EXHIBIT 7 (9)
FORM OF
CUSTODY AGREEMENT
CUSTODY AGREEMENT, dated May ____, 1997, among The Bank of New York, as
Custodian (the "Custodian"), and ____________________________________________
(the "Selling Shareholder").
Clear Channel Communications, Inc., a Texas corporation (the "Company") has
filed a Registration Statement, file No. 333-25497 (including any registration
statement filed pursuant to Rule 462(b) the "Registration Statement"), with the
Securities and Exchange Commission to register for sale to the public under the
Securities Act of 1933, as amended (the "Act"), shares of the Company's Common
Stock, par value $. 10 per share (the "Common Stock").
The shares to be covered by the Registration Statement shall consist of (a)
up to 4,093,790 shares of Common Stock to be sold by the Company (plus such
additional shares of Common Stock that the Company, in its sole discretion,
desires to offer in such public offering), excluding the over-allotment option
granted to the underwriters (the "Underwriters") named in an Underwriting
Agreement to be entered into by such Underwriters, the Company and certain
selling shareholders of the Company (the "Underwriting Agreement"), and (b) up
to 5,906,210 shares of Common Stock to be sold by certain selling shareholders
of the Company, of which _______________ shares (the "Shares") are to be sold by
the undersigned Selling Shareholder. Further information with respect to the
Shares is set forth on EXHIBIT A attached hereto and incorporated herein by
reference.
1. A custody arrangement is hereby established by the Selling Shareholder
with the Custodian with respect to the Shares, and the Custodian is hereby
instructed to act in accordance with this Agreement and any amendments or
supplements hereto authorized by the Selling Shareholder.
2. There are herewith delivered to the Custodian, and the Custodian
hereby acknowledges receipt of, certificates representing the Shares, which
certificates have been endorsed in blank or are accompanied by duly executed
stock powers, in each case with all signatures guaranteed by a commercial bank
or trust company or by a member firm of the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. or a member of the National Association of
Securities Dealers, Inc. Such certificates are to be held by the Custodian for
the account of the Selling Shareholder and are to be disposed of by the
Custodian in accordance with this Agreement.
3. The Custodian is authorized and directed by the Selling Shareholder:
a. To hold the certificates representing the Shares delivered by the
Selling Shareholder in its custody;
b. On or immediately prior to the settlement date for any Shares
sold pursuant to the Registration Statement as advised by Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P., counsel for the Company ("Company Counsel") (the "Closing
Date"), to cause such Shares to be transferred on the books of the Company into
such names as the Custodian shall have been instructed in writing by Alex. Xxxxx
& Sons Incorporated, as representative of the several Underwriters (the
"Underwriters"); to cause to be issued, against surrender of the certificates
for the Shares, a new certificate or certificates for such Shares, free of any
restrictive legend, registered in such name or names; to deliver such new
certificates representing such Shares to the Underwriters on the Closing Date
for their account or accounts against full payment therefor; and to give receipt
for such payment; and
c. To disburse such payments in the following manner: (i) to itself,
as agent for the Selling Shareholder, a reserve amount to be designated in
writing by the Selling Shareholder from which amount the Custodian shall pay, as
soon as reasonably practicable, (A) its reasonable charges and disbursements, if
any, for acting hereunder with respect to the sale of the Shares and (B) any
applicable stock transfer taxes; and (ii) to the Selling Shareholder, pursuant
to the written instructions of the Selling Shareholder, (A) on the Closing Date,
a sum equal to the proceeds of the sale of the Shares, less the reserve amount,
if any, designated by the Selling Shareholder, and (B) promptly after all proper
charges, disbursements, costs and expenses shall have been paid, any remaining
balance of the amount reserved under clause (i) above. Before making any
payment from the amount reserved under clause (i) above, except payments made
pursuant to subclause (B) of clause (ii) above, the Custodian shall request and
receive the written approval of the Selling Shareholder.
d. The duties, responsibilities and obligation of the Custodian
shall be limited to those expressly set forth herein and not duties,
responsibilities or obligations shall be inferred or implied. Custodian shall
not be subject to, nor required to comply with, any other agreement between or
among any or all of the Selling Shareholders or to which any Selling Shareholder
is a party, even though reference thereto may be made herein, or to comply with
any direction or instruction (other than those contained herein or delivered in
accordance with this Agreement) from any Selling Shareholder or any entity
acting on its behalf. Custodian shall not be required to expend or risk any of
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder.
e. Custodian shall not be liable for any action taken or omitted or
for any loss or injury resulting from its actions or its performance or lack of
performance of its duties hereunder in the absence of gross negligence or
willful misconduct on its part. In no event shall Custodian be liable (i) for
acting in accordance with or relying upon any instruction, notice, demand,
certificate or document from any Selling Shareholder or any entity acting on
behalf of any Selling Shareholder, (ii) for any indirect, consequential,
punitive or special damages regardless of the form of action and whether or not
any such damages were foreseeable or contemplated, (iii) for the acts or
omissions of its nominees, correspondents, designees, subagents or
subcustodians, or (iv) for an amount in excess of
the value of the Shares deposited hereunder, valued as of the date of deposit,
but only to the extent of direct money damages.
f. Custodian shall not incur any liability for not performing any
act or fulfilling any duty, obligation or responsibility hereunder by reason of
any occurrence beyond the control of Custodian (including but not limited to any
act or provision of any present or future law or regulation or governmental
authority, any act of God or war, or the unavailability of the Federal Reserve
Bank wire or telex or other wire or communication facility).
g. Custodian shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities deposited
hereunder, or for any description therein, or for the identity, authority or
rights of persons executing or delivering or purporting to execute or deliver
any such document, security or endorsement.
h. The Custodian shall be entitled to rely upon oral instructions
actually received by the Custodian from a person believed by the Custodian to be
authorized to give the same. The Selling Shareholder giving such oral
instructions agrees to forward to the Custodian a facsimile confirming such oral
instructions so that it is received by the Custodian by the close of business on
the same day that such oral instructions are given. The Selling Shareholder
agrees that the fact that such confirming instructions are not received by the
Custodian shall in no way affect the validity of the transactions or
enforceability of the actions taken or omitted by the Custodian, and the
Custodian shall incur no liability for action upon any such oral instruction,
not for acting upon any written instructions believed by the Custodian to have
been given by a person authorized to give the same.
4. Subject in each case to the indemnification obligations set forth in
Section 7, in the event any Shares are not sold, the Custodian, as instructed in
writing by Company Counsel, shall deliver to the Selling Shareholder as soon as
practicable after termination of the offering of the Shares, certificates
representing such Shares deposited by the Selling Shareholder. Certificates
returned to the Selling Shareholder shall be returned with any related stock
powers, and any new certificates issued to the Selling Shareholder with respect
to such Shares shall bear any appropriate legend reflecting the unregistered
status thereof under the Act.
5. This Agreement is for the express benefit of the Company, the Selling
Shareholder, any other selling shareholders in the offering and the
Underwriters. The obligations and authorizations of the Selling Shareholder
hereunder are irrevocable and shall not be terminated by any act of the Selling
Shareholder or by operation of law, whether by the death, disability or
incapacity of the Selling Shareholder or by the occurrence of any other event or
events, and if after the execution hereof the Selling Shareholder shall die or
become disabled or incapacitated, or if any other event or events shall occur
before the delivery of the Shares hereunder to the Underwriters, the Shares
shall be delivered to the Underwriters in accordance with the terms and
conditions of this Agreement, as if such event had not occurred, regardless of
whether or not the Custodian shall have received notice of such event.
6. Until payment of the purchase price for the Shares has been made to
the Selling Shareholder or to the Custodian, the Selling Shareholder shall
remain the owner of (and shall retain the right to receive dividends and
distributions on, and to vote) the Shares delivered to the Custodian hereunder.
Until such payment in full has been made or until the offering of Shares has
been terminated, the Selling Shareholder agrees that it will not give, sell,
pledge, hypothecate, grant any lien on, transfer, deal with or contract with
respect to the Shares and any interests therein.
7. The Custodian shall assume no responsibility to any person other than
to deal with the certificates for the Shares and the proceeds from the sale of
the Shares represented thereby in accordance with the provisions hereof, and the
Selling Shareholder hereby agrees to indemnify the Custodian for and to hold the
Custodian harmless against any and all losses, claims, damages or liabilities
incurred on its part arising out of or in connection with it acting as the
Custodian pursuant hereto, as well as the cost and expenses of investigating and
defending any such losses, claims, damages or liabilities, except to the extent
such losses, claims, damages or liabilities are due to the negligence or bad
faith of the Custodian. The Selling Shareholder agrees that the Custodian may
consult with counsel of its own choice (who may be counsel for the Company), and
the Custodian shall have full and complete authorization and protection for any
action taken or suffered by the Custodian hereunder in good faith and in
accordance with the opinion of such counsel.
8. The Selling Shareholder hereby represents and warrants that: (a) it
has, and at the time of delivery of the Shares to the Underwriters it will have,
full power and authority to enter into this Agreement, to carry out the terms
and provisions hereof and thereof and to make all of the representations,
warranties and agreements contained herein; (b) this Agreement is the valid and
binding agreements of the Selling Shareholder and is enforceable against the
Selling Shareholder in accordance with its terms; and (c) that the Selling
Shareholder has good and marketable title to the Shares, subject to no lien,
encumbrance, pledge, security interest or restriction of any kind.
9. The Selling Shareholder agrees not to offer, sell, sell short or
otherwise dispose of any shares of Common Stock of the Company or other capital
stock of the Company, or any other securities convertible, exchangeable or
exercisable for Common Stock or derivative of Common Stock owned by the Selling
Shareholder, or request the registration for the offer or sale of any of the
foregoing (or as to which the Selling Shareholder has the right to direct the
disposition of) for a period of 90 days after the date the Underwriting
Agreement is executed, except with the prior written consent of Alex, Xxxxx &
Sons Incorporated.
10. The Custodian's acceptance of this Agreement by the execution hereof
shall constitute an acknowledgment by the Custodian of the authorization herein
conferred and shall evidence the Custodian's agreement to carry out and perform
this Agreement in accordance with its terms.
11. This Agreement may be executed in two or more counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
12. This Agreement shall be binding upon the Custodian, the Selling
Shareholder and the heirs, legal representatives, distributees, successors and
assigns of the Selling Shareholder.
13. This Agreement shall be governed by the laws of the State of New York
applicable to contracts made and to be performed entirely in such State.
14. Any notice given pursuant to this Agreement shall be deemed given if
in writing and delivered in person, or if given by telephone or telegraph if
subsequently confirmed by letter: (i) if to the Selling Shareholder, to him at:
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and (ii) if to the Custodian, to it at:
The Bank of New York
Corporate Trust Administration
Attn: Xxxx Xxxxxxx
000 Xxxxxxx Xxxxxx, Xxxxx 00-X
Xxx Xxxx, Xxx Xxxx, 00000.
15. The Custodian shall be entitled to act and conclusively rely upon any
statement, request, notice or instruction with respect to this Agreement given
to it on behalf of the Selling Shareholder if the same shall be made or given to
the Custodian by the Selling Shareholder, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE BANK OF NEW YORK, as Custodian
By:
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Name:
Title:
SELLING SHAREHOLDER:
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Name:
By:
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Name:
Title:
EXHIBIT A
DESCRIPTION OF SHARES
CERTIFICATE NUMBER NUMBER OF SHARES
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TOTAL NUMBER OF SHARES:
SELLING SHAREHOLDER:
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Name
By:
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Name:
Title:
Date:
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