SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
June 5, 1996
Clear Channel Communications, Inc.
(Exact name of registrant as specified in its charter)
Texas
(State of Incorporation)
1-9645 74-1787539
(Commission File Number) (I.R.S. Employer Identification No.)
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
(210) 822-2828
(Address and telephone number of principal executive offices)
<PAGE>
Clear Channel Communications, Inc.
Form 8-K
Item 2.(a)
On May 9 1996, Clear Channel Communications, Inc. (the "Company")
announced that Clear Channel Radio, Inc. and Clear Channel Radio
Licenses, Inc., wholly owned subsidiaries of the Company, had
entered into a definitive agreement to purchase substantially all
of the assets of Radio Equity Partners, L.P. ("REP"), which owns
radio stations in Springfield, Massachusetts; Columbia, South
Carolina; Providence, Rhode Island; Greensboro, North Carolina; Ft.
Myers/Naples, Florida; Oklahoma City, Oklahoma; Memphis, Tennessee
and New Orleans, Louisiana. REP is not an affiliate of the
registrant.
The assets to be acquired consist of items of broadcasting and
technical equipment utilized in the transmission of radio signals,
Federal Communications Commission licenses, real property serving
as the site for broadcasting towers and other items of personal
property associated with the continuing operations of the broadcast
facilities. In addition, the accounts receivable and other assets
existing as of the acquisition date pertaining to the radio
stations will be acquired.
As consideration for the assets acquired, the Company's subsidiary
will pay cash of approximately $240,000,000. The purchase price
was determined based upon an arms-length negotiation considering
the potential cash flow to be generated by the stations,
consideration of the markets in which the stations are located,
management, personnel, and the overall operation of the facilities
as a going concern.
The Company anticipates that sources of funds utilized in
completing this acquisition will be provided by the Company's
revolving long-term line of credit facility by and between
NationsBank of Texas, N.A., as agent, and the registrant.
Item 2.(b)
The assets to be acquired by registrant's subsidiaries are being
utilized by REP for the purpose of radio broadcasting. Registrant
intends to continue such use.<PAGE>
Clear Channel Communications, Inc.
Form 8-K
Item 7.(a)-1 Historical Financial Statements
Consolidated Financial Statements
Radio Equity Partners, L.P. and Subsidiary
December 31, 1995 and 1994
(with Report of Independent Auditors thereon)
Independent Auditors' Report
Radio Equity Partners, L.P. and subsidiary:
We have audited the accompanying consolidated balance sheets of
Radio Equity Partners, L.P. and its subsidiary (the "Partnership")
as of December 31, 1995 and 1994 and the related consolidated
statements of operations, partners' capital, and cash flows for the
years then ended. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these consolidated financial statements
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Radio Equity Partners, L.P. and its subsidiary as of
December 31, 1995 and 1994 and the results of their operations and
cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
New York, New York
March 29, 1996
<PAGE>
RADIO EQUITY PARTNERS, L.P. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 1995 and 1994
Assets 1995 1994
____ ____
Current Assets:
Cash $ 3,947,872 $ 5,137,868
Trade accounts
receivable,
less allowance
for doubtful
accounts of
$556,462 in
1995 and $422,385
in 1994 9,303,302 7,883,536
Assets held for
sale, net -- 476,637
Prepaid expenses
and other current
assets 1,126,725 736,739
____________ ____________
Total current assets 14,377,899 14,234,780
Property and equipment,
net (note 3) 16,919,615 18,475,320
Intangible and other
assets, net (note 4) 135,968,163 132,053,705
____________ ____________
Total assets $167,265,677 $164,763,805
============ ============
Liabilities and Partners' Capital
Current liabilities:
Accounts payable $ 1,207,488 $ 907,973
Accrued interest 5,201,619 2,622,765
Accrued expenses 1,794,551 1,150,204
Other current liabilities -- 180,518
Current portion of long-term
debt 8,093,000 --
____________ ____________
Total current
liabilities 16,296,658 4,861,460
Long-term debt (note 7) 101,261,201 112,124,000
____________ ____________
Total liabilities 117,557,859 116,985,460
Partners' capital:
General partner 565,944 543,988
Limited partners 49,141,874 47,234,357
____________ ____________
Total partners'
capital 49,707,818 47,778,345
____________ ____________
Total liabilities
and partners'
capital $167,265,677 $164,763,805
============ ============
See accompanying notes to consolidated statements.
<PAGE>
RADIO EQUITY PARTNERS, L.P. AND SUBSIDIARY
Consolidated Statements of Operations
Years Ended December 31, 1995 and 1994
1995 1994
____ ____
Net broadcasting revenue $46,498,247 $30,497,374
Station operating expenses
before depreciation,
amortization and
management fee:
Selling 11,087,226 8,193,648
Program 13,296,549 6,354,014
General and
administrative 5,133,067 4,089,580
___________ ___________
Total station operating
expenses before
depreciation, amortization
and management fee 29,516,842 18,637,242
Depreciation and
amortization 13,845,761 10,253,002
Management fee (note 5) 1,204,375 721,514
___________ ___________
Operating income 1,931,269 885,616
Other income (expenses):
Interest income 200,116 171,875
Interest expense (10,441,428) (6,382,546)
Other expenses (210,484) (87,418)
___________ ___________
Net loss $(8,520,527) $(5,412,473)
============ ============
See accompanying notes to consolidated statements.
<PAGE>
RADIO EQUITY PARTNERS, L.P. AND SUBSIDIARY
Consolidated Statements of Partners' Capital
Years Ended December 31, 1995 and 1994
General Limited
Partner Partners Total
Balance, December 31, 1993 $150,988 $13,096,210 $13,247,198
Capital contributions -
February 3, 1994 133,656 11,600,846 11,734,502
Capital contributions -
May 11, 1994 260,253 22,610,595 22,870,848
Capital contributions -
June 23, 1994 60,793 5,277,477 5,338,270
Allocation of partnership
loss (61,702) (5,350,771) (5,412,473)
________ ___________ ___________
Balance, December 31, 1994 543,988 47,234,357 47,778,345
Capital contributions -
March 30, 1995 68,328 5,931,672 6,000,000
Capital contributions -
May 23, 1995 50,677 4,399,323 4,450,000
Allocation of partnership
loss (97,049) (8,423,478) (8,520,527)
________ ___________ ___________
Balance, December 31, 1995 $565,944 $49,141,874 $49,707,818
========= =========== ===========
See accompanying notes to consolidated statements
<PAGE>
RADIO EQUITY PARTNERS, L.P. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years Ended December 31, 1995 and 1994
1995 1994
____ ____
Cash flows from operating activities:
Net loss $(8,520,527) $(5,412,473)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 13,845,761 10,253,002
Changes in assets and
liabilities net of the
effects from purchases
of radio stations:
Increase in trade accounts
receivable (1,419,766) (7,389,756)
Increase in prepaid expenses
and other assets (389,986) (693,732)
Increase in accounts payable 299,515 666,271
Increase in accrued expenses
and other 3,047,054 3,422,288
___________ ___________
Net cash provided by operating
activities 6,862,051 845,600
___________ ___________
Cash flows from investing activities:
Purchases of property, plant
and equipment (241,363) (665,867)
Acquisition of radio stations (16,065,885) (132,931,536)
Proceeds from the sale of radio
stations 575,000 --
Other, net -- (12,514)
___________ ___________
Net cash used in investing
activities (15,732,248) (133,609,917)
___________ ___________
Cash flows from financing
activities:
Proceeds from long-term
borrowings 10,461,200 97,124,000
Principal payments of debt (13,230,999) --
Payment of debt issuance cost -- (1,475,000)
Partner capital contributions 10,450,000 39,943,620
___________ ___________
Net cash provided by financing
activities 7,680,201 135,592,620
___________ ___________
Net increase (decrease) in
cash (1,189,996) 2,828,303
Cash, beginning of year 5,137,868 2,309,565
___________ ___________
Cash, end of year $3,947,872 $5,137,868
=========== ===========
The Partnership paid $7,930,177 and $4,708,410 for interest in 1995
and 1994, respectively.
See accompanying notes to consolidated statements.
<PAGE>
RADIO EQUITY PARTNERS, L.P. AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1995 and 1994
(1) Nature of Business and Organization
Radio Equity Partners, L.P. and its wholly-owned subsidiary, REP
Radio Corp., (the "Partnership") was established as a Delaware
Limited Partnership in October 1992. The Partnership's primary
purpose is to acquire and operate radio stations. The Partnership
sells radio advertising and also pays license fees for rights to
broadcast certain programs and commercial music.
Partnership profits and losses are allocated to the general partner
and limited partners in proportion to their partnership interests.
Acquisitions
On February 1, 1994, the Partnership acquired the net assets of
WCKT-FM, a radio station in Fort Myers, FL, for $10.9 million in
cash. The purchase was financed through partners' contributions.
On May 11, 1994, the Partnership acquired the net assets of eleven
radio stations from NewMarket Media Corp., for $102.5 million.
This acquisition was financed through $76 million in borrowings and
$26.5 million of partners contributions. The stations included:
WSJS-AM and WTQR-FM in Winston-Salem, WREC-AM, WEGR-FM and WRXQ-FM
in Memphis, KXXY-AM/FM and KTST-FM in Oklahoma City, and WNOE-AM/FM
and KGTR-FM (now KLJZ-FM) in New Orleans.
On June 22, 1994, the Partnership acquired the net assets of WWDM-
FM in Columbia, SC for $13.7 million. This acquisition was
financed through $9.0 million in borrowings and $4.7 million of
partners' contributions.
On September 22, 1994, the Partnership acquired the net assets of
WNEU-FM (now WXRA-FM) in High Point, NC for $3.5 million. The
purchase price was financed through partners' contributions.
The Partnership acquired three stations in 1995. On January 5,
1995, the Partnership acquired the net assets of WIXI-FM, Naples,
FL and WARQ-FM in Columbia, SC for $5.3 million. The acquisition
was financed through $2.0 million of debt and $3.3 million of
partners' contributions. On May 25, 1995, the Partnership acquired
the net assets of WWRX-FM in Providence, Rhode Island. The
acquisition was financed through $7.0 million in borrowings and
$3.2 million of partners' contributions.
These acquisitions were accounted for under the purchase method of
accounting.<PAGE>
Sale
On March 16, 1995, the Partnership sold the net assets of WNOE-AM,
New Orleans. Net proceeds from the sale of $0.6 million
approximated the net book value of the assets sold.
(2) Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Radio Equity Partners, L.P. and its wholly-owned
subsidiary. All significant intercompany balances and transactions
have been eliminated in consolidation.
Property and Equipment
Property and equipment are recorded at cost and depreciated using
the straight-line method over the estimated useful lives of the
respective assets, which range from three to thirty-nine years.
Maintenance and repairs are charged to operations as incurred.
Intangible Assets
Intangible assets consist primarily of covenants-not-to-compete,
FCC licenses, goodwill and organization costs. They are being
amortized on a straight-line basis over lives ranging from one to
fifteen years.
Revenue Recognition
Revenue is recognized when commercials are broadcast.
Federal Income Taxes
The Internal Revenue Code of 1986 provides that a partnership is
not subject to Federal income tax. Each partner takes into account
separately on his or her tax return, his or her share of the
realized income, gains, losses, deductions or credits for the
Partnership's taxable year ending within or with his or her taxable
year, whether or not any distribution is made to such partner.
Accordingly, no provision has been made for Federal income taxes.
Certain assets have a basis for income tax purposes that differs
from the carrying value for financial reporting purposes, primarily
due to differences in depreciation methods.
Barter Transactions
Revenue from barter transactions (advertising provided in exchange
for goods and services) is recognized as income when advertisements
are broadcast. Barter expense is recognized when merchandise is
received or services are performed. Total revenue from barter
transactions was $2.5 million and $1.5 million in 1995 and 1994,
respectively. Total expense from barter transactions was $2.3
million and $1.3 million in 1995 and 1994, respectively.
Financial Instruments
The carrying values of all financial instruments included in the
financial statements approximate their fair values.
Reclassification
Certain prior year balances have been reclassified to conform to
the current year presentation.
Use of Estimates
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(3) Property and Equipment
Property and equipment consists of the following at December 31,
1995 and 1994:
1995 1994
____ ____
Land $1,613,184 $1,608,020
Building and
leasehold
improvements 1,500,678 1,435,503
Studio
equipment 4,714,560 3,774,074
Furniture
and other
equipment 14,210,312 13,479,388
Vehicles 332,543 243,936
22,371,277 20,540,921
Less accumulated
depreciation and
amortization (5,451,662) (2,065,601)
$16,919,615 $18,475,320
Depreciation and amortization of property and equipment amounted to
$3,430,625 and $2,026,302 for the years ended December 31, 1995 and
1994. Depreciation of assets held for sale amounted to $87,136 for
the year ended December 31, 1994.
<PAGE>
(4) Intangible and Other Assets
Intangible assets, which are amortized over two to 15 years,
consist of the following at December 31, 1995 and 1994:
1995 1994
FCC licenses $138,487,611 $125,853,867
Goodwill 9,956,401 8,839,287
Acquired
advertising
contracts 4,470,356 4,128,191
Favorable
leases 1,380,302 1,050,262
Other 365,884 452,898
154,660,554 140,324,505
Less accumulated
amortization (18,692,391) (8,270,800)
$135,968,163 $132,053,705
Amortization of intangibles amounted to $10,415,136 and $8,139,564
for the years ended December 31, 1995 and 1994, respectively.
(5) Related Party Transactions
The Partnership has a management agreement with Fairfield
Communications, Inc., a radio management company, which manages the
Partnership's radio properties. Fairfield Communications, Inc., is
owned and operated by an officer of the partnership, who is also a
limited partner. Expenses incurred by the Partnership under this
agreement amounted to $1,204,375 and $721,514 in 1995 and 1994,
respectively. The management agreement between Fairfield
Communications, Inc. and the Partnership was amended in June 1994
to extend the term from December 31, 1993 to December 31, 1997.
Other current assets included a receivable of $445,752 and $145,407
in 1995 and 1994, respectively, from Fairfield Communications, Inc.
(6) Commitments
The Partnership is obligated under certain noncancellable operating
leases for which future minimum payments are as follows:
Year ending December 31, Amount
________________________ ________
1996 $ 873,834
1997 759,943
1998 686,643
1999 600,756
2000 538,269
Thereafter 1,601,121
__________
Total $5,060,566
==========
Rental expense amounted to $923,582 and $114,877 for the years
ended December 31, 1995 and 1994, respectively.
(7) Indebtedness
Total debt at December 31, 1995 and 1994 consists of the following:
1995 1994
Revolving credit agreement
with interest payable through
March 30, 1996, at which time
outstanding balance will convert
to a term loan with amortization
to begin on March 30,
1996 $ 73,893,001 $85,124,000
Note payable to Westerly
Broadcast, payable May 24,
2000, interest at prime
+2% 7,000,000 --
Subordinated, unsecured notes
payable to Partners, due on
or before May 1, 2003, interest
at 10% payable quarterly
beginning February 1,
1997 26,461,200 25,000,000
Non-interest bearing,
unsecured note payable
to NewMarket Media under a
purchase agreement, payable
May 11, 1997, a final
additional amount may be
due dependent upon the
change in the Consumer Price
Index between the date of the
Note and May 11,
1997 2,000,000 2,000,000
_____________ ____________
Total debt 109,354,201 112,124,000
Current portion of long-term
debt (8,093,000) --
______________ ____________
Long-term debt $101,261,201 $112,124,000
============ ============
On May 11, 1994, the Partnership amended its Revolving Credit/Term
Loan agreement with a commercial bank to total $100,000,000,
pursuant to which the Company owes $73,893,001 at December 31,
1995. Such borrowings are secured by substantially all of the
assets of the Partnership. Interest is due quarterly and is based
on the base lending rate, Eurodollar lending rate, or the CD
lending rate at the option of the Partnership and may apply to all
or any unpaid principal amount. For the years ended December 31,
1995 and 1994, the interest rate ranged from 8.125% to 9.063% and
7.625% to 9.25%, respectively. On March 29, 1996, the Revolving
Credit Agreement terminated and the outstanding balance borrowed
was converted to a term loan. Principal reduction payments will
begin on March 31, 1996 and be made every quarter through June 30,
2001.
The Revolving Credit Agreement contains restrictions which include,
among others, limitations of interest payments on the subordinated
debt, minimum broadcast cash flow requirements and restrictions on
additional borrowings, capital expenditures and lease commitments.
The Partnership must pay an annual commitment fee of one-half
percent of the average daily amount of the Revolving Commitment
which is due quarterly beginning June 30, 1994.
At December 31, 1995, the Partnership was in violation of several
debt covenant provisions. On March 29, 1996, the Partnership re-
negotiated the terms of the debt agreement providing, among other
matters, revised debt covenant provisions and waiver of the
previous default. At December 31, 1995 the Partnership would have
been in compliance with these revised covenants.
The aggregate maturities of long-term debt for each of the five
years subsequent to December 31, 1995 are as follows: 1996,
$8,093,000; 1997, $11,600,000; 1998, $11,900,000; 1999,
$13,300,000; 2000 and thereafter, $64,461,201.
(8) Post Retirement Savings Plan
Effective January 1, 1994, the Partnership entered into a defined
contribution savings plan under which eligible employees may
contribute up to 20% of their compensation. The Partnership's
matching contribution is $25% of the first 4% contributed. The
Partnership's contributions amounted to $34,425 in 1994 and $73,704
in 1995.<PAGE>
Item 7.(a)-2 Historical Interim Financial Statements
Radio Equity Partners, L.P.
(Unaudited)
Consolidated Statements of Income
For the Three Months Ended March 31,
1996 1995
____ ____
REVENUE:
Local $ 7,929,317 $7,142,680
National 1,713,111 1,679,316
Network/Other 358,897 322,174
___________ __________
Net Cash Revenue 10,001,325 9,144,170
Trade 803,402 540,602
___________ __________
Net Revenue 10,804,727 9,684,772
Total Cash Operating
Expenses 7,108,350 6,272,234
Total Trade Operating Expense 656,672 509,123
__________ __________
Total Operating Expense 7,765,022 6,781,357
__________ __________
Operating Income 3,039,705 2,903,415
Other Expense/(Income)
Depreciation 864,738 658,655
Amortization 2,734,875 2,311,243
Interest Expense 2,446,320 2,574,450
Commitment Fee 32,985 16,011
REP Overhead 318,777 232,104
Interest Income (54,261) (44,931)
Other 5,686 34,637
___________ ___________
Net Loss $(3,309,415) $(2,878,754)
=========== ===========
<PAGE>
Radio Equity Partners, L.P.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
MARCH 31, 1996
Assets
Current Assets:
Cash and cash equivalents $5,697,486
Accounts receivable,
less allowance for doubtful
accounts 7,482,716
Prepaid Expenses 475,248
Other Current Assets 815,932
____________
Total current assets 14,471,382
Receivable from Fairfield Communications 332,572
Property, Plant and Equipment
Land 1,492,700
Land improvements 212,761
Buildings and leasehold improvements 1,608,516
Autos 361,203
Equipment 18,929,189
Less: accumulated depreciation 6,323,095
__________
Total property, plant and equipment 16,281,274
Intangible Assets:
Goodwill 141,859,278
Organization costs 6,413,221
Other intangible assets 6,388,055
Less: accumulated amortization 21,427,265
____________
Total intangible assets 133,233,289
Total Assets $164,318,517
============
Liabilities and Partners' Equity
Current liabilities:
Accounts payable $1,203,582
Accrued expenses 7,445,910
Current portion of long-term debt 8,000,000
____________
Total current liabilities 16,649,492
Debt payable to partners 26,468,006
Long-term debt: less portion classified
as current liability 74,800,001
Partners' equity
Equity contribution 63,679,750
Accumulated deficit - prior year (13,969,317)
Accumulated deficit - current year (3,309,415)
------------
Total partners' equity 46,401,018
____________
Total liabilities and partners'
equity $164,318,517
============
<PAGE>
Item 7.(b) Pro Forma Financial Statements
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED) CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
AND US RADIO, INC. AND RADIO EQUITY PARTNERS, L.P. AND SUBSIDIARY
The following pro forma condensed consolidated statements of
operations for the year ended December 31, 1995 and the three
months ended March 31, 1996 give effect to the acquisition of US
Radio, Inc., ("US Radio ") consummated May 15, 1996 and the pending
acquisition of Radio Equity Partners, L.P. and Subsidiary ("REP"),
collectively referred to as "the Acquisitions"). The unaudited pro
forma statements of operations are based on the historical results
of operations of REP, US Radio and the Company, giving effect to
the Acquisitions under the purchase method of accounting as if the
Acquisitions had been consummated on January 1, 1995 and 1996 for
the year ended December 31, 1995 and for the three months ended
March 31, 1996, respectively. The unaudited pro forma balance
sheet is based on historical financial positions of REP, US Radio
and the Company, giving effect to the Acquisitions under the
purchase method of accounting as if the Acquisitions had been
consummated on March 31, 1996. The assumptions and adjustments in
the accompanying notes to the pro forma condensed consolidated
statements of operations and balance sheet are based on a
preliminary estimated purchase price allocation.
These pro forma statements may not be indicative of the results
that actually would have occurred if the Acquisitions had been
consummated on the dates indicated or which may be obtained in the
future.
<PAGE>
CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CLEAR CHANNEL/US RADIO COMBINED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
Year ended December 31, 1995
- -----------------------------------------------------------------
Increase
(Decrease) CCC/
CCC US Radio Income Pro US Radio
Historical(1) Historical(2) Forma Adj. (3) Pro Forma
---------- ----------- -----------------------
Net broadcast
revenue $243,813 $ 27,492 -- $271,305
Station operating
expenses 131,258 15,556 146,814
Depreciation and
amortization 33,769 7,853 $3,259 44,881
Corporate general and
administrative
expenses 7,414 2,632 (2,632) 7,414
----------- --------------------------------------
Station operating
income 71,372 1,451 (627) 72,196
Interest
expense 20,752 6,021 3,669 30,442
Equity in net income of, and
other income from,
nonconsolidated
affiliates 2,927 -- -- 2,927
Other income
(expense) (803) 51 -- (752)
------------ -----------------------------------------
Income (loss) before
income
taxes 52,744 (4,519) (4,296) 43,929
Income tax (expense)/
benefit (20,730) 223 1,721 (18,786)
------------ ----------------------------------------
Net income
(loss) $ 32,014 $ (4,296) $ (2,575) $25,143
======== ======== =========== ========
Net income
per common
share $ .91 $ .72
======== ========
Weighted average common
shares and common share
equivalents
outstanding 35,100 35,100
======== ========
<PAGE>
Three months ended March 31, 1996
- ------------------------------------------------------------------
Increase
(Decrease) CCC/
CCC US Radio Income Pro US Radio
Historical(4) Historical(5) Forma Adj. (6) Pro Forma
----------- -----------------------------------------
Net broadcast
revenue $ 62,209 $ 6,919 $ 69,128
Station operating
expenses 38,230 4,567 42,797
Depreciation and
amortization 8,755 1,453 757 10,965
Corporate general and
administrative
expenses 1,674 641 (641) 1,674
----------- --------------------------------------
Station operating
income 13,550 258 (116) 13,692
Interest
expense 5,424 1,625 548 7,597
Equity in net income of,
and other income from,
nonconsolidated
affiliates 875 -- -- 875
Other income
(expense) 205 -- -- 205
------------ -----------------------------------------
Income (loss) before
income
taxes 9,206 (1,367) (664) 7,175
Income tax (expense)/
benefit (2,968) -- 444 (2,524)
------------ ----------------------------------------
Net income
(loss) $ 6,238 $ (1,367) $ (220) $ 4,651
======= ======= ========= =======
Net income per common
share $ .18 $ .13
======== ========
Weighted average common
shares and common share
equivalents
outstanding 35,205 35,205
======== ========
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
CLEAR CHANNEL COMMUNICATIONS, INC./US RADIO, INC.
Year ended December 31, 1995
(1) Historical Condensed Consolidated Statement of Operations for
Clear Channel Communications, Inc. and Subsidiaries.
(2) Historical Condensed Consolidated Statement of Operations for
US Radio, Inc. acquired on May 15, 1996.
(3) Represents the pro forma effect of the acquisition of US Radio,
Inc., assuming it was acquired January 1, 1995.
Increase
(Decrease)
Income
(in Thousands)
-------------------
(a) Increase in amortization
of license & goodwill
resulting from a write
up of license & goodwill
and a change in amortizable
life from 40 years (US Radio)
to 25 years (CCC) $(3,259)
(b) Increase in interest expense
due to a higher amount of
average debt outstanding which
was partially offset
by a lower average interest rate
(6.8% average rate for CCC for
1995) (3,669)
(c) Elimination of corporate general and
administrative expenses
resulting from the elimination of the
US Radio, Inc. corporate
office 2,632
(d) Tax benefit of the US Radio, Inc.
historical loss and the tax
effect of the pro forma adjustments at
the statutory tax rate for
1995 (35%) 1,721
<PAGE>
Three months ended March 31, 1996
(4) Historical Condensed Consolidated Statement of Operations for
the three months ended March 31, 1996 for Clear Channel
Communications, Inc. and Subsidiaries.
(5) Historical Condensed Consolidated Statement of Operations for
the three months ended March 31, 1996 for US Radio, Inc., acquired
on May 15, 1996.
(6) Represents the pro forma effect of the acquisition of US Radio,
Inc., assuming it was acquired January 1, 1996.
Increase
(Decrease)
Income
(in Thousands)
-------------------
(a) Increase in amortization of
license & goodwill
resulting from a write up of
license & goodwill
and a change in amortizable
life from 40 years (US Radio)
to 25 years (CCC) $(757)
(b) Increase in interest expense
due to a higher amount
of average debt outstanding
which was offset by a
lower average interest rate
(6.1% average rate for
CCC for the three months
ended March 31, 1996) (548)
(c) Elimination of corporate
general and administrative
expenses resulting from the
elimination of the US Radio,
Inc. corporate office 641
(d) Tax benefit of the US Radio,
Inc. historical loss and the
tax effect of the pro forma
adjustments at the statutory
tax rate for 1996 (35%) 444
<PAGE>
CLEAR CHANNEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CLEAR CHANNEL/US RADIO/RADIO EQUITY PARTNERS COMBINED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
Year ended December 31, 1995
- ------------------------------------------------------------------
Increase CCC/
(Decrease) US Radio/
CCC/US Radio REP Pro REP
Pro Forma(7) Historical(8) Forma Adj. (9) Pro Forma
---------- ----------- -----------------------
Net broadcast
revenue $271,305 $ 46,498 -- $317,803
Station operating
expenses 146,814 24,384 171,198
Depreciation and
amortization 44,881 13,846 $(1,878) 56,849
Corporate general and
administrative
expenses 7,414 6,337 (6,337) 7,414
----------- --------------------------------------
Station operating
income 72,196 1,931 8,215 82,342
Interest
expense 30,442 10,442 5,879 46,763
Equity in net income of, and
other income from,
nonconsolidated
affiliates 2,927 -- -- 2,927
Other income
(expense) (752) (10) -- (762)
------------ -----------------------------------------
Income (loss) before
income
taxes 43,929 (8,521) 2,336 37,744
Income tax (expense)/
benefit (18,786) -- 2,164 (16,622)
------------ ----------------------------------------
Net income
(loss) $ 25,143 $ (8,521) $ 4,500 $21,122
======== ======== =========== ========
Net income per common
share $ .72 $ .60
======== ========
Weighted average common
shares and common share
equivalents
outstanding 35,100 35,100
======== ========
<PAGE>
Three months ended March 31, 1996
------------------------------------------------------------------
Increase CCC/
(Decrease) US Radio/
CCC/US Radio REP Pro REP
Pro Forma(10) Historical(11) Forma Adj. (12) Pro Forma
----------- -----------------------------------------
Net broadcast
revenue $ 69,128 $ 10,805 $ 79,933
Station
operating
expenses 42,797 6,668 49,465
Depreciation and
amortization 10,965 3,599 $ (608) 13,956
Corporate general
and
administrative
expenses 1,674 1,416 (1,416) 1,674
----------- ----------- ---------------------------
Station
operating
income
(loss) 13,692 (878) 2,024 14,838
Interest
expense 7,597 2,446 1,214 11,257
Equity in net
income of,
and other
income from,
nonconsolidated
affiliates 875 -- -- 875
Other income
(expense) 205 15 -- 220
------------ -----------------------------------------
Income (loss)
before
income taxes 7,175 (3,309) 810 4,676
Income tax
(expense)/
benefit (2,524) -- 875 (1,649)
------------ ----------------------------------------
Net income
(loss) $ 4,651 $ (3,309) $ 1,685 $ 3,027
======= ======= ========= =======
Net income per common
share $ .13 $ .09
======== ========
Weighted average common
shares and common share
equivalents
outstanding 35,205 35,205
======== ========
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
CLEAR CHANNEL COMMUNICATIONS, INC./US RADIO, INC./
RADIO EQUITY PARTNERS, L.P.
Year ended December 31, 1995
(7) Historical Condensed Consolidated Statement of Operations for Clear
Channel Communications, Inc. and Subsidiaries, including the pro forma
effect of the acquisition of US Radio, Inc., assuming it was acquired
January 1, 1995.
(8) Historical Condensed Consolidated Statement of Operations for Radio
Equity Partners, L.P., acquisition announced on May 9, 1996.
(9) Represents the pro forma effect of the acquisition of Radio Equity
Partners, L.P., assuming it was acquired January 1, 1995.
Increase
(Decrease)
Income
(in Thousands)
-------------------
(a) Decrease in amortization
of license & goodwill
resulting from a change in
amortizable life from
15 years (REP) to 25 years
(CCC) $1,878
(b) Increase in interest
expense due to a higher
amount of average debt
outstanding which was
partially offset by a lower
average interest rate (6.8%
average rate for CCC for
1995) (5,879)
(c) Elimination of corporate
general and administrative
expenses resulting from the
elimination of the Radio
Equity Partners, L.P.
corporate office 6,337
(d) Tax benefit of the Radio
Equity Partners, L.P.
historical loss and the
tax effect of the pro forma
adjustments at the statutory
tax rate for 1995
(35%) 2,164
<PAGE>
Three months ended March 31, 1996
(10) Historical Condensed Consolidated Statement of Operations for the
three months ended March 31, 1996 for Clear Channel Communications,
Inc. and Subsidiaries, including the pro forma effect of the
acquisition of US Radio, Inc., assuming it was acquired January 1,
1996.
(11) Historical Condensed Consolidated Statement of Operations for the
three months ended March 31, 1996 for Radio Equity Partners, L.P.,
acquisition announced on May 9, 1996.
(12) Represents the pro forma effect of the acquisition of Radio Equity
Partners, L.P., assuming it was acquired January 1, 1996.
Increase
(Decrease)
Income
(in Thousands)
-------------------
(a) Decrease in amortization
of license & goodwill
resulting from a change in
amortizable life from 15
years (Radio Equity
Partners, L.P.) to 25
years (CCC) $608
(b) Increase in interest expense
due to a higher amount of
average debt outstanding which
was offset by a lower average
interest rate (6.1% average rate
for CCC for the three months
ended March 31, 1996) (1,214)
(c) Elimination of corporate
general and administrative
expenses resulting from
the elimination of the
Radio Equity Partners, L.P.
corporate office 1,416
(d) Tax benefit of the Radio
Equity Partners, L.P.
historical loss and the
tax effect of the pro forma
adjustments at the statutory
tax rate for 1996 (35%) 875
<PAGE>
CLEAR CHANNEL COMMUNICATIONS, INC.
CLEAR CHANNEL/US RADIO COMBINED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
(Dollars in thousands, except per share data)
March 31, 1996
- -----------------------------------------------------------------------
Clear Channel/
US Radio US Radio
Historical Historical Pro Forma Combined
Clear Channel(13) US Radio(14) Adjustments(15) Pro Forma
-----------------------------------------------------------------
ASSETS
Current assets:
Cash and cash
equivalents $ 12,006 $ 239 $ 12,245
Accounts
receivable,
net 45,325 5,602 50,927
Film rights -
current 11,340 -- 11,340
Other current
assets -- 1,189 1,189
----------- ------------ -------------- ------------
Total Current
Assets 68,671 7,030 -- 75,701
Property, Plant &
Equipment 165,211 13,676 178,887
Less accumulated
depreciation (62,224) (2,693) (64,917)
------------------------- --------------- ------------
102,987 10,983 -- 113,970
Intangible assets:
Leases 1,455 1,455
Network affiliation
agreements 23,423 23,423
Licenses and
goodwill 322,682 85,822 39,391 447,895
Covenants
not-to-
compete 22,972 22,972
Other intangible
assets 4,522 4,636 (4,636) 4,522
------------------------- --------------- -------------
375,054 90,458 34,755 500,267
Less accumulated
amortization (56,862) (8,700) 8,700 (56,862)
----------------------------------------- -------------
318,192 81,758 43,455 443,405
Other assets:
Film rights - noncurrent,
net of
accumulated
amortization 13,641 13,641
Equity investments
in, and advances
to, nonconsolidated
affiliates 81,711 --- 81,711
Other
assets 8,382 1,263 433 10,078
Other
investments 1,395 1,395
------------------------------------------------------------
TOTAL ASSETS $594,979 $101,034 $ 43,888 $739,901
======= ======= ======== =======
<PAGE>
LIABILITIES
Current
liabilities:
Accounts
payable $ 6,186 $ 535 $ 6,721
Accrued
interest 1,542 605 (605) 1,542
Accrued
expenses 5,022 1,756 6,778
Accrued income and
other
taxes 3,025 131 3,156
Current portion
of long-term
debt 3,405 3,888 (3,888) 3,405
Current portion
of film rights
liability 11,868 -- 11,868
-------------------------- ----------- ------------
Total Current
Liabilities 31,048 6,915 (4,493) 33,470
Long-Term
Debt 366,569 61,329 81,171 509,069
Film Rights
Liability 15,090 -- 15,090
Deferred Income
Taxes 5,553 -- 5,553
Minority
Interest 6,447 -- 6,447
Shareholders' equity:
Preferred
Stock --- --- --
Common Stock,
Class A 3,461 10 (10) 3,461
Common Stock,
Class B --- 2 (2) --
Additional paid-in
capital 91,489 39,666 (39,666) 91,489
Retained earnings (accumulated
deficit) 74,597 (6,888) 6,888 74,597
Other 896 --- 896
Cost of shares held
in treasury (171) --- (171)
------------------------------ --------------------------
Total Shareholders'
Equity 170,272 32,790 (32,790) 170,272
----------------------------- --------------------------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $594,979 $101,034 $ 43,888 $739,901
======== ========= ======= ========
See Accompanying Notes to Unaudited Pro Forma Financial Information
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
CLEAR CHANNEL COMMUNICATIONS, INC./US RADIO, INC.
March 31, 1996
(13) Historical Condensed Consolidated Balance Sheet as of March
31, 1996 for Clear Channel Communications, Inc. and Subsidiaries.
(14) Historical Condensed Consolidated Balance Sheet as of March
31, 1996 for US Radio, Inc., acquired on May 15, 1996.
(15) On May 15, 1996, the Company purchased 100% of the
outstanding shares of common stock of US Radio, Inc. for
approximately $142.5 million cash and assumption of approximately
$2,400,000 in current liabilities. The transaction has been
accounted for as a purchase, and the accounts of US Radio, Inc.
have been included in the accompanying financial statements as of
March 31, 1996. The increases (decreases) in the values of the
assets acquired and liabilities assumed (as if the acquisition had
been consummated March 31, 1996) are as follows:
Increase
(Decrease)
Licenses & goodwill 39,391
Other intangible assets (4,636)
Accumulated Amortization (8,700)
Deferred tax assets (other assets) 433
Accrued interest payable (605)
Current portion of long-term debt (3,888)
Long-term debt 81,171
Common stock, Class A (10)
Common stock, Class B (2)
Additional paid-in capital (39,666)
Retained earnings (accumulated
deficit) 6,888
<PAGE>
CLEAR CHANNEL COMMUNICATIONS, INC.
CLEAR CHANNEL/US RADIO/RADIO EQUITY PARTNERS COMBINED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
(Dollars in thousands, except per share data)
March 31, 1996
- -----------------------------------------------------------------
Clear Channel/
US Radio/
REP REP
CCC/ US Radio Historical Pro Forma Combined
Pro Forma(16) REP(17) Adjustments(18) Pro Forma
-----------------------------------------------------------------
ASSETS
Current assets:
Cash and cash
equivalents $ 12,245 $ 5,697 (5,697) $ 12,245
Accounts
receivable,
net 50,927 7,483 (83) 58,327
Film rights -
current 11,340 -- 11,340
Other current
assets 1,189 1,624 (1,624) 1,189
----------------------- --------------------------
Total Current
Assets 75,701 14,804 (7,404) 83,101
Property, Plant &
Equipment 178,887 22,604 396 201,887
Less accumulated
depreciation (64,917) (6,323) 6,323 (64,917)
----------------------------------------------------
113,970 16,281 6,719 136,970
Intangible assets:
Leases 1,455 1,455
Network affiliation
agreements 23,423 23,423
Licenses and
goodwill 447,895 148,444 61,156 657,495
Covenants
not-to-
compete 22,972 22,972
Other intangible
assets 4,522 6,216 (6,216) 4,522
-----------------------------------------------------
500,267 154,660 54,940 709,867
Less accumulated
amortization (56,862) (21,427) 21,427 (56,862)
------------------------------------------------------
443,405 133,233 76,367 653,005
Other assets:
Film rights - noncurrent,
net of
accumulated
amortization 13,641 13,641
Equity investments
in, and
advances to,
nonconsolidated
affiliates 81,711 --- 81,711
Other
assets 10,078 -- -- 10,078
Other
investments 1,395 1,395
------------------------------------------------------------
TOTAL ASSETS $739,901 $164,318 $ 75,682 $979,901
======= ======= ======== =======
<PAGE>
LIABILITIES
Current
liabilities:
Accounts
payable $ 6,721 $ 1,203 (1,203) $ 6,721
Accrued
interest 1,542 -- -- 1,542
Accrued
expenses 6,778 7,446 (7,446) 6,778
Accrued income and
other
taxes 3,156 -- 3,156
Current portion
of long-term
debt 3,405 8,000 (8,000) 3,405
Current portion
of film rights
liability 11,868 -- 11,868
-------------------------- -----------------------
Total Current
Liabilities 33,470 16,649 (16,649) 33,470
Long-Term
Debt 509,069 101,268 138,732 749,069
Film Rights
Liability 15,090 -- 15,090
Deferred Income
Taxes 5,553 -- 5,553
Minority
Interest 6,447 -- 6,447
Shareholders' equity:
Partners'
equity: -- 46,401 (46,401) --
Preferred
Stock --- --- ---
Common Stock,
Class A 3,461 --- --- 3,461
Additional paid-in
capital 91,489 --- --- 91,489
Retained
earnings 74,597 --- --- 74,597
Other 896 --- 896
Cost of shares held
in treasury (171) --- (171)
--------------------------------------------------------
Total Shareholders'
Equity 170,272 46,401 (46,401) 170,272
----------------------------- --------------------------
TOTAL LIABILITIES
AND SHAREHOLDERS'
EQUITY $739,901 $164,318 $ 75,682 $979,901
======== ========= ======= ========
See Accompanying Notes to Unaudited Pro Forma Financial Information
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
CLEAR CHANNEL COMMUNICATIONS, INC./US RADIO, INC./
RADIO EQUITY PARTNERS, L.P.
March 31, 1996
(16) Historical Condensed Consolidated Balance Sheet as of March
31, 1996 for Clear Channel Communications, Inc. and Subsidiaries,
including the pro forma effect of the acquisition of US Radio,
Inc., acquired on May 15, 1996.
(17) Historical Condensed Consolidated Balance Sheet as of March
31, 1996 for Radio Equity Partners, L.P., acquisition announced on
May 9, 1996.
(18) On May 9, 1996, the Company announced that it had entered
into a definitive agreement to purchase substantially all of the
assets of Radio Equity Partners, L.P. for approximately $240
million cash. The transaction has been accounted for as a
purchase, and the accounts of Radio Equity Partners, L.P. have been
included in the accompanying financial statements as of March 31,
1996. The increases (decreases) in the values of the assets
acquired (as if the acquisition had been consummated March 31,
1996) are as follows:
Increase
(Decrease)
Cash (5,697)
Accounts Receivable (83)
Other Current Assets (1,624)
Property, Plant and Equipment 396
Accumulated Depreciation (6,323)
Licenses & goodwill 61,156
Other intangible assets (6,216)
Accumulated Amortization (21,427)
Accounts payable (1,203)
Accrued expenses (7,446)
Current portion of long-term debt (8,000)
Long-term debt 138,732
Partners' Equity (46,401)
<PAGE>
Item 7.(c)
See index to exhibits following "Signatures."
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Clear Channel Communications, Inc.
Date May 23, 1996 By /s/L. LOWRY MAYS
L. Lowry Mays, President
Date May 23, 1996 By /s/HERBERT W. HILL, JR.
Herbert W. Hill, Jr.
Vice President/Controller and
Principal Financial Officer
<PAGE>
Clear Channel Communications, Inc.
Form 8-K
Item 7.(c) Index to Exhibits
(a) 3.1 -- Articles of Incorporation, as amended, of Registrant
(m) 3.11 -- Articles of Amendment to the Articles of Incorporation
of Clear Channel Communications, Inc.
(a) 4 -- Buy-Sell Agreement among Clear Channel Communications,
Inc., L. Lowry Mays, B. J. McCombs, John M. Schaefer
and John W. Barger dated May 31, 1977.
(a)10.1 -- Incentive Stock Option Plan of Clear Channel
Communications, Inc. as of January 1, 1984.
(b)10.2 -- Television Asset Purchase Agreement dated January 27,
1992, by and between Chase Broadcasting of Memphis,
Inc. and Clear Channel Television, Inc.
(b)10.3 -- Radio Asset Purchase Agreement dated January 31, 1992,
by and between Noble Broadcasting of Connecticut, Inc.
and Clear Channel Radio, Inc.
(b)10.4 -- Radio Asset Purchase Agreement dated April 19, 1992,
by and between Edens Broadcasting, Inc. and Clear
Channel Radio, Inc.
(k)10.33 -- Radio Asset Purchase Agreement dated January 31, 1993,
by and between KHFI Venture, LTD. and Clear Channel
Radio, Inc.
(l)10.34 -- Radio Asset Purchase Agreement dated December 28,
1992, by and between Westinghouse Broadcasting
Company, Inc. and Clear Channel Radio, Inc.
(c)10.5 -- Radio Asset Purchase Agreement dated December 23,
1992, by and between Inter-Urban Broadcasting of New
Orleans Partnership and Snowden Broadcasting, Inc.
(d)10.6 -- Television Asset Purchase Agreement dated August 19,
1993, by and between Television Marketing Group of
Memphis, Inc. and Clear Channel Television, Inc.
(e)10.7 -- Radio Asset Purchase Agreement April 1, 1993, by and
Capital Broadcasting of Virginia, Inc. and Clear
Channel Radio, Inc.
(f)10.8 -- Television Asset Purchase Agreement dated August 31,
1993, by and between Nationwide Communications, Inc.
and Clear Channel Television, Inc.
(g)10.9 -- Radio Asset Merger Agreement dated March 22, 1994, by
and between Metroplex Communications, Inc. and Clear
Channel Radio, Inc.
(h)10.10 -- Radio Partnership Interest Purchase Agreement dated
April 5, 1994, by and between Cook Inlet
Communications, Inc. and WCC Associates and Clear
Channel Radio, Inc.
(i)10.11 -- Television Asset Purchase Agreement September 12,1994,
by and between Heritage Broadcasting Company of New
York, Inc. and Clear Channel Television, Inc. and
Clear Channel Television Licenses, Inc.
(j)10.12 -- Radio Asset Purchase Agreement dated November 17,1994,
by and between Noble Broadcast of Houston, Inc. and
Clear Channel Radio, Inc.
(k)10.13 -- Australian Radio Network Shareholders Agreement dated
February, 1995, by and between APN Broadcasting
Investments Pty Ltd, Australian Provincial Newspapers
Holdings Limited, APN Broadcasting Pty Ltd and Clear
Channel Radio, Inc. and Clear Channel Communications,
Inc.
(l)10.14 -- $600,000,000 Amended and Restated Credit Agreement
Among Clear Channel Communications, Inc., Certain
Lenders, and NationsBank of Texas, N.A., as
Administrative Lender, dated October 19, 1995.
(m)10.15 -- Clear Channel Communications, Inc. 1994 Incentive
Stock Option Plan.
(m)10.16 -- Clear Channel Communications, Inc. 1994 Nonqualified
Stock Option Plan.
(m)10.17 -- Clear Channel Communications, Inc. Directors'
Nonqualified Stock Option Plan.
(m)10.18 -- Option Agreement for Officer
(n)10.19 -- Employment Agreement between Clear Channel
Communications, Inc. and L. Lowry Mays
(o)10.20 -- Stock Purchase Agreement, dated as of March 4, 1996,
by and among US Radio Stations, L.P., Blackstone USR
Capital Partners L.P., Blackstone USR Offshore Capital
Partners L.P., Blackstone Family Investment
Partnership II L.P., BCP Radio L.P., BCP Offshore
Radio L.P.,, US Radio, Inc., Clear Channel
Communications of Memphis, Inc., and Clear Channel
Communications, Inc.
10.21 -- Asset Purchase Agreement, dated as of May 9, 1996, by
and among REP New England G.P., REP Southeast G.P.,
REP Ft. Myers G.P., REP Rhode Island G.P., REP
Florida, G.P., REP WHYN G.P., REP WWBB G.P., S.E.
Licensee G.P., REP WCKT G.P. and RI Licensee G.P.,
Radio Station Management, Inc., Clear Channel Radio,
Inc., and Clear Channel Radio Licenses, Inc.
(a) -- Incorporated by reference to the exhibits of the
Company's Registration Statement on Form S-1(Reg. No.
289161) dated April 19, 1984.
(b) -- Incorporated by reference to the Registrant's Form 8-K
dated July 14, 1992.
(c) -- Incorporated by reference to the Registrant's Form
10-Q dated May 12, 1993.
(d) -- Incorporated by reference to the Registrant's Form 8-K
dated September 2, 1993.
(e) -- Incorporated by reference to the Registrant's Form
10-Q dated November 1, 1993.
(f) -- Incorporated by reference to the Registrant's Form 8-K
dated October 27, 1993.
(g) -- Incorporated by reference to the Registrant's Form 8-K
dated October 26, 1994.
(h) -- Incorporated by reference to the Registrant's Form
10-Q dated November 14 1994.
(i) -- Incorporated by reference to the Registrant's Form 8-K
dated December 14, 1994.
(j) -- Incorporated by reference to the Registrant's Form 8-K
dated January 13, 1995.
(k) -- Incorporated by reference to the Registrant's Form 8-K
dated May 26, 1995.
(l) -- Incorporated by reference to the Registrant's Form
10-Q dated November 14, 1995.
(m) -- Incorporated by reference to the Registrant's Form S-8
dated November 20, 1995.
(n) -- Incorporated by reference to the Registrant's Form
10-K dated March 29, 1996 as amended by form 10-K/A
dated April 19, 1996.
(o) -- Incorporated by reference to the Registrant's Form 8-K
dated May 24, 1996.
<PAGE>
Exhibit 10.21 -- Asset Purchase Agreement, dated as of May 9, 1996,
by and among REP New England G.P., REP Southeast G.P., REP Ft.
Myers G.P., REP Rhode Island G.P., REP Florida, G.P., REP WHYN
G.P., REP WWBB G.P., S.E. Licensee G.P., REP WCKT G.P. and RI
Licensee G.P., Radio Station Management, Inc., Clear Channel
Radio, Inc., and Clear Channel Radio Licenses, Inc.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is
entered into this 9th day of May, 1996 by and among REP New England
G.P., REP Southeast G.P., REP Ft. Myers G.P., REP Rhode Island G.P.
and REP Florida G.P. ("REP Florida") (collectively the "Asset
Sellers") and REP WHYN G.P., REP WWBB G.P., S.E. Licensee G.P., REP
WCKT G.P., and RI Licensee G.P. (collectively the "Licensees" and
together with the Asset Sellers the "Sellers"), each a Delaware
general partnership, Radio Station Management, Inc., a Delaware
corporation, as managing partner of each Seller ("RSM"), and Clear
Channel Radio, Inc. ("CCR") and Clear Channel Radio Licenses, Inc.
("CCRL"), each a Nevada corporation (CCR and CCRL, collectively
"Buyer").
WHEREAS, the Asset Sellers own the non-license assets
of the radio broadcast stations on Schedule 2.1(a) hereto (each a
"Station" and collectively the "Stations");
WHEREAS, the Licensees and REP Florida have been
issued the FCC Licenses for and operate the Stations as set forth
in Schedule 2.1(a);
WHEREAS, the FCC Licenses may only be assigned with
the prior approval of the FCC; and
WHEREAS, Buyer desires to purchase the Assets, other
than the Excluded Assets, (as each term is hereinafter defined)
from Sellers, and Sellers desire to sell such Assets to Buyer, all
in accordance with and subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND REFERENCES
Unless the context otherwise specifies or requires,
terms used herein shall have the respective meanings assigned
thereto as follows (such definitions to be equally applicable to
both the singular and plural forms of the terms defined). Unless
otherwise specified, all references herein to "Articles" or
"Sections" are to Articles or Sections of this Agreement.
Accounts Receivable means all accounts receivable with
respect to the Stations as of midnight of the day immediately
preceding the Closing Date.
Accounts Receivable Adjustment shall mean the
adjustment determined in accordance with Section 2.6(b).
Additional Agreements mean any Contracts executed and
delivered between the date hereof and the Closing Date.
Adjustment Date shall have the meaning specified in
Section 2.6(a).
Assets shall have the meaning specified in Section
2.1.
Assignment Applications shall have the meaning
specified in Section 5.1.
Assignment of Contracts means an Assignment of
Contracts, dated as of the Closing Date and executed by the Asset
Sellers, substantially in the form attached hereto as Exhibit A.
Assignment of Leases means an Assignment of Leases,
dated as of the Closing Date and executed by the Asset Sellers,
substantially in the form attached hereto as Exhibit B.
Assignment of FCC Licenses means Assignments of FCC
Licenses, dated as of the Closing Date and executed by Licensees
and REP Florida, substantially in the form or forms attached hereto
as Exhibit C.
Assumption Agreement means an Assumption Agreement,
dated the Closing Date and executed by Buyer and Sellers,
substantially in the form attached hereto as Exhibit D.
Benefit Arrangement means a benefit program or
practice providing for bonuses, incentive compensation, vacation
pay, severance pay, insurance, restricted stock, stock options,
employee discounts, company cars, tuition reimbursement or any
other perquisite or benefit (including, without limitation, any
fringe benefit under Section 132 of the Code) to employees,
officers or independent contractors that is not a Plan.
Bill of Sale means a Bill of Sale and Assignment of
Assets, dated as of the Closing Date and executed by Asset Sellers,
substantially in the form attached hereto as Exhibit E.
Buyer Documents shall mean, collectively, this
Agreement, the Support Agreement, the Escrow Agreement, the
Assumption Agreement and the other documents to be executed and
delivered by Buyer under Section 11.3 and as otherwise contemplated
herein.
Buyer Indemnified Parties shall have the meaning
specified in Section 12.2.
Closing means each closing of the assignment and sale
of the Assets, other than the Excluded Assets, to Buyer and the
purchase of such Assets and the assumption of the liabilities to be
assumed hereunder by Buyer as contemplated hereunder.
Closing Date means the time and date on which each
Closing takes place, as established by Section 11.1.
Code means the Internal Revenue Code of 1986, as
amended, and all applicable regulations promulgated pursuant
thereto.
Communications Act means the Communications Act of
1934, as amended and the rules and regulations of the FCC
promulgated pursuant thereto.
Confidentiality Agreement shall have the meaning
specified in Section 7.1.
Contracts mean the contracts, agreements, and leases
to which any Seller is a party or which relate to any Station.
Current Balance Sheet Date shall have the meaning
specified in Section 3.5.
Dames & Moore Report shall have the meaning specified
in Section 3.19(b).
Deeds means the warranty deeds dated as of the Closing
Date and executed and delivered by the relevant Asset Sellers
conveying title to the Real Property owned by Sellers in accordance
with this Agreement.
Deposit shall mean the Pre-Closing Deposit and the
Post-Closing Deposit.
Encumbrances mean any mortgages, pledges, liens,
claims, security interests, agreements, restrictions, defects in
title, easements or encumbrances.
Environmental Laws means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
("CERCLA") as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), 42 U.S.C. Section 9601 et seq.; the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1802 et
seq.; the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C. Section
1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et
seq.; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.; or any
other applicable federal, state, or local laws, including any
plans, rules, regulations, orders, or ordinances adopted, pursuant
to the preceding laws or other similar laws, regulations, rules,
orders, or ordinances now or hereafter in effect relating to
Hazardous Materials generation, production, use, storage,
treatment, transportation or disposal.
ERISA means the Employee Retirement Income Security
Act of 1974, as amended, and all applicable regulations promulgated
pursuant thereto.
Escrow Agent shall have the meaning specified in
Section 2.3.
Escrow Agreement shall have the meaning specified in
Section 2.3.
Excluded Assets shall have the meaning specified in
Section 2.2.
FCC means the Federal Communications Commission.
FCC Licenses shall have the meaning specified in
Section 2.1(a).
FCC Order means an order or orders of the FCC, or of
the Chief, Mass Media Bureau of the FCC, acting under delegated
authority, consenting to the assignment to Buyer of the FCC
Licenses for a Station or the Stations, as the case may be, and
granting the Market Rule Waiver, if applicable to such Station, as
proposed in the applications therefor, without conditions which are
materially adverse to Buyer or which in any material way diminish
the operating rights with respect to such Station and the Assets
related thereto, except any such conditions expressly accepted by
Buyer in writing.
Final Order means an FCC Order as to which the time
for filing a request for administrative or judicial review, or for
instituting administrative review sua sponte, shall have expired
without any such filing having been made or notice of such review
having been issued; or, in the event of such filing or review sua
sponte, as to which such filing or review shall have been disposed
of favorably to the grant and the time for seeking further relief
with respect thereto shall have expired without any request for
such further relief having been filed.
GAAP shall have the meaning specified in Section 3.5.
Governmental Authority means any agency, board,
bureau, court, commission, department, instrumentality or
administration of the United States government, any state
government or any local or other governmental body in a state of
the United States or the District of Columbia.
Group shall have the meaning specified in Section
13.1(b).
Hart-Scott-Rodino means the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and all applicable
regulations promulgated pursuant thereto.
HSR Filing shall have the meaning specified in Section
5.2.
Hazardous Materials means any wastes, substances, or
materials (whether solids, liquids or gases) that are hazardous or
toxic, including without limitation, substances defined as
"hazardous wastes," "hazardous substances," "toxic substances,"
"radioactive materials," or other similar designations in any
Environmental Laws. "Hazardous Materials" includes polychlorinated
biphenyls (PCBs), asbestos, lead-based paints and petroleum and
petroleum products.
Indemnified Party and Indemnifying Party shall have
the respective meanings specified in Section 12.5(a).
Intellectual Property shall have the meaning specified
in Section 2.1(d).
IRS means the Internal Revenue Service.
Losses means any and all demands, claims, complaints,
actions or causes of action, suits, proceedings, investigations,
arbitrations, assessments, losses, damages (including diminution in
value), liabilities, obligations (including those arising out of
any action, such as any settlement or compromise thereof or
judgment or award therein) and any costs and expenses, including,
without limitation to, interest, penalties and reasonable
attorneys' fees and disbursements.
Market Rule Waiver means any permanent waiver of the
FCC's one-to-a-market rule (47 C.F.R. Section 73.3555(c)) necessary to
consummate the transactions contemplated by this Agreement with
respect to the Stations located in the Providence, Rhode Island and
Memphis, Tennessee markets.
Material Adverse Effect means any event or condition
which has a material adverse effect (financial or otherwise) on the
Assets (other than the Excluded Assets) to be acquired in a Closing
hereunder taken as a whole or on the ability of any Station to be
acquired in a Closing hereunder to conduct its operations
substantially as previously conducted, provided, however, that
solely for the purpose of the representation to be made as of the
date of this Agreement (and not subsequently) under Section 3.6 the
term shall be deemed to apply to all of the Assets (other than the
Excluded Assets) and each of the Stations which are the subject of
this Agreement.
Ordinary Course of Business means, with respect to
Sellers, the ordinary course of business consistent with past
practices of Sellers, provided, however, that the following events
are not in the Ordinary Course of Business: (i) any format change
in any Station except on 180 days prior written notice to Buyer;
(ii) entering into any new Talent Contract calling for payments in
excess of $100,000; or (iii) entering into any new barter agreement
with a term, a balance or a subject matter which is unusual or
unprecedented in light of Sellers' past practices or is likely to
generate a material negative barter balance affecting the Buyer.
Partial Closing shall have the meaning specified in
Section 15.2.
Permitted Encumbrances means (a) easements that do not
adversely affect the full use and enjoyment of the Real Property
for the purposes for which it is currently used or detract from its
value in any material respect; (b) imperfections of title and non-
consensual encumbrances, if any, which, in the aggregate, do not
detract from the marketability or value of the properties subject
thereto in any material respect and do not impair the operations of
the owner thereof; (c) liens for taxes not yet due and payable; (d)
liens of Seller's lenders, all of which shall be removed at the
Closing; and (e) Encumbrances (other than consensual financing
liens) shown on Seller's Title Insurance Policies.
Plan means any plan, program or arrangement that is an
"employee benefit plan" as such term is defined in Section 3(3) of
ERISA and (i) which was or is established or maintained by Sellers;
(ii) to which Sellers contributed or were obligated to contribute;
or (iii) which provides or promises benefits to any person who
performs or who has performed services for Sellers and because of
those services is or has been (A) a participant therein or (B)
entitled to benefits thereunder.
Pre-Closing Deposit shall have the meaning specified
in Section 2.3(a).
Post-Closing Deposit shall have the meaning specified
in Section 2.3(a).
Purchase Price shall have the meaning specified in
Section 2.4.
Real Property means all realty, towers, fixtures,
easements, rights-of-way, and leasehold interests in real property,
buildings and improvements owned, leased or used in the business
and operations of any of the Stations.
REP shall have the meaning specified in Section 3.5.
REP Letter means an agreement by REP to undertake on
its own behalf and on behalf of REP Radio Corporation not to offer
employment elsewhere than at the Stations to any employees of
Sellers who Buyer has expressed an intent to employ or who are in
fact employed by Buyer without the prior written approval of Buyer.
Seller Documents shall mean, collectively, this
Agreement, the Escrow Agreement, the Deeds, the Assignment of
Leases, the Bill of Sale, the Assignment of FCC Licenses, the
Assignment of Contracts, the Assumption Agreement, and the other
documents to be executed and delivered by any Sellers under Section
11.2 or as otherwise contemplated herein.
Seller Indemnified Parties shall have the meaning
specified in Section 12.3.
Seller Tax Returns means all federal, state, local,
foreign and other applicable Tax returns and declarations of
estimated Tax reports required to be filed by Sellers.
Station Contracts shall have the meaning specified in
Section 2.1(e).
Station Employee Benefit Plans shall have the meaning
specified in Section 3.17.
Support Agreement means the agreement in the form of
Exhibit F of Clear Channel Communications, Inc. ("CCC"), the
ultimate parent of Buyer, with respect to the payment of the
Purchase Price.
Survey means any survey heretofore provided by Sellers
to Buyer relating to any parcel or parcels of Real Property.
Talent Contracts shall have the meaning specified in
Section 6.1(e).
Taxes means all federal, state and local taxes
(including, without limitation, income, profit, franchise, sales,
use, real property, personal property, ad valorem, excise,
employment, social security and wage withholding taxes) and
installments of estimated taxes, assessments, deficiencies, levies,
imports, duties, license fees, registration fees, withholdings, or
other similar charges of every kind, character or description
imposed by any Governmental Authorities, and any interest,
penalties or additions to tax imposed thereon or in connection
therewith.
Title Insurance Policies mean any title insurance
policies heretofore provided by Sellers to Buyer relating to any
Real Property.
True Lease means a lease at the termination of which
the lessor retains title to the property or asset subject to the
lease unless the lessee pays after or at such termination a
purchase price bearing a reasonable relation to the then fair
market value of such property or asset.
WARN Act shall have the meaning specified in Section
8.5(a).
ARTICLE 2.
SALE AND PURCHASE OF ASSETS; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITY; LENDERS' CONSENT
2.1. Asset Sale and Purchase of Assets.
Subject to the terms and conditions hereof and in
reliance upon the representations, warranties, covenants and
agreements contained herein, at the Closing, Sellers shall sell,
assign, transfer, convey and deliver to Buyer, and Buyer agrees to
purchase from Sellers, all real, personal and mixed assets, rights,
benefits and privileges, both tangible and intangible, wheresoever
situated or located, owned, leased, used, or held for use by
Sellers in connection with the business and operations of the
Stations (collectively, the "Assets"); but excluding the Excluded
Assets described in Section 2.2. Subject to the provisions of
Section 2.2, Assets shall include all such assets existing on the
date hereof and all such assets acquired between the date hereof
and midnight of the day immediately preceding the Closing Date.
The Assets shall include, without limitation, all of
Sellers' right, title and interest in, to and under the following:
2.1(a) FCC Licenses. All licenses, permits and other
authorizations issued by the FCC to Licensees for the operation of
the Stations (the "FCC Licenses"), including without limitation
those set forth and described in Schedule 2.1(a), and all
applications therefor, together with any renewals, extensions or
modifications thereof and additions thereto;
2.1(b) Real Property Interests. All the Real Property
listed or described in Schedule 2.1(b);
2.1(c) Tangible Personal Property. All of the
furniture, fixtures, furnishings, machinery, computers, equipment
(mobile or otherwise), inventory, supplies, antenna installations,
towers, office materials and other tangible property set forth and
described in the tangible personal property list dated December 31,
1995, previously delivered to Buyer;
2.1(d) Intellectual Property. All of the service
marks, copyrights, franchises, software, licenses (other than the
FCC Licenses), trademarks, trade names, jingles, slogans, logotypes
and other intangible assets maintained, owned, used, or held for
use by Sellers in connection with the business and operations of
the Stations (including any and all applications, registrations,
extensions and renewals relating thereto) (the "Intellectual
Property"), and all of the rights, benefits and privileges
associated therewith set forth and described in Schedule 2.1(d) and
the right to use the call letters for the Stations;
2.1(e) Station Contracts. The Contracts entered into
by Sellers with respect to the programming, air time, business and
operations of the Stations (other than those relating to Real
Property and those relating to employment) listed on, or described
in the trade receivable balance set forth in, Schedule 2.1(e) (the
"Station Contracts");
2.1(f) Prepaid Items. All deposits, reserves and
prepaid expenses set forth and described in Schedule 2.1(f);
2.1(g) Vehicles. All automotive equipment and motor
vehicles owned, leased, or used by Sellers in connection with the
business and operations of the Stations set forth and described in
Schedule 2.1(g);
2.1(h) Files and Records. All engineering, business
and other books, papers, logs, files and records pertaining to the
Assets or the business and operations of the Stations, but not the
partnership records of Sellers;
2.1(i) Auxiliary Facilities. All translators and
other auxiliary facilities, and all applications therefor;
2.1(j) Third-Party Claims. Except for claims relating
to Taxes, all rights and claims of Sellers whether mature,
contingent or otherwise, against third parties relating to the
Assets (other than the Excluded Assets) or the Stations, whether in
tort, contract, or otherwise, including, without limitation, causes
of action, unliquidated rights and claims under or pursuant to all
warranties, representations and guarantees made by manufacturers,
suppliers or vendors;
2.1(k) Permits and Licenses. All permits, approvals,
orders authorizations, consents, licenses, certificates,
franchises, exemptions of, or filings or registrations with, any
court or Governmental Authority (other than the FCC) in any
jurisdiction, which have been issued or granted to or are owned or
used by Sellers in connection with the business and operation of
each Station and ownership of the Assets and all pending
applications therefor;
2.1(l) Goodwill. Sellers' goodwill in and "going
concern" value of the Stations;
2.1(m) Accounts Receivable. All Accounts Receivable;
and
2.1(n) Other Assets. Without duplication, all other
assets of Sellers, including but not limited to inventory, used or
held for use in the business and operation of the Stations.
2.2. Excluded Assets.
Notwithstanding anything to the contrary in this
Agreement, there shall be excluded from the Assets and retained by
Sellers, to the extent in existence at midnight (Eastern Standard
Time) on the date immediately preceding the Closing Date, the
following assets (collectively, the "Excluded Assets"):
2.2(a) Third Party Claims. All rights and claims of
Sellers against third parties relating to Taxes and to property or
equipment repaired, replaced or restored by Sellers prior to the
Closing;
2.2(b) Personal Property Disposed Of. All tangible
personal property disposed of in the Ordinary Course of Business as
permitted by this Agreement;
2.2(c) Insurance. All Contracts of insurance and all
insurance plans and the assets thereof listed on Schedule 3.21;
including, without limitation, the cash surrender value thereof and
all insurance proceeds or claims of Sellers relating to property or
equipment repaired, replaced or restored by Sellers prior to the
Closing.
2.2(d) Employee Plans and Assets. All Station
Employee Benefit Plans other than the Employment Contracts marked
with a dagger in Schedule 3.17;
2.2(e) Certain Books and Records. All of (i) Sellers'
records relating to formation, financing and finances of Sellers
(other than any such records delivered to Buyer in connection with
this Agreement), (ii) duplicated copies of any books, records,
accounts, checks, payment records, Tax records (including payroll,
unemployment, real estate and other Tax records) and other similar
books, records and information of the Sellers relating to the
Assets or Sellers' operation of the Stations prior to the Closing,
(iii) all records prepared by or on behalf of Sellers in connection
with the sale of the Stations, and (iv) all records and documents
relating to any Excluded Assets;
2.2(f) Rights under this Agreement. All of the
Sellers' rights under or pursuant to this Agreement or any other
rights in favor of the Sellers pursuant to the other agreements
contemplated hereby;
2.2(g) Securities. All capital stock or other
securities in respect of any direct or indirect subsidiary of the
Sellers;
2.2(h) Excluded Contracts. All Contracts that have
terminated or expired prior to the Closing as permitted by this
Agreement, all Contracts relating to employment other than the
Employment Contracts marked with a dagger in Schedule 3.17, and all
Contracts set forth in Schedule 2.2(h);
2.2(i) Certain Contracts and Unrelated Assets. Any
financing or loan agreements (including, without limitation,
equipment financing agreements including financing leases), and
other obligations for borrowed money; any Contract of Sellers which
was not entered into in the Ordinary Course of Business (unless
otherwise assumed pursuant to this Agreement); any Contract entered
into after the date hereof except as permitted by this Agreement;
and any and all assets, rights, benefits and privileges, both
tangible and intangible, wheresoever situated or located, used by
Sellers in connection with any business or operations of Sellers,
including without limitation any radio broadcast station other than
the Stations, other than the business and operation of the
Stations;
2.2(j) Cash. All cash and cash equivalents and cash
held by Sellers, bank balances and rights in and to bank accounts,
marketable and other securities of the Stations and the Sellers;
and
2.2(k) Name. To the exclusion of Buyer, all rights in
the name "Radio Equity Partners" and to any variants or derivatives
thereof which include the initials "REP" or the phrase "Radio
Equity" or "Radio Equities".
2.3. Deposit.
2.3(a) Concurrent with the execution and delivery of
this Agreement Buyer, Sellers and NationsBank, N.A. (the "Escrow
Agent") shall enter into an Escrow Agreement in the form of Exhibit
G pursuant to and under the terms of which (i) Buyer shall
concurrently with the execution and delivery of the Escrow
Agreement deposit with the Escrow Agent cash in the amount of Four
Million Eight Hundred Thousand Dollars ($4,800,000) (the "Pre-
Closing Deposit") and (ii) the Escrow Agent shall retain the same
amount as a post-Closing deposit (the "Post-Closing Deposit") for
a period of twelve (12) months after the Closing to secure Sellers'
obligations under Section 12 hereof, such amount to be decreased in
accordance with the Escrow Agreement to Two Million Four Hundred
Thousand Dollars ($2,400,000) on the latter to occur of (x) the six
month anniversary of the Closing or (y) March 31 of the year
following the calendar year period in which the Closing occurred.
In the event that the Post-Closing Deposit is less than Four
Million Eight Hundred Thousand Dollars ($4,800,000) as of the
Closing Date as the result of any payment to Buyer, a portion of
the Purchase Price equal to the difference shall be disbursed into
escrow as a portion of the Post-Closing Deposit. At Closing, the
principal balance of the Pre-Closing Deposit shall be retained as
the Post-Closing Deposit and the amount of the Post-Closing Deposit
shall be treated as payment of a portion of the Purchase Price
equal to such amount.
2.3(b) In the event there are multiple Closings
hereunder, the Pre-Closing Deposit and the Post-Closing Deposit
shall be allocated in accordance with Schedule 15.2 hereto with the
result that the allocated portion of the Pre-Closing Deposit shall
remain in escrow with respect to Stations which remain to be
acquired by Buyer hereunder and the allocated portion of the Post-
Closing Deposit shall remain in escrow with respect to the Stations
acquired by Buyer hereunder. For the purposes of calculating the
periods described in Section 2.3(a), the term "Closing" shall mean
each individual Closing hereunder.
2.3(c) The Escrow Agent shall disburse all interest or
other earnings on the Pre-Closing Deposit to Buyer promptly upon
the receipt thereof and at Closing. The Escrow Agent shall
disburse all interest or other earnings on the Post-Closing Deposit
to Sellers promptly upon receipt thereof.
2.3(d) The Buyer and Sellers agree that they will
jointly instruct the Escrow Agent to proceed in accordance with
this Section 2.3 and Articles 8, 12 and 14 and will take no action
to delay or prevent any disbursement of the Deposit as provided in
this Agreement.
2.4. Purchase Price.
For and in consideration of the conveyances and
assignments described herein and in addition to the assumption of
liabilities by Buyer as set forth in Section 2.7, Buyer agrees to
pay to Sellers, and Sellers agree to accept from Buyer, a purchase
price (the "Purchase Price") equal to Two Hundred Thirty Five
Million Dollars ($235,000,000), adjusted by the adjustments and
prorations provided for in Section 2.6. The Purchase Price shall
be payable as described in Section 2.5. The Purchase Price shall
be allocated among the Assets in accordance with Section 8.3.
2.5. Payment of Purchase Price.
The Purchase Price shall be payable to Sellers at the
Closing by application of the Pre-Closing Deposit described in
Section 2.3 above and a wire transfer of federal funds of the
remainder of the Purchase Price to the account or accounts which
will be identified by RSM on behalf of Sellers in writing not less
than three (3) days prior to the Closing Date.
2.6. Adjustments.
2.6(a) Prorations. The operation of the Stations and
the income and normal operating expenses attributable thereto
through midnight of the day immediately preceding the Closing Date
(the "Adjustment Date") shall be for the account of Seller and
thereafter for the account of Buyer, and, if any income or expense
is properly allocable or credited, then it shall be allocated,
charged or prorated accordingly. Expenses for goods or services
received both before and after the Adjustment Date, power and
utilities charges, frequency discounts, prepaid cash time sales
agreements, commissions, license fees, and rents and similar
prepaid and deferred items shall be prorated between Sellers and
Buyer as of the Adjustment Date in accordance with generally
accepted accounting principles. All special assessments and
similar charges or liens imposed against the Real Property and
tangible personal property in respect of any period of time through
the Adjustment Date, whether payable in installments or otherwise,
shall be the responsibility of Seller, and amounts payable with
respect to such special assessments, charges or liens in respect of
any period of time after the Adjustment Date shall be the
responsibility of Buyer, and such charges shall be adjusted as
required hereunder. There shall be no adjustment in respect of any
positive or negative barter balance. To the extent that any of the
foregoing prorations and adjustments cannot be determined as of the
Closing Date, Buyer and Seller shall conduct a final accounting and
make any further payments, as required on a date mutually agreed
upon, within ninety (90) days after the Closing.
2.6(b) Accounts Receivable Adjustment. The Purchase
Price shall be increased by an amount equal to the greater of (a)
Five Million Dollars ($5,000,000) or (b) an amount equal to one-
half of the amount of the aggregate Accounts Receivable as
reflected in an unaudited combined balance sheet of Sellers (i)
dated within three (3) days of the Adjustment Date as adjusted to
the Adjustment Date (ii) prepared in conformity with Section 3.5,
as such Section applies to unaudited balance sheets, (iii)
certified by the Chief Financial Officer of Sellers' managing
partner, and (iv) supplemented by lists of Accounts Receivable as
of a date reasonably specified by Buyer in advance of the Closing
and as of the Adjustment Date.
2.6(c) Commissions Adjustment. The Purchase Price
shall be reduced by the product of (i) the accruals as of the
Closing Date for national sales representative and other sales
commissions accrued with respect to such Accounts Receivable as
shown on Sellers' books and disclosed to Buyer in writing at the
Closing and (ii) a fraction, the numerator of which is the Accounts
Receivable Adjustment and the denominator of which is the total
Accounts Receivable.
2.7. Assumption of Liabilities.
2.7(a) At the Closing, Buyer shall assume and become
liable for the following: (i) the liabilities and obligations of
Sellers to be performed on and after the Closing Date under the
Contracts listed or described in Schedule 2.1(e), the leases marked
with a dagger or two asterisks in Schedule 2.1(b) and the
employment Contracts marked with a dagger in Schedule 3.17, (ii)
the liabilities and obligations of Sellers to be performed after
the Closing Date under any Additional Agreements entered into after
the date hereof in compliance with Section 6.1, and (iii) the
accrued sales commissions which are described in Section 2.6(c)(i).
2.7(b) Except for those liabilities and obligations
expressly assumed by Buyer pursuant to Section 2.7(a) hereof or in
the Assumption Agreement, or for which Buyer has received a credit
under Section 2.6, Buyer shall have no responsibility for any
liabilities or obligations of any kind or description whether
connected with the business and operations of the Stations, the
Sellers or otherwise arising from the ownership or operation of any
of the Assets or the business and operations of the Stations or the
Sellers prior to the Closing Date.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLERS
RSM represents and warrants to Buyer for and on behalf of
the Sellers as follows:
3.1. Organization and Standing.
Each Seller is a general partnership duly formed under
the laws of Delaware and has all requisite power and authority to
carry on its business as now being conducted. Each Seller has all
requisite power and authority to execute and deliver Seller
Documents to be executed by RSM on behalf of such Seller and to
consummate the transactions contemplated hereby and thereby.
Neither the nature of the business of the Stations, nor the
character of the properties owned, leased or otherwise held by
Sellers for use in the Stations' business makes any qualification
necessary in any other state, country, territory or jurisdiction.
Certified copies of (i) the general partnership agreements for each
Seller and (ii) the Articles of Incorporation and Bylaws of RSM,
and each amendment to any of the foregoing have been delivered to
Buyer, are complete and correct, and no amendments have been made
thereto or have been authorized since the date of the last
amendment thereto. Sellers do not own any capital stock of or
other equity interest in any corporation, partnership, limited
liability company or other entity, except as shown on Annex II.
3.2. Authorization.
The execution, delivery and performance of the Seller
Documents to be executed by RSM on behalf of such Seller
contemplated herein, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary partnership actions of such Seller
(none of which actions has been modified or rescinded and all of
which actions are in full force and effect). This Agreement
constitutes, and upon execution and delivery each other Seller
Document will constitute, valid and binding agreements and
obligations of each Seller that is a party thereto, enforceable in
accordance with their respective terms.
3.3. Compliance with Laws.
Sellers have complied and are in compliance in all
material respects with all laws and regulations applicable to
Sellers' operation of the Stations and ownership of the Assets.
Sellers have obtained and hold all permits, licenses and approvals
(none of which has been rescinded and all of which are in full
force and effect) from all Governmental Authorities necessary in
order to conduct the operations of the Stations as presently
conducted and to own, use and maintain the Assets except (solely as
of the date hereof and not thereafter) such permits, licenses and
approvals the failure of which to obtain or hold does not
constitute a Material Adverse Effect.
3.4. Required Consents; No Conflicts.
3.4(a) Except in connection with the filings referred
to in Section 5.1 and Section 5.2, the execution, delivery and
performance by each Seller of the Seller Documents to which it is
a party will not require the consent, approval, authorization or
permit of, or filing with, or notification to any person, entity or
Governmental Authority, except (i) as have been obtained or will be
obtained or have occurred prior to the Closing, and (ii) the
consents of third parties to the assignment of certain of the
Contracts on Schedule 2.1(e), including without limitation those
marked with two asterisks thereon, and to the Contracts marked with
a dagger or two asterisks on Schedules 2.1(b) or 3.17.
3.4(b) Except as set forth in Schedule 3.4(b) or,
solely as of the date hereof and not thereafter, which does not
constitute a Material Adverse Effect, the execution and delivery of
the Seller Documents, the fulfillment of and the compliance with
the respective terms and provisions of each, and the consummation
of the transactions described in each, do not and will not (i)
conflict with or violate any law, regulation, order, award,
judgment, injunction or decree applicable to or affecting Sellers,
the Assets (other than the Excluded Assets) or the Stations,
(ii) conflict with or result in any breach of or constitute a
default (or an event which with notice or lapse of time or both
would become a default) of any Contract to which Sellers or any of
them are a party or by which Sellers or any of them are bound or to
which any of the Assets or the Stations is subject or affected
(except with respect to consents of third parties referred to in
Section 3.4), or result in the acceleration of any indebtedness (so
long as such indebtedness is repaid at the Closing or Sellers'
lenders consent to such Closing) or in the creation of any
Encumbrance upon the Assets, or (iii) conflict with or violate the
organizational documents of Sellers.
3.5. Financial Statements.
Schedule 3.5 refers to (i) audited balance sheets of
Radio Equity Partners, Limited Partnership ("REP") as of the end of
the fiscal year ending December 31 in each of 1994 and 1995, and
statements of income for each such fiscal year; and (ii) unaudited
balance sheet of REP as of March 31, 1996 (the "Current Balance
Sheet Date"), and the unaudited statement of income for the quarter
then ended, which have previously been delivered to Buyer. All of
the financial statements referred to in this Section or furnished
to Buyer after the date hereof pursuant to Sections 2.6(b) or
6.2(j): (i) are or will be, as the case may be, in accordance with
the books and records of the Sellers, (ii) present fairly and
accurately in all material respects the financial position of the
Stations as of the respective dates and the results of operations
for the respective periods indicated, (iii) have been prepared in
accordance with generally accepted accounting principles ("GAAP")
(except that unaudited financial statements do not contain
footnotes and year-end adjustments required under GAAP) and (iv) do
not reflect any activity other than the operations of the Stations.
Since December 31, 1995, there have been no changes in accounting
principles (for financial accounting purposes) at any time made,
agreed to, requested or required with respect to REP.
3.6. Absence of Certain Changes or Events.
Except as set forth and described in Schedule 3.6, since
the Current Balance Sheet Date, there has been no material adverse
change in the business, operations, condition (financial or
otherwise), Assets (other than Excluded Assets) or liabilities of
Sellers. Except as set forth and described in Schedule 3.6, since
the Current Balance Sheet Date, Sellers have conducted their
respective businesses diligently and substantially in the manner
heretofore conducted and only in the Ordinary Course of Business,
and Sellers have not (a) incurred an uninsured loss of, or
significant injury to, any of the Assets (other than Excluded
Assets) as the result of any fire, explosion, flood, windstorm,
earthquake, labor trouble, riot, accident, act of God or public
enemy or armed forces, or other casualty in excess of One Hundred
Thousand Dollars ($100,000) in the aggregate which loss or injury
has not been replaced or repaired; (b) incurred, or become subject
to, any obligation or liability (absolute or contingent, matured or
unmatured, known or unknown), except liabilities incurred in the
Ordinary Course of Business or to which Buyer has consented in
writing; (c) discharged or satisfied any Encumbrance or paid any
obligation or liability (absolute or contingent, matured or
unmatured, known or unknown) other than liabilities shown in the
balance sheets furnished pursuant to Section 3.5, liabilities
incurred since the Current Balance Sheet Date in the Ordinary
Course of Business and repayment of indebtedness from the proceeds
of the transactions contemplated by this Agreement or to which
Buyer has consented in writing; (d) mortgaged, pledged or subjected
to any Encumbrance any of its Assets (other than the Excluded
Assets) other than in the Ordinary Course of Business; (e) sold,
exchanged, transferred or otherwise disposed of any of its Assets
(other than the Excluded Assets) or canceled any debts or claims
other than in the Ordinary Course of Business or with the prior
written consent of Buyer; (f) written down the value of any Assets
(other than Excluded Assets) or written off as uncollectible any
Accounts Receivable, except write-downs and write-offs (i) in the
Ordinary Course of Business, none of which, individually or in the
aggregate, constitutes a Material Adverse Effect or (ii) are
required by GAAP; (g) entered into any transactions other than in
the Ordinary Course of Business or with the prior written consent
of Buyer; (h) made capital expenditures, or entered into
commitments therefor, in either case aggregating more than Two
Hundred Fifty Thousand Dollars ($250,000) without the prior written
consent of Buyer; (i) made any change in any method of accounting
or accounting practice; or (j) made any agreement to do any of the
foregoing.
3.7. Absence of Litigation.
Except as set forth and described in Schedule 3.7 there
is no action, suit, investigation, claim, arbitration or litigation
pending or, to Sellers' knowledge, threatened against, affecting or
involving Sellers, the Assets, any of the Stations or the business
and operations of any of the Stations, or the transactions
contemplated by any Seller Document, at law or in equity, or before
or by any court, arbitrator or Governmental Authority, and neither
the Sellers nor any of the Stations are operating under or subject
to an order, award, judgment, writ, decree, determination or
injunction of any court, arbitrator or Governmental Authority.
3.8. Ownership and Condition of Assets.
3.8(a) Schedules 2.1(a), (b), (d), (f) and (g) and the
tangible personal property list referenced in Section 2.1(b)
contain a listing, as of the dates listed therein (which dates,
except as set forth in Section 2.1(b), are all no more than thirty
(30) days prior to the date hereof), of each FCC License, interest
in Real Property, item of tangible personal property or
Intellectual Property, deposit, reserve or prepaid expense and
vehicle owned or leased by any Seller and which is used or held for
use in the operations of any of the Stations other than any such
asset which is recorded on Sellers' books for an amount less than
Ten Thousand Dollars ($10,000).
3.8(b) Sellers (a) have good and marketable title to
the Real Property owned by Sellers and (b) own, lease or have the
right to use each other Asset (other than the Excluded Assets), in
the case of (a) and (b) free and clear of any Encumbrances, except
for and subject only to (i) Permitted Encumbrances; (ii) those
Encumbrances set forth in Schedule 3.8(b) or in the Title Insurance
Policies, which shall be discharged and removed prior to or
contemporaneously with the Closing, (iii) purchase-money security
interests, and (iv) True Leases.
3.8(c) On the Closing Date, Buyer shall acquire good
and marketable title to the Real Property owned by Sellers, such
title to be insurable at standard rates, and all of the Sellers'
right, title and interest in and to the other Assets (other than
the Excluded Assets), free and clear of all Encumbrances, except
for and subject only to the Permitted Encumbrances.
3.8(d) No item of the tangible personal property
included in the Assets (other than the Excluded Assets) is in need
of material repair or replacement, other than as part of routine
maintenance in the Ordinary Course of Business.
3.9. FCC Matters.
3.9(a) Licensees hold the FCC Licenses set forth and
described on Schedule 2.1(a). The FCC Licenses constitute all of
the licenses, permits and authorizations from the FCC that are
necessary or required for and/or used in the business and
operations of the Stations. The FCC Licenses are valid and in full
force and effect through the dates set forth on Schedule 2.1(a)
unimpaired by any condition which could have a material adverse
effect on the business and operations of the Stations. Except as
set forth on Schedule 2.1(a), no application, action or proceeding
is pending for the renewal or modification of any of the FCC
Licenses, and, except for actions or proceedings affecting radio
broadcast stations generally, no application, complaint, action or
proceeding is pending or, to the best of Sellers' knowledge,
threatened that may result in the (i) denial of an application for
renewal, (ii) the revocation, modification, non-renewal or
suspension of any of the FCC Licenses, (iii) the issuance of a
cease-and-desist order, or (iv) the imposition of any
administrative or judicial sanction with respect to any of the
Stations.
3.9(b) There is not now issued or outstanding or, to
Sellers' knowledge, threatened any investigation, proceeding,
notice of violation or material complaint against the Sellers at
the FCC. Sellers have no knowledge of any person who has
manifested an intention to contest the renewal of any FCC license
for any of the Stations.
3.9(c) The Stations, their respective physical
facilities, electrical and mechanical systems and transmitting and
studio equipment (i) are being operated in all material respects in
compliance with the specifications of the applicable FCC Licenses,
and (ii) are being operated in compliance in all material respects
with all requirements of the Communications Act. Sellers have
complied in all material respects with all requirements of the FCC
and the Federal Aviation Administration with respect to the
construction and/or alteration of Sellers' antenna structures, and
"no hazard" determinations for each antenna structure have been
obtained.
3.9(d) Sellers and the Stations are in compliance in
all material respects with the Communications Act.
3.9(e) Sellers know of no facts, conditions or events
relating to the Sellers or the Stations that might cause the FCC to
have a legally valid basis to deny the assignment of the FCC
Licenses as provided for in this Agreement or not to renew any of
the FCC Licenses in the ordinary course.
3.10. Real Property.
3.10(a) Each lease and sublease of Real Property to
which any Seller is a party is in full force and effect, and
constitutes a legal, valid and binding obligation of, and is
legally enforceable against, the Seller that is a party thereto.
Neither Sellers nor (to the best of Sellers' knowledge) any other
party thereto is in default under any such lease or sublease in any
material respect, and, to the best of Sellers' knowledge, there has
not occurred any event which (whether with or without notice, lapse
of time or the happening or occurrence of any other event) would
constitute such a default by Sellers, or (to the best of Sellers'
knowledge) any other party.
3.10(b) All buildings, structures, fixtures and other
improvements on the Real Property are maintained in the Ordinary
Course of Business. To Sellers' knowledge, all Real Property and
such buildings, structures, fixtures and improvements on the Real
Property conform in all material respects, including usage by
Sellers, with all applicable contractual requirements and building,
zoning, subdivision, environmental, land-use, fire and other
applicable laws and regulations pertaining to or affecting such
Real Property. All notices or orders to Sellers to correct
violations of applicable laws and regulations issued by any
Governmental Authority having jurisdiction against or affecting any
of the Real Property have been complied with in all material
respects. The buildings, structures, fixtures and improvements on
each parcel of the Real Property lie entirely within the boundaries
of such parcel of the Real Property except as specified in the
Title Insurance Policies or in Schedule 2.1(b).
3.10(c) No portion of the Real Property or any
building, structure, fixture or improvement thereon is the subject
of any pending condemnation, eminent domain or inverse condemnation
proceeding, and Sellers have no knowledge that any of the foregoing
are threatened.
3.10(d) Except as set forth in the Title Insurance
Policies or in Schedule 2.1(b), the Real Property has access to a
public right-of-way and to electric, gas, water, sewer and
telephone lines.
3.10(e) On the Closing Date, no tangible Assets (other
than Excluded Assets) used or held for use in the business and
operations of the Stations by Sellers will be located on any real
property not included in the Real Property.
3.10(f) The Title Insurance Policies and Surveys are
all of the existing title insurance policies and surveys relating
to any of the Real Property in the possession of any Seller or
Sellers' lenders.
3.10(g) The Contracts marked with a dagger or two
asterisks on Schedule 2.1(b) constitute all of the leases,
subleases and other Contracts relating to any Real Property.
3.11. Intellectual Property.
Except as set forth on Schedule 2.1(d), Sellers pay no
royalty to anyone with respect to the Intellectual Property and
have the right to bring action for the infringement thereof to the
extent permitted by the Contracts relating thereto and applicable
law. Sellers do not have any knowledge and have not received any
notice to the effect that any service rendered by Sellers relating
to the business of the Stations may infringe on any Intellectual
Property right or other legally protectable right of another.
Sellers have the right pursuant to the rules and regulations of the
FCC to the use of the various call letters set forth on Schedule
2.1(a).
3.12. Reports and Records.
All returns, reports, statements and other documents
relating to the Stations currently required to be filed by Sellers
with the FCC or, to the best of Sellers' knowledge, any other
Governmental Authority in connection with, or as a result of,
Sellers' operation of the Stations or ownership of the Assets have
been filed and complied with and are true, correct and complete in
all material respects. All such reports, returns, statements and
other documents shall continue to be filed on a current basis until
the Closing Date, and will be true, correct, and complete in all
material respects. All documents required by the FCC's rules to be
placed in the Stations' public files have been placed and are being
held in such files. All logs and business records of every type
and nature relating to the business and operations of the Stations,
including without limitation, political and public files, program,
operating and maintenance logs, equipment performance measurements,
policies or evidence of insurance, licenses, payroll, social
security and withholding tax returns and other records pertaining
to the business and operations of the Stations have been maintained
in all material respects in accordance with the rules and
regulations of the FCC and are in the possession of Sellers at the
respective Stations.
3.13. Station Contracts.
Schedule 2.1(e) contains a listing, as of the dates
listed therein (which dates are all no more than thirty (30) days
prior to the date hereof), of the Contracts (except those relating
to Real Property and employment which are separately described
herein) other than (solely as of the date hereof and not
subsequently) Contracts which require payments, individually, of
less than Twelve Thousand Dollars ($12,000) and, in the aggregate,
of less than Two Hundred and Fifty Thousand Dollars ($250,000).
Each Station Contract is in full force and effect, and constitutes
a legal, valid and binding obligation of, and is legally
enforceable against the Seller that is a party thereto. The Seller
that is a party thereto and, to the best of Seller's knowledge, the
other parties thereto, have complied with all of the material
provisions of such Station Contracts and are not in default
thereunder in any material respect, and there has not occurred any
event which (whether with or without notice or lapse of time) would
constitute such a default. To Sellers' knowledge, there has not
been any threatened cancellation of any Station Contract or any
outstanding dispute thereunder.
3.14. Intentionally Omitted.
3.15. Accounts Receivable.
The Accounts Receivable shown on the balance sheets
referred to in Section 3.5, or thereafter acquired by Sellers arose
or will have arisen in the Ordinary Course of Business.
3.16. Taxes.
3.16(a) Sellers have (or, in the case of returns
becoming due after the date hereof and on or before the Closing
Date, will have prior to the Closing Date) duly filed all Seller
Tax Returns required to be filed by Sellers on or before the
Closing Date with respect to all applicable Taxes and have paid all
Taxes due or claimed to be due by any Governmental Authority in
connection with any of the Seller Tax Returns.
3.16(b) Sellers do not have nor on the Closing Date
will have any liability for Taxes due and payable for or with
respect to any periods prior to and including the Closing Date in
excess of the amounts required by applicable law to be paid prior
to the Closing Date.
3.16(c) Except as set forth in Schedule 3.16(c), there
is no action, suit, proceeding, audit, investigation or claim
pending or, to the knowledge of Sellers, threatened in respect of
any Taxes for which Sellers are liable, nor has any deficiency or
claim for any such Taxes been proposed, asserted or, to the
knowledge of Sellers, threatened.
3.17. Employee Benefit Plans.
3.17(a) Schedule 3.17 sets forth and describes all
Plans and Benefit Arrangements in which any current, former or
retired employee of the Sellers participates (collectively,
"Station Employee Benefit Plans"). The Station Employee Benefit
Plans (except for any employment Contracts marked with a dagger on
Schedule 3.17) shall not become plans of Buyer, nor shall Buyer
have any liability or obligation under any Station Employee Benefit
Plan.
3.17(b) There are no unpaid fees, penalties, interest
or assessments due from Sellers with respect to Station Employee
Benefit Plans that are an Encumbrance on any Asset (other than any
Excluded Asset).
3.18. Labor Relations.
3.18(a) Except as set forth on Schedule 3.7, there are
no strikes, work stoppages, grievance proceedings, union
organization efforts pending or, to the knowledge of Sellers,
threatened between Sellers and (i) their current or former
employees or agents, or (ii) any union or collective bargaining
unit representing such employees. Sellers are in compliance in all
material respects with all applicable laws and regulations relating
to employment at the Stations including, without limitation,
provisions relating to wages, hours, collective bargaining, safety
and health, work authorization, equal employment opportunity,
unemployment compensation, and worker's compensation. Except as
set forth in Schedule 3.17 hereto, there are no collective
bargaining agreements, employment agreements between Sellers and
their employees not terminable at will or professional service
contracts not terminable at will relating to the Stations or the
business and operations thereof other than (solely as of the date
hereof and not subsequently) Contracts which require payments,
individually, of less than Twelve Thousand Dollars ($12,000) and,
in the aggregate together with the Station Contracts not included
in Schedule 2.1(e), of less than Two Hundred and Fifty Thousand
Dollars ($250,000). The consummation of the transactions
contemplated hereby will not cause Buyer to incur or suffer any
liability relating to, or obligation to pay, severance,
termination, or other payments to any person or entity. Except as
set forth in Schedule 3.17 hereto, no employee of Sellers has any
contractual right to continued employment by Sellers following
consummation of the transactions contemplated by this Agreement.
3.18(b) Sellers have provided a true and complete list
dated as of April 15, 1996, of all Station employees of Sellers and
for each employee his or her respective position, title, salary and
date of hire. Prior to the date ten (10) business days following
the date hereof, Sellers will provide a true and complete list of
the accrued vacation, sick days, and date of last review for each
employee. Such list shall be dated as of a date not earlier than
the date referred to in the first sentence of this Section 3.18(b).
3.19. Environmental Matters.
3.19(a) To the best of the knowledge of RSM and the
station manager of each Station, there are no pending or threatened
actions, suits, claims, legal proceedings or other proceedings
based on, and Sellers have not received any notice of any
complaint, order, directive, citation, notice of responsibility,
notice of potential responsibility, or information request from any
Governmental Authority arising out of or attributable to: (i) the
presence at any part of the Real Property of Hazardous Materials;
(ii) the release or threatened release into the environment from
the Real Property (including, without limitation, into any storm
drain, sewer, septic system or publicly owned treatment works) of
any Hazardous Materials; (iii) the off-site disposal of Hazardous
Materials originating on or from the Real Property or the
businesses or Assets of Sellers; (iv) any facility operations or
procedures of Sellers which do not conform to requirements of the
Environmental Laws; or (v) any violation of Environmental Laws at
any part of the Real Property or otherwise arising from any
Sellers' activities involving Hazardous Materials.
3.19(b) Except as set forth in the Phase I
environmental studies prepared in May, 1996, by Dames & Moore, Inc.
with respect to certain of the Real Property (the "Dames & Moore
Report") or on Schedule 3.19, to the best of the knowledge of RSM
and the station manager of each Station, the Real Property contains
no underground storage tanks, or underground piping associated with
such tanks, used currently or in the past for Hazardous Materials.
3.19(c) To the best of the knowledge of RSM and the
station manager of each Station, the Dames & Moore Report and
Schedule 3.19 contain accurate and complete information pertaining
to all environmental assessments performed by or on behalf of any
of the Sellers with respect to any of the Real Property.
3.19(d) Except as set forth in the Dames & Moore
Report, to the best of the knowledge of RSM and the station manager
of each Station, Sellers have been duly issued, and currently have
and will maintain through the Closing Date, all permits, licenses,
certificates, and approvals required under any Environmental Law.
A true and complete list of all such permits, licenses,
certificates and approvals, all of which are valid and in full
force and effect, is set out in the Dames & Moore Report or in
Schedule 3.19.
3.19(e) Other than in compliance with the
Communications Act, the operation of the Stations does not cause or
result in exposure of workers or the general public to levels of
radio frequency radiation in excess of the "Radio Frequency
Protection Guides" recommended in "American National Standard
Safety Levels with Respect to Human Exposure to Radio Frequency
Electromagnetic Fields 300 kHz to 100 gHz" (ANSI C95.1-1982),
issued by the American National Standards Institute. Renewal of
the FCC Licenses would not constitute a "major action" within the
meaning of Section 1.1301, et seq., of the FCC's rules.
3.20. Shared Assets or Operations.
Except as set forth on Schedule 3.20, the Sellers do not
share, exchange or use any assets or personnel (or any costs or
expenses associated therewith) used in connection with the business
and operations of any Station with any entity controlling,
controlled by or under common control with any Seller which is not
also a Seller.
3.21. Insurance.
Schedule 3.21 contains a list of all policies of title,
property, fire, casualty, liability, life, workmen's compensation,
libel and slander, and other forms of insurance of any kind
relating to the Assets (other than the Excluded Assets) or the
business and operations of the Stations and owned or held by
Sellers or any of them. All such policies are in full force and
effect.
3.22. Disclosure.
The representations and warranties of Sellers in this
Agreement and the other information furnished by Sellers to Buyer
in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby, do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated in order to
make such information not misleading. Except for facts affecting
the radio industry generally, there is no fact known to Sellers
which materially adversely affects the condition of the Assets, the
status of the FCC Licenses or the ownership, operation or financial
condition of any Station which has not been disclosed to Buyer in
this Agreement or in such other information.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents, warrants and covenants to Sellers as
follows:
4.1. Organization and Standing.
Each of CCR and CCRL is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Nevada, and has all requisite power and authority to carry on
its business as now being conducted. Each of CCR and CCRL has all
requisite power and authority to execute and deliver this Agreement
and the agreements contemplated herein, and to consummate the
transactions contemplated hereby and thereby. A certified copy of
each Buyer's certificate of incorporation has been delivered to
Sellers, is complete and correct, and no amendments have been made
thereto or have been authorized since the date thereof.
4.2. Authorization.
The execution, delivery and performance of this Agreement
and the agreements contemplated herein, and the consummation of the
transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary actions of each of CCR and CCRL
(none of which actions has been modified or rescinded and all of
which actions are in full force and effect). This Agreement
constitutes, and upon execution and delivery each other Buyer
Document will constitute, a valid and binding agreement and
obligation of each Buyer, enforceable in accordance with their
respective terms. Except for the filings referred to in Section
5.1 and Section 5.2, the execution, delivery and performance by
each Buyer of this Agreement and the other Buyer Documents will not
require the consent, approval or authorization of any person,
entity or Governmental Authority.
4.3. Compliance with Laws.
Buyer has complied and is in compliance in all material
respects with all laws and regulations applicable to Buyer, its
business and operations. As of the Closing Date, Buyer shall have
obtained and shall hold all permits, licenses and approvals (none
of which will have been modified or rescinded and all of which
shall be in full force and effect) from all Governmental
Authorities necessary in order to conduct the operations of the
Stations as presently conducted and to own, use and maintain the
Assets.
4.4. Qualification of Buyer.
With the exception of the Market Rule Waiver and a market
rule waiver with respect to the acquisition of KJMS(FM) and
KWAM(AM), Memphis, Tennessee, Buyer knows of no facts or
circumstances which would cause it not to meet any qualification to
be the assignee of the FCC Licenses or which Buyer believes will
delay a routine grant of the Assignment Applications. To the best
knowledge of Buyer, except if the Commission does not grant the
Market Rule Waiver, it will not be necessary for Buyer or any
person controlling, controlled by or under common control with
Buyer to sell, dispose of or surrender any FCC license held by
Buyer or any such person with respect to any broadcast properties,
or any other properties or businesses of Buyer or such other
person, as may be required under the laws, rules, regulations and
policies of the FCC in order to consummate the sale and purchase of
the Assets contemplated by this Agreement.
4.5. Absence of Litigation.
Except as set forth and described in Schedule 4.5 there
is no action, suit, investigation, claim, arbitration or litigation
pending or, to Buyer's knowledge, threatened against, affecting or
involving the transactions contemplated by this Agreement or any
other Buyer Document, at law or in equity, or before or by any
court, arbitrator or Governmental Authority, and the Buyer is not
operating under or subject to an order, award, judgment, writ,
decree, determination or injunction of any court, arbitrator or
Governmental Authority which would affect any such transactions.
4.6 Disclosure.
The representations and warranties of Buyer in this
Agreement and the other information furnished by Buyer to Sellers
in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby, do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated in order to
make such information not misleading.
4.7 Bankruptcy.
Neither Buyer nor CCC is subject to any case under the
Bankruptcy Code, Title 11 of the United States Code, or any other
bankruptcy arrangement, reorganization, receivership, custodianship
or similar proceeding under any federal, state or foreign law with
respect to itself or any material portion of its property.
4.8 Financial Capacity.
Buyer will by each Closing have the financial capacity to
perform all of its obligations under this Agreement with respect to
such Closing, including without limitation the payment of the
Purchase Price payable in connection therewith.
ARTICLE 5.
PRE-CLOSING FILINGS
5.1. Applications for FCC Consent.
As promptly as practicable and no later than three (3)
business days following the execution of this Agreement, the
Licensees and Buyer shall jointly file one or more applications
with the FCC requesting its consent to the assignment of the FCC
Licenses for the Stations from Licensees to Buyer and requesting
the Market Rule Waiver (the "Assignment Applications"). The
Licensees and Buyer will diligently take, or fully cooperate in the
taking of, all necessary and proper steps, and provide any
additional information reasonably requested in order to obtain
promptly the requested consent and approval of the Assignment
Applications by the FCC. The Buyer will use its reasonable
commercial efforts to obtain the Market Rule Waiver.
Notwithstanding anything in this Agreement to the contrary, if the
Closing occurs before the FCC Order becomes a Final Order, this
Section 5.1 shall survive the Closing until the FCC Order becomes
a Final Order. No assignment of the FCC Licenses shall occur
without the prior written consent of the FCC.
5.2. Hart-Scott-Rodino.
As promptly as practicable and no later than five (5)
days following the execution of this Agreement, Sellers and Buyers
shall complete any filing that may be required pursuant to Hart-
Scott-Rodino (each an "HSR Filing"), or shall mutually agree that
no such filing is required. Sellers and Buyer shall diligently
take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested
in order to comply with, the requirements of such Act.
5.3. Sharing Information.
Each party hereto shall as promptly as possible, and in
any event within two (2) business days, inform the other of any
material communications between such party and the Federal Trade
Commission, the Department of Justice, the Federal Communications
Commission or any other Governmental Authority regarding this
Agreement or the transactions contemplated hereby. If any party
receives a request for additional information or documentary
material from any such Governmental Authority, then such party
shall endeavor in good faith to make, or cause to be made, as
promptly as practicable and after consultation with the other
parties, an appropriate response to such request.
5.4 Pending Renewals.
In the event at the Closing one or more applications for
renewal of any of the FCC Licenses remains pending or any order of
the FCC granting such an application for renewal of a FCC License
has not become a Final Order, each party hereto agrees to abide by
the procedures established in Stockholders of CBS, Inc., FCC 95-469
(rel. Nov. 22, 1995) Paragraphs 34-35, for processing applications for
transfer of control of a licensee during the pendency of an
application for renewal of a station license. Without limiting the
generality of the foregoing, the Sellers agree to use their
reasonable commercial efforts to cooperate with Buyer with the
prosecution of any such application for renewal of a FCC License,
and Buyer agrees that any interest it may acquire in such license
at Closing is subject to whatever action the FCC may ultimately
take with respect to the renewal application. Notwithstanding
anything in this Agreement to the contrary, this Section 5.4 shall
survive the Closing until any order issued by the FCC with respect
to a renewal application pending, or granted but not yet final, as
of the Closing becomes a Final Order.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLERS
Subject to Section 8.1 below, Sellers covenant and agree
with Buyer as follows:
6.1. Negative Covenants.
Pending and prior to the Closing, Sellers will not,
without the prior written consent or approval of Buyer, which shall
not be unreasonably withheld, do or agree to do any of the
following, as such actions relate to any of the Stations:
6.1(a) Dispositions: Mergers. Sell, assign, lease or
otherwise transfer or dispose of any of the Assets; or merge or
consolidate with or into any other entity or enter into any
Contracts relating thereto; provided, however, that Sellers may
sell, assign, lease or otherwise transfer or dispose of any Asset
in the Ordinary Course of Business.
6.1(b) Accounting Principles and Practices. Change or
modify any of Sellers' accounting principles or practices or any
method of applying such principles or practices.
6.1(c) Additional Agreements. Acquire or enter into
any new Additional Agreements or renew, extend, amend, alter,
modify or otherwise change any existing Station Contract, except
(i) in the Ordinary Course of Business and (ii) as permitted by
Section 6.1(e).
6.1(d) Contract Breaches. Do or omit to do any act
(or permit such action or omission) which will cause a material
breach of any Station Contract or any other Contract to which
Sellers are a party or by which Sellers are bound.
6.1(e) Employee Matters. Except in the Ordinary
Course of Business or as required by law, (i) enter into, become
subject to or amend or modify any existing employment, labor,
union, or professional service Contract not terminable at will, or
any bonus, pension, insurance, profit sharing. incentive, deferred
compensation, severance pay, retirement, hospitalization, employee
benefit, or other similar plan, other than the Station Employee
Benefit Plans, except Sellers may (x) renew existing employment
contracts for air personalities at the Stations ("Talent
Contracts"), or enter into new Talent Contracts for individuals
hired to replace any existing air personalities who are currently
under contract with the Stations so long as any such renewed or new
Talent Contracts are entered into in the Ordinary Course of
Business and (y) accelerate the payment of the maximum eligible
bonuses under employee incentive bonus plans set forth in
Schedule 3.17; or (ii) increase the compensation payable or to
become payable to any employee, or pay or arrange to pay any bonus
payment to any employee. All new employment, labor, union and
professional service Contracts shall be terminable at the Closing.
Notwithstanding the foregoing, Sellers may pay their employees
prior to Closing a ratable portion of the bonuses that would
normally be paid following the end of Sellers' fiscal year,
provided, however, that Sellers shall inform Buyer of any such
payments at Closing and provided further that Sellers shall not
receive any proration or other adjustment to the Purchase Price as
the result of any such payments.
6.1(f) Actions Affecting FCC Licenses or Contracts.
Take any action which jeopardizes the validity or enforceability of
or rights under the FCC Licenses, or take any action under any
Station Contract which would have a Material Adverse Effect.
6.1(g) Accounts. Accelerate the collection of
Accounts Receivable, or decelerate the payment of accounts payable,
except in order to conform with Sellers' past business practices or
in accordance with the policies described in Schedule 6.1(g).
6.2. Affirmative Covenants.
Pending and prior to the Closing Date, Sellers will:
6.2(a) Preserve Existence. Preserve their respective
existences as general partnerships and keep their business
organizations intact, maintain their existing franchises and
licenses in accordance with this Agreement, use their reasonable
commercial efforts to preserve for Buyer their relationships with
suppliers, customers, employees and others with whom they have
business relationships.
6.2(b) Normal Operations. Subject to the terms and
conditions of this Agreement (including, without limitation,
Section 6.1) (i) carry on the businesses and activities of the
Stations, including without limitation, the sale of advertising
time and scheduling of programming, in the Ordinary Course of
Business; (ii) pay or otherwise satisfy all obligations (cash and
barter) of the Stations as they come due and payable; (iii)
maintain all Assets in customary repair, order and condition; and
(iv) maintain their books of account, records, and files in
substantially the same manner as heretofore.
6.2(c) FCC Matters. (i) Maintain the validity of the
FCC Licenses, and comply in all material respects with all
requirements of the FCC Licenses and the rules and regulations of
the FCC; and (ii) deliver to Buyer, within ten (10) business days
after filing, copies of any reports, applications or responses to
the FCC related to any of the Stations that are filed between the
date of this Agreement and the Closing Date.
6.2(d) Taxes. Pay or discharge when due and payable
all Taxes payable by Sellers.
6.2(e) Actions. Take all actions under the applicable
laws and regulations of any state having jurisdiction over Sellers
necessary to effectuate the transactions contemplated by this
Agreement and by the other Seller Documents.
6.2(f) Transfer Tax: Bulk Sales. Take all necessary
action to provide for the payment of all applicable state sales,
transfer or use taxes, and to comply with all applicable bulk
transfer and similar laws, in connection with the transactions
contemplated by this Agreement and the other Seller Documents.
6.2(g) Access. Sellers shall (i) give to Buyer and
Buyer's authorized representatives access upon reasonable prior
notice to Mr. George Sosson during normal business hours to
Sellers' properties, books, records, Contracts, commitments,
facilities, premises, and equipment and to Sellers' respective
directors, officers and employees, agents and representatives
(including, without limitation, the independent accountants of
Sellers), (ii) cause Sellers' outside accountants to cooperate with
Buyer's authorized representatives and make available to such
representatives work papers relating to the Stations maintained by
such accountants, and (iii) on two business days prior notice to
Mr. George Sosson or his designee permit Buyer and Buyer's
consulting engineers and independent contractors, at Buyer's
expense, to conduct engineering and other inspections of the
Stations and the Assets, provided that all access under
subparagraphs (i), (ii) and (iii) shall be upon reasonable prior
notice and in a manner that will not interfere with any of the
Stations' operations.
6.2(h) Other Information. Provide to Buyer within ten
business days of the date of this Agreement, (i) updated Schedules
2.1(e), 3.17, and 3.19, if necessary, including an updated Schedule
2.1(e) which indicates with an asterisk all Contracts requiring
third party consent to assignment; (ii) as of a date no later than
the date three (3) days prior to Closing, a further updated
Schedule 2.1(e); and (iii) all such other information and copies of
documents concerning Sellers, the operation of the Stations and the
Assets, (other than the Excluded Assets) and Sellers' customers and
suppliers, as Buyer may reasonably request. From and after the
date of any update of Schedules 2.1(e), 3.17 and 3.19 in accordance
with the foregoing, each such Schedule shall include all of the
information provided in such update.
6.2(i) Insurance. Maintain in full force and effect
all of their existing casualty, liability, and other insurance
through the day following the Closing Date in amounts not less than
those in effect on the date hereof.
6.2(j) Financial Statements. Provide Buyer with
copies of the regular monthly internal operating statements of cash
flow for each of the Stations substantially in the form currently
generated employing the principles currently used for such
statements for April, 1996 and for each month thereafter, within
thirty (30) days after the end of each such month.
6.2(k) Violations. Upon receiving notice or otherwise
becoming aware of any violation relating to the FCC Licenses, any
violation by any of the Stations of any rules and regulations of
the FCC, or any material violations under any other applicable laws
and regulations, promptly notify Buyer and, at Sellers' expense,
use reasonable commercial efforts to cure all such violations prior
to the Closing Date.
6.2(l) Interruption in Broadcast Operations. Promptly
notify Buyer in writing if any of the Stations ceases to broadcast
at its authorized power for more than 48 consecutive hours. Such
notice shall specify the reason or reasons for such cessation and
the corrective measures taken or to be taken by Sellers.
6.2(m) Environmental Matters. (i) Promptly furnish to
Buyer written notice of any discharge of any Hazardous Materials or
of any actions or notices described in Section 3.19; (ii) use
reasonable commercial efforts to obtain and supply Buyer with
information regarding the disposal of PCBs from Reggio, Louisiana;
Oklahoma City, Oklahoma; and Columbia, Leesburg and Wedgefield, SC
(the "SC Sites"), all as described in the Dames & Moore Report; and
(iii) use reasonable commercial efforts to remove and properly
dispose of the debris on the Holyoke, MA and the SC Sites described
in the Dames & Moore Report.
6.2(n) Consents. Use reasonable commercial efforts
(which shall not require the payment of any fee not provided for in
the relevant Station Contract) to obtain the third party consents
required to assign to Buyer the Contracts relating to the Real
Property on Schedule 2.1(b), the employment Contracts marked with
a dagger on Schedule 3.17 and those Station Contracts on Schedule
2.1(e) which are marked with one or more asterisks.
6.2(o) Title Policies and Survey. Sellers acknowledge
that Buyer has not received all of the Title Policies, has only
received the remainder of the Title Policies and Surveys on the
date of this Agreement, and has not had the opportunity to review
any of the underlying documents. Accordingly, Sellers agree to
deliver to Buyer complete Title Policies within ten business days
of the date hereof and that Sellers will use reasonable commercial
efforts to provide any of the underlying documents in the
possession of Sellers and to satisfy any reasonable concerns of
Buyer with respect to any matters disclosed by such Policies and
documentation.
6.3. Confidentiality.
Sellers shall, at all times prior to the final Closing
Date hereunder, maintain strict confidentiality with respect to all
documents and information furnished to Sellers by or on behalf of
Buyer and shall keep confidential the fact of and contents of this
Agreement until the filing of the Assignment Applications. Nothing
shall be deemed to be confidential information that: (a) is known
to Sellers at the time of its disclosure to Sellers; (b) becomes
publicly known or available other than through disclosure by
Sellers; (c) is received by Sellers from a third party not actually
known by Sellers to be bound by a confidentiality agreement with or
obligation to Buyer; or (d) is independently developed by Sellers.
Notwithstanding the foregoing provisions of this Section 6.3,
Sellers may disclose such confidential information (x) to the
extent required or deemed advisable to comply with applicable laws
and regulations, (y) to its partners, officers, directors,
employees, representatives, financial advisors, attorneys,
accountants, and agents with respect to the transactions
contemplated hereby (so long as such parties are informed of the
confidentiality of such information), and (z) to any Governmental
Authority in connection with the transactions contemplated hereby.
In the event this Agreement is terminated, Sellers will return to
Buyer all confidential information prepared or furnished by Buyer
relating to the transactions contemplated hereunder, whether
obtained before or after the execution of this Agreement.
6.4. Employees.
For a period commencing upon the execution of this
Agreement and ending twelve (12) months following the Closing Date,
Sellers and RSM will not, without the prior written approval of
Buyer, offer employment elsewhere than at the Stations to any
employees of Sellers who Buyer has expressed an intent to employ or
who are in fact employed by Buyer.
6.5. Joint Liability.
Sellers covenant and agree that any claim of Buyer
arising under this Agreement or under any other Seller Document may
be asserted against any of the Sellers, and Sellers shall be
jointly and severally liable under this Agreement and the other
Seller Documents for any default in the performance of obligations
of Sellers hereunder or under any other Seller Documents, or for
any breach by Sellers of any representation, warranty, covenant or
agreement contained in this Agreement or the other Seller
Documents.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Sellers as follows:
7.1. Confidentiality.
Buyer shall, at all times prior to the Closing, comply
with the Confidentiality Agreement dated October 12, 1995 between
CCC and certain partners of REP (the "Confidentiality Agreement").
The Confidentiality Agreement shall be deemed terminated as of the
final Closing Date hereunder.
7.2. Actions.
Prior to the Closing, Buyer shall take all action under
the applicable laws and regulations of any state having
jurisdiction over Buyer necessary to effectuate the transactions
contemplated by this Agreement and the other Buyer Documents.
7.3. Access.
Buyer agrees to (i) hold all of the books and records of
the Stations existing on the Closing Date for a period of five (5)
years from the Closing Date, and (ii) give Sellers and Sellers'
authorized representatives full and complete access upon reasonable
notice during normal business hours to such books and records of
the Stations existing on the Closing Date.
7.4 Notice of Certain Events
Buyer agrees to promptly notify Sellers of any fact or
circumstance of which Buyer becomes aware after the date of this
Agreement which would cause it not to meet any qualification to be
the assignee of the FCC Licenses or which it believes may delay a
routine grant of the Assignment Applications. Buyer will use its
reasonable commercial efforts to remedy such fact or circumstance.
Buyer will not take any action that Buyer knows, or has reason to
believe, would result in the occurrence of any such fact or
circumstance; provided, however, that nothing contained in this
Section 7.4 shall prevent Buyer from seeking the FCC's consent to
acquire KJMS(FM) and KWAM(AM), Memphis, Tennessee, at any time; or
from seeking the FCC's consent to acquire any other radio or
television station(s) after the date hereof so long as Buyer uses
reasonable commercial efforts (which shall in no event be deemed to
require any sale, disposal of or surrender of any FCC license held
by Buyer or the withdrawal of any application to the FCC) to avoid
any delay of the grant of the Assignment Applications including by
advising the FCC that acquisition of the FCC Licenses contemplated
herein shall take priority over the acquisition of such other radio
or television station(s).
ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLERS AND BUYER
8.1. Possession and Control.
Notwithstanding any other provision of any Seller or
Buyer Document, between the date hereof and the Closing Date, Buyer
shall not directly or indirectly control, supervise or direct, or
attempt to control, supervise or direct, the business and
operations of any of the Stations, and such operation, including
complete control and supervision of all programming, finances and
employment shall be the sole responsibility of Sellers; provided,
however, that Buyer shall be entitled to inspect the Assets as
provided in Section 6.2(g). On and after the Closing Date, Sellers
shall have no control over, or right to intervene, supervise,
direct or participate in, the business and operations of the
Stations.
8.2. Risk of Loss.
8.2(a) The risk of loss or damage by fire or other
casualty or cause to the Assets until the Closing Date shall be
upon Sellers. In the event of such loss or damage prior to the
Closing Date, Sellers shall use reasonable commercial efforts to
restore, replace or repair the damaged Assets in accordance with
Sellers' past practices at Sellers' sole cost and expense. In the
event such loss or damage shall not be restored, replaced, or
repaired as of the Closing Date, Buyer shall, at its option,
either:
(i) proceed with the Closing and receive at Closing
a reduction of the Purchase Price in an amount which, net of any
insurance proceeds paid by Sellers to Buyer, or the value of any
rights to receive insurance proceeds which are assigned by Sellers
to Buyer, is sufficient to pay for such restoration, replacement or
repair, provided, however, that no adjustment shall be made for any
uninsured loss of less than $100,000; or
(ii) if the cost of such restoration, replacement or
repair, net of such insurance proceeds paid or assigned to Buyer,
exceeds Five Million Dollars ($5,000,000), at its option by written
notice to Sellers, terminate this Agreement with respect to the
Group in which the Station or Stations subject to such loss or
damage is included; or
(iii) defer the Closing Date until such
restorations, replacements or repairs are made (provided that if
such restoration, replacement or repairs are not completed within
thirty (30) days after the original Closing Date, Buyer shall have
the additional right to proceed under clause (i) or clause (ii) of
this Section 8.2(a)).
8.2(b) In the event that any loss or damage described
in Section 8.2(a) shall not be restored, replaced or repaired as of
the Closing Date, Sellers may defer the Closing Date until such
restorations, replacements or repairs are made, so long as such
restorations, replacements or repairs are made within thirty (30)
days after the date the Closing would have occurred in the absence
of such loss or damage.
8.2(c) If any event occurs which prevents the
broadcast transmission of any of the Stations with substantially
full licensed power and antenna height as described in the
applicable FCC License in the manner that such Station has
heretofore been operating, and (i) such Station is not restored so
that operation is resumed (a) at some level of power within five
(5) days of such event, or, in the case of more than one event, the
aggregate number of days preceding such restorations from all such
events exceeds ten (10) days and (b) with substantially full
licensed power and antenna height as described in the applicable
FCC License within thirty (30) days or (ii) if such Station is off
the air more than four (4) times for a period, in each case
exceeding four (4) hours (other than for regularly scheduled
maintenance and repairs during the hours from midnight to 5 A.M.),
in the case of either (i) or (ii), Sellers agree to give prompt
written notice to Buyer, and Buyer shall have the right, by giving
written notice to Sellers of its election to do so, exercisable
within five (5) business days of receipt of such written notice
from Sellers, to terminate this Agreement with respect to the Group
in which such Station is included.
8.2(d) If this Agreement is terminated in accordance
with this Section 8.2, the Pre-Closing Deposit together with
accrued interest thereon (or in the case of any partial
termination, the portion of such Pre-Closing Deposit allocable to
any Group with respect to which this Agreement is terminated,
determined in accordance with Schedule 15.2) shall be returned to
Buyer. In the case of any termination of this Agreement in its
entirety pursuant to this Section 8.2, upon such payment of the
Pre-Closing Deposit, no party to this Agreement shall have any
liability to any other party to this Agreement, and this Agreement
in its entirety, except for the provisions set forth in Section
13.2 (which shall survive such termination), shall be deemed null,
void and of no further force and effect
8.3. Allocation of Purchase Price.
Buyer and Sellers will allocate the Purchase Price in
accordance with the respective fair market values of the Assets and
the goodwill being purchased and sold in accordance with the
requirements of Section 1060 of the Internal Revenue Code of 1986,
as amended (the "Code"). A preliminary allocation shall be
prepared by Sellers and the final allocation shall be determined by
mutual agreement of the parties prior to the Closing. Buyer and
Sellers further agree to file their respective federal income tax
returns and other tax returns in a manner consistent with such
final allocation.
8.4. Public Announcements.
Sellers and Buyer shall consult with each other before
issuing an initial press release or otherwise making any initial
public statements with respect to this Agreement or the
transactions contemplated herein and shall not issue any such press
release or make any such public statement without the prior written
consent of the other party, which shall not be unreasonably
withheld; provided, however, that a party may, without the prior
consultation with or written consent of the other party, issue such
press release or make such public statement as may be required by
Law or any listing agreement with a national securities exchange to
which Sellers or Buyer (or any affiliate of Sellers or Buyer) is a
party if it has used all reasonable efforts to consult with the
other party and to obtain such party's consent but has been unable
to do so in a timely manner.
8.5. Employee Matters.
8.5(a) All employees of the Stations shall be and
remain Sellers' employees until the Closing Date, with Sellers
having full authority and control over their actions, and Buyer
shall not assume the status of an employer or a joint employer of,
or incur or be subject to any liability or obligations of an
employer with respect to, any such employees unless and until
actually hired by Buyer. Sellers shall be solely responsible for
any and all liabilities and obligations Sellers may have to the
employees of the Stations, including, without limitation,
compensation, severance pay, incentive bonuses, health expenses,
and accrued vacation time and sick leave relating to periods prior
to the Closing Date. Sellers shall comply with the provisions of
the Worker Adjustment and Retraining and Notification Act (the
"WARN Act") and similar laws and regulations, if applicable, and
shall be solely responsible for any and all liabilities, penalties,
fines, or other sanctions that may be assessed or otherwise due
under such applicable laws and regulations on account of the
dismissal or termination of any of the employees of any of the
Stations by Sellers. Effective on the Closing Date, the employment
of all persons employed by Sellers other than persons party to the
employment Contracts marked with a dagger on Schedule 3.17 shall be
terminated by Sellers.
8.5(b) Buyer shall have the right, but not the
obligation, at any time prior to or after the Closing Date to offer
employment to the employees of the Stations on terms and conditions
determined by Buyer. Buyer shall employ at least that proportion
of the employees of each Station as shall be necessary to prevent
a "mass layoff" or a "plant closing" as such terms are defined in
the WARN Act.
8.5(c) Sellers will be solely responsible for
providing, at their cost, all medical, life and other insurance
coverage and benefits, and disability benefits to which any
employee of Sellers who retired or was terminated from service with
Sellers prior to the Closing Date or who was disabled prior to the
Closing Date is entitled under the Station Employee Benefit Plans
or applicable law.
ARTICLE 9.
CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer to purchase the Assets and to
proceed with the Closing are subject to the satisfaction (or waiver
in writing by Buyer) at or prior to the Closing of each of the
following conditions:
9.1. Representations and Covenants.
(a) The representations and warranties of Sellers made
in this Agreement or in any other Seller Document (i) shall have
been true and correct when made, and (ii) shall be true and correct
on the Closing Date as though such representations and warranties
were made on and as of the Closing Date except (x) with respect to
changes occurring as a result of actions permitted by this
Agreement which are reflected on updated Schedules (subject to the
limitation in Section 3.13 relating to Schedules 2.1(e) and 3.17)
delivered at the Closing and (y) matters described in (I) Section
3.7 which are not described in Section 9.7 or (II) Section 3.3 and
3.4(b), and which in either case do not have a Material Adverse
Effect; and (b) Sellers shall have performed and complied with all
covenants and agreements required by this Agreement or any other
Seller Document to be performed or complied with by Sellers prior
to the Closing.
9.2. Consents.
Sellers shall have obtained prior to the Closing Date all
consents, authorizations or approvals necessary to effect valid
assignments to Buyer of the Contracts relating to Real Property
marked with two asterisks on Schedule 2.1(b) and those Station
Contracts on Schedule 2.1(e) which are marked with two asterisks
and all other consents necessary (which shall not be deemed to
include consents to Contracts listed on the Schedules and not so
marked) to consummate the transactions contemplated hereby (except
for the FCC Order, which shall be governed by Section 9.4 and
except for any HSR filing, which shall be governed by Section 9.8),
each of which consents, authorizations and approvals shall be in
form and substance reasonably satisfactory to Buyer.
9.3. Delivery of Documents.
Sellers shall have delivered to Buyer the Seller
Documents required to be delivered by Sellers to Buyer pursuant to
Section 11.2.
9.4. FCC Order.
The FCC Order shall have become a Final Order.
9.5. Financial Statements.
Sellers shall have provided Buyer with the financial
statements referred to in Sections 2.6(b) and 6.2(j).
9.6. REP Letter.
Sellers shall have provided Buyer with the duly executed
REP Letter.
9.7. Legal Proceedings.
No action or proceeding by or before any Governmental
Authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which
restrains, prohibits or invalidates the transactions contemplated
by this Agreement or any other Seller Document or prevents, limits,
restricts or impairs the ownership, use or operation of the Assets
or the Stations by Buyer, other than an action or proceeding
instituted or threatened by Buyer.
9.8. Hart-Scott-Rodino.
All applicable waiting periods under Hart-Scott-Rodino
shall have expired or terminated.
ARTICLE 10.
CONDITIONS PRECEDENT TO
SELLERS' OBLIGATION TO CLOSE
The obligations of Sellers to sell, transfer, convey and
deliver the Assets (other than the Excluded Assets) and to proceed
with the Closing are subject to the satisfaction (or waiver in
writing by Sellers) at or prior to the Closing of each of the
following conditions:
10.1. Representations and Covenants.
(a) The representations and warranties of Buyer made in
this Agreement or in any other Buyer Document shall have been true
and correct when made, and shall be true and correct on the Closing
Date as though such representations and warranties were made on and
as of the Closing Date; and (b) Buyer shall have performed and
complied with all covenants and agreements required to be performed
or complied with by Buyer prior to the Closing.
10.2. Delivery by Buyer.
Buyer shall have delivered to Sellers the Purchase Price
and all Buyer Documents required to be delivered by Buyer to
Sellers pursuant to Section 11.3.
10.3. FCC Order.
The FCC Order shall have been issued.
10.4. Legal Proceedings.
No action or proceeding by or before any Governmental
Authority shall have been instituted or threatened (and not
subsequently dismissed, settled, or otherwise terminated) that
restrains, prohibits, or invalidates the transactions contemplated
by this Agreement, other than an action or proceeding instituted or
threatened by Sellers.
10.5. Hart-Scott-Rodino.
All applicable waiting periods under Hart-Scott-Rodino
shall have expired or terminated.
ARTICLE 11.
THE CLOSING
11.1. Closing.
The Closing Date shall be the tenth (10th) business day
after the date on which the FCC Order is issued with respect to the
Stations, provided, however, that at the option of Buyer the
Closing Date shall be delayed to any date up to the fifth (5th)
business day after the date on which the FCC Order becomes a Final
Order, and provided further that (i) subject to the provisions of
Section 13.1(b), if one or more conditions to the obligations of
Sellers or Buyer is not satisfied by such date, the party
benefitting from such condition may elect, in its sole discretion,
one or more postponements of the Closing Date for the purpose of
enabling such condition to be satisfied; and (ii) upon written
agreement of the parties hereto, the Closing may be postponed to a
future date. The Closing shall be held at such time of day and
place or places as the parties may agree.
11.2. Delivery by Sellers.
At or before the Closing, Sellers shall deliver to Buyer
the following:
11.2(a) Contracts, Agreements and Instruments. The
following Seller Documents dated as of the Closing Date and duly
executed by Sellers, in form and substance satisfactory to counsel
to Buyer and sufficient to transfer and convey to Buyer all of
Sellers' right, title and interest (of the quality required in this
Agreement) in and to the Assets other than the Excluded Assets:
(i) the Assignment of Leases;
(ii) the Bill of Sale;
(iii) the Assignment of FCC Licenses;
(iv) the Assignment of Contracts;
(v) the Assumption Agreement;
(vi) the Deeds;
(vii) certificates of title with respect to
the motor vehicles listed on Schedule 2.1(g) or if any such motor
vehicles are leased by Sellers, an assignment of such lease; and
(viii) all such other general instruments
of transfer, assignment and conveyance, general warranty deeds,
certificates of title, assignments, estoppel certificates for
leased Real Property, evidences of consent or waiver, and other
instruments or documents in form and substance satisfactory to
Buyer, as shall be necessary to evidence the sale, assignment,
transfer and conveyance of the Assets other than the Excluded
Assets to Buyer in accordance with this Agreement.
11.2(b) Consents. Originals of all consents necessary
to effect valid assignments to Buyer of all of the Contracts listed
on Schedule 2.1(b) which are marked with two asterisks and on
Schedule 2.1(e) which are marked with two asterisks and any other
consents Sellers have been able to obtain.
11.2(c) UCC Report. A report dated not more than ten
(10) days prior to the Closing Date of the appropriate filing
officers in the jurisdictions specified in Schedule 11.2(c)
evidencing no judgments, financing statements, tax liens,
mechanics', materialmen's or other statutory liens on file with
respect to the Assets, and, if such report evidences that
judgments, financing statements, tax liens, mechanics',
materialmen's or other statutory liens are on file with respect to
any of the Assets, a termination statement or other appropriate
document signed by the secured party or lienholder evidencing the
release or termination of such financing statement or such lien or
a pay-off letter from such secured party or lienholder indicating
that such party or lienholder will provide such release or
termination statement upon receipt of payment from the proceeds of
the sale contemplated herein.
11.2(d) Certified Resolutions. A copy of (i) the
consents of the partners of Sellers and the resolutions of the
Board of Directors of RSM, certified as being correct and complete
and then in full force and effect, authorizing the execution,
delivery and performance of the Seller Documents, and the
consummation of the transactions contemplated thereby, (ii) a copy
of the general partnership agreement for each Seller, each
certified by a duly authorized officer of the managing partner of
each Seller as being true, correct and complete as of the Closing
Date, and (iii) a copy of the Articles of Incorporation and Bylaws
of RSM, certified by a duly authorized officer of RSM as being
true, correct and complete as of the Closing Date.
11.2(e) Officers' Certificates.
(i) A certificate of each Seller signed by a duly
authorized officer of the managing partner of such Seller
certifying that the representations and warranties of such Seller
made herein and in the other Seller Documents were true and correct
as of the date of this Agreement and that such representations and
warranties and the representations and warranties in the other
Seller Documents are true and correct as of the Closing Date, and
that such Seller has performed and complied with all covenants and
agreements required to be performed or complied with by such Seller
on or prior to the Closing; and
(ii) A certificate signed by a duly authorized
officer of the managing partner of each Seller as to the incumbency
of the officers of such managing partner executing any Seller
Document on behalf of such Seller.
11.2(f) Sellers' IRS Form 8594. Internal Revenue
Service Form 8594 completed by Sellers in connection with the
acquisition of the Assets by Buyer.
11.2(g) Expense Payment. A check or checks, or other
evidence of payment acceptable to Buyer, with respect to the
expenses payable by Sellers as described in Section 15.4.
11.2(h) Opinion of Counsel. Opinions of Dewey
Ballantine, of Richards, Layton & Finger, and of Verner Liipfert,
et al., respectively New York, Delaware and FCC counsel to Sellers,
dated the Closing Date, addressed to Buyer, in form and substance
reasonably satisfactory to Buyer and its counsel.
11.2(i) Other Documents. Such other documents to be
delivered by Sellers hereunder as are reasonably necessary for
Buyer to effectuate and document the transactions contemplated
hereby.
11.3. Delivery by Buyer.
At or before the Closing, Buyer shall deliver to Sellers
the following:
11.3(a) Purchase Price Payment. The Purchase Price in
the amount and manner set forth in Section 2.
11.3(b) Buyer Documents. The following Buyer
Documents:
(i) the Assumption Agreement; and
(ii) such other certificates, opinions, instruments
or documents as Sellers may reasonably request in order to effect
and document the transactions contemplated hereby.
11.3(c) Certified Resolution. Copies of (i) the
resolutions of the board of directors of each Buyer, certified as
being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this
Agreement and of the other Buyer Documents, and the consummation of
the transactions contemplated hereby and thereby and (ii) a copy of
the Certificate of Incorporation and Bylaws of each Buyer, each
certified by the Secretary of each Buyer as being true, correct and
complete as of the Closing Date.
11.3(d) Officers' Certificate. (i) A certificate of
each Buyer signed by the President and the Secretary of such Buyer
certifying that the representations and warranties of such Buyer
made herein were true and correct as of the date of this Agreement
and are true and correct as of the Closing Date, and that such
Buyer has performed and complied with all covenants and agreements
required to be performed or complied with by such Buyer prior to
the Closing; and (ii) a certificate signed by the Secretary of each
Buyer as to the incumbency of the officers of such Buyer executing
this Agreement or any of the other Buyer Documents on behalf of
such Buyer.
11.3(e) Buyer's IRS Form 8594. Internal Revenue
Service Form 8594 completed by Buyer in connection with the
acquisition of the Assets by Buyer.
11.3(f) Expense Payment. A check or checks, or other
evidence of payment acceptable to Sellers, with respect to the
expenses payable by Buyer as described in Section 15.4.
11.3(g) Opinion of Counsel. The opinion of Wiley, Rein
& Fielding, counsel to the Buyers, dated the Closing Date,
addressed to Sellers, in form and substance reasonably satisfactory
to Sellers and their Counsel.
11.3(h) Other Documents. Such other documents to be
delivered by Buyer hereunder as are reasonably necessary for
Sellers to effectuate the transactions contemplated herein.
ARTICLE 12.
SURVIVAL; INDEMNIFICATION
12.1. Survival of Representations.
Unless otherwise set forth herein, all representations
and warranties, covenants and agreements of Sellers and Buyer
contained in or made pursuant to this Agreement or in any
certificate furnished pursuant hereto shall survive the Closing
Date and shall remain in full force and effect for a period of one
year after the Closing Date. All such representations and
warranties, covenants, and agreements shall also survive and be
unaffected by (and shall not be deemed waived by) any
investigation, audit, appraisal, or inspection at any time made by
or on behalf of any party hereto. Notwithstanding anything herein
to the contrary, any representation, warranty, covenant or
agreement which is the subject of a claim which is asserted in
writing prior to the expiration of the applicable period set forth
above shall survive with respect to such claim or dispute until the
final resolution thereof.
12.2. Indemnification by Sellers.
Subject to the conditions and provisions of Section 12.4,
Sellers jointly and severally agree to indemnify, defend and hold
harmless Buyer and Buyer's respective directors, officers, managers
and employees ("Buyer Indemnified Parties") from and against and in
respect of any and all Losses, asserted against, resulting to,
imposed upon or incurred by the Buyer Indemnified Parties, directly
or indirectly, by reason of or resulting from (a) any liability or
obligation of or claim against Buyer Indemnified Parties (whether
absolute, accrued, contingent or otherwise and whether a
contractual, Tax or any other type of liability or obligation or
claim) not expressly assumed by Buyer pursuant to Section 2.7 or
the Assumption Agreement or for which, and to the extent which, the
Buyer received a credit under Section 2.6, arising out of, relating
to or resulting from the businesses of Sellers, or relating to or
resulting from the Assets or the business and operations of the
Stations during the period prior to the Closing Date; (b) any
misrepresentation or breach of the warranties of Sellers contained
in or made pursuant to any Seller Document; (c) any noncompliance
by Sellers with any covenants, agreements or undertakings of
Sellers contained in or made pursuant to any Seller Document;
(d)(i) any employment related practices, policies, Contracts,
decisions, actions or omissions by Sellers for the period ending on
the Closing Date with respect to any of Sellers' employees or
former employees, or (ii) Buyer's failure to (A) offer employment
to any of Sellers' employees or (B) continue or establish any
Station Employee Benefit Plan; or (e) matters falling within the
exception to the condition to Buyer's obligation to close set forth
in Section 9.1(a)(y).
12.3. Indemnification by Buyer.
Subject to the conditions and provisions of Section 12.4
and Section 12.5, Buyer hereby agrees to indemnify, defend and hold
harmless Sellers, RSM and their respective partners, directors,
officers and employees ("Seller Indemnified Parties") from, against
and with respect to any and all Losses, asserted against, resulting
to, imposed upon or incurred by Seller Indemnified Parties,
directly or in indirectly, by reason of or resulting from (a) any
liability or obligation of or claims against Seller Indemnified
Parties (whether absolute, accrued, contingent or otherwise and
whether contractual, Tax or any other type of liability or
obligation or claim) expressly assumed by Buyer pursuant to Section
2.7 or the Assumption Agreement or for which, and to the extent
which, the Buyer received a credit under Section 2.6; (b) any
misrepresentation or breach of the warranties of Buyer contained in
or made pursuant to this Agreement; (c) any noncompliance by Buyer
with any covenants, agreements or undertakings of Buyer contained
in or made pursuant to this Agreement; or (d) any liability or
obligation of or claims against Seller Indemnified Parties (whether
absolute, accrued, contingent or otherwise and whether a
contractual, Tax or any other type of liability or obligation or
claim) arising out of, relating to or resulting from the businesses
of Buyer, or relating to or resulting from the Assets (other than
the Excluded Assets) or the business and operations of the Stations
during the period from and after the Closing Date.
12.4. Conditions of Indemnification.
The obligations and liabilities of Sellers and of Buyer
hereunder with respect to their respective indemnities pursuant to
this Section 12, resulting from any Losses, shall be subject to the
following terms and conditions:
12.4(a) The party seeking indemnification (the
"Indemnified Party") must give the other party or parties, as the
case may be (the "Indemnifying Party"), notice specifying in
reasonable detail the nature of any such Losses promptly after the
Indemnified Party receives notice thereof; provided that the
failure to give such notice shall not affect the rights of the
Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual damage by reason of
such failure.
12.4(b) The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing,
the defense of such Losses at the Indemnifying Party's risk and
expense.
12.4(c) In the event that the Indemnifying Party shall
elect not to undertake such defense, or, within a reasonable time
after notice from the Indemnified Party of any such Losses, shall
fail to defend, the Indemnified Party (upon further written notice
to the Indemnifying Party) shall have the right to undertake the
defense, compromise or settlement of such Losses, 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 such Losses at any time
prior to settlement, compromise or final determination thereof).
In such event, the Indemnifying Party shall pay to the Indemnified
Party, in addition to the other sums required to be paid hereunder,
the costs and expenses incurred by the Indemnified Party in
connection with such defense, compromise or settlement as and when
such costs and expenses are so incurred.
12.4(d) Anything in this Section 12.4 to the contrary
notwithstanding, (i) if there is a reasonable probability that
Losses may materially and adversely affect the Indemnified Party
other than as a result of money damages or other money payments,
the Indemnified Party shall have the right, at its own cost and
expense, to participate in the defense, compromise or settlement of
the Losses, (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, which shall not be
unreasonably withheld, settle or compromise any Losses 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 Losses in form and substance satisfactory to the Indemnified
Party, and (iii) in the event that the Indemnifying Party
undertakes defense of any Losses, 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
Losses and the Indemnifying Party and the Indemnified Party and
their respective counsel or other representatives shall cooperate
with respect to such Losses and (iv) in the event that the
Indemnifying Party undertakes defense of any Losses, the
Indemnifying Party shall have an obligation to keep the Indemnified
Party informed of the status of the defense of such Losses and
furnish the Indemnified Party with all documents, instruments and
information that the Indemnified party shall reasonably request in
connection therewith.
12.5. Post-Closing Deposit.
Sellers' obligations to indemnify Buyers as set forth
above shall be payable solely from the Post-Closing Deposit in
accordance with the Escrow Agreement. In the event that any claim
for indemnification made by Buyer in writing has not been satisfied
prior to the date on which the Post-Closing Deposit is due to be
returned to Sellers, funds reasonably sufficient to satisfy such
claim shall be retained in escrow until the amount of such claim is
finally determined.
ARTICLE 13.
TERMINATION
13.1. Termination.
This Agreement may be terminated at any time prior to the
Closing by:
13.1(a) the mutual consent of Sellers and Buyer;
13.1(b) Buyer, by written notice of termination
delivered to Sellers, provided that the Buyer shall not be in
default or breach under this Agreement, if (i) the FCC Order has
not become a Final Order and/or the Closing has not occurred by
November 30, 1996, with respect to the Stations set forth as Group
A in Section 15.2 (the "Group A Stations"); (ii) if the FCC Order
has not become a Final Order and/or the Closing has not occurred by
the date ten (10) months from the date hereof with respect to any
of the Stations in Group B or C in Section 15.2; (iii) with respect
to the Stations in any Group, if the FCC designates any Assignment
Application for a Station in such Group for an evidentiary hearing,
(iv) with respect to the Stations in any Group, if the FCC issues
an order in connection with any Assignment Application with respect
to any Station in such Group with conditions which are materially
adverse to Buyer or which in any material way diminishes the
operating rights with respect to the Assets or any such Station
(except any such conditions expressly accepted by Buyer in
writing); or (v) the Schedule 2.1(e) or 3.18(a) delivered pursuant
to Section 6.2(h)(i) exceeds the $12,000 or $250,000 limits set
forth in Section 3.13, provided that any termination pursuant to
this subparagraph (v) must be effected by written notice delivered
to Sellers no more than ten (10) days from the date of delivery of
such updated Schedule;
13.1(c) Buyer, pursuant to, and in accordance with,
Section 8.2; or
13.1(d) Sellers, provided that Sellers shall not be in
default or breach under this Agreement, by written notice of
termination delivered to Buyer, if (i) the FCC Order has not become
a Final Order and/or the Closing has not occurred by November 30,
1996, with respect to the Group A Stations; (ii) if the FCC Order
has not become a Final Order and/or the Closing has not occurred by
the date ten (10) months from the date hereof with respect to any
of the Group B or Group C Stations; or (iii) with respect to the
Stations in any Group, if the FCC designates any Assignment
Application for a Station in such Group for an evidentiary hearing.
13.2. Effect of Termination.
In the event this Agreement is terminated as provided in
this Article 13 or Article 14, this Agreement shall be deemed null,
void and of no further force or effect, and the parties hereto
shall be released from all future obligations hereunder with
respect to the Stations affected by such termination; provided,
however, that the obligations of Buyer and Sellers as in Sections
6.3, 7.1, and 15.3, shall survive such termination.
ARTICLE 14.
REMEDIES
14.1 Default by Buyer.
If Buyer shall default in the performance of its
obligations under this Agreement or if, as a result of Buyer's
action in violation of this Agreement or failure to act in
accordance with this Agreement, the conditions precedent to
Sellers' obligation to close specified in Section 10 are not
satisfied, and for such reason or reasons this Agreement is not
consummated, and provided that Sellers shall not then be in default
in the performance of Sellers' obligations hereunder, Sellers shall
be entitled, by written notice to Buyer, as their sole and
exclusive remedy, to terminate this Agreement and to instruct the
Escrow Agent to pay to Seller the Pre-Closing Deposit as liquidated
damages.
14.2. Default by Sellers.
If any Seller shall default in the performance of
Sellers' obligations under this Agreement, or if, as a result of
any Seller's action in violation of this Agreement or failure to
act in accordance with this Agreement, the conditions precedent to
Buyer's obligation to close specified in Section 9 are not
satisfied and for such reason or reasons this Agreement is not
consummated, and provided that Buyer shall not then be in default
in the performance of Buyer's obligations hereunder, Buyer shall be
entitled, at Buyer's sole option:
(i) to require Sellers to consummate and specifically
perform the sale in accordance with the terms of this Agreement, if
necessary through injunction or other court order or process; or
(ii) by written notice to Sellers, to terminate this
Agreement, to instruct the Escrow Agent to pay to Buyer the Pre-
Closing Deposit together with all interest and other earnings
thereon.
14.3. Specific Performance.
Sellers acknowledge that the Assets to be sold and
delivered to Buyer pursuant to this Agreement are unique and that
Buyer has no adequate remedy at law if Sellers shall fail to
perform any of their obligations hereunder, and Sellers therefore
confirm and agree that Buyer's right to specific performance is
essential to protect the rights and interests of Buyer.
Accordingly, Sellers hereby agree that Buyer shall have the right
to have all obligations, undertakings, agreements and other
provisions of this Agreement specifically performed by Sellers and
that Buyer shall have the right to obtain an order or decree of
such specific performance in any of the courts of the United States
or of any state or other political subdivision thereof.
14.4 Remedies Exclusive.
The remedies provided in this Article 14 with respect to
the Pre-Closing Deposit and specific performance and the Post-
Closing Deposit shall be the sole and exclusive remedies for the
failure by the Sellers or Buyer to perform their respective
obligations under this Agreement. Neither Sellers nor Buyer shall
have any other remedies at law or equity except as specifically
provided in this Agreement and each of the Sellers and Buyer hereby
waive, to the extent permitted by applicable law, all rights to
pursue any of such other remedies.
ARTICLE 15.
GENERAL PROVISIONS
15.1. Additional Actions, Documents and Information.
Each of the parties hereto agrees that it will, at any
time, prior to, at or after the Closing Date, take or cause to be
taken such further actions, and execute, deliver and file or cause
to be executed, delivered and filed such further documents and
instruments and obtain such consents, as may be necessary or
reasonably requested in connection with the consummation of the
purchase and sale contemplated by this Agreement or in order to
fully effectuate the purposes, terms and conditions of this
Agreement. Subject to the Confidentiality Agreement, prior to the
Closing Date, the Sellers shall provide to Buyer and Buyer's
counsel, accountants, and other representatives all information
reasonably requested thereby in connection with the preparation by
Buyer of any disclosure document or registration statement to be
filed with the Securities and Exchange Commission.
15.2. Multiple/Partial Closings Permitted
(a) The Sellers and the Buyer have entered into this
Agreement in the contemplation of selling and purchasing all of the
Assets (other than the Excluded Assets). The Sellers and the Buyer
agree to proceed in good faith to complete the sale and purchase of
all of such Assets in accordance with this Agreement. If, however,
the conditions to the obligations of the Buyer and the Sellers with
respect to one or more of the following three groups of Stations
are satisfied, the Closing with respect to such Stations and the
Assets (other than the Excluded Assets) related thereto shall occur
in accordance with Section 11.1 and the deliveries by Buyer and
Seller contemplated by Sections 11.2 and 11.3 shall be made only
with respect to such Stations and the Assets (other than the
Excluded Assets) related thereto (each a "Partial Closing"):
Group A
Call Letters Licensed To:
WHYN-AM Springfield, MA
WHYN-FM Springfield, MA
WCKT-FM Lehigh Acres, FL
WXRM-FM Naples Park, FL
WWDM-FM Sumter, SC
WARQ-FM Columbia, SC
WSJS-AM Winston Salem, NC
WTQR-FM Winston Salem, NC
WXRA-FM Eden, NC
WNOE-FM New Orleans, LA
KLJZ-FM Port Sulphur, LA
KXXY-AM/FM Oklahoma City, OK
KTST-FM Oklahoma City, OK
Group B
Call Letters Licensed To:
WREC-AM Memphis, TN
WEGR-FM Memphis, TN
WRXQ-FM Olive Branch, MS
Group C
Call Letters Licensed To:
WWBB-FM Providence, RI
WWRX-FM Westerly, RI
References herein to the Closing and the Closing Date shall mean
and refer to separately to each such Partial Closing and to the
date on which such Partial Closing occurred.
(b) Solely for purposes of (i) determining the portion
of the Purchase Price payable with respect to any Partial Closing
and (ii) transferring moneys held in the Pre-Closing Deposit to the
Post-Closing Deposit, Buyer and Sellers agree to allocate the
Purchase Price and the amount of such Deposit among the Stations in
accordance with the percentages set forth on Schedule 15.2.
(c) In any Partial Closing, the adjustments described in
Section 2.6 shall be made only with respect to the Stations in the
relevant Group, and for the purposes of calculating the Accounts
Receivable Adjustment, the $5,000,000 figure described in Section
2.6(b) shall be allocated in accordance with the percentages set
forth in Schedule 15.2, provided, however, that in the event of any
allocation of such $5,000,000 figure, at the final Closing
hereunder, or at the termination of this Agreement with respect to
all remaining Stations, the aggregate Accounts Receivable
Adjustment made at the Partial Closings shall be compared with the
Accounts Receivable Adjustment which would have been made had all
of the Accounts Receivable acquired in such Partial Closings been
acquired in a single Closing, and any difference shall, at such
final Closing or within three (3) business days of such
termination, be paid by Buyer to Seller or vice versa, as the case
may be.
15.3. Brokers.
Sellers represent to Buyer that, Sellers have not
engaged, or incurred any unpaid liability (for any brokerage fees,
finders' fees, commissions or otherwise) to, any broker, finder or
agent in connection with the transactions contemplated by this
Agreement; Buyer represents to Sellers that Buyer has not engaged,
or incurred any unpaid liability (for any brokerage fees, finders'
fees, commissions or otherwise) to, any broker, finder or agent in
connection with the transactions contemplated by this Agreement;
and Sellers agree to indemnify Buyer, and Buyer agrees to indemnify
Sellers, against any claims asserted against the other parties for
any such fees or commissions by any person purporting to act or to
have acted for or on behalf of the indemnifying party.
Notwithstanding any other provision of this Agreement, this Section
15.3 shall survive the Closing without limitation.
15.4. Expenses.
Each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and
consummation of the transactions provided for herein.
Notwithstanding the foregoing, Sellers and Buyer shall each pay
one-half of (a) the fees and expenses of Dames & Moore in
connection with the transactions contemplated in this Agreement and
(b) any transfer, sales, filing or use Taxes or fees applicable to,
imposed upon or arising out of the transactions contemplated hereby
including, without limitation, any transfer Tax or filing fee
relating to the assignment of the FCC Licenses, any HSR Filings or
the transfer of Real Property or personal property, whether now in
effect or hereinafter adopted and regardless of which party such
Tax or fee is imposed upon, but excluding any Tax on or measured by
net or gross income or gain of Sellers (which Tax or fee shall be
paid by Sellers).
15.5. Mail.
Sellers hereby authorize and empower Buyer from and after
the Closing Date (a) to receive and open mail addressed to Sellers
and (b) to deal with the contents thereof in any manner Buyer sees
fit, provided such mail and the contents thereof relate to the
Assets (other than the Excluded Assets) or otherwise to the
business currently conducted by Sellers or to any of the
liabilities and obligations assumed by Buyer hereunder. Sellers
agree to deliver to Buyer any mail, checks or other documents
received by it pertaining to the present business of Sellers, the
Assets or any of the liabilities and obligations assumed by Buyer
hereunder. Buyer agrees to deliver to RSM any mail which it
receives to which it is not entitled by reason of the Agreement or
otherwise and to which Sellers are entitled.
15.6. Notices.
All notices, demands, requests, or other communications
which may be or are required to be given or made by any party to
any other party pursuant to this Agreement shall be in writing and
shall be hand delivered, mailed by first-class registered or
certified mail, return receipt requested, postage prepaid,
delivered by overnight air courier, or transmitted by facsimile
transmission addressed as follows:
(i) If to Buyer:
c/o Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, TX 78216
Attention: Mark P. Mays
Fax: (210) 822-2299
with a copy (which shall not constitute notice) to:
Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Attention: Richard J. Bodorff, Esq.
Fax: (202) 429-7207
(ii) If to Sellers or RSM:
Radio Station Management, Inc.
1 Norwalk West
40 Richards Ave.
Norwalk, CT 06854
Attention: George Sosson
Fax: (203) 857-5609
with a copy (which shall not constitute notice) to:
Dewey Ballantine
1301 Avenue of the Americas
New York, NY 10019
Attention: E. Ann Gill, Esq.
Fax: (212) 259-6333
or such other address as the addressee may indicate by written
notice to the other parties.
Each notice, demand, request, or communication which
shall be given or made in the manner described above shall be
deemed sufficiently given or made for all purposes at such time as
it is delivered to the addressee (with the return receipt, the
delivery receipt, or the affidavit of messenger being deemed
conclusive but not exclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
15.7. Waiver.
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or
under any other instrument or document given in connection with or
pursuant to this Agreement shall impair any such right, power or
privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of
such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent
expressly specified therein.
15.8. Benefit and Assignment.
15.8(a) Except as hereinafter specifically provided in
this Section 15.8, no party hereto shall assign this Agreement, in
whole or in part, whether by operation of law or otherwise, without
the prior written consent of Sellers (if the assignor is Buyer) or
Buyer (if the assignors are Sellers); and any purported assignment
contrary to the terms hereof shall be null, void and of no force
and effect. Buyer shall have the right to assign this Agreement to
any entity or entities controlling, controlled by, or under common
control with Buyer so long as any such assignment will not delay
the Closing beyond the date on which any Closing is required to
occur in accordance with this Agreement. Any assignment in
accordance with the terms hereof shall become effective upon
delivery of written notice in accordance with Section 15.6.
15.8(b) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and assigns as permitted hereunder. No person or entity
other than the parties hereto is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of
the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be
enforceable only by, the parties hereto or their respective
successors and assigns as permitted hereunder.
15.9. Entire Agreement; Amendment.
This Agreement, including the Schedules, Annexes and
Exhibits hereto and the other instruments and documents referred to
herein or delivered pursuant hereto and the Confidentiality
Agreement, contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior oral
or written agreements, commitments or understandings with respect
to such matters. No amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and
duly executed by the parties hereto.
15.10. Severability.
If any part of any provision of this Agreement or any
other contract, agreement, document or writing given pursuant to or
in connection with this Agreement shall be invalid or unenforceable
under applicable law, such part shall be ineffective to the extent
of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provisions or the remaining
provisions of said contract, agreement, document or writing.
15.11. Headings.
The headings of the sections and subsections contained in
this Agreement are inserted for convenience only and do not form a
part or affect the meaning, construction or scope thereof.
15.12. Governing Law.
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be
governed by and construed under and in accordance with the laws of
the State of New York, excluding the choice of law rules thereof.
15.13. Signature in Counterparts.
This Agreement may be executed in separate counterparts,
none of which need contain the signatures of all parties, each of
which shall be deemed to be an original, and all of which taken
together constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has
executed this Asset Purchase Agreement, or has caused this Asset
Purchase Agreement to be duly executed and delivered in its name on
its behalf, all as of the day and year first above written.
SELLERS
REP NEW ENGLAND G.P.
REP SOUTHEAST G.P.
REP FT. MYERS G.P.
REP RHODE ISLAND, G.P.
REP FLORIDA G.P.
REP WHYN G.P.
REP WWBB G.P.
S.E. LICENSEE G.P.
REP WCKT G.P.
RI LICENSEE G.P.
By: RADIO STATION MANAGEMENT, INC.,
as Managing Partner of each Seller
By: /s/GEORGE SOSSON
George Sosson
President
RSM
RADIO STATION MANAGEMENT, INC.
By: /s/GEORGE SOSSON
George Sosson
President
BUYER
CLEAR CHANNEL RADIO, INC.
By: /s/MARK P. MAYS
Mark P. Mays
Senior Vice President
CLEAR CHANNEL RADIO LICENSES, INC.
By: /s/MARK P. MAYS
Mark P. Mays
Senior Vice President<PAGE>
EXHIBITS
Exhibit A Assignment of Contracts
Exhibit B Assignment of Leases
Exhibit C Assignment of FCC Licenses
Exhibit D Assumption Agreement
Exhibit E Bill of Sale
Exhibit F Support Agreement
Exhibit G Escrow Agreement
ANNEXES
Annex I Intentionally Omitted
Annex II Equity Ownership
<PAGE>
INDEX OF SCHEDULES
2.1(a) FCC Licenses
2.1(b) Real Property Interests
2.1(d) Intellectual Property
2.1(e) Station Contracts and Trade
Receivable Balance
2.1(f) Prepaid Items
2.1(g) Vehicles
2.2(h) Excluded Contracts
3.4(b) Conflicts
3.5 Financial Statements of REP
3.6 Certain Changes or Events
3.7 Seller Litigation
3.8(b) Certain Encumbrances
3.16(c) Tax Proceedings
3.17 Employee Benefit Plans Contracts
3.19 Environmental
3.20 Shared Assets or Operations
3.21 Insurance
4.5 Buyer Litigation
6.1(g) Collection Policies
11.2(c) UCC Report Jurisdictions
15.2 Allocation
<PAGE>
Exhibit 21
Subsidiaries of Registrant, Clear Channel Communications, Inc.
Name State of Incorporation
Clear Channel Communications of Memphis, Inc. Texas
Clear Channel Television, Inc. Nevada
Clear Channel Radio, Inc. Nevada
Clear Channel Management, Inc. Delaware
Clear Channel Radio Licenses, Inc. Nevada
Clear Channel Television Licenses, Inc. Nevada
Clear Channel Productions, Inc. Nevada
Clear Channel Metroplex, Inc. Nevada
Clear Channel Metroplex Licenses, Inc. Nevada
Clear Channel Holdings, Inc. Nevada
CCR Houston-Nevada, Inc. Nevada
Clear Channel Real Estate Nevada
<PAGE>
Exhibit 23 -- Consent of KPMG Peat Marwick LLP
Consent of Independent Auditors
We consent to the incorporation by reference in the
Registration Statements (Nos. 33-14193, 33-59772, and 33-
64463) on Form S-8 of Clear Channel Communications, Inc. of
our report dated March 29, 1996, with respect to the
consolidated balance sheets of Radio Equity Partners, L.P. and
its subsidiary as of December 31, 1995 and 1994, and the
related consolidated statements of operations, partners'
capital and cash flows for the years then ended, which report
appears in the Form 8-K of Clear Channel Communications, Inc.,
dated June 5, 1996.
/s/KPMG PEAT MARWICK LLP
New York, New York
June 5, 1996
