EXHIBIT 99.1
Clear Channel Communications, Inc.
Underwriting Agreement
New York, New York
March 12, 2003
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Clear Channel Communications, Inc., a Texas corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, the additional principal amount of its securities identified in
Schedule I hereto of the Company, to be issued under an indenture dated as of
October 1, 1997, between the Company and The Bank of New York, as trustee (the
"Trustee"), as amended by the Twelfth Supplemental Indenture dated as of March
17, 2003 (as so amended, the "Indenture") (said principal amount to be issued
and sold by the Company being hereinafter called the "Underwritten Securities").
The Company also proposes to grant to the Underwriters an option to purchase up
to the additional principal amount of its securities identified on Schedule II
(the "Option Securities"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "Securities"). If the firm or firms
listed in Schedule II hereto include only the firm or firms listed in Schedule I
hereto, then the terms "Underwriters" and "Representatives", as used herein,
shall each be deemed to refer to such firm or firms. To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, shall
except as specified therein, be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus,
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any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. The use of the
neuter in this Agreement shall include the feminine and masculine wherever
appropriate.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in Section 16
hereof.
(a) The Company meets the requirements for the use of Form S-3
under the Act and has filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto)
on such Form, including a basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may have
filed one or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission one of the following: (x) a
final prospectus supplement relating to the Securities in accordance
with Rules 430A and 424(b), (y) prior to the Effective Date of such
registration statement, an amendment to such registration statement,
including the form of final prospectus supplement, or (z) a final
prospectus in accordance with Rules 415 and 424(b). In the case of
clause (x), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Final Prospectus. As
filed, such final prospectus supplement or such amendment and form of
final prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein), and on any date on which Option Securities sold in respect of
the Underwriters' over-allotment option are purchased, if such date is
not the Closing Date (a "Settlement Date"), the Final Prospectus (and
any supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and The Trust
Indenture Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective
Date and on the Closing Date and any Settlement Date the Indenture did
or will comply in all material respects with the requirements of the
Trust Indenture Act and the rules thereunder; and, on the Effective
Date, the Final
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Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and
any Settlement Date, the Final Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order 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 (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished herein or in
writing to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto), it being
understood that the information referred to in this clause (b)(ii)
shall be limited to the information described in Section 7(b) hereof.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Texas, with corporate power and authority to own its properties and
conduct its business as described in the Final Prospectus; each of the
subsidiaries of the Company as listed on Schedule III hereto
(collectively, the "Subsidiaries") has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of
its organization, with power and authority to own or lease its
properties and conduct its business as described in the Final
Prospectus; the Company and each of the Subsidiaries are duly qualified
to transact business in all jurisdictions in which the conduct of their
business requires such qualification and a failure to qualify would
have a material adverse effect upon the business or financial condition
of the Company and the Subsidiaries taken as a whole; except as set
forth on Schedule III hereto, or as described in the Final Prospectus,
the outstanding shares of capital stock of each of the Subsidiaries
owned by the Company or a Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by the
Company or another subsidiary free and clear of all liens, encumbrances
and security interests 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 in the Subsidiaries are outstanding.
(d) The authorized shares of Common Stock of the Company have
been duly authorized. The outstanding shares of Common Stock of the
Company have been duly authorized and are validly issued, fully-paid
and non-assessable.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms.
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(f) The Indenture and the Securities conform in all material
respects with the statements concerning them in the Final Prospectus.
(g) The Commission has not issued an order preventing or
suspending the use of any Basic Prospectus, Preliminary Final
Prospectus or Final Prospectus relating to the proposed offering of the
Securities nor instituted proceedings for that purpose.
(h) The consolidated financial statements of the Company and
its subsidiaries, together with related notes and schedules
incorporated by reference in the Final Prospectus present fairly the
financial position and the results of operations of the Company and its
subsidiaries consolidated, at the indicated dates and for the indicated
periods. Such financial statements have been prepared in accordance
with generally accepted principles of accounting, consistently applied
throughout the periods involved, and all adjustments necessary for a
fair presentation of results for such periods have been made. The
selected and summary financial and statistical data included in the
Final Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements
incorporated by reference therein and the books and records of the
Company. The pro forma financial information included in the Final
Prospectus present fairly the information shown therein, have been
properly compiled on the pro forma bases described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
(i) Except for those license renewal applications of the
Company or its subsidiaries currently pending before the Federal
Communications Commission (the "FCC"), or as set forth in the Final
Prospectus or on Schedule III, there is no action or proceeding pending
or, to the knowledge of the Company, threatened against the Company or
any of the Subsidiaries before any court or administrative agency which
could reasonably be likely to result in any material adverse change in
the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) of the Company and of
the Subsidiaries (taken as a whole).
(j) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial
statements herein above described (or as described in the Final
Prospectus) subject to no material lien, mortgage, pledge, charge or
encumbrance of any kind, except those reflected in such financial
statements or as described in the Final Prospectus or set forth on
Schedule III. The Company and the Subsidiaries occupy their leased
properties under valid leases with such exceptions as are not material
to the Company and the subsidiaries taken as a whole and do not
materially interfere with the use made and proposed to be made of such
properties by the Company and the Subsidiaries.
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(k) 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. The
Company has no knowledge of any tax deficiency that has been or might
be asserted against the Company that would have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(l) Since the last date as of which information is given in
the Final Prospectus, as it may be amended or supplemented, there has
not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or business prospects of the Company and its
subsidiaries (taken as a whole), whether or not occurring in the
ordinary course of business, other than general economic and industry
conditions, changes in the ordinary course of business and changes or
transactions described or contemplated in the Final Prospectus, and
there has not been any material definitive agreement entered into by
the Company or the Subsidiaries, other than transactions in the
ordinary course of business and changes and transactions contemplated
by the Final Prospectus, as it may be amended or supplemented. None of
the Company or the Subsidiaries have any material contingent
obligations which are not disclosed in the Final Prospectus, as it may
be amended or supplemented.
(m) Neither the Company nor any of the Subsidiaries is or with
the giving of notice or lapse of time or both, will be in default under
its certificate or articles of incorporation, by-laws or partnership
agreements 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 its subsidiaries (taken as a whole). The execution and
delivery of this Agreement and the consummation of the transactions
herein contemplated 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 material agreement or instrument to which the Company or
any Subsidiary is a party, or of the certificate or articles of
incorporation, by-laws or partnership agreement of the Company or any
order, rule or regulation applicable to the Company or any Subsidiary,
or of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction, except in all cases a
conflict, breach or default which would not have a materially adverse
effect on the business or financial condition of the Company and the
subsidiaries (taken as a whole).
(n) 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
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such additional steps as may be required by the National Association of
Securities Dealers, Inc. ("NASD") or the New York Stock Exchange
("NYSE") or as may be necessary to qualify the Securities for public
offering by the Underwriters under State securities or Blue Sky laws)
has been obtained or made and is in full force and effect.
(o) The Company and each of the Subsidiaries hold all material
licenses, certificates and permits from governmental authorities,
including without limitation, the FCC, which are necessary to the
conduct of their businesses; and neither the Company nor any of the
Subsidiaries has received notice of any infringement of any material
patents, patent rights, trade names, trademarks or copyrights, which
infringement is material to the business of the Company and the
Subsidiaries (taken as a whole).
(p) Ernst & Young LLP, who has certified certain of the
financial statements incorporated by reference in the Final Prospectus,
is to the knowledge of the Company an independent public accounting
firm as required by the Act and the Rules and Regulations.
(q) To the Company's knowledge, there are no affiliations or
associations between any member of the National Association of
Securities Dealers and any of the Company's officers, directors or 5%
or greater security holders except as otherwise disclosed in writing to
▇.▇. ▇▇▇▇▇▇ Securities Inc. or set forth in Schedule III.
(r) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
(s) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(t) The Company and each of its Subsidiaries carry, or are
covered by, insurance, including self insurance, in such amounts and
covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is
customary for companies engaged in similar industries.
(u) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act
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of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined
in ERISA) for which the Company would have any liability has occurred
and is continuing; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company would have any liability that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification and where any such noncompliance, "reportable event,"
liability or nonqualification, alone or in the aggregate, would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed solely to be a
representation and warranty by the Company, as to matters covered thereby, to
each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase at the purchase price set forth on
Schedule I, the principal amount of Underwritten Securities set forth opposite
such Underwriter's name in Schedule II.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to the principal amount of Option Securities set forth on Schedule I or II at
the same purchase price per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the Underwriters.
Said option may be exercised in whole or in part at any time (but not more than
once) on or before the 30th day after the date of the Final Prospectus upon
written or telegraphic notice by the Representatives to the Company setting
forth the principal amount of the Option Securities as to which the several
Underwriters are exercising the option and the Settlement Date. Delivery of
Option Securities, and payment therefor, shall be made as provided in Section 3
hereof. The principal amount of the Option Securities to be purchased by each
Underwriter shall be the same percentage of the total principal amount of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made on the date and at the time
specified in Schedule I hereto, which date and
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time may be postponed by agreement among the Representatives and the Company or
as provided in Section 8 hereof (such date and time of delivery and payment for
the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of the Securities
being sold by the Company to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. Delivery of
the Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representatives on
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver the Option Securities to the Representatives on
the Settlement Date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 5 hereof.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its reasonable best efforts to cause
the Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination of
the offering of the Securities, the Company will not file any amendment
of the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus
or any Rule 462(b) Registration Statement unless the Company has
furnished you a copy for your review prior to filing and will not file
any such proposed amendment or supplement to which you reasonably
object in writing. Subject to the foregoing sentence, the Company will
cause the Final Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (i) when
the Registration Statement, if not effective at the Execution Time,
shall have become effective, (ii) when the Final Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant
to Rule 424(b) or when any Rule 462(b) Registration Statement shall
have been filed with the Commission, (iii) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (iv) of any
request by the Commission or its staff for any
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amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Final Prospectus
or of any additional information, (v) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its reasonable
efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 4, an amendment or supplement or, if appropriate, a
filing under the Exchange Act, which will correct such statement or
omission or effect such compliance and (ii) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of any Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering, provided that the Company will not be required to file a
consent to service of process in any state in which it is not qualified
or for which consent has not been given.
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(f) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities in
such a manner as would require the Company or any of the Subsidiaries
to register as an investment company under the Investment Company Act
of 1940, as amended (the "1940 Act").
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any Settlement Date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives
the opinion of Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Company, dated the Closing Date, to the effect that:
(i) The Company is validly existing as a corporation
in good standing under the laws of the State of Texas, with
corporate power and authority to own or lease its properties
and conduct its business as described in the Final Prospectus;
and the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable; and, to the best of such
counsel's knowledge, except (A) as reflected in the Company's
financial statements, (B) as described in the Registration
Statement or (C) as set forth on Schedule III hereto or as
disclosed in such counsel's opinion, (x) the outstanding
shares of capital stock of each of the subsidiaries are owned
by the Company or the subsidiary free and clear of all liens,
encumbrances and security interests and (y) no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any
obligations into any shares of capital stock or of ownership
interests in the Subsidiaries are outstanding.
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(ii) The Indenture and the Securities conform in all
material respects to the descriptions thereof contained in the
Final Prospectus; and to the knowledge of such counsel, no
preemptive rights of stockholders exist with respect to any of
the Securities of the issue and sale thereof.
(iii) Except as described in the Final Prospectus, to
the knowledge of such counsel, no holder of any securities of
the Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived,
to cause the Company to sell or otherwise issue to them, or to
permit them to underwrite the sale of, any of the Securities
or the right to have any Common Stock or other securities of
the Company included in the Registration Statement or the
right, as a result of the filing of the Registration
Statement, to require registration under the Act of any shares
of Common Stock or other securities of the Company.
(iv) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms and the Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters pursuant to this Agreement, will constitute
legal, valid and binding obligations of the Company entitled
to the benefits of the Indenture (subject, in respect to both
the Indenture and the Securities, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance or transfer, moratorium or
other laws affecting creditors' rights generally from time to
time in effect);
(v) 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.
(vi) The Registration Statement, the Final Prospectus
and each amendment or supplement thereto and documents
incorporated by reference therein (each as amended to date)
comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable and
the applicable rules and regulations thereunder (except that
such counsel need express no opinion as to the statistical
information contained in the Final Prospectus or financial
statements, schedules and other financial information
incorporated by reference therein).
(vii) The statements under the captions "Business"
and "Description of the Notes" in the Final Prospectus,
insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries
and fairly and correctly present the
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information called for with respect to such documents and
matters in all material respects.
(viii) To such counsel's knowledge, there are no
contracts or documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Final Prospectus (excluding any document
incorporated therein by reference) which are not so filed or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Final
Prospectus (excluding any document incorporated therein by
reference) are fairly summarized in all material respects.
(ix) Except as set forth on Schedule III, to such
counsel's knowledge, there are no material legal proceedings
pending or threatened against the Company or any of the
Subsidiaries which is of a character required to be disclosed
in the Final Prospectus and which has not been properly
disclosed therein.
(x) Neither the execution and delivery of the
Indenture, the issue and sale of the Securities nor the
execution and delivery of this Agreement and the consummation
of the transactions herein contemplated conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default under, (a) the Articles of Incorporation
or (b) By-laws of the Company, or (c) to such counsel's
knowledge, any agreement or instrument 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 (other than licenses or
permits granted by the FCC, on which such counsel need not
express any opinion), or (d) will contravene any law, rule or
regulation of the United States or the State of Texas or the
General Corporation Law of the State of Delaware, or, to such
counsel's knowledge, any order or decree of any court or
governmental agency or instrumentality, except, with respect
to clause (c) above, a conflict, breach or default which would
not have a materially adverse effect on the business or
financial condition of the Company and its subsidiaries taken
as a whole.
(xi) This Agreement has been duly authorized,
executed and delivered by the Company.
(xii) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body having jurisdiction
over the Company is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be
required by the NASD or NYSE or as required by State
securities and Blue Sky laws as to which such counsel need
express no opinion) except such as have been obtained or made,
specifying the same.
13
(xiii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by
this Agreement, and application of the net proceeds therefor
as described in the Final Prospectus, required to register as
an investment company under the 1940 Act.
In rendering such opinion, such counsel may rely (A) as to matters
governed by the laws of states other than Texas or Federal laws on
local counsel in such jurisdictions, provided that in each case such
counsel shall state that they believe that they and the Underwriters
are justified in relying on such other counsel and (B) as to matters of
fact, on certificates of responsible officers of the Company and
certificates or other written statements of officers or departments of
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and any Subsidiary.
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 the
Registration Statement, as of the time it became effective under the
Act, the Final Prospectus or any amendment or supplement thereto, on
the date it was filed pursuant to Rule 424(b) and the Registration
Statement and the Final Prospectus, or any amendment or supplement
thereto, as of the Closing Date or any Settlement Date, as the case may
be, 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 not misleading (except that such counsel need
express no view as to matters pertaining to the statistical information
contained in the Final Prospectus or financial statements, schedules
and other financial information contained or incorporated by reference
in the Final Prospectus). With respect to such statement, such counsel
may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.
(c) The Underwriters shall have received on the Closing Date
or any Settlement Date, as the case may be, the opinion of Wiley, Rein
& Fielding, special FCC counsel to the Company, dated the Closing Date
or any Settlement Date, as the case may be, addressed to the
Underwriters as is reasonably acceptable to the Underwriters.
(d) The Representatives shall have received from Cravath,
Swaine & ▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date or any Settlement Date, as the case may be, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Final Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chief Executive Officer or
the President and the principal financial or accounting officer of the
Company, in their capacity as such,
14
dated the Closing Date or any Settlement Date, as the case may be, to
the effect that the signers of such certificate have carefully examined
the Registration Statement, the Final Prospectus, any supplements to
the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date or any Settlement Date,
as the case may be, with the same effect as if made on the
Closing Date or any Settlement Date, as the case may be, and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date or any Settlement Date, as the
case may be;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or otherwise), prospects, business
or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(f) At the Execution Time and at the Closing Date or any
Settlement Date, as the case may be, Ernst & Young LLP shall have
furnished to the Representatives letters dated as of the Execution Time
and the Closing Date or any Settlement Date, as the case may be, in
form and substance satisfactory to the Representatives.
(g) Except as agreed to by ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purpose of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(h) Prior to the Closing Date or any Settlement Date, as the
case may be, the Company shall have furnished to the Representatives
such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the
15
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance to
the Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date or any Settlement Date, as the case may be, by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & ▇▇▇▇▇, counsel for the
Underwriters, at Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the
Closing Date.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof (other than a
termination under Section 9(b) resulting from a default by an Underwriter as
provided in Section 8 hereof) or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally through ▇.▇. ▇▇▇▇▇▇
Securities Inc. on demand for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities, but
the Company shall not be liable in any event to any of the Underwriters for
damages on account of loss of anticipated profits from the sale of the
Securities.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are 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, and
agrees to reimburse each such indemnified party, as reasonably incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that with respect to any untrue statement or omission of
material fact made in any Preliminary Final Prospectus, the indemnity agreement
contained in this Section 7(a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability
purchased the securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where (w)
the Company had
16
previously furnished copies of the Final Prospectus to the Representatives, (x)
delivery of the Final Prospectus was required by the Act to be made to such
person, (y) the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in the Preliminary Final
Prospectus was corrected in the Final Prospectus and (z) there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such securities to such person, a copy of the Final Prospectus. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth under the heading "Underwriting" relating to concessions and
reallowances and to stabilization, in any Preliminary Final Prospectus or the
Final Prospectus, constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the documents referred to in
the foregoing indemnity.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the prejudice by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified parties
shall have the right to employ one separate counsel (and, if reasonably
necessary, one additional local counsel), and the indemnifying party shall bear
the reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or, (iii) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying
17
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
18
8. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay within 24 hours for (in the respective proportions which the amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Securities set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase within 24 hours all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the event
of a default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement may be terminated by you by
notice to the Company as follows:
(a) at any time after the Execution Time and prior to the
Closing Date if any of the following has occurred: (i) 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 its
subsidiaries taken as a whole or the earnings, business affairs, management or
business prospects of the Company and its subsidiaries taken as a whole, whether
or not arising in the ordinary course of business, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic or political conditions, if the effect of such outbreak,
escalation, calamity, crisis or change on the financial markets of the United
States would, in your reasonable judgment, make the offering or delivery of the
Securities impracticable, (iii) suspension of trading in securities on the NYSE
or limitation on prices (other than limitations on hours or numbers of days of
trading) for securities on the NYSE, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your reasonable opinion
materially and adversely affects or will materially or adversely affect the
business or operations of the Company and its subsidiaries taken as a whole, (v)
declaration of a banking moratorium by either federal or New York State
authorities, (vi) a material disruption in commercial banking or securities
settlement or clearance services in the United States, if the effect of such
disruption is so material or adverse that it makes the offering or delivery of
the Securities on the terms and in the manner contemplated in the Final
Prospectus impraticable or (vii) the taking of any action by any federal, state
or
19
local government or agency in respect of its monetary or fiscal affairs which in
your reasonable opinion has a material adverse effect on the securities markets
in the United States; or
(b) as provided in Sections 5 and 8 of this Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option
Securities, upon the occurrence at any time prior to a Settlement Date of any of
the events described in subparagraph (a) above or as provided in Sections 5 and
8 of this Agreement.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, and of the Underwriters set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 6 and 7 hereof shall survive the termination or cancelation of this
Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed or delivered to ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, attention: Transaction Execution Group or, if sent to
the Company, will be mailed or delivered to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇ attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Executive Vice President.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Securities merely because of
such purchase.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
15. Headings. The Section headings used herein are for
convenience only and shall not affect the construction hereof.
16. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended.
20
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or Dallas, Texas.
"Commission" means the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that is first filed pursuant to Rule 424(b)
after the Execution Time together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as
the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule
430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to
such rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration statement.
21
"Rules and Regulations" means the rules and regulations of the
Commission.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended.
22
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
Clear Channel Communications, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President-Finance
23
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
Banc of America Securities LLC
Barclays Capital Inc.
▇. ▇. ▇▇▇▇▇▇ Securities Inc.
By: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Vice President
For themselves and the other several Underwriters, if any, named in Schedule II
to the foregoing Agreement.
24
SCHEDULE I
Underwriting Agreement dated March 12, 2003
Registration Statement No. 333-76942
Representatives:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Underwriters:
Banc of America Securities LLC
Barclays Capital Inc.
▇. ▇. ▇▇▇▇▇▇ Securities Inc.
Title, Purchase Price and Description of Securities:
Title: $200,000,000 4 5/8% Senior Notes due 2008 (the "notes")
Principal Amount of Underwritten Securities: $200,000,000
Purchase Price (include accrued interest or amortization, if any):
$205,397,222.22 (comprised of net proceeds of $203,650,000, and accrued
interest of $1,747,222.22) for the $200,000,000 aggregate principal
amount of the notes
Sinking fund provisions: None
Redemption provisions:
The notes are redeemable by the Company. The notes will be
redeemable as a whole at any time or in part from time to time, at the
option of the Company, at a redemption price equal to the greater of
(i) 100% of the principal amount of such notes or (ii) the sum of the
present values of the remaining scheduled payments of principal and
interest thereon from the redemption date to January 15, 2008 ,
discounted to the redemption date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate
plus 25 basis points and any interest accrued but not paid to the date
of redemption. Notice of any redemption will be mailed at least 30 days
but no more than 60 days before the redemption date to each holder of
the notes to be redeemed. Unless the Company defaults in payment of the
redemption price, on and after the redemption date interest will cease
to accrue on the notes or portions thereof called for redemption. The
notes will not be subject to any sinking fund provision.
25
"Treasury Rate" means, with respect to any redemption date for
the notes, (i) the yield, under the heading which represents the
average for the immediately preceding week, appearing in the most
recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Board of
Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the maturity date, yields for
the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight
line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum
equal to the semi-annual equivalent yield maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date. The Treasury Rate
shall be calculated on the third Business Day preceding the redemption
date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an "Independent Investment Banker" as having a
maturity comparable to the remaining term of the Notes to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such notes.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Comparable Treasury Price" means, with respect to any
redemption date for the notes, (i) the average of four Reference
Treasury Dealer Quotations (as defined below) for the redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such
quotations.
"Reference Treasury Dealer" means each of Credit Suisse First
Boston Corporation and ▇.▇. ▇▇▇▇▇▇ Securities Inc. and two other
primary U.S. Government securities dealers in New York City (each, a
"Primary Treasury Dealer") appointed by the Trustee in consultation
with the Company; provided, however, that if any of the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute
therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid (expressed in each case as a
percentage of its principal
26
amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m. on the third Business Day preceding such redemption
date.
Principal Amount of Option Securities: N/A
Other provisions: None
Closing Date, Time and Location: March 17, 2003 at 10:00 a.m. at
Cravath, Swaine & ▇▇▇▇▇, Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Type of Offering: Non-delayed
Overallotment Option: None
27
SCHEDULE II
Underwriters Principal Amount of Notes
------------------------------------------------------ ----------------------------------------------
Banc of America Securities LLC.................... 66,667,000
Barclays Capital Inc.............................. 66,667,000
▇. ▇. ▇▇▇▇▇▇ Securities Inc....................... 66,666,000
------------
Total.................................... $200,000,000
============
The Company has not granted the Underwriters an option to purchase any
additional principal amount of the above referenced securities.
28
SCHEDULE III
DISCLOSURE ITEMS
1. Material Subsidiaries
A. Clear Channel Outdoor, Inc.
B. Clear Channel Broadcasting, Inc.
C. Clear Channel Broadcasting Licenses, Inc.
D. Clear Channel Holdings, Inc.
E. Jacor Communications Company
F. SFX Entertainment, Inc.
G. AMFM Operating Inc.
H. The ▇▇▇▇▇▇▇▇ Group, Inc.
2. Liens, Encumbrances and other disclosure relating to the Company's and
its Subsidiary capital stock.
A Under the Company's existing Amended and Restated Credit
Agreement, neither the Company nor its subsidiaries may pledge
any of the capital stock of the Subsidiaries.
B. In connection with the amendment of the Company's existing
credit facility and the adoption of the Company's $3 billion
credit facilities, the Company pledged an intercompany note
not to exceed amount permitted under the Senior Indenture to
AMFM Operating Inc. or their respective subsidiaries relating
to funds advanced to such entities.
C. Under AMFM Operating Inc.'s public indebtedness, there are
restrictions and limitations on the sale of AMFM Operating
Inc.'s and its subsidiaries' capital stock.
3. NASD Affiliates
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a director of the Company, is a senior managing
director of Bear, ▇▇▇▇▇▇▇ & Co., Inc., which is a member of the NASD.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., a director of the Company, is a senior managing
director of Lazard Freres & Co., LLC, which is a member of the NASD.
▇▇▇▇▇ ▇▇▇▇▇, a director of the Company, is an affiliate of Morgan,
Lewis, ▇▇▇▇▇▇▇ & Ahn, Inc., which is a member of the NASD.
4. SFX Entertainment, Inc. has certain earn out agreements not to exceed
1% of the capital stock of SFX Entertainment.
5. The Company is among the defendants in a lawsuit filed on June 12, 2002
in the United States District Court for the Southern District of
Florida by Spanish Broadcasting System. The plaintiffs allege that the
company is in violation of Section One and Section Two of the ▇▇▇▇▇▇▇
Antitrust Act as well as various claims such as unfair trade practices
and defamation, among other counts. This case was dismissed with
prejudice on January 31, 2003, but the plaintiffs have filed with the
court for reconsideration.