1
Exhibit 1.2
8,000,000 Shares
Xxxxx Advertising Company
Class A Common Stock
(Par Value $.001 per share)
UNDERWRITING AGREEMENT
June 4, 2001
DEUTSCHE BANC ALEX. XXXXX INC.
As Representative of the
Several Underwriters
c/o Deutsche Banc Alex. Xxxxx Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
AMFM Operating, Inc., a wholly-owned subsidiary of Clear Channel
Communications, Inc. (the "Selling Shareholder"), proposes to sell to the
several underwriters (the "Underwriters") named in Schedule I hereto for whom
you are acting as representative (the "Representative") an aggregate of
8,000,000 shares of the Class A Common Stock, par value $.001 per share (the
"Firm Shares") of Xxxxx Advertising Company, a Delaware corporation (the
"Company"). The respective amounts of the Firm Shares to be so purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto.
The Company proposes to sell, at the Underwriter's option, an aggregate of up to
1,200,000 additional shares of the Company's Class A Common Stock (the "Option
Shares") subject to the terms set forth below.
As the Representative, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part for the
accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "Shares." If the Underwriters listed on Schedule I includes only the
Representative, then references herein to the Representative shall mean the
Underwriter.
2
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants as follows:
(i) A registration statement on Form S-3 (File No. 333-45490) with
respect to the Firm Shares has been filed with the Securities and Exchange
Commission (the "Commission") under the Act (the "Firm Share Registration
Statement") and has become effective, and a registration statement on Form S-3
(File No. 333-48288) with respect to the Option Shares has been filed with the
Commission under the Act (the "Option Share Registration Statement") and has
become effective. On the effective date of each registration statement, such
registration statement conformed in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Act"), and the Rules and
Regulations of the Commission (the "Rules and Regulations") thereunder. Copies
of such registration statements, including any amendments thereto, the
preliminary prospectuses contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. As used herein, Registration Statement shall
mean both the Firm Share Registration Statement and the Option Share
Registration Statement, including any documents incorporated therein by
reference and any exhibits, financial statements and schedules thereto, together
with any registration statement filed pursuant to Rule 462(b). Each of the
Registration Statements has been declared effective by the Commission under the
Act and no post-effective amendment thereto has been filed as of the date of
this Agreement. As used herein, Prospectus means, as the context requires, each
base prospectus included in the applicable Registration Statement as
supplemented, in each case, by a prospectus supplement dated the date of this
Agreement filed by the Company with the Commission pursuant to Rule 424(b). Each
preliminary supplement or amendment thereto relating to the Shares being issued
and sold pursuant hereto is herein referred to as a "Preliminary Prospectus."
Any reference herein to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, as of the date of such Registration
Statement, as the case may be, and, in the case of any reference herein to any
Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments relating to the Shares
being issued and sold pursuant hereto, filed with the Commission under Rule
424(b), and prior to the termination of the offering of the Shares by the
Underwriters. Any reference to the Registration Statement shall include any
post-effective amendment filed pursuant to Rule 462(d).
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; the subsidiaries listed on
Schedule II hereto (the "Subsidiaries") are the only subsidiaries of the
Company; the Subsidiaries have been duly organized and are validly existing as
corporations in good standing under the laws of their jurisdiction of
organization, with corporate power and authority to own or lease their
properties and conduct their business as described in the Registration
Statement, except where the failure so to be in good standing does
-2-
3
not, individually or in the aggregate, have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole (a "Material
Adverse Effect"). The Company and the Subsidiaries are duly qualified to
transact business in all jurisdictions in which the conduct of their business
requires such qualification, except where the failure so to qualify would not
have a Material Adverse Effect; the outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable; and, except as indicated on Schedule II hereto, all of the
shares of capital stock of the Subsidiaries are owned by the Company (free and
clear of all liens, encumbrances and security interests (other than as described
in the Registration Statement) which would not reasonably be expected
individually or in the aggregate to materially impair the value of such shares,
and no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares of
capital stock or ownership interests of the Subsidiaries are outstanding. Except
for the Subsidiaries and investments in securities as described in the
Registration Statement, the Company has no equity or other interest in, or right
to acquire an equity or other interest in, any corporation, partnership, trust
or other entity.
(iii) The outstanding shares of Class A Common Stock of the Company,
including the Shares to be sold by the Selling Shareholder, have been duly
authorized and validly issued and are fully paid and non-assessable; the Shares
to be issued and sold by the Company have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully-paid and
non-assessable; and no preemptive rights of stockholders exist with respect to
any of the Shares or the issue and sale thereof.
(iv) The Shares conform with the statements concerning them in the
Registration Statement.
(v) The Commission has not issued an order preventing or suspending
the use of any Prospectus or Preliminary Prospectus relating to the proposed
offering of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains and the Prospectus and any amendments or
supplements thereto will contain all statements which are required to be stated
therein by, and in all material respects conform or will conform, as the case
may be, to the requirements of, the Act and the Rules and Regulations. The
documents incorporated by reference in the Prospectus, at the time they were
filed or will be filed with the Commission, conformed or will conform at the
time of filing, in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the Act, as applicable,
and the Rules and Regulations of the Commission thereunder. Neither the
Registration Statement nor any amendment thereto, and neither the Prospectus nor
any supplement thereto, including any documents incorporated by reference
therein, contains or will contain, as the case may be, any untrue statement of a
material fact or omits or will omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to information
contained in or omitted from the Registration Statement or the Prospectus, or
incorporated by reference or any such amendment or supplement or any documents
incorporated by reference therein, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of the
-3-
4
Selling Shareholder or any Underwriter through the Representative, specifically
for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and its
subsidiaries, together with related notes and schedules, as set forth or
incorporated by reference in the Registration Statement, present fairly the
consolidated financial position and the consolidated results of operations of
the Company and its subsidiaries at the indicated dates and for the indicated
periods. All such financial statements have been prepared in accordance with
generally accepted principles of accounting, consistently applied throughout the
periods involved, except as disclosed therein. The summary and selected
financial and statistical data included or incorporated by reference in the
Registration Statement present fairly in all material respects the information
shown therein and have been compiled on a basis consistent with the financial
statements presented therein.
(vii) Since January 1, 1999, the documents filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), at the time filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act, and such documents at
the time of such filing did not, and as of the date hereof do not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary or make the statements therein not misleading.
(viii) There is no action or proceeding pending or, to the knowledge
of the Company, threatened against the Company or the Subsidiaries before any
court or administrative agency or by any regulatory authority which may
reasonably be expected to have a Material Adverse Effect.
(ix) The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases conforming to the description
thereof set forth in the Registration Statement, with such exceptions as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or materially impair the value of such leasehold estate to the
Company or such Subsidiary.
(x) The Company and the Subsidiaries have filed all Federal, State and
foreign income tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments received by them or any
of them to the extent that such taxes have become due and are not being
contested in good faith, except for such failure to file or defaults in payment
of a character not required to be disclosed in the Prospectus and which would
not reasonably be expected to have a Material Adverse Effect.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, as the same may be amended or
supplemented, there
-4-
5
has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company and the Subsidiaries taken as a whole or the earnings,
business affairs, management, or business prospects of the Company and the
Subsidiaries taken as a whole, whether or not occurring in the ordinary course
of business, and there has not been any material transaction entered into by the
Company or any of the Subsidiaries other than transactions in the ordinary
course of business and changes and transactions contemplated by the Registration
Statement and the Prospectus, as the same may be amended or supplemented. The
Company and the Subsidiaries have no contingent obligations which are material
to the Company and the Subsidiaries taken as a whole and which are not disclosed
in the Registration Statement or the Prospectus, as it may be amended or
supplemented.
(xii) Neither the Company nor any of the Subsidiaries is, nor with the
giving of notice, lapse of time or both, will be, in default under its
Certificate of Incorporation or By-Laws or any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it or any of its properties is bound and which default is of material
significance in respect of the business or financial condition of the Company
and the Subsidiaries taken as a whole. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party, or of the Charter or By-Laws of the Company or the Subsidiaries or any
order, rule or regulation applicable to the Company or any of the Subsidiaries
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction which conflict, breach or default would
have a Material Adverse Effect.
(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or may be necessary to
qualify the Shares for public offering by the Underwriters under State
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.
(xiv) The Company and each of the Subsidiaries hold all material
licenses, consents, authorizations, approvals, orders, certificates and permits
(collectively, "Licenses") of and from, all federal, state, local, foreign and
other governmental authorities, all self-regulatory organizations in each case
as required for the conduct of the business in which it is engaged, and each
such License is in full force and effect, except to the extent that the failure
to obtain or maintain any such License would not have a Material Adverse Effect.
(xv) The Company and the Subsidiaries are in compliance with all
applicable federal, state, foreign and local laws and regulations relating to
(i) zoning, land use, protection of the environment, human health and safety or
hazardous or toxic substances, wastes, pollutants or contaminants and (ii)
employee or occupational safety, discrimination in hiring,
-5-
6
promotion or pay of employees, employee hours and wages or employee benefits,
except where such noncompliance would not, singly or in the aggregate, have a
Material Adverse Effect.
(xvi) Each of KPMG LLP, PricewaterhouseCoopers LLP, BDO Xxxxxxx, LLP
Xxxxxx Xxxxxxxx LLP and Barbich Xxxxxxxxx Xxxxxx & Xxxx, Accounting Corporation
(each an "Accountant"), who have certified certain of the financial statements
of the Company filed with the Commission as part of, or incorporated by
reference in, the Registration Statement, are independent public accountants as
required by the Act and the Rules and Regulations.
(xvii) The Company has never been, is not now, and immediately after
the sale of the Shares under this Agreement will not be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(xviii) Any Shares of the Company to be sold under this Agreement
(subject to the additional approval of the shares, if any, being registered
pursuant to Rule 462(b)) have been approved for listing on the Nasdaq Stock
Market subject to official notice of issuance.
(b) The Selling Shareholder represents and warrants as follows:
(i) The Selling Shareholder now has and, at the Closing Date (as such
date is hereinafter defined), will have, good and valid title to the Firm Shares
to be sold by the Selling Shareholder, free of any liens, encumbrances, equities
and claims, and full right, power and authority to effect the sale and delivery
of the Firm Shares; and upon the delivery of and payment for the Firm Shares
pursuant to this Agreement, the Underwriters will acquire good and valid title
thereto, free of any liens, encumbrances, equities and claims.
(ii) The Selling Shareholder has full right, power and authority to
execute and deliver this Agreement and to perform its obligations thereunder.
The execution and delivery of this Agreement and the consummation by the Selling
Shareholder of the transactions contemplated herein will not result in a breach
of any of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Selling Shareholder is a party, or of any order, rule or regulation applicable
to the Selling Shareholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(iii) The Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to result in, or which has
constituted, or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of the Class A Common Stock of the
Company and, other than as permitted by the Act, the Selling Shareholder will
not distribute any prospectus or other offering material in connection with the
offering of the Shares.
(iv) As of the date hereof, the information pertaining to such Selling
Shareholder under the caption "Selling Stockholder" in the Prospectus relating
to the Firm Shares Registration Statement, as amended by the information under
the caption "Selling Stockholder" in the Prospectus Supplement relating to the
Firm Shares Registration Statement, other than any numbers expressed as
percentages (the "Selling Shareholder Information"), did
-6-
7
not contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 and the Interest and Dividend Tax Compliance Act of 1983 with respect to
the transactions herein contemplated, the Selling Shareholder agrees, if
required, to deliver to you prior to or at the Closing Date a properly completed
and executed United States Treasury Department Form W-9 or Form 8709 (or other
applicable from or statement specified by Treasury Department regulations in
lieu thereof).
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Selling
Shareholder agrees to sell to the Underwriters the Firm Shares and each
Underwriter agrees, severally and not jointly, to purchase, at a price of $40.00
per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be made in
immediately available funds by wire transfer to the order of the Selling
Shareholder for the Firm Shares, against delivery of certificates therefor to
the Underwriters. Such payment and delivery are to be made through the
facilities of The Depository Trust Company, New York, New York, at 10:00 A.M.,
New York time, on the third business day after the date of this Agreement or at
such other time and date not later than three business days thereafter as you
and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and are not permitted by law or executive order to be closed.).
(c) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase the Option
Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part but
only once and at any time upon written notice given within 30 days after the
date of this Agreement, by you, as Representative of the several Underwriters,
to the Company setting forth the number of Option Shares as to which the several
Underwriters are exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which certificates for
Option Shares are to be delivered shall be determined by the Representative but
shall not be earlier than three nor later than 10 full business days after the
exercise of such option, nor in any event prior to the Closing Date (such time
and date being herein referred to as the "Option Closing Date"). If the date of
exercise of the option is three or more days before the Closing Date, the notice
of exercise shall set the Closing Date as the Option Closing Date. The number of
Option Shares to be purchased by each Underwriter shall be in the same
-7-
8
proportion to the total number of Option Shares being purchased as the number of
Firm Shares being purchased by such Underwriter bears to 8,000,000, adjusted by
you in such manner as to avoid fractional shares. The option with respect to the
Option Shares granted hereunder may be exercised only to cover over-allotments
in the sale of the Firm Shares by the Underwriters. You, as Representative of
the several Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company and the
Selling Shareholder. To the extent, if any, that the option is exercised,
payment for the Option Shares shall be made on the Option Closing Date in
immediately available funds by wire transfer to the order of the Company through
the facilities of The Depository Trust Company, New York, New York.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representative deems it advisable to
do so. The Firm Shares are to be offered to the public from time to time for
sale in one or more negotiated transactions or otherwise at market prices
prevailing at the time of sale or at negotiated prices, subject to receipt and
acceptance by the Underwriters, and subject to their right to reject any order
in whole or in part. To the extent, if at all, that any Option Shares are
purchased pursuant to Section 2 hereof, the Underwriters will offer them to the
public on the foregoing terms.
It is further understood that you will act as the Representative for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees with the several Underwriters and the
Selling Shareholder that:
(i) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a supplementary prospectus
setting forth such other information and the terms of the Offering contemplated
by Section 2 hereof, (B) not file any amendment to the Registration Statement or
supplement to the Prospectus or document incorporated by reference therein of
which the Representative shall not previously have been advised and furnished
with a copy or to which the Representative shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and (C)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus and prior to the termination of the offering of the
Shares by the Underwriters.
(ii) The Company will advise the Representative and the Selling
Shareholder promptly of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, or of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the use of the Prospectus or
of the institution of any proceedings for that purpose, and the Company will use
all reasonable efforts to prevent the issuance of any such stop order preventing
or
-8-
9
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
(iii) The Company will deliver to, or upon the order of, the
Representative, from time to time, as many copies of any Preliminary Prospectus
as the Representative may reasonably request. The Company will deliver to, or
upon the order of, the Representative during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representative may
reasonably request; provided, however, that if any Underwriter is required to
deliver a prospectus in connection with sales of any shares at any time nine
months or more after the date of this Agreement, upon your request, but at the
expense of such Underwriter, the Company will prepare and deliver to such
Underwriter such copies of an amended and supplemented Prospectus as you may
reasonably request. The Company will deliver to the Representative at or before
the Closing Date, four complete conformed copies of the Registration Statement
and all amendments thereto including all exhibits filed therewith, and will
deliver to the Representative such number of copies of the Registration
Statement, including documents incorporated by reference therein, and of all
amendments thereto, as the Representative may reasonably request.
(iv) If during the period in which a prospectus is required by law to
be delivered by an Underwriter or dealer any event shall occur as a result of
which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading, or, if
it is necessary at any time to amend or supplement the Prospectus to comply with
the Act, the Company promptly will, at its election, either (A) prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus or (B) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be incorporated by
reference in the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law.
(v) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(vi) The Company will, for a period of five years from the Closing
Date, deliver to the Representative copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or the Exchange Act.
-9-
10
(vii) No offering, sale or other disposition of any Class A Common
Stock of the Company or any other securities convertible or exchangeable or
exercisable for Class A Common Stock or derivatives of Class A Common Stock,
will be made for a period of 60 days after the date of this Agreement, directly
or indirectly, by the Company otherwise than hereunder or with the prior written
consent of Deutsche Banc Alex. Xxxxx Inc. except that the Company may, without
such consent, (A) issue up to 725,000 shares of Class A Common Stock in
connection with its previously announced acquisition of Xxxxxx Outdoor
Advertising And Travel Centers Incorporated, (B) issue shares of Class A Common
Stock in connection with pending acquisitions or otherwise as consideration for
the acquisition of additional outdoor advertising or logo sign assets, provided
that persons receiving such shares agree not to distribute such shares during
the period of 60 days following the date of this Agreement and (C) issue shares
upon the exercise of options outstanding on the date of this Agreement or
otherwise pursuant to the Company's 1996 Equity Incentive Plan.
(b) The Selling Shareholder covenants and agrees with the several
Underwriters that:
(i) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, the Selling Shareholder agrees,
if required, to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(ii) The Selling Shareholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(iii) No offering, sale or other disposition of any Class A Common
Stock of the Company or any other securities convertible or exchangeable or
exercisable for Class A Common Stock or derivatives of Class A Common Stock,
will be made for a period of 90 days after the date of this Agreement, directly
or indirectly, by the Selling Shareholder, otherwise than hereunder, or with the
prior written consent of Deutsche Banc Alex. Xxxxx Inc.
5. COSTS AND EXPENSES. The Selling Shareholder will pay all costs,
expenses and fees incident to the performance of the obligations of the Company
and the Selling Shareholder under this Agreement with respect to the sale of the
Firm Shares, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of counsel
for the Company; the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus, this Agreement, the Agreement Among Underwriters, the Underwriters'
Selling Memorandum, the Underwriters' Questionnaire, the Invitation Letter; the
filing fees of the Commission; the filing fees and expenses incident to securing
any required review by the NASD of the terms of the sale of the Shares; and the
fees and expenses incurred with respect to the listing of the Shares on the
Nasdaq Stock Market. The Company shall pay all of the above
-10-
11
expenses incident to the sale of the Option Shares, unless otherwise agreed that
the Selling Shareholder will be responsible for the expenses. Neither the
Selling Shareholder nor the Company shall, however, be required to pay for any
of the Underwriters' expenses except that, if this Agreement shall not be
consummated because the conditions in Section 7 hereof are not satisfied, or
because this Agreement is terminated by the Representative pursuant to Section 6
hereof, or by reason of any failure, refusal or inability on the part of the
Selling Shareholder or the Company, as the case may be, to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on its part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or omission of
any Underwriter, then the Selling Shareholder or the Company, as the case may
be, shall reimburse the several Underwriters for reasonable out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder; but neither the
Company nor the Selling Shareholder shall in any event be liable to any of the
several Underwriters for damages on account of loss of anticipated profits from
the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several obligations
of the Underwriters to purchase the Firm Shares on the Closing Date and the
Option Shares, if any, on the Option Closing Date are subject to the accuracy in
all material respects, as of the Closing Date or the Option Closing Date, as the
case may be, of the representations and warranties of the Company and the
Selling Shareholder contained herein, and to the performance by the Company and
the Selling Shareholder in all material respects, of their respective covenants
and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective and any and all filings required by Rule 424, and
any request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representative and complied with to its reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission.
(b) (1) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxxx & Dodge LLP,
counsel for the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriters to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own, and hold under lease, its properties and
conduct its business as described in the Prospectus.
(ii) The Shares conform in all material respects to the description
thereof contained in the Prospectus; and the certificates for the Shares are in
due and proper form.
-11-
12
(iii) The Shares to be sold by the Company and the Selling Shareholder
pursuant to this Agreement have been duly authorized and will be validly issued,
fully paid and non-assessable when issued and paid for as contemplated by this
Agreement; and no statutory preemptive rights of stockholders or, to the best of
such counsel's knowledge, any other preemptive rights exist with respect to any
of the Shares or the issue and sale thereof.
(iv) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order proceedings with respect
thereto have been instituted or are pending or threatened under the Act.
(v) The Registration Statement, all Preliminary Prospectuses, the
Prospectus and each amendment or supplement thereto filed with the Commission on
or prior to the date of such opinion comply as to form in all material respects
with the requirements of the Act and the applicable rules and regulations
thereunder in effect as of the time of such filing (except that such counsel
need express no opinion as to the financial statements, schedules and other
financial information included therein).
(vi) Each document incorporated by reference in the Registration
Statement, all Preliminary Prospectuses, the Prospectus and each amendment or
supplement thereto filed with the Commission on or prior to the date of such
opinion complied as to form at the time of such filing in all material respects
with the applicable requirements (if any) of the Exchange Act and the applicable
rules and regulations thereunder in effect as of the date of such filing (except
that such counsel need express no opinion as to the financial statements,
schedules and other financial information included therein).
(vii) The conditions for the use of Form S-3 as the proper form for
the Registration Statement have been satisfied.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated, do not and will not
violate the Certificate of Incorporation or By-Laws of the Company, or result in
a breach of any of the terms or provisions of, or constitute a default under,
any material agreement or instrument of which such counsel has knowledge to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries may be bound (each a "Contractual Obligation"), and
which conflict, breach or default could reasonably be expected to have a
Material Adverse Effect.
(ix) This Agreement has been duly authorized, executed and delivered
by the Company.
(x) Except for approvals, consents, orders, authorizations,
designations, declarations or filings which have been waived, or which have been
obtained or made, no approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery by
the Company of this Agreement and the consummation by the Company of the
transactions herein contemplated (other than as may be required by the NASD
-12-
13
or as required by State securities and Blue Sky laws as to which such counsel
need express no opinion).
(xi) The Company is not, and will not become as a result of the
consummation of the transactions contemplated by this Agreement, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and has not been an "investment company" at any time since 1988.
In rendering such opinion, Xxxxxx & Dodge LLP may rely as to matters
governed by the laws of states other than the Delaware General Corporate Law or
Federal laws on local counsel in such jurisdictions provided that in each case
Xxxxxx & Dodge LLP shall state that they believe that they and the Underwriters
are justified in relying on such other counsel and such other counsel's opinion
is also delivered to the Underwriters. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel which causes them to believe that (A)
the Registration Statement, as of the time it became effective under the Act and
as of the Closing Date or the Option Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (B) the Prospectus or any supplement thereto, on the date it was
filed pursuant to Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made not misleading (except that such counsel need express no
view as to financial statements and the notes thereto, schedules and other
financial and statistical information included or incorporated by reference
therein). With respect to such statement, Xxxxxx & Dodge LLP may state that
their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(2) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Kean, Miller, Hawthorne,
X'Xxxxxx, XxXxxxx & Xxxxxx, L.L.P., counsel for the Company, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters to the effect that:
(i) Based upon appropriate certificates of public officials (which
shall be furnished to the Representative with the opinion), each of the
Subsidiaries incorporated or organized as a corporation or partnership has been
duly incorporated or organized and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization with
corporate or other organizational power and authority to own, and hold under
lease, its properties and conduct its business as described in the Prospectus.
(ii) Based upon appropriate certificates of public officials (which
shall be furnished to the Representative with the opinion), the Company is duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of each of the jurisdictions in which the conduct of its business
requires such qualification, except to the extent that the failure to qualify
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
-13-
14
(iii) The outstanding shares of capital stock of the Subsidiaries have
been duly authorized and validly issued and are fully paid and non-assessable.
To the best knowledge of such counsel, the shares of capital stock of the
Subsidiaries are owned by the Company or one of the other Subsidiaries free and
clear of all liens, encumbrances and security interests, and except as disclosed
in the Registration Statement, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests of the
Subsidiaries are outstanding.
(iv) The Company's Class A and Class B Common Stock have been duly
authorized; the outstanding shares of its Class A Common Stock, including the
Shares to be sold by the Company and the Selling Shareholder, have been duly
authorized and validly issued and are fully paid and non-assessable.
(v) Such counsel does not know of any contracts or documents required
to be filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus which are
not so filed, incorporated by reference or described as required.
(vi) Such counsel knows of no material legal proceedings or regulatory
or other claims pending or threatened against the Company or the Subsidiaries of
a character required to be reflected in the Prospectus that are not set forth in
the Prospectus.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of such
counsel which causes them to believe that (A) the Registration Statement, as of
the time it became effective under the Act and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and (B) the
Prospectus or any supplement thereto, on the date it was filed pursuant to Rules
and Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading (except that such counsel need express no view as to financial
statements and the notes thereto, schedules and other financial and statistical
information included or incorporated by reference therein).
(3) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxx X. XxXxxxxx,
Esquire, general counsel of the Company, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Underwriters to the effect
that:
(i) The statements in the Prospectus under the captions "Risk Factors
-- Our Operations are Impacted by the Regulation of Outdoor Advertising" insofar
as such statements constitute a summary of regulatory matters relating to the
outdoor advertising industry, fairly describe the regulatory matters relating to
such industry.
-14-
15
In addition to the matters set forth above, such opinion shall also include
a statement to the effect that nothing has come to the attention of such counsel
which causes them to believe that (A) the Registration Statement, as of the time
it became effective under the Act and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) the Prospectus
or any supplement thereto, on the date it was filed pursuant to Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made
not misleading (except that such counsel need express no view as to financial
statements, and the notes thereto, schedules and other financial and statistical
information included or incorporated by reference therein).
(4) The Representative shall have received on the Closing Date, the
opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for the Selling
Shareholder, dated the Closing Date, addressed to the Underwriters to the effect
that:
(i) The execution and delivery of this Agreement and the consummation
of the sale of the Firm Shares by the Selling Shareholder as herein contemplated
do not violate or result in a breach of any terms or provisions of, or
constitute a default under any material agreement or instrument of which such
counsel has knowledge, to which the Selling Shareholder is a party or by which
the Selling Shareholder may be bound, which breach could reasonably be expected
to have a materially adverse effect on the ability of the Selling Shareholder to
perform its obligations under this Agreement.
(ii) The Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as may be required by
State securities and Blue Sky laws or for clearance of the offering with the
NASD, as to which counsel need express no opinion) to sell, assign, transfer and
deliver the Firm Shares pursuant to this Agreement.
(iii) This Agreement has been executed and delivered by the Selling
Shareholder and is a valid and binding obligation of the Selling Shareholder
enforceable in accordance with its respective terms, except as enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally and by general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(iv) Upon payment for the Firm Shares to be sold by the Selling
Shareholder, and delivery of the stock certificates evidencing the Firm Shares
in accordance with the Underwriting Agreement, the Underwriters (assuming that
they are purchasing the Firm Shares being sold by the Selling Shareholder in
good faith and without actual notice of any adverse claim) will have acquired
valid title to the Firm Shares being sold by the Selling Shareholder on the
Closing Date, free and clear of any adverse claims, any lien in favor of the
Company, and any restrictions on transfer imposed by the Company.
-15-
16
(c) The Representative shall have received from Xxxxx Xxxxxxx Xxxxxxx &
Xxxxx LLP, counsel for the Underwriters, an opinion dated the Closing Date or
the Option Closing Date, as the case may be, substantially to the effect
specified in subparagraphs (iii), (iv) and (ix) of Paragraph (b)(1) of this
Section 6, and that the Company is a validly organized and existing corporation
under the laws of the State of Delaware. In rendering such opinion Xxxxx Xxxxxxx
Xxxxxxx & Xxxxx LLP may rely as to all matters governed other than by the laws
of the State of Maryland, the Delaware General Corporation Law or Federal laws
on the opinion of counsel referred to in paragraph (b) of this Section 6. In
addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (A) the Registration Statement, as of the time
it became effective under the Act and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) the Prospectus
or any supplement thereto, on the date it was filed pursuant to Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading
(except that such counsel need express no view as to financial statements,
schedules and other financial information included or incorporated by reference
therein). With respect to such statement, Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP may
state that their belief is based upon the procedures set forth therein, but is
without independent check and verification.
(d) The Representative shall have received, on each of the Closing Date and
the Option Closing Date, as the case may be, from KPMG LLP a signed letter,
dated the Closing Date or the Option Closing Date, as the case may be, which
shall (i) confirm that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations thereunder
and stating that in their opinion the financial statements and schedules
examined by them and included in the Registration Statement comply in form in
all material respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations and (ii) contain such other
statements and information as is ordinarily included in accountants' "comfort
letters" to Underwriters with respect to financial statements and certain
financial and statistical information contained in the Registration Statement
and Prospectus. All such letters shall be in form and substance satisfactory to
the Representative. The letter from KPMG LLP shall confirm that they have
performed the procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described in SAS
No. 71, Interim Financial Information, on the unaudited balance sheet data of
the Company as of March 31, 2001 and the unaudited income and cash flow
information of the Company for the three month period ended March 31, 2001,
included in the Company's quarterly report on Form 10-Q.
(e) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents in such capacity as follows:
-16-
17
(i) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission.
(ii) He does not know of any litigation instituted or threatened
against the Company or any of the Subsidiaries a character required to be
disclosed in the Registration Statement which is not so disclosed; he does not
know of any material contract required to be filed as an exhibit to the
Registration Statement which is not so filed; and the representations and
warranties of the Company contained in Section 1 hereof are true and correct in
all material respects as of the Closing Date or the Option Closing Date, as the
case may be.
(iii) He has carefully examined the Registration Statement and the
Prospectus related thereto and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration Statement,
including any documents incorporated by reference therein, were true and correct
in all material respects, and such Registration Statement and Prospectus or any
document incorporated by reference therein did not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances in which they were made, not misleading
and, in his opinion, since the effective date of the Registration Statement, no
event has occurred which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in such supplement
or amendment.
(f) The Company and the Selling Shareholder shall have furnished to the
Representative such further certificates and documents confirming the
representations and warranties of such person contained herein and related
matters as the Representative may reasonably have requested.
(g) The Firm Shares, and Option Shares, if any, have been approved for
listing upon official notice of issuance on the Nasdaq Stock Market.
(h) The Representative shall have received from each stockholder of the
Company listed on Schedule III a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which such person shall agree not
to offer, sell, sell short or otherwise dispose of any shares of Common Stock of
the Company or other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Stock or derivative of
Common Stock owned by such person (or as to which such person has the right to
direct the disposition of) for a period of 60 days (90 days in the case of Clear
Channel Communications, Inc.) after the date of this Agreement, except with the
prior written consent of Deutsche Banc Alex. Xxxxx Inc. or except as may be
expressly permitted by the terms of such letter or letters.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representative and to Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the
-17-
18
Underwriters hereunder may be terminated by the Representative by notifying the
Company of such termination in writing or by telegram at or prior to the Closing
Date or the Option Closing Date, as the case may be.
In such event, the Company, the Selling Shareholder and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY AND THE SELLING
SHAREHOLDER. The obligations of the Company and the Selling Shareholder to sell
and deliver the portion of the Shares required to be delivered as and when
specified in this Agreement are subject to the conditions that at the Closing
Date or the Option Closing Date, as the case may be, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and in
effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION
(a) The Company and the Selling Shareholder agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages or liabilities
to which such Underwriter or such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
or incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the
omission or alleged omission to state therein a material fact required to be
stated or incorporated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each such controlling person
for any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that the
Company and the Selling Shareholder will not be liable in any such case to the
extent that (i) any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement, or omission or
alleged omission made or incorporated by reference in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through or on behalf of the Representative
specifically for use in the preparation thereof; or (ii) such statement or
omission was contained or made in any Preliminary Prospectus and corrected in
the Prospectus and (A) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (B) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the Act. Notwithstanding the foregoing, the Selling
Shareholder's obligations to indemnify and hold harmless under this Section 8
shall be limited to any loss, claim, liability, action or proceeding arising out
of the Selling Shareholder Information. The Company and the Underwriters
acknowledge that the Selling Shareholder Information constitutes the only
information furnished in writing by or on behalf of the Selling
-18-
19
Shareholder for inclusion in the documents referred to in the foregoing
indemnity. In no event, however, shall the aggregate liability of the Selling
Shareholder for indemnification under this Section 8(a) exceed the net proceeds
after underwriters discounts and commissions received by the Selling Shareholder
from the Underwriters in the offering. In addition, the Selling Shareholder will
not be obligated to make a payment under this subparagraph (a) for any
indemnification claims if and to the extent that payment of such claim is made
by the Company within ninety (90) days after written demand by the Underwriters.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement,
the Selling Shareholder, and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Selling Shareholder, the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained or
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, Selling Shareholder, partner or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through or
on behalf of the Representative or the Selling Shareholder specifically for use
in the preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of Section 8(a) or (b). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as
-19-
20
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel reasonably acceptable to the
indemnified party within a reasonable period of time after notice of
commencement of the action. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to Section 8(a) and
by the Company and the Selling Shareholder in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Selling Shareholder and the
Underwriters from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company, the Selling Shareholder and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Selling Shareholder and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Shareholder or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were determined by pro rata
-20-
21
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation and (iii) the Selling Shareholder shall not be required to
contribute any amount in excess of (a) the proceeds received by the Selling
Shareholder from the Underwriters in the offering after deducting underwriting
discounts and commissions plus (b) any damages previously paid by the Selling
Shareholder. Notwithstanding the foregoing, the Selling Shareholder shall not be
required to contribute in respect of any losses, claims, liabilities or
judgments (or expenses incurred in connection therewith) unless the same arise
with respect to the Selling Shareholder Information. The Underwriters'
obligations in this Section 8(d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
9. DEFAULT BY UNDERWRITERS. If on the Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or the Selling Shareholder), you, as Representative of the Underwriters, shall
use your best efforts to procure within 24 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholder such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 24
hours you, as such Representative, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such
-21-
22
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case
may be, covered hereby, the Company and the Selling Shareholder or you as the
Representative of the Underwriters will have the right, by written notice given
within the next 24-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriters
or of the Company or of the Selling Shareholder except to the extent provided in
Section 8 hereof. In the event of a default by any Underwriter or Underwriters,
as set forth in this Section 9, the Closing Date or Option Closing Date, as the
case may be, may be postponed for such period, not exceeding seven days, as you,
as Representative, may determine in order that the required changes in the
Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. NOTICES. All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriters, to Deutsche Banc Alex. Xxxxx Inc.,
Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Syndicate Manager; with
a copy to 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General
Counsel, with a copy to Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, 0000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Xx.; if to the Company,
to Xxxxx Advertising Company, 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxx,
00000; Attention: Xxxxx X. Xxxxxx, Xx., President; with a copy to Xxxxxx & Dodge
LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxx Xxxxxx; if to the
Selling Shareholder, c/o Clear Channel Communications, Inc., 000 Xxxx Xxxxx, Xxx
Xxxxxxx, Xxxxx 00000, Attention: Xxxxxxx X. Xxxx, with a copy to Akin, Gump,
Strauss, Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxx 00000, Attention: Xxxxxxx X. Mount.
11. TERMINATION. This Agreement may be terminated by you by notice to the
Company and the Selling Shareholder as follows:
(a) at any time after the date hereof and prior to the Closing if any of
the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole or the earnings, business affairs,
management or business prospects of the Company and the Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity or
crisis or change in economic or political conditions if the effect of such
outbreak, escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment, make
the offering or delivery of the Shares impracticable, (iii) trading in
securities on the New York Stock Exchange or the American Stock Exchange shall
have been suspended or materially limited (other than limitations on hours or
numbers of days of trading) or minimum prices shall have been established for
securities on either such Exchange, (iv) declaration of a banking moratorium by
either federal or New York State authorities, (v) any downgrading in the rating
of the Company's debt securities by any
-22-
23
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Exchange Act of 1934, as amended); or (vi)
the taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in your reasonable opinion has a material
adverse effect on the securities markets in the United States or elsewhere; or
(b) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company and
the Selling Shareholder, as to any obligation of the Underwriters to purchase
the Option Shares, upon the occurrence at any time prior to the Option Closing
Date of any of the events described in subparagraph (a) above or as provided in
Sections 6 and 9 of this Agreement.
13. SUCCESSORS. This Agreement has been and is made solely for the benefit
of the Underwriters, the Company and the Selling Shareholder and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
14. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, by or on behalf of the
Company or its directors or officers or by or on behalf of the Selling
Shareholder and (c) delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
-23-
24
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Shareholder and the several Underwriters in accordance with its terms.
Very truly yours,
Xxxxx Advertising Company
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Treasurer and Chief Financial
Officer
Selling Shareholder
AMFM Operating, Inc.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Senior Vice President - Finance
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANC ALEX. XXXXX INC.
By /s/ Herb May
---------------------------------
Authorized Officer
For itself and as Representative of the
several Underwriters listed on Schedule I.
-24-
25
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Deutsche Banc Alex. Xxxxx Inc............................................. 8,000,000
---------
Total..................................... 8,000,000
=========
-25-
26
SCHEDULE II
Subsidiaries of Xxxxx Advertising Company*
State of Other Jurisdiction of
Name Incorporation or Organization
---- ------------------------------
Xxxxx Media Corp. Delaware
American Signs, Inc. Washington
Canadian TODS Limited Nova Scotia, Canada
Colorado Logos, Inc. Colorado
Delaware Logos, LLC Delaware
Florida Logos, Inc. Florida
Xxxxxx Development Corporation Florida
Kansas Logos, Inc. Kansas
Kentucky Logos, LLC Kentucky
Xxxxx Advertising of Colorado Springs, Inc. Colorado
Xxxxx Advertising of Kentucky, Inc. Kentucky
Xxxxx Advertising of Michigan, Inc. Michigan
Xxxxx Advertising of South Dakota, Inc. South Dakota
Xxxxx Advertising of West Virginia, Inc. West Virginia
Lamar Advertising of Youngstown, Inc. Delaware
Lamar Air, L.L.C. Louisiana
Lamar Electrical, Inc. Louisiana
Lamar OCI North Corporation Delaware
Lamar OCI South Corporation Mississippi
Lamar Pensacola Transit, Inc. Florida
Lamar Tennessee, L.L.C. Tennessee
Lamar Texas General Partner, Inc. Louisiana
Lamar Texas Limited Partnership Texas
Michigan Logos, Inc. Michigan
Minnesota Logos, Inc. Minnesota
Lamar Advantage Outdoor Company, L.P. Delaware
Lamar Advantage Holding Company Delaware
Lamar Ember, Inc. Texas
Xxxxx Oklahoma Holding Company, Inc. Oklahoma
Xxxxx Advertising of Oklahoma, Inc. Oklahoma
Lamar Benches, Inc. Oklahoma
Lamar I-40 West, Inc. Oklahoma
Georgia Logos, L.L.C. Georgia
Mississippi Logos, L.L.C. Mississippi
New Jersey Logos, L.L.C. NewJersey
Oklahoma Logos, L.L.C. Oklahoma
Interstate Logos, L.L.C. Louisiana
LC Billboard L.L.C. Delaware
Lamar KYO, Inc. Mississippi
Lamar Ohio Outdoor Holding Corp. Ohio
Xxxxx Xxxxxx Poster Corp. Pennsylvania
Missouri Logos, a Partnership Missouri
-26-
27
Superior Outdoor Advertising, Inc. Arkansas
Custom leasing & Realty, Inc. Arkansas
Arkansas Outdoor Advertising Co., Inc. Arkansas
Able Outdoor, Inc. North Carolina
Outdoor Marketing Systems, Inc. Pennsylvania
Outdoor Marketing Systems, LLC Pennsylvania
Xxxxx Advertising Southwest, Inc. Nevada
Lamar G & H Outdoor Advertising, L.L.C. Oklahoma
Xxxxx Xxxxx Outdoor Advertising, Inc. Louisiana
Xxxxx Xxxxxxx Outdoor Advertising, Inc. Nebraska
XxXxxxxxx Outdoor Advertising, Inc. Oklahoma
Xxxxx DOA Tennessee Holdings, Inc. Delaware
Lamar DOA Tennessee, Inc. Delaware
* All subsidiaries are 100% owned by Xxxxx Advertising Company, except for
Missouri Logos, a Partnership, in which Xxxxx Advertising Company holds a 66
2/3% partnership interest.
-27-
28
SCHEDULE III
Lock-Up Letters
Xxxxxx Family Limited Partnership
AMFM Operating, Inc.
Clear Channel Communications, Inc.
-28-
