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EXHIBIT 10.15
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of July 14,
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"):
KEYI-FM, San Marcos, Texas
B. Subject to the terms and conditions set forth herein, Buyer desires
to acquire the Station Assets (defined below).
C. Clear Channel Communications, Inc. (Seller's parent), CCU Merger
Sub, Inc. and AMFM Inc. 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:
1 ARTICLE: PURCHASE OF ASSETS
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 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;
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(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 (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, 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 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 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").
1.1 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;
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(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;
(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;
(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; and
(h) all Seller's 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.
1.2 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.
2 ARTICLE: 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 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 ("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
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or not disclosed to Buyer, other than the Assumed Obligations (the "Retained
Obligations").
3 ARTICLE: 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 the sum of FIFTEEN MILLION DOLLARS ($15,000,000), subject to
adjustment pursuant to Sections 3.3 (the "Purchase Price").
3.2 Deposit. Within three (3) business days from the date of this Agreement with
no Cure Period as defined below, Buyer shall deposit an amount in cash or an
irrevocable letter of credit from a nationally recognized commercial bank, such
letter of credit subject to prior approval by Seller, equal to 10% of the
Purchase Price (the "Deposit") with NationsBank/Bank of America or the Fifth
Third Bank, Cincinnati, Ohio (cash with the Bank of America or irrevocable
letter of credit with the Fifth Third Bank) (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, which failure constitutes a breach of its
obligations hereunder, or if this Agreement is otherwise terminated by Seller
pursuant to Section 16.1(c)(ii), 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 Station 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
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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
based upon an appraisal prepared by Bond & Xxxxxx at Seller's request and whose
fees shall be paid by Seller. 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.
4 ARTICLE: 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.
5 ARTICLE: GOVERNMENTAL CONSENTS
6 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).
6.1 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 but excluding any condition that materially and adversely
affects the value of the Stations Assets), Buyer shall timely comply therewith.
6.2 HSR. If not previously filed, then on a date designated by Seller 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 Xxxx-Xxxxx-Xxxxxx
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.
6.3
6.4
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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 but excluding any
condition that materially and adversely affects the value of the Stations
Assets.
7 ARTICLE: REPRESENTATIONS AND WARRANTIES OF BUYER
8 Buyer hereby makes the following representations and warranties to Seller:
8.1 Organization and Standing. Buyer 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 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.
8.2 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
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).
8.3 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.
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8.4
8.5 Qualification. Buyer is legally, financially and otherwise 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 has and will have available
on the Closing Date sufficient funds to enable it to consummate the transactions
contemplated hereby.
8.6 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.
9 ARTICLE: REPRESENTATIONS AND WARRANTIES OF SELLER
10 Seller makes the following representations and warranties to Buyer:
10.1 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 each jurisdiction in which the 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.
10.2 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).
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10.3 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.
10.4 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
is operating in compliance in all material respects with the FCC Licenses, the
Communications Act, and the rules, regulations and policies of the FCC.
10.5 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.
10.6 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.
10.7 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 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.
10.8 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
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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.
10.9
10.10 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.
10.11 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.
10.12 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).
10.13 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
Seller or any party acting on Seller's behalf.
10.14 Financial Statements. Seller has delivered to Buyer copies of the
unaudited results of operations of the Station for the twelve months ended
December 31, 1999, prepared in accordance with the books and records of the
Station.
11 ARTICLE: ACCOUNTS RECEIVABLE
11.1 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
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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. 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.
12 ARTICLE: COVENANTS OF SELLER
12.1 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;
(c) furnish Buyer with such information relating to the Station Assets as Buyer
may reasonably request, at Buyer's expense and provided such request does not
interfere unreasonably with the business of the Station; and
(d) not enter into new Station Contracts with a term greater than one year and
an aggregate value greater than $50,000 which cannot be canceled with ninety
(90) days prior written notice, without providing prior written notice to Buyer,
or enter into Trade Agreements which in the aggregate exceed related barter
assets.
13 ARTICLE: JOINT COVENANTS
14 Buyer and Seller hereby covenant and agree that between the date hereof and
Closing:
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14.1. 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.
14.2. 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.
14.3. 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.
14.4. Employee Matters. 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 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 any of 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
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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 to extent Buyer receives a credit therefor from
Seller.
14.5. 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.
14.6. 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.
15 ARTICLE: CONDITIONS OF CLOSING BY BUYER
16 The obligations of Buyer hereunder are, at its option, subject to
satisfaction, at or prior to Closing, of each of the following conditions:
16.1. 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.
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16.2. 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.
17 ARTICLE: CONDITIONS OF CLOSING BY SELLER
18 The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to Closing, of each of the following conditions:
18.1. 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.
18.2. 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.
18.3. AMFM Closing. The closing under the AMFM Agreement shall have been
consummated.
18.4
19 ARTICLE: EXPENSES
19.1. 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 equally by Buyer and Seller.
20 ARTICLE: DOCUMENTS TO BE DELIVERED AT CLOSING
20.1. 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;
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(ii) the certificate described in Section 11.1; and
(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.
1.1. Buyer's Documents. At Closing, Buyer shall deliver or cause to be delivered
to Seller:
1.2. (i) the certified copies of resolutions authorizing its execution, delivery
and performance of this Agreement, including the consummation of the
transactions contemplated hereby;
1.3. (ii) the certificate described in Section 12.1; and
1.4. (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.
2 ARTICLE: SURVIVAL; INDEMNIFICATION.
2.1. 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) the following
provisions (the "Expense Provisions"): 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.
2.2. 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, however, that after Closing,
except for Expenses Provisions (which shall not be subject to such limitations),
(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 $1,500,000.
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(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; provided however, that after Closing, except for the Expense Provisions
(which shall not be subject to such limitations), (i) 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 $1,500,000.
2.3. 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:
(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.
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(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 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.
3 ARTICLE: TERMINATION
3.1. 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;
17
(e) by written notice of Seller to Buyer on or after the closing date of the
AMFM Agreement, provided that DOJ Consent, FCC Consent or HSR Clearance have not
been received;
(f) by written notice of Seller to Buyer if the AMFM Agreement is terminated or
expires;
(g) by written notice of Seller to Buyer, or Buyer to Seller if the Closing is
not consummated on or before March 31, 2001; or
(h) by written notice of Seller to Buyer, or Buyer to Seller, if the FCC
Consent, DOJ Consent or HSR Clearance imposes any condition that materially and
adversely affects the value of the Stations Assets as set forth in Sections 5.1
and 5.3 above.
(i) 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.
3.2. 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. Notwithstanding anything in this Agreement to the
contrary, Buyer's sole remedy with respect to the FCC Consent's, DOJ Consent's
or HSR Clearance's imposition of any condition that materially and adversely
affects the value of the Stations Assets as set forth in Sections 5.1 and 5.3
above shall be the termination of this Agreement pursuant to Section 16.1(h).
18
3.3. 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)(ii), then Buyer shall
pay Seller as liquidated damages an amount equal to 25% of the Purchase Price.
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. On the date of this Agreement, Buyer shall execute and
deliver to Seller the liquidated damages agreement attached hereto as Exhibit B.
4 ARTICLE: MISCELLANEOUS PROVISIONS
4.1. 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 assets 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 the insurance proceeds assigned to
Buyer.
4.2. 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.
4.3. 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 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.
4.4. 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.
19
4.5. 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.
4.6. 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.
4.7. 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.
000 X. Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy (which shall not
constitute notice) to: Xxxxxxx, Head & Xxxxxxx LLP
1900 Fifth Third Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
if to Buyer: Secret 3 LLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
with a copy (which shall not
constitute notice) to: Xxxx, Stettinius & Hollister LLP
1800 Firstar Tower
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
20
1.1. 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.
1.2. 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.
1.3. 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.
1.4. 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 or
indemnification between Secret Communications II, LLC and Seller dated June 6,
2000 relating to the Station.
[SIGNATURE PAGE FOLLOWS]
21
SIGNATURE PAGE(S) 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:
-------------------------------------------
By: Xxxxxx X. Xxxxxxxx, Senior Vice President
CLEAR CHANNEL BROADCASTING LICENSES, INC.
By:
-------------------------------------------
Xxxxxx X. Xxxxxxxx, Senior Vice President
22
BUYER: SECRET 3 LLC
By: Secret Communications II, LLC,
its Manager
By:
-------------------------------------------
Xxxxx X. Xxxx,
----------------------------
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
Exhibit A Lease
Exhibit B Liquidated Damages Agreement
