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EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
February 14, 1996, by and among Heftel Broadcasting Corporation, a Delaware
corporation (the "Company"), and Clear Channel Communications, Inc., a Texas
corporation.
RECITALS
A. Clear Channel Communications, Inc. and Tichenor Media System,
Inc., a Texas corporation ("TMS"), have entered into that certain Agreement and
Plan of Merger dated July 9, 1996, as it may be amended (the "Merger
Agreement"), which has been assumed by the Company and which provides for the
merger of a wholly-owned subsidiary of the Company with and into TMS (the
"Merger").
B. Pursuant to the terms of the Merger Agreement, it is a
condition to the obligations of TMS thereunder that the Company grant certain
registration rights to Clear Channel (as hereinafter defined), with respect to
the shares of Class A Common Stock, par value $.001 per share (the "Common
Stock"), of the Company held from time to time by Clear Channel.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties to this Agreement hereby agree as follows:
AGREEMENTS
1. Definitions. In addition to the terms defined elsewhere
herein, when used herein the following terms shall have the meanings indicated:
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with the first Person. For
purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person.
"Clear Channel" means Clear Channel Communications, Inc., a Texas
corporation, and its Affiliates.
"Commission" means the Securities and Exchange Commission.
"Conversion Date" means the date on which Clear Channel and its
Affiliates collectively beneficially own a greater number of shares of Common
Stock than the number of shares of Common Stock collectively beneficially owned
by Tichenor Holders.
"Demand Registration" has the meaning set forth in Section 2(a) below.
"Demand Request" has the meaning set forth in Section 2(a) below.
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"Exempt Registration Statement" means a registration statement on Form
S-4 or S-8 or any substitute form that may be adopted by the Commission or any
registration statement filed in connection with an exchange offer or offering
of securities solely to the Company's existing security holders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the value of the Registrable Securities
determined as follows: (i) if the security is listed on any established stock
exchange or a national market system, including, without limitation, the
National Market System of The Nasdaq Stock Market, its fair market value shall
be the average of the high and low sales prices or the average of the closing
bids if no sales were reported, as quoted on such system or exchange for the
five business days preceding the date of the Demand Request (or if there are no
sales or bids for such dates, then for the five last preceding business days
for such sales or bids), as reported in The Wall Street Journal or similar
publication; (ii) if the security is regularly quoted by a recognized
securities dealer but high and low selling prices are not reported, its fair
market value shall be the mean between the high bid and low asked prices for
the security for the five business days preceding the Demand Request (or if
there are no quoted prices for such dates, then for the five last preceding
business days for which there were quoted prices); or (iii) in the absence of
an established market for the security, the fair market value shall be
determined in good faith by the Company's Board of Directors, with reference to
the Company's net worth, prospective earning power, dividend-paying capacity
and other relevant factors, including the goodwill of the Company, the economic
outlook in the Company's industry, the Company's position in the industry and
its management, and the values of stock of other corporations in the same or
similar line of business (all such factors determined as of the date of a
Demand Request).
"Indemnified Party" has the meaning set forth in Section 7(c) below.
"Indemnifying Party" has the meaning set forth in Section 7(c) below.
"Inspectors" has the meaning set forth in Section 5(j) below.
"Material Adverse Effect" has the meaning set forth in Section 3(b)
below.
"NASD" means the National Association of Securities Dealers, Inc.
"Other Holders" means any Person holding securities entitled to
piggyback registration rights that are pari passu with those provided in
Section 3 hereof, including the Tichenor Holders.
"Person" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 3(a)
below.
"Piggyback Securities" has the meaning set forth in Section 3(b)
below.
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"Records" has the meaning set forth in Section 5(j) below.
"Registrable Securities" means the shares of Common Stock owned
directly or issuable upon conversion of another security of the Company owned
at any time on or after the date hereof by Clear Channel and its Affiliates and
other securities issued or issuable with respect to such Common Stock by way of
a stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or reorganization; provided, that any
Registrable Security will cease to be a Registrable Security when, after the
completion of the Merger, (a) a registration statement covering such
Registrable Security has been declared effective by the Commission and it has
been disposed of pursuant to such effective registration statement, (b) (i)
Clear Channel holds less than 100,000 shares of Registrable Securities and (ii)
it is eligible to be sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met, or (c) (i) it has been otherwise transferred and (ii)
it may be resold without subsequent registration under the Securities Act.
"Registration Expenses" has the meaning set forth in Section 6 below.
"Required Filing Date" has the meaning set forth in Section 2(b)
below.
"Securities Act" means the Securities Act of 1933, as amended.
"Tichenor Holders" means those Persons defined as Holders in, and
entitled to certain demand and piggyback registration rights pursuant to, the
Tichenor Registration Rights Agreement.
"Tichenor Registration Rights Agreement" means that certain
Registration Rights Agreement, dated as of the date hereof, between the Company
and the Original Holders (as defined therein).
"Underwriter" means a securities dealer which purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
2. Demand Registration.
(a) Request for Registration. At any time Clear Channel
shall make a transfer to the shareholders of Clear Channel of Registrable
Securities in a pro rata distribution or upon a partial or complete liquidation
or dissolution of Clear Channel and it is necessary to register such
transaction under the Securities Act in order to deliver to such shareholders
freely transferable shares, Clear Channel may make a written request of the
Company (a "Demand Request") for registration under the Securities Act (a
"Demand Registration") of all or part of its Registrable Securities. The
Company shall be obligated to register Registrable Securities pursuant to a
Demand Registration on one occasion only.
(b) Effective Registration and Expenses. Subject to
Section 4(c), the Company shall file the Demand Registration within 90 days
after receiving a Demand Request (the "Required Filing Date") and shall use all
commercially reasonable efforts to cause the same to be declared effective by
the Commission as promptly as practicable after such filing. A registration
will not count
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as a Demand Registration until it has become effective (unless Clear Channel
withdraws all of its Registrable Securities, in which case such demand will
count as a Demand Registration unless Clear Channel pays all Registration
Expenses in connection with such withdrawn registration); provided, that if,
after it has become effective, an offering of Registrable Securities pursuant
to a registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court,
such registration will be deemed not to have been effected.
3. Piggy-Back Registration.
(a) Subject to the provisions of this Agreement, if the
Company proposes to file a registration statement under the Securities Act with
respect to an offering of any equity securities by the Company for its own
account or for the account of any of its equity holders (other than an Exempt
Registration Statement), then the Company shall give written notice of such
proposed filing to Clear Channel as soon as practicable (but in no event less
than 30 days before the anticipated effective date of such registration
statement), and such notice shall offer Clear Channel the opportunity to
register such number of Registrable Securities as Clear Channel may request (a
"Piggyback Registration"). Subject to Section 3(b), the Company shall include
in each such Piggyback Registration all Registrable Securities requested to be
included in the registration for such offering by Clear Channel. Clear Channel
shall be permitted to withdraw all or part of its Piggyback Securities from a
Piggyback Registration at any time prior to the effective date thereof.
(b) The Company shall use all commercially reasonable
efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in the registration statement for such offering under Section 3(a)
(the "Piggyback Securities") to be included on the same terms and conditions as
any similar securities included therein. Notwithstanding the foregoing, the
Company shall not be required to include Clear Channel's Piggyback Securities
in such offering unless Clear Channel accepts the terms of the underwriting
agreement between the Company and the managing Underwriter or Underwriters and
otherwise complies with the provisions of Section 8 below. Furthermore, if,
(i) prior to the Conversion Date or (ii) subsequent to the Conversion Date and
subsequent to the exercise or termination of all demand registration rights
granted to the Tichenor Holders, the managing Underwriter or Underwriters of a
proposed underwritten offering advise the Company in writing that in their
opinion the total amount of securities, including Piggyback Securities and
other securities proposed to be registered by Other Holders pursuant to similar
piggyback registration rights, to be included in such offering is sufficiently
large to materially and adversely affect the price or success of the Offering
(a "Material Adverse Effect"), then in such event the securities to be included
in such offering shall be allocated first to the party initiating the proposed
underwritten offering; second, to the extent that any additional securities
can, in the opinion of such managing Underwriter or Underwriters, be sold
without any such Material Adverse Effect, pro rata (based on the number of
Registrable Securities and other securities requested to be included in such
registration by Clear Channel or any Other Holder) among Clear Channel and the
Other Holders registering securities of the Company pursuant to similar
piggyback registration rights; and third, to the extent the Company is not the
party initiating such proposed underwritten offering and that any additional
securities can, in the opinion of such managing Underwriter or Underwriters, be
sold without any Material Adverse Effect, to the Company. If, subsequent to
the Conversion Date, but prior to the exercise or
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termination of all demand registration rights granted to Tichenor Holders, the
managing Underwriter or Underwriters of a proposed underwritten offering advise
the Company in writing that in their opinion the total amount of securities,
including Piggyback Securities and other securities proposed to be registered
by Other Holders pursuant to similar piggyback registration rights, to be
included in such offering is sufficiently large to cause a Material Adverse
Effect, then in such event the securities to be included in such offering shall
be allocated first to the party initiating the proposed underwritten offering;
second, to the extent that any additional securities can, in the opinion of
such managing Underwriter or Underwriters, be sold without any such Material
Adverse Effect, (x) 50% of the total amount of additional securities shall be
allocated to the Tichenor Holders requesting piggyback registration (which
allocation shall be allocated pro rata among the requesting Tichenor Holders
based on the number of Registrable Securities requested to be included in such
registration) and (y) the remaining 50% of the additional securities to be
included shall be allocated pro rata among the requesting Other Holders
(excluding the shares included for the Tichenor Holders pursuant to clause (x))
and Clear Channel (based upon the number of Registrable Securities and other
securities requested to be included in such registration); and third, to the
extent the Company is not the party initiating such proposed underwritten
offering and that any additional securities can, in the opinion of such
managing Underwriter or Underwriters, be sold without any Material Adverse
Effect, to the Company.
4. Holdback Agreements.
(a) Restrictions on Public Sale by Clear Channel. Clear
Channel agrees not to effect any public sale or distribution of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock,
including a sale pursuant to Rule 144 under the Securities Act, during the 14
days prior to, and during the 180-day period beginning on, the effective date
of a registration statement filed relating to a firm commitment underwritten
public offering of Common Stock or securities convertible into, or exchangeable
or exercisable for, Common Stock except as part of such registration if and to
the extent requested by the Company in the case of a nonunderwritten public
offering or if and to the extent requested by the managing Underwriter or
Underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) not to effect any public sale or distribution
of any securities similar to those being registered or any securities
convertible into or exchangeable or exercisable for such securities other than
pursuant to a registration statement on Form S-8 or any successor form, during
the 14 days prior to, and during the 180-day period beginning on, the effective
date of any registration statement which includes Registrable Securities
(unless such sale or distribution is pursuant to such registration statement
pursuant to Section 3(b) or Clear Channel is participating in such registration
statement pursuant to Section 3 and such offering was initiated by the Company
with respect to the sale of securities by the Company) and (ii) that any
agreement entered into after the date of this Agreement pursuant to which the
Company issues or agrees to issue any privately placed securities shall contain
a provision under which holders of such securities agree not to effect any
public sale or distribution of any such securities during the period described
in (i) above, including a sale pursuant to Rule 144 under the Securities Act
(except as part of any such registration, if permitted); provided, however,
that the
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provisions of this paragraph (b) shall not prevent the conversion or exchange
of any securities pursuant to their terms into or for other securities.
(c) Deferral of Filing. The Company may defer the filing
(but not the preparation) of a registration statement required by Section 2
until a date not later than 90 days after the Required Filing Date if, at the
time the Company receives the Demand Request, the Company or its subsidiaries
are engaged in confidential negotiations or other confidential business
activities, disclosure of which would be required in such registration
statement (but would not be required if such registration statement were not
filed), and the Board of Directors of the Company determines in good faith that
such disclosure would be materially detrimental to the Company and its
stockholders. A deferral of the filing of a registration statement pursuant to
this Section 4(c) shall be lifted, and the requested registration statement
shall be filed forthwith, if the negotiations or other activities are disclosed
or terminated. In order to defer the filing of a registration statement
pursuant to this Section 4(c), the Company shall promptly, upon determining to
seek such deferral, deliver to Clear Channel a certificate signed by the
President of the Company stating that the Company is deferring such filing
pursuant to this Section 4(c) and the basis therefor in reasonable detail.
Within 20 days after receiving such certificate, may withdraw such request by
giving notice to the Company. If withdrawn, the Demand Request shall be deemed
not to have been made for all purposes of this Agreement. The Company may
defer the filing of a particular registration statement pursuant to this
Section 4(c) only once.
5. Registration Procedures. The Company will, at its expense,
use all commercially reasonable efforts to effect the registration of any
Registrable Securities under the Securities Act in accordance with the intended
method of disposition thereof as quickly as practicable, and in connection with
any such request, the Company will as expeditiously as practicable:
(a) prepare and file with the Commission a registration
statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
registration of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use all
commercially reasonable efforts and proceed diligently and in good faith to
cause such filed registration statement to become effective under the
Securities Act; provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish
to Clear Channel and to one counsel reasonably acceptable to the Company
selected by Clear Channel, copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel; provided,
further, that in connection with a Demand Registration, the Company shall not
file any registration statement or prospectus, or any amendments or supplements
thereto, if Clear Channel and its counsel shall reasonably object, in writing,
on a timely basis;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective pursuant to Section 2 for a period (except as provided in the last
paragraph of this Section 5) of not less than 180 consecutive days or, if
shorter, the period terminating when all Registrable Securities covered by such
registration statement have been sold (but not before the expiration of the
applicable period referred to in Section 4(3) of the Securities Act and
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Rule 174 thereunder, if applicable) and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the intended
method of disposition by Clear Channel set forth in such registration
statement;
(c) furnish to Clear Channel such number of copies of
such registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as Clear Channel may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by Clear Channel;
(d) notify Clear Channel promptly, and (if requested by
any such Person) confirm such notice in writing, (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective under the Securities Act and each applicable state
law, (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a registration
statement or related prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(iv) if at any time the representations or warranties of the Company or any
subsidiary contained in any agreement contemplated by Section 5(i) below cease
to be true and correct in any material respect, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event which makes any statement made in
such registration statement or related prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in such registration
statement, prospectus or documents so that, in the case of the registration
statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the prospectus,
it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made
not misleading and (vii) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
(e) use every commercially reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction in the United States, at the earliest practicable moment;
(f) cooperate with Clear Channel to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be registered, which certificates shall not bear any restrictive legends and
shall be in a form eligible for deposit with The Depositary Trust Company; and
enable such Registrable Securities to be registered in such names as Clear
Channel may request at least two business days prior to any registration of
Registrable Securities;
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(g) use all commercially reasonable efforts to register
or qualify such Registrable Securities as promptly as practicable under such
other securities or blue sky laws of such jurisdictions as Clear Channel
reasonably (in light of the intended plan of distribution) requests and do any
and all other acts and things which may be reasonably necessary or advisable to
enable Clear Channel to consummate the disposition in such jurisdictions in the
United States of the Registrable Securities owned by Clear Channel; provided,
that the Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (g), (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction;
(h) use all commercially reasonable efforts to cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable Clear Channel to consummate
the disposition of such Registrable Securities;
(i) enter into customary agreements and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;
(j) make available for inspection by Clear Channel and
any attorney, accountant or other professional retained by Clear Channel
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in
connection with such registration statement. Records which the Company
determines, in good faith, to be confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such registration statement or (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction. Clear Channel agrees that information
obtained by it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company or its affiliates unless and until such is made
generally available to the public. Clear Channel further agrees that it will,
as soon as practicable upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent disclosure of
the Records deemed confidential;
(k) use all commercially reasonable efforts to obtain a
comfort letter or comfort letters from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by comfort letters as Clear Channel reasonably requests;
(l) otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of twelve months, beginning within three
months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
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(m) use all commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed or quoted on any
inter-dealer quotation system on which similar securities issued by the
Company are then quoted;
(n) if any event contemplated by Section 5(d)(vi) above
shall occur, as promptly as practicable prepare a supplement or amendment or
post-effective amendment to such registration statement or the related
prospectus or any document incorporated therein by reference or promptly file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
(o) cooperate and assist in any filing required to be
made with the NASD and in the performance of any due diligence investigation by
Clear Channel.
The Company may require Clear Channel to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as it may from time to time reasonably request and such
other information as may be legally required in connection with such
registration. Notwithstanding anything herein to the contrary, the Company
shall have the right to exclude from any offering the Registrable Securities of
Clear Channel if it does not comply with the provisions of the immediately
preceding sentence.
Clear Channel agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
5(d)(vi), Clear Channel will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until Clear Channel's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5(d)(vi), and, if so directed by the
Company, Clear Channel will deliver to the Company all copies, other than
permanent file copies, then in Clear Channel's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective (including the period referred to in Section 5(b)) by the number of
days during the period from and including the date of the giving of notice
pursuant to Section 5(d)(vi) to the date when the Company shall make available
to Clear Channel a prospectus supplemented or amended to conform with the
requirements of Section 5(d)(vi).
6. Registration Expenses. Subject to the provisions in Section
2(b) above with respect to a Demand Registration, in connection with any Demand
Registration or Piggyback Registration, the Company shall pay the following
registration expenses (the "Registration Expenses"): (a) all registration and
filing fees (including, without limitation, with respect to filings to be made
with the NASD), (b) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities), (c) printing expenses,
(d) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), (e) the
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fees and expenses incurred in connection with the listing on an exchange of the
Registrable Securities if the Company shall choose, or be required pursuant to
Section 5(m) to list such Registrable Securities, (f) reasonable fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any comfort letters requested pursuant to Section 5(k)), (g) the
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration, (h) reasonable fees and expenses of one
counsel reasonably acceptable to the Company selected by Clear Channel incurred
in connection with the registration of such Registrable Securities hereunder
and (i) fees and expenses of any "qualified independent underwriter" or other
independent appraiser participating in an offering pursuant to Section 3 of
Schedule E to the Bylaws of the NASD. The Company shall not have any
obligation to pay any underwriting fees, discounts, or commissions attributable
to the sale of Registrable Securities or the fees and disbursements of counsel
for any Underwriter.
7. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify and hold harmless Clear Channel, each Person, if any, who controls
Clear Channel within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, and the officers, directors, agents, general and
limited partners, and employees of Clear Channel and each such controlling
person from and against any and all losses, claims, damages, liabilities, and
expenses (including reasonable costs of investigation) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Registrable Securities or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by Clear Channel or on Clear
Channel's behalf expressly for use therein; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnity agreement contained
in this paragraph shall not apply to the extent that any such loss, claim,
damage, liability or expense results from the fact that a current copy of
the prospectus was not sent or given to the Persons asserting any such loss,
claim, damage, liability or expense at or prior to the written confirmation of
the sale of the Registrable Securities concerned to such Person if it is
determined that (i) it was the responsibility of Clear Channel or any
Underwriter or dealer for Clear Channel to provide such person with a current
copy of the prospectus, (ii) Clear Channel was provided with a current copy of
the prospectus prior to the written confirmation of sale and (iii) such current
copy of the prospectus would have cured the defect giving rise to such loss,
claim, damage, liability or expense. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers and directors and
each Person who controls such Underwriters on substantially the same basis as
that of the indemnification of Clear Channel provided in this Section 7(a).
(b) Indemnification by Clear Channel. Clear Channel
agrees to indemnify and hold harmless the Company, and each Person, if any, who
controls the Company within the meaning of
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either Section 15 of the Securities Act or Section 20 of the Exchange Act and
the officers, directors, agents and employees of the Company and each such
controlling Person to the same extent as the foregoing indemnity from the
Company to Clear Channel, but only with respect to information furnished in
writing by Clear Channel or on Clear Channel's behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities.
The liability of Clear Channel under this Section 7(b) shall be limited to the
aggregate cash and property received by Clear Channel pursuant to the sale of
Registrable Securities covered by such registration statement or prospectus.
(c) Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation) shall be
brought or asserted against any Person entitled to indemnification under
Section 7(a) or 7(b) above (an "Indemnified Party") in respect of which
indemnity may be sought from any party who has agreed to provide such
indemnification under Section 7(a) or 7(b) above (an "Indemnifying Party"), the
Indemnified Party shall give prompt notice to the Indemnifying Party and the
Indemnifying Party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Party, and shall assume
the payment of all reasonable expenses of such defense. Such Indemnified Party
shall have the right to employ separate counsel in any such action or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Party has agreed to pay such fees and expenses, or (ii) the
Indemnifying Party fails promptly to assume the defense of such action or
proceeding or fails to employ counsel reasonably satisfactory to such
Indemnified Party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Party and
Indemnifying Party (or an Affiliate of the Indemnifying Party), and such
Indemnified Party shall have been advised by counsel that there is a conflict
of interest on the part of counsel employed by the Indemnifying Party to
represent such Indemnified Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party). Notwithstanding the foregoing, the Indemnifying
Party shall not, in connection with any one such action or proceeding or
separate but substantially similar related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable at any time for the fees and expenses of more than one separate firm of
attorneys (together in each case with appropriate local counsel for the
Indemnified Party). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding effected without its written
consent (which consent will not be reasonably withheld), but if settled with
its written consent, or if there be a final judgment for the plaintiff in any
such action of proceeding, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Party from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment. The
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release, in form and
substance satisfactory to the Indemnified Party, from all liability in respect
of such action or proceeding for which such Indemnified Party would be entitled
to indemnification hereunder.
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(d) Contribution. If the indemnification provided for in
this Section 7 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages, liabilities or judgments referred to herein, then each
such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments as between the
Company on the one band and Clear Channel on the other, in such proportion as
is appropriate to reflect the relative fault of the Company and of Clear
Channel in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company on the
one hand and of Clear Channel on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and Clear Channel agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), Clear
Channel shall not be required to contribute any amount in excess of the amount
by which the total price at which its Registrable Securities were offered to
the public exceeds the amount of any damages which it has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
8. Participation in Underwritten Registrations. Clear Channel
may not participate in any underwritten registration hereunder unless it (a)
agrees to sell its Registrable Securities on the basis provided in any
underwriting arrangements approved by the Person entitled hereunder to approve
such arrangements, (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and this Agreement,
and (c) if requested by another Person participating in such underwritten
registration, provides that all securities convertible or exchangeable into
Common Stock that are included in such underwritten registration shall be so
converted or exchanged on or prior to the consummation thereof.
9. Marketing of Securities. Upon the registration of any
Registrable Securities pursuant to the terms of this Agreement, the Company
shall use all commercially reasonable efforts to participate in and cooperate
with the managing Underwriter or Underwriters in the marketing of such
Registrable Securities, including, but not limited to, participating in any
sales force presentations and any "roadshow" or other marketing presentations
deemed necessary by the managing Underwriter or Underwriters to market such
securities.
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10. Additional Registration Rights. The Company shall not on or
after the date of this Agreement enter into any agreement granting registration
rights to any other Person with respect to the securities of the Company, that
are demand registration rights of the type described in Section 2 and do not
rank pari passu or subordinate to the rights granted under Section 2, or with
respect to any piggyback registration rights of the type described in Section
3, that are not pari passu or subordinate to the rights granted to Clear
Channel hereunder, without the prior written consent of Clear Channel. Any
agreement entered into pursuant to such consent shall not be amended without a
further written consent of Clear Channel. The Company represents and warrants
to Clear Channel that the Company has not granted registration rights to any
other Person with respect to the securities of the Company other than pursuant
to that certain Registration Rights Agreement of even date herewith among the
Company and McHenry T. Tichenor, Sr., McHenry T. Tichenor, Jr., Warren W.
Tichenor, William E. Tichenor, Jean T. Russell, McHenry T, Tichenor, Jr., as
Custodian for David T. Tichenor, Alta Subordinated Debt Partners III, L.P., a
Delaware limited partnership, Prime II Management, L.P., a Delaware limited
partnership, PrimeComm, L.P., A Delaware limited partnership, Ricardo A. del
Castillo, Jeffrey T. Hinson and David D. Lykes.
11. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company, Clear Channel and,
so long as the Tichenor Holders own at least 15% of the Common Stock
(calculated assuming all securities held by Clear Channel exercisable or
exchangeable for or convertible into Class B Common Stock have been so
exercised, exchanged or converted and the Class B Common Stock subject thereto
is outstanding and by treating the Class B Common Stock of the Company as
converted into Common Stock), the holders of at least a majority of the then
outstanding "Registrable Securities" (as defined in the Tichenor Registration
Rights Agreement).
12. Notices. Any notices required or permitted to be given under
this Agreement shall be given in writing and shall be deemed received when
received by the relevant party at such party's address as set forth opposite
such party's signature to this Agreement whether personally delivered or sent
by mail or delivered by telefacsimile or similar device.
13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.
14. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized representatives, effective as of the date
first written above.
HEFTEL BROADCASTING CORPORATION
Address: By: /s/ L. LOWRY MAYS
100 Crescent Court, Suite 1777 -------------------------
Dallas, TX 75201 Name: L. Lowry Mays
Attn: Chief Executive Officer Title: President & CEO
CLEAR CHANNEL COMMUNICATIONS, INC.
Address: By: /s/ L. LOWRY MAYS
200 Concord Plaza, Suite 600 -------------------------
San Antonio, TX 78216 Name: L. Lowry Mays
Attn: Randall T. Mays Title: President & CEO
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