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EXHIBIT 10.12
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 7,
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
(collectively, the "Station") pursuant to certain authorizations issued by the
Federal Communications Commission (the "FCC"):
KFON-AM (Austin, 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:
ARTICLE 1: PURCHASE OF ASSETS
1.1. Station Assets. On the terms and subject to the conditions hereof, on
the Closing Date (defined below), Seller shall sell, assign, transfer, convey
and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of
the right, title and interest of Seller in and to all of the assets, properties,
interests and rights of Seller of whatsoever kind and nature, real and personal,
tangible and intangible, which are used 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;
(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
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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, domain names and web sites and other intangible
property which are used exclusively in the operation of the Station and listed
on Schedule 1.1(d) (the "Intangible Property"); and
(e) Seller's rights in and to all the files, documents, records, and
books of account (or copies thereof) relating exclusively to the operation of
the Station, including the Station's local public files, programming information
and studies, blueprints, technical information and engineering data, advertising
studies, marketing and demographic data, sales correspondence, lists of
advertisers, credit and sales reports, and logs, but excluding records relating
to Excluded Assets (defined below);
(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").
1.2. Excluded Assets. Notwithstanding anything to the contrary contained
herein, the Station Assets shall not include the following assets along with all
rights, title and interest therein (the "Excluded Assets"):
(a) all cash and cash equivalents of Seller, including without
limitation certificates of deposit, commercial paper, treasury bills, marketable
securities, asset or money market accounts and all such similar accounts or
investments;
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(b) all accounts receivable or notes receivable arising in the
operation of the Station prior to Closing except to the extent said receivables
represent payment for goods and/or services to be rendered by the Station
subsequent 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 materially relating to the
operation of the Station; provided, however, that to the extent Seller must
provide records under this subsection, it may provide certified copies in lieu
of original documents;
(f) contracts of insurance, and all insurance proceeds or claims made
thereunder except to the extent that said proceeds or claims made arise as a
result of events occurring after the date of this Agreement;
(g) except as provided in Section 10.3, 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.
ARTICLE 2: ASSUMPTION OF OBLIGATIONS
2.1. Assumed Obligations. On the Closing Date, Buyer shall assume the
obligations of Seller (the "Assumed Obligations") arising after Closing under
the Station Contracts, including without limitation all agreements for the sale
of advertising time on the Station for cash 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 or not
disclosed to Buyer, other than the Assumed Obligations (the "Retained
Obligations").
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Buyer also 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 any Assumed Obligation as would otherwise fall within the
purview of Paragraph 2.1, supra, if the assumption of the obligation requires
approval of a third party and such approval has not been obtained by Seller on
or before Closing.
ARTICLE 3: PURCHASE PRICE
3.1. Purchase Price. In consideration for the sale of the Station Assets to
Buyer, in addition to the assumption of the Assumed Obligations, Buyer shall at
Closing (defined below) deliver the sum of $1.1 million to Seller by wire
transfer of immediately available funds.
3.2. Deposit. Within three business days of the date both parties have
executed this Agreement, Buyer shall deposit an amount equal to the lesser of
25% of the Purchase Price (the "Deposit") or $150,000 with NationsBank/Bank of
America (the "Escrow Agent") pursuant to the Escrow Agreement (the "Escrow
Agreement") of even date herewith among Buyer, Seller and the Escrow Agent. At
Closing, the Deposit shall be applied to the Purchase Price and any interest
accrued thereon shall be disbursed to Buyer. If this Agreement is terminated by
Seller due to Buyer's failure to consummate the Closing on the Closing Date or
if this Agreement is otherwise terminated by Seller pursuant to Section 16.1(c),
the Deposit and any interest accrued thereon shall be disbursed to Seller. 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
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.
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3.4. Allocation. The Purchase Price shall be allocated among the Station
Assets in a manner as mutually agreed between the parties. Seller may elect to
have an appraisal on said assets prepared by Bond & Xxxxxx, whose fees shall be
paid one-half by Seller and one-half by Buyer. If Seller makes such election,
Buyer agrees to use to be bound by the allocations contained therein. Seller and
Buyer agree to use the allocations determined pursuant to this Section 3.4 for
all tax purposes, including without limitation, those matters subject to Section
1060 of the Internal Revenue Code of 1986, as amended.
ARTICLE 4: CLOSING
4.1. Closing. The consummation of the sale and purchase of the Station
Assets (the "Closing") shall occur on a date (the "Closing Date") and at a time
and place designated solely by Seller after FCC Consent (defined below), subject
to satisfaction or waiver of the conditions to Closing contained herein (other
than those to be satisfied at Closing). Buyer shall receive written notice of
the date, time and place of Closing at least three (3) business days prior to
the date on which it scheduled to take place.
ARTICLE 5: GOVERNMENTAL CONSENTS
Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC
Consent") to the assignment of the FCC Licenses to Buyer, (ii) United States
Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the
transactions contemplated hereby, including without limitation any such approval
as may be necessary to enable Seller to consummate the merger under the AMFM
Agreement, and (iii) expiration or termination of any applicable waiting period
("HSR Clearance") under the HSR Act (defined below).
5.1. FCC. If not previously filed, within three (3) business days after the
execution of this Agreement, Buyer and Seller shall file an application with the
FCC (the "FCC Application") requesting the FCC Consent. Buyer and Seller shall
diligently prosecute the FCC Application and otherwise use their best efforts to
obtain the FCC Consent as soon as possible. If the FCC Consent imposes upon
Buyer any condition (including without limitation any divestiture condition),
Buyer shall timely comply therewith.
5.2. HSR. If not previously filed, then within five (5) business days after
the execution of this Agreement, Buyer and Seller shall make any required
filings with the Federal Trade Commission and the DOJ pursuant to the
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. Said filings, if any, shall be prepared by the
Seller at Seller's expense; Buyer shall cooperate with Seller by providing any
information on the Buyer requested as part of said filings.
5.3. General. Buyer and Seller shall notify each other of all documents
filed with or received from any governmental agency with respect to this
Agreement or the transactions
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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
or Seller become aware of any fact relating to it which would prevent or delay
the FCC Consent, the DOJ Consent or HSR Clearance, it shall promptly notify the
other thereof and take such steps as necessary to remove such impediment,
including but not limited to divesting any Station and terminating any
agreements to acquire or program or market any Station.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby makes the following representations and warranties to Seller:
6.1. Organization and Standing. Buyer is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, and
is qualified to do business in each jurisdiction in which the Station Assets are
located on or before Closing. Buyer has the requisite power and authority to
execute and deliver this Agreement and all of the other agreements and
instruments to be executed and delivered by Buyer pursuant hereto (collectively,
the "Buyer Ancillary Agreements"), to consummate the transactions contemplated
hereby and thereby and to comply with the terms, conditions and provisions
hereof and thereof.
6.2. Authorization. The execution, delivery and performance of this
Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized
and approved by all necessary action of Buyer and do not require any further
authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary
Agreement when executed and delivered by Buyer and the other parties thereto
will be, a legal, valid and binding agreement of Buyer enforceable in accordance
with its respective terms, except in each case as such enforceability may be
limited by bankruptcy, moratorium, insolvency, reorganization or other similar
laws affecting or limiting the enforcement of creditors' rights generally and
except as such enforceability is subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
6.3. No Conflicts. Neither the execution and delivery by Buyer of this
Agreement and the Buyer Ancillary Agreements or the consummation by Buyer of any
of the transactions contemplated hereby or thereby nor compliance by Buyer with
or fulfillment by Buyer of the terms, conditions and provisions hereof or
thereof will: (i) conflict with any organizational documents of Buyer or any
law, judgment, order or decree to which Buyer is subject; or (ii) require the
approval, consent, authorization or act of, or the making by Buyer of any
declaration, filing or registration with, any third party or any foreign,
federal, state or local court, governmental or regulatory authority or body,
except the FCC Consent and DOJ Consent, and, if applicable, HSR Clearance.
6.4. Qualification. Buyer is legally, financially and otherwise qualified
to be the licensee of, acquire, own and operate the 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 to the best of Buyer's
knowledge that would, under existing law and the existing
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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 or will have available on the
Closing Date sufficient funds to enable it to consummate the transactions
contemplated hereby.
6.5. No Finder. No broker, finder or other person is entitled to a
commission, brokerage fee or other similar payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
or action of Buyer or any party acting on Buyer's behalf.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties to Buyer:
7.1. Organization and Standing. 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.
7.2. Authorization. The execution, delivery and performance of this
Agreement and the Seller Ancillary Agreements by Seller have been duly
authorized and approved by all necessary action of Seller and do not require any
further authorization or consent of Seller. This Agreement is, and each Seller
Ancillary Agreement when executed and delivered by Seller and the other parties
thereto will be, a legal, valid and binding agreement of Seller enforceable in
accordance with its respective terms, except in each case as such enforceability
may be limited by bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting or limiting the enforcement of creditors' rights
generally and except as such enforceability is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
7.3. No Conflicts. Neither the execution and delivery by Seller of this
Agreement and the Seller Ancillary Agreements or the consummation by Seller of
any of the transactions contemplated hereby or thereby nor compliance by Seller
with or fulfillment by Seller of the terms, conditions and provisions hereof or
thereof will: (i) conflict with any organizational documents of Seller or any
law, judgment, order, or decree to which Seller is subject or, except as set
forth on Schedule 1.1(c), any Station Contract; or (ii) require the approval,
consent, authorization or act of, or the making by Seller of any declaration,
filing or registration with, any third party or any foreign, federal, state or
local court, governmental or regulatory authority or body, except the FCC
Consent and DOJ Consent and, if applicable, HSR Clearance.
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7.4. FCC Licenses. Seller (or one of the companies comprising Seller) is
the holder of the FCC Licenses described on Schedule 1.1(a). The FCC Licenses
are in full force and effect and have not been revoked, suspended, canceled,
rescinded or terminated and have not expired. There is not pending any action by
or before the FCC to revoke, suspend, cancel, rescind or materially adversely
modify any of the FCC Licenses (other than proceedings to amend FCC rules of
general applicability), and there is not now issued or outstanding, by or before
the FCC, any order to show cause, notice of violation, notice of apparent
liability, or notice of forfeiture against Seller with respect to the Station.
The Station are operating in compliance in all material respects with the FCC
Licenses, the Communications Act, and the rules, regulations and policies of the
FCC.
7.5. Taxes. Seller has, in respect of the Station's business, filed all
foreign, federal, state, county and local income, excise, property, sales, use,
franchise and other tax returns and reports which are required to have been
filed by it under applicable law and has paid all taxes which have become due
pursuant to such returns or pursuant to any assessments which have become
payable.
7.6. Personal Property. Schedule 1.1(b) contains a list of all material
items of Tangible Personal Property included in the Station Assets. Seller has
title to the Tangible Personal Property free and clear of Liens other than
Permitted Liens.
7.7. Real Property. Schedule 1.1(f) contains a description of all Real
Property included in the Station Assets. Seller has fee simple title to the
owned Real Property ("Owned Real Property") free and clear of Liens other than
Permitted Liens. Schedule 1.1(f) includes a description of each lease of Real
Property or similar agreement included in the Station Assets (the "Real Property
Leases"). The Owned Real Property includes, and the Real Property Leases
provide, access to the Station' facilities. To Seller's knowledge, the Real
Property is not subject to any suit for condemnation or other taking by any
public authority.
7.8 Contracts. Each of the Station Contracts (including without limitation
each of the Real Property Leases) is in effect and is binding upon Seller and,
to Seller's knowledge, the other parties thereto (subject to bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting the
enforcement of creditors' rights generally). Seller has performed its
obligations under each of the Station Contracts in all material respects, and is
not in material default thereunder, and to Seller's knowledge, no other party to
any of the Station Contracts is in default thereunder in any material respect.
7.9 Environmental. Except as set forth in any environmental report
delivered by Seller to Buyer prior to the date of this Agreement and except as
set forth on Schedule 1.1(f), to Seller's knowledge, no hazardous or toxic
substance or waste regulated under any applicable environmental, health or
safety law has been generated, stored, transported or released on, in, from or
to the Real Property included in the Station Assets. Except as set forth in any
environmental report delivered by Seller to Buyer prior to the date of this
Agreement and except
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as set forth on Schedule 1.1(f), to Seller's knowledge, Seller has complied in
all material respects with all environmental, health, and safety laws applicable
to the Station.
7.10 Intangible Property. Schedule 1.1(d) contains a description of the
material Intangible Property included in the Station Assets. Except as set forth
on Schedule 1.1(d), Seller has received no notice of any claim that its use of
the Intangible Property infringes upon any third party rights. Except as set
forth on Schedule 1.1(d), Seller owns or has the right to use the Intangible
Property free and clear of Liens other than Permitted Liens.
7.11 Compliance with Law. Seller has complied in all material respects with
all laws, regulations, rules, writs, injunctions, ordinances, franchises,
decrees or orders of any court or of any foreign, federal, state, municipal or
other governmental authority, which are applicable to the operation of the
Station. There is no action, suit or proceeding pending or threatened against
Seller in respect of the Station that will subject Buyer to liability or which
questions the legality or propriety of the transactions contemplated by this
Agreement. To Seller's knowledge, there are no governmental claims or
investigations pending or threatened against Seller in respect of the Station
(except those affecting the industry generally).
7.12 No Finder. No broker, finder or other person is entitled to a
commission, brokerage fee or other similar payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
or action of Seller or any party acting on Seller's behalf.
7.13 Assignment of Contracts. Seller is conveying pursuant to this
Agreement only those contracts and other agreements, which it has the legal
right to assign.
7.14 Times Sales and Trade Agreements. All Time Sales and Trade Agreement
to which Seller is a party will have been performed in full on or before
Closing.
ARTICLE 8: ACCOUNTS RECEIVABLE
8.1. Accounts Receivable. All accounts receivable arising prior to the
Closing Date in connection with the operation of the Station, including but not
limited to accounts receivable for advertising revenues for programs and
announcements performed prior to the Closing Date and other broadcast revenues
for services performed prior to the Closing Date, shall remain the property of
Seller (the "Accounts Receivable") and Buyer shall not acquire any right or
interest therein. For a period of ninety (90) days from closing (the "Collection
Period"), Buyer shall collect the Accounts Receivable in the normal and ordinary
course of Buyer's business and shall apply all such amounts collected to the
debtor's oldest account receivable first. Buyer's obligation shall not extend to
the institution of litigation, employment of counsel or a collection agency or
any other extraordinary means of collection. During the Collection Period,
neither Seller or its agents shall make any direct solicitation of any such
account debtor for` collection purposes or institute litigation for the
collection of amounts due. Any amounts relating to the Accounts Receivable that
are paid directly to Seller shall be retained by Seller. Within ten calendar
days after the end of each month, Buyer shall make a payment to Seller equal to
the amount of all collections of Accounts Receivable during the preceding month.
At the end of the
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Collection Period, any remaining Accounts Receivable shall be returned to Seller
for collection. Buyer may offset against the sums it pays to Seller on account
of its collections of Seller's Accounts Receivable any amounts it is owed under
Times Sales or Trade Agreements entered into by Seller prior to Closing but
performable after Closing to the extent Seller received cash or cash equivalents
for the advertising or other services rendered by Buyer.
ARTICLE 9: COVENANTS OF SELLER
9.1. Seller's Covenants. Seller covenants and agrees with respect to the
Station that, between the date hereof and Closing, except as permitted by this
Agreement or with the prior written consent of Buyer, which shall not be
unreasonably withheld, Seller shall:
(a) operate the Station in the ordinary course of business consistent
with past practice and in all material respects in accordance with FCC rules and
regulations and with all other applicable laws, regulations, rules and orders;
(b) not, other than in the ordinary course of business in accordance
with past practice, sell, lease or dispose of or agree to sell, lease or dispose
of any of the Station Assets, or create, assume or permit to exist any Liens
upon the Station Assets, except for Permitted Liens; and
(c ) maintain all insurance policies and bonds in effect at the time of
the execution of the Agreement through Closing.
9.2 Seller further covenants and agrees with respect to the Station that it
will 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.
9.3 Consents to Assignment. Seller will obtain any third party consents
necessary for the assignment of any Station Contract. To the extent that such
consent is not obtained, Buyer may elect to have such Station Contract excluded
from its Assumed Obligations as set forth in Paragraph 2.1, supra.
Alternatively, to the extent a required consent on any Station Contract is not
obtained by Seller prior to Closing and Buyer nonetheless is still willing to
assume the obligations of said Contract, 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.
ARTICLE 10: JOINT COVENANTS
Buyer and Seller hereby covenant and agree that between the date hereof and
Closing:
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10.1. Cooperation. Subject to express limitations contained elsewhere
herein, each party (i) shall cooperate fully with one another in taking any
reasonable actions (including without limitation, reasonable actions to obtain
the required consent of any governmental instrumentality or any third party)
necessary or helpful to accomplish the transactions contemplated by this
Agreement, including but not limited to the prompt satisfaction of any condition
to Closing set forth herein, and (ii) shall not take any action that conflicts
with its obligations hereunder or that causes its representations and warranties
to become untrue in any material respect.
10.2. Control of Station. Buyer shall not, directly or indirectly, control,
supervise or direct the operations of the Station prior to Closing. Such
operations, including complete control and supervision of all Station programs,
employees and policies, shall be the sole responsibility of Seller.
10.3. 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 without written consent 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"), Seller shall to the extent permitted by law
provide Buyer access to its personnel records and such other information as
Buyer may reasonably request prior to Closing. With respect to such hired
employees, Seller shall be responsible for the payment of all compensation and
accrued employee benefits payable by it until Closing and thereafter Buyer shall
be responsible for all such obligations payable by it. Buyer shall cause all
employees it hires to be eligible to participate in its "employee welfare
benefit plans" and "employee pension benefit plans" (as defined in Section 3(1)
and 3(2) of ERISA, respectively) in which similarly situated employees are
generally eligible to participate; provided, however, that all such employees
and their spouses and dependents shall be eligible for coverage immediately
after Closing (and shall not be excluded from coverage on account of any
pre-existing condition) to the extent provided under such plans. For purposes of
any length of service requirements, waiting periods, vesting periods or
differential benefits based on length of service in any such plan for which such
employees may be eligible after Closing, Buyer shall ensure that service with
Seller shall be deemed to have been service with the Buyer. In addition, Buyer
shall ensure that each such employee receives credit under any welfare benefit
plan of Buyer for any deductibles or co-payments paid by such employees and
dependents for the current plan year under a plan maintained by Seller.
Notwithstanding any other provision contained herein, Buyer shall grant credit
to each such employee for all unused sick leave accrued as of Closing as an
employee of Seller. Notwithstanding any other provision contained herein, Buyer
shall assume and discharge Seller's liabilities for the payment of all unused
vacation leave accrued by such employees as of Closing. From and after the
Closing, Buyer shall cooperate with the reasonable requests of Seller to
continue to withhold from the paychecks of Transferred Employees who have
outstanding loan balances in Seller's 401(k) Savings Plan, and Buyer shall remit
such amounts to Seller in a timely fashion such that the outstanding loans do
not go into default. Notwithstanding the foregoing, Seller has represented that
there are no employees currently under employment contracts with KFON and there
are therefore no employees, which Buyer is obligated by this agreement to hire.
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10.4. 1031 Exchange. At or prior to Closing, Seller may assign its rights
under this Agreement (in whole or in part) to a qualified intermediary (as
defined in Treasury regulation section 1.1031(k)-1(g)(4)) or similar entity or
arrangement ("Qualified Intermediary"). Upon any such assignment, Seller shall
promptly give written notice thereof to Buyer, and Buyer shall cooperate with
the reasonable requests of Seller and any Qualified Intermediary in connection
therewith. Without limiting the generality of the foregoing, if Seller gives
notice of such assignment, Buyer shall (i) promptly provide Seller with written
acknowledgment of such notice and (ii) at Closing, pay the Purchase Price (or
any portion thereof designated by the Qualified Intermediary) to or on behalf of
the Qualified Intermediary (which payment shall, to the extent thereof, satisfy
the obligations of Buyer to make such payment hereunder). Seller's assignment to
a Qualified Intermediary will not relieve Seller of any of its duties or
obligations herein. Except for the obligations of Buyer set forth in this
Section, Buyer shall not have any liability or obligation to Seller for the
failure of the contemplated exchange to qualify as a like-kind exchange under
Section 1031 of the Internal Revenue Code unless such failure is the result of
the material breach or default by Buyer under this Agreement.
10.5. 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 is legally
qualified to assume and assumes Seller's duties and obligations hereunder with
respect to the Station Assets held in such trust.
ARTICLE 11: CONDITIONS HAVE CLOSING BY BUYER
The obligations of Buyer hereunder are, at its option, subject to
satisfaction, at or prior to Closing, of each of the following conditions:
11.1. Representations, Warranties and Covenants. The representations and
warranties of Seller made in this Agreement shall be true and correct in all
material respects as of the Closing Date except for changes permitted or
contemplated by the terms of this Agreement, and the covenants and agreements to
be complied with and performed by Seller at or prior to Closing shall have been
complied with or performed in all material respects. Buyer shall have received a
certificate dated as of the Closing Date from Seller, executed by an authorized
officer of Seller to the effect that the conditions set forth in this Section
have been satisfied.
11.2 Covenants of Seller. Seller shall have materially complied with its
Covenants as set forth in Article 9 herein
11.3 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.
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ARTICLE 12: CONDITIONS OF CLOSING BY SELLER
The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to Closing, of each of the following conditions:
12.1. Representations, Warranties and Covenants. The representations and
warranties of Buyer made in this Agreement shall be true and correct in all
material respects as of the Closing Date except for changes permitted or
contemplated by the terms of this Agreement, and the covenants and agreements to
be complied with and performed by Buyer at or prior to Closing shall have been
complied with or performed in all material respects. Seller shall have received
a certificate dated as of the Closing Date from Buyer, executed by an authorized
officer of Buyer, to the effect that the conditions set forth in this Section
have been satisfied.
12.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if
applicable, HSR Clearance, shall have been obtained, and no court or
governmental order prohibiting Closing shall be in effect.
12.3. AMFM Closing. The closing under the AMFM Agreement shall have been
consummated.
ARTICLE 13: EXPENSES
13.1. Expenses. Each party shall be solely responsible for all costs and
expenses incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this Agreement, except that (i)
all recordation, transfer and documentary taxes, fees and charges, and any
excise, sales or use taxes, applicable to the transfer of the Station Assets
shall be paid equally by Buyer and Seller, (ii) all FCC filing fees shall be
paid equally by Buyer and Seller, and (iii) all HSR Act filing fees and expenses
shall be paid by equally by Buyer and Seller.
ARTICLE 14: DOCUMENTS TO BE DELIVERED AT CLOSING
14.1. Seller's Documents. At Closing, Seller shall deliver or cause to be
delivered to Buyer:
(i) certified copies of resolutions authorizing its execution, delivery
and performance of this Agreement, including the consummation of the
transactions contemplated hereby;
(ii) the certificate described in Section 11.1;
(iii) such bills of sale, assignments, special warranty deeds,
documents of title and other instruments of conveyance, assignment and transfer
as may be necessary to convey, transfer and assign the Station Assets to Buyer,
free and clear of Liens, except for Permitted Liens;
(iv) an Owner Policy of Title Insurance (the Title Policy) issued by
Texas Professional Title Company or Heritage Title Company (the Title Company)
in the amount of the
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Purchase Price allocated to the real property allocated pursuant to Section 3.4,
supra, dated at or after closing, insuring Buyer against loss under the
provisions of the Title Policy, subject only to those title exceptions permitted
by this contract, or as may be approved by Buyer in writing, and the standard
printed exceptions contained in the promulgated form of Title Policy; provided
however that: (1) the exception as to area and boundaries shall be deleted
except for any shortages in area at the expense of Buyer; and (2) the exception
as to restrictive covenants shall be endorsed "None of Record", unless
restrictions are approved by Buyer.
14.2. Buyer's Documents. At Closing, Buyer shall deliver or cause to be
delivered to Seller:
(i) the certified copies of resolutions authorizing its execution,
delivery and performance of this Agreement, including the consummation of the
transactions contemplated hereby;
(ii) the certificate described in Section 12.1; and
(iii) the Purchase Price in accordance with Section 3.1 hereof.
ARTICLE 15: SURVIVAL; INDEMNIFICATION.
15.1. Survival. The covenants, agreements, representations and warranties
in this Agreement shall survive Closing for a period of six (6) months from the
Closing Date whereupon they shall expire and be of no further force or effect,
except those under (i) this Article 15 that relate to Damages (defined below)
for which written notice is given by the indemnified party to the indemnifying
party prior to the expiration, which shall survive until resolved and (ii)
Sections 2.1 (Assumed Obligations), 3.3 (Adjustments), 3.4 (Allocation), 8.1
(Accounts Receivable) and 13.1 (Expenses), and indemnification obligations with
respect to such provisions, which shall survive until performed.
15.2. Indemnification.
(a) From and after the Closing, Seller shall defend, indemnify and hold
harmless Buyer from and against any and all losses, costs, damages, liabilities
and expenses, including reasonable attorneys' fees and expenses ("Damages")
incurred by Buyer arising out of or resulting from: (i) any breach or default by
Seller under this Agreement; (ii) the Retained Obligations; or (iii) the
business or operation of the Station before Closing; provided, however, that (i)
Seller shall have no liability to Buyer hereunder until, and only to the extent
that, Buyer's aggregate Damages exceed $250,000; and (ii) the maximum liability
of Seller hereunder shall be $1,100,000.
(b) From and after the Closing, Buyer shall defend, indemnify and hold
harmless Seller from and against any and all Damages incurred by Seller arising
out of or resulting from: (i) any breach or default by Buyer under this
Agreement; (ii) the Assumed Obligations; or (iii) the business or operation of
the Station after Closing; provided, however, that (i) Buyer shall
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have no liability to Seller hereunder until, and only to the extent that,
Seller's aggregate Damages exceed $100,000; and (ii) the maximum liability of
Buyer hereunder shall be $ 300,000
15.3. Procedures. The indemnified party shall give prompt written notice to
the indemnifying party of any demand, suit, claim or assertion of liability by
third parties or other circumstances that could give rise to an indemnification
obligation hereunder against the indemnifying party (a "Claim"), but a failure
to give such notice or delaying such notice shall not affect the indemnified
party's right to indemnification and the indemnifying party's obligation to
indemnify as set forth in this Agreement, except to the extent the indemnifying
party's ability to remedy, contest, defend or settle with respect to such Claim
is thereby prejudiced. The obligations and liabilities of the parties with
respect to any Claim shall be subject to the following additional terms and
conditions:
(a) The indemnifying party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense or opposition
to such Claim.
(b) In the event that the indemnifying party shall elect not to
undertake such defense or opposition, or, within twenty (20) days after written
notice (which shall include sufficient description of background information
explaining the basis for such Claim) of any such Claim from the indemnified
party, the indemnifying party shall fail to undertake to defend or oppose, the
indemnified party (upon further written notice to the indemnifying party) shall
have the right to undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own choosing, on behalf
of and for the account and risk of the indemnifying party (subject to the right
of the indemnifying party to assume defense of or opposition to such Claim at
any time prior to settlement, compromise or final determination thereof).
(c) Anything herein to the contrary notwithstanding: (i) the
indemnified party shall have the right, at its own cost and expense, to
participate in the defense, opposition, compromise or settlement of the Claim;
(ii) the indemnifying party shall not, without the indemnified party's written
consent, settle or compromise any Claim or consent to entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such Claim; and (iii) in the event that the indemnifying
party undertakes defense of or opposition to any Claim, the indemnified party,
by counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the indemnifying party and its
counsel or other representatives concerning such Claim and the indemnifying
party and the indemnified party and their respective counsel or other
representatives shall cooperate in good faith with respect to such Claim.
(d) All claims not disputed shall be paid by the indemnifying party
within thirty (30) days after receiving notice of the Claim. "Disputed Claims"
shall mean claims for Damages by an indemnified party, which the indemnifying
party objects to in writing within thirty (30) days after receiving notice of
the Claim. In the event there is a Disputed Claim with respect to any Damages,
the indemnifying party shall be required to pay the indemnified party the amount
of
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such Damages for which the indemnifying party has, pursuant to a final
determination, been found liable within ten (10) days after there is a final
determination with respect to such Disputed Claim. A final determination of a
Disputed Claim shall be (i) a judgment of any court determining the validity of
a Disputed Claim, if no appeal is pending from such judgment and if the time to
appeal therefrom has elapsed; (ii) an award of any arbitration determining the
validity of such disputed claim, if there is not pending any motion to set aside
such award and if the time within which to move to set aside such award has
elapsed; (iii) a written termination of the dispute with respect to such claim
signed by the parties thereto or their attorneys; (iv) a written acknowledgment
of the indemnifying party that it no longer disputes the validity of such claim;
or (v) such other evidence of final determination of a disputed claim as shall
be acceptable to the parties. No undertaking of defense or opposition to a Claim
shall be construed as an acknowledgment by such party that it is liable to the
party claiming indemnification with respect to the Claim at issue or other
similar Claims.
ARTICLE 16: TERMINATION
16.1. Termination. This Agreement may be terminated at any time prior to
Closing as follows:
(a) by mutual written consent of Buyer and Seller;
(b) by written notice of Buyer to Seller if Seller (i) does not satisfy
the conditions or perform the obligations to be satisfied or performed by it on
the Closing Date; or (ii) otherwise breaches in any material respect any of its
representations or warranties or defaults in any material respect in the
performance of any of its covenants or agreements herein contained and such
breach or default is not cured within the Cure Period (defined below);
(c) by written notice of Seller to Buyer if Buyer (i) does not satisfy
the conditions or perform the obligations to be satisfied or performed by it on
the Closing Date; or (ii) otherwise breaches in any material respect any of its
representations or warranties or defaults in any material respect in the
performance of any of its covenants or agreements herein contained and such
breach or default is not cured within the Cure Period (defined below);
(d) by written notice of Buyer to Seller, or by Seller to Buyer, if the
FCC denies the FCC Application;
(e) by written notice of Seller to Buyer if the Closing shall not have
been consummated on or before four months after the date of this Agreement; or
(f) by written notice of Seller to Buyer if the AMFM Agreement is
terminated or expires;
The term "Cure Period" as used herein means a period commencing the date
Buyer or Seller receives from the other written notice of breach or default
hereunder and continuing until the earlier of (i) thirty (30) days thereafter or
(ii) the Closing Date; provided, however, that if the breach or default cannot
reasonably be cured within such period but can be cured before the Closing Date,
and if diligent efforts to cure promptly commence, then the Cure Period shall
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continue as long as such diligent efforts to cure continue, but not beyond the
Closing Date. Except as set forth below, the termination of this Agreement shall
not relieve any party of any liability for breach or default under this
Agreement prior to the date of termination. Notwithstanding anything contained
herein to the contrary, Section 13.1 shall survive any termination of this
Agreement.
16.2. Remedies. The parties recognize that if either party refuses to
consummate the Closing pursuant to the provisions of this Agreement or either
party otherwise breaches or defaults such that the Closing has not occurred
("Breaching Party"), monetary damages alone will not be adequate to compensate
the non-breaching party ("Non-Breaching Party") for its injury. Such
Non-Breaching Party shall therefore be entitled to obtain specific performance
of the terms of this Agreement in lieu of, and not in addition to, any other
remedies, including but not limited to monetary damages, that may be available
to it; provided however, that Seller may elect to recover liquidated damages in
lieu of obtaining specific performance. If any action is brought by the
Non-Breaching Party to enforce this Agreement, the Breaching Party shall waive
the defense that there is an adequate remedy at law. In the event of a default
by the Breaching Party which results in the filing of a lawsuit for damages,
specific performance, or other remedy, the Non-Breaching Party shall be entitled
to reimbursement by the Breaching Party of reasonable legal fees and expenses
incurred by the Non-Breaching Party, provided that the Non-Breaching Party is
successful in such lawsuit.
16.3. Liquidated Damages. If Seller terminates this Agreement due to
Buyer's failure to consummate the Closing on the Closing Date after all
conditions precedent to Closing have been met by Seller or if this Agreement is
otherwise terminated by Seller pursuant to Section 16.1(c), then Seller shall be
paid the sum of $300,000, and such payment shall constitute liquidated damages
with the Deposit and any interest accrued thereon paid to Seller and applied
against said sum. If Buyer terminates this Agreement due to Seller's failure to
consummate the Closing on the Closing Date or if this Agreement is otherwise
terminated by Buyer pursuant to Section 16.1 or Seller terminates this Agreement
pursuant to Sections 16.1(e) or (f), then an amount equal to Buyer's Deposit and
any interest accrued thereon shall be paid to Buyer by Seller, and such payment
shall constitute liquidated damages. It is understood and agreed that the amount
designated as "liquidated damages" represents Buyer's and Seller's reasonable
estimate of actual damages and does not constitute a penalty.
ARTICLE 17: MISCELLANEOUS PROVISIONS
17.1. Casualty Loss. In the event any loss or damage of the Station Assets
exists on the Closing Date, Buyer and Seller shall consummate the Closing and
Seller shall assign to Buyer the proceeds of any insurance payable to Seller on
account of such damage or loss.
17.2. Further Assurances. After the Closing, Seller shall from time to
time, at the request of and without further cost or expense to Buyer, execute
and deliver such other instruments of conveyance and transfer and take such
other actions as may reasonably be requested in order to more effectively
consummate the transactions contemplated hereby to vest in Buyer good title to
the Station Assets, and Buyer shall from time to time, at the request of and
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without further cost or expense to Seller, execute and deliver such other
instruments and take such other actions as may reasonably be requested in order
more effectively to relieve Seller of any obligations being assumed by Buyer
hereunder.
17.3. Assignment. Except as set forth in Sections 10.5 (1031 Exchange) and
10.6 (Trust), neither party may assign this Agreement without the prior written
consent of the other party hereto. With respect to any permitted assignment, the
parties shall take all such actions as are reasonably necessary to effectuate
such assignment, including but not limited to cooperating in any appropriate
filings with the FCC or other governmental authorities. All covenants,
agreements, statements, representations, warranties and indemnities in this
Agreement by and on behalf of any of the parties hereto shall bind and inure to
the benefit of their respective successors and permitted assigns of the parties
hereto.
17.4. Amendments. No amendment, waiver of compliance with any provision or
condition hereof or consent pursuant to this Agreement shall be effective unless
evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
17.5. Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
17.6. Governing Law. The construction and performance of this Agreement
shall be governed by the laws of the State of Texas without giving effect to the
choice of law provisions thereof.
17.7. Notices. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing, including by
facsimile, and shall be deemed to have been received on the date of personal
delivery, on the third day after deposit in the U.S. mail if mailed by
registered or certified mail, postage prepaid and return receipt requested, on
the day after delivery to a nationally recognized overnight courier service if
sent by an overnight delivery service for next morning delivery or when
delivered by facsimile transmission, and shall be addressed as follows (or to
such other address as any party may request by written notice):
if to Seller: c/o Clear Channel Broadcasting, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile: (000) 000-0000
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with a copy (which shall not
constitute notice) to: Xxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxxxx, Xxxxx & Xxxxxx
Xxxxx 000, Xxx Xxxxxx Xxxxxx Xxxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: (000) 000-0000
if to Buyer: Pecan Partners, Ltd.
0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Pecan Radio Management, LLC, General
Partner Xxxx Xxxxx Xxxxxx, Jr., Manager
Facsimile: (000) 000-0000
with a copy (which shall not
constitute notice) to: Bechtel & Xxxx
L Street, N.W., Suite 250
Washington, D.C. 20036
Attention: Xxx Xxxxxx
Facsimile: (000) 000-0000
Xxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
17.8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
17.9. No Third Party Beneficiaries. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement.
17.10. Severability. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
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17.11. Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to the matters provided for herein.
[SIGNATURE PAGES FOLLOW]
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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
SELLER: CLEAR CHANNEL BROADCASTING LICENSES, INC.
By:
---------------------------------------------
Name: Xxxx Xxxx
Title: President & COO
Date:
---------------------------------------------
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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
BUYER: PECAN PARTNERS, LTD.
By: Pecan Radio Management, LLC, General Partner
By:
---------------------------------------------
Xxxx Xxxxx Xxxxxx, Jr.
Manager
Date:
---------------------------------------------
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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
