attention: Mark P. Mays, Kenneth E. Wyker With a copy to: Wiley, Rein & Fielding 1776 K Street, N.W. Washington, D.C. 20006 Facsimile: (202) 719-7049 Attention: Richard J. Bodorff, Esq. (ii) If to the Trustee: Charles E. Giddens 8889 Pelican Bay Boulevard Fifth Floor Naples, Florida 34108 Facsimile: (941) 514-3376 With a copy to: Smithwick & Belendiuk, P.C. 5028 Wisconsin Avenue, N.W., Suite 301 Washington, D.C. 20016 Facsimile: (202) 363-4266 Attention: Gary S. Smithwick, Esq. or to such other address as any of them by written notice to the others may from time to time designate. Each notice or other communication which shall be delivered, mailed or transmitted in the manner described above shall be deemed sufficiently received for all purposes at such time as it is delivered to the addressee (with any return receipt or delivery receipt being deemed conclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation, but in the case of a facsimile, only if a hard copy is also sent by overnight courier. 7. Miscellaneous (a) This Trust Agreement, together with the Engagement Agreement, constitute the entire agreement between the parties hereto and thereto with respect to the subject -11- 12 matter hereof and thereof and supersede all prior oral or other written agreements, commitments or understandings with respect to the matters provided for herein and therein. This Trust Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by each of the parties hereto. Substantial changes in this Trust Agreement may be made only as required or approved by FCC order. A copy of any insubstantial change shall be filed by the Trustee with the FCC within ten days following the execution thereof, with copies to the appropriate divisions and bureaus of the FCC. (b) This Trust Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors and permitted assigns. Subject to Section 4(g) hereof, this Trust Agreement shall not be assignable by either party, provided, however, that Clear Channel may freely assign its rights and obligations hereunder without Trustee's prior written consent to any person or entity that owns or controls, is owned or controlled by, or is under common control with, Clear Channel. (c) If any part of any provision of this Trust Agreement or any other agreement, document or writing given pursuant to or in connection with this Trust Agreement shall be invalid or unenforceable under applicable law, said part shall be ineffective to the extent of such invalidity only, without in any way affecting the remaining part of said provision or the remaining provisions of this Trust Agreement. (d) The headings of the sections of this Trust Agreement are inserted for convenience of reference only and do not form a part or affect the meaning hereof. (e) This Trust Agreement, the rights and obligations of the parties hereto, and any claims and disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Delaware (not including the choice of law rules thereof). (f) This Trust Agreement may be executed in any number of 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 instrument. (g) It is the intention of the parties hereto that the CCU/AMFM Trust I shall be disregarded as an entity separate from Clear Channel and the Subs for federal income tax purposes, and that all of its assets shall be treated for tax purposes as directly owned by Clear Channel or one of the Subs, as appropriate, and any successor thereto by merger or otherwise. The parties hereto agree that all relevant federal income tax reporting shall be consistent with the foregoing. 8. Compliance With Consent Decree. Notwithstanding any other provision of this Trust Agreement, the Trustee and all other parties hereto agree to comply with the terms of any consent decree entered into by Clear Channel and/or AMFM with DOJ (a "Consent Decree"), including, without limitation, divestiture of one or more Stations within any period of time and in the manner specified therein. Should any term, provision or condition of this Trust Agreement conflict in any respect with any term, provision or condition of a Consent Decree, the Consent Decree shall be controlling. -12- 13 [SIGNATURE PAGE FOLLOWS] -13- 14 [SIGNATURE PAGE FOR TRUST AGREEMENT] IN WITNESS WHEREOF, the parties hereto have duly executed this Trust Agreement as of the date and year first written above. CLEAR CHANNEL BROADCASTING, INC. By: ------------------------------------------ Name: Title: 15 CLEAR CHANNEL BROADCASTING LICENSES, INC. By: ------------------------------------------ Name: Title: 16 CLEAR CHANNEL COMMUNICATIONS, INC. By: ------------------------------------------ Name: Title: 17 AMFM RADIO LICENSES, L.L.C. By: --------------------------------------- Name: William S. Banowsky, Jr. Title: Executive Vice President 18 AMFM OHIO, INC. By: --------------------------------------- Name: William S. Banowsky, Jr. Title: Executive Vice President 19 CAPSTAR TX LIMITED PARTNERSHIP By: --------------------------------------- Name: William S. Banowsky, Jr. Title: Executive Vice President, Capstar Radio Operating Company, Its General Partner 20 CAPSTAR RADIO OPERATING COMPANY By: --------------------------------------- Name: William S. Banowsky, Jr. Title: Executive Vice President 21 CHARLES E. GIDDENS -------------------------------- (Trustee) 22 ATTACHMENT I STATIONS
Station Community of License Area - ------- -------------------- ---- WEEX(AM) Easton, Pennsylvania Allentown-Bethlehem, Pennsylvania WODE-FM Easton, Pennsylvania Allentown-Bethlehem, Pennsylvania KVOD(AM) Denver, Colorado Denver, Colorado WNCE-FM Palmyra, Pennsylvania Harrisburg, Pennsylvania WNNK-FM Harrisburg, Pennsylvania Harrisburg, Pennsylvania WTCY(AM) Harrisburg, Pennsylvania Harrisburg, Pennsylvania WTPA(FM) Mechanicsburg, Pennsylvania Harrisburg, Pennsylvania KJOJ(AM) Conroe, Texas Houston, Texas KJOJ-FM Freeport, Texas Houston, Texas KQUE(AM) Houston, Texas Houston, Texas KSEV(AM) Tomball, Texas Houston, Texas KTJM(FM) Port Arthur, Texas Houston, Texas WMEZ(FM) Pensacola, Florida Pensacola, Florida WXBM-FM Milton, Florida Pensacola, Florida
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