<PAGE>
------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
Clear Channel Communications, Inc.
----------------------------------
(Name of Issuer)
Common Stock, Par Value $0.10
-----------------------------
(Title of Class of Securities)
184502102
---------
CUSIP Number
H & F INVESTORS III, INC.
One Maritime Plaza, 12th Floor
San Francisco, California 94111
(415) 788-5111
with a copy to:
Timothy G. Hoxie, Esq.
Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, California 94104
(415) 772-6052
------------------------------------
(Name, address and telephone number
of person authorized to receive
notices and communications)
April 10, 1997
---------------
(Date of Event which requires
filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this statement, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following:
/ /
Check the following box if a fee is being paid with this statement:
/ /
(Page 1 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
Hellman & Friedman Capital Partners III, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ---------------------------------------
(b) / / ---------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 5,566,114
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 5,566,114
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 5,566,114
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
6.66%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): PN
- --------------------------------------------------------------------------------
(Page 2 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
H & F Orchard Partners III, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only ----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 409,708
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 409,708
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 409,708
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
0.49%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): PN
- --------------------------------------------------------------------------------
(Page 3 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
H & F International Partners III, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 123,458
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 123,458
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 123,458
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
0.15%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): PN
- --------------------------------------------------------------------------------
(Page 4 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
H&F Investors III
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only ----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): PN
- --------------------------------------------------------------------------------
(Page 5 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
Hellman & Friedman Associates III, L.P.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11): 7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): PN
- --------------------------------------------------------------------------------
(Page 6 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
H & F Administration III, L.L.C.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): OO
- --------------------------------------------------------------------------------
(Page 7 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
H & F Investors III, Inc.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): CO
- --------------------------------------------------------------------------------
(Page 8 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
H&F Management III, L.L.C.
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
- --------------------------------------------------------------------------------
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions):
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: California
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): 00
- --------------------------------------------------------------------------------
(Page 9 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
F. Warren Hellman (individually, and as trustee of the
Hellman Family revocable Trust)
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions): OO (WC of
other group member)
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: U.S.
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
(Page 10 of 15)
<PAGE>
CUSIP NO. 184502102 13D
1) Name of Reporting Persons:
Tully M. Friedman (individually, and as trustee of the Tully
M. Friedman Revocable Trust)
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / X / ----------------------------------------
(b) / / ----------------------------------------
- --------------------------------------------------------------------------------
3) SEC Use Only -----------------------------------
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions): OO (WC of other
group member)
- --------------------------------------------------------------------------------
5) / / Check if Disclosure of Legal proceedings
is Required Pursuant to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization: U.S.
- --------------------------------------------------------------------------------
Number 7) Sole Voting Power: -0-
of -------------------------------------------
Shares
Beneficially 8) Shared Voting Power: 6,099,280
Owned -------------------------------------------
by
Each 9) Sole Dispositive Power: -0-
Reporting -------------------------------------------
Person
With 10) Shared Dispositive Power: 6,099,280
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each
Reporting Person: 6,099,280
- --------------------------------------------------------------------------------
12) / / Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
- --------------------------------------------------------------------------------
13) Percent of Class Represented by amount in Row (11):
7.3%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions): IN
- --------------------------------------------------------------------------------
(Page 11 of 15)
<PAGE>
CUSIP NO. 184502102 13D
INTRODUCTION
H&F Investors III, Inc. ("Investors III, Inc.") hereby files this Amendment
No. 1 (the "Amendment") to the Statement on Schedule 13D which was filed on
March 7, 1997 (the "Statement") on behalf of the Reporting Persons identified
therein pursuant to the Agreement with respect to Schedule 13D attached to the
Statement as Exhibit 7(1).
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is amended by adding the following paragraph at the end
thereof:
On April 10, 1997, the Partnerships, the other stockholders of Eller
Media Corporation ("Eller Media") and the Issuer closed the transactions
contemplated by the Purchase Agreement. Immediately prior to the Closing, the
parties amended the Purchase Agreement by means of the First Amendment to the
Purchase Agreement dated as of April 10, 1997 (the "First Amendment"). The
First Amendment, a copy of which is attached as Exhibit 7(5), provided that the
Issuer would not purchase all of the shares of Eller Media, but rather would
acquire approximately 93% of such shares (on a fully diluted basis). The
purchase price for the acquired shares consisted of $325,329,131 in cash and
7,834,664 shares of Common Stock (of which the Partnerships received, in the
aggregate net of expenses, $267,141,988 in cash and 6,099,280 shares).
(Page 12 of 15)
<PAGE>
CUSIP NO. 184502102 13D
Item 4. PURPOSE OF TRANSACTION.
Item 4 is amended by adding at the end thereof the following:
The Partnerships have requested, pursuant to the Registration Rights
Agreement, that the Issuer register for sale approximately 5,426,213 shares of
Common Stock acquired by the Partnerships. Whether such shares will be sold
depends on a variety of factors, including market conditions that cannot be
predicted, and the Partnerships reserve the right to determine when and whether
to sell any such shares.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Paragraph (a) and (b) of Item 5 are amended to read as follows:
(a) and (b). The aggregate number of shares and percentage of Common
Stock of the Issuer (based upon the representation of the Issuer in the Purchase
Agreement that it had 76,965,200 shares of Common Stock outstanding at December
31, 1996) beneficially owned by each person named in Item 2, as well as the
number of shares of Common Stock as to which such person is deemed to have sole
power to vote or to direct the vote, shared power to vote or to direct the vote,
sole power to dispose or to direct the disposition, or shared power to dispose
or direct the disposition, in each case after giving effect to the transactions
contemplated by the Purchase Agreement, is set forth in the following table.
(Page 13 of 15)
<PAGE>
CUSIP NO. 184502102 13D
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
No. of Shares
Beneficially Percentage Power to Vote Power to Dispose
Person Owned of Class Sole Shared Sole Shared
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HFCP III 5,566,114 6.66% 0 5,566,114 0 5,566,114
- ----------------------------------------------------------------------------------------------------
Orchard Partners
III 409,708 0.49% 0 409,708 0 409,708
- ----------------------------------------------------------------------------------------------------
International
Partners III 123,458 0.15% 0 123,458 0 123,458
- ----------------------------------------------------------------------------------------------------
Investors III 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
Administration III 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
Associates III 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
Management III 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
Investors III, Inc. 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
F. Warren Hellman 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
Tully M. Friedman 6,099,280 7.3% 0 6,099,280 0 6,099,280
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
The information required by Item 2 with respect to persons with whom voting
or dispositive power is shared is set forth in Item 2.
(Page 14 of 15)
<PAGE>
CUSIP NO. 184502102 13D
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Item 6 is amended by adding to the end thereof the following:
At the Closing, the parties executed the Escrow Agreement and the
Registration Rights Agreements in the form attached as Exhibit 7(6) and 7(7)
hereto.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is amended to add the following Exhibits:
Exhibit 7(5). First Amendment to Stock Purchase Agreement.
Exhibit 7(6). Escrow Agreement
Exhibit 7(7). Registration Rights Agreement
(Page 15 of 15)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
H&F INVESTORS III, INC.
Dated: April 15, 1997 By: /s/ Georgia Lee
----------- --------------------------------------
Title: Vice President
-----------------------------------
<PAGE>
CUSIP NO. 184502102 13D
LIST OF EXHIBITS
Exhibit No Description Page
- ---------- ----------- ----
7(5) First Amendment to Stock Purchase Agreement
7(6) Escrow Agreement
7(7) Registration Rights Agreement
<PAGE>
CUSIP NO. 184502102 13D
<PAGE>
Exhibit 7.5
AMENDMENT TO
STOCK PURCHASE AGREEMENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT (this "AMENDMENT"), dated
as of April 10, 1997, is by and among Clear Channel Communications, Inc., a
Texas corporation ("PURCHASER"), Eller Media Corporation, a Delaware corporation
(the "COMPANY"), and those persons listed on EXHIBIT A hereto (individually,
including both option holders and stockholders as identified on such exhibit,
each a "STOCKHOLDER" and collectively, the "STOCKHOLDERS"), being the beneficial
owners of all shares, and all options to acquire shares, of capital stock of the
Company issued and outstanding on the date hereof.
RECITALS
WHEREAS, the Stockholders as a group own all of the shares of Common
Stock, par value $.01 per share, of the Company, issued and outstanding or
issuable pursuant to options outstanding on the date hereof, with each
Stockholder owning or having the right to acquire the number of shares set forth
opposite such Stockholder's name on EXHIBIT A;
WHEREAS, Purchaser, the Company and certain of the Stockholders are
parties to that certain Stock Purchase Agreement, dated as of February 25, 1997
(the "STOCK PURCHASE AGREEMENT"); and
WHEREAS, Purchaser, the Company and the Stockholders now desire to
amend the Stock Purchase Agreement in the manner set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, the parties hereto agree to amend the Stock Purchase
Agreement as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have the meanings given such terms in the Stock Purchase Agreement.
2. AMENDMENTS TO THE STOCK PURCHASE AGREEMENT.
(a) EXHIBITS.
(i) EXHIBIT A is hereby amended and restated in its
entirety to read in the form attached hereto as Exhibit A.
(ii) EXHIBIT B is hereby amended and restated in its
entirety to read in the form attached hereto as Exhibit B.
<PAGE>
(iii) EXHIBIT C is hereby amended and restated in its
entirety to read in the form attached hereto as Exhibit C.
(iv) EXHIBIT E is hereby amended and restated in its
entirety to read in the form attached hereto as Exhibit E.
(v) EXHIBIT F is hereby amended and restated in its
entirety to read in the form attached hereto as Exhibit F.
(vi) Exhibit H - New Stockholders Agreement, in the form
attached hereto as EXHIBIT H, is hereby appended as Exhibit H to the Stock
Purchase Agreement.
(vii) The exhibit index on page (iii) of the Stock Purchase
Agreement is hereby amended to add the following exhibits:
"Exhibit H - Form of New Stockholders Agreement."
(b) DISCLOSURE LETTER. The Disclosure Letter is hereby amended
and restated in its entirety to read in the form of Disclosure Letter attached
hereto. Changes in the Disclosure Letter attached hereto from the Disclosure
Letter delivered in connection with the Stock Purchase Agreement are amendments
to the Disclosure Letter for purposes of Section 15(a) of the Stock Purchase
Agreement.
(c) DEFINITIONS.
(i) The following definition of "ADCO CLAIM" shall be added
to Section 1 of the Stock Purchase Agreement:
"`ADCO CLAIM' has the meaning specified in Section 12(a)(i) of this
Agreement."
(ii) The definition of "AVERAGE SHARE PRICE" appearing in
Section 1 of the Stock Purchase Agreement is hereby amended to read in its
entirety as follows:
"`AVERAGE SHARE PRICE'" shall mean $44.8625."
(iii) The definition of "COMPANY STOCK OPTION AGREEMENTS"
appearing in Section 1 of the Stock Purchase Agreement is hereby amended to read
in its entirety as follows:
"`COMPANY STOCK OPTION AGREEMENTS' shall mean the Company stock option
agreements listed on Schedule 3(b) of this Agreement, as such agreements
may hereafter be amended and restated as contemplated by Schedule 6(d) of
this Agreement."
2
<PAGE>
(iv) The definition of "ESCROW AGREEMENT" appearing in
Section 1 of the Stock Purchase Agreement is hereby amended to read in its
entirety as follows:
"`ESCROW AGREEMENT' shall mean that certain Escrow Agreement, dated as
of the Closing Date, by and among Purchaser, Holdings, the Stockholder
Representative and the Escrow Agent, substantially in the form of EXHIBIT C
attached hereto."
(v) The definition of "ESCROWED SHARES" appearing in
Section 1 of the Stock Purchase Agreement is hereby amended to read in its
entirety as follows:
"`ESCROWED SHARES' shall mean a number of shares of Purchaser Common
Stock and any other securities or property deposited with the Escrow Agent
pursuant to this Agreement and the Escrow Agreement."
(vi) The following definition of "HOLDINGS" shall be added
to Section 1 of the Stock Purchase Agreement:
"`HOLDINGS' shall mean EM Holdings LLC, an Arizona limited liability
company."
(vii) The following definition of "NEW STOCKHOLDERS AGREEMENT"
shall be added to Section 1 of the Stock Purchase Agreement:
"`NEW STOCKHOLDERS AGREEMENT' shall mean that certain Stockholders
Agreement, dated as of April 9, 1997, by and among Purchaser, the Company
and Holdings, substantially in the form of EXHIBIT H attached hereto."
(viii) The following definition of "PHANTOM STOCK AGREEMENTS"
shall be added to Section 1 of the Stock Purchase Agreement:
"`PHANTOM STOCK AGREEMENTS' shall mean the Company phantom stock
agreements listed on Schedule 3(b) of this Agreement, as such agreements
may hereafter be amended and restated and/or documented as contemplated by
Schedule 6(d) of this Agreement."
(ix) The definition of "PHANTOM STOCK UNITS" appearing in
Section 1 of the Stock Purchase Agreement is hereby amended to read in its
entirety as follows:
"`PHANTOM STOCK UNITS' shall mean the aggregate number of units of
phantom stock issuable pursuant to the terms of the Phantom Stock
Agreements."
3
<PAGE>
(x) The following definition of "RETAINED SHARES" shall be
added to Section 1 of the Stock Purchase Agreement:
"`RETAINED SHARES' shall mean 140.450 shares of Company Common Stock
owned by Holdings which will not be sold to Purchaser on the Closing Date."
(d) SALE OF SHARES; PURCHASE PRICE.
(i) Section 2(a) of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"(a) SALE OF SHARES. On the terms and subject to the conditions
set forth in this Agreement and, subject to the immediately following
sentence hereof, each Stockholder hereby severally agrees to sell, assign
and transfer to Purchaser, and Purchaser hereby agrees to purchase from
such Stockholder, on the Closing Date, the number of shares of Company
Common Stock owned by such Stockholder on the date hereof as set forth
opposite such Stockholder's name on EXHIBIT B hereto (excluding the
Retained Shares), plus such number of additional shares of Company Common
Stock as will hereafter be acquired by such Stockholder prior to the
Closing Date upon the exercise of Company Stock Options held by such
Stockholder as set forth on EXHIBIT B, for the aggregate consideration set
forth on EXHIBIT B opposite such Stockholder's name, subject to the Escrow
Agreement provided for in Section 2(d). In the event any Optionee who on
the date hereof is an employee of the Company does not fully exercise
Company Stock Options as listed opposite such Optionee's name on EXHIBIT B
under the column "Value of Stock Consideration" on or prior to the Closing
Date, Purchaser hereby agrees to assume such options pursuant to Section
2(c) hereof and no shares of Purchaser Common Stock will be issuable at
Closing in respect of the unexercised portion of such Company Stock
Options. The Retained Shares will not be sold to Purchaser at Closing. As
used herein, `SHARES' shall mean the aggregate number of shares of Company
Common Stock to be sold by the Stockholders and purchased by the Purchaser
pursuant to this Section 2."
(ii) Section 2(b)(i) of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"(i) In consideration of the transactions contemplated by this
Agreement, Purchaser shall pay to the Stockholders, the Optionees and the
Phantom Stock Grantees an aggregate purchase price (the `PURCHASE PRICE')
equal to (A) $325,329,131 (the `CASH CONSIDERATION') in cash (without
interest), payable in immediately available funds, plus (B) a number of
shares of Purchaser Common Stock (the `STOCK CONSIDERATION') determined as
set forth in subsection (ii) of this Section 2(b), subject to the Escrow
Agreement described in Section 2(d) hereof. The Purchase Price shall be
allocated among the Stockholders, the Optionees and the Phantom Stock
Grantees, and allocated for the payment of expenses pursuant to Section 22
hereof in the manner set forth on
4
<PAGE>
EXHIBIT B hereto; PROVIDED, HOWEVER, that Purchaser shall pay the portion
of the Stock Consideration to be paid to the Phantom Stock Grantees as set
forth on EXHIBIT B hereto in accordance with the terms of the Phantom Stock
Agreements."
(iii) Section 2(b)(ii) of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"(ii) The Stock Consideration shall equal the number of
shares of Purchaser Common Stock obtained as a result of dividing
$351,482,592 by the Average Share Price.
(iv) Section 2(d) of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"(d) ESCROW AGREEMENT. In order to establish a procedure for the
satisfaction of any claims by Purchaser for indemnification pursuant to
Section 12 hereof, the Stockholder Representative and Holdings shall enter
into the Escrow Agreement with Purchaser pursuant to which, among other
things, (i) Purchaser shall deposit with the Escrow Agent a number of
shares of Purchaser Common Stock to be received by the Stockholders
pursuant to Section 2(b) equal to $40 million divided by the Average Share
Price multiplied by the sum of the percentages set forth opposite the names
under the caption "Stockholders" on EXHIBIT F hereto, (ii) rights with
respect to a number of shares of Purchaser Common Stock issuable upon the
exercise of Restated Options equal to $40 million divided by the Average
Share Price multiplied by the sum of the percentages set forth opposite the
names under the caption "Optionees" on EXHIBIT F hereto, shall be made
subject to an escrow fund pursuant to the Escrow Agreement, and (iii)
rights with respect to a number of shares of Purchaser Common Stock
issuable upon the exercise of certain rights granted in the New
Stockholders Agreement equal to $40 million divided by the Average Share
Price multiplied by the percentage set forth opposite the name under the
caption "Retained Shares" on EXHIBIT F hereto, shall be made subject to an
escrow fund pursuant to the terms of the Escrow Agreement. The Escrowed
Shares shall be available to secure, in accordance with the Escrow
Agreement, and shall be the sole source of payment of, the Stockholders'
indemnity obligations under Section 12 hereof. All costs of the escrow
shall be paid one-half by the Purchaser, on the one hand, and one-half by
the Stockholders collectively, on the other, all as further provided in the
Escrow Agreement."
(v) Section 2(e) is hereby added to the Stock Purchase
Agreement to read in its entirety as follows:
"(e) PHANTOM STOCK AGREEMENTS. On the Closing Date, Purchaser
shall assume and agree to perform the terms of the Phantom Stock Agreements
in the same manner and to the same extent that the Company would
5
<PAGE>
be required to perform such agreements had the transactions contemplated by
this Agreement not been consummated."
(e) REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Section
4(a) of the Stock Purchase Agreement is hereby amended to read in its entirety
as follows:
"(a) TITLE; AGREEMENTS. Except for the Stockholders Agreement
and the New Stockholders Agreement (in the case of Holdings), and except
with respect to Optionees who do not exercise their Company Stock Options
on or prior to the Closing Date, and except with respect to the lien of the
Escrow Agreement, such Stockholder holds of record and holds beneficially
the number of shares of Company Common Stock set forth opposite its or his
name on EXHIBIT A, free and clear of any and all Encumbrances or other
restrictions on transfer. Except for the Stockholders Agreement and other
than this Agreement and the New Stockholders Agreement (in the case of
Holdings), such Stockholder is not a party to any voting trust, proxy or
other agreement or understanding with respect to any capital stock of the
Company."
(f) COVENANTS OF THE STOCKHOLDERS, THE COMPANY AND PURCHASER.
(i) Section 6(d) of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"(d) CONDUCT OF BUSINESS. From and after the date hereof and
until the Closing Date, the Company shall conduct and cause the business of
the Subsidiaries to be conducted in the ordinary course, consistent with
the present conduct of their business. During such period of time, except
upon the prior written consent of Purchaser, the Company shall not and
shall not permit any Subsidiaries to: (i) amend its Certificate of
Incorporation or By-Laws or comparable organizational documents (except to
the extent reflected in the Disclosure Letter); (ii) except as disclosed on
Schedule 6(d) hereto, issue any additional shares of capital stock or
issue, sell or grant any option or right to acquire or otherwise dispose of
or commit to dispose of any of its authorized but unissued capital stock or
other corporate securities (except upon exercise of Company Stock Options
currently outstanding); (iii) declare or pay any dividends or make any
other distribution in cash or property on its capital stock or other equity
interests, except to the Company or a Subsidiary; (iv) except as disclosed
on Schedule 6(d) hereto, repurchase or redeem any shares of its stock or
other equity interests; (v) except as disclosed on Schedule 6(d),
voluntarily incur any obligation or liability, except obligations and
liabilities incurred in the ordinary course of business or permitted by
clause (x) below; (vi) except as disclosed on Schedule 6(d), enter into any
employment agreement or alter any bonus, profit-sharing, incentive, or
other compensation arrangement for any of its officers or directors (other
than make changes which do not increase the compensation or benefits
provided by the foregoing), or otherwise materially change personnel
policies, compensation programs or benefit plans, except for
6
<PAGE>
changes in the ordinary course of business; (vii) mortgage, pledge, or
otherwise encumber any part of its assets, tangible or intangible, except
Permitted Encumbrances; (viii) sell, transfer or acquire any properties or
assets, tangible or intangible, other than in the ordinary course of
business, and except as set forth in Schedule 6(d) hereto; (ix) except as
set forth on Schedule 6(d) hereto, merge or consolidate with any
corporation, acquire control or acquire any capital stock or other
securities, or all or substantially all of the assets, of any other
corporation or business entity, or take any steps incident to or in
furtherance of any such actions whether by entering into an agreement
providing therefor or otherwise; (x) other than the ADCO Note and except in
connection with the transactions set forth on Schedule 6(d) hereto or to
fund working capital requirements arising in the ordinary course of
business consistent with the 1997 budget heretofore provided to Purchaser
(the `1997 BUDGET'), incur Indebtedness in excess of the level outstanding
at December 31, 1996; (xi) incur any capital expenditures beyond those set
forth in the 1997 Budget; or (xii) take any other action not contemplated
hereby which would cause any of the representations and warranties made by
the Company and the Stockholders in this Agreement not to be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as if such representations and warranties had been
made on and as of the Closing Date."
(ii) Section 6(f)(i) of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"(i) On the day following the Closing Date, Purchaser shall
appoint Karl Eller to its Board of Directors, and shall thereafter cause
Karl Eller to be included in the annual slate of directors to be proposed
by the management of Purchaser until such time as either Purchaser owns
less than a majority of the Company Common Stock or Karl Eller is no longer
the Chief Executive Officer or Chairman of the Board of the Company."
(g) CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION. Section 7(g) of
the Stock Purchase Agreement is hereby amended to read in its entirety as
follows:
"(g) Purchaser shall have received the opinion of Latham &
Watkins, counsel for the Company, the opinion of Meyer, Hendricks, Bivens &
Moyes, counsel for a certain Stockholder, and the opinion of Heller,
Ehrman, White & McAuliffe, counsel for certain other Stockholders, as to
such matters to be mutually agreed upon."
(h) CLOSING DATE; CLOSING. Section 9(c) of the Stock Purchase
Agreement is hereby amended to delete clause (ix) and to add the following
paragraphs:
"(ix) Prior to the Closing Date, Purchaser, the Company and
Holdings shall enter into the New Stockholders Agreement."
7
<PAGE>
(i) INDEMNIFICATION.
(i) Section 12(a)(i) of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"(i) Each of the Stockholders severally (on a PRO RATA basis as
provided in the Escrow Agreement), but not jointly, agrees to indemnify and
hold Purchaser and its Affiliates harmless from and against any and all
losses, claims, demands, liabilities, obligations, damages, deficiencies,
assessments, judgments, payments, penalties, costs and expenses (including
without limitation reasonable attorneys' fees, any amounts paid in
investigation, defense or settlement of any of the foregoing and interest)
(herein, `DAMAGES') incurred in connection with, arising out of, resulting
from or incident to, (A) any breach of any representation or warranty (as
updated pursuant to Section 15 hereof and as in effect on the Closing Date)
made by the Company and the Stockholders in this Agreement (other than the
representations and warranties made in Section 4(a) hereof), (B) any breach
of any covenant or agreement made by the Company and the Stockholders in
this Agreement, (C) any liability or obligation which the Company or its
Subsidiaries pays or becomes obligated to pay after December 31, 1996 and
prior to twelve months after the Closing Date in respect of costs of
defense, settlement or resolution of any litigation matter which has been
disclosed on Schedule 3(p) to this Agreement, to the extent, and only to
the extent, that such costs in the aggregate, after giving credit for any
insurance recoveries to which the Company or the Subsidiaries is entitled,
exceeds the aggregate amount of the Company's reserves therefor on the
Balance Sheet, (D) any Pre-Agreement Disclosure Matter (as hereinafter
defined) or (E) any claim by Richard Traverso, ADCO Outdoor Advertising or
Pacific Coast Display for any amount or recovery in excess of, or in
addition to, the express obligation of the Company contained in the ADCO
Note and the related Asset Purchase Agreement, Security Agreement and
Registration Rights Agreement, in accordance with their respective terms,
including, without limitation, any claim, liability, expense or loss
resulting from a recession of the ADCO Note and the transactions concluded
in connection therewith (an `ADCO CLAIM'). The parties hereby acknowledge
and agree that after the Closing Date recourse against the Escrowed Shares
constitutes the sole remedy, at law or in equity, that Purchaser may have
against the Stockholders, and that the Escrowed Shares shall be Purchaser's
exclusive method of receiving indemnification from the Stockholders,
pursuant to this Section 12(a)(i). Notwithstanding the foregoing,
Purchaser may not receive any of the Escrowed Shares in connection with
Damages arising from breaches or inaccuracies pursuant to this Section
12(a)(i) unless the aggregate of such Damages indemnified against shall
exceed $10 million, in which event such indemnification shall be effective
with respect to all Damages in excess of such amount, and shall be limited
to the Escrowed Shares; PROVIDED, HOWEVER, that the foregoing $10 million
threshold will not apply to any Damages from an ADCO Claim, as to which the
indemnification obligation of the Stockholders shall accrue from the first
dollar of Damages. For purposes of determining the Stockholders'
8
<PAGE>
indemnification obligations pursuant to this Section 12(a)(i), each
representation and warranty stated in Sections 3 and 4 hereof shall be
deemed to exclude any materiality standard, materiality exception and
materiality qualification stated therein. The parties acknowledge that the
limitations on liability of the Stockholders in this Section 12(a)(i)
contained were an essential inducement to the Stockholders to cause them to
enter into and perform this Agreement, and without which they would not
have done so."
(ii) Section 12(c) of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"(c) DAMAGES. The term `DAMAGES' as used in this Section 12 is
not limited to matters asserted by third parties against any indemnified
party, but includes Damages incurred or sustained by any indemnified party
in the absence of third party claims. Any Damages otherwise due and
payable under this Section 12 shall be (i) decreased to the extent of any
reduction of Tax liability that is realizable by the indemnified party upon
payment of an indemnifiable loss and (ii) increased to the extent of any
increase in Tax liability that is imposed on the indemnified party upon the
receipt of an indemnity payment pursuant to this Section 12. In addition,
Damages shall be determined net of any insurance recoveries by any
indemnified party and shall be net of any indemnity to which the Company is
entitled pursuant to that certain Stock Purchase Agreement, dated as of
July 14, 1995, by and between Eller Investment Company, Inc., an Arizona
corporation, and General Electric Capital Corporation, a New York
corporation. In the case of the ADCO Claim, Damages shall include
reasonable reimbursement for the cost of the time which employees of
Purchaser and the Company spend in resolving the ADCO Claim."
(iii) Section 12(d)(iv) is hereby added to the Stock Purchase
Agreement to read in its entirety as follows:
"(iv) Notwithstanding the foregoing, as to any items
identified as Pre-Agreement Disclosure Matters on Schedule 3(p), and as to
any item on Schedule 3(p) to the extent it could give rise to a claim for
Damages pursuant to Section 12(a)(i)(C) of this Agreement (i) notice of the
potential Claim hereby is deemed given for purposes of Section 12(d), and
(ii) Purchaser hereby is entitled to take control of the defense of such
matters and to employ and engage attorneys to handle and defend the same
and to compromise and settle such action in such manner as it may deem
necessary and appropriate, all in accordance with Section 12(d)(i). Notice
of the potential Claim is also deemed given for the ADCO Claim, which will
be defended by the Stockholders as the indemnifying party in accordance
with the procedures set forth in Section 12(d)(i)."
9
<PAGE>
(j) TERMINATION; AMENDMENTS TO DISCLOSURE LETTER. Section 15(b)
of the Stock Purchase Agreement is hereby amended to read in its entirety as
follows:
"(b) AMENDMENTS TO DISCLOSURE LETTER. Between the date hereof
and the Closing Date, the Company and the Stockholders may add to the
Disclosure Letter by notification in writing to Purchaser of the matter to
be added, which may be matters relating to events first arising after the
date of this Agreement (`POST-AGREEMENT DATE DISCLOSURE MATTERS') or may be
matters which relate to events first arising prior to the date of this
Agreement and which, if not so added to the Disclosure Letter, would
constitute a breach of the representations and warranties provided by the
Company and the Stockholders on the date of this Agreement (`PRE-AGREEMENT
DATE DISCLOSURE MATTERS' and, collectively with the Post-Agreement Date
Disclosure Matters, the `NEW DISCLOSURE MATTERS'); PROVIDED, HOWEVER, any
additions or changes to Schedule 6(d) between the date hereof and the
Closing Date shall not constitute New Disclosure Matters. If the aggregate
dollar amount involved in the New Disclosure Matters exceeds $5,000,000,
Purchaser may, at its election by written notice to the Company and the
Stockholders on or before the Closing Date, either (i) accept the
Disclosure Letter as so modified and close the transactions contemplated
hereby, in which case the Disclosure Letter as so modified will be deemed
to have been delivered on or before the date of this Agreement or
(ii) terminate this Agreement. If the aggregate dollar amount involved in
the Pre-Agreement Date Disclosure Matters exceeds $5,000,000, the Company
and the Stockholders may terminate this Agreement by written notice to
Purchaser, unless Purchaser agrees in writing that the aggregate indemnity
obligation of the Stockholders in respect of such Pre-Agreement Date
Disclosure Matters pursuant to Section 12(a)(i) will in all events be
limited to $5,000,000. Nothing contained herein will preclude Purchaser
from alleging that any matter disclosed in a proposed modification to the
Disclosure Letter which is not subject to quantification does not give rise
to a right not to close under this Agreement because of the inability of
the Company and the Stockholders to satisfy the condition set forth in
Section 7(a) hereof due to such New Disclosure Matter. Notwithstanding the
foregoing, it is understood that the Company will as soon as practicable
furnish to Purchaser its audited financial statements for the year 1996 in
substitution for its unaudited 1996 financial statements (as contemplated
by the definition `FINANCIAL STATEMENTS'), and it is agreed that Purchaser
shall have no right to object to such substitution unless the audited 1996
financial statements contain material adjustments or disclosures not
contained in the unaudited 1996 financial statements."
(k) ENTIRE AGREEMENT. Section 18 of the Stock Purchase Agreement is
hereby amended to read in its entirety as follows:
"18. ENTIRE AGREEMENT. This Agreement together with all
exhibits and schedules hereto (including the Disclosure Letter as updated
pursuant to Section 15 hereof) represent the entire understanding and
agreement among the
10
<PAGE>
parties hereto with respect to the subject matter hereof and supersedes all
prior understandings and agreements, whether written or oral, and can be
amended, supplemented or changed, and any provision hereof can be waived,
only by written instrument making specific reference to this Agreement
signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought, including, in the case of the
Stockholders, all Stockholders who are a party to this Agreement at the
time such enforcement is sought. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided. Upon Closing, all
rights and obligations under that certain letter, dated February 25, 1997,
regarding the ADCO Note shall terminate."
(l) EXPENSES. Section 22 of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"EXPENSES. Whether or not the transactions contemplated hereby
are consummated, (a) Purchaser shall pay all of its legal, accounting and
other out-of-pocket expenses incident to the transactions contemplated
hereby and (ii) the Stockholders and the Phantom Stock Grantees shall pay
their own and the Company's legal, accounting and other out-of-pocket
expenses incident to the transactions contemplated hereby, provided
however, that Purchaser, on the one hand, and the Stockholders, on the
other, shall divide and share equally filing fees in connection with
government filings necessary to consummate the transactions contemplated
hereby (provided that if this Agreement is terminated, each party shall
attempt to obtain any available refunds of such fees or otherwise utilize
such fees in other transactions such that expense to the parties is
minimized)."
3. EFFECT OF AMENDMENT. Except as specifically provided herein, this
Amendment does not in any way affect or impair the terms and conditions of the
Stock Purchase Agreement, and all terms and conditions of the Stock Purchase
Agreement remain in full force and effect unless otherwise specifically amended,
waived or changed pursuant to the terms and conditions hereof.
4. ADDITIONAL PARTIES. By executing this Amendment below, each party who
was an original signatory to the Stock Purchase Agreement hereby ratifies,
approves and confirms the Stock Purchase Agreement in all respects, except as
amended by this Amendment, and each Stockholder who was not an original
signatory to the Stock Purchase Agreement hereby affirms the Stock Purchase
Agreement as so amended and hereby becomes a party thereto and agrees to be
bound thereby.
5. APPLICABLE LAW. This Amendment and the rights and obligations of the
parties hereto and all other aspects hereof shall be deemed to be made under,
and shall be governed by, and shall be construed and enforced in accordance
with, the laws of the State of Delaware.
11
<PAGE>
6. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
PURCHASER
By /s/ Randall Mays
----------------------------------------
Name:
Title:
ELLER MEDIA CORPORATION
By /s/ Karl Eller
----------------------------------------
Name: Karl Eller
Title: Chief Executive Officer
<PAGE>
HELLMAN & FRIEDMAN
CAPITAL PARTNERS III, L.P.
By: Its General Partner,
H&F Investors III
By: Its Managing General Partner,
Hellman & Friedman Associates
III, L.P.
By: Its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Joseph Niehaus
---------------------------
Its: Vice President
H&F ORCHARD PARTNERS III, L.P.
By: Its General Partner,
H&F Investors III
By: Its Managing General Partner,
Hellman & Friedman Associates
III, L.P.
By: Its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Joseph Niehaus
---------------------------
Its: Vice President
<PAGE>
H&F INTERNATIONAL PARTNERS III, L.P.
By: Its General Partner,
H&F Investors III
By: Its Managing General Partner,
Hellman & Friedman Associates
III, L.P.
By: Its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Joseph Niehaus
---------------------------
Its: Vice President
EM HOLDINGS LLC
By: /s/ Karl Eller
-------------------------
Its: Managing Member
/s/ H. Irving Grousbeck
----------------------------
H. Irving Grousbeck
AMERICAN MEDIA MANAGEMENT, INC.
By: /s/ Arthur Kern
-------------------------
Its: CHMN./CEO
/s/ Richard Reiss, Jr.
----------------------------
Richard Reiss, Jr.
<PAGE>
/s/ Glenn Krevlin
----------------------------
Glenn Krevlin, as Trustee fbo
Nina Krevlin, Glenn Krevlin,
Michael Krevlin and Jill Krevlin
/s/ K. Tucker Andersen
----------------------------
K. Tucker Andersen
/s/ Bruce Halle
----------------------------
Bruce Halle
/s/ Timothy J. Donmoyer
----------------------------
Timothy J. Donmoyer
<PAGE>
/s/ Karl Eller
----------------------------
Karl Eller
/s/ Paul J. Meyer
----------------------------
Paul J. Meyer
/s/ Patricia Salas Pineda
----------------------------
Patricia Salas Pineda
EL DORADO INVESTMENT COMPANY
By: Gregory S. Anderson
-------------------------
Its: Managing Director
/s/ Karl Eller
----------------------------
Steven G. Mihaylo
By: Karl Eller
as Attorney-in-Fact
<PAGE>
Exhibit 7.6
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of this 10th day of April, 1997 (this
"AGREEMENT"), is by and among Clear Channel Communications, Inc., a Texas
corporation ("PURCHASER"), Paul J. Meyer, as stockholder representative (the
"STOCKHOLDER REPRESENTATIVE") for each of the persons listed on Exhibit A hereto
and as each such person's attorney in fact and agent pursuant to Section 13(b)
of the Stock Purchase Agreement (as defined below), EM Holdings LLC, an Arizona
limited liability company ("HOLDINGS"), and Chase Trust Company of California, a
California corporation, as escrow agent (the "ESCROW AGENT").
RECITALS
A. Concurrently with the execution and delivery hereof, Purchaser is
acquiring 1793.504 of the issued and outstanding shares of capital stock of
Eller Media Corporation, a Delaware corporation (the "COMPANY"), pursuant to a
Stock Purchase Agreement, dated as of February 25, 1997, as amended (the "STOCK
PURCHASE AGREEMENT"), by and among Purchaser, the Company and those persons
listed on EXHIBIT A thereto (individually, including Holdings and both option
holders and stockholders as identified on such exhibit, each a "STOCKHOLDER" and
collectively, the "STOCKHOLDERS").
B. Purchaser and the Stockholders desire to set aside a portion of
the consideration to be paid to the Stockholders pursuant to Section 2(b) of the
Stock Purchase Agreement, for the purpose of providing Purchaser with a remedy
in the event of a breach by the Company or the Stockholders of the
representations, warranties and covenants made in the Stock Purchase Agreement.
C. Purchaser and the holders of Company Stock Options (as defined in
the Stock Purchase Agreement) which have not been exercised prior to the Closing
(as defined in the Stock Purchase Agreement) desire to set aside rights to a
portion of the Purchaser Common Stock (as defined in the Stock Purchase
Agreement) to be delivered to holders of Restated Options (as defined in the
Stock Purchase Agreement) upon exercise of such Restated Options pursuant to the
Option Assumption Agreements (as defined in the Stock Purchase Agreement), for
the purpose of providing Purchaser with a remedy in the event of a breach by the
Company or the Stockholders of the representations, warranties and covenants
made in the Stock Purchase Agreement.
D. Purchaser, Holdings and the Company have entered into that
certain Stockholders Agreement, dated as of April 8, 1997 (the "STOCKHOLDERS
AGREEMENT"), pursuant to which the Holdings Stockholders (as defined in the
Stockholders Agreement) have been granted certain put rights (the "PUT RIGHT"),
and obligated themselves with respect to certain purchase rights (the
"REDEMPTION RIGHT"), upon the terms and subject to the conditions set forth
therein.
E. Purchaser and Holdings desire to set aside rights to a portion of
the Purchaser Common Stock to be delivered to the Holdings Stockholders upon
exercise of the Put Right or the Redemption Right, as the case may be, pursuant
to the Stockholders Agreement,
<PAGE>
for the purpose of providing Purchaser with a remedy in the event of a breach by
the Company or the Stockholders of the representations, warranties and covenants
made in the Stock Purchase Agreement.
F. A material condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement is that the parties hereto enter
into this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Except as hereinafter defined, capitalized terms used in
this Agreement will have the meanings assigned to such terms in the Stock
Purchase Agreement.
"ACCOUNT" or "ACCOUNTS" shall mean ADCO Account(s) and/or General
Account(s).
"ADCO ACCOUNT" shall have the meaning set forth in Section 4(a).
"ADCO AMOUNT" shall mean $5 million.
"ADCO CONTINGENT SHARES" shall mean Contingent Shares deposited in an
ADCO Account.
"ADCO INITIAL SHARES" shall mean a number of shares of Purchaser
Common Stock equal to (a) the ADCO Amount divided by the Average Share Price,
(b) multiplied by a fraction of which the numerator is the sum of the
percentages set forth opposite the names under the captions "Stockholders" on
Exhibit F, and of which the denominator is the sum of the percentages set forth
opposite the names under the captions "Stockholders," "Optionees," and "Retained
Shares" on Exhibit F.
"ADCO PRIOR PAYMENT" shall mean, in the case of an Optionee or
Holdings, the product of multiplying (a) the respective numbers of Deposited
Contingent Shares previously deposited in such Holder's ADCO Account, by (b) the
Average Share Price.
"ADCO REQUIRED AMOUNT" shall mean for an Optionee or for Holdings the
product of multiplying the ADCO Amount times the percentage set forth opposite
their respective names under the captions "Optionees" and "Retained Shares," on
Exhibit F.
"ADCO REQUIRED NUMBER" shall mean for an Optionee or Holdings such
number of shares of Purchaser Common Stock as shall be the result of dividing
(a) his ADCO Undeposited Difference, by (b) the Average Share Price.
"ADCO SHORTFALL" shall have the meaning set forth in Section 7(c).
2
<PAGE>
"ADCO SHORTFALL RESPONSIBILITY" shall mean, for any Holder with an
ADCO Undeposited Difference after distribution of Escrow Funds pursuant to
Section 7(c), the product of multiplying (a) the amount of any ADCO shortfall,
up to the sum of all ADCO Undeposited Differences, by (b) a fraction of which
the numerator is such Holder's ADCO Undeposited Difference, and the denominator
is the sum of all ADCO Undeposited Differences, all as of the date of
distribution.
"ADCO UNDEPOSITED DIFFERENCE" shall mean, at any time, in the
aggregate, the sum the ADCO Required Amounts for all Optionees and for Holdings,
less the aggregate amount of ADCO Prior Payments for all such Holders; and for
each Optionee or for Holdings, the ADCO Required Amount for such Holder less his
ADCO Prior Payments.
"AVERAGE DISBURSEMENT SHARE PRICE" shall mean the average closing
price of Purchaser Common Stock on the NYSE during the 10 trading days beginning
13 trading days prior to, as applicable, (a) the date of any disbursement of
Escrowed Funds, or (b) the date of determination under Section 5 or 7.
"CLAIM" shall mean a claim for Damages incurred by Purchaser pursuant
to Section 12 of the Stock Purchase Agreement.
"CLAIM DATE" shall have the meaning set forth in Section 5 hereof.
"CLAIM EXPIRATION TIME" shall mean the day prior to the first
anniversary of the Closing. If such day is not a Business Day or a trading day
on the NYSE, solely for purposes of the valuations required herein, the Escrow
Agent shall deem the Claim Expiration Time to be the next previous Business Day
which was a trading day on the NYSE.
"CLAIM NOTICE" shall have the meaning set forth in Section 5 hereof.
"COMPANY" shall have the meaning set forth in Recital A hereof.
"CONTINGENT SHARES" shall mean shares of Purchaser Common Stock issued
after the Closing on behalf of Optionees in respect of Restated Options, and on
behalf of Holdings in respect of the Put Right or the Redemption Right, as the
case may be.
"DAMAGE AMOUNT" shall have the meaning set forth in Section 5 hereof.
"DEPOSITED CONTINGENT SHARES" shall mean at any time the Contingent
Shares deposited with the Escrow Agent.
"ESCROW AGENT" shall have the meaning set forth in the heading hereof.
"ESCROW AMOUNT" shall mean $35 million.
"ESCROWED FUNDS" shall have the meaning set forth in Section 4 hereof.
3
<PAGE>
"ESCROWED SHARES" shall mean the Initial Shares, the ADCO Initial
Shares, and any Deposited Contingent Shares.
"EXHIBIT F" shall mean Exhibit F to the Stock Purchase Agreement.
"FINAL INSTRUCTION" shall have the meaning set forth in Section 6
hereof.
"GENERAL ACCOUNT" or "GENERAL ACCOUNTS" shall have the meaning set
forth in Section 4(a) hereof.
"HOLDERS" shall mean the Stockholders, including Holdings with respect
to the Retained Shares.
"HOLDINGS" shall have the meaning set forth in the heading hereof.
"INDEMNIFIABLE AMOUNT" shall mean those amounts for which Purchaser is
entitled to indemnity pursuant to Section 12(a) of the Stock Purchase Agreement.
"INITIAL SHARES" shall mean a number of shares of Purchaser Common
Stock equal to (a) the Escrow Amount divided by the Average Share Price, (b)
multiplied by a fraction of which the numerator is the sum of the percentages
set forth opposite the names under the caption "Stockholders" on Exhibit F, and
of which the denominator is the sum of the percentages set forth opposite the
names under the captions "Stockholders," "Optionees," and "Retained Shares" on
Exhibit F.
"NET NUMBER" shall mean, as to an Optionee, the number of shares of
Purchaser Common Stock issued upon any exercise of a Restated Option, minus the
number of shares which is equal to the result of dividing the aggregate exercise
price of the portion of the Restated Option which was exercised by the closing
price per share of Purchaser Common Stock on the NYSE on the trading day prior
to the date of exercise of the Restated Option.
"OPTIONEES" shall mean Stockholders who at the date hereof hold
unexercised Restated Options.
"PRIOR PAYMENT" shall mean, in the case of an Optionee or Holdings,
the product of multiplying (a) the respective numbers of Deposited Contingent
Shares previously deposited on behalf of such Holder in such Holder's General
Account, by (b) the Average Share Price.
"PRO RATA IN PROPORTION TO THEIR RESPECTIVE OWNERSHIP OF ESCROWED
SHARES" shall mean, as of the date of determination, the balance(s) remaining in
such Stockholder's General Account(s) or ADCO Account(s), as the case may be.
"PURCHASER" shall have the meaning set forth in the heading hereof.
"PUT RIGHT" shall have the meaning set forth in Recital D hereof.
4
<PAGE>
"REDEMPTION RIGHT" shall have the meaning set forth in Recital D
hereof.
"REDUCTION FORMULA" shall mean that number of shares of Purchaser
Common Stock equal to the lesser of the result of (a) dividing a Holder's
Shortfall Responsibility (or ADCO Shortfall Responsibility, as the case may be)
by the Average Share Price (which is the number of shares which otherwise would
be required to be deposited in Escrow); and (b) dividing a Holder's Shortfall
Responsibility (or ADCO Shortfall Responsibility, as the case may be) by the
Average Disbursement Share Price as of the date of determination (which is the
number of shares, if available in the subject Account, which otherwise would be
required to be distributed from the Escrow to satisfy the applicable Damage
Amount).
"REQUIRED AMOUNT" shall mean for an Optionee or for Holdings the
product of multiplying the Escrow Amount times the percentage set forth opposite
their respective names under the captions "Optionees" and "Retained Shares," on
Exhibit F.
"REQUIRED NUMBER" shall mean for an Optionee or Holdings such number
of shares of Purchaser Common Stock as shall be the result of dividing (a) his
Undeposited Difference, by (b) the Average Share Price.
"RESERVE" shall have the meaning set forth in Section 7 hereof.
"RESPECTIVE PERCENTAGES" shall mean the indicated respective
percentages set forth opposite a Stockholder's, Optionee's or Holdings' name on
Exhibit F.
"SHORTFALL" shall have the meaning set forth in Section 7(d) hereof.
"SHORTFALL RESPONSIBILITY" shall mean, for any Holder with an
Undeposited Difference after distribution of Escrow Funds pursuant to Section
7(d), the product of multiplying (a) the amount of any shortfall, up to the sum
of all Undeposited Differences, by (b) a fraction of which the numerator is such
Holder's Undeposited Difference, and the denominator is the sum of all
Undeposited Differences, all as of the date of distribution.
"STOCKHOLDER REPRESENTATIVE" shall have the meaning set forth in the
heading hereof.
"STOCKHOLDER" or "STOCKHOLDERS" shall have the meaning set forth in
Recital A hereof.
"STOCKHOLDERS AGREEMENT" shall have the meaning set forth in Recital D
hereof.
"STOCK PURCHASE AGREEMENT" shall have the meaning set forth in Recital
A hereof.
"TOTAL ESCROW AMOUNT" shall mean the ADCO Amount and the Escrow Amount
(or $40 million).
5
<PAGE>
"UNDEPOSITED DIFFERENCE" shall mean, at any time, in the aggregate,
the sum of the Required Amounts for all Optionees and for Holdings, less the
aggregate amount of Prior Payments for all such Holders; and for each Optionee
or for Holdings, the Required Amount for such Holder less his Prior Payments.
2. APPOINTMENT OF ESCROW AGENT. Purchaser, Holdings and the Stockholder
Representative hereby designate and appoint Escrow Agent as escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment
on the terms herein provided.
3. DEPOSIT OF ESCROWED SHARES.
(a) Simultaneously with the execution and delivery of this Agreement,
Purchaser, on behalf of the Stockholders and for the benefit of Purchaser, shall
deliver to the Escrow Agent one or more certificates registered in the name of
the Escrow Agent representing a number of shares of Purchaser Common Stock equal
to (i) the Initial Shares, and (ii) the ADCO Initial Shares. In addition, the
Optionees and Holdings hereby assign to the Escrow Agent, for the benefit of
Purchaser, their rights, as described in Recitals C and E, to such number of
Contingent Shares, as may be required of each of the Optionees and Holdings
hereunder. Upon such deposit, the duties and obligations of each of the parties
to this Agreement will commence.
(b) If, prior to the termination of this Agreement, any Restated
Options are exercised in whole or in part, a number of shares of Purchaser
Common Stock issuable upon such exercise equal to the lesser of (i) the Net
Number, or (ii) sum of the Required Number and the ADCO Required Number, shall
be delivered to the Escrow Agent and registered in the name of the Escrow Agent,
and such shares shall become and thereafter be Escrowed Shares. Deposits first
will be made to the ADCO Account and then to the General Account.
Notwithstanding the foregoing, the ADCO Required Number need not be deposited if
at the time of exercise there shall have been a final distribution of Escrowed
Funds pursuant to Section 7(c).
(c) If, prior to the termination of this Agreement, the Put Right is
exercised, in whole or in part, or the Redemption Right is exercised, a number
of shares of Purchaser Common Stock issuable upon such exercise equal to the sum
of the Required Number and the ADCO Required Number shall be delivered to the
Escrow Agent and registered in the name of the Escrow Agent, and such shares
shall become and thereafter be Escrowed Shares. Deposits first will be made to
the ADCO Account and then to the General Account. Notwithstanding the
foregoing, the ADCO Required Number need not be deposited if at the time of
exercise there shall have been a final distribution of Escrowed Funds pursuant
to Section 7(c).
4. MAINTENANCE OF ESCROW.
(a) The Escrow Agent shall hold the Escrowed Shares in escrow, and
shall maintain and disburse the Escrowed Shares, pursuant to this Agreement.
The Escrow Agent shall establish separate accounts in respect of any (i) Initial
Shares (one for each Stockholder in respect of whom Initial Shares were
deposited), (ii) Deposited Contingent Shares other than
6
<PAGE>
ADCO Contingent Shares (one for each Optionee in respect of the exercise of
Restated Options and one for Holdings in respect of the exercise of the Put
Right or the Redemption Right) (the accounts in sub-paragraphs (i) and (ii)
individually a "GENERAL ACCOUNT" and collectively, the "GENERAL ACCOUNTS"),
(iii) ADCO Initial Shares (one for each Stockholder in respect of whom ADCO
Initial Shares were deposited), and (iv) ADCO Contingent Shares (one for each
Optionee in respect of the exercise of Restated Options and one for Holdings in
respect of the exercise of the Put Right or the Redemption Right in each case
resulting in a deposit of ADCO Contingent Shares) (the accounts in subparagraphs
(iii) and (iv) individually an "ADCO ACCOUNT" and collectively, the "ADCO
ACCOUNTS"), (v) and shall credit to such respective General Accounts or ADCO
Accounts, as the case may be, any stock splits or dividends payable in stock or
other securities, that are received with respect to such Initial Shares, ADCO
Initial Shares, or Deposited Contingent Shares.
(b) All stock splits or dividends payable in stock or other
securities that are made by Purchaser with respect to the Escrowed Shares while
such shares are held by the Escrow Agent shall be registered in the name of the
Escrow Agent, deposited in escrow and governed by this Agreement. The Escrowed
Shares, such stock or other dividends deposited in escrow and any cash in lieu
of fractional shares of Purchaser Common Stock are collectively referred to in
this Agreement as the "ESCROWED FUNDS." All other dividends or distributions
made by Purchaser with respect to the Escrowed Shares while such shares are held
by the Escrow Agent shall be delivered to the Holders by the Escrow Agent pro
rata in accordance with their respective ownership of Escrowed Shares at the
time of such distribution, and such dividends or distributions shall be made to
each such Holder as soon as practicable after receipt by the Escrow Agent of
such dividends or distributions.
5. PURCHASER'S RIGHT TO ASSERT CLAIM TO ESCROWED FUNDS. Purchaser shall
have the right to make one or more Claims on or prior to the Claim Expiration
Time by delivering a notice of such Claim (a "CLAIM NOTICE") to the Stockholder
Representative and the Escrow Agent prior to such time (the date of such notice,
the "CLAIM DATE"). If Purchaser asserts a Claim, such Claim Notice shall state
with particularity (i) the basis for the Claim, together with sufficient facts
relating thereto so that the Stockholder Representative may reasonably evaluate
such Claim, (ii) Purchaser's estimate of the amount that equals the aggregate
amount of such Indemnifiable Amount (the "DAMAGE AMOUNT") (it being understood
that such estimate shall not preclude Purchaser from revising such Damage Amount
by notice to the Stockholder Representative and the Escrow Agent and thereafter
such revised amount shall become the Damage Amount for all purposes hereunder),
and (iii) a calculation of the number of Escrowed Shares to be disbursed from
the Escrow Funds in connection with such Damage Amount (for purposes of such
calculation, each share of Purchaser Common Stock shall be valued at the Average
Disbursement Share Price).
6. DETERMINATION OF VALID DAMAGE AMOUNT; FINAL INSTRUCTION. For purposes
of this Agreement, a "FINAL INSTRUCTION" shall mean a written notice given to
the Escrow Agent directing the disbursement of Escrowed Funds in respect of a
Damage Amount (which had previously been set forth in a Claim Notice properly
delivered in accordance with the provisions of Section 5 hereof), and shall be
signed both by Purchaser and by the Stockholder Representative except as
otherwise provided below in clause (b) or (d). A Final Instruction shall
7
<PAGE>
be delivered to the Escrow Agent under the following circumstances, and
accompanied by the indicated documentation:
(a) If the Stockholder Representative disputes either the validity,
amount or calculation of the Claim and/or the Damage Amount, the Stockholder
Representative shall give written notice of such dispute to Purchaser, with a
copy to the Escrow Agent, within twenty (20) Business Days after the delivery of
the Claim Notice by Purchaser to the Stockholder Representative. In such
circumstances, no Final Instruction may be given to the Escrow Agent except as
provided in (c) or (d) below.
(b) If the Stockholder Representative fails to respond to the Claim
Notice within twenty (20) Business Days after the delivery to the Stockholder
Representative and the Escrow Agent of the Claim Notice, or if the Stockholder
Representative notifies the Escrow Agent that there is no dispute with respect
to the Claim and the Damage Amount, Purchaser shall have the right to deliver to
the Escrow Agent a Final Instruction, signed only by Purchaser, with respect to
the Claim and the Damage Amount.
(c) If the Stockholder Representative and Purchaser reach an
agreement with respect to the proper determination of the Claim and the Damage
Amount, the Stockholder Representative and Purchaser shall give to the Escrow
Agent a Final Instruction, signed by both the Stockholder Representative and
Purchaser, with respect to the Claim and the Damage Amount.
(d) If the Stockholder Representative and Purchaser are unable to
reach an agreement with respect to the proper determination of the Claim and/or
the Damage Amount, the disputed Claim and/or the Damage Amount shall be
submitted by Purchaser and the Stockholder Representative to court action to be
conducted New Castle County, State of Delaware, as provided in Section 20 of the
Stock Purchase Agreement. Upon final, non-appealable resolution of such
disputed Claim and/or the Damage Amount, either the Stockholder Representative
or Purchaser shall have the right to deliver to the Escrow Agent a Final
Instruction with respect to the Claim and the Damage Amount based on and in
compliance with the resolution of such court action, signed only by the
Stockholder Representative or by Purchaser, as the case may be, and accompanied
by a copy of any judgment or other court order with respect thereto.
Upon receipt of a Final Instruction in accordance with this Section,
the Escrow Agent shall value the Escrowed Funds based on the valuation
procedures set forth in Section 8 hereof and shall distribute the Escrowed Funds
in accordance with Section 7 hereof. Notwithstanding anything to the contrary
in the foregoing, in no event shall the Escrow Agent distribute any portion of
the Escrowed Funds to Purchaser with respect to any Claim Notice received by the
Escrow Agent after the Claim Expiration Time.
The Stockholder Representative acknowledges that a Claim Notice has
been made in respect of the ADCO Claim (as defined in the Stock Purchase
Agreement) in the amount of the ADCO Amount, which Claim will be treated as a
disputed Claim subject to resolution as provided in Section 6(a). The existence
and estimation of the ADCO Claim (and the definition
8
<PAGE>
of the ADCO Amount) shall not preclude Purchaser from making an additional Claim
against the Escrow Amount in connection with the ADCO Claim, it being understood
that the Total Escrow Amount shall be available if and to the extent required to
satisfy the ADCO Claim (with amounts first being charged against the ADCO Amount
and thereafter against the Escrow Amount).
7. DISTRIBUTION OF ESCROWED FUNDS.
(a) If Purchaser fails to make a Claim on or prior to the Claim
Expiration Time in accordance with Section 5 hereof or if any and all Claims
have been resolved and paid at such time, then as promptly as practicable
thereafter (and in no event later than ten (10) Business Days following the
Claim Expiration Time), the Escrow Agent shall deliver the Escrowed Shares with
all other Escrowed Funds relating to such Escrowed Shares to the Holders pro
rata in accordance with their respective ownership of Escrowed Shares at the
time of such distribution.
(b) If Purchaser timely makes a Claim or Claims as to which there has
been no Final Instruction by the expiration of the Claim Expiration Time, the
Escrow Agent promptly shall, at the Claim Expiration Time, (i) multiply the
aggregate Damage Amount of all such Claims by 110% (including 110% of the Damage
Amount of the ADCO Claim (if any) less the sum of the aggregate ADCO Undeposited
Differences and the fair value determined as provided in clause (iii) of this
paragraph of all ADCO Accounts) (the "reserve"), (ii) for each General Account,
multiply the reserve by the Respective Percentage applicable to the General
Account (those opposite Holder names under the caption "Stockholders" being
applicable to Initial Shares Accounts and those opposite Holder names under the
captions "Optionees" and "Retained Shares" being applicable to Deposited
Contingent Share Accounts), (iii) determine the fair value (which for each share
of Purchaser Common Stock shall be deemed to be the Average Disbursement Share
Price) at the Claim Expiration Time of each Holder's Account(s), and (iv)
distribute to each Holder the amount of any excess in his General Account(s)
over the reserve applicable to such General Account(s).
(c) Upon receipt of a Final Instruction with respect to the ADCO
Claim, the Escrow Agent promptly shall, on the date of such receipt, (i)
multiply the final Damage Amount for such ADCO Claim by the applicable
Respective Percentage(s) (as more particularly described in clause (b) (ii)
above), (ii) determine in accordance with Section 8 the fair value on such date
of each Holder's ADCO Account(s), (iii) distribute to each Holder the amount of
any excess of the amount(s) determined in (ii) over the amount(s) determined in
(i), and (iv) distribute the balance of property held in the ADCO Accounts to
Purchaser. If any portion of the Damages Amount relating to the ADCO Claim
shall remain unsatisfied as a result of ADCO Undeposited Differences in respect
of Optionees and/or Holdings (an "ADCO shortfall"), the Escrow Agent shall (x)
determine the amount thereof, up to the sum of all ADCO Undeposited Differences,
(y) calculate the ADCO Shortfall Responsibility of each Holder with an ADCO
Undeposited Difference, and (z) notify Purchaser and such Holders of its
determination. For each Holder with an ADCO Shortfall Responsibility, Purchaser
shall thereupon reduce the number of shares of Purchaser Common Stock issuable
upon exercise of such Holder's Restated Options or Put Right or Redemption
Right, as the case may be, by the number of shares determined by the
9
<PAGE>
Reduction Formula. To the extent the foregoing does not completely satisfy the
ADCO Claim, any balance will be satisfied from General Accounts, subject to
paragraph (d).
(d) After the Claim Expiration Time, upon receipt of a Final
Instruction with respect to all Claims, the Escrow Agent promptly shall, on the
date of such receipt, (i) multiply the final unsatisfied Damage Amount
(including the Damage Amount of the ADCO Claim less the sum (if any) of the
aggregate ADCO Undeposited Differences and the fair value determined in
accordance with clause (ii) of this paragraph) of all ADCO Accounts) by the
applicable Respective Percentage(s) (as more particularly described in clause
(b)(ii) above), (ii) determine in accordance with Section 8 the fair value on
such date of receipt of each Holder's Account(s), (iii) distribute to each
Holder the amount of any excess of the amount(s) determined in (ii) over the
amount(s) determined in (i), and (iv) distribute the balance of property held in
the General Accounts to Purchaser. If any portion of the Damage Amount shall
remain unsatisfied as a result of an Undeposited Difference in respect of
Optionees and/or Holdings (a "shortfall"), the Escrow Agent shall (x) determine
the amount thereof, up to the sum of all Undeposited Differences, (y) calculate
the Shortfall Responsibility of each Holder with an Undeposited Difference, and
(z) notify Purchaser and such Holders of its determinations. For each Holder
with a Shortfall Responsibility, Purchaser shall thereupon reduce the number of
shares of Purchaser Common Stock issuable upon exercise of such Holder's
Restated Options or Put Right or Redemption Right, as the case may be, by the
number of shares determined by the Reduction Formula.
8. VALUATION OF ESCROWED SHARES; FRACTIONAL SHARES. For purposes of
determining the number of Escrowed Shares to be disbursed from the Escrow Funds
under this Agreement with respect to a Damage Amount, each share of Purchaser
Common Stock shall be valued at the Average Disbursement Share Price and
fractional shares shall be rounded to the nearest whole number.
9. RELIANCE BY ESCROW AGENT; LIABILITY OF ESCROW AGENT. The Escrow Agent
shall be protected in acting upon any written notice, request, waiver, consent,
certificate, receipt, authorization or other paper or document that the Escrow
Agent believes to be genuine and what it purports to be. The Escrow Agent may
confer with its own corporate or outside legal counsel in the event of any
dispute or question as to the construction of any of the provisions hereof, or
its duties hereunder, and shall incur no liability and shall be fully protected
in acting in accordance with the written opinions of such counsel. The duties
of the Escrow Agent hereunder will be limited to the observance of the express
provisions of this Agreement. The Escrow Agent will not be subject to, or be
obliged to recognize, any other agreement between the parties hereto or
directions or instructions not specifically set forth as provided for herein.
The Escrow Agent will not make any payment or disbursement from or out of the
Escrow Funds that is not expressly authorized pursuant to this Agreement. The
Escrow Agent may rely upon and act upon any instrument received by it pursuant
to the provisions of this Agreement that it reasonably believes to be genuine
and in conformity with the requirements of this Agreement. The Escrow Agent
shall not be held liable for any error in judgment made in good faith by an
officer of the Escrow Agent unless it shall be proved that the Escrow Agent was
grossly negligent in ascertaining the pertinent facts or acted intentionally in
bad faith. The Escrow Agent will not be liable for any action taken or not
taken by it under the terms hereof in the
10
<PAGE>
absence of breach of its obligations hereunder or gross negligence or willful
misconduct on its part. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including, but
not limited to, lost profits), even if the Escrow Agent had been advised of the
likelihood of such loss or damage and regardless of the form of action.
10. INDEMNIFICATION OF ESCROW AGENT. Purchaser, on the one hand, and the
Stockholders collectively (and severally, pro rata in proportion to their
Respective Percentages) on the other, will indemnify and hold the Escrow Agent
harmless from and against any and all losses, costs, damages or expenses
(including, but not limited to, reasonable attorneys' fees) it may sustain by
reason of its service as Escrow Agent hereunder, and except such losses, costs,
damages or expenses (including, but not limited to, reasonable attorneys' fees)
incurred by reason of such acts or omissions for which the Escrow Agent is
liable or responsible under the last sentence of Section 9 hereof. Any
indemnification amounts payable pursuant to this Section 10 shall be paid
one-half by the Purchaser, on the one hand, and one-half by the Stockholders
collectively, on the other.
11. STOCKHOLDER REPRESENTATIVE; SUCCESSOR STOCKHOLDER REPRESENTATIVE.
(a) The Holders have made, constituted and appointed the Stockholder
Representative as their agent and authorized and empowered him to fulfill the
role of Stockholder Representative hereunder. In the event of the resignation
of the Stockholder Representative, the resigning Stockholder Representative
shall appoint a successor either from among the Stockholders or who shall
otherwise be acceptable to Purchaser and who shall agree in writing to accept
such appointment, and the resigning Stockholder Representative's resignation
shall not be effective until such a successor shall exist. The Holders entitled
to receive a majority of the Escrowed Shares may remove the Stockholder
Representative at any time. If a Stockholder Representative should die or
become incapacitated or be removed by the Holders pursuant to this Section 12,
his successor shall be appointed within 21 days of his death or incapacity by
the remaining Holders entitled to receive a majority of the Escrowed Shares, and
such successor either shall be a Stockholder or shall otherwise be acceptable to
Purchaser. If the Holders fail to appoint a successor within such 21-day
period, then Purchaser shall have the right to appoint the successor from among
the Stockholders. The choice of a successor Stockholder Representative
appointed in any manner permitted above shall be final and binding upon all of
the Holders. The decisions and actions of any successor Stockholder
Representative shall be, for all purposes, those of a Stockholder Representative
as if originally named herein.
(b) Each Holder has made, constituted and appointed the Stockholder
Representative as such person's true and lawful attorney in fact and agent, for
such person and in such person's name, (i) to receive all notices and
communications directed to such Holder under this Agreement and the Stock
Purchase Agreement, (ii) to execute and deliver any and all documents required
to be executed and delivered by such Holder pursuant to this Agreement in order
to effect the transactions contemplated hereby, and (iii) to execute and deliver
all instruments and documents of every kind incident to the foregoing to all
intents and purposes and with the same effect as such Holder could do
personally. Notwithstanding the foregoing, except with respect to
administrative and other ministerial tasks, the Stockholder Representative
11
<PAGE>
is required and entitled to act only at the written direction of Holders
entitled to receive a majority of the Escrowed Shares.
(c) It is acknowledged by the Holders appointing the Stockholder
Representative that the designation of the Stockholder Representative as
attorney-in-fact is coupled with an interest and is binding upon such Holders
notwithstanding the death, incapacity or dissolution of any such Holder. If any
such event shall occur prior to the completion of the transactions contemplated
by this Agreement, the Stockholder Representative is, nevertheless, to the
extent that he is legally able to do so, authorized and directed to complete all
transactions and act pursuant to this authority as if such event had not
occurred. Purchaser is entitled to deal solely with the Stockholder
Representative in connection with this Agreement and is entitled to rely upon
the provisions hereof and the authority granted to the Stockholder
Representative to act on behalf of the Holders.
(d) The Stockholder Representative's acceptance of his duties under
this Agreement is subject to the following terms and conditions, which the
parties hereto agree shall govern and control with respect to his rights,
duties, liabilities and immunities as Stockholder Representative (but not in his
capacity as a Stockholder or as an officer, director, or employee of the
Company):
(i) The Stockholder Representative makes no representation
and has no responsibility as to the validity of this Agreement or of any other
instrument referred to herein, or as to the correctness of any statement
contained herein, and he shall not be required to inquire as to the performance
of any obligation under this Agreement.
(ii) The Stockholder Representative shall be protected in
acting upon written notice, request, waiver, consent, receipt or other paper or
document, not only as to its due execution and the validity and effectiveness of
its provisions, but also as to the truth of any information therein contained,
which he in good faith believes to be genuine and what it purports to be.
(iii) The Stockholder Representative shall not be liable for
any error of judgment, or for any act done or step taken or omitted by him in
good faith, or for any mistake of fact or law, or for anything which he may do
or refrain from doing in connection therewith, except his own gross negligence
or willful misconduct.
(iv) The Stockholder Representative may consult with
competent and responsible legal counsel selected by him, and he shall not be
liable for any action taken or omitted by him in good faith in accordance with
the advice of such counsel.
(v) The Holders shall bear pro rata all expenses (including
transfer taxes and other governmental charges) incurred by the Stockholder
Representative in connection with his duties hereunder and shall indemnify him
against and save him harmless from any and all claims, liabilities, costs,
payments and expenses, including fees of counsel (who may be selected by the
Stockholder Representative), for anything done or omitted by him in the
12
<PAGE>
performance of this Agreement or the Stock Purchase Agreement, except as a
result of his own gross negligence or willful misconduct.
(vi) The Stockholder Representative shall have no duties or
responsibilities except those expressly set forth herein and in the Stock
Purchase Agreement. He shall not be bound by any modification of this Agreement
or the Stock Purchase Agreement unless in writing and signed by the other
parties hereto or thereto and if his duties as Stockholder Representative
hereunder or thereunder are affected, unless he shall have given prior written
consent thereto.
12. FEES AND EXPENSES OF THE ESCROW AGENT. All fees of the Escrow Agent
for its services hereunder, together with any expenses reasonably incurred by
the Escrow Agent in connection with this Agreement, shall be paid one-half by
Purchaser, on the one hand, and one-half by the Holders collectively, on the
other.
13. RESIGNATION OF THE ESCROW AGENT. The Escrow Agent may resign from its
duties hereunder by giving each of the parties hereto not less than sixty
(60) days prior written notice of the effective date of such resignation (which
effective date shall be at least sixty (60) days after the date such notice is
given). The parties hereto intend that a substitute Escrow Agent will be
appointed by mutual agreement of Purchaser and the Stockholder Representative to
fulfill the duties of the Escrow Agent hereunder for the remaining term of this
Agreement in the event of the Escrow Agent's resignation. If on or before the
effective date of such resignation, a substitute Escrow Agent has not been
appointed, the Escrow Agent will thereupon deposit the Escrowed Funds into the
registry of a court of competent jurisdiction.
14. SUCCESSOR ESCROW AGENT. Any corporation into which the Escrow Agent
in its individual capacity may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual capacity shall be a
party, or any corporation to which substantially all the corporate trust
business of the Escrow Agent in its individual capacity may be transferred,
shall be the Escrow Agent under this Agreement without further act.
15. DESIGNEES FOR INSTRUCTIONS. Purchaser, may, by notice to the Escrow
Agent, designate one or more persons who will execute notices and from whom the
Escrow Agent may take instructions hereunder. Such designations may be changed
from time to time upon notice to the Escrow Agent from Purchaser. The Escrow
Agent will be entitled to rely conclusively on any notices or instructions from
any person so designated by Purchaser.
16. INSPECTION. All property held as part of the escrow shall at all
times be clearly identified as being held by the Escrow Agent hereunder. Any
party hereto may at any time during the Escrow Agent's business hours (with
reasonable notice) inspect any records or reports relating to the Escrowed
Funds.
17. VOTING OF ESCROWED SHARES. With respect to any matter on which the
Escrowed Shares or any other shares of Purchaser Common Stock in the Escrowed
Funds are entitled to vote, the Escrow Agent shall seek voting instructions from
the Holders. With respect to Holders
13
<PAGE>
who timely provide such instruction, the Escrow Agent shall vote the Escrowed
Shares that would be distributed to such Holders (assuming no Claim is made) in
accordance with the instructions received by such Holders, but shall not
otherwise vote such shares.
18. NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (E.G., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
Notwithstanding the foregoing, a Claim Notice delivered pursuant to Section 5
hereof and a Final Instruction provided pursuant to Section 6 hereof shall be
deemed to have been duly given only if delivered personally, by recognized
overnight delivery or by certified or registered mail and if receipt of such
Claim Notice or such Final Instruction, as the case may be, was acknowledged in
writing. In each case notice shall be sent to:
(a) If to Purchaser: Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Randall T. Mays
Telephone: (210) 822-2828
Telecopy: (210) 822-2299
with a copy to: Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Kenneth E. Wyker, Esq.
Telephone: (210) 822-2828
Telecopy: (210) 822-2299
Piper & Marbury L.L.P.
36 South Charles Street
Baltimore, Maryland 21201
Attention: R.W. Smith, Jr., Esq.
Telephone: (410) 539-2530
Telecopy: (410) 576-1700
(b) If to the Stockholder Representative:
Paul J. Meyer, Esq.
c/o Eller Media Corporation
2850 East Camelback Road, Suite 300
Phoenix, Arizona 85016
Telephone: (602) 957-8116
Telecopy: (602) 381-5740
14
<PAGE>
with a copy to: H & F Investors III, Inc.
One Maritime Plaza, 12th Floor
San Francisco, California 94111
Attention: John L. Bunce, Jr.
Telephone: (415) 788-5111
Telecopy: (415) 788-0176
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
Attention: Paul J. Mundie, Esq.
Telephone: (415) 772-6000
Telecopy: (415) 772-6168
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Attention: Thomas W. Dobson, Esq.
Telephone: (213) 485-1234
Telecopy: (213) 891-8763
(c) If to Holdings: Karl Eller
c/o Eller Media Corporation
2850 E. Camelback Road, Suite 300
Phoenix, Arizona 85016
Telephone: (602) 957-8116
Telecopy: (602) 957-8602
Scott S. Eller
c/o Eller Media Corporation
2850 E. Camelback Road, Suite 300
Phoenix, Arizona 85016
Telephone: (602) 957-8116
Telecopy: (602) 957-8602
with a copy to: Paul J. Meyer, Esq.
c/o Eller Media Corporation
2850 E. Camelback Road, Suite 300
Phoenix, Arizona 85016
Telephone: (602) 957-8116
Telecopy: (602) 957-8602
15
<PAGE>
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: Thomas W. Dobson, Esq.
Telephone: (213) 485-1234
Telecopy: (213) 891-8763
(d) If to the Escrow Agent: Chase Trust Company of California
101 California St., Suite 2725
San Francisco, CA 94111
Attention: Hans H. Helley
Telephone: (415) 954-9506
Telecopy: (415) 693-8850
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
19. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by any party without the prior
written consent of the other parties. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
20. AMENDMENT AND TERMINATION. This Agreement may be amended or modified
by and upon written notice to the Escrow Agent given jointly by Purchaser,
Holdings and the Stockholder Representative, but the duties and responsibilities
of the Escrow Agent may not be increased without its written consent. This
Agreement will terminate on the date on which all the Escrowed Funds have been
distributed in accordance with the terms set forth herein.
21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. SEVERABILITY AND FURTHER ASSURANCES. This Agreement constitutes the
entire agreement among the parties and supersedes all prior and contemporaneous
agreements and undertakings on the parties in connection herewith. No failure
or delay of the Escrow Agent in exercising any right, power or remedy may be, or
may be deemed to be, a waiver thereof; nor may any single or partial exercise of
any right, power or remedy preclude any other or further exercise of any right,
power or remedy. In the event that any one or more of the provisions contained
in this Agreement, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement. Each of the parties hereto shall, at the request of any
other party, deliver to the requesting party all further documents or other
assurances as may reasonably be necessary or desirable in connection with this
Agreement.
16
<PAGE>
23. TITLES. The titles, captions or headings of the Sections herein are
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
24. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws.
25. TAX REPORTING. Unless otherwise required by Treasury Regulations
issued in the future, the parties will treat the Escrowed Shares and any other
shares of Purchaser Common Stock deposited with the Escrow Agent hereunder for
purposes of Section 468B(g) of the Internal Revenue Code of 1986, as amended,
and for all other income tax purposes as being owned by the Holders during the
period such shares are held in escrow, and therefore any income earned on such
shares during such period will be allocated and reported to the Holders as such
income is earned. The parties will make any elections or filings required to
characterize such shares in a manner consistent with the preceding sentence.
Each party to this Agreement (other than the Escrow Agent), including the
Stockholder Representative on behalf of each Stockholder, shall provide a
completed I.R.S. Form W-8 or Form W-9 to the Escrow Agent at the signing of this
Agreement. For purposes of reporting to tax authorities, the Escrow Agent will
treat all income earned by the escrow as paid upon distribution. Purchaser, the
Stockholder Representative, Holdings and the Stockholders, jointly and
severally, covenant and agree to indemnify and hold the Escrow Agent harmless
against all liability for tax withholding and/or reporting for any payments made
by the Escrow Agent pursuant to this Agreement (it, being agreed; however, that
as between the parties each is responsible for its or his tax payments or
reporting).
[SIGNATURE PAGE FOLLOWS]
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the date first written above.
CLEAR CHANNEL COMMUNICATIONS, INC.
By /s/ Randall Mays
----------------------------
Name: Randall Mays
Title: CEO
EM HOLDINGS LLC
By /s/ Karl Eller
----------------------------
Karl Eller
Managing Member
CHASE TRUST COMPANY OF CALIFORNIA
By /s/ Hans H. Helley
----------------------------
Hans H. Helley
Assistant Vice President,
As Escrow Agent
/s/ Paul J. Meyer
-------------------------------
Paul J. Meyer, as
Stockholder Representative
<PAGE>
Exhibit 7.7
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
April 10, 1997, is entered into by and among Clear Channel Communications, Inc.,
a Texas corporation (the "COMPANY"), and the persons listed on the signature
pages hereof (the "STOCKHOLDERS").
RECITALS
A. The Company and the Stockholders desire to enter into this
Agreement for the purpose of granting to the Stockholders certain rights with
respect to registering under the Securities Act of 1933, as amended, shares of
Common Stock, par value $.10 per share, of the Company.
B. The Common Stock is being acquired by the Stockholders pursuant
to the stock purchase (the "TRANSACTION") contemplated by the Stock Purchase
Agreement, dated as of February 25, 1997, as amended, by and among the Company,
Eller Media Corporation, a Delaware corporation ("EMC"), and the persons listed
on Exhibit A thereto.
AGREEMENT
In consideration of the Recitals and mutual promises contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"ADVICE" shall have the meaning set forth in Section 4 hereof.
"AFFILIATE" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person, means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGREEMENT" shall have the meaning set forth in the heading hereof.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a
legal holiday on which banking institutions in the State of New York are not
required to be open.
<PAGE>
"CAPITAL STOCK" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock issued by such person, including each class of common stock and preferred
stock of such person.
"COMMON STOCK" means the Common Stock, par value $.10 per share, of
the Company issued to any Holder named on the signature pages hereof in the
Transaction or any other shares of capital stock or other securities of the
Company into which such shares of Common Stock shall be reclassified or changed,
including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or
if the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.
"COMPANY" shall have the meaning set forth in the heading hereof.
"COMPANY COMMON STOCK" shall mean shares of Common Stock, par value
$.10 per share, of the Company.
"DELAY PERIOD" shall have the meaning set forth in Section 2(d)
hereof.
"DEMAND NOTICE" shall have the meaning set forth in Section 2(a)
hereof.
"DEMAND REGISTRATION" shall have the meaning set forth in Section 2(b)
hereof.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(d) hereof.
"EMC" shall have the meaning set forth in Recital B.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"H&F FUNDS" shall mean Hellman & Friedman Capital Partners III, L.P.,
H&F Orchard Partners III, L.P. and H&F International Partners III, L.P.
"HOLDER" means a person who owns Registrable Shares and is either (i)
a Stockholder, (ii) a Permitted Transferee or (iii) a Permitted Assignee.
"HOLDINGS" shall mean EM Holdings LLC, an Arizona limited liability
company.
"HOLDINGS AGREEMENT" shall mean the Stockholders Agreement, dated as
of April 8, 1997, by and among EMC, the Company and Holdings.
"INCLUSION NOTICE" shall have the meaning set forth in Section 2(a)
hereof.
2
<PAGE>
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 7(c)
hereof.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 7(c)
hereof.
"INSPECTORS" shall have the meaning set forth in Section 4(l) hereof.
"INTERRUPTION PERIOD" shall have the meaning set forth in Section 4
hereof.
"LOSSES" shall have the meaning set forth in Section 7(a) hereof.
"PERMITTED ASSIGNEE" means a Holder who acquires (a) more than $5
million in value of Common Stock at the date of transfer from a Holder, or (b)
Common Stock from a Holder in a transfer in which consent to assignment of this
Agreement is granted pursuant to Section 9(e), in either case in a transfer
exempt pursuant to Rule "4(1-1/2)" (or any similar private transfer exemption),
provided that in each case the transferee assumes and agrees to perform and
becomes a party to this Agreement.
"PERMITTED TRANSFEREES" means, as to any Holder, (A) any other Holder,
(B) any Affiliate or partner of a Stockholder (and in the case of a general
partner of a Stockholder, any partner of such general partner or its partners or
members); (C) any person who is the spouse or former spouse of, or any lineal
descendent (including adopted children) of, or any spouse of such lineal
descendant (including adopted children) of, or the grandparent, parent, brother
or sister of, or spouse of such brother or sister of, a Holder or Permitted
Transferee of such person; (D) upon the death of any Holder or any Permitted
Transferee of such person, the executors of the estate of such Holder or
Permitted Transferee, any of such Holder's or such Permitted Transferee's heirs,
testamentary trustees, devisees, or legatees; (E) any trust principally for the
benefit of one or more of the foregoing Holders or Permitted Transferees
(including a charitable lead or remainder trust); or (F) upon the disability of
any Holder or Permitted Transferee, any guardian or conservator of such Holder
or Permitted Transferee; provided that in each case such transferee assumes and
agrees to perform and becomes a party to this Agreement.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PIGGYBACK REGISTRATION" shall have the meaning set forth in Section
3(a) hereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective Registration Statement in
reliance upon Rule 430A), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Shares covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
3
<PAGE>
"RECORDS" shall have the meaning set forth in Section 4(l) hereof.
"REGISTRABLE SHARES" means shares of Common Stock unless (i) they have
been effectively registered under Section 5 of the Securities Act and disposed
of pursuant to an effective Registration Statement, or (ii) all of such Common
Stock of a Holder can be freely sold and transferred without restriction under
the volume limitation provisions of Rule 144 or Rule 145 under the Securities
Act or any successor rule such that, after any such transfer referred to in this
clause (ii), such securities may be freely transferred without restriction under
the Securities Act. In addition, any shares of Common Stock held by a
Stockholder who owns Common Stock representing more than 1% of the then
outstanding Company Common Stock shall be considered Registrable Shares.
Further, no Holder who is not a Stockholder shall be deemed to own Registrable
Shares after three years from the date hereof. For purposes of this definition,
the H&F Funds shall be considered a single Stockholder.
"REGISTRATION" means registration under the Securities Act of an
offering of Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.
"REGISTRATION PERIOD" means, as to any Holder, the period beginning on
the date hereof and ending on the date when such Holder no longer owns any
Registrable Shares.
"REGISTRATION STATEMENT" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"STOCKHOLDERS" shall have the meaning set forth in the heading hereof.
"TRANSACTION" shall have the meaning set forth in Recital B.
"UNDERWRITTEN OFFERING" means a registration under the Securities Act
in which securities of the Company are sold to an underwriter for reoffering to
the public.
2. DEMAND REGISTRATION.
(a) Subject to the last sentence of this Section 2(a), any
Holder or Holders shall have the right during the Registration Period, by
written notice (the "DEMAND NOTICE") given to the Company, to request the
Company to register under and in accordance with the provisions of the
Securities Act all or any portion of the Registrable Shares designated by such
Holders; PROVIDED, HOWEVER, that the aggregate value (based on the closing price
per
4
<PAGE>
share of Common Stock at the respective dates of such notices) of Registrable
Shares requested to be registered pursuant to any Demand Notice and pursuant to
any related Inclusion Notices received pursuant to the following sentence shall
be at least $ 20 million. Upon receipt of any such Demand Notice, the Company
shall promptly (and in no event later than 15 days after receipt of such Demand
Notice) notify all other Holders of the receipt of such Demand Notice and allow
them the opportunity to include Registrable Shares held by them in the proposed
registration by submitting their own written notice to the Company no later than
15 days after receipt of the notice from the Company of the Demand Notice
requesting inclusion of a specified number of such Holders' Registrable
Securities (the "INCLUSION NOTICE"). In connection with any Demand Registration
in which more than one Holder participates, in the event that such Demand
Registration involves an Underwritten Offering and the managing underwriter or
underwriters participating in such offering advise in writing the Holders of
Registrable Shares to be included in such offering that the total number of
Registrable Shares to be included in such offering exceeds the amount that can
be sold in (or during the time of) such offering without delaying or
jeopardizing the success of such offering (including the price per share of the
Registrable Shares to be sold), then the amount of Registrable Shares to be
offered for the account of such Holders shall be reduced pro rata on the basis
of the number of Registrable Shares to be registered by each such Holder. The
Holders as a group shall be entitled to three Demand Registrations pursuant to
this Section 2. If any such Demand Registration does not become effective or is
not maintained for a period (whether or not continuous) of at least 120 days (or
such shorter period as shall terminate when all the Registrable Shares covered
by such Demand Registration (other than any shares reserved for issuance upon
exercise of the underwriters' overallotment option) have been sold pursuant
thereto), the affected Holders will be entitled to an additional Demand
Registration pursuant hereto. For purposes of the foregoing, the 120-day period
does not have to be consecutive and may be interrupted by Delay Periods or
Interruption Periods as set forth herein. It is agreed that the registration of
Registrable Shares pursuant to an Inclusion Notice shall not be deemed to be a
separate Demand Registration. Nothing in this Section 2(a) shall limit any
rights pursuant to Section 3 hereof.
(b) The Company, within 45 days of the date on which the Company
receives a Demand Notice given by Holders in accordance with Section 2(a)
hereof, shall file with the SEC, and the Company shall thereafter use
commercially reasonable efforts to cause to be declared effective, a
Registration Statement on the appropriate form for the registration and sale, in
accordance with the intended method or methods of distribution, of the total
number of Registrable Shares specified by the Holders in such Demand Notice (a
"DEMAND REGISTRATION").
(c) The Company shall use commercially reasonable efforts to
cause the Registration Statement to be declared effective and to keep each
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of the Registrable Shares covered thereby until the
earlier of (i) 120 days from the date on which the SEC declares such
Registration Statement effective (as such period may be extended pursuant to
this Section 2) and (ii) the date on which all the Registrable Shares covered by
such Registration Statement (other than any shares reserved for issuance upon
exercise of the underwriters' overallotment option) have been sold pursuant to
such Registration Statement.
5
<PAGE>
(d) Except with respect to the first Demand Notice contemplated
by Section 2(g) hereof, the Company shall be entitled to postpone the filing of
any Registration Statement otherwise required to be prepared and filed by the
Company pursuant to this Section 2 for a reasonable period of time, but not in
excess of 90 days (a "DELAY PERIOD"), if the Board of Directors of the Company
determines in good faith that the registration and distribution of the
Registrable Shares covered or to be covered by such Registration Statement would
materially interfere with any pending material financing, acquisition or
corporate reorganization or other material corporate development involving the
Company or any of its subsidiaries or would require premature disclosure thereof
and promptly gives the Holders written notice of such determination, containing
a general statement of the reasons for such postponement and an approximation of
the period of the anticipated delay; PROVIDED, HOWEVER, that (i) the aggregate
number of days included in all Delay Periods during any consecutive 12 months
shall not exceed the aggregate of (x) 120 days minus (y) the number of days
occurring during all Interruption Periods during such consecutive 12 months and
(ii) a period of at least 60 days shall elapse between the termination of any
Delay Period or Interruption Period and the commencement of the immediately
succeeding Delay Period. If the Company shall so postpone the filing of a
Registration Statement, the Holders of Registrable Shares to be registered shall
have the right to withdraw the request for registration by giving written notice
from the Holders of a majority of the Registrable Shares that were to be
registered to the Company within 30 days after receipt of the notice of
postponement or, if earlier, the termination of such Delay Period (and, in the
event of such withdrawal, such request shall not be counted for purposes of
determining the number of requests for registration to which the Holders of
Registrable Shares are entitled pursuant to this Section 2). The time period
for which the Company is required to maintain the effectiveness of any
Registration Statement shall be extended by the aggregate number of days of all
Delay Periods and all Interruption Periods occurring during such Registration
and such period and any extension thereof is hereinafter referred to as the
"EFFECTIVENESS PERIOD." The Company shall not be entitled to initiate a Delay
Period or an Interruption Period unless it shall (A) concurrently prohibit sales
by all other security holders under registration statements covering securities
held by such other security holders (excluding exercise of options pursuant to a
Form S-8) and (B) forbid purchases and sales in the open market by senior
executives of the Company.
(e) Except with respect to the first Demand Registration
contemplated by Section 2(g) hereof, the Company shall not include any
securities that are not Registrable Shares in any Registration Statement filed
pursuant to this Section 2 without the prior written consent of the Holders of a
majority in number of the Registrable Shares held by Holders covered by such
Registration Statement, which consent shall not be unreasonably withheld.
(f) Holders of a majority in number of the Registrable Shares to
be included in a Registration Statement pursuant to this Section 2 may, at any
time prior to the effective date of the Registration Statement relating to such
Registration, revoke such request by providing a written notice to the Company
revoking such request. The Holders of Registrable Shares who revoke such
request shall reimburse the Company for all its out-of-pocket expenses incurred
in the preparation, filing and processing of the Registration Statement;
PROVIDED, HOWEVER, that, if such revocation was pursuant to Section 2(d) (for a
postponement) or was based on the Company's failure to comply in any material
respect with its obligations
6
<PAGE>
hereunder, such reimbursement shall not be required, and such registration shall
not count against the maximum number of Demand Registrations to which the
applicable Holders are entitled under Section 2(a). In addition, if pursuant to
the terms of this Section 2(f), the Holders reimburse the Company for its
out-of-pocket expenses incurred in the preparation, filing and processing of any
Registration Statement requested, and subsequently revoked by such Holder(s),
such registration shall not count against the maximum number of Demand
Registrations to which the applicable Holder(s) are entitled under Section 2(a).
(g) Notwithstanding anything herein to the contrary, the
Stockholders hereby give their first Demand Notice to the Company as set forth
on Schedule I hereto, subject to their right to revoke such request pursuant to
Section 2(f), and understand and agree that the Company intends to include
authorized but unissued Company Common Stock for sale in such Registration
pursuant to a firm commitment Underwritten Offering. In the event the managing
underwriter or underwriters participating in such offering advise in writing the
Company and the Holders of Registrable Shares to be included in such offering
that the total number of Registrable Shares and shares of Company Common Stock
to be sold by the Company to be included in such offering exceeds the amount
that can be sold in (or during the time of) such offering without delaying or
jeopardizing the success of such offering (including the price per share of the
Registrable Shares and other shares of Company Common Stock to be sold), then
the amount of shares to be offered shall be reduced in the following order of
priority: (i) first, the amount of Company Common Stock to be sold by the
Company shall be reduced, to the extent necessary, until such amount equals
zero, and (ii) second, to the extent necessary, the amount of Registrable Shares
shall be reduced pro rata on the basis of the number of Registrable Shares to be
registered by each such Holder. It is understood that the second Demand Notice
may not be given for a period of at least six months after the completion of the
sale of Registrable Shares effected pursuant to the first Demand Registration,
and that the third Demand Notice may not be given for a period of at least
twelve months after the completion of the sale of Registrable Shares effected
pursuant to the second Demand Registration, and that no Demand Notice will be
given for a period of 120 days after the sale of any shares of Company Common
Stock pursuant to a Registration Statement in which the Holders have been given
an opportunity to participate as provided in Section 3(a) hereof and have either
sold any shares as part of such offering or have elected not to participate.
3. PIGGYBACK REGISTRATION.
(a) RIGHT TO PIGGYBACK. If at any time during the Registration
Period the Company proposes to file a registration statement under the
Securities Act with respect to a public offering of securities of the same type
as the Registrable Shares pursuant to a firm commitment Underwritten Offering
for cash for its own account (other than a registration statement (i) on Form
S-8 or any successor forms thereto, or (ii) filed solely in connection with a
dividend reinvestment plan or employee benefit plan of the Company or its
Affiliates) or for the account of any holder of securities of the same type as
the Registrable Shares (to the extent that the Company has the right to include
Registrable Shares in any registration statement to be filed by the Company on
behalf of such holder), then the Company shall give written notice of such
proposed filing to the Holders at least 10 days before the anticipated filing
date of such registration statement. Such notice shall offer the Holders the
opportunity to register such
7
<PAGE>
amount of Registrable Shares as they may request (a "PIGGYBACK REGISTRATION").
Subject to Section 3(b) hereof, the Company shall include in each such Piggyback
Registration all Registrable Shares with respect to which the Company has
received written requests for inclusion therein within 10 days after notice has
been given to the Holders. Each Holder shall be permitted to withdraw all or
any portion of the Registrable Shares of such Holder from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration; PROVIDED, HOWEVER, that if such withdrawal occurs after the filing
of the Registration Statement with respect to such Piggyback Registration, the
withdrawing Holders shall reimburse the Company for the portion of the
registration expenses payable with respect to the Registrable Shares so
withdrawn.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. The Company shall
permit the Holders to include all such Registrable Shares on the same terms and
conditions as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or the managing underwriter or
underwriters participating in such offering advise the Holders in writing that
the total amount of securities requested to be included in such Piggyback
Registration exceeds the amount which can be sold in (or during the time of)
such offering without delaying or jeopardizing the success of the offering
(including the price per share of the securities to be sold), then the amount of
securities to be offered for the account of the Holders and other holders of
securities who have registration rights with respect thereto shall be reduced
(to zero if necessary) pro rata on the basis of the number of common stock
equivalents requested to be registered by each such Holder or holder
participating in such offering.
(c) RIGHT TO ABANDON. Nothing in this Section 3 shall create
any liability on the part of the Company to the Holders if the Company in its
sole discretion should decide not to file a registration statement proposed to
be filed pursuant to Section 3(a) hereof or to withdraw such registration
statement subsequent to its filing and prior to the later of its effectiveness
or the release of the Registrable Shares for public offering by the managing
underwriter, in the case of an underwritten public offering, regardless of any
action whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice hereunder or otherwise.
(d) PRIORITY OVER DEMAND REGISTRATIONS. If the Company at any
time within 15 days after receipt of a Demand Notice (or any applicable Delay
Period) notifies the Holders of its proposal to file a Registration Statement
covered by Section 3(a) hereof pursuant to which a majority of shares to be sold
will be sold by the Company (without regard to any shares to be sold by the
Holders), the Company's proposed filing and notice thereof will take priority
over the Demand Notice, and the Demand Notice will be considered to have been
revoked and will not be considered or counted as a Demand Registration under
Section 2. Subject to the provisions of Section 2(g), the revocation of the
Demand Notice shall in no way affect or preclude a new Demand Notice if the
Company abandons the proposed registration as contemplated by Section 3(c). The
provisions of this Section 2(d) will not apply to the first Demand Notice
pursuant to Section 2(g) hereof.
8
<PAGE>
4. REGISTRATION PROCEDURES. In connection with the registration
obligations of the Company pursuant to and in accordance with Sections 2 and 3
hereof (and subject to Sections 2 and 3 hereof), the Company shall use
commercially reasonable efforts to effect such registration to permit the sale
of such Registrable Shares in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall (subject to Sections
2 and 3 hereof):
(a) At least three business days before filing a Registration
Statement or Prospectus, furnish to the Holders (or their representatives) who
are participating in such Registration Statement and the underwriters, if any,
copies of all such documents (which may be drafts or proofs) proposed to be
filed, which documents will be subject to the review of such Holders and such
underwriters (and their respective counsel), and, in the case of a Demand
Registration, the Company will not file any Registration Statement or amendment
thereto or any Prospectus or any supplement thereof to which the registering
Holders or the underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC a Registration Statement for
the sale of the Registrable Shares on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate in accordance
with such Holders' intended method or methods of distribution thereof, subject
to Section 2(b) hereof, and, subject to the Company's right to terminate or
abandon a registration pursuant to Section 3(c) hereof, use commercially
reasonable efforts to cause such Registration Statement to become effective and
remain effective as provided herein;
(c) prepare and file with the SEC such amendments (including
post-effective amendments) to such Registration Statement, and such supplements
to the related Prospectus, as may be required by the rules, regulations or
instructions applicable to the Securities Act during the applicable period in
accordance with the intended methods of disposition specified by the Holders of
the Registrable Shares covered by such Registration Statement, make generally
available earnings statements satisfying the provisions of Section 11(a) of the
Securities Act (provided that the Company shall be deemed to have complied with
this clause if it has complied with Rule 158 under the Securities Act), and
cause the related Prospectus as so supplemented to be filed pursuant to Rule 424
under the Securities Act; PROVIDED, HOWEVER, that before filing a Registration
Statement or Prospectus, or any amendments or supplements thereto (other than
reports required to be filed by it under the Exchange Act), the Company shall
furnish to the Holders of Registrable Shares covered by such Registration
Statement and their counsel for their reasonable review and comment, copies of
all documents required to be filed;
(d) notify the Holders of any Registrable Shares covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding such Holders,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of such
9
<PAGE>
Registration Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose, and (v) of the happening of any event that
requires the making of any changes in such Registration Statement, Prospectus or
documents incorporated or deemed to be incorporated therein by reference so that
they will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(e) use commercially reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of such Registration Statement, or the
lifting of any suspension of the qualification or exemption from qualification
of any Registrable Shares for sale in any jurisdiction in the United States;
(f) furnish to the Holder of any Registrable Shares covered by
such Registration Statement, each counsel for such Holders and each managing
underwriter, if any, without charge, one conformed copy of such Registration
Statement, as declared effective by the SEC, and of each post-effective
amendment thereto, in each case including financial statements and schedules and
all exhibits and reports incorporated or deemed to be incorporated therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Shares of such
Holder covered by such Registration Statement in conformity with the
requirements of the Securities Act;
(g) prior to any public offering of Registrable Shares covered
by such Registration Statement, use commercially reasonable efforts to register
or qualify such Registrable Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Holders of such Registrable Shares
shall reasonably request in writing; PROVIDED, HOWEVER, that the Company shall
in no event be required to qualify generally to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not at the time so
qualified or to execute or file a general consent to service of process in any
such jurisdiction where it has not theretofore done so or to take any action
that would subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;
(h) upon the occurrence of any event contemplated by paragraph
4(d)(v) above, prepare a supplement or post-effective amendment to such
Registration Statement or the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference and file any other required
document so that, as thereafter delivered to the purchasers of the Registrable
Shares being sold thereunder (including upon the termination of any Delay
Period), such Prospectus will not contain an untrue statement of a material fact
or omit to state any 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;
(i) use commercially reasonable efforts to cause all Registrable
Shares covered by such Registration Statement to be listed on each securities
exchange or automated
10
<PAGE>
interdealer quotation system, if any, on which similar securities issued by the
Company are then listed or quoted;
(j) use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC and any securities exchange or
regulatory body;
(k) on or before the effective date of such Registration
Statement, provide the transfer agent of the Company for the Registrable Shares
with printed certificates for the Registrable Shares covered by such
Registration Statement which are in a form eligible for deposit with The
Depository Trust Company;
(l) if such offering is an Underwritten Offering, make available
for inspection by any Holder of Registrable Shares included in such Registration
Statement, any underwriter participating in any offering pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the "INSPECTORS"), such financial
and other records and other information, pertinent corporate documents and
properties of any of the Company and its subsidiaries and Affiliates
(collectively, the "RECORDS"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities; PROVIDED, HOWEVER, that the
Records that the Company determines, in good faith, to be confidential and which
it notifies the Inspector in writing are confidential shall not be disclosed to
any Inspector unless such Inspector signs a confidentiality agreement reasonably
satisfactory to the Company, which agreement shall permit the release of such
Records if such release is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction; PROVIDED, HOWEVER, that each Holder of
Registrable Shares agrees that it shall, promptly after learning that disclosure
of such Records is sought in a court having jurisdiction, give notice to the
Company so that the Company, at the Company's expense, may undertake appropriate
action to prevent disclosure of such Records; and
(m) if such offering is an Underwritten Offering, enter into
such agreements (including an underwriting agreement in form, scope and
substance as is customary in underwritten offerings) and take all such other
appropriate and reasonable actions requested by the Holders of a majority of the
Registrable Shares being sold in connection therewith (including those
reasonably requested by the managing underwriters) in order to expedite or
facilitate the disposition of such Registrable Shares, and in such connection,
(i) use commercially reasonable efforts to obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters and
counsel to the Holders of the Registrable Shares being sold), addressed to each
selling Holder of Registrable Shares covered by such Registration Statement and
each of the underwriters as to the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such counsel and underwriters, (ii) use commercially reasonable
efforts to obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each selling Holder of Registrable Shares covered by
the Registration Statement (unless such accountants
11
<PAGE>
shall be prohibited from so addressing such letters by applicable standards of
the accounting profession) and each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings (iii) if requested
and if an underwriting agreement is entered into, provide indemnification
provisions and procedures substantially to the effect set forth in Section 7
hereof with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting or similar
agreement, or as and to the extent required thereunder. In addition, the
Company agrees not to effect any public sale or distribution of Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock,
during the period commencing with the effective date of any underwritten Demand
or Piggyback Registration and until the earlier of (A) the abandonment of such
offering or (B) the termination of any "hold back" period reasonably requested
by the underwriters (with exceptions for issuances pursuant to outstanding
options, warrants, and convertible or exchangeable securities, pursuant to
employee and dividend reinvestment plans, and such other exceptions as are
customary or agreed with the managing underwriter).
The Company may require each Holder of Registrable Shares covered
by a Registration Statement to furnish such information regarding such Holder
and such Holder's intended method of disposition of such Registrable Shares as
it may from time to time reasonably request in writing. If any such information
is not furnished within a reasonable period of time after receipt of such
request, the Company may exclude such Holder's Registrable Shares from such
Registration Statement. In addition, the Company may require each Holder of
Registrable Shares covered by a Registration Statement to agree not to effect
any public sale or distribution of Common Stock, or any securities convertible
into or exchangeable or exercisable for Common Stock, during the period
commencing with the effective date of any underwritten Demand or Piggyback
Registration and until the earlier of (A) the abandonment of such offering or
(B) the termination of any "hold back" period reasonably requested by the
underwriters (with such exceptions as are customary or agreed with the managing
underwriter). In addition, if the Holders have been given an opportunity to
participate in a Registration Statement pursuant to Section 3(a), any Holder who
owns Registrable Shares representing 1% or more of the then outstanding shares
of Common Stock of the Company will agree, if so requested by the Company, not
to effect any public sale or distribution of Common Stock, or any securities
convertible into or exchangeable or exercisable for Common Stock, during the
period commencing with the effective date of any underwritten Piggyback
Registration and until the earlier of (A) the abandonment of such offering or
(B) 30 days after the effective date of such Piggyback Registration; provided
that each officer and director of the Company who beneficially owns 1% or more
of the then outstanding Company Common Stock and each stockholder of the Company
who owns "restricted" shares of Company Common Stock (as defined in Rule 144)
constituting 1% or more of the then outstanding Company Common Stock agrees to
the same hold-back arrangements.
12
<PAGE>
Each Holder of Registrable Shares covered by a Registration
Statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(d)(ii), 4(d)(iii),
4(d)(iv) or 4(d)(v) hereof, that such Holder shall forthwith discontinue
disposition of any Registrable Shares covered by such Registration Statement or
the related Prospectus until receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(h) hereof, or until such Holder is
advised in writing (the "ADVICE") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
(such period during which disposition is discontinued being an "INTERRUPTION
PERIOD") and, if requested by the Company, the Holder shall deliver to the
Company (at the expense of the Company) all copies then in its possession, other
than permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such request.
Each Holder of Registrable Shares covered by a Registration
Statement further agrees not to utilize any material other than the applicable
current preliminary prospectus or Prospectus in connection with the offering of
such Registrable Shares.
5. REGISTRATION EXPENSES. The costs, fees and expenses incident to
the Company's performance of or compliance with this Agreement, including (i)
all registration and filing fees, including NASD filing fees, (ii) all fees and
expenses of compliance with securities or Blue Sky laws, including reasonable
fees and disbursements of counsel in connection therewith, (iii) printing
expenses (including expenses of printing certificates for Registrable Shares and
of printing preliminary and final prospectuses if the printing of prospectuses
is requested by the Holders or the managing underwriter, if any), (iv)
messenger, telephone and delivery expenses, (v) fees and disbursements of
counsel for the Company, (vi) fees and disbursements of all independent
certified public accountants of the Company (including expenses of any "cold
comfort" letters required in connection with this Agreement) and all other
persons retained by the Company in connection with this Agreement and the
Registration Statement, (vii) all other costs, fees and expenses incident to the
Company's performance or compliance with this Agreement (excluding the Company's
internal direct and indirect expenses, any expenses which the Company would
otherwise incur, including the costs of its financial and other reporting under
the Exchange Act and filings made on its own behalf under the Securities Act,
any amounts payable by the Company on behalf of other sellers pursuant to other
registration rights agreements or otherwise, and discounts, commissions and
brokers' fees or fees of similar securities industry professionals and any
transfer taxes payable by the Company, which shall be borne by the Company),
shall be borne by the Holders and, if applicable, the Company, pro rata (based
on the number of Registrable Shares sold by such Holders in such offering as a
percentage of the total number of shares sold in the offering). The fees and
expenses of any persons retained by any Holder, including counsel for such
Holder, and any discounts, commissions or brokers' fees or fees of similar
securities industry professionals and any transfer taxes relating to the
disposition of the Registrable Shares by a Holder, will be payable by such
Holder.
13
<PAGE>
6. UNDERWRITING REQUIREMENTS.
(a) Subject to Section 6(b) hereof, any Holder giving a Demand
Notice shall have the right, by written notice, to request that any Demand
Registration provide for an Underwritten Offering.
(b) In the case of any Underwritten Offering pursuant to a
Demand Registration, the Company shall select the institution or institutions
that shall manage or lead such offering, with the consent of the Holders of a
majority of the Registrable Shares covered by the Demand Notice to be disposed
of in connection therewith, which consent shall not be unreasonably withheld.
In the case of any Underwritten Offering pursuant to a Piggyback Registration,
the Company shall select the institution or institutions that shall manage or
lead such offering.
7. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall, without
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each Holder of Registrable Shares whose Registrable Shares are covered
by a Registration Statement or Prospectus, the officers, directors and agents
and employees of each of them, each Person who controls each such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgment, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (collectively,
"LOSSES"), as incurred, arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in such Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are based upon
information furnished in writing to the Company by or on behalf of such Holder
expressly for use therein or by any underwriter in a Demand Registration;
PROVIDED, HOWEVER, that the Company shall not be liable to any such Holder to
the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if (i) having previously been furnished by or on
behalf of the Company with copies of the Prospectus, such Holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale of Registrable Shares by such Holder to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have corrected in all material respects such untrue statement or alleged untrue
statement or such omission or alleged omission; and provided further, however,
that the Company shall not be liable in any such case to the extent that any
such Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the Prospectus, if (x) such untrue
statement or alleged untrue statement, omission or alleged omission is corrected
in all material respects in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or
14
<PAGE>
supplemented, prior to or currently with the sale of Registrable Shares. In
connection with any Underwritten Offering, the Company will also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers and directors
and each Person who controls such Persons (within the meaning of Section 15 of
the Securities Act) to the same extent as provided above with respect to
indemnification of Holders of Registrable Shares, or on such other terms as are
reasonable and customary and requested by the managing underwriter.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SHARES. In
connection with any Registration Statement in which a Holder is participating,
such Holder shall furnish to the Company in writing such information as the
Company reasonably requests for use in connection with such Registration
Statement or the related Prospectus and agrees to indemnify, to the full extent
permitted by law, the Company, its directors, officers, agents or employees,
each Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act) and the directors, officers,
agents or employees of such controlling Persons, from and against all Losses as
incurred arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in such Registration Statement or the related
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged omission is based
upon any information so furnished in writing by or on behalf of such Holder to
the Company expressly for use in such Registration Statement or Prospectus.
(c) If any Person shall be entitled to indemnity hereunder (an
"INDEMNIFIED PARTY"), indemnified party shall give prompt notice to the party
from which such indemnity is sought (the "INDEMNIFYING PARTY") of any claim or
of the commencement of any proceeding with respect to indemnitee party seeks
indemnification or contribution pursuant hereto; PROVIDED, HOWEVER, that the
delay or failure to so notify the indemnifying party shall not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced by such delay or failure. The
indemnifying party shall have the right, exercisable by giving written notice to
an indemnified party promptly after the receipt of written notice from such
indemnified party of such claim or proceeding, to assume, at the indemnifying
party's expense, the defense of any such claim or proceeding, with counsel
reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, that (i)
an indemnified party shall have the right to employ separate counsel in any such
claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (1) the indemnifying party agrees to pay such fees and expenses; (2) the
indemnifying party fails promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party; or (3) the named parties to any proceeding (including
impleaded parties) include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised by counsel that there
are likely to be one or more legal defenses available to it that are
inconsistent with those available to the indemnifying party or that a conflict
of interest is likely to exist among such indemnified party and any other
indemnified parties (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified
15
<PAGE>
party); and (ii) subject to clause (3) above, the indemnifying party shall not,
in connection with any one such claim or proceeding or separate but
substantially similar or related claims or proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one firm of attorneys (together with appropriate
local counsel) at any time for all of the indemnified parties, or for fees and
expenses that are not reasonable. Whether or not such defense is assumed by the
indemnifying party, such indemnified party shall not be subject to any liability
for any settlement made without its consent. The indemnifying party shall not
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release, in form and substance reasonably
satisfactory to the indemnified party, from all liability in respect of such
claim or litigation for which such indemnified party would be entitled to
indemnification hereunder.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 7 is unavailable to an indemnified party in respect of any Losses (other
than in accordance with its terms), then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue statement of a material fact or
omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with any investigation or proceeding. The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the this Section
7(d). Notwithstanding the provision of this Section 7(d), an indemnifying party
that is a Holder shall not be required to contribute any amount which is in
excess of the amount by which the total proceeds received by such Holder from
the sale of the Registrable Shares sold by such Holder (net of all underwriting
discounts and commissions) exceeds the amount of any damages that such
indemnifying party has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
8. RULE 144. The Company covenants that it will use all reasonable
commercial efforts to timely file the reports required to be filed by it under
the Securities Act or the Exchange Act (including but not limited to the reports
under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 adopted by the SEC under the Securities Act) and the rules
and regulations adopted by the SEC thereunder (or if the Company
16
<PAGE>
is not required to file such reports, the Company will, upon the request of any
Holder of Registrable Shares, make publicly available other information), and
will take such further action as any Holder of Registrable Shares may reasonably
request, all to the extent required from time to time to enable such Holder of
Registrable Shares to sell Registrable Shares within the exemption provided by
(i) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Shares, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
9. RIGHTS OF HOLDINGS. In the event that Holdings receives any
shares of Company Common Stock pursuant to and in accordance with the terms of
the Holdings Agreement, and so long as at least one other Holder (which is not a
Permitted Transferee or Permitted Assignee of Holdings) owns Registrable Shares
and this Agreement has not been terminated in accordance with its terms, such
shares received by Holdings shall then and thereafter for purposes of this
Agreement constitute Registrable Shares (subject to the qualifications set forth
in the definition of Registrable Shares) and Holdings shall then and thereafter
for purposes of this Agreement be a Holder in respect of such Registrable
Shares. Notwithstanding the foregoing, in respect of the Demand Registration
rights granted to Holders under Section 2 of this Agreement, Holdings (and the
Permitted Transferees and Permitted Assignees of Holdings), as a Holder
hereunder, shall not have the right to request any Demand Registrations, but
only the right to participate with other Holders in such Demand Registrations in
accordance with and subject to the provisions of Section 2. Also, in respect of
the termination provisions set forth in Section 10(a) below, the Registrable
Shares owned by Holdings hereunder (or any Permitted Transferee or Permitted
Assignee thereof) shall not be Registrable Shares for purposes of any
determinations made thereunder.
10. MISCELLANEOUS.
(a) TERMINATION. Section 2 of this Agreement shall terminate on
the later of 2 years after the date of this Agreement or the date when the H&F
Funds collectively own less than 2,285,000 Registrable Shares (appropriately
adjusted for stock splits, combinations, stock dividends and similar
transactions). This Agreement and the obligations and rights of the Company and
the Holders hereunder (other than Section 7 hereof) shall terminate on the
earlier of (i) the first date on which there remains outstanding Registrable
Shares having a value (based on the closing price per share of Common Stock) of
less than $20 million and (ii) 5 years after the date of this Agreement.
(b) NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case, notice shall be sent to each of the
Stockholders at the address indicated below such Stockholder's name on the
signature pages hereto, and to the Company at the address indicated below:
17
<PAGE>
Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Randall T. Mays
Telecopy: (210) 822-2299
with a copy to:
Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Kenneth E. Wyker, Esq.
Telecopy: (210) 822-2299
Piper & Marbury L.L.P.
36 South Charles Street
Baltimore, Maryland 21201
Attention: R.W. Smith, Jr., Esq.
Telecopy: (410) 539-1700
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(c) INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". This Agreement shall not be construed for or against either party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective parties. All terms defined in this
Agreement in the singular shall have the same comparable meanings when used in
the plural and vice versa, unless otherwise specified.
(d) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
(e) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned (whether by operation of
law or otherwise) by any Holder without the consent of the Company, or by the
Company without the consent of Holders of at least a majority in number of the
Registrable Shares then outstanding; provided that any Holder can assign its
rights hereunder to a Permitted Transferee or Permitted Assignee without the
consent of the Company. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective
18
<PAGE>
successors and assigns. In no event shall any transferee of Common Stock be
entitled, solely as a result of such transfer, to any of the benefits of this
Agreement or to enforce the same.
(f) GOVERNING LAW. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Delaware (without reference to the choice of law provisions),
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.
(g) SEVERABILITY. Each party agrees that, should any court or
other competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby. Upon any such holding that any provision of this Agreement
is null, void or unenforceable, the parties will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible. Except
as otherwise contemplated by this Agreement, to the extent that a party hereto
took an action inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an order or judgment of a court or other
competent authority, such party shall incur no liability or obligation unless
such party did not in good faith seek to resist or object to the imposition or
entering of such order or judgment.
(h) INJUNCTIVE RELIEF. The parties acknowledge that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person or entity will be irreparably
damaged and will not have an adequate remedy at law. Any such person or entity
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.
(i) ATTORNEYS' FEES. If any party to this Agreement brings an
action to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.
(j) CUMULATIVE REMEDIES. All rights and remedies of any party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
19
<PAGE>
(k) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.
(l) AMENDMENTS AND WAIVERS. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority in number of the Registrable Shares then outstanding, or
the Holders have obtained the written consent of the Company.
(m) OTHER AGREEMENTS. The Company shall not enter into any
registration rights agreements which are in conflict with the provisions of this
Agreement.
[SIGNATURE PAGES FOLLOW]
20
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ Randall Mays
---------------------------------------
Name: Randall Mays
Title: CFO
HELLMAN & FRIEDMAN
CAPITAL PARTNERS III, L.P.
By: Its General Partner,
H&F Investors III
By: Its Managing General Partner,
Hellman & Friedman Associates
III, L.P.
By: Its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Joseph Niehaus
---------------------
Its: Vice President
Address: One Maritime Plaza
12th Floor
San Francisco, CA 94111
<PAGE>
H&F ORCHARD PARTNERS III, L.P.
By: Its General Partner,
H&F Investors III
By: Its Managing General Partner,
Hellman & Friedman Associates
III, L.P.
By: Its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Joseph Niehaus
---------------------
Its: Vice President
Address: One Maritime Plaza
12th Floor
San Francisco, CA 94111
H&F INTERNATIONAL PARTNERS III, L.P.
By: Its General Partner,
H&F Investors III
By: Its Managing General Partner,
Hellman & Friedman Associates
III, L.P.
By: Its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Joseph Niehaus
-------------------------
Its: Vice President
Address: One Maritime Plaza
12th Floor
San Francisco, CA 94111
/s/ H. Irving Grousbeck
----------------------------
H. Irving Grousbeck
Address: c/o Stanford University
Graduate School of Business Administration
Room L336
Stanford, CA 94305
<PAGE>
AMERICAN MEDIA MANAGEMENT, INC.
By: /s/ Arthur Kern
-------------------------
Its: CHMN./CEO
Address: 1940 Webster Street
San Francisco, CA 94115
/s/ Richard Reiss, Jr.
----------------------------
Richard Reiss, Jr.
Address: c/o Cumberland Associates
1114 Avenue of the Americas
New York, NY 10036
/s/ Glenn Krevlin
----------------------------
Glenn Krevlin, as Trustee fbo
Nina Krevlin, Glenn Krevlin,
Michael Krevlin and Jill Krevlin
Address: c/o Richard Reiss, Jr.
Cumberland Associates
1114 Avenue of the Americas
New York, New York 10036
/s/ K. Tucker Andersen
----------------------------
K. Tucker Andersen
Address: c/o Richard Reiss, Jr.
Cumberland Associates
1114 Avenue of the Americas
New York, New York 10036
<PAGE>
/s/ Bruce T. Halle
----------------------------
Bruce Halle
Address: c/o Discount Tire Company
14631 North Scottsdale Road
Scottsdale, Arizona 85254
/s/ Timothy J. Donmoyer
----------------------------
Timothy J. Donmoyer
Address: c/o Eller Media Corporation
2850 E. Camelback Road, Suite 300
Phoenix, AZ 85016
/s/ Patricia Salas Pineda
----------------------------
Patricia Salas Pineda
Address: c/o NUMMI
45500 Fremont Boulevard
Fremont, CA 94538
EL DORADO INVESTMENT COMPANY
By: /s/ Gregory S. Anderson
-------------------------
Its: Managing Director
Address: c/o Eller Media Corporation
2850 E. Camelback Road, Suite 300
Phoenix, AZ 85016
/s/ Karl Eller
----------------------------
Steven G. Mihaylo
Address: 5710 North 25th Place
Phoenix, AZ 85016
By Karl Eller
as Attorney-in-Fact
<PAGE>
EM HOLDINGS LLC
Dated , 1997 By: /s/ Karl Eller
----------- -------------------------
Its:
Address: c/o Eller Media Corporation
2850 E. Camelback Road, Suite 300
Phoenix, AZ 85016
