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EXHIBIT 1.2
4,500,000 SHARES
▇▇▇▇▇ ADVERTISING COMPANY
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
DATED NOVEMBER 15, 2000
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UNDERWRITING AGREEMENT
November 15, 2000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ Advertising Company, a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Underwriter") an aggregate of 4,500,000
shares (the "Firm Shares") of its Class A Common Stock, par value $.001 per
share (the "Class A Common Stock"). In addition, the Company has granted to the
Underwriter an option to purchase up to an additional 675,000 shares (the
"Option Shares") of Class A Common Stock, as provided in Section 2. The Firm
Shares and, if and to the extent such option is exercised, the Option Shares are
collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants as follows:
(a) A registration statement on Form S-3 (File No. 333-48288) with
respect to, among other securities, the Company's Class A Common Stock has been
filed with the Securities and Exchange Commission (the "Commission") under the
Act and has become effective. On the effective date of such registration
statement, such registration statement conformed in all material respects with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations of the Commission (the "Rules and Regulations"). Copies of
such registration statement, including any amendments thereto, the preliminary
prospectuses contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, including any documents
incorporated therein by reference and any exhibits, financial statements and
schedules thereto, herein referred to as the "Registration Statement," has been
declared effective by the Commission under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date of this
Agreement. The form of prospectus dated November 2, 2000 included in the
Registration Statement, as supplemented by the prospectus supplement, dated the
date of this Agreement, relating to the offering of the Firm Shares and the
Option Shares and filed by the Company with the Commission pursuant to Rule
424(b), are herein referred to collectively as the "Prospectus." Any reference
herein to the Registration Statement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein, as of the date
of such Registration Statement or Prospectus, as the case may be, and, in the
case of any reference herein to any Prospectus, also shall be deemed to include
any documents incorporated
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by reference therein, and any supplements or amendments relating to the Shares
being issued and sold pursuant hereto, filed with the Commission under Rule
424(b), and prior to the termination of the offering of the Shares by the
Underwriter.
(b) Except as otherwise disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Prospectus: (i) there
has been no material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and
its subsidiaries, considered as one entity (any such change is called a
"Material Adverse Change"); (ii) the Company and its subsidiaries, considered as
one entity, have not incurred any material liability or obligation, indirect,
direct or contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared, paid
or made by the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; the subsidiaries listed on
Schedule I hereto (the "Subsidiaries") are the only subsidiaries of the Company;
the Subsidiaries have been duly organized and are validly existing entities in
good standing under the laws of their jurisdiction of organization, with
corporate power and authority to own or lease their properties and conduct their
business as described in the Registration Statement, except where the failure so
to be in good standing would not, individually or in the aggregate, result in a
Material Adverse Change. The Company and the Subsidiaries are duly qualified to
transact business in all jurisdictions in which the conduct of their business
requires such qualification, except where the failure so to qualify would not
result in a Material Adverse Change; the outstanding shares of capital stock of
the Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable; and, except as indicated on Schedule I hereto, all of the
shares of capital stock of the Subsidiaries are owned by the Company (free and
clear of all liens, encumbrances and security interests (other than as described
in the Registration Statement) which would not reasonably be expected
individually or in the aggregate to materially impair the value of such shares,
and no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares of
capital stock or ownership interests of the Subsidiaries are outstanding. Except
for the Subsidiaries and investments in securities as described in the
Registration Statement, the Company has no equity or other interest in, or right
to acquire an equity or other interest in, any corporation, partnership, trust
or other entity.
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(d) The outstanding shares of Class A Common Stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable;
the Shares to be issued and sold by the Company have been duly authorized and
when issued and paid for as contemplated herein will be validly issued,
fully-paid and non-assessable; and no preemptive rights of stockholders exist
with respect to any of the Shares or the issue and sale thereof.
(e) The Shares conform with the statements concerning them in the
Registration Statement.
(f) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor
instituted proceedings for that purpose. The Registration Statement contains and
the Prospectus and any amendments or supplements thereto will contain all
statements which are required to be stated therein by, and in all material
respects conform or will conform, as the case may be, to the requirements of,
the Act and the Rules and Regulations. The documents incorporated by reference
in the Prospectus, at the time they were filed or will be filed with the
Commission, conformed or will conform at the time of filing, in all material
respects to the requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or the Act, as applicable, and the Rules and Regulations of
the Commission thereunder. Neither the Registration Statement nor any amendment
thereto, and neither the Prospectus nor any supplement thereto, including any
documents incorporated by reference therein, contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or incorporated by reference or any
such amendment or supplement or any documents incorporated by reference therein,
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of the Underwriter, specifically for use in the
preparation thereof.
(g) The consolidated financial statements of the Company and its
subsidiaries, together with related notes and schedules, as set forth or
incorporated by reference in the Registration Statement, present fairly the
consolidated financial position and the consolidated results of operations of
the Company and its subsidiaries at the indicated dates and for the indicated
periods. All such financial statements have been prepared in accordance with
generally accepted principles of accounting, consistently applied throughout the
periods involved, except as disclosed therein. The summary and selected
financial and statistical data included or incorporated by reference in the
Registration Statement present fairly in all material respects the
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information shown therein and have been compiled on a basis consistent with the
financial statements presented therein. The (i) pro forma condensed consolidated
statement of operations of the Company and its subsidiaries and the related
notes thereto, included as Exhibit 99.1 to the Company's Current Report on Form
8-K filed with the Commission on September 6, 2000, (ii) pro forma condensed
consolidated statement of operations of the Company and its subsidiaries and the
related notes thereto, included as Exhibit 99.1 to the Company's Current Report
on Form 8-K dated February 8, 2000 and filed with the Commission on February 9,
2000, (iii) pro forma condensed consolidated statement of earnings (loss) of the
Company and its subsidiaries and the related notes thereto and pro forma
condensed consolidated balance sheet of the Company, included as Exhibit 99.2 to
the Company's Current Report on Form 8-K dated November 22, 1999 and filed with
the Commission on November 23, 1999, and (iv) pro forma condensed consolidated
statement of operations of the Company and its subsidiaries and the related
notes thereto and pro forma condensed consolidated balance sheet of the Company,
included as Exhibit 99.2 to the Company's Current Report on Form 8-K dated July
6, 1999 and filed with the Commission on July 7, 1999, present fairly the
information contained therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly presented on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(h) After due inquiry, the Company has no reason to believe that the
consolidated balance sheet and consolidated statement of operations,
stockholders' deficit and cash flow of Chancellor Media Outdoor Corporation (the
"Updated Chancellor Media Financials") included as Exhibit 99.1 to the Company's
Current Report on Form 8-K dated November 22, 1999 and filed with the Commission
on November 23, 1999, do not fairly present the consolidated financial position,
results of operations, changes in stockholder's equity and cash flows described
therein on the basis described therein at the respective dates or for the
respective periods to which they apply or that the Updated Chancellor Financials
have not been prepared in accordance with generally accepted accounting
principles consistently applied, except as described therein.
(i) After due inquiry, the Company has no reason to believe that the
(i) consolidated balance sheets, consolidated statements of operations, equity
and cash flows of Chancellor Media Outdoor Corporation (the "Chancellor Media
Financials"), (ii) statements of income, divisional equity and cash flows,
balance sheets, and statements of income and cash flows of Whiteco Industries,
Inc. (the "Whiteco Financials"), (iii) statements of operations, partners'
capital and cash flows, balance sheets, and statements of operations, partners'
capital (deficit) and cash flows of ▇▇▇▇▇▇ Media L.P. (the "▇▇▇▇▇▇ Media
Financials"), and (iv) statements of operations, retained earnings and cash
flows, balance sheets, statements of income, retained earnings and cash flows of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, Inc. (the "▇▇▇▇▇▇ & MacFarlane Financials,"
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collectively, with the Chancellor Media Financials, the ▇▇▇▇▇▇ Media Financials
and the Whiteco Financials, the "Chancellor Financials"), included as Exhibit
99.1 to the Company's Current Report on Form 8-K dated July 6, 1999 and filed
with the Commission on July 7, 1999,), do not fairly present the consolidated
financial position, results of operations, changes in stockholder's equity and
cash flows of the entities described therein on the basis described therein at
the respective dates or for the respective periods to which they apply or that
the Chancellor Financials have not been prepared in accordance with generally
accepted accounting principles consistently applied, except as described
therein.
(j) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
applicable requirements of the Exchange Act, and, when read together with the
other information in the Prospectus, at the time the Registration Statement and
any amendment thereto become effective, at the date of the Prospectus and at the
First Closing Date and the Second Closing Date, as the case may be, do not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(k) There is no action or proceeding pending or, to the knowledge of
the Company, threatened against the Company or the Subsidiaries before any court
or administrative agency or by any regulatory authority that may reasonably be
expected to result in a Material Adverse Change.
(l) The Company and the Subsidiaries have good and marketable title to
all of the properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Registration Statement) or
which are not material in amount. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases conforming to the description
thereof set forth in the Registration Statement, with such exceptions as would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change or materially impair the value of such leasehold estate
to the Company or such Subsidiary.
(m) The Company and the Subsidiaries have filed all Federal, State and
foreign income tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments received by them or any
of them to the extent that such taxes have become due and are not being
contested in good faith, except for such failure to file or defaults in payment
of a character not required to be disclosed in the Prospectus and that would not
reasonably be expected to result in a Material Adverse Change.
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(n) Neither the Company nor any of the Subsidiaries is, nor with the
giving of notice, lapse of time or both, will be, in default under its
Certificate of Incorporation or By-Laws or any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it or any of its properties is bound and which default is of material
significance in respect of the business or financial condition of the Company
and the Subsidiaries taken as a whole. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party, or of the Charter or By-Laws of the Company or the Subsidiaries or any
order, rule or regulation applicable to the Company or any of the Subsidiaries
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction which conflict, breach or default would
result in a Material Adverse Change.
(o) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or may be necessary to
qualify the Shares for public offering by the Underwriter under State securities
or Blue Sky laws) has been obtained or made and is in full force and effect.
(p) The Company and each of the Subsidiaries hold all material
licenses, consents, authorizations, approvals, orders, certificates and permits
(collectively, "Licenses") of and from, all federal, state, local, foreign and
other governmental authorities, all self-regulatory organizations in each case
as required for the conduct of the business in which it is engaged, and each
such License is in full force and effect, except to the extent that the failure
to obtain or maintain any such License would not result in a Material Adverse
Change.
(q) The Company and the Subsidiaries are in compliance with all
applicable federal, state, foreign and local laws and regulations relating to
(i) zoning, land use, protection of the environment, human health and safety or
hazardous or toxic substances, wastes, pollutants or contaminants and (ii)
employee or occupational safety, discrimination in hiring, promotion or pay of
employees, employee hours and wages or employee benefits, except where such
noncompliance would not, singly or in the aggregate, result in a Material
Adverse Change.
(r) KPMG LLP, who have certified the financial statements of the
Company filed with the Commission as part of, or incorporated by reference in,
the Registration Statement, are independent public accountants as required by
the Act and the Rules and Regulations.
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(s) PricewaterhouseCoopers LLP, who have certified the Chancellor Media
Financials and certain of the Whiteco Financials, the ▇▇▇▇▇▇ Media Financials
and the ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ Financials filed with the Commission as part of, or
incorporated by reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(t) BDO ▇▇▇▇▇▇▇ LLP, who have certified certain of the Whiteco
Financials filed with the Commission as part of, or incorporated by reference
in, the Registration Statement, are independent public accountants as required
by the Act and the Rules and Regulations.
(u) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain of the ▇▇▇▇▇▇ Media
Financials and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ Financials filed with the Commission as part
of, or incorporated by reference in, the Registration Statement, are independent
public accountants as required by the Act and the Rules and Regulations.
(v) Barbich ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇, Accounting Corporation, who have
certified certain of the ▇▇▇▇▇▇ & MacFarlane Financials filed with the
Commission as part of, or incorporated by reference in, the Registration
Statement, are independent public accountants as required by the Act and the
Rules and Regulations.
(w) The Company has never been, is not now, and immediately after the
sale of the Shares under this Agreement will not be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(x) The Shares of the Company to be sold under this Agreement (subject
to the additional approval of the shares, if any, being registered pursuant to
Rule 462(b)) have been approved for listing on the Nasdaq Stock Market subject
to official notice of issuance, if required.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Firm Shares. On the basis of the representations, warranties
and agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Company agrees to issue and sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, the Firm
Shares. The purchase price per Firm Share to be paid by the Underwriter to the
Company shall be $44.125 per share.
(b) The First Closing Date. Delivery of certificates for the Firm
Shares to be purchased by the Underwriter and payment therefor shall be made at
the offices of the Underwriter, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (or such other
place as may be agreed to by the Company and the Underwriter) at 6:00 a.m. New
York time, on November 20, 2000 or such
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other time and date not later than 10:30 a.m. New York time, on November 20,
2000 as the Underwriter shall designate by notice to the Company (the time and
date of such closing are called the "First Closing Date").
(c) The Option Shares; the Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the Underwriter to purchase up to an aggregate of
675,000 Option Shares from the Company at the purchase price per share to be
paid by the Underwriter for the Firm Shares. The option granted hereunder is for
use by the Underwriter solely in covering any over-allotments in connection with
the sale and distribution of the Firm Shares. The option granted hereunder may
be exercised at any time (but not more than once) upon notice by the Underwriter
to the Company, which notice may be given at any time within 30 days from the
date of this Agreement. Once given in writing, such notice shall be irrevocable.
Such notice shall set forth (i) the aggregate number of Option Shares as to
which the Underwriter is exercising the option, (ii) the names and denominations
in which the certificates for the Option Shares are to be registered and (iii)
the time, date and place at which such certificates will be delivered (which
time and date may be simultaneous with, but not earlier than, the First Closing
Date; and in such case the term "First Closing Date" shall refer to the time and
date of delivery of certificates for the Firm Shares and the Option Shares).
Such time and date of delivery, if subsequent to the First Closing Date, is
called the "Second Closing Date" and shall be determined by the Underwriter and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise, except that if such time and date of
delivery are to occur simultaneously with the First Closing Date, the
Underwriter shall give the Company at least one business day's notice thereof.
(d) Payment for the Shares. Payment for the Shares shall be made at the
First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer of immediately available funds to the order of the Company.
(e) Delivery of the Shares. The Company shall deliver, or cause to be
delivered, to the Underwriter for the account of the Underwriter certificates
for the Firm Shares at the First Closing Date, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be delivered, to the
Underwriter for the accounts of the Underwriter, certificates for the Option
Shares the Underwriter has agreed to purchase at the First Closing Date or the
Second Closing Date, as the case may be, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The certificates for the Shares shall be in definitive form and
registered in such names and denominations as the Underwriter shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day
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preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Underwriter may designate. Time shall
be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriter.
SECTION 3. PUBLIC OFFERING OF THE SHARES.
The Underwriter hereby advises the Company that the Underwriter intends
to offer the Shares for sale as described in the Prospectus as soon after this
Agreement has been executed as the Underwriter, in its sole judgment, has
determined is advisable and practicable.
SECTION 4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the Underwriter that:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a supplementary prospectus
setting forth such other information and the terms of the offering contemplated
by Section 2 hereof, (ii) not file any amendment to the Registration Statement
or supplement to the Prospectus or document incorporated by reference therein of
which the Underwriter shall not previously have been advised and furnished with
a copy or to which the Underwriter shall have reasonably objected in writing or
which is not in compliance with the Rules and Regulations and (iii) file on a
timely basis all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission subsequent to the date
of the Prospectus and prior to the termination of the offering of the Shares by
the Underwriter.
(b) The Company will advise the Underwriter promptly of any request of
the Commission for amendment of the Registration Statement or for supplement to
the Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any proceedings
for that purpose, and the Company will use all reasonable efforts to prevent the
issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will deliver to, or upon the order of, the Underwriter
during the period when delivery of a Prospectus is required under the Act, as
many copies of the Prospectus in final form, or as thereafter amended or
supplemented, as the Underwriter may reasonably request; provided, however, that
if the Underwriter is required to deliver a prospectus in connection with sales
of any shares at any time nine months or more after the date of this Agreement,
upon your request, but at the expense of the Underwriter, the Company will
prepare
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and deliver to the Underwriter such copies of an amended and supplemented
Prospectus as you may reasonably request. The Company will deliver to the
Underwriter at or before the Closing Date, four complete conformed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Underwriter such number of copies of the
Registration Statement, including documents incorporated by reference therein,
and of all amendments thereto, as the Underwriter may reasonably request.
(d) If during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer any event shall occur as a result of
which, in the judgment of the Company or in the opinion of counsel for the
Underwriter, it becomes necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, not misleading, or, if it
is necessary at any time to amend or supplement the Prospectus to comply with
the Act, the Company promptly will, at its election, either (i) prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus or (ii) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be incorporated by
reference in the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law.
(e) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.
(f) The Company will, for a period of five years from the Closing Date,
deliver to the Underwriter copies of annual reports and copies of all other
documents, reports and information furnished by the Company to its stockholders
or filed with any securities exchange pursuant to the requirements of such
exchange or with the Commission pursuant to the Act or the Exchange Act.
(g) No offering, sale or other disposition of any Class A Common Stock
of the Company or any other securities convertible or exchangeable or
exercisable for Class A Common Stock or derivatives of Class A Common Stock,
will be made for a period of 90 days after the date of this Agreement, directly
or indirectly, by the Company otherwise than hereunder or with the prior written
consent of the Underwriter except that the Company may, without such consent,
(i) issue shares of Class A Common Stock in connection with the pending
acquisitions or
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otherwise as consideration for the acquisition of additional outdoor advertising
or logo sign assets, (ii) issue shares upon the exercise of options outstanding
on the date of this Agreement and disclosed in the Company's filings with the
Commission or otherwise pursuant to the Company's 1996 Equity Incentive Plan and
(iii) issue shares pursuant to the Company's 2000 Employee Stock Purchase Plan.
SECTION 5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriter copies of the
Registration Statement, the Prospectus and this Agreement; the filing fees of
the Commission; the filing fees and expenses incident to securing any required
review by the NASD of the terms of the sale of the Shares; and the fees and
expenses incurred with respect to the listing of the Shares on the Nasdaq Stock
Market. The Company shall not, however, be required to pay for any of the
Underwriter' expenses except that, if this Agreement shall not be consummated
because the conditions in Section 7 hereof are not satisfied, or because this
Agreement is terminated by the Underwriter pursuant to Section 6 hereof, or by
reason of any failure, refusal or inability on the part of the Company to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on its part to be performed, unless such failure to
satisfy said condition or to comply with said terms be due to the default or
omission of the Underwriter, then the Company shall reimburse the Underwriter
for reasonable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the Shares or in contemplation of performing its obligations
hereunder; but the Company shall in no event be liable to the Underwriter for
damages on account of loss of anticipated profits from the sale by it of the
Shares.
SECTION 6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
The obligations of the Underwriter to purchase the Firm Shares on the
Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy in all material respects, as of the Closing Date or the
Option Closing Date, as the case may be, of the representations and warranties
of the Company contained herein, and to the performance by the Company in all
material respects, of its covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule
424, and any request of the
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Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriter and
complied with to its reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company, shall be contemplated by the Commission.
(b) (i) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of ▇▇▇▇▇▇ & Dodge LLP,
counsel for the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriter to the effect that:
(A) The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware, with
corporate power and authority to own, and hold under lease,
its properties and conduct its business as described in the
Prospectus.
(B) The Shares conform in all material respects to the
description thereof contained in the Prospectus; and the
certificates for the Shares are in due and proper form.
(C) The Shares to be sold by the Company pursuant to this
Agreement have been duly authorized and will be validly
issued, fully paid and non-assessable when issued and paid for
as contemplated by this Agreement; and no statutory preemptive
rights of stockholders or, to the best of such counsel's
knowledge, any other preemptive rights exist with respect to
any of the Shares or the issue and sale thereof.
(D) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are
pending or threatened under the Act.
(E) The Registration Statement, the Prospectus and each
amendment or supplement thereto filed with the Commission on
or prior to the date of such opinion comply as to form in all
material respects with the requirements of the Act and the
applicable rules and regulations thereunder in effect as of
the time of such filing (except that such counsel need express
no opinion as to the financial statements, schedules and other
financial information included therein).
(F) Each document incorporated by reference in the
Registration Statement, the Prospectus and each amendment or
supplement thereto filed with the
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Commission on or prior to the date of such opinion complied as
to form at the time of such filing in all material respects
with the applicable requirements (if any) of the Exchange Act
and the applicable rules and regulations thereunder in effect
as of the date of such filing (except that such counsel need
express no opinion as to the financial statements, schedules
and other financial information included therein).
(G) The conditions for the use of Form S-3 as the proper form
for the Registration Statement have been satisfied.
(H) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated, do not
and will not violate the Certificate of Incorporation or
By-Laws of the Company, or result in a breach of any of the
terms or provisions of, or constitute a default under, any
material agreement or instrument of which such counsel has
knowledge to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries may
be bound (each a "Contractual Obligation"), and which
conflict, breach or default could reasonably be expected to
result in a Material Adverse Change.
(I) This Agreement has been duly authorized, executed and
delivered by the Company.
(J) Except for approvals, consents, orders, authorizations,
designations, declarations or filings which have been waived,
or which have been obtained or made, no approval, consent,
order, authorization, designation, declaration or filing by or
with any regulatory, administrative or other governmental body
is necessary in connection with the execution and delivery by
the Company of this Agreement and the consummation by the
Company of the transactions herein contemplated (other than as
may be required by the NASD or as required by State securities
and Blue Sky laws as to which such counsel need express no
opinion).
(K) The Company is not, and will not become as a result of the
consummation of the transactions contemplated by this
Agreement, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and has not been
an "investment company" at any time since 1988.
In rendering such opinion, ▇▇▇▇▇▇ & Dodge LLP may rely as to
matters governed by the laws of states other than the Delaware General Corporate
Law or Federal laws on local counsel in such jurisdictions provided that in each
case ▇▇▇▇▇▇ & Dodge LLP shall state that they believe that they and the
Underwriter are justified in relying on such other counsel and such other
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counsel's opinion is also delivered to the Underwriter. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which causes them
to believe that (A) the Registration Statement, as of the time it became
effective under the Act and as of the Closing Date or the Option Closing Date,
as the case may be, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) the Prospectus or any supplement
thereto, on the date it was filed pursuant to Rules and Regulations and as of
the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading (except that such
counsel need express no view as to financial statements and the notes thereto,
schedules and other financial and statistical information included or
incorporated by reference therein). With respect to such statement, ▇▇▇▇▇▇ &
Dodge LLP may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.
(ii) The Underwriter shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Kean, Miller,
Hawthorne, ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Company, dated
the Closing Date or the Option Closing Date, as the case may be, addressed to
the Underwriter to the effect that:
(A) Based upon appropriate certificates of public officials
(which shall be furnished to the Underwriter with the
opinion), each of the Subsidiaries incorporated or organized
as a corporation, partnership or limited liability company has
been duly incorporated or organized and is validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or organization with corporate or other
organizational power and authority to own, and hold under
lease, its properties and conduct its business as described in
the Prospectus.
(B) Based upon appropriate certificates of public officials
(which shall be furnished to the Underwriter with the
opinion), the Company is duly qualified to transact business
as a foreign corporation and is in good standing under the
laws of each of the jurisdictions in which the conduct of its
business requires such qualification, except to the extent
that the failure to qualify would not, in the aggregate,
reasonably be expected to result in a Material Adverse Change.
(C) The outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable. To the best knowledge of
such counsel, the shares of capital stock of the Subsidiaries
are
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owned by the Company or one of the other Subsidiaries free and
clear of all liens, encumbrances and security interests, and
except as disclosed in the Registration Statement, no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership
interests of the Subsidiaries are outstanding.
(D) The Company's Class A and Class B Common Stock have been
duly authorized; the outstanding shares of its Class A Common
Stock have been duly authorized and validly issued and are
fully paid and non-assessable.
(E) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by
reference in the Registration Statement or described in the
Registration Statement or the Prospectus which are not so
filed, incorporated by reference or described as required.
(F) Such counsel knows of no material legal proceedings or
regulatory or other claims pending or threatened against the
Company or the Subsidiaries of a character required to be
reflected in the Prospectus that are not set forth in the
Prospectus.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the attention of
such counsel which causes them to believe that (A) the Registration Statement,
as of the time it became effective under the Act and as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and (B) the
Prospectus or any supplement thereto, on the date it was filed pursuant to Rules
and Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading (except that such counsel need express no view as to financial
statements and the notes thereto, schedules and other financial and statistical
information included or incorporated by reference therein).
(iii) The Underwriter shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esquire, general counsel of the Company, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriter to the
effect that: The statements in the Prospectus under the caption "Risk Factors --
Our operations are impacted by the regulation of outdoor advertising" and
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999 under the
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caption "Business -- Regulation" insofar as such statements constitute a summary
of regulatory matters relating to the outdoor advertising industry, fairly
describe the regulatory matters relating to such industry.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the attention of
such counsel which causes him to believe that (A) the Registration Statement, as
of the time it became effective under the Act and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and (B) the
Prospectus or any supplement thereto, on the date it was filed pursuant to Rules
and Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made not misleading (except that such counsel need express no view as to
financial statements, and the notes thereto, schedules and other financial and
statistical information included or incorporated by reference therein).
(c) The Underwriter shall have received from ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP,
counsel for the Underwriter, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (C), (D), (E) and (I) of Paragraph (b)(i) of this Section 6, and
that the Company is a validly existing corporation in good standing under the
laws of the State of Delaware. In rendering such opinion ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
may rely as to all matters governed other than by the laws of the State of New
York, the Delaware General Corporation Law or Federal laws on the opinion of
counsel referred to in paragraph (b) of this Section 6. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads them
to believe that (A) the Registration Statement, as of the time it became
effective under the Act and as of the Closing Date or the Option Closing Date,
as the case may be, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, and (B) the Prospectus or any supplement thereto, on the date it was
filed pursuant to Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (except that such
counsel need express no view as to financial statements, schedules and other
financial information included or incorporated by reference therein). With
respect to such statement, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP may state that their belief is
based upon the procedures set forth therein, but is without independent check
and verification.
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(d) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter with respect to the
financial statements of the Company and certain financial information relating
to the Company included or incorporated by reference in the Registration
Statement and the Prospectus from KPMG LLP, dated the Closing Date or the Option
Closing Date, as the case may be, which shall confirm, on the basis of a review
in accordance with the procedures set forth in the letter signed by such firm
and dated and delivered to the Underwriter on the date hereof, that nothing has
come to their attention during the period from the date five days prior to the
date hereof, to a date not more than three days prior to the Closing Date or the
Option Closing Date, as the case may be, which would require any change in their
letter dated the date hereof if it were required to be dated and delivered on
the Closing Date or the Option Closing Date, as the case may be. Such letter
shall be in form and substance satisfactory to the Underwriter. The letter from
KPMG LLP shall confirm that they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial Information,
on the unaudited balance sheet data of the Company as of September 30, 2000 and
the unaudited income and cash flow information of the Company for the nine month
periods ended September 30, 1999 and 2000, included in the Registration
Statement.
(e) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from
PricewaterhouseCoopers LLP, dated the Closing Date or the Option Closing Date,
as the case may be, relating to certain financial statements of Chancellor Media
Outdoor Corporation, The Outdoor Division of Whiteco Industries, Inc., ▇▇▇▇▇▇
Media L.P. and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, Inc., incorporated by reference in the
Registration Statement and the Prospectus, which shall confirm, on the basis of
a review in accordance with the procedures set forth in the letter signed by
such firm and dated and delivered to the Underwriter on the date hereof, that
nothing has come to their attention during the period from the date five days
prior to the date hereof, to a date not more than three days prior to the
Closing Date or the Option Date, as the case may be, which would require any
change in their letter dated the date hereof if such letter were required to be
dated and delivered on the Closing Date or the Option Closing Date, as the case
may be. Such letter shall be in form and substance satisfactory to the
Underwriter.
(f) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from BDO ▇▇▇▇▇▇▇ LLP,
dated the Closing Date or the Option Closing Date, as the case may be, relating
to certain financial statements of The Outdoor Advertising Division of Whiteco
Industries, Inc., incorporated by reference in the Registration Statement and
the Prospectus, which shall confirm, on the basis of a review in accordance with
the procedures set forth in the letter signed by such firm and dated and
delivered to the Underwriter on the date hereof, that nothing has come to their
attention during the period from
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the date five days prior to the date hereof, to a date not more than three days
prior to the Closing Date or the Option Date, as the case may be, which would
require any change in their letter dated the date hereof if such letter were
required to be dated and delivered on the Closing Date or the Option Closing
Date, as the case may be. Such letter shall be in form and substance
satisfactory to the Underwriter.
(g) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from Barbich,
Longcrier, ▇▇▇▇▇▇ & ▇▇▇▇, dated the Closing Date or the Option Closing Date, as
the case may be, relating to certain financial statements of ▇▇▇▇▇▇ &
MacFarlane, Inc., incorporated by reference in the Registration Statement and
the Prospectus, which shall confirm, on the basis of a review in accordance with
the procedures set forth in the letter signed by such firm and dated and
delivered to the Underwriter on the date hereof, that nothing has come to their
attention during the period from the date five days prior to the date hereof, to
a date not more than three days prior to the Closing Date or the Option Date, as
the case may be, which would require any change in their letter dated the date
hereof if such letter were required to be dated and delivered on the Closing
Date or the Option Closing Date, as the case may be. Such letter shall be in
form and substance satisfactory to the Underwriter.
(h) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
LLP, dated the Closing Date or the Option Closing Date, as the case may be,
relating to certain financial statements of ▇▇▇▇▇▇ Media L.P. and ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇, Inc., incorporated by reference in the Registration Statement and
the Prospectus, which shall confirm, on the basis of a review in accordance with
the procedures set forth in the letter signed by such firm and dated and
delivered to the Underwriter on the date hereof, that nothing has come to their
attention during the period from the date five days prior to the date hereof, to
a date not more than three days prior to the Closing Date or the Option Date, as
the case may be, which would require any change in their letter dated the date
hereof if such letter were required to be dated and delivered on the Closing
Date or the Option Closing Date, as the case may be. Such letter shall be in
form and substance satisfactory to the Underwriter.
(i) The Underwriter shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents in such capacity as follows:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been taken or are, to
his knowledge, contemplated by the Commission.
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(ii) He does not know of any litigation instituted or
threatened against the Company or any of the Subsidiaries of a character
required to be disclosed in the Registration Statement which is not so
disclosed; he does not know of any material contract required to be filed as an
exhibit to the Registration Statement which is not so filed; and the
representations and warranties of the Company contained in Section 1 hereof are
true and correct in all material respects as of the Closing Date or the Option
Closing Date, as the case may be.
(iii) He has carefully examined the Registration Statement and
the Prospectus and, in his opinion, as of the effective date of the Registration
Statement, the statements contained in the Registration Statement, including any
documents incorporated by reference therein, were true and correct in all
material respects, and such Registration Statement and Prospectus or any
document incorporated by reference therein did not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances in which they were made, not misleading
and, in his opinion, since the effective date of the Registration Statement, no
event has occurred which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in such supplement
or amendment.
(j) The Company shall have furnished to the Underwriter such further
certificates and documents confirming the representations and warranties
contained herein and related matters as the Underwriter may reasonably have
requested.
(k) The Firm Shares, and Option Shares, if any, have been approved for
listing upon official notice of issuance on the Nasdaq Stock Market, if
required.
(l) The Underwriter shall have received from each executive officer,
director and stockholder of the Company listed on Schedule II a letter or
letters, in form and substance satisfactory to the Underwriter, pursuant to
which such person shall agree not to offer, sell, sell short or otherwise
dispose of any shares of Common Stock of the Company or other capital stock of
the Company, or any other securities convertible, exchangeable or exercisable
for Common Stock or derivative of Common Stock owned by such person (or as to
which such person has the right to direct the disposition of) for a period of 90
days after the date of this Agreement, except with the prior written consent of
the Underwriter or except as may be expressly permitted by the terms of such
letter or letters.
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The opinions and certificates mentioned in this Agreement shall be deemed to be
in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Underwriter and to ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel
for the Underwriter.
If any of the conditions hereinabove provided for in this Section 6 shall not
have been fulfilled when and as required by this Agreement to be fulfilled, the
obligations of the Underwriter hereunder may be terminated by the Underwriter by
notifying the Company of such termination in writing or by telegram at or prior
to the Closing Date or the Option Closing Date, as the case may be.
In such event, the Company and the Underwriter shall not be under any obligation
to each other (except to the extent provided in Sections 5, 8 and 9 hereof).
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
SECTION 8. INDEMNIFICATION
(a) Indemnification of the Underwriter. The Company agrees to indemnify
and hold harmless the Underwriter, its officers and employees, and each person,
if any, who controls the Underwriter within the meaning of the Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which the Underwriter or such controlling person may become subject, under
the Act, the Exchange Act or other federal or state statutory law or regulation,
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A or Rule 434 under the Act, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse the
Underwriter and each such controlling person for any
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and all expenses (including the fees and disbursements of counsel chosen by the
Underwriter) as such expenses are reasonably incurred by the Underwriter or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Underwriter
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto); and provided, further,
that with respect to the Prospectus, the foregoing indemnity agreement shall not
inure to the benefit of the Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Shares, or any person controlling
the Underwriter, if copies of an amendment or supplement to such Prospectus were
timely delivered to the Underwriter pursuant to Section 2 and a copy of such
amendment or supplement was not sent or given by or on behalf of the Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if such
amendment or supplement would have cured the defect contained in the Prospectus
giving rise to such loss, claim, damage, liability or expense. The indemnity
agreement set forth in this Section 8(a) shall be in addition to any liabilities
that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or arises out of or is
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Underwriter expressly for
use therein; and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person
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in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action. The Company hereby
acknowledges that the only information that the Underwriter has furnished to the
Company expressly for use in the Registration Statement or the Prospectus (or
any amendment or supplement thereto) are the statements set forth as [the second
and sixth] paragraphs under the caption "Underwriting" in the Prospectus
Supplement; and the Underwriter confirms that such statements are correct. The
indemnity agreement set forth in this Section 8(b) shall be in addition to any
liabilities that the Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (the Underwriter in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party
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to represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriter, on the
other hand, from the offering of the Shares pursuant to this Agreement or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company, on the one hand, and the Underwriter, on the other hand, in connection
with the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Underwriter, on the
other hand, in connection with the offering of the Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Shares pursuant to this Agreement (before
deducting
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expenses) received by the Company, and the total underwriting compensation
actually received by the Underwriter. The relative fault of the Company, on the
one hand, and the Underwriter, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company, on the one hand, or the
Underwriter, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 9.
SECTION 10. NOTICES.
All communications hereunder shall be in writing and shall be mailed,
hand delivered or telecopied and confirmed to the parties hereto as follows:
If to the Underwriter:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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If to the Company:
▇▇▇▇▇ Advertising Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
with a copy to:
▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 11. TERMINATION.
This Agreement may be terminated by you by notice to the Company as
follows:
(a) at any time after the date hereof and prior to the Closing if any
of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and the Subsidiaries taken as a whole or the earnings, business affairs,
management or business prospects of the Company and the Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity or
crisis or change in economic or political conditions if the effect of such
outbreak, escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your judgment, make the
offering or delivery of the Shares impracticable, (iii) trading in securities on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited (other than limitations
on hours or numbers of days of trading) or minimum prices shall have been
established for securities on either such Exchange, (iv) declaration of a
banking moratorium by either federal or New York State authorities, (v) any
downgrading in the rating of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g)
25
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under the Securities Exchange Act of 1934, as amended); (vi) the taking of any
action by any governmental body or agency in respect of its monetary or fiscal
affairs which in your opinion has a material adverse effect on the securities
markets in the United States or elsewhere; or (vii) any litigation or proceeding
is pending or threatened against the Underwriter which seeks to enjoin or
otherwise restrain, or seeks damages in connection with, or questions the
legality or validity of this Agreement or the transactions contemplated hereby;
or
(b) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company as to any
obligation of the Underwriter to purchase the Option Shares, upon the occurrence
at any time prior to the Option Closing Date of any of the events described in
subparagraph (a) above or as provided in Sections 6 and 9 of this Agreement.
SECTION 12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9, and in each case
their respective successors, and personal representatives, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Shares as such from the Underwriter merely by
reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
SECTION 15. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two
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or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement and the Prospectus (and
any amendments and supplements thereto), as required by the Act and the Exchange
Act.
[The remainder of this page intentionally left blank.]
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
▇▇▇▇▇ ADVERTISING COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
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The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Underwriter in New York, New York as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Principal
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SCHEDULE I
Subsidiaries of ▇▇▇▇▇ Advertising Company*
STATE OR OTHER JURISDICTION OF
NAME INCORPORATION OR ORGANIZATION
---- -----------------------------
▇▇▇▇▇ Media Corp. Delaware
Interstate Logos, Inc. Delaware
American Signs, Inc. Washington
Canadian TODS Limited Nova Scotia, Canada
Colorado Logos, Inc. Colorado
Delaware Logos, LLC Delaware
▇▇▇▇▇▇▇ Company, Incorporated Virginia
Florida Logos, Inc. Florida
▇▇▇▇▇▇ Development Corporation Florida
Kansas Logos, Inc. Kansas
Kentucky Logos, LLC Kentucky
▇▇▇▇▇ Advertising of Ashland, Inc. Kentucky
▇▇▇▇▇ Advertising of Colorado Springs, Inc. Colorado
▇▇▇▇▇ Advertising of Kentucky, Inc. Kentucky
▇▇▇▇▇ Advertising of Michigan, Inc. Michigan
▇▇▇▇▇ Advertising of South Dakota, Inc. South Dakota
▇▇▇▇▇ Advertising of West Virginia, Inc. West Virginia
Lamar Advertising of Youngstown, Inc. Delaware
Lamar Air, L.L.C. Louisiana
Lamar Electrical, Inc. Louisiana
▇▇▇▇▇ ▇▇▇▇▇▇ Corporation Delaware
▇▇▇▇▇ ▇▇ Sign Corporation Delaware
Lamar Nevada Sign Corporation Delaware
Lamar OCI North Corporation Delaware
Lamar OCI South Corporation Mississippi
▇▇▇▇▇ Outdoor Corporation Delaware
Lamar Pensacola Transit, Inc. Florida
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc. Missouri
Lamar Tennessee, L.L.C. Tennessee
Lamar Texas General Partner, Inc. Louisiana
Lamar Texas Limited Partnership Texas
▇▇▇▇▇ ▇▇▇▇ L.P. California
▇▇▇▇▇ ▇▇▇▇▇▇▇ Outdoor Corporation Delaware
Lindsay Outdoor Advertising, Inc. California
Michigan Logos, Inc. Michigan
Minnesota Logos, Inc. Minnesota
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STATE OR OTHER JURISDICTION OF
NAME INCORPORATION OR ORGANIZATION
---- -----------------------------
Missouri Logos, LLC Missouri
Nebraska Logos, Inc. Nebraska
Nevada Logos, Inc. Nevada
New Mexico Logos, Inc. New Mexico
Ohio Logos, Inc. Ohio
Outdoor Promotions West, LLC Delaware
▇▇▇▇▇▇▇ Development Company Florida
Revolution Outdoor Advertising, Inc. Florida
Scenic Outdoor Marketing & Consulting, Inc. California
South Carolina Logos, Inc. South Carolina
Tennessee Logos, Inc. Tennessee
Texas Logos, Inc. Texas
TLC Properties II, Inc. Texas
TLC Properties, Inc. Louisiana
TLC Properties, L.L.C. Louisiana
Transit America Las Vegas, L.L.C. Delaware
Triumph Outdoor Holdings, LLC Delaware
Triumph Outdoor Louisiana, LLC Delaware
Triumph Outdoor Rhode Island, LLC Delaware
Utah Logos, Inc. Utah
Virginia Logos, Inc. Virginia
The ▇▇▇▇▇ Company, L.L.C. Louisiana
▇▇▇▇▇ Advertising of Penn, LLC Delaware
▇▇▇▇▇ Advertising of Louisiana, L.L.C. Louisiana
▇▇▇▇▇ Florida, Inc. Florida
Lamar Advan, Inc. Pennsylvania
▇▇▇▇▇ Advertising of Iowa, Inc. Iowa
Lamar T.T.R., L.L.C. Arizona
▇▇▇▇▇ Advertising of Macon, L.L.C. Louisiana
Outdoor West, Inc. of Tennessee Georgia
Outdoor West, Inc. of Georgia ▇▇▇▇▇▇▇
▇▇▇▇▇ Advertising of Texas, Inc. Delaware
Lamar Advantage GP Company, LLC Delaware
Lamar Advantage LP Company, LLC Delaware
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STATE OR OTHER JURISDICTION OF
NAME INCORPORATION OR ORGANIZATION
---- -----------------------------
Lamar Advantage Outdoor Company, L.P. Delaware
Lamar Advantage Holding Company Delaware
Lamar Ember, Inc. Texas
▇▇▇▇▇ Oklahoma Holding Company, Inc. Oklahoma
▇▇▇▇▇ Advertising of Oklahoma, Inc. Oklahoma
Lamar Benches, Inc. Oklahoma
Lamar I-40 West, Inc. Oklahoma
Georgia Logos, L.L.C. Georgia
Mississippi Logos, L.L.C. Mississippi
New Jersey Logos, L.L.C. New Jersey
Oklahoma Logos, L.L.C. Oklahoma
Interstate Logos, L.L.C. Louisiana
Lamar Aztec, Inc. Michigan
LC Billboard L.L.C. Delaware
Lamar KYO, Inc. Mississippi
Lamar Ohio Outdoor Holding Corp. Ohio
▇▇▇▇▇▇▇ Advertising, Inc. Colorado
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Inc. New York
▇▇▇▇▇ ▇▇▇▇▇▇ Poster Corp. Pennsylvania
Missouri Logos, a Partnership Missouri
* All subsidiaries are 100% owned by ▇▇▇▇▇ Advertising Company, except for
Missouri Logos, a Partnership, in which ▇▇▇▇▇ Advertising Company holds a
66 2/3% partnership interest.
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SCHEDULE II
Lock-Up Letters
▇▇▇▇▇▇ Family Limited Partnership
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇