EXHIBIT 10.16
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of August 9, 1999, is entered
into by and between CLEAR CHANNEL COMMUNICATIONS, INC., a Texas corporation
("Buyer"), and XXXXX.XXX INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Buyer and the Company
have approved the purchase by Buyer (the "Acquisition") of shares of the common
stock, par value $0.01 per share of the Company (the "Company Common Stock")
upon the terms and subject to the conditions set forth in this Stock Purchase
Agreement (this "Agreement"); certain capitalized terms used in this Agreement
are defined in Section 8.3 hereof;
WHEREAS, Buyer and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Acquisition and also
to prescribe certain conditions to the Acquisition.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Buyer and the Company hereby agree as follows:
ARTICLE I.
THE ACQUISITION
SECTION 1.1. THE ACQUISITION. Upon the terms and subject to the
conditions set forth in this Agreement and applicable law, the Company shall
issue to Buyer, and Buyer shall purchase from the Company, the Purchased Shares.
SECTION 1.2 PURCHASE PRICE; PURCHASED SHARES. The following
calculations have been determined after giving effect to the 1.25-for-1 stock
split of the Company Common Stock which shall occur immediately prior to the
Company's IPO.
(a) The purchase price per share for the Purchased Shares (the
"Per Share Purchase Price") shall be equal to the lower of $14.00 or the initial
offering price per share of the Company Common Stock as offered to the public
(without giving effect to any underwriters' discount) in connection with the
Company's IPO.
(b) The number of shares of Company Common Stock to be
purchased by Buyer hereunder (the "Purchased Shares") shall be equal to the
number obtained by dividing (i) $14,999,999 by (ii) the Per Share Purchase Price
(rounding any fractional share to the next lowest whole number.
SECTION 1.3. CLOSING. The closing of the Acquisition shall take place
simultaneously with the closing of the Company's IPO (the "Closing Date") at
such place as the parties may mutually agree.
SECTION 1.4 CLOSING OBLIGATIONS. At the Closing:
(a) The Company will deliver to Buyer:
(i) a stock certificate representing the
Purchased Shares, duly executed and issued in the name of Buyer;
(ii) the Warrant;
(iii) the Registration Rights Agreement;
(iv) the officer's certificate described in
Section 6.2 hereof; and
(v) the opinion of Company's counsel as
described in Section 6.2 hereof;
(b) Buyer will deliver to the Company:
(i) The Purchase Price, by wire transfer or such
other form of same day funds as the Company shall have designated in
writing to Buyer at least 24 hours prior to the Closing Date;
(ii) the Registration Rights Agreement; and
(iii) the officer's certificate described in
Section 6.3 hereof.
ARTICLE II.
REPRESENTATIONS AND WARRANTS OF THE COMPANY
The Company hereby represents and warrants to Buyer that, except as set
forth in the disclosure letter delivered by the Company to Buyer on the date
hereof (the "Company Disclosure Letter"):
SECTION 2.1. ORGANIZATION, QUALIFICATION, ETC. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to own its
properties and assets and to carry on its business as it is now being conducted
and in which it presently proposes to engage and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership of
its properties or the conduct of its business requires such qualification. The
copies of the Company's charter and by-laws which have been made available to
Buyer are complete and correct and in full force and effect. Each of the
Company's Subsidiaries is a corporation duly organized, validly existing and in
good
2
standing under the laws of its jurisdiction of incorporation or
organization, has the corporate power and authority to own its properties and to
carry on its business as it is now being conducted and in which it presently
proposes to engage, and is duly qualified to do business and is in good standing
in each jurisdiction in which the ownership of its property or the conduct of
its business requires such qualification. All the outstanding shares of capital
stock of, or other ownership interests in, the Company's Subsidiaries are
validly issued, fully paid and non-assessable and are owned by the Company,
directly or indirectly, free and clear of all liens, claims, charges or
encumbrances.
SECTION 2.2. CAPITAL STOCK. As of the Closing Date, the authorized
capital stock of the Company will consist of 50,000,000 shares of the Company
Common Stock and 5,000,000 shares of the Company's preferred stock, par value
$0.01 per share (the "Company Preferred Stock"). As of the Closing Date, and
assuming that none of the options, warrants or similar rights identified below
are exercised between the date hereof and the Closing Date, there will be issued
and outstanding 13,438,096 shares of the Company Common Stock and no shares of
the Company Preferred Stock. All of the outstanding shares of the Company Common
Stock have been duly authorized, validly issued and are, and will be as of the
Closing Date, fully paid and non-assessable. The Purchased Shares, when issued
at the Closing, will be duly authorized, validly issued, fully-paid and
non-assessable; and no preemptive rights of stockholders exist with respect to
any of the Purchased Shares or the issue and sale thereof. As of the Closing
Date, no outstanding subscriptions, options, warrants, rights or other
arrangements or commitments obligating the Company to issue any shares of its
stock will be outstanding, other than options and other rights to receive or
acquire an aggregate of 3,946,527 shares of the Company Common Stock pursuant
to:
(a) Company's 1997 Stock Option Plan;
(b) Company's 1999 Stock Option Plan;
(c) Company Warrant expiring on the Closing Date;
(d) Company Warrant expiring June, 2004;
(e) Company Warrant expiring November, 2007; and
(f) Company Warrant expiring no later than
December 31, 2008;
plus options and warrants which may be issued by the Company between the date
hereof and the Closing Date for up to an additional 475,000 shares of Company
Common Stock.
SECTION 2.3. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO
VIOLATION. The Company has the corporate power and authority to enter into this
Agreement, the Warrant, and the Registration Rights Agreement; collectively, the
Agreement, the Warrant and the Registration Rights Agreement are referred to as
the "Transaction Documents") and to carry out its obligations hereunder and
thereunder. The execution
3
and delivery of the Transaction Documents, and the consummation of the
transactions contemplated thereby have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize the Transaction Documents and the
transactions contemplated thereby. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement has been duly
and validly executed and delivered by the other parties hereto, constitutes the
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies). Upon the receipt by the Company of the
Purchase Price, and the execution and delivery of the Warrant and the
Registration Rights Agreement, each of the Warrant and the Registration Rights
Agreement will constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with its terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies.
Other than in connection with or in compliance with the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the
securities or blue sky laws of the various states (collectively, the "Company
Approvals"), to the extent such laws require, no authorization, consent or
approval of, or filing with, any governmental body or authority is necessary for
the consummation by the Company of the transactions contemplated by this
Agreement; provided that the Company makes no representation with respect to
such of the foregoing as are required by reason of the regulatory status of
Buyer or any of its Subsidiaries or facts specifically pertaining to any of
them. Except for the Company Approvals (to the extent required), the Company is
not subject to or obligated under any charter, bylaw or contract provision or
any governmental licenses, franchise or permit, or subject to any order or
decree, which would be breached or violated by its executing or carrying out the
Transaction Documents.
SECTION 2.4. REPORTS AND FINANCIAL STATEMENTS. The Company has made
available to Buyer true and complete copies of the Company's Registration
Statement on Form S-1, as amended (the "Registration Statement"), filed with the
Securities and Exchange Commission (the "SEC") in connection with the initial
public offering of shares of the Common Stock (the "IPO"). The Registration
Statement, as of the date thereof, (i) complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations promulgated thereunder and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
that the foregoing clause (ii) shall not apply to the financial statements
included in the Registration Statement (which are covered by the following
sentence). The audited consolidated financial statements and unaudited
consolidated interim financial statements included in the Registration Statement
(including any related notes and schedules) fairly
4
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their results of
operations and cash flows for the periods or as of the dates then ended
(subject, where appropriate, to normal year-end adjustments), in each case in
accordance with past practice and generally accepted accounting principles in
the United States ("GAAP") consistently applied during the periods involved
(except as otherwise disclosed in the notes thereto and except that the
unaudited financial statements therein do not contain all of the footnote
disclosures required by GAAP).
SECTION 2.5. NO UNDISCLOSED LIABILITIES. Neither the Company nor any of
its Subsidiaries has any liabilities or obligations of any nature, whether or
not accrued, contingent or otherwise, of a type required by GAAP to be reflected
on a consolidated balance sheet except liabilities or obligations reflected in
the Registration Statement and, to the Knowledge of the Company, there is no
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against them giving rise to
any such liability or obligation.
SECTION 2.6. NO VIOLATION OF LAW. The businesses of the Company and its
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental body or authority except as described in the
Registration Statement, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure to comply with any such law, ordinance or
regulation. The Company and its Subsidiaries have all permits, licenses and
governmental authorizations material to ownership or occupancy of their
respective properties and assets and the carrying on of their respective
businesses.
SECTION 2.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Other than as
disclosed in the Registration Statement, since June 30, 1999, the businesses of
the Company and its Subsidiaries have been conducted in all material respects in
the ordinary course and there has not been any event, occurrence, development or
state of circumstances or facts that has had a Material Adverse Effect on the
Company. Since June 30, 1999, no dividends or distributions have been declared
or paid on or made with respect to the shares of capital stock or other equity
interests of the Company or its Subsidiaries nor have any such shares been
repurchased or redeemed, other than dividends or distributions paid to the
Company or a Subsidiary.
SECTION 2.8. INVESTIGATIONS; LITIGATION. Except as described in the
Registration Statement:
(a) to the Knowledge of the Company, no investigation or
review by any governmental body or authority with respect to the Company or any
of its Subsidiaries which would in the aggregate have a Material Adverse Effect
on the Company is pending nor has any governmental body or authority notified
the Company of an intention to conduct the same; and
5
(b) there are no actions, suits or proceedings pending or, to
the Company's Knowledge, threatened against or affecting the Company or its
Subsidiaries, or any of their respective properties or before any federal,
state, local or foreign governmental body or authority, which, in the aggregate,
are reasonably likely to have a Material Adverse Effect on the Company.
SECTION 2.9. TAX MATTERS. All federal, state, local and foreign Tax
Returns required to be filed by or on behalf of the Company, each of its
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which the Company or any of its Subsidiaries is a member (a "Company Group")
have been timely filed or requests for extensions to file such returns or
reports have been timely filed and granted and have not expired, and all returns
filed are complete and accurate in all material respects. All Taxes due and
owing by the Company, any Subsidiary of the Company or any Company Group have
been paid, or adequately reserved for. There is no audit examination,
deficiency, refund litigation, proposed adjustment or matter in controversy with
respect to any Taxes due and owing by the Company, any Subsidiary of the Company
or any Company Group nor has the Company or any Subsidiary filed any waiver of
the statute of limitations applicable to the assessment or collection of any
Tax, in each case, which would, individually or in the aggregate, have a
Material Adverse Effect on the Company. All assessments for Taxes due and owing
by the Company, any Subsidiary of the Company or any Company Group with respect
to completed and settled examinations or concluded litigation have been paid.
Neither the Company nor any Subsidiary is a party to any tax indemnity
agreement, tax sharing agreement or other agreement under which the Company or
any Subsidiary could become liable to another person as a result of the
imposition of a Tax upon any person, or the assessment or collection of a Tax.
The Company and each of its Subsidiaries has complied in all material respects
with all rules and regulations relating to the withholding of Taxes.
SECTION 2.10. MATERIAL CONTRACTS. Each "material contract" (as such
term is defined in item 601(b)(10) of Regulation S-K under the Securities Act)
to which the Company or any of its Subsidiaries is a party is (i) legal, valid,
binding, enforceable, and in full force and effect; and (ii) will continue to be
legal, valid, binding, enforceable, and in full force and effect on
substantially identical terms following the consummation of the transactions
contemplated hereby. To the Company's knowledge, no party to any material
contract to which the Company or any of its Subsidiaries is a party is in breach
or default, and no event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or
acceleration under any such contract and no party has repudiated any provision
of any material contract.
SECTION 2.11. ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with
6
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
SECTION 2.12. INSURANCE. The Company and each of its Subsidiaries
carry, or are covered by, insurance, including self insurance, in such amounts
and covering such risks as are adequate for the conduct of their respective
businesses and the value of their respective properties and as are customary for
companies engaged in similar industries.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company that except as set
forth in the Buyer Disclosure Letter delivered to the Company on the date
hereof:
SECTION 3.1. ORGANIZATION, QUALIFICATION, ETC. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas .
SECTION 3.2. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has
the corporate power and authority to enter into this Agreement and the
Registration Rights Agreement and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by the Board of Directors of
Buyer and no other corporate or stockholder proceedings on the part of Buyer are
necessary to authorize this Agreement and the other transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by Buyer
and, assuming this Agreement has been duly and validly executed and delivered by
the other parties hereto, this Agreement constitutes the valid and binding
agreement of Buyer, enforceable against it in accordance with its terms (except
insofar as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
Other than in connection with or in compliance with the provisions of the
Securities Act, the Exchange Act, the HSR Act, and the securities or blue sky
laws of the various states (collectively, the "Buyer Approvals"), to the extent
such laws require, no authorization, consent or approval of, or filing with, any
governmental body or authority is necessary for the consummation by Buyer of the
transactions contemplated by this Agreement or the Registration Rights
Agreement, except for such authorizations, consents, approvals or filings, the
failure to obtain or make which would not, in the aggregate, have a Material
Adverse Effect on Buyer; provided that Buyer makes no representation with
respect to such of the foregoing as are required by reason of the regulatory
status of the Company or any of its Subsidiaries or facts specifically
pertaining to any of them.
SECTION 3.3. INVESTMENT INTENT. Buyer is purchasing the Purchased
Shares and the Warrant for its own account, solely for the purpose of investment
and not with a view to the distribution or sale thereof in violation of the
securities laws.
7
SECTION 3.4 NO REGISTRATION. Buyer understands that the offering and
sale to Buyer of the Purchased Shares and the Warrant is intended to be exempt
from registration under the Securities Act pursuant to Section 4(2) of the
Securities Act. Buyer is an accredited investor within the meaning of Regulation
D under the Securities Act.
SECTION 3.5 INVESTOR QUALIFICATIONS. Buyer (a) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Purchased Shares, (b) is able to
bear the complete loss of its investment in the Purchased Shares, and (c) has
had the opportunity to ask questions of, and receive satisfactory answers from,
the Company and its management concerning the terms and conditions of the
offering of the Purchased Shares and to obtain additional information. Buyer is
not relying upon any statements or instruments made or issued by any Person
other than the Company and its officers in making its decision to invest in the
Purchased Shares.
SECTION 3.6 RELIANCE. Buyer acknowledges that the Company is relying
upon the representations and warranties contained herein in determining to make
the sale of the Purchased Shares and the Warrant, and Buyer consents to such
reliance.
ARTICLE IV.
COVENANTS
SECTION 4.1. CONDUCT OF BUSINESS. Except as contemplated by this
Agreement and in the Company Disclosure Letter or the Buyer Disclosure Letter,
or as necessary or appropriate to satisfy the obligations hereunder, prior to
the Closing Date or the date, if any, on which this Agreement is earlier
terminated pursuant to Section 6.1, and except as may be agreed to by the other
parties hereto or as may be permitted pursuant to this Agreement:
(a) The Company:
(i) shall, and shall cause each of its
Subsidiaries to, conduct its operations according to their ordinary and usual
course of business; provided, however, that nothing contained in this proviso
shall limit the Company's ability to authorize or propose, or enter into, an
agreement with respect to any acquisitions or to issue any debt or equity
securities;
(ii) shall use its reasonable efforts, and cause
each of its Subsidiaries to use its reasonable efforts, consistent with prudent
business practice to (A) preserve intact its business organizations and goodwill
in all material respects, (B) keep available the services of its officers and
employees as a group, subject to changes in the ordinary course, and (C)
maintain satisfactory relationships with suppliers, distributors, customers and
others having business relationships with them, in each case as a group;
8
(iii) shall notify Buyer of any emergency or other
change in the normal course of its or its Subsidiaries' respective businesses or
in the operation of its or its Subsidiaries' respective properties and of any
complaints, investigations or hearings (or communications indicating that the
same may be contemplated) of any governmental body or authority if such
emergency, change, complaint, investigation or hearing could have a Material
Adverse Effect on the Company; and
(v) shall not take any action which would make
any representation or warranty in Article II hereof untrue or incorrect.
(b) Buyer shall not take any action which would make any
representation or warranty in Article III hereof untrue or incorrect.
SECTION 4.2. CONFIDENTIALITY. It is acknowledged and agreed by each
party that any confidential information divulged in connection with this
Agreement or the transactions contemplated hereby by one party to the other is
in all respects of a confidential and proprietary nature, and that any
disclosure or use of such information by the recipient, except in connection
with the transactions contemplated hereby, can and will involve serious harm or
damage to the businesses of the parties. Therefore, each party covenants that it
will not, either directly or indirectly through any agent, employee or
otherwise, disclose any such information (except any information required by law
to be disclosed or generally available to the public other than as a result of a
disclosure in violation of this Agreement) either in whole or in part to any
third party. Without limiting the generality of the foregoing, each party
covenants that it will disclose such information only to those of its officers,
directors, employees, agents, accountants, attorneys, consultants and other
advisors who need to know such information in connection with the consummation
of the transactions contemplated herein.
SECTION 4.3. FILINGS. Subject to the terms and conditions herein
provided, the Company and Buyer shall use reasonable efforts to cooperate with
one another in (i) determining whether any filings are required to be made with,
or consents, permits, authorizations or approvals are required to be obtained
from, any third party, the United States government or any agencies, departments
or instrumentalities thereof or other governmental or regulatory bodies or
authorities of federal, state, local and foreign jurisdictions in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and (ii) timely making all such filings and
timely seeking all such consents, permits, authorizations or approvals,
including as may be required under state blue sky or securities laws.
SECTION 4.4. FURTHER ASSURANCES. In case at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers of the Company and Buyer shall take all such
necessary action.
SECTION 4.5. ADDITIONAL REPORTS. The Company shall furnish to Buyer
copies of any reports of the type referred to in Section 2.4 which it files with
the SEC on or after the date hereof, and the Company represents and warrants
that as of the respective dates
9
thereof, such reports will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statement therein, in light of the circumstances under which they were
made, not misleading; provided, that the foregoing shall not apply to the
financial statements contained therein (which are covered by the following
sentence). Any consolidated financial statements included in such reports
(including any related notes and schedules) will fairly present, in all material
respects, the financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their results of operations and changes
in financial position or other information included therein for the periods or
as of the date then ended (subject, where appropriate, to normal year-end
adjustments), in each case in accordance with GAAP consistently applied during
the periods involved (except as otherwise disclosed in the notes thereto and
except that such financial statements will not include all of the notes required
by GAAP).
SECTION 4.6. NOTICE OF DEVELOPMENT. The Company will give prompt
written notice to the Buyer of any development that would have a Material
Adverse Effect on the Company or that would result in a breach of any of the
representations and warranties in Article II hereof. No disclosure by the
Company pursuant to this Section 4.6, however, shall be deemed to amend or
supplement the Company Disclosure Letter or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
SECTION 4.7. PUBLIC ANNOUNCEMENTS. Unless otherwise required by
applicable law or the requirements of any listing agreement with any applicable
stock exchange, Buyer and the Company shall each use their reasonable efforts to
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or any transaction contemplated
by this Agreement and shall not issue any such press release or make any such
public statement prior to such consultation.
SECTION 4.8 RESTRICTED NATURE OF SHARES. Buyer acknowledges that the
Purchased Shares will be restricted securities under the Securities Act which
may not be sold or offered for sale in the absence of an effective registration
statement as to such Purchased Shares under the Securities Act or an opinion of
counsel satisfactory to the Company that such registration is not required.
Buyer agrees it will not transfer, by way of gift or otherwise, or sell the
Purchased Shares or any part thereof, unless such Purchased Shares have been
registered under the Securities Act and any applicable state securities laws or
it first obtains, at its own expense, if requested by the Company, an opinion of
counsel reasonably satisfactory to the Company that the transfer of such Common
Shares may be effected without registration under the Securities Act and any
applicable state securities laws. Buyer acknowledges that the certificates
evidencing the Purchased Shares will contain a legend to such effect.
SECTION 4.9 STRATEGIC MARKETING ARRANGEMENT. Promptly following the
Closing, Buyer and the Company will in good faith seek to establish a mutually
beneficial strategic cross sales and marketing agreement and, to that end, will
consider: (i) the Company providing (subject to any third party licensing
restrictions) selected portions of its content on Buyer radio Web sites; (ii)
data sharing (subject to any user privacy
10
restrictions) between the Company Web sites and Buyer radio Web sites; and/or
(iii) joint sales efforts.
SECTION 4.10 REIMBURSEMENT OF BUYER'S EXPENSES. If the sale of the
Purchased Shares provided for herein is not consummated because any condition to
the obligations of the Buyer set forth in Section 5.1 or Section 5.2 hereof is
not satisfied, because of any termination pursuant to Section 6.1(b) or Section
6.1(e) hereof or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Buyer, the Company will reimburse the
Buyer on demand for all reasonable out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by it in
connection with the proposed purchase and sale of the Purchased Shares,
provided, however, that such reimbursement shall not exceed $20,000.00.
ARTICLE V.
CONDITIONS TO CLOSING
SECTION 5.1. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of the Company and Buyer to consummate the Acquisition are subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions.
(a) The Registration Statement shall have become effective
under the Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceeding for
that purpose shall have been initiated by the SEC.
(b) No statute, rule, regulation, executive order, decree,
preliminary or permanent injunction or restraining order shall have been
enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits the consummation of the transactions contemplated hereby. No action or
proceeding by any Governmental Entity shall have been commenced (and be
pending), or, to the knowledge of the parties hereto, threatened, against the
Company or Buyer or any of their respective affiliates, partners, associates,
officers or directors, or any officers or directors of such partners, seeking to
prevent or delay the transactions contemplated hereby or challenging any of the
terms of provisions of this Agreement or seeking material damages in connection
therewith.
SECTION 5.2. CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of
Buyer to consummate the Acquisition are subject to the satisfaction or waiver by
Buyer on or prior to the Closing Date of the following further conditions:
(a) The representations and warranties of the Company
contained herein shall be true and correct in all material respects as of the
Closing Date with the same effect as though made as of the Closing Date except
that the accuracy of representations and warranties that by their terms speak as
of the date of this Agreement or some other date will be determined as of such
date.
11
(b) The Company shall have performed in all material respects
all material obligations and complied in all material respects with all material
agreements and covenants required by this Agreement to be performed or complied
with by it prior to the Closing Date.
(c) The Company shall have delivered to Buyer a certificate,
dated the Closing Date and signed by its Chief Executive Officer, Chief
Financial Officer or any Senior Vice President or Vice President, certifying to
both Section 5.2(b) and 5.2(c).
(d) The Company shall have furnished to the Buyer the opinion
of Xxxxxxxx & Xxxxxx, counsel for the Company, dated the Closing Date, to the
effect that:
(i) The Company is validly existing as a corporation
in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties
and conduct its business as it is now being conducted and the
outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and, to the best of such
counsel's knowledge, are owned by the Company or a Subsidiary,
except (A) as reflected in the Company's financial statements,
(B) as described in the Registration Statement or (C) as set
forth in the Company Disclosure Letter; and, to such counsel's
knowledge, except as otherwise disclosed, the outstanding
shares of capital stock of each of the Subsidiaries are owned
free and clear of all liens, encumbrances and security
interests and no options, warrants or other rights to
purchase, agreements or other obligations to issue, or other
rights to convert any obligations into any shares of capital
stock or of ownership interests in the Subsidiaries are
outstanding.
(ii) The Company has authorized and outstanding
capital stock as set forth under Section 2.2 of this
Agreement, the authorized shares of its Common Stock have been
duly authorized; the outstanding shares of its Common Stock
have been duly authorized and validly issued and are fully
paid and non-assessable; the Purchased Shares, including the
shares of Common Stock issuable upon exercise of the Warrant,
if any, have been duly authorized and will be validly issued,
fully paid and non-assessable when issued and paid for as
contemplated by this Agreement or the Warrant, as applicable;
and, to the knowledge of such counsel, no preemptive rights of
stockholders exist with respect to any of the Purchased Shares
or the shares of Common Stock issuance upon exercise of the
Warrant or the issue and sale thereof.
(iii) Except as described in the Company Disclosure
Letter, to the knowledge of such counsel, no holder of any
securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or
effectively waived, to cause the Company
12
to sell or otherwise issue to them any of the Purchased Shares
or the shares of Common Stock issuable upon exercise of the
Warrant.
(iv) The Registration Statement has become effective
under the Act and, to the best of the knowledge of such
counsel, no stop order proceedings with respect thereto have
been instituted or are pending or threatened under the Act.
(v) To such counsel's knowledge, there are no
contracts or documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement which are not so filed or described as required, and
such contracts and documents as are summarized in the
Registration Statement are fairly summarized in all material
respects.
(vi) To such counsel's knowledge there are no
material legal proceedings pending or threatened against the
Company or any of the Subsidiaries which is of a character
required to be disclosed in the Registration Statement and
which has not been properly disclosed therein.
(vii) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
do not and will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
the charter, as amended, or by-laws, as amended, of the
Company, or to such counsel's knowledge, any agreement or
instrument to which the Company or any of the Subsidiaries is
a party or by which the Company or any of the Subsidiaries may
be bound, except a conflict, breach or default which would not
have a Material Adverse Effect on the Company.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body having jurisdiction
over the Company is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be
required by state securities and blue sky laws as to which
such counsel need express no opinion) except such as have been
obtained or made, specifying the same.
In rendering such opinion, such counsel may rely (A) as to matters governed by
the laws of states other than Delaware or Federal laws on local counsel in such
jurisdictions, provided that in each case such counsel shall state that they
believe that they and the Buyer are justified in relying on such other counsel
and (B) as to matters of fact, on certificates of responsible officers of the
Company and certificates or other written
13
statements of officers or departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of the Company and
any Subsidiary. In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that the Registration Statement, as of
the time it became effective under the Act as of the Closing Date, contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
(except that such counsel need express no view as to matters pertaining to
statistical information contained in the Registration Statement or financial
statements, schedules and other financial information contained or incorporated
by reference in the Registration Statement).
(e) The Registration Rights Agreement shall have been
authorized, approved and adopted by the requisite vote of the stockholders and
directors of the Company.
SECTION 5.3. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver by the Company on or prior to the Closing Date of the
following further conditions:
(a) The representations and warranties of Buyer contained
herein shall be true and correct in all material respects as of the Closing Date
with the same effect as though made as of the Closing Date except that the
accuracy of representations and warranties that by their terms speak as of the
date of this Agreement or some other date will be determined as of such date.
(b) Buyer shall have performed in all material respects all
material obligations and complied in all material respects with all material
agreements and covenants required by this Agreement to be performed or complied
with by it prior to the Closing Date.
(c) Buyer shall have delivered to the Company a certificate,
dated the Closing Date and signed by its Chief Executive Officer, Chief
Financial Officer or a Senior Vice President, certifying to both such effects.
ARTICLE VI.
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.1. TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of Buyer and the Company;
(b) by Buyer (provided that Buyer is not then in material
breach of any representation, warranty, covenant or other agreement contained
herein), upon a breach of any representation, warranty, covenant or agreement on
the part of the Company set
14
forth in this Agreement, or if any representation or warranty of the Company
shall have become untrue, in either case continuing five (5) days following
notice to the Company of such breach or untruth or of a nature such that the
conditions set forth in Section 5.2(a) or Section 5.2(b), as the case may be,
would be incapable of being satisfied by the date of the closing of the IPO;
provided that, in any case, a willful breach shall be deemed to cause such
conditions to be incapable of being satisfied for purposes of this Section
6.1(b);
(c) by the Company (provided that the Company is not then in
material breach of any representation, warranty, covenant or other agreement
contained herein), upon a breach of any representation, warranty, covenant or
agreement on the part of Buyer set forth in this Agreement, or if any
representation or warranty of Buyer shall have become untrue, in either case
continuing five (5) days following notice to Buyer of such breach or untruth or
of a nature such that the conditions set forth in Section 5.3(a) or Section
5.3(b), as the case may be, would be incapable of being satisfied by the date of
the closing of the IPO; provided that, in any case a willful breach shall be
deemed to cause such conditions to be incapable of being satisfied for purposes
of this Section 6.1(c);
(d) by either Buyer or the Company (provided that the party
seeking to so terminate this Agreement is not then in material breach of Section
4.3) if any Governmental Entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the Acquisition and such order, decree or filing
or other action shall have become final and nonappealable; or
(e) by either Buyer or the Company, if the IPO shall not have
closed by August 27, 1999.
SECTION 6.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Buyer as provided in Section 6.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Buyer or the Company or their respective officers
or directors, except as set forth in Section 4.2 which shall survive termination
and except to the extent that such termination results from the breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 6.3. AMENDMENT. This Agreement may be amended by the parties at
any time. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties.
SECTION 6.4. EXTENSION; WAIVER. At any time prior to the Closing Date,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) waive compliance with any
of the agreements or conditions contained in this
15
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing, signed on behalf
of such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
SECTION 6.6. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.
A termination of this Agreement or other action attributed to the Board of
Directors pursuant to Section 6.1, an amendment of this Agreement pursuant to
Section 6.3 or an extension or waiver pursuant to Section 6.4 shall, in order to
be effective, require in the case of Buyer, or the Company, action by its Board
of Directors, acting by the affirmative vote of a majority of the members of the
entire Board of Directors.
ARTICLE VII.
GENERAL PROVISIONS
SECTION 7.1. SURVIVAL OF REPRESENTATIONS. All of the representations
and warranties of the parties contained in this Agreement shall survive the
Closing hereunder and continue in full force and effect forever thereafter
(subject to any applicable statutes of limitations).
SECTION 7.2. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by facsimile transmission or overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such address for a party as shall be specified by like notice):
(a) if to the Company, to:
Xxxxx.xxx Inc.
000 X. XxXxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (312) 360- 6575
16
(b) if to Buyer, to:
Clear Channel Communications, Inc.
000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Mount, Esq.
Facsimile No.: (000) 000-0000
SECTION 7.3. DEFINITIONS. For purposes of this Agreement:
"Governmental Entity" means any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"IPO" is defined in Section 3.4.
"Knowledge" or "Know" means, with respect to the matter in
question, if any of the executive officers of the Company or Buyer, listed on
SCHEDULE 8.3(g) hereof, as the case may be, has actual knowledge of such matter.
"Material Adverse Effect" means, any adverse change in the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise), or business prospects of the Company or
Buyer, as the case may be, or its respective Subsidiaries that is material to
the Company or Buyer, as the case may be, and its respective Subsidiaries taken
as a whole.
"Person" means any natural person, firm, individual, business
trust, trust, association, corporation, partnership, joint venture, company,
unincorporated entity or Governmental Entity.
"Registration Rights Agreement" means the Second Amended and
Restated Registration Rights Agreement, in the form attached as EXHIBIT A, to be
executed and delivered by the parties at the Closing.
"Registration Statement" is defined in Section 3.4.
17
"Subsidiary" or "Subsidiaries" of any Person means another
Person, an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority of its
board of directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or
indirectly by such first Person.
"Taxes" means any and all federal, state, local, foreign or
other taxes of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any taxing authority, including, without limitation, taxes or other charges on
or with respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, transfer, capital stock, payroll, employment,
social security, workers' compensation, unemployment compensation, or net worth,
and taxes or other charges in the nature of excise, withholding, ad valorem or
value added.
"Tax Return" means any return, report or similar statement
(including the attached schedules) required to be filed with respect to any Tax,
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
"Warrant" means the Warrant to Purchase Shares of Common
Stock, in the form attached hereto as EXHIBIT B, to be issued by the Company to
Buyer at the Closing. The number of shares of Company Common Stock to be
purchased under the Warrant shall be equal to one and one-half times the number
of shares of Company Common Stock actually purchased by the Buyer under this
Agreement, and the exercise price shall be equal to the Per Share Purchase
Price.
SECTION 7.4. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
SECTION 7.5. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and is not intended to confer upon any person
other than the parties any rights or remedies hereunder.
SECTION 7.6. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties hereto without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
18
SECTION 7.7. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to any applicable conflicts of law.
SECTION 7.8. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than a federal or state court sitting in the
State of Delaware.
SECTION 7.9. SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
SECTION 7.10. INTERPRETATION. Headings of the Articles and Sections of
this Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever. The disclosure of any matter in
any section of a Disclosure Letter hereto shall not be deemed to constitute an
admission by any party or to otherwise imply that any such matter is material or
may have a Material Adverse Effect for purposes of this Agreement.
SECTION 7.11. FINDERS OR BROKERS. Except as provided on SCHEDULE 7.11,
neither the Company nor Buyer nor any of their respective Subsidiaries has
employed any investment banker, broker, finder or intermediary in connection
with the transactions contemplated hereby who might be entitled to any fee or
any commission in connection with or upon consummation of the Acquisition.
19
IN WITNESS WHEREOF, Buyer and the Company have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ Clear Channel Communications, Inc.
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
XXXXX.XXX INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, Chief Executive
Officer
[Signature page to Stock Purchase Agreement]
