Document:

exv10w4

 

Exhibit 10.4

TRADEMARK AND COPYRIGHT LICENSE AGREEMENT

     THIS TRADEMARK AND COPYRIGHT LICENSE AGREEMENT (this “Agreement”) is made effective as
of                           , 2005 (the “Effective Date”) by and between Clear Channel Identity, L.P., a
Delaware limited partnership (“Licensor”), and CCE Spinco, Inc., a Delaware corporation
(“Licensee”).

RECITALS:

     WHEREAS, Licensee is a wholly owned subsidiary of Licensor and, as such, has been using
certain of Licensor’s intellectually property pursuant to a license in connection with the
production and promotion of live entertainment (the “Business”);

     WHEREAS, Licensee will cease to be a wholly owned subsidiary of Licensor pursuant to a
separate agreement between the parties entitled Master Separation and Distribution Agreement;

     WHEREAS, Licensor is the owner of the trademark CLEAR CHANNEL, other marks incorporating the
term CLEAR CHANNEL or variations thereof, the mark CC, and other marks used in connection with the
Business, and trade dress and other indicia of origin associated with such trademarks
(collectively, the “Marks”) and is the owner of trademark registrations and applications
for the Marks, including, without limitation, those set forth on Exhibit A;

     WHEREAS, Licensor is the owner of the copyrights in packaging, labels, signage, marketing,
advertising and promotional materials that bear or display the Marks (collectively, the
“Copyrights”);

     WHEREAS, Licensor owns certain Internet domain name registrations that incorporate the Marks,
including, without limitation, those set forth on Exhibit B (collectively, the “Domains”);

     WHEREAS, although certain of the Marks, certain of the Domains and certain of the Copyrights
are assets currently used in the Business, Licensee does not own and is not acquiring any rights in
the Marks, the Domains or the Copyrights;

     WHEREAS, the parties, by this Agreement, desire to establish Licensee’s right to continue to
use certain of the Marks and certain of the Copyrights in the Licensed Territory (as defined below)
for the Business (as defined below), during a transitional period, under the terms and conditions
set forth in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
agreements contained herein, the parties hereto agree as follows:

 

 

AGREEMENT:

1. CERTAIN DEFINITIONS.

     The following terms shall have the following meanings as used herein:

     (a) “Affiliate” means, with respect to a specified person or entity, any other person
or entity or member of a group of persons or entities acting together that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by or is under common control with,
the specified person or entity.

     (b) “Distribution Date” shall mean that certain day defined as such under the Master
Separation and Distribution Agreement between the parties, dated ___, 2005.

     (c) “Domain Names” shall mean the domain name registrations that incorporate the
Marks, including, but not limited to, those set forth in Exhibit B, used in connection with the
Business.

     (d) “Licensed Copyrighted Works” shall mean all packaging, labels, signage, marketing,
advertising and promotional materials bearing or displaying the Licensed Marks including website
materials that are used by Licensor for the Business in the Licensed Territory as of the Effective
Date of this Agreement, in only the specific form or medium in which they are embodied as of the
Effective Date, or in such other form as may be approved by Licensor as provided in Section
2, to the extent that Licensor or one of its Affiliates owns each such work.

     (e) “Licensed Marks” shall mean the Marks as and in the form in which they are used by
Licensee on or in connection with the Business in the Licensed Territory as of the Effective Date
of this Agreement.

     (f) “Business” shall mean the business operations, including any services and
products, offered or carried out by Licensor in the Licensed Territory as of the Effective Date of
this Agreement.

     (g) “Licensed Territory” shall mean the world.

     (h) “Permitted Third Party Provider” shall mean any third party manufacturer or
provider approved by Licensor pursuant to Section 2.11 of this Agreement.

     (i) “Trademark Rights” shall mean, collectively, all foreign, federal, state, and
common law rights in and to the Licensed Marks.

2. GRANT OF LICENSES; RESERVATION OF RIGHTS.

     2.1 Trademark License. Upon the terms and conditions set forth in this Agreement,
Licensor grants to Licensee a revocable, non-exclusive, royalty-free, non-transferable license to
utilize the Licensed Marks solely upon and in connection with the Business in the Licensed
Territory during the Term of this Agreement (the “Trademark License”).

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     2.2 Limitations on Trademark License. The Trademark License is limited to the
Business, providing the products and services provided in connection with the Business are at least
of a quality that is substantially the same as or is higher than the quality of those currently
provided or sold by Licensee as of the Effective Date of this Agreement. NO LICENSE IS GRANTED
HEREUNDER FOR ANY USE OTHER THAN THAT SPECIFIED, AND NO LICENSE IS GRANTED HEREUNDER FOR ANY
COMBINATION OF THE LICENSED MARKS WITH OTHER PRODUCTS SERVICES OR MARKS WITHOUT PRIOR WRITTEN
CONSENT OF LICENSOR WHICH SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.

     (a) Licensee may use other marks, including marks owned by third parties, for the
Business, in addition to the Licensed Marks, provided Licensee has obtained the necessary
rights from the third party, if any. In no event shall the other mark be used in such a
manner that, in Licensor’s reasonable business judgment, a composite mark is created that
includes any of the Licensed Marks and, notwithstanding anything to the contrary in this
Agreement, Licensor may reject any proposed use that bears such a composite mark.

     (b) It is hereby recognized that Licensee may wish to transition to a new mark or an
existing mark owned by Licensee during the course of this Agreement and phase out the use of
the Licensed Marks gradually during the Term of this Agreement. In connection with such
transition, Licensee may wish to utilize such new or existing mark in connection with the
Business in addition to the Licensed Marks. In the event Licensee desires to utilize both
the Licensed Marks and a new mark simultaneously during the transition, Licensee shall
provide at least thirty (30) calendar days prior written notice to Licensor of such proposed
transition, along with a rendering of the proposed transitional usage. Licensor shall have
a period of thirty (30) calendar days following receipt of such notice and rendition in
which to give or withhold its approval of such transitional usage and Licensor shall be
deemed to not have approved such transitional usage if Licensor does not deliver to Licensee
its written approval thereof within such thirty (30) calendar day period. Licensor shall
not unreasonably withhold or delay its approval, but such approval shall not be deemed to be
unreasonable if (i) the proposed usage of the Licensed Marks with such transitional mark
creates, in Licensor’s reasonable business judgment, a composite mark that includes any of
the Licensed Marks, (ii) if the new mark proposed to be used by Licensee in addition to the
Licensed Marks is confusingly similar to the Licensed Marks, or (iii) if the proposed usage
is derogatory or coveys a negative connotation with respect to Licensor or the Licensed
Marks.

     2.3 Copyright License. Upon the terms and conditions set forth in this Agreement,
including, without limitation, those set forth in this Section 2.3, Licensor, on behalf of
itself and its Affiliates, grants to Licensee a revocable, nonexclusive, royalty-free, transferable
to the extent provided in Section 9.1, license to use, reproduce, distribute copies of,
make derivative works of, publish, distribute, display, broadcast and/or transmit the Licensed
Copyrighted Works in the Licensed Territory, through only the media utilized by Licensor as of the
Effective Date, for the limited purpose of enabling Licensee to exercise its rights under the
Trademark License (the “Copyright License”). By way of example, without limitation, in the
case of a print

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advertisement appearing in a particular magazine as of the Effective Date, the Copyright
License shall permit Licensee to utilize the advertisement in the same magazine. Notwithstanding
the foregoing, Licensee shall have the right during the term of this Agreement to modify or create
derivative works of the Licensed Copyright Works and to use new media for the publication,
distribution, display, broadcast and/or transmission of same, subject to the prior written approval
of Licensor, which approval shall not be unreasonably withheld or delayed. In the event Licensee
desires to modify, create derivative works of or utilize new media for the publication,
distribution, display, broadcast and/or transmission of the Licensed Copyrighted Works in
connection with the exercise of its rights under the Trademark License, Licensee shall provide
Licensor at least sixty (60) calendar days prior written notice, which notice shall include
reasonably sufficient details concerning Licensee’s plans, including copies or drafts of the
modified or derivative works, and a list and description of the use thereof, including the media
through which such works will be published, distributed, displayed, broadcast and/or transmitted.
Licensor shall have until the end of such sixty (60) calendar day period in which to give or
withhold its written approval for all or a portion of the matters contained in Licensee’s notice;
provided, that Licensor shall be deemed not to have approved any matter contained in Licensee’s
notice if Licensor does not deliver to Licensee its written approval thereof within such sixty (60)
calendar day period.

     (a) Licensee shall cooperate with Licensor in connection with Licensor’s review of the
matters contained in Licensee’s notice, including by providing any additional information or
materials that may be requested by Licensor.

     (b) Upon Licensor’s written approval of any modified or derivative works for use for
the Licensed Products such modified or derivative works shall be deemed to be “Licensed
Copyrighted Works”. In addition, upon approval (or deemed approval) by Licensor any
resulting trade dress or trademarks shall be deemed to be “Licensed Marks”. If Licensor
does not approve in writing any modified or derivative works, or the media through which
such works or any other Licensed Copyrighted Works are to be disseminated, then Licensee
shall be prohibited from employing same under the terms of this Agreement, including under
the Trademark License or the Copyright License. It is hereby expressly understood, however,
that the primary purpose of this Agreement is to enable Licensee to transition to a new mark
and trade dress for use in the Business. Accordingly, the failure of Licensor to approve
modified or derivative works shall not be deemed unreasonable if Licensor, in its sole
discretion, considers the proposed works to be a material alteration of the Licensed Marks
or Licensed Copyrighted Works as of the Effective Date.

     (c) Any modified or derivative works not approved by Licensor hereunder and from which
the Licensed Marks are not removed or obliterated shall be promptly destroyed by Licensor,
Licensee and, if applicable, by any Permitted Third Party Provider.

     2.4 Rights of and Obligations to Third Parties. Notwithstanding any other provisions
of this Agreement to the contrary, nothing in this Agreement shall be deemed to be a grant by
Licensor of a license, sublicense, or other grant of a right to Licensee to use any copyrights of a
third party or any rights under any third-party license that cannot be licensed, sublicensed or

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granted without the consent, approval or agreement of another party, unless such consent,
approval or agreement is first obtained.

     2.5 Reservation of Rights. Notwithstanding anything herein to the contrary, Licensor
may utilize (and may license another party to utilize) the Licensed Marks in connection with any
business in the Licensed Territory. Further, this Agreement does not restrict or limit Licensor’s
rights to utilize or license the Licensed Marks in any manner. Notwithstanding anything contained
herein to the contrary, Licensor shall have the unrestricted right to utilize (and to license
another party to utilize) its copyrights in the Licensed Copyrighted Works.

     2.6 Term. Subject to the survival provisions of Section 12.4, the term of this
Agreement and the Trademark License and Copyright License granted hereunder shall begin on the
Effective Date of this Agreement and shall expire exactly one year from the Distribution Date,
unless sooner terminated in accordance with the provisions of this Agreement. This Agreement will
not be renewed or extended, absent the execution of a separate document explicitly expressing such,
executed by both Licensor and Licensee.

     2.7 Domain Names. Licensee acknowledges that Licensor owns the Domain Names. For the
term of this Agreement, Licensor agrees to maintain the Domain Names and redirect the “***.com”
domain name to a new website included in the New Works (as defined in Section 3.5) that
Licensee may create pursuant to this Agreement at a url that Licensee will register and maintain.
Licensee shall be responsible for hosting and maintaining the website, whether the website is part
of the Licensed Copyrighted Works or New Works (as defined in Section 3.5). Licensor shall
not be required to maintain registrations of the Domain Names after expiration or termination of
this Agreement, though it may, at its own discretion, do so.

     2.8 Corporate Name. Notwithstanding the foregoing license grants, within thirty (30)
days of the Distribution Date, Licensee shall and shall cause any of its subsidiaries or
Affiliates, if necessary, to change, at its own expense, its corporate name to delete therefrom any
Licensed Marks or any words or phrases confusingly similar to the Licensed Marks that may be
incorporated therein.

     2.9 Permitted Third Party Providers. The parties acknowledge that Licensee may wish
to engage a third party manufacturer/service provider in connection with Licensee’s exercise of its
rights under the Trademark License and the Copyright License. Licensee shall give written notice
to Licensor of any proposed third party manufacturer/provider arrangement not less than ninety (90)
calendar days prior to Licensee’s engaging any third party manufacturer/provider (the “Notice
Period”), which notice shall contain the name of any proposed third party provider and a
summary of the terms of Licensee’s proposed arrangement with same.

     (a) During the Notice Period, Licensor shall have sole discretion as to whether to
initially approve any proposed third party manufacturer/provider; provided, that such
approval shall not be unreasonably withheld or delayed. Licensor shall advise Licensee
whether it initially approves the proposed third party manufacturer/provider as soon as
practicable during the Notice Period. For purposes of this Agreement, any third party

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manufacturer/provider that is approved by Licensor shall be a “Permitted Third Party
Provider.”

3. DEVELOPMENT OF NEW TRADEMARK RIGHTS AND NEW COPYRIGHTS.

     3.1 Development of New Trademark Rights. Except as expressly provided in this
Agreement, Licensee shall not develop or acquire new Trademark Rights associated with the Business
or otherwise. Except as expressly permitted under Section 2 or as may be in use as of the
Effective Date of this Agreement, Licensee is not itself permitted to develop or use any derivative
variations of any of the Licensed Marks or to develop or use any variations, forms or stylizations
of the Licensed Marks. Trademark Rights that Licensee shall not develop or acquire include, but are
not be limited to, any federal, state, or foreign trademark registrations or applications,
trademarks, trade dress, trade names, service marks, symbols, slogans, emblems, logos, designs and
other indicia of origin or domain names incorporating the Licensed Marks. The parties acknowledge
and agree that any and all new Trademark Rights shall be considered included within the definition
of “Trademark Rights” for purposes of this entire Agreement. Notwithstanding the foregoing, any
new trademarks that are not derivations of, variations upon, or confusingly similar to, the
Licensed Marks that are developed by Licensee shall be the sole property of Licensee.

     3.2 Objection to New Trademark Rights. In the event that Licensee inadvertently or
intentionally develops or acquires new Trademark Rights, Licensee shall give prompt written notice
to Licensor of same. As soon as practicable after Licensor becomes aware of any new Trademark
Right inadvertently or intentionally developed or acquired by Licensee, Licensor shall have the
right to object to the new Trademark Right which it deems, in its sole discretion: (a) to be
incompatible or inconsistent with any other Trademark Rights, or with the image of the Licensed
Marks; (b) to be in violation of any law; or (c) to be otherwise inappropriate or offensive. Upon
Licensor’s objection to a new Trademark Right, Licensee shall: (a) promptly modify the new
Trademark Right to obviate Licensor’s objections, (b) promptly cease usage of the new Trademark
Right, and/or (c) withdraw or cancel (as appropriate) any pending trademark application or issued
trademark registration pertaining to the new Trademark Right.

     3.3 Requirement for Assignment of New Trademark Rights. The parties agree that
Licensor shall be deemed the owner of any rights Licensee may have in a new Trademark Right
(excluding any new trademarks that are not derivations of, variations on, or confusingly similar
to, the Licensed Marks. Upon request, Licensee shall promptly provide a confirmatory assignment of
any new Trademark Right to Licensor. Licensor has the right to refuse to license the new Trademark
Right to the Licensee for the remainder of the term of this Agreement. Licensor shall have the
right to use, and to license others to use, any new Trademark Right after the termination of this
Agreement. The decision whether to seek or maintain any federal, foreign, or state registration
for any new Trademark Right or any of the Licensed Marks shall be made in the sole discretion of
Licensor. Licensee shall fully cooperate with Licensor, including executing any documents and
providing any materials that Licensor shall request, to obtain or maintain any such registration.
To the extent the Licensed Marks or new Trademark Rights are not the subject of federal or foreign
registrations as of the Effective Date, Licensee shall bear the cost of obtaining or maintaining
same if Licensor decides to seek registration.

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     3.4 Modifications to or Derivative Works of the Licensed Copyrighted Works. Except as
expressly permitted under this Agreement, Licensee shall not itself develop or use any modified or
derivative works of the Licensed Copyrighted Works. Notwithstanding any provision of law that may
initially vest ownership of copyrights in modifications or derivative works of the Licensed
Copyrighted Works in Licensee or a third party that Licensee may engage in connection therewith,
Licensor and Licensee hereby expressly agree that Licensor shall be considered the author and owner
of the copyrights in the Licensed Copyrighted Works, including any derivative works or
modifications of the original Licensed Copyrighted Works, whether or not any such modified or
derivative works are approved by Licensor for use in connection with the Licensed Marks and the
Business. To the extent permitted by law, the creation of any modifications or derivative works of
the Licensed Copyrighted Works shall be deemed “works made for hire” for Licensor. Licensee shall
execute any documents, including assignments, Licensor may determine it requires to vest ownership
of the Licensed Copyrighted Works, including any modifications or derivative works of the original
Licensed Copyrighted Works, in Licensee. Licensee shall have sole discretion as to whether to seek
registration of the Licensed Copyrighted Works, but in no event shall Licensee apply for copyright
registration of any of such works in its own name. Licensee shall execute written agreements, in a
form acceptable to Licensor, with any independent contractor Licensee engages in connection with
the creation of modifications or derivative works of the Licensed Copyrighted Works to ensure that
such independent contractor is bound by this Section 3.4 and Section 3.7 to the
same extent as Licensor. Notwithstanding the foregoing, Licensee does not assign to Licensor, and
Licensee expressly retains the copyrights in all original content added by Licensee (including any
new trademarks of Licensee that are not derivations of, variations upon, or confusingly similar to,
the Licensed Marks) that is incorporated in such modifications or derivative works of the Licensed
Copyrighted Works, to the extent such content does not bear or display any Licensed Marks.

     3.5 Creation of New Works. Subject to the terms and conditions of this Agreement,
including those set forth in this Section 3.5, Licensee may create new works in the nature
of signage, marketing, advertising or promotional materials, including websites that display the
Licensed Marks (the “New Works”). At least sixty (60) calendar days prior to the
utilization of any of the New Works in connection with Licensee’s exercise of its rights under the
Trademark License, Licensee shall provide a specimen of the New Work to Licensor and specifics as
to the proposed medium or media for the publication, distribution, display, broadcast and/or
transmission of same. Upon Licensor’s written approval, which shall not be unreasonably withheld
or delayed, Licensee may utilize the approved New Work in the approved media to the extent
permitted under the Trademark License. Should Licensee desire to utilize a new medium for the
publication, distribution, display, broadcast or transmission of a New Work previously approved,
Licensee shall give Licensor at least thirty (30) calendar days prior written notice as to the
specifics of the proposed new media. Upon Licensor’s written approval, which shall not be
unreasonably withheld or delayed, Licensee shall be permitted to use the new medium for the New
Work to the extent permitted by the Trademark License.

     3.6 Ownership of New Works. As between Licensor and Licensee, Licensee shall be
deemed the owner of the copyrights in the New Works and shall be permitted to apply for copyright
registration of the New Works. Under no circumstances shall ownership rights extend to the
Licensed Marks and upon termination of Licensee’s rights under the Trademark License,

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Licensee shall cease all use of the New Works; provided, however, to the extent that the
Licensed Marks can be removed from the New Works, Licensee may continue to use the New Works with
the new mark that it will use for the Business.

     3.7 Appointment as Attorneys-In-Fact. IN THE EVENT THAT LICENSOR IS UNABLE FOR ANY
REASON WHATSOEVER TO SECURE LICENSEE’S SIGNATURE TO ANY ASSIGNMENT DOCUMENT CONTEMPLATED UNDER THIS
SECTION 3 OR TO ANY LAWFUL AND NECESSARY DOCUMENT REQUIRED TO APPLY FOR OR EXECUTE ANY
TRADEMARK OR COPYRIGHT APPLICATIONS WITH RESPECT TO THE LICENSED MARKS OR THE LICENSED COPYRIGHTED
WORKS, LICENSEE HEREBY IRREVOCABLY DESIGNATES AND APPOINTS LICENSOR AND ITS DULY AUTHORIZED
OFFICERS AND AGENTS AS LICENSEE’S AGENTS AND ATTORNEYS-IN-FACT TO ACT FOR AND ON LICENSEE’S BEHALF
AND INSTEAD OF LICENSEE, TO EXECUTE ANY SUCH ASSIGNMENT AND EXECUTE AND FILE ANY SUCH APPLICATION
AND TO DO ALL OTHER LAWFULLY PERMITTED ACTS TO FURTHER THE PROSECUTION AND ISSUANCE OF TRADEMARK OR
COPYRIGHT REGISTRATIONS PERTAINING TO THE LICENSED MARKS OR THE LICENSED COPYRIGHTED WORKS WITH THE
SAME LEGAL FORCE AND EFFECT AS IF EXECUTED BY LICENSEE.

4. QUALITY CONTROL.

     4.1 Acknowledgment of Quality. The parties acknowledge that the Licensed Marks have
come to signify a high level of quality to the purchasing public and that Licensor’s use of the
Licensed Marks before the Effective Date of this Agreement has been in connection with high quality
products and services. The parties further agree that it is important to both parties and to the
purchasing public that the goodwill in the Licensed Marks be retained and enhanced, and that the
sale of quality products and services under the Licensed Marks is the essence of this Agreement.

     4.2 Acceptable Level of Quality. Licensee agrees to maintain at all times a minimum
level of quality of the products and services sold in connection with the Business operated under
the Licensed Marks (hereinafter referred to as “Acceptable Level of Quality”). This
Acceptable Level of Quality shall be substantially consistent with or superior to, but in any case
must not be inferior in any material respect to, the level of quality maintained by Licensee in the
products and services sold in connection with the Business as Licensor’s wholly owned subsidiary
prior to the separation. Licensee also agrees as part of the Acceptable Level of Quality that the
products and services sold in connection with the Business shall be produced, packaged, labeled,
promoted, sold, distributed and provided in accordance with all applicable foreign, federal, state
and local laws, and governmental orders and regulations as they all may be in effect from time to
time, and that the policy of sale, distribution and exploitation by Licensee shall in no manner
reflect adversely upon the Licensed Trademarks. Licensee shall have a continuing obligation to
immediately notify Licensor within three (3) business days of any conflict of which it becomes
aware between any requirement of Licensor, and applicable foreign, federal, state and local laws,
and governmental orders and regulations as may be in effect from time to time. Licensee shall be
responsible for modifying any Licensed Copyrighted Works (including the costs of any such

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modifications) as may be required to comply with applicable foreign, federal, state and local
laws, and governmental orders and regulations or with the terms of this Agreement. Any such
modification shall be made in accordance with Section 2.3 of this Agreement; provided that
Licensor agrees to provide as soon as reasonably practicable any approval that is necessary to
authorize Licensee to modify any Licensed Copyrighted Works as may be required to comply with
applicable foreign, federal, state and local laws, and governmental orders and regulations.
Licensee shall have a further continuing obligation to notify Licensor immediately of any inquiry,
investigation, inspection or any other action by any government body or unit thereof, with respect
to the production, packaging, promotion, sale or distribution of the products and services sold in
connection with the Business by Licensee (or any Permitted Third Party Provider) and the results
thereof, or by any of Licensee’s customers.

     4.3 Inspection of Premises and Licensed Products. Licensor, or its designated
representatives, shall have the right, at any time upon reasonable notice to Licensee, to conduct
during regular business hours an examination of the products and services sold in connection with
the Business offered by Licensee under the Licensed Marks and to inspect and review during regular
business hours the business locations of Licensee and any Permitted Third Party Provider, including
all manufacturing, packaging, distribution, storage facilities and the like, for the purpose of
assuring adherence to the Acceptable Level of Quality, proper use of the Licensed Marks, and
compliance with the terms of this Agreement. Licensee and any Permitted Third Party Provider shall
comply with all of Licensor’s reasonable requests directed to the condition of or conduct of
activities at these business locations that may, in Licensor’s reasonable business judgment, affect
the quality of the products and services offered in connection with the Business and maintenance of
an Acceptable Level of Quality. If at any time, under any circumstances, Licensor determines that
the products and services offered in connection with the Business fail to be of an Acceptable Level
of Quality, Licensor shall so notify Licensee. Licensee and any Permitted Third Party Provider
shall immediately make such changes as are required to obtain an Acceptable Level of Quality.

     4.4 Provision of Samples. Licensee agrees to furnish to Licensor, or Licensor’s
designated representative, samples of Licensee’s uses of the Licensed Marks, including product,
packaging, labels, signage and all forms of advertising, promotional, and marketing materials, as
Licensor may request at any time, for the purpose of inspecting to ensure that these uses are of an
Acceptable Level of Quality and have been approved by Licensor for use with the Licensed Marks.
Licensee agrees to work promptly to correct or remedy uses of the Licensed Marks which may, for any
reason, fail in the judgment of Licensor to meet the Acceptable Level of Quality imposed by
Licensor, or to violate the terms of this Agreement.

     4.5 Maintenance of Reputation and Goodwill. Licensee agrees that neither Licensee nor
any Permitted Third Party Provider who is not an Affiliate of Licensor nor any other person or
entity which controls, is controlled by, or is under common control with either Licensee or any
Permitted Third Party Manufacturer who is not an Affiliate of Licensor, shall, during the term of
this Agreement or thereafter, misuse the Licensed Marks or the Trademark Rights, take any action
that would bring any of them into public disrepute, or take any action that would reasonably be
expected to destroy or diminish Licensor’s ownership, value or goodwill in the Licensed Marks, the
Licensed Copyrighted Works or the Trademark Rights.

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5. OTHER CONDITIONS APPLICABLE TO LICENSED MARKS AND LICENSED COPYRIGHTED WORKS.

     5.1 In connection with any and all of its uses of the Licensed Marks, Licensee agrees to
identify the licensed use under this Agreement and the proprietary rights of Licensor. Examples of
such notices include “CLEAR CHANNEL is a registered mark of Clear Channel Identity, L.P.” and
“CLEAR CHANNEL is a registered mark used by CCE Spinco, Inc. under license from Clear Channel
Identity, L.P.”

     5.2 In connection with its use of any of the Licensed Marks, Licensee agrees to use
commercially reasonable efforts to make proper use of the “®” symbol or other proper notice to
indicate a registered mark, and the “TM” symbol to indicate an unregistered mark in which Licensor
may claim rights and/or which is the subject of a state registration. Upon receiving notice from
Licensor that Licensee’s use of a registration notice or “TM” symbol is incorrect or otherwise
deemed unacceptable, Licensee shall promptly modify such uses to obviate Licensor’s objections.
Licensor shall use commercially reasonable efforts to include a legally sufficient copyright notice
on the Licensed Copyrighted Works, including any modification or derivative works of the original
Licensed Copyrighted Works. Licensee shall comply with all of Licensor’s requests concerning the
copyright notice for the Licensed Copyrighted Works.

6. ACKNOWLEDGMENT OF RIGHTS; CESSATION OF USE.

     6.1 Goodwill. Licensee acknowledges that all goodwill accruing to Licensee’s use of
the Licensed Marks and/or Trademark Rights shall inure to the benefit of Licensor.

     6.2 Acknowledgment of Licensor’s Ownership; Cessation of Use. Licensee expressly
recognizes and acknowledges that the use of the Licensed Marks or Licensed Copyrighted Works shall
not confer upon Licensee any intellectual property or other proprietary rights. Upon expiration or
upon termination of this Agreement, the Trademark License and/or the Copyright License for any
reason, Licensee shall immediately cease all use of the Licensed Marks, the Licensed Copyrighted
Works and the New Works (except as expressly permitted in this Agreement). Licensee further agrees
that, at no time after the expiration or termination of its rights to use the Licensed Marks
pursuant to this Agreement, will it make any further use of the Licensed Marks or any other
designation, symbol, design, emblem, mark, or name similar to the Licensed Marks even if Licensor
does not thereafter use the Licensed Marks, either itself or through another authorized party.

     6.3 Agreement Not to Contest. Licensee shall not question, contest or challenge the
title or ownership by Licensor of the Licensed Marks or the Licensed Copyrighted Works during the
term of this Agreement or thereafter. Licensee will claim no right, title or interest in the
Licensed Marks or any other designation, symbol, design, emblem, mark, or name similar thereto or
the Licensed Copyrighted Works except the right to use the same pursuant to the terms, provisions
and conditions of this Agreement, and will not seek during the term of this Agreement or thereafter
to register the same in any jurisdiction or before any agency, regulatory body, or official entity.

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     6.4 Registration of Domain Names. Licensee agrees that neither Licensee nor any other
person or entity which controls, is controlled by, or is under common control with Licensee shall
during the term of this Agreement or thereafter register or use any domain name that incorporates
the Licensed Marks, or any formative of the Licensed Mark, or any confusingly similar mark, whether
in a top level domain name or secondary domain name, or as part of any other uniform resource
locator (URL) address.

     6.5 Licensor’s Right to Protect Trademarks and Copyrights. Nothing in this Agreement
shall be construed to bar Licensor from protecting its right to the exclusive use of its
trademarks, service marks, names or copyrights against infringement thereof by any party or
parties, including Licensee (in the case of its use of any of the foregoing other than pursuant to
the Trademark License or the Copyright License), either during the term of this Agreement or
thereafter.

7. POLICING OF TRADEMARK RIGHTS AND COPYRIGHTS.

     7.1 Duty to Notify of Infringement. Licensee shall promptly notify Licensor in
writing in the event it becomes aware of any third party infringing, misusing, or otherwise
violating any of Licensor’s rights in the Licensed Marks or the Licensed Copyrighted Works, or who
Licensee believes is, or may be infringing, diluting, or otherwise derogating the Licensor’s rights
in the Licensed Marks or the Licensed Copyrighted Works.

     7.2 Enforcement Action by Licensor. Licensor may, at its sole discretion, take action
against such third party to enforce its interest in the Licensed Marks and the Licensed Copyrighted
Works, and in such event shall be entitled to retain all monetary recovery from any such third
party by way of judgment, settlement, or otherwise. In the event Licensor elects or takes
enforcement action, Licensee agrees to cooperate promptly and fully with any such effort, at
Licensee’s expense.

8. CONFIDENTIALITY.

     8.1 Each of Licensor and Licensee (the “Receiving Party”), on behalf of itself, and on
behalf of its Affiliates, agrees to maintain the confidentiality of all data and other proprietary
information concerning the other party (the “Disclosing Party”) and/or the Disclosing
Party’s Affiliates that may be made available or disclosed to it during the term of this Agreement
(collectively, the “Confidential Information”); provided that Confidential Information will
not include any information that: (a) is or becomes generally available to the public other than
as a result of a breach of this Agreement by the Receiving Party or its Affiliates; (b) was
available to the Receiving Party on a non-confidential basis prior to its disclosure to the
Receiving Party by the Disclosing Party; (c) becomes available to the Receiving Party on a
non-confidential basis from a source other than the Disclosing Party who the Receiving Party
reasonably believes is not bound by a legal or contractual obligation not to disclose such
Confidential Information; or (d) was independently developed by the Receiving Party without use of
or reference to the Confidential Information. Without limiting the foregoing, Licensor and
Licensee will utilize the same methods and practices in the protection of the Confidential
Information that each utilizes in protecting its own confidential information. Each of Licensor
and Licensee, in its capacity as a Receiving Party, agrees that it will not disclose the
Confidential Information of the Disclosing

11

 

Party without the prior written consent of the Disclosing Party, except for disclosures (a)
that may be required by applicable law, rule or regulation, (b) that may be required by the
Receiving Party to enforce the rights of the Receiving Party under this Agreement, and (c) to the
Receiving Party’s Affiliates and other representatives and agents that the Receiving Party
reasonably believes need to know such Confidential Information to perform obligations hereunder.
Each of Licensor and Licensee, in its capacity as a Receiving Party, will be responsible for any
breach of this Section 8.1 by its Affiliates, representatives and agents. Before any
disclosure is made pursuant to applicable law, rule or regulation, the party with the disclosure
requirement will, if permitted by applicable law, rule or regulation, give advance written notice
of such disclosure to the non-disclosing party so that such non-disclosing party may seek a
protective order against such disclosure. In the absence or unavailability of any such protective
order, the party with the disclosure requirement hereby agrees to take all reasonable and lawful
actions to seek confidential treatment for such disclosure and, to the extent practicable, to
minimize the extent of such disclosure. The provisions of Section 8.1 shall survive
expiration or termination of this Agreement for any reason and shall remain in full force and
effect in accordance with its terms, without modification, limitation or impairment of any kind for
a period of two (2) years following such expiration or termination.

9. ASSIGNMENT AND SUBLICENSE.

     9.1 Restriction on Assignment and Sublicense. Except as otherwise expressly set forth
herein, neither this Agreement nor any of the rights, interests or obligations hereunder may be
assigned, transferred, conveyed or delegated by Licensee in any manner (whether by operation of law
pursuant to a change of control or otherwise) without the prior written consent of Licensor, and
any purported assignment, transfer, conveyance or delegation in violation hereof will be null and
void, provided that Licensee may assign this Agreement and its rights and obligations hereunder to
any direct successor to all or substantially all of the Business. This Agreement is not intended
to confer any rights or benefits on any person or entity other than the parties hereto, except as
expressly provided in Section 10.1. Licensee shall not sublicense any of its rights under
this Agreement without the express prior written consent of Licensor, which shall be solely within
Licensor’s discretion and subject to Licensee’s sublicensee’s express written agreement to abide by
and comply with all of the terms and conditions of this Agreement. Licensor may freely transfer
this Agreement and its rights or obligations hereunder or the Licensed Marks or Licensed
Copyrighted Works, subject only to Licensee’s rights under this Agreement.

     9.2 Continuance of Obligations. Any assignment or sublicense of rights of Licensee
under this Agreement, even with the prior consent of Licensor, shall not operate to release, limit,
impair or suspend any of the obligations of Licensee under this Agreement.

10. WARRANTY DISCLAIMER/INDEMNITY/HOLD HARMLESS.

     10.1 Licensee’s Indemnification Obligation. Regardless of any inspections conducted
by or consents granted by Licensor and regardless of compliance by Licensee (or any Permitted Third
Party Provider) with any standards promulgated hereunder, Licensee agrees to indemnify, defend and
hold harmless Licensor, its Affiliates (including parent entities), and their respective
stockholders, directors, officers, employees, agents and assignees from and against any and all

12

 

claims, demands, causes of action, damages, losses, liabilities, judgments, costs, fines,
penalties, obligations, together with all reasonable costs and expenses incurred in connection with
the foregoing (including, without limitation, court costs, litigation expenses and reasonable
attorneys fees) (“Damages”) that any of them may suffer or incur (including pursuant to judgment or
settlement) as a result of or relating to (a) Licensee’s use of the Licensed Marks or the Licensed
Copyrighted Works (excluding any Damages that result from any claim, suit or proceeding involving
an allegation that, if true, would result in a breach of any representation or warranty by Licensor
set forth in Section 2.16 of the Purchase Agreement), (b) Licensee’s breach of any of the terms of
this Agreement, and (c) the activities or omissions of Licensee or any of its stockholders,
directors, officers, employees, agents and assignees; provided, however, that Licensor shall not be
entitled to indemnification hereunder to the extent that the Damages being sought were caused by
any breach of a representation or warranty of Licensor hereunder or act or omission of Licensor.
If in the reasonable good faith judgment of Licensor, the Licensee fails to undertake and continue
the defense of any of the foregoing, Licensor shall have the right (but not obligation) to make and
continue such defense as it considers appropriate and to settle the underlying matter at the
expense of Licensee. Nothing herein shall prevent Licensor from defending, if it so desires in its
own discretion, any matter at its own expense through its own counsel, notwithstanding that the
defense thereof may have been undertaken by Licensee.

     10.2 Warranty. Licensor represents and warrants that it has full right and
authority to grant the licenses granted to Licensee hereunder.

     10.3 Warranty Disclaimer. EXCEPTING ONLY THE WARRANTY BY LICENSOR IN SECTION
10.2, LICENSEE HEREBY EXPRESSLY ACKNOWLEDGES THAT LICENSOR MAKES NO WARRANTIES OF ANY KIND TO
LICENSEE, WHETHER WITH RESPECT TO THE LICENSED MARKS, THE LICENSED COPYRIGHTED WORKS OR OTHERWISE.
EXCEPTING ONLY THE WARRANTY BY LICENSOR IN SECTION 10.2, LICENSOR HEREBY EXPRESSLY DISCLAIMS ANY
WARRANTY OBLIGATION, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.

11. DEFAULT; TERMINATION OF LICENSES.

     11.1 Defaults. For purposes of this Agreement, the term “Default” shall mean and
include any of the following:

     (a) the failure of Licensee or a Permitted Third Party Provider to fully and timely
perform any of its obligations under this Agreement (including any failure to maintain an
Acceptable Level of Quality), which failure continues for thirty (30) calendar days, in the
case of a failure to maintain an Acceptable Level of Quality, or for ninety (90) days, in
the case of other failure, after written notice to Licensee from Licensor describing such
failure with reasonable specificity;

     (b) the failure of any of the warranties or representations of Licensee in this
Agreement to be true and correct, which failure is not fully remedied within thirty (30)
calendar days of written notice to Licensee from Licensor describing such failure with
reasonable specificity.

13

 

     11.2 This Agreement and the Trademark License and Copyright License granted to Licensee under
this Agreement, together with any and all rights of Licensee or any of its assigns or sublicensees,
shall terminate upon the first to occur of the following:

     (a) Expiration of the Term;

     (b) the date specified for termination in a written notice by Licensor to Licensee
after the occurrence of the Default;

     (c) (i) Licensee files a petition for bankruptcy or is otherwise adjudicated bankrupt,
(ii) a petition for bankruptcy is filed against Licensee and such petition is not dismissed
within ninety (90) calendar days, or (iii) Licensee becomes insolvent, discontinues its
business or voluntarily submits to, or is ordered by a bankruptcy court to undergo,
liquidation pursuant to Chapter 7 of the United States Bankruptcy Code (or any successor
thereto);

     (d) any assignment for the benefit of creditors of Licensee; or

     (e) any attachment, execution of judgment or process against any of Licensee’s rights
under the Trademark License, the Copyright License or otherwise under this Agreement, unless
satisfied or released within sixty (60) calendar days.

     11.3 Additional Requirements Upon Expiration or Termination. Upon termination or
expiration of this Agreement for any reason, all rights granted to Licensee hereunder shall cease,
including the Trademark License and the Copyright License.

     (a) In addition to requirements upon expiration or termination set forth elsewhere in
this Agreement, within ten (10) calendar days of termination or expiration of this Agreement
for any reason, Licensee shall return or destroy, all materials (including, without
limitation, product, packaging, labels, signage, marketing, advertising or promotional
materials) pertaining to use of the Licensed Marks and the Licensed Copyrighted Works that
are in Licensee’s possession (or in the possession of any third party over which Licensee
maintains control with respect to possession of such materials, including any Permitted
Third Party Provider).

     (b) Upon termination or expiration of this Agreement for any reason, Licensee shall not
operate its business in any manner which could suggest to the public that such license is
still in force, or that any relationship exists between Licensor and Licensee. Without
limitation, it is understood that this Section 12.3(b) shall require Licensee to
“de-identify” its facilities, products, services and materials so as to remove any
references to any of the Licensed Marks, including from its signage and all advertising,
marketing, packaging and promotional materials, and to change the overall appearance of any
location to eliminate the use of any trademark or trade dress confusingly similar with those
owned by Licensor.

     11.4 Survival. In addition to the survival provisions set forth elsewhere in this
Agreement, the provisions Sections 1, 2.1(e), 2.1(f), 2.4, 3.1, 3.3, 3.4, 3.7, 4.5, 6, 7.2,
8.1, 9, 10, 

14

 

11, 12.3, 12.4, 13, 14, 15 and 16 shall survive expiration or termination of this
Agreement for any reason and shall remain in full force and effect in accordance with their
respective terms, without modification, limitation or impairment of any kind.

12. INJUNCTIVE RELIEF; GOVERNING LAW.

     12.1 Injunctive Relief. Licensee acknowledges and agrees that Licensor would be
damaged irreparably in the event any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached. Accordingly, Licensee agrees that
Licensor shall be entitled to injunctive relief, in addition to an award for damages to prevent
breaches of the provisions of this Agreement and to enforce specifically (without posting bond)
this Agreement and the terms and provisions hereof.

     12.2 Governing Law.

     (a) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW
RULE OR PRINCIPLE THAT MIGHT RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

     (b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF THE UNITED
STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE, FOR ANY LITIGATION, CLAIM OR DISPUTE
UNDER THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE
ANY LITIGATION, CLAIM OR DISPUTE RELATING HERETO EXCEPT IN SUCH COURTS); PROVIDED, THAT THIS
SECTION 13.2(B) SHALL NOT PRECLUDE ANY PARTY TO THIS AGREEMENT FROM COMMENCING
LITIGATION, CLAIM OR DISPUTE IN ANOTHER JURISDICTION TO SECURE ENFORCEMENT OF ANY JUDGMENT
OR AWARD OBTAINED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, INCLUDING AN AWARD OF
SPECIFIC PERFORMANCE. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY LITIGATION, CLAIM OR DISPUTE ARISING OUT
OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE OF
TEXAS OR THE UNITED STATES OF AMERICA LOCATED IN TEXAS, HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

15

 

13. STATUS OF THE PARTIES.

     13.1 Employment/Partnership Issues. This Agreement does not create, is not intended
to create, and shall not be interpreted or construed as creating a partnership, joint venture,
agency, employment, master and servant, or similar relationship between Licensor and Licensee, and
no representation to the contrary shall be binding upon either party.

14. NOTICES.

     All notices and other communications under this Agreement must be in writing and will be
deemed given (a) when delivered personally, (b) on the fifth business day after being mailed by
certified mail, return receipt requested, (c) the next business day after delivery to a recognized
overnight courier or (d) upon transmission and receipt by the facsimile operator of confirmation of
successful transmission, if sent by facsimile, to the parties at the following addresses or
facsimile numbers (or to such other address or facsimile number as such party may have specified by
notice given to the other party pursuant to this provision):

	 	 	 	 	 	 	 
	 	 	If to Licensor:	 	with copies to:
	 
	 	 	 	 	 	 
	 

	 	 
	 	Attention: General Counsel	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	If to Licensee:	 	with copies to:
	 
	 	 	 	 	 	 
	 

	 	 
	 	Attention:	 	 
	 

	 	 
	 	Facsimile:	 	 

15. MISCELLANEOUS.

     15.1 Attorneys’ Fees and Costs. If attorneys’ fees or other costs are incurred to
secure performance of any obligations hereunder, or to establish damages for the breach thereof or
to obtain any other appropriate relief, whether by way of prosecution or defense, the Prevailing
Party (as defined below) will be entitled to recover reasonable attorneys’ fees and costs incurred
in connection therewith. A party will be considered the “Prevailing Party” if: (a) it
initiated the litigation and substantially obtained the relief it sought, either through a judgment
or the losing party’s voluntary action before trial or judgment; (b) the other party withdraws its
action without substantially obtaining the relief it sought; or (c) it did not initiate the
litigation and judgment is entered into for any party, but without substantially granting the
relief sought by the initiating party or granting more substantial relief to the non-initiating
party with respect to any counterclaim asserted by the non-initiating party in connection with such
litigation.

     15.2 Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile or portable document format (pdf)) for the convenience of the parties
hereto, each of which will be deemed an original, but all of which together will constitute one and
the same instrument. No signature page to this Agreement evidencing a party’s execution

16

 

hereof will be deemed to be delivered by such party to any other party hereto until such
delivering party has received signature pages from all parties signatory to this Agreement.

     15.3 Headings. The article and section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the parties and will not in
any way affect the meaning or interpretation of this Agreement.

     15.4 Severability. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision of this Agreement,
each of which will remain in full force and effect, so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in a manner materially adverse to
any party.

     15.5 Binding Effect. This Agreement will be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.

     15.6 Entire Agreement. This Agreement and the related documents contained as Exhibits
hereto contain the entire understanding of the parties relating to the subject matter hereof and
supersede all prior written or oral and all contemporaneous oral agreements and understandings
relating to the subject matter hereof. This Agreement may be amended, supplemented or modified,
and any provision hereof may be waived, only by written instrument making specific reference to
this Agreement signed by the party against whom enforcement is sought. The recitals to this
Agreement are hereby incorporated by reference and made a part of this Agreement for all purposes.
To the extent of any conflict between this Agreement and the Master Separation and Distribution
Agreement, the provisions of this Agreement shall control.

     15.7 Construction. Neither this Agreement nor any provision contained in this
Agreement will be interpreted in favor of or against any party hereto because such party or its
legal counsel drafted this Agreement or such provision. Whenever the plural form of a word is used
in this Agreement, that word will include the singular form of that word. Whenever the singular
form of a word is used in this Agreement, that word will include the plural form of that word. The
term “and” shall also mean “or” and “or” shall also mean “and” as the context permits or requires
to provide the broadest meaning or inclusion of the subject. The term “include” or any derivative
of such term does not mean that the items following such term are the only types of such items.

     16.8 Effect of Licensor Approvals. The parties recognize that the need for the
protection of consumers and of the public is of paramount consideration. Accordingly, the parties
agree that in no event will any approval granted by Licensor under this Agreement serve to confirm
Licensee’s compliance with, or absolve or otherwise release Licensee of its responsibilities to
comply with, the provisions of this Agreement, including those relating to Product quality.

     16.9 Time is of the Essence. Time is of the essence of this Agreement.

17

 

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in duplicate
originals by its duly authorized representatives on the respective dates entered below.

	 	 	 	 	 
	 	 	LICENSOR:
	 
	 	 	 	 
	 	 	CLEAR CHANNEL IDENTITY, L.P.
	 
	 	 	 	 
	 	 	By                                         , its general partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	LICENSEE:
	 
	 	 	 	 
	 	 	CCE SPINCO, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

18exv10w5

 

Exhibit 10.5

CCE SPINCO, INC.

2005 STOCK INCENTIVE PLAN

     1. Purpose. The purpose of the plan is to facilitate the ability of CCE Spinco, Inc.,
a Delaware corporation (the “Company”) and its subsidiaries to attract, motivate and retain
eligible employees, directors and other personnel through the use of equity-based and other
incentive compensation opportunities. Awards made under the plan may take the form of options to
purchase shares of the Company’s common stock, $.01 par value (the “Common Stock”) granted pursuant
to Section 5, director shares issued pursuant to Section 6, stock appreciation rights granted
pursuant to Section 7, restricted stock and deferred stock rights issued or granted pursuant to
Section 8, other types of stock-based awards made pursuant to Section 9, and/or performance-based
awards made pursuant to Section 10.

     2. Administration.

          2.1 The Committee. The Plan will be administered by the compensation committee of the
Company’s board of directors, except the entire board will have sole authority for granting and
administering awards to non-employee directors.

          2.2 Responsibility and Authority of the Committee. Subject to the provisions of the
Plan, the committee, acting in its discretion, will have responsibility and the power and authority
to (a) select the persons to whom awards will be made, (b) prescribe the terms and conditions of
each award and make amendments thereto, (c) construe, interpret and apply the provisions of the
Plan and of any agreement or other document evidencing an award made under the Plan, and (d) make
any and all determinations and take any and all other actions as it deems necessary or desirable in
order to carry out the terms of the Plan. The committee may obtain at the Company’s expense such
advice, guidance and other assistance from outside compensation consultants and other professional
advisers as the committee deems appropriate in connection with the proper administration of the
plan.

          2.3 Delegation of Authority by Committee. Subject to the requirements of applicable
law, the committee may delegate to any person or group or subcommittee of persons (who may, but
need not be members of the committee) such Plan-related functions within the scope of its
responsibility, power and authority as it deems appropriate. If the committee wishes to delegate a
particular function to a subcommittee consisting solely of its own members, it may choose to do so
on a de facto basis by limiting the members entitled to vote on matters relating to that function.
Reference herein to the committee with respect to functions delegated to another person, group or
subcommittee will be deemed to refer to such person, group or subcommittee.

          2.4 Committee Actions. A majority of the members of the committee shall constitute a
quorum. The committee may act by the vote of a majority of its members present at a meeting at
which there is a quorum or by unanimous written consent. The decision of the committee as to any
disputed question arising under the plan or an agreement or other document governing an individual
award, including questions of construction, interpretation and administration, shall be final and
conclusive on all persons. The committee shall keep a record of

 

 

its proceedings and acts and shall keep or cause to be kept such books and records as may be
necessary in connection with the proper administration of the plan.

          2.5 Indemnification. The Company shall indemnify and hold harmless each member of the
board of directors of the committee or of any subcommittee appointed by the board of directors or
the committee and any employee of the Company or any of its subsidiaries and affiliates who
provides assistance with the administration of the plan or to whom a plan-related responsibility is
delegated, from and against any loss, cost, liability (including any sum paid in settlement of a
claim with the approval of the board of directors), damage and expense (including reasonable legal
fees and other expenses incident thereto and, to the extent permitted by applicable law,
advancement of such fees and expenses) arising out of or incurred in connection with the plan,
unless and except to the extent attributable to such person’s fraud or willful misconduct.

     3. Limitations on Company Stock Awards Under the Plan.

          3.1 Aggregate Share Limitation. Subject to adjustments required or permitted by the
plan, the Company may issue a total of nine million (9,000,000) shares of Common Stock under the
plan. For these purposes, the following shares of Common Stock will not be taken into account and
will remain available for issuance under the plan: (a) shares covered by awards that expire or are
canceled, forfeited, settled in cash or otherwise terminated, (b) shares delivered to the Company
and shares withheld by the Company for the payment or satisfaction of purchase price or tax
withholding obligations associated with the exercise or settlement of an award, and (c) shares
covered by stock-based awards assumed by the Company in connection with the acquisition of another
company or business.

          3.2 Individual Employee Limitations. In any calendar year, (a) the total number of
shares that may be covered by awards made to an individual may not exceed 1,000,000 plus the
aggregate amount of such individual’s unused annual share limit as of the close of the preceding
calendar year, (b) the maximum amount of cash that may be payable to an individual pursuant to
performance-based cash awards made under Section 10 of the plan is $5,000,000 plus the aggregate
amount of such individual’s unused annual dollar limit as of the close of the preceding calendar
year.

     4. Eligibility to Receive Awards. Awards may be granted under the plan to any present
or future director, officer, employee, consultant or adviser of or to the Company or any of its
subsidiaries. For purposes of the plan, a subsidiary is any entity in which the Company has a
direct or indirect ownership interest of at least 50%.

     5. Stock Option Awards.

          5.1 General. Stock options granted under the Plan will have such vesting and other
terms and conditions as the committee, acting in its discretion in accordance with the Plan, may
determine, either at the time the option is granted or, if the holder’s rights are not adversely
affected, at any subsequent time.

          5.2 Minimum Exercise Price. The exercise price per share of Common Stock covered by an
option granted under the plan may not be less than 100% of the fair market value

-2-

 

per share on the date the option is granted (110% in the case of “incentive stock options”
(within the meaning of Section 422 of the Code) granted to an employee who is a 10% stockholder
within the meaning of Section 422(b)(6) of the Code). For purposes of the plan, unless determined
otherwise by the committee, the fair market value of a share of Common Stock on any date is the
closing sale price per share in consolidated trading of securities listed on the principal national
securities exchange or market on which shares of Common Stock are then traded, as reported by a
recognized reporting service or, if there is no sale on such date, on the first preceding date on
which such shares are traded.

          5.3 Limitation on Repricing of Options. Except for adjustments made in accordance with
Section 13, the repricing of stock options granted under the plan is prohibited in the absence of
stockholder approval.

          5.4 Maximum Duration. Unless sooner terminated in accordance with its terms, an option
granted under the plan will automatically expire on the tenth anniversary of the date it is granted
or, in the case of an “incentive stock option” granted to an employee who is a 10% stockholder, the
fifth anniversary of the date it is granted.

          5.5 Effect of Termination of Employment or Service. The committee may establish such
exercise and other conditions applicable to an option following the termination of the optionee’s
employment or other service with the Company and its subsidiaries as the committee deems
appropriate on a grant-by-grant basis. For purposes of the plan, an individual’s employment or
service with the Company and its subsidiaries will be deemed to have terminated if such individual
is no longer receiving or entitled to receive compensation for providing services to the Company
and its subsidiaries.

          5.6 Method of Exercise. An outstanding and exercisable option may be exercised by
transmitting to the Secretary of the Company (or other person designated for this purpose by the
committee) a written notice identifying the option that is being exercised and specifying the
number of whole shares to be purchased pursuant to that option, together with payment in full of
the exercise price and the withholding taxes due in connection with the exercise, unless and except
to the extent that other arrangements satisfactory to the Company have been made for such
payment(s). The exercise price may be paid in cash or in any other manner the committee, in its
discretion, may permit, including, without limitation, (a) by the delivery of previously-owned
shares, (b) by a combination of a cash payment and delivery of previously-owned shares, or (c)
pursuant to a cashless exercise program established and made available through a registered
broker-dealer in accordance with applicable law. Any shares transferred to the Company (or withheld
upon exercise) in connection with the exercise of an option shall be valued at fair market value
for purposes of determining the extent to which the exercise price and/or tax withholding
obligation is satisfied by such transfer (or withholding) of shares.

          5.7 Non-Transferability. No option shall be assignable or transferable except upon the
optionee’s death to a beneficiary designated by the optionee in a manner prescribed or approved for
this purpose by the committee or, if no designated beneficiary shall survive the optionee, pursuant
to the optionee’s will or by the laws of descent and distribution. During an optionee’s lifetime,
options may be exercised only by the optionee or the optionee’s guardian or

-3-

 

legal representative. Notwithstanding the foregoing, the committee may permit the inter vivos
transfer of an option (other than an “incentive stock option”) pursuant to a domestic relations
order (within the meaning of Rule 16a-12 promulgated under the Exchange Act) in settlement of
marital property rights, or by gift to any “family member” (within the meaning of Item A.1.(5) of
the General Instructions to Form S-8 or any successor provision), on such terms and conditions as
the committee deems appropriate.

          5.8 Rights as a Stockholder. No shares of Common Stock shall be issued in respect of
the exercise of an option until payment of the exercise price and the applicable tax withholding
obligations have been satisfied or provided for to the satisfaction of the Company, and the holder
of an option shall have no rights as a stockholder with respect to any shares covered by the option
until such shares are duly and validly issued by the Company to or on behalf of such holder.

     6. Director Shares.

          6.1 The committee may permit non-employee directors to elect to receive all or part of their
annual retainers in the form of shares (“Director Shares”). Unless the committee determines
otherwise, any such elections may be made during the month a director first becomes a director and
during the last month of each calendar quarter thereafter, and shall remain in effect unless and
until the end of the calendar quarter in which a new election is made (or, if later, the calendar
quarter next following the calendar quarter in which the director first becomes a director). Any
such election shall also indicate the percentage of the retainer to be paid in shares and shall
contain such other information as the committee or the Board may require.

          6.2 The Company shall issue Director Shares on the first trading day of each calendar quarter
to all directors on that trading day except any director whose retainer is to be paid entirely in
cash. The number of Director Shares issuable to a director on the relevant trading date shall
equal:

[ % multiplied by (R/4) ] divided by P

          WHERE:

          % = the percentage of the director’s retainer that is payable in shares;

          R = the director’s retainer for the applicable calendar year; and

          P = the closing price, as quoted on the principal exchange on
which shares are traded, on the date of issuance.

Director Shares shall not include any fractional shares. Fractions shall be rounded to the nearest
whole share.

     7. Stock Appreciation Rights.

          7.1 General. The committee may grant stock appreciation rights (“SARs”), either alone
or in connection with the grant of an option, upon such vesting and other terms and

-4-

 

conditions as the committee, acting in its discretion in accordance with the Plan, including,
as applicable, Section 5 (relating to options), may determine, either at the time the SARs are
granted or, if the holder’s rights are not adversely affected, at any subsequent time. Upon
exercise, the holder of an SAR shall be entitled to receive a number of whole shares of Common
Stock having a fair market value equal to the product of X and Y, where—

X = the number of whole shares of Common Stock as to which the SAR is being
exercised, and

Y = the excess of the fair market value per share of Common Stock on the date of
exercise over the fair market value per share of Common Stock on the date the SAR is
granted (or such greater base value as the committee may prescribe at the time the
SAR is granted).

          7.2 Tandem SARs. An SAR granted in tandem with an option shall cover the same shares
covered by the option (or such lesser number of shares as the committee may determine) and, unless
the committee determines otherwise, shall be subject to the same terms and conditions as the
related option. Upon the exercise of an SAR granted in tandem with an option, the option shall be
canceled to the extent of the number of shares as to which the SAR is exercised, and, upon the
exercise of an option granted in tandem with an SAR, the SAR shall be canceled to the extent of the
number of shares as to which the option is exercised.

          7.3 Method of Exercise. An outstanding and exercisable SAR may be exercised by
transmitting to the Secretary of the Company (or other person designated for this purpose by the
committee) a written notice identifying the SAR that is being exercised and specifying the number
of shares as to which the SAR is being exercised, together with payment in full of the withholding
taxes due in connection with the exercise, unless and except to the extent that other arrangements
satisfactory to the Company have been made for such payment. The withholding taxes may be paid in
cash or in any other manner the committee, in its discretion, may permit, including, without
limitation, (a) by the delivery of previously-owned shares of Common Stock, or (b) by a combination
of a cash payment and the delivery of previously-owned shares. The committee may impose such
additional or different conditions for exercise of an SAR as it deems appropriate. No fractional
shares will be issued in connection with the exercise of an SAR.

          7.4 Rights as a Stockholder. No shares of Common Stock shall be issued in respect of
the exercise of an SAR until payment of the applicable tax withholding obligations have been
satisfied or provided for to the satisfaction of the Company, and the holder of an SAR shall have
no rights as a stockholder with respect to any shares issuable upon such exercise until such shares
are duly and validly issued by the Company to or on behalf of such holder.

     8. Restricted Stock and Deferred Stock Awards.

          8.1 General. Under a restricted stock award, shares of Common Stock will be issued by
the Company to the recipient at the time of the award. Under a deferred stock award, the recipient
will be entitled to receive shares of Common Stock in the future. The shares covered by a
restricted stock award and the right to receive shares under a deferred stock award

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will be subject to such vesting and other conditions and restrictions as the committee, acting
in its discretion in accordance with the plan, may determine.

          8.2 Minimum Purchase Price. Unless the committee, acting in accordance with applicable
law, determines otherwise, the purchase price payable for shares of Common Stock transferred
pursuant to a restricted or deferred stock award must be at least equal to the par value of the
shares.

          8.3 Issuance of Restricted Stock. Shares of Common Stock issued pursuant to a
restricted stock award may be evidenced by book entries on the Company’s stock transfer records
pending satisfaction of the applicable vesting conditions. If a stock certificate for restricted
shares is issued, the certificate will bear an appropriate legend to reflect the nature of the
conditions and restrictions applicable to the shares. The Company may require that any or all such
stock certificates be held in custody by the Company until the applicable conditions are satisfied
and other restrictions lapse. The committee may establish such other conditions as it deems
appropriate in connection with the issuance of certificates for restricted shares, including,
without limitation, a requirement that the recipient deliver a duly signed stock power, endorsed in
blank, for the shares covered by the award.

          8.4 Stock Certificates for Vested Stock. The recipient of a restricted or deferred
stock award will be entitled to receive a certificate, free and clear of conditions and
restrictions (except as may be imposed in order to comply with applicable law), for shares that
vest in accordance with the award, subject, however, to the payment or satisfaction of applicable
withholding taxes. The delivery of vested shares covered by a deferred stock award may be deferred
if and to the extent provided by the terms of the award, subject, however, to the applicable
deferral requirements of Section 409A of the Code.

          8.5 Rights as a Stockholder. Subject to and except as otherwise provided by the terms
of a restricted stock award, the holder of restricted shares of Common Stock will be entitled to
receive dividends paid on, and exercise voting rights associated with, such shares as if the shares
were fully vested. The holder of a deferred stock award shall no rights as a stockholder with
respect to shares covered by a deferred stock award unless and until the award vests and the shares
are issued; provided, however, that the committee, in its discretion, may provide for the payment
of dividend equivalents on shares covered by a deferred stock award.

          8.6 Nontransferability. Neither a restricted or deferred stock award nor restricted
shares of Common Stock issued pursuant to any such award may be sold, assigned, transferred,
disposed of, pledged or otherwise hypothecated other than to the Company or its designee in
accordance with the terms of the award or of the plan, and any attempt to do so shall be null and
void and, unless the committee determines otherwise, shall result in the immediate forfeiture of
the award or the restricted shares, as the case may be.

          8.7 Termination of Service Before Vesting; Forfeiture. Unless the committee determines
otherwise, shares of restricted stock and non-vested deferred stock awards will be forfeited upon
the recipient’s termination of employment or other service with the Company and its subsidiaries.
If shares of restricted stock are forfeited, any certificate representing such shares will be
canceled on the books of the Company and the recipient will be entitled to receive from

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the Company an amount equal to any cash purchase price previously paid for such shares. If a
non-vested deferred stock award is forfeited, the recipient will have no further right to receive
the shares of Common Stock covered by the non-vested award.

     9. Other Equity-Based Awards. The committee may grant dividend equivalent payment
rights, phantom shares, bonus shares and other forms of equity-based awards to eligible persons,
subject to such terms and conditions as it may establish. Awards made pursuant to this section may
entail the transfer of shares of Common Stock to the recipient or the payment in cash or otherwise
of amounts based on the value of shares of Common Stock and may include, without limitation, awards
designed to comply with or take advantage of applicable tax and/or other laws, provided, that the
terms and conditions of any award that is treated as non-qualified deferred compensation must
satisfy the applicable deferral requirements of Section 409A of the Code.

     10. Performance Awards.

          10.1 General. The committee may condition the grant, exercise, vesting or settlement
of equity-based awards under the Plan (whether settled in shares of Common Stock or cash or other
property) on the achievement of specified performance goals in accordance with this section.

          10.2 Objective Performance Goals. A performance goal established in connection with an
award covered by this section must be (a) objective, so that a third party having knowledge of the
relevant facts could determine whether the goal is met; (b) prescribed in writing by the committee
at a time when the outcome is substantially uncertain, but in no event later than the first to
occur of (1) the 90th day of the applicable performance period, or (2) the date on which
25% of the performance period has elapsed; and (c) based on any one or more of the following
business criteria, applied to an individual, a subsidiary, a business unit or division, the Company
and any one or more of its subsidiaries, or such other operating unit(s) as the committee may
designate (in each case, subject to the conditions of the performance-based compensation exemption
from Section 162(m) of the Code):

	 	(i)	 	earnings per share,
	 
	 	(ii)	 	share price or total shareholder return,
	 
	 	(iii)	 	pre-tax profits,
	 
	 	(iv)	 	net earnings,
	 
	 	(v)	 	return on equity or assets,
	 
	 	(vi)	 	revenues,
	 
	 	(vii)	 	operating income before depreciation,
amortization and non-cash compensation expense,
	 
	 	(viii)	 	market share or market penetration, or
	 
	 	(ix)	 	any combination of the foregoing.

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The applicable performance goals may be expressed in absolute or relative terms, and must include
an objective formula or standard for computing the amount of compensation payable to an employee if
the goal is attained. A formula or standard is objective if a third party having knowledge of the
relevant performance results could calculate the amount to be paid to the employee. The formula or
standard may provide for the payment of a higher or lower amount depending upon whether and the
extent to which a performance goal is attained. The committee may not use its discretion to
increase the amount of compensation payable that would otherwise be due upon attainment of a
performance goal; provided that, subject to the requirements for exemption under Section 162(m) of
the Code, the committee may make appropriate adjustments to an award in order to equitably reflect
changes in accounting rules, corporate transactions (including, without limitation, dispositions
and acquisitions) and other similar types of events or circumstances occurring during the
applicable performance period.

          10.3 Determination of Amount Payable. Following the expiration of the performance
period applicable to an award made under this section, the committee shall determine whether and
the extent to which the performance goals have been attained and the amount of compensation, if
any, that is payable as a result. The committee must certify in writing prior to payment of the
compensation that the performance goals and any other material terms of the award were in fact
satisfied. Compensation otherwise payable pursuant to a performance-based award made under this
section will be subject to the individual limitations set forth in section 3.2.

     11. Capital Changes, Reorganization or Sale of the Company.

          11.1 Adjustments Upon Changes in Capitalization. The aggregate number and class of
shares issuable under the plan, the total number and class of shares with respect to which awards
may be granted to any individual in any calendar year, the number and class of shares and the
exercise price per share covered by each outstanding option, the number and class of shares and the
base price per share covered by each outstanding SAR, and the number and class of shares covered by
each outstanding deferred stock award or other-equity-based award, and any per-share base or
purchase price or target market price included in the terms of any such award, and related terms
shall be subject to adjustment in order to equitably reflect the effect on issued shares of Common
Stock resulting from a split-up, spin-off, recapitalization, consolidation of shares or any similar
capital adjustment, and/or to reflect a change in the character or class of shares covered by the
plan and an award. For the avoidance of doubt, no adjustments will be required or made under this
section in respect of the spin-off of the Company by Clear Channel Communications, Inc.

          11.2 Cash, Stock or Other Property for Stock. Except as otherwise provided in this
Section, in the event of an Exchange Transaction (as defined below), all option holders shall be
permitted to exercise their outstanding options and SARs in whole or in part (whether or not
otherwise exercisable) immediately prior to such Exchange Transaction, and any outstanding options
and SARs which are not exercised before the Exchange Transaction shall thereupon terminate.
Notwithstanding the preceding sentence, if, as part of an Exchange Transaction, the stockholders of
the Company receive capital stock of another corporation (“Exchange Stock”) in exchange for their
shares of Common Stock (whether or not such Exchange Stock is the sole consideration), and if the
Company’s board of directors, in its sole discretion, so directs, then all

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options and SARs for Common Stock that are outstanding at the time of the Exchange Transaction
shall be converted into options or SARs (as the case may be) for shares of Exchange Stock. The
number of shares of Exchange Stock and the exercise price per share under a converted option will
be adjusted such that (a) the ratio of the exercise price per share to the value per share at the
time of the conversion (which value will be equal to the consideration payable for each share of
Common Stock in the Exchange Transaction) is the same as the ratio of the per share exercise price
to the value of per share of Common Stock under the original option; and (b) the aggregate
difference between the value of the shares of Exchange Stock and the exercise price under the
converted option immediately after the Exchange Transaction is the same as the aggregate difference
between the value of the shares of Common Stock and the exercise price under the original option
immediately before the Exchange Transaction. Similar adjustments will be made to the number of
shares of Exchange Stock and the base value per share covered by SARs that are converted. Unless
the Company’s board of directors determines otherwise, the vesting and other terms and conditions
of the converted options and SARs shall be substantially the same as the vesting and corresponding
other terms and conditions of the original options and SARs. The Company’ board of directors,
acting in its discretion, may accelerate vesting of other non-vested awards, and cause cash
settlements and/or other adjustments to be made to any outstanding awards (including, without
limitation, options and SARs) as it deems appropriate in the context of an Exchange Transaction,
taking into account with respect to other awards the manner in which outstanding options and SARs
are being treated.

          11.3 Definition of Exchange Transaction. For purposes of the plan, the term “Exchange
Transaction” means a merger (other than a merger of the Company in which the holders of Common
Stock immediately prior to the merger have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger), consolidation, acquisition or disposition of
property or stock, separation, reorganization (other than a mere reincorporation or the creation of
a holding company), liquidation of the Company or any other similar transaction or event so
designated by the Company’s board of directors in its sole discretion, as a result of which the
stockholders of the Company receive cash, stock or other property in exchange for or in connection
with their shares of Common Stock.

          11.4 Fractional Shares. In the event of any adjustment in the number of shares covered
by any award pursuant to the provisions hereof, any fractional shares resulting from such
adjustment shall be disregarded, and each such award shall cover only the number of full shares
resulting from the adjustment.

          11.5 Determination of Board to be Final. All adjustments under this Section shall be
made by the Company’s board of directors, and its determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive.

     12. Termination and Amendment of the Plan. The board of directors of the Company may
terminate the plan at any time or amend the plan at any time and from time to time; provided,
however, that:

                  (a) no such action shall impair or adversely alter any awards theretofore granted under the
plan, except with the consent of the recipient or holder, nor shall

-9-

 

any such action deprive any such person of any shares which he or she may have acquired
through or as a result of the plan; and

                  (b) to the extent necessary under applicable law or the requirements of any stock exchange or
market upon which the shares of Common Stock may then be listed, no amendment shall be effective
unless approved by the stockholders of the Company in accordance with applicable law.

Notwithstanding the foregoing, no incentive stock options may be granted subsequent to the tenth
anniversary of the date the plan is adopted. The plan does not have a fixed termination date.

                  (c) Limitation of Rights. Nothing contained in the plan or in any award agreement
shall confer upon any recipient of an award any right with respect to the continuation of his or
her employment or other service with the Company or a subsidiary or other affiliate, or interfere
in any way with the right of the Company and its subsidiaries and other affiliates at any time to
terminate such employment or other service or to increase or decrease, or otherwise adjust, the
compensation and/or other terms and conditions of the recipient’s employment or other service.

     13. Miscellaneous.

          13.1 Governing Law. The plan and the rights of all persons claiming under the plan
shall be governed by the laws of the State of Delaware, without giving effect to conflicts of laws
principles thereof.

          13.2 Shares Issued Under Plan. Shares of Common Stock available for issuance under the
plan may be authorized and unissued, held by the Company in its treasury or otherwise acquired for
purposes of the plan. No fractional shares of Common Stock will be issued under the plan.

          13.3 Compliance with Law. The Company will not be obligated to issue or deliver shares
of Common Stock pursuant to the plan unless the issuance and delivery of such shares complies with
applicable law, including, without limitation, the Securities Act of 1933, as amended, the Exchange
Act, and the requirements of any stock exchange or market upon which the Common Stock may then be
listed, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.

          13.4 Transfer Orders; Placement of Legends. All certificates for shares of Common
Stock delivered under the plan shall be subject to such stock-transfer orders and other
restrictions as the Company may deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange or market upon which the Common Stock
may then be listed, and any applicable federal or state securities law. The Company may cause a
legend or legends to be placed on any such certificates to make appropriate reference to such
restrictions.

          13.5 Decisions and Determinations Final. All decisions and determinations made by the
Company’s board of directors pursuant to the provisions hereof and, except to the extent rights or
powers under the Plan are reserved specifically to the discretion of the board of

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directors, all decisions and determinations of the committee, shall be final, binding and
conclusive on all persons.

          13.6 Withholding of Taxes. As a condition to the exercise and/or settlement of any
award or the lapse of restrictions on any award or shares, or in connection with any other event
that gives rise to a federal or other governmental tax withholding obligation on the part of the
Company or a subsidiary with respect to an award, the Company and/or the subsidiary may (a) deduct
or withhold (or cause to be deducted or withheld) from any payment or distribution otherwise
payable to the award recipient, whether or not such payment or distribution is covered by the plan,
or (b) require the recipient to remit cash (through payroll deduction or otherwise) or make other
arrangements permitted by the Company, in each case in an amount or of a nature sufficient in the
opinion of the Company to satisfy or provide for the satisfaction of such withholding obligation.
If the event giving rise to the withholding obligation involves a transfer of shares of Common
Stock, then, at the sole discretion of the committee, the recipient may satisfy the withholding
obligations associated with such transfer by electing to have the Company withhold shares of Common
Stock or by tendering previously-owned shares of Common Stock, in each case having a fair market
value equal to the amount of tax to be withheld.

          13.7 Disqualifying Disposition. If a person acquires shares of Common Stock pursuant
to the exercise of an incentive stock option and the shares so acquired are sold or otherwise
transferred in a “disqualifying disposition” (within the meaning of Section 424(c) of the Code)
within two-years from the date the option was granted or one year after the option is exercised,
such person shall, within ten days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office.

          13.8 Effective Date. The plan shall become effective on the date it is initially
approved and adopted by the Company’s board of directors. However, no awards may be made pursuant
to the plan after the date preceding the date of the first annual meeting of the Company’s
stockholders occurring after December 31, 2006, unless the Company’s stockholders approve the plan
at such meeting.

-11-

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