Asset Exchange Agreement

ASSET EXCHANGE AGREEMENT


THIS ASSET EXCHANGE AGREEMENT (this "Agreement") is made as of March 5, 2000, among the company or companies designated as Clear Channel on the signature page hereto (collectively, "Clear Channel") and the company or companies designated as Exchange Party on the signature page hereto (collectively, "Exchange Party").


Recitals


A. Clear Channel owns and operates the following radio broadcast stations (collectively, the "Clear Channel Stations") pursuant to certain authorizations issued by the Federal Communications Commission (the "FCC"):


WNCE-FM, Palmyra, Pennsylvania
WNNK-FM, Harrisburg, Pennsylvania
WTCY(AM), Harrisburg, Pennsylvania
WTPA(FM), Mechanicsburg, Pennsylvania


KMJJ-FM, Shreveport, Louisiana
KRMD(AM), Shreveport, Louisiana
KRMD-FM, Shreveport, Louisiana


B. Exchange Party owns and operates the following radio broadcast stations (collectively, the "Exchange Party Stations") pursuant to certain authorizations issued by the FCC:


WUSY(FM), Cleveland, Tennessee WLOV-FM,
South Pittsburg, Tennessee WKXJ(FM), Signal
Mountain, Tennessee WKXJ-FM1, Chattanooga,
Tennessee WRXR-FM (formerly WLMX-FM),
Rossville, Georgia WUUS(AM) (formerly
WLMX), Rossville, Georgia


C. Subject to the terms and conditions set forth herein, the parties desire to exchange the Clear Channel Station Assets (defined below) and the Exchange Party Station Assets (defined below). The parties intend the transaction contemplated by this Agreement to be a like-kind exchange in accordance with the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code").


D. Clear Channel Communications, Inc. (Clear Channel's parent), CCU Merger Sub, Inc. and AMFM Inc. are parties to an Agreement and Plan of Merger dated October 2, 1999 (the "AMFM Agreement").


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Agreement


NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:


ARTICLE 1: EXCHANGE OF ASSETS


1.1. Clear Channel Station Assets. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Clear Channel shall assign, transfer, convey and deliver to Exchange Party, and Exchange Party shall acquire from Clear Channel, all of the right, title and interest of Clear Channel in and to all of the assets, properties, interests and rights of Clear Channel of whatsoever kind and nature, real and personal, tangible and intangible, which are used exclusively in the operation of the Clear Channel Stations and specifically described in this Section 1.1, but excluding the Clear Channel Excluded Assets as hereafter defined (the "Clear Channel Station Assets"):


(a) all licenses, permits and other authorizations which are issued to Clear Channel by the FCC with respect to the Clear Channel Stations (the "Clear Channel FCC Licenses") and described on Schedule 1.1(a), including any renewals or modifications thereof between the date hereof and Closing;


(b) all equipment, electrical devices, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used exclusively in the operation of the Clear Channel Stations and listed on Schedule 1.1(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Clear Channel (the "Clear Channel Tangible Personal Property");


(c) all Clear Channel Time Sales Agreements and Clear Channel Trade Agreements (both defined in Section 2.3), Clear Channel Real Property Leases (defined in Section 6.7), and other contracts, agreements, and leases which are used in the operation of the Clear Channel Stations and listed on Schedule 1.1(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Clear Channel Stations (the "Clear Channel Station Contracts");


(d) all of Clear Channel's rights in and to the Clear Channel Stations' call letters and Clear Channel's rights in and to the trademarks, trade names, domain names, domain name registrations, service marks, franchises, copyrights, computer software, programs and programming material, jingles, slogans, logos, and other intangible property which are used exclusively in the operation of the Clear Channel Stations and listed on Schedule 1.1(d) (the "Clear Channel Intangible Property");


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(e) Clear Channel's rights in and to all the files, documents, records, and books of account (or copies thereof) relating exclusively to the operation of the Clear Channel Stations, including the Clear Channel Stations' local public files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to the Clear Channel Excluded Assets (defined below); and


(f) any real property which is used exclusively in the operation of the Clear Channel Stations (including any of Clear Channel's appurtenant easements and improvements located thereon) and described on Schedule 1.1(f) (the "Clear Channel Real Property").


The Clear Channel Station Assets shall be transferred to Exchange Party free and clear of liens, claims and encumbrances ("Liens") except for (i) Exchange Party Assumed Obligations (defined below), (ii) liens for taxes not yet due and payable and for which Exchange Party receives a credit pursuant to Section 3.3, (iii) such liens, easements, rights of way, building and use restrictions, exceptions, reservations and limitations that do not in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Clear Channel Stations, and (iv) any items listed on Schedule 1.1(b) (collectively, "Clear Channel Permitted Liens").


1.2. Clear Channel Excluded Assets. Notwithstanding anything to the contrary contained herein, the Clear Channel Station Assets shall not include the following assets along with all rights, title and interest therein (the "Clear Channel Excluded Assets"):


(a) all cash and cash equivalents of Clear Channel, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments;


(b) all accounts receivable or notes receivable arising in the operation of the Clear Channel Stations prior to Closing;


(c) all tangible and intangible personal property of Clear Channel disposed of or consumed in the ordinary course of business of Clear Channel between the date of this Agreement and Closing;


(d) all Clear Channel Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Clear Channel;


(e) Clear Channel's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Clear Channel, duplicate copies of the records of the Clear Channel Stations, and all records not relating exclusively to the operation of the Clear Channel Stations;


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(f) contracts of insurance, and all insurance proceeds or claims made thereunder;


(g) all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Clear Channel; and


(h) all rights, properties and assets described on Schedule 1.2(h), and all rights, properties and assets not specifically described in Section 1.1.


1.3. Exchange Party Station Assets. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Exchange Party shall assign, transfer, convey and deliver to Clear Channel, and Clear Channel shall acquire from Exchange Party, all of the right, title and interest of Exchange Party in and to all of the assets, properties, interests and rights of Exchange Party of whatsoever kind and nature, real and personal, tangible and intangible, which are used exclusively in the operation of the Exchange Party Stations and specifically described in this Section 1.3, but excluding the Exchange Party Excluded Assets as hereafter defined (the "Exchange Party Station Assets"):


(a) all licenses, permits and other authorizations which are issued to Exchange Party by the FCC with respect to the Exchange Party Stations (the "Exchange Party FCC Licenses") and described on Schedule 1.3(a), including any renewals or modifications thereof between the date hereof and Closing;


(b) all equipment, electrical devices, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used exclusively in the operation of the Exchange Party Stations and listed on Schedule 1.3(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Exchange Party (the "Exchange Party Tangible Personal Property");


(c) all Exchange Party Time Sales Agreements and Exchange Party Trade Agreements (both defined in Section 2.1), Exchange Party Real Property Leases (defined in Section 7.7), and other contracts, agreements, and leases which are used in the operation of the Exchange Party Stations and listed on Schedule 1.3(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Exchange Party Stations (the "Exchange Party Station Contracts");


(d) all of Exchange Party's rights in and to the Exchange Party Stations' call letters and Exchange Party's rights in and to the trademarks, trade names, domain names, domain name registrations, service marks, franchises, copyrights, computer software, programs and programming material, jingles, slogans, logos, and other intangible property


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(e) Exchange Party's rights in and to all the files, documents, records, and books of account (or copies thereof) relating exclusively to the operation of the Exchange Party Stations, including the Exchange Party Stations' local public files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to the Exchange Party Excluded Assets (defined below); and


(f) any real property which is used exclusively in the operation of the Exchange Party Stations (including any of Exchange Party's appurtenant easements and improvements located thereon) and described on Schedule 1.3(f) (the "Exchange Party Real Property").


The Exchange Party Station Assets shall be transferred to Clear Channel free and clear of Liens except for (i) Clear Channel Assumed Obligations (defined below), (ii) liens for taxes not yet due and payable and for which Clear Channel receives a credit pursuant to Section 3.3, (iii) such liens, easements, rights of way, building and use restrictions, exceptions, reservations and limitations that do not in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Exchange Party Stations, and (iv) any items listed on Schedule 1.3(b) (collectively, "Exchange Party Permitted Liens").


1.4. Exchange Party Excluded Assets. Notwithstanding anything to the contrary contained herein, the Exchange Party Station Assets shall not include the following assets along with all rights, title and interest therein (the "Exchange Party Excluded Assets"):


(a) all cash and cash equivalents of Exchange Party, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments;


(b) all accounts receivable or notes receivable arising in the operation of the Exchange Party Stations prior to Closing;


(c) all tangible and intangible personal property of Exchange Party disposed of or consumed in the ordinary course of business of Exchange Party between the date of this Agreement and Closing;


(d) all Exchange Party Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Exchange Party;


(e) Exchange Party's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization,


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existence or share capitalization of Exchange Party, duplicate copies of the records of the Exchange Party Stations, and all records not relating exclusively to the operation of the Exchange Party Stations;


(f) contracts of insurance, and all insurance proceeds or claims made thereunder;


(g) all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Exchange Party; and


(h) any rights, properties or assets described on Schedule 1.4(h), and all rights, properties and assets not specifically described in Section 1.3.


1.5. Lease Agreements. At Closing, Clear Channel and the Exchange Party shall enter into the lease agreements described on Schedule 1.2(h) pursuant to leases in the form of Exhibit A attached hereto (for each tower space lease), Exhibit B-1 attached hereto (for any single tenant studio lease) and Exhibit B-2 attached hereto (for any multi-tenant studio lease).


ARTICLE 2: ASSUMPTION OF OBLIGATIONS


2.1. Clear Channel Assumed Obligations. On the Closing Date, Clear Channel shall assume the obligations of Exchange Party (the "Clear Channel Assumed Obligations") arising after Closing under the Exchange Party Station Contracts, including without limitation all agreements for the sale of advertising time on the Exchange Party Stations for cash in the ordinary course of business ("Exchange Party Time Sales Agreements") and all agreements for the sale of advertising time on the Exchange Party Stations for non-cash consideration ("Exchange Party Trade Agreements").


2.2. Exchange Party Retained Obligations. Clear Channel does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Exchange Party of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Clear Channel, other than the Clear Channel Assumed Obligations (the "Exchange Party Retained Obligations").


2.3. Exchange Party Assumed Obligations. On the Closing Date, Exchange Party shall assume the obligations of Clear Channel (the "Exchange Party Assumed Obligations") arising after Closing under the Clear Channel Station Contracts, including without limitation all agreements for the sale of advertising time on the Clear Channel Stations for cash in the ordinary course of business ("Clear Channel Time Sales Agreements") and all agreements for


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the sale of advertising time on the Clear Channel Stations for non-cash consideration ("Clear Channel Trade Agreements").


2.4. Clear Channel Retained Obligations. Exchange Party does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Clear Channel of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Exchange Party, other than the Exchange Party Assumed Obligations (the "Clear Channel Retained Obligations").


ARTICLE 3: CASH PAYMENT


3.1. Cash Payment. The parties agree that the aggregate value of the Clear Channel Station Assets exceeds the aggregate value of the Exchange Party Station Assets by an amount equal to One Hundred Five Million Five Hundred Thousand Dollars ($105,500,000) (the "Cash Amount"). Exchange Party shall at Closing (defined below) deliver to Clear Channel by wire transfer of immediately available funds the Cash Amount, subject to adjustment pursuant to Sections 3.3 (the "Cash Payment").


3.2. Deposit. Within three (3) business days of the date of this Agreement (with no Cure Period (defined below)), Exchange Party shall deposit an amount equal to 10% of the Cash Amount (the "Deposit") with Bank of America (the "Escrow Agent") pursuant to the Escrow Agreement (the "Escrow Agreement") of even date herewith among Clear Channel, Exchange Party and the Escrow Agent. At Closing, the Deposit shall be applied to the Cash Payment and any interest accrued thereon shall be disbursed to Exchange Party (if in cash) or returned to Exchange Party (if a letter of credit). If this Agreement is terminated by Clear Channel due to Exchange Party's failure to consummate the Closing on the Closing Date in accordance with this Agreement or if this Agreement is otherwise terminated by Clear Channel pursuant to Section 16.1(b), the Deposit and any interest accrued thereon shall be disbursed to Clear Channel as partial payment of liquidated damages pursuant to Section 16.3. If this Agreement is terminated for any other reason, the Deposit and any interest accrued thereon shall be disbursed to Exchange Party. Exchange Party may make the Deposit by delivering to the Escrow Agent (as beneficiary) a letter of credit (the "L/C") issued by Bank of Nova Scotia (the "Issuing Bank") in the stated amount of 10% of the Purchase Price, without draw conditions and with an expiry date of not less than 6 months (and otherwise in a form reasonably satisfactory to Seller). If the Deposit is to be disbursed to Clear Channel as provided in this Agreement, then the Escrow Agent shall present the L/C to the Issuing Bank and draw the entire stated amount and such proceeds shall be disbursed to Clear Channel. If the L/C is not extended prior to the date one month before its expiry date, then the Escrow Agent shall present the L/C to the Issuing Bank and draw the entire stated amount and such proceeds shall be held by the Escrow Agent as a cash deposit.


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3.3. Prorations and Adjustments. Except as otherwise provided herein, all deposits, reserves and prepaid and deferred income and expenses arising from the conduct of the business and operations of the Clear Channel Stations and Exchange Party Stations shall be prorated in accordance with generally accepted accounting principles as of 11:59 p.m. on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate and other property taxes (but excluding transfer taxes which shall be paid as set forth in Section 13.1), business and license fees, music and other license fees (including any retroactive adjustments thereof), utility expenses, amounts due or to become due under contracts, rents, lease payments and similar prepaid and deferred items. Real estate taxes shall be apportioned on the basis of taxes assessed for the preceding year, with a reapportionment, if any, as soon as the new tax rate and valuation can be ascertained. Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days of the Closing Date. In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid at the time provided herein and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Clear Channel and one-half by Exchange Party.


3.4. Allocation.


(a) The values of the assets comprising the Clear Channel Station Assets and the Exchange Party Station Assets shall be determined by an appraisal (the "Appraisal") prepared by Bond & Pecaro (whose fees shall be paid one-half by Clear Channel and one-half by Exchange Party). Prior to Closing, Clear Channel shall prepare and provide to Exchange Party schedules which, for each party to this Agreement, show the respective Clear Channel Station Assets and Exchange Party Station Assets to be conveyed and acquired and Cash Payment to be made and received at Closing under this Agreement.


(b) Before or after Closing, Clear Channel shall prepare schedules (the "Exchange Group Schedules") which (i) divide the Exchange Party Station Assets and the Clear Channel Station Assets into both "exchange groups" (in accordance with the like-kind exchange rules covering exchanges of multiple properties under Treas. Reg. Section 1.1031(j)-1) and residual groups and (ii) set forth the total value of the assets making up each such exchange group and residual group (based upon the Appraisal). For tax purposes, the parties shall report the exchange of assets under this Agreement consistently with the Exchange Group Schedules and the Appraisal, including without limitation filing when due IRS Form 8594 and (if applicable) IRS Form 8824 on the basis of the Exchange Group Schedules and the Appraisal.


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ARTICLE 4: CLOSING


4.1. Closing. The consummation of the exchange of assets under this Agreement (the "Closing") shall occur on a date (the "Closing Date") and at a time and place designated solely by Clear Channel after FCC Consent (defined below), subject to satisfaction or waiver of the conditions to Closing contained herein (other than those to be satisfied at Closing). If requested by Clear Channel, prior to Closing the parties shall hold a pre-closing conference at a time and place designated by Clear Channel, at which the parties shall provide (for review only) all documents to be delivered at Closing under this Agreement, each duly executed but undated, and otherwise confirm their ability to timely consummate the Closing.


ARTICLE 5: GOVERNMENTAL CONSENTS


Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC Consent") to the assignment of the Clear Channel FCC Licenses to Exchange Party and the Exchange Party FCC Licenses to Clear Channel, (ii) United States Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the transactions contemplated hereby, including without limitation any such approval as may be necessary to enable Clear Channel to consummate the merger under the AMFM Agreement, and (iii) expiration or termination of any applicable waiting period ("HSR Clearance") under the HSR Act (defined below).


5.1. FCC. On a date designated by Clear Channel, Clear Channel and Exchange Party shall file applications with the FCC (the "FCC Application") requesting the FCC Consent. Clear Channel and Exchange Party shall diligently prosecute the FCC Application and otherwise use their best efforts to obtain the FCC Consent as soon as possible. If the FCC Consent imposes upon Exchange Party any condition (including without limitation in any divestiture condition), Exchange Party shall timely comply therewith.


5.2. HSR. If not previously filed, then within five (5) business days after the execution of this Agreement, Clear Channel and Exchange Party shall make any required filings with the Federal Trade Commission and the DOJ pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation.


5.3. General. Clear Channel and Exchange Party shall notify each other of all documents filed with or received from any governmental agency with respect to this Agreement or the transactions contemplated hereby. Clear Channel and Exchange Party shall furnish each other with such information and assistance as such the other may reasonably request in connection with their preparation of any governmental filing hereunder. If Exchange Party becomes aware of any fact relating to it which would prevent or delay the FCC Consent, the DOJ Consent or HSR Clearance, Exchange Party shall promptly notify Clear Channel thereof and take such steps as necessary to remove such impediment, including


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but not limited to divesting any stations and terminating any agreements to acquire or program or market any stations.


ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF CLEAR CHANNEL


Clear Channel makes the following representations and warranties to Exchange Party:


6.1. Organization. Clear Channel is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Clear Channel Station Assets and the Exchange Party Station Assets are located. Clear Channel has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Clear Channel pursuant hereto (collectively, the "Clear Channel Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof.


6.2. Authorization. The execution, delivery and performance of this Agreement and the Clear Channel Ancillary Agreements by Clear Channel have been duly authorized and approved by all necessary action of Clear Channel and do not require any further authorization or consent of Clear Channel. This Agreement is, and each Clear Channel Ancillary Agreement when executed and delivered by Clear Channel and the other parties thereto will be, a legal, valid and binding agreement of Clear Channel enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

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