[Federal Register Volume 66, Number 39 (Tuesday, February 27, 2001)]
[Notices]
[Pages 12544-12565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-87]


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DEPARTMENT OF JUSTICE

Antitrust Division


Clear Channel Communications, Inc., and AMFM Inc. Merger 
Settlement

    Proposed Final Judgment and Competitive Impact Statement in United 
States v. Clear Channel Communications, Inc., and AMFM Inc., Civ. 
Action No. 1:00CV02063.
    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Secs. 16(b)-(h), that a proposed Final 
Judgment, Stipulation and Order, and Competitive Impact Statement have 
been filed with the United States District Court for the District of 
Columbia, in United States versus Clear Channel Communications, Inc., 
and AMFM Inc., Civ. Action No. 1:00CV02063 (Thomas Penfield Jackson, 
J.).
    On August 29, 2000, the United States filed a Complaint alleging 
that the effect of the merger of Clear Channel Communications, Inc. and 
AMFM Inc. may be to lessen competition substantially in the sale of 
radio advertising time and out-of-home advertising in several local 
markets in the United States in violation of Section

[[Page 12545]]

7 of the Clayton Act, as amended, 15 U.S.C. 18.
    The proposed Final Judgment, also filed on August 29, 2000, 
requires Defendants to divest 14 radio stations in five markets: 
Allentown-Bethlehem, PA; Denver, CO; Harrisburg-Lebanon-Carlisle, PA; 
Houston-Galveston, TX; and Pensacola, FL, to preserve competition in 
the sale of radio advertising time in these markets. In addition, the 
proposed Final Judgment requires the Defendants to divest the 
approximate 28.6 percent equity interest in Lamar Advertising Company 
that Clear Channel acquired as a result of the merger in order to 
maintain effective and viable competition in the sale of out-of-home 
advertising in various markets in the United States. A Competitive 
Impact Statement filed by the United States on November 15, 2000, 
describes the Complaint, the proposed Final Judgment, and the remedies 
available to private litigants who may have been injured by the alleged 
violations.
    Copies of the Complaint, proposed Final Judgment, Stipulation and 
Order, and Competitive Impact Statement are available for inspection at 
the U.S. Department of Justice, Antitrust Division, 325 Seventh Street, 
NW., Room 325, Washington, DC 20530, and at the Clerk's Office of the 
United States District Court for the District of Columbia.
    Public comment is invited with the statutory 60-day comment period. 
Such comments and responses thereto will be published in the Federal 
Register and filed with the Court. Comments should be directed to: J. 
Robert Kramer, II, Chief, Litigation II Section, Antitrust Division, 
U.S. Department of Justice, 1401 H Street, NW., Suite 3000, Washington, 
DC 20530 (telephone: (202) 307-0924).

Constance K. Robinson,
Director of Operations & Merger Enforcement.

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Clear Channel Communications, 
Inc. and AMFM Inc., Defendants

[Civil Action No.: 1:00CV02063]

    Judge: Thomas Penfield Jackson.
    Filed: August 29, 2000.

Stipulation and Order

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the United States District Court for the District of 
Columbia.
    2. The parties stipulate that a Final Judgment in the form attached 
hereto may be filed with and entered by the Court, upon the motion of 
any party or upon the Court's own motion, at any time after compliance 
with the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. 16), and without further notice to any party or other 
proceedings, provided that the United States has not withdrawn its 
consent, which it may do at any time before the entry of the proposed 
Final Judgment by serving notice thereof on defendants and by filing 
that notice with the Court.
    3. The defendants shall abide by and comply with the provisions of 
the proposed Final Judgment entry of the Final Judgment by the Court, 
or until expiration of time for all appeals of any Court ruling 
declining entry of the proposed Final Judgment, and shall, from the 
date of the signing of this Stipulation and Order by the parties, 
comply with all the terms and provisions of the proposed Final Judgment 
as though the same were in full force and effect as an order of the 
Court.
    4. The parties recognize that there could be a delay in obtaining 
approval by or ruling of a government agency related to the 
divestitures required by Section IV of the Final Judgment, 
notwithstanding the good faith efforts of the defendants and any 
prospective Acquirer, as defined in the Final Judgment. In this 
circumstance, plaintiff will, in the exercise of its sole discretion, 
acting in good faith, give special consideration to forbearing from 
applying for the appointment of a trustee pursuant to Section VII(A) of 
the Final Judgment, or from pursuing legal remedies available to it as 
a result of such delay, provided that: (1) Defendants have entered into 
one or more definitive agreements to divest the relevant Radio Assets, 
as defined in the Final Judgment, and such agreements and the Acquirer 
have been approved by the United States; (ii) all papers necessary to 
secure any governmental approvals and/or rulings to effectuate such 
divestitures (including but not limited to FCC, SEC and IRS approvals 
or rulings) have been filed with the appropriate agency; (iii) receipt 
of such approvals are only closing conditions that have not been 
satisfied or waived; and (iv) defendants have demonstrated that neither 
they nor the prospective Acquirer or Acquirers are responsible for such 
delay.
    5. In the event that (I) the United States withdraws its consent, 
as provided in paragraph 2 above, or (ii) the proposed Final Judgment 
is not entered pursuant to Stipulation and Order, the time has expired 
for all appeals of any Court ruling declining entry of the proposed 
Final Judgment, and this Court has not otherwise ordered continued 
compliance with the terms and provisions of the proposed Final 
Judgment, then the parties are released from all further obligations 
under the Stipulation and Order, and the making of this Stipulation and 
Order shall be without evidentiary prejudice to any party in this or 
any other proceeding.
    6. This Stipulation and Order shall apply with equal force and 
effect to any amended proposed Final Judgment agreed upon in writing by 
the parties and submitted to the Court.
    7. Defendants represent that the divestitures ordered in the 
proposed Final Judgment can and will be made, and that defendants will 
later raise no claim of hardship or difficulty as grounds for asking 
the Court to modify any of the divestiture provisions contained 
therein.

    Dated: August 29, 2000.

    For Plaintiff United States:

John C. Filippini (165159)
Allen P. Grunes, Rex Fujichaku, Litigation II Section, Antitrust 
Division, U.S. Department of Justice, 1401 H Street, NW., Suite 
3000, Washington, DC 20005, (202) 307-5782.

For Defendant Clear Channel Communications, Inc.:

Charles E. Biggio,
Akin, Gump, Strauss, Hauer & Feld, 590 Madison Avenue--20th Floor, 
New York, NY 10022, (212) 872-1010.
Phillip A. Proger,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW., Washington, DC 
20001-2113, (202) 879-4668.

For Defendant AMFM Inc.:

Neil W. Imus,
Vinson & Elkins, The Willard Office Building, 1455 Pennsylvania 
Avenue, NW., Washington, DC 20004-1008, (202) 639-6675.

Order

    It Is So Ordered by this Court, this ______ Day of August, 2000.
----------------------------------------------------------------------
United States District Judge

Final Judgment

    Whereas, plaintiff, United States of America, filed its Complaint 
on August 29, 2000, plaintiff and defendants, Clear Channel 
Communications, Inc. (``Clear Channel'') and AMFM Inc. (``AMFM''), by 
their respective attorneys, have consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law, and 
without

[[Page 12546]]

this Final Judgment constituting any evidence against or admission by 
any party regarding any issue of fact or law;
    And Whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by the defendants to 
assure that competition is not substantially lessened;
    And Whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And Whereas, defendants have represented to the United States that 
the divestitures required below can and will be made and that 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now, Therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is Ordered, Adjudged, and Decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against defendants under section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Clear Channel'' means defendant Clear Channel Communications, 
Inc., a Texas corporation with its headquarters in San Antonio, Texas, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    B. ``AMFM'' means defendants AMFM Inc., a Delaware corporation with 
its headquarters in Austin, Texas, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    C. ``Lamar'' means Lamar Advertising Company, a Delaware 
corporation with its principal place of business in Baton Rouge, 
Louisiana, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and their 
directors, officers, managers, agents, and employees.
    D. ``Divestiture Assets'' means Radio Assets and Lamar Holdings.
    E. ``Radio Assets'' means all of the assets, tangible or 
intangible, used in the operation of each of the radio stations listed 
in Schedule A attached hereto, including all real property (owned or 
leased) used in the operation of the station, all broadcast equipment, 
office equipment, office furniture, fixtures, materials, supplies, and 
other tangible property used in the operation of the station; all 
licenses, permits, authorities, and applications therefor issued by the 
Federal Communications Commission (``FCC'') and other government 
agencies related to the station; all contracts (including programming 
contracts and rights), agreements, leases and commitments of Clear 
Channel or AMFM relating to its operation; all trademarks, service 
marks, trade names, copyrights, patents, slogans, programming 
materials, and promotional materials relating to the station; and all 
logs and other records maintained by Clear Channel or AMFM or that 
station in connection with its business.
    F. ``Lamar Holdings'' means the 26,227,273 shares of Lamar 
Advertising Company's Class A stock owned by AMFM when the Complaint in 
this matter was filed to be acquired by Clear Channel in its merger 
with AMFM.
    G. ``Divestiture Cities'' means the Metropolitan Survey Areas 
defined as ``Arbitron Markets'' in the BIA Investing In Radio Market 
Report 2000 (2d edition) set forth in Schedule B attached hereto.
    H. ``Acquirer'' means the entity or entities to whom defendants 
divest any Divestiture Assets.

III. Applicability

    A. This Final Judgment applies to Clear Channel and AMFM, as 
defined above, and all other persons in active concert or participation 
with either of them who receive actual notice of this Final Judgment by 
personal service or otherwise.
    B. Defendants shall require, as a condition of the sale or other 
disposition of all or substantially all of their assets or of lesser 
business units that include any of the Divestiture Assets, that the 
acquiring party or parties agree to be bound by the provisions of this 
Final Judgment.

 IV. Divestiture of Radio Assets

    A. Defendants are ordered and directed, within one hundred and 
fifty (150) days after the filing of the Complaint in this matter, or 
five (5) days after notice of the entry of this Final Judgment by the 
Court, whichever is later, to divest the Radio Assets in a manner 
consistent with this Final Judgment to an Acquirer or Acquirers 
acceptable to the United States in its sole discretion. The United 
States, in its sole discretion, may agree to an extension of this time 
period of up to two thirty (30) day time periods, not to exceed sixty 
(60) calendar days in total, and shall notify the Court in such 
circumstances. Defendants agree to use their best efforts to divest the 
Radio Assets, and to obtain all regulatory approvals necessary for such 
divestitures, as expeditiously as possible.
    B. In accomplishing the divestitures of the Radio Assets ordered by 
the Final Judgment, defendants promptly shall make known, by usual and 
customary means, the availability of the Radio Assets. Defendants shall 
inform any person making an inquiry regarding a possible purchase of 
the Radio Assets that the sale is being made pursuant to this Final 
Judgment and provide each person with a copy of this Final Judgment. 
Defendants shall offer to furnish to all prospective Acquirers, subject 
to customary confidentiality assurances, all information and documents 
regarding the Radio Assets customarily provided in a due diligence 
process, except such information or documents subject to the attorney-
client or work product privileges. Defendants shall make available such 
information to the United States at the same time that such information 
is made available to any other person.
    C. Defendants shall provide the Acquirer(s) and the United States 
information relating to the personnel involved in the operation of the 
Radio Assets to enable the Acquirer(s) to make offers of employment. 
Defendants will not interfere with any negotiations by the Aquirer(s) 
to employ any defendant employee whose primary responsibility relates 
to the operation of the Radio Assets.
    D. Defendants shall permit prospective Acquirers of the Radio 
Assets to have reasonable access to personnel and to make inspections 
of the physical facilities of the radio stations to be divested; access 
to any and all environmental, zoning, and other permit documents and 
information; and access to any and all financial, operational, or other 
documents and information customarily provided as part of a due 
diligence process.
    E. Defendants shall warrant to any and all Acquirers of the Radio 
Assets that each asset will be operational on the date of sale.
    F. Defendants shall not take any action that will impede in any way 
the

[[Page 12547]]

permitting, operation, or divestiture of the Radio Assets.
    G. Defendants shall warrant to the Acquirer(s) of the Radio Assets 
that there are no material defects in the environmental, zoning or 
other permits pertaining to the operation of each asset, and that 
following the sale of the Radio Assets, defendants will not undertake, 
directly or indirectly, any challenges to the environmental, zoning or 
other permits relating to the operation of the Radio Assets.
    H. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV, or by trustee appointed pursuant 
to Section VIII(A) and IX, of this Final Judgment, shall include the 
entire Radio Assets, and shall be accomplished in such a way to satisfy 
the United States, in its sole discretion, that the Radio Assets can 
and will be used by the Acquirer(s) as part of a viable, ongoing 
commercial radio broadcasting business. Divestiture of the Radio Assets 
may be made to one or more Acquirers, provided that in each instance it 
is demonstrated to the sole satisfaction of the United States that the 
divestiture assets will remain viable and the divestiture of such 
assets will remedy the competitive harm alleged in the Complaint. The 
divestitures, whether pursuant to Section IV or IX of this Final 
Judgment.

    (i) Shall be made to an Acquirer (or Acquirers) that, in the 
United State's sole judgment, has the intent and capability 
(including the necessary managerial, operational, and financial 
capability) of competing effectively in the commercial radio 
broadcasting business in the Divestiture Cities; and
    (ii) shall be accomplished so as to satisfy the United States, 
in its sole discretion, that none of the terms of any agreement 
between an Acquirer or Acquirers and Clear Channel or AMFM give 
Clear Channel or AMFM the ability unreasonably to raise the 
Acquirer's costs, to lower the Acquirer's efficiency, or otherwise 
to interfere in the ability of the Acquirer to compete effectively.

V. Preservation of Radio Assets/Hold Separate

    Until the divestiture of all the Radio Assets required by this 
Final Judgment have been accomplished:
    A. Defendants shall preserve, hold and continue to operate the 
Radio Assets as separate, independent, ongoing, economically viable and 
active competitors to the other stations in the Divestiture Cities, 
with their assets, management and operations separate, distinct and 
apart from defendants' other radio stations. Except as necessary to 
comply with Sections V(B) and (D) of this Final Judgment, the 
management of said stations, including the performance of decision-
making functions regarding marketing and pricing, will be kept separate 
and apart from, and not influenced by, defendant Clear Channel in the 
case of AMFM stations, and defendant AMFM in the case of Clear Channel 
stations. The books, records, and competitively sensitive sales, 
marketing and pricing information associated with the divestiture 
assets shall be kept separate and apart from defendants' other 
business.
    B. Defendants shall use all reasonable efforts to maintain and 
increase sales of advertising time by the Radio Assets and shall 
maintain at 1999 or previously approved levels for 2000, whichever are 
higher, promotional, advertising, sales, marketing and merchandising 
support for such Radio Assets.
    C. Defendants shall provide sufficient working capital to maintain 
the Radio Assets as economically viable and competitive ongoing 
businesses.
    D. Defendants shall take all steps necessary to ensure that the 
Radio Assets are fully maintained in operable condition and shall 
maintain and adhere to normal repair and maintenance schedules for the 
Radio Assets.
    E. Defendants shall not, except as part of a divestiture approved 
by the United States in accordance with the terms of this Final 
Judgment, remove, sell, lease, assign, transfer, license, pledge for 
collateral or otherwise dispose of any of the Radio Assets.
    F. Defendants shall maintain, in accordance with sound accounting 
principles, separate, accurate and complete financial ledgers, books 
and records that report on a periodic basis (such as the last business 
day of every month), consistent with past practices, the assets, 
liabilities, expenses, revenues and income of the Radio Assets.
    G. Defendants' employees with primary responsibility for sales, 
marketing and programming of the Radio Assets to be divested pursuant 
to this Final Judgment shall not be transferred or reassigned to any 
other station, except for transfer bids initiated by employees pursuant 
to each defendant's regular, established job posting policies. 
Defendants shall provide the United States with ten (10) days' notice 
of such transfer.
    H. Defendants shall appoint a person or persons to oversee the 
Radio Assets who will be responsible for defendants' compliance with 
this section. Such person shall have complete managerial responsibility 
for the Radio Assets, subject to the provisions of this Final Judgment. 
In the event that individual is unable to perform his or her duties, 
defendants shall appoint, subject to the approval of the United States, 
a replacement within ten (10) working days. Should defendants fail to 
appoint a replacement acceptable to the United States within this time 
period, the United States shall appoint a replacement.

VI. Divestiture of the Lamar Holdings

    A. Defendants are ordered and directed to divest completely the 
Lamar Holdings on or before December 31, 2002, in a manner consistent 
with this Final Judgment. A divestiture is not considered complete 
until the Acquirer(s) takes ownership and possession of all rights and 
interests held by Clean Channel in the relevant portion of the Lamar 
Holdings and Clear Channel has irrevocably relinquished to the Acquirer 
ownership and possession of, and all rights and interests in, the 
relevant portion of the Lamar Holdings.
    B. The divestitures required by this Section may be made by public 
offering, private sale, or a combination thereof. Such divestitures, 
whether pursuant to Sections VI or IX shall not be made: (i) To any 
person who provides outdoor advertising services unless the United 
States shall otherwise agree in writing; or (ii) in a manner that, in 
the sole judgment of the United States, could significantly impair 
Lamar as an effective competitor in the sale of outdoor advertising.
    C. In accomplishing the divestitures ordered by this Final 
Judgment, defendants shall make known the availability of the Lamar 
Holdings by usual and customary means, consistent with state and 
federal securities laws and in sufficient time so as to allow the 
divestitures to be completed within the time periods specified in 
Section VI(A) above. Defendants shall inform any person making an 
inquiry regarding the purchase of the Lamar Holdings that they are 
being divested pursuant to this Final Judgment. Defendants shall permit 
prospective Acquirer(s) in a private sale access to any and all 
financial, operational, or other documents and information customarily 
provided as part of a due diligence process, except such information or 
documents subject to the attorney-client or work product privileges. 
Defendants shall make available such information to the United States 
at the same time that such information is made available to any other 
person.

VII. Lamar Governance and Economic Interest

    A. Defendants shall abide by the First Amendment to Stockholders 
Agreement between Lamar, AMFM, and the controlling shareholders of 
Lamar

[[Page 12548]]

(``First Amendment to Stockholders Agreement'') and the Amended And 
Restated Registration Rights Agreement between Lamar, AMFM, and Clear 
Channel (``Amended And Restated Registration Rights Agreement''), 
attached hereto as Schedules C and D, respectively. No amendment or 
revision of the Amendment to Stockholders Agreement or Amended And 
Restated Registration Rights Agreement shall become effective unless 
approved in writing by a representative of the United States.
    B. Until the divestiture of the Lamar Holdings required by the 
Final Judgment has been completed, defendants shall treat the Lamar 
Holdings as a passive investment, and shall hold the Lamar Holdings 
separate and apart from the activities and interests of Clear Channel. 
Neither the defendants nor their designees may exercise any rights 
relating to the governance of Lamar, including but not limited to: (i) 
Exercising any voting rights associated with the Lamar holdings in a 
manner inconsistent with the First Amendment to Stockholders Agreement; 
(ii) electing, nominating, appointing or otherwise designating or 
participating as officers or directors; (iii) participating, as a 
member of the Board of Directors or otherwise, in any meetings of the 
Board of Directors; (iv) participating in any committees; (v) 
exercising any veto rights with respect to the business of Lamar, 
including veto power over changes in control of Lamar, over significant 
asset purchases or sales, over change in majority of board membership, 
or over changes in majority ownership of Lamar; or (vi) obtaining any 
financial or business information with respect to Lamar that is not 
otherwise publicly available. In no event shall defendants influence or 
attempt to influence the decision-making, management, or policies of 
Lamar.
    C. Within two (2) business days after Clear Channel acquires AMFM, 
Thomas O. Hicks and R. Steven Hicks shall resign from the Board of 
Directors of Lamar and from any committees of the Board of Directors.
    D. Except as necessary to carry out the provisions of this Final 
Judgment, the trustee shall not exercise any voting rights associated 
with the Lamar Holdings for so long as they are held in trust in a 
manner inconsistent with the First Amendment to Stockholders Agreement.
    E. Defendants shall not acquire, directly or indirectly, additional 
shares of Lamar Advertising Company stock, except pursuant to a stock 
split, stock dividend, rights offering, recapitalization, 
reclassification, or merger, consolidation, corporate reorganization, 
or other similar transaction hat does not increase defendants' 
proportion of the outstanding equity of Lamar. Any additional equity of 
Lamar that defendants acquire by such means shall be treated as part of 
the Lamar Holdings and be subject to the divestiture obligations of 
Section VI(A) of this Final Judgment. Notwithstanding anything to the 
contrary contained in this Final Judgment, nothing in this Final 
Judgment shall prohibit a transaction in which Clear Channel would 
acquire a majority of the voting securities of Lamar, provided that 
such transaction is subject to the reporting and waiting period 
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 
1976, as amended, 15 U.S.C. 18a.
    F. Defendants shall appoint a person or persons to oversee the 
Lamar Holdings who will be responsible for defendants' compliance with 
this section. In the event that individual is unable to perform his or 
her duties, defendants shall appoint, subject to the approval of the 
United States, a replacement within ten (10) working days. Should 
defendants fail to appoint a replacement acceptable to the United 
States within this time period, the United States shall appoint a 
replacement.
    G. Defendants shall not take any action that will impede in any way 
the divestiture of the Lamar Holdings.

VIII. Appointment of Trustees

    A. Appointment of a Trustee to Divest Radio Assets: If defendants 
have not divested the Radio Assets within the time period specified in 
Section IV(A) of this Final Judgment, defendants shall notify the 
United States of that fact in writing. Upon application of the United 
States, the Court shall appoint a trustee selected by the United States 
(``Radio Trustee'') to effect the divestiture of the Radio Assets.
    B. Appointment of a Trustee to Divest Lamar Holdings: Clear Channel 
shall notify the United States, no less than sixty (60) calendar days 
prior to the expiration of the time period for divestiture specified in 
Section VI(A) of this Final Judgment, whether it has arranged to 
complete the divestiture of the Lamar Holdings in a timely fashion. In 
the event that Clear Channel has not made an arrangement which, in the 
sole discretion of the United States, will result in completion of the 
divestiture within the time limit specified in Section VI(A), or in the 
event that Clear Channel has not completed the divestiture within the 
appropriate time limit, the Court shall appoint, upon application of 
the United States, a trustee selected by the United States to effect 
the divestiture of the Lamar Holdings (``Lamar Stock Trustee''). The 
United States may request, and the Court may appoint, a trustee before 
the time period for divestiture specified in Section VI(A) expires.

IX. General Powers and Duties of the Trustees

    The following provisions apply to the Radio Trustee and the Lamar 
Stock Trustee:
    A. After the appointment of a trustee becomes effective, only that 
trustee shall have the right to sell the Divestiture Assets. The 
trustee(s) shall have the power and authority to accomplish the 
divestitures to an Acquirer(s) acceptable to the United States at such 
price and on such terms as are then obtainable upon the best reasonable 
effort by the trustee(s), subject to the provisions of Sections IV, VI, 
IX, and X of this Final Judgment, and shall have such other powers as 
the Court shall deem appropriate. Subject to Section IX(C) of this 
Final Judgment, the trustee(s) may hire at the cost and expense of 
defendants any investment bankers, attorneys, or other agents, who 
shall be solely accountable to the trustee, reasonably necessary in the 
trustee's judgment to assist in the divestitures.
    B. Defendants shall not object to a sale by the trustee(s) on any 
grounds other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to the United States and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under Section X.
    C. The trustee(s) shall serve at the cost and expense of 
defendants, on such terms and conditions as the United States approves, 
and shall account for all monies derived from the sale of the assets 
sold by the trustee(s) and all costs and expenses so incurred. After 
approval by the Court of the trustee's accounting, including fees for 
its services and those of any professionals and agents retained by the 
trustee(s), all remaining money shall be paid to defendants and the 
trust shall then be terminated. The compensation of the trustee(s) and 
any professionals and agents retained by the trustee(s) shall be 
reasonable in light of the value of the Divestiture Assets and based on 
a fee arrangement providing the trustee(s) with incentives based on the 
price and terms of the divestitures and the speed with which they are 
accomplished, but timeliness is paramount.
    D. Defendants shall use their best efforts to assist the trustee(s) 
in

[[Page 12549]]

accomplishing the required divestitures. The trustee(s) and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee(s) shall have full and complete access to the personnel, books, 
records, and facilities related to any of the Divestiture Assets. 
Defendants shall develop financial and other information relevant to 
the Divestiture Assets as the trustee(s) may reasonably request, 
subject to reasonable protection for trade secret or other confidential 
research, development or commercial information. Defendants shall take 
no action to interfere with or to impede the trustee's accomplishment 
of the divestitures.
    E. After his or her appointment becomes effective, the trustee(s) 
shall file monthly reports with the United States and the Court, 
setting forth the trustee's efforts to accomplish the divestitures 
ordered under this Final Judgment. To the extent that such reports 
contain information that the trustee deems confidential, such reports 
shall not be filed in the public docket of the Court. Such reports 
shall include the name, address and telephone number of each person 
who, during the preceding month, made an offer to acquire, expressed an 
interest in acquiring, entered into negotiations to acquire, or was 
contacted or made an inquiry about acquiring, any interest in the 
Divestiture Assets, and shall describe in detail each contact with any 
such person. The trustee(s) shall maintain full records of all efforts 
made to divest the Divestiture Assets.
    F. If the trustee(s) has not accomplished such divestitures within 
six (6) months after his or her appointment, the trustee(s) shall 
promptly file with the Court a report setting forth: (i) The trustee's 
efforts to accomplish the required divestitures, (ii) the reasons, in 
the trustee's judgment, why the required divestitures have not been 
accomplished, and (iii) the trustee's recommendations. To the extent 
such reports contain information that the trustee deems confidential, 
such reports shall not be filed in the public docket of the Court. The 
trustee at the same time shall furnish such reports to the United 
States, who shall have the right to make additional recommendations 
consistent with the purpose of the trust. The Court thereafter shall 
enter such orders as it deems appropriate to carry out the purpose of 
this Final Judgment, which may, if necessary, include extending the 
trust and the term of the trustee's appointment by a period requested 
by the United States.

X. Notice of Proposed Divestitures of Radio Assets

    A. Within two (2) business days following execution of a definitive 
agreement, defendants or the Radio Trustee, whichever is then 
responsible for effecting the divestiture of the Radio Assets required 
herein, shall notify the United States of any proposed divestiture 
required by Section IV or IX of this Final Judgment. If the Radio 
Trustee is responsible, it shall similarly notify defendants. The 
notice shall set forth the details of the proposed transaction and list 
the name, address, and telephone number of each person not previously 
identified who offered or expressed an interest in or desire to acquire 
any ownership interest in the Radio Assets, together with full details 
of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendants, 
the proposed Acquirer or Acquirers, any other third party, or the Radio 
Trustee if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer or Acquirers, and any other 
potential Acquirer. Defendants and the Radio Trustee shall furnish any 
additional information requested within fifteen (15) calendar days of 
the receipt of the request, unless the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from defendants, the 
proposed Acquirer or Acquirers, any third party, and the Radio Trustee, 
whichever is later, the United States shall provide written notice to 
defendants and the Radio Trustee, if there is one, stating whether or 
not it objects to any proposed divestiture. If the United States 
provides written notice that it does not object, then the divestiture 
may be consummated, subject only to defendants' limited right to object 
to the sale under Section IX(B) of this Final Judgment. Absent written 
notice that the United States does not object to the proposed Acquirer 
or upon objection by the United States, a divestiture proposed under 
Section IV or IX shall not be consummated. Upon objection by defendants 
under Section IX(B), a divestiture proposed under Section IX shall not 
be consummated unless approved by the Court.

XI. Financing

    Defendants shall not finance all or any part of any purchase made 
pursuant to this Final Judgment.

XII. Notification of Future Radio Transactions

    A. Clear Channel shall provide advance notification to the United 
States if it intends, directly or indirectly, to acquire any assets of 
or any interest (including any financial, security, loan, equity or 
management interest) in any broadcast radio station that sells 
advertising time in any of the Divestiture Cities, or intends to enter 
into any joint sales agreement or any cooperative selling arrangement 
between a Clear Channel radio station and any other operator of radio 
stations serving listeners in that same City. This obligation to 
provide notice is met under this section when a transaction is subject 
to the reporting and waiting period requirements of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. 18a.
    B. Notification under this section shall be provided to the United 
States in the same format as, and per the instructions relating to, the 
Notification and Report Form set forth in the Appendix to Part 803 of 
Title 16 of the Code of Federal Regulations as amended, except that the 
information requested in Items 5 through 9 of the instructions must be 
provided only about the sales of radio advertising time in the relevant 
Divestiture Cities. Notification shall be provided at least thirty (30) 
days prior to the acquisition of any such interest, and shall include, 
beyond what may be required by the applicable instructions, the names 
of the principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the proposed transaction. If within the 30-day period after 
notification, representatives of the Department of Justice Antitrust 
Division make a written request for additional information, defendants 
shall not consummate the proposed transaction or agreement until twenty 
(20) days after submitting all such additional information. Early 
termination of the waiting periods in this paragraph may be requested 
and, where appropriate, granted in the same manner as is applicable 
under the requirements and provisions of the HSR Act and rules 
promulgated thereunder. This Section shall be broadly construed, and 
any ambiguity or uncertainty regarding the filing of notice under this 
Section shall be resolved in favor of filing notice.

[[Page 12550]]

XIII. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
and every thirty (30) calendar days thereafter until all the 
divestitures have been completed, whether pursuant to Section IV, VI, 
or IX of this Final Judgment, defendants shall deliver to the United 
States an affidavit as to the fact and manner of their compliance with 
Sections IV, VI, or IX of this Final Judgment. Each such affidavit 
shall include the name, address and telephone number of each person 
who, during the preceding thirty (30) days, made an offer to acquire, 
expressed an interest in acquiring, entered into negotiations to 
acquire, or was contracted or made an inquiry about acquiring, any 
interest in the Divestiture Assets, and shall describe in detail each 
contact with any such person during that period. Each such affidavit 
shall also include a description of the efforts that Defendants have 
taken to solicit buyers for the Divestiture Assets and to provide 
required information to prospective purchasers, including the 
limitations, if any, on such information.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to the United States an 
affidavit that describes in reasonable detail all actions defendants 
have taken and all steps defendants have implemented on an on-going 
basis to comply with Section V of this Final Judgment.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.

XIV. Compliance Inspection

    For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon the written request of a duly 
authorized representative of the Assistant Attorney General in charge 
of the Antitrust Division, and on reasonable notice to defendants, be 
permitted:

    (i) Access during defendants' office hours to inspect and copy 
or, at plaintiff's option, to demand that defendants provide copies 
of, all books, ledgers, accounts, records and documents in the 
possession or control of the defendants, who may have counsel 
present, relating to any matters contained in this Final Judgment; 
and
    (ii) to interview, either informally or on the record, 
defendants' officers, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
shall be subject to the interviewee's reasonable convenience and 
without restraint or interference by defendants.

    B. Upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division, defendants shall submit such written 
reports, under oath if requested, relating to any of the matters 
contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by the United States to any person other 
than a duly authorized representative of the Executive Branch of the 
United States, except in the course of legal proceedings to which the 
United States is a party (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. If at the time information or documents are furnished by 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and defendants mark each pertinent page of 
such material, ``Subject to claim of protection under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure,'' then the United States shall 
give defendants ten (10) calendar days' notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XV. No Reacquisition

    Defendants may not reacquire any part of the Divestiture Assets or 
the assets used in the operation of the radio stations listed in 
Schedule E during the term of this Final Judgment.

XVI. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify its provisions, to enforce compliance, 
and to punish violations of its provisions.

XVII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XVIII. Public Interest Determination

    Entry of this Final Judgment is in the public interest.

    Court Approval Subject to Procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

Date:-----------------------------------------------------------------

----------------------------------------------------------------------
United States District Judge

Schedule A--Radio Stations Ordered To Be Divested

1. Allentown-Bethlehem, PA
    WEEX-AM
    WODE-FM
2. Denver, CO
    KVOD-AM
3. Harrisburg-Lebanon-Carlisle, PA
    WNCE-FM
    WNNK-FM
    WTCY-AM
    WTPA-FM
4. Houston-Galveston, TX
    KJOJ-AM
    KJOJ-FM
    KQUE-AM
    KSEV-AM
    KTJM-FM
5. Pensacola, FL
    WMEZ-FM
    WXBM-FM

Schedule B--Divestiture Cities

1. Allentown-Bethlehem, PA
2. Denver, CO
3. Harrisburg-Lebanon-Carlisle, PA
4. Houston-Galveston, TX
5. Pensacola, FL

Schedule C--First Amendment to Stockholders Agreement

    This Amendment (this ``Amendment''), dated as of July 19, 2000, 
by and among Lamar Advertising Company, a Delaware corporation 
(including its successors, the ``Company''), AMFM Operating Inc. (f/
k/a Chancellor Media Corporation of Los Angeles), a Delaware 
corporation (``AMFM Operating''), AMFM Holdings Inc. (f/k/a 
Chancellor Mezzanine Holdings Corporation), a Delaware corporation 
(``AMFM Holdings''), Clear Channel Communications, Inc., a Texas 
corporation (``Clear Channel''), and The Reilly Family Limited 
Partnership, a Louisiana limited partnership (``RFLP''), constitutes 
an amendment to the Stockholders Agreement (as defined below).

Witnesseth

    Whereas, the Company, AMFM Operating, AMFM Holdings and RFLP are 
parties to that certain Stockholders Agreement, dated as of 
September 15, 1999 (the ``Stockholders Agreement'');
    Whereas, AMFM Holdings has transferred to AMFM Operating all of 
the Common Stock of the Company held by AMFM Holdings;
    Whereas, AMFM, Inc., a Delaware corporation (``AMFM''), is the 
indirect parent company of AMFM Operating;
    Whereas, pursuant to a certain Agreement and Plan of Merger 
dated October 2, 1999 (the ``Merger Agreement''), by and among Clear 
Channel, CCU Merger Sub, Inc., a

[[Page 12551]]

Delaware corporation and wholly-owned subsidiary of Clear Channel 
(``Merger Sub''), and AMFM, Merger Sub will be merged with and into 
AMFM (the ``Merger'') and AMFM Operating will become a wholly-owned 
indirect subsidiary of clear channel;
    Whereas, the company, AMFM Operating, AMFM Holdings, Clear 
Channel and RFLP desire to amend the Stockholders Agreement in 
connection with and upon the consummation of the Merger, on the 
terms and conditions hereinafter set forth.
    Now, Therefore, in consideration of the premises and mutual 
convenants contained herein and in the Stockholders Agreement, and 
for other good, valuable and binding consideration, the receipt and 
sufficiency of which are hereby acknowledged, the parties hereto, 
intending to be legally bound hereby, agree as follows:
    1. AMENDMENTS. Upon the consummation of the Merger, the 
Stockholders Agreement shall be amended as follows:
    (A) (i) The following new defined terms shall be added to 
Section 1.1 of the Stockholders Agreement:
    ``Business Day'' means any day except Saturday, Sunday and any 
day which shall be a legal holiday or a day on which banking 
institutions in the State of Texas and/or the State of Louisiana 
generally are authorized or required by law or other government 
actions to close.
    ``Registration Rights Agreement'' means the Amended and Restated 
Registration Rights Agreement dated as of July ____, 2000 by and 
among the Company, AMFM Operating, AMFM Holdings and Clear Channel.
    ``Selling AMFM Holders'' means AMFM Holders who sell or propose 
to sell Common Stock or Common Stock Equivalents pursuant to a 
third-Party Sale.
    ``Third-Party Sale'' has the meaning ascribed thereto in Section 
3.1(a).
    ``Underwritten Offering'' means an offering (other than a block 
sale) in which all or part of the Registrable Securities (as defined 
in the Registration Rights Agreement) or securities convertible 
into, exchangeable for, or exercisable for Registrable Securities 
are sold to an underwriter for reoffering pursuant to the Shelf 
Registration Statement (as defined in the Registration Rights 
Agreement).
    ``Voting Stock'' means any Common Stock or Common Stock 
Equivalents entitled ordinarily, and in the absence of 
contingencies, to vote for the election of directors of the Company.
    (ii) The following defined term shall be substituted in lieu of 
the existing defined term ``Chancellor Holders'' in Section 1.1 of 
the Stockholders Agreement (and wherever such term is elsewhere used 
in the Stockholders Agreement):
    ``AMFM Holders'' means, collectively, AMFM Operating and any 
Affiliates of AMFM Operating who then are parties to this 
Stockholders Agreement and who own any Common Stock or Common Stock 
Equivalents or any interest therein.
    (iii) The following defined term shall be substituted in lieu of 
the existing defined term ``Common Stock Equivalent'' in Section 1.1 
of the Stockholders Agreement (and wherever such term is elsewhere 
used in the Stockholders Agreement):
    ``Common Stock Equivalent'' means, without duplication with any 
other Common Stock or Common Stock Equivalents, any security which 
is convertible into, exercisable for or exchangeable for, directly 
or indirectly, Class A Common Stock of the Company, whether at the 
time of issuance or upon the passage of time or the occurrence of 
some future event.
    (B) The text of the following Sections of the Stockholders 
Agreement shall be deleted in their entirely and replaced by the 
words ``Intentionally Omitted'':
    Section 2.1.1  Board Representation.
    Section 2.1.2  Vacancies.
    Section 2.1.3  Committee Representation.
    Section 2.1.4  Costs and Expenses.
    Section 4.2  Other Significant Transactions.
    Section 7.1  Financial Statements.
    (C) Article 3 of the Stockholders Agreement shall be deleted in 
its entirely and the following provisions shall be substituted 
therefor:

``Article 3--Right To Participate in Certain Dispositions By AMFM 
Holders; Lock-Up

    Section 3.1  Right to Participate in Certain Dispositions by 
AMFM Holders.
    (a) Subject to the provisions of this Section 3.1, in the event 
that any one or more of the AMFM Holders proposes to offer or sell 
any Common Stock or Common Stock Equivalents for an aggregate 
offering price of $200 million or more to any Person who is not an 
Affiliate of the AMFM Holders in a single offering or a series of 
related offerings (if at the time of the first of such series of 
related offerings the Selling AMFM Holders know that there will be a 
series of related offerings to a single purchaser or a affiliated 
group of purchasers having an aggregate offering price of $200 
million or more) (a ``Third-Party Sale''), then such Selling AMFM 
Holders shall give notice in writing to such effect (a ``Co-Sale 
Notice'') to the Company not later than (i) three (3) Business Days 
before the date of a proposed offer or sale other than an 
Underwritten Offering or (ii) ten (10) Business Days before the date 
of a proposed Underwritten Offering. The Co-Sale Notice shall state 
the number of shares of Common Stock or Common Stock Equivalents 
that the Selling AMFM Holders intend to sell, the purchase price per 
share (or the method of calculating such price), and any other 
material terms and conditions of the proposed offer and sale. Upon 
receipt of the Co-Sale Notice, the Company shall have the right (the 
``Co-Sale Right''), exercisable by written notice (an ``Election 
Notice'') to the Selling AMFM Holders given within three (3) 
Business Days after receipt of the Co-Sale Notice, to elect to 
include in such Third-Party Sale, additional shares of Common Stock 
for sale for the Company's account (but not for the account of any 
other Person), at the price per share (or the method of calculating 
such price) and on the same terms and conditions specified in the 
Co-Sale Notice (or at such other price or on such other terms as the 
Selling AMFM Holders and the Company may agree). Any such election 
by the Company shall be irrevocable; Provided, however, that if the 
price per share is not specified in the Co-Sale Notice, then the 
Company shall have the right to revoke the election Notice within 
one (1) Business Day following the determination of the price 
(except that the Company shall not have a right to revoke the 
Election Notice if an estimated price per share is specified in the 
Co-Sale Notice and the actual price per share is not more than five-
percent (5%) greater or more than five percent (5%) less than the 
estimated price per share specified in the Co-Sale Notice). Failure 
of the Company to give an Election Notice within such three (3) 
Business Day period shall be deemed an election by the Company not 
to participate in the proposed Third-Party Sale.
    (b) The number of shares of Common Stock that the Company shall 
be entitled to sell in a Third-Party Sale shall be determined solely 
by the Company and shall be set forth in the Election Notice; 
provided, however, that if in the good faith view of the 
underwriter, placement agent, broker-dealer or other similar person 
engaged by the Selling AMFM Holders in connection with such offering 
(or, if no such person has been engaged, of the Board of Directors 
of the Selling AMFM Holders), the inclusion of all or a part of such 
additional shares of Common Stock or Common Stock Equivalents in the 
Third-Party Sale would be likely to have a material adverse effect 
on the price, timing or distribution of the offering and sale of the 
Common Stock or Common Stock Equivalents then contemplated by the 
Selling AMFM Holders, or if the purchaser is not willing to purchase 
all or a part of such additional shares of Common Stock or Common 
Stock Equivalents from the Company, then the number of additional 
shares of Common Stock or Common Stock Equivalents that shall be 
included in the Third-Party Sale shall be reduced to the number (if 
any) of such shares that can, in the good faith view of the 
underwriter, placement agent, broker-dealer or other similar person 
engaged by the Selling AMFM Holders in connection with such offering 
(or, if no such person has been engaged, of the Board of Directors 
of the Selling AMFM Holders), be sold in such Third-Party Sale 
without so materially adversely affecting such offering and sale, or 
in the case that the purchaser is not willing to purchase all or a 
part of such additional shares of Common Stock or Common Stock 
Equivalents from the Company, reduced to the amount that the 
purchaser, in its sole discretion, is willing to purchase. Further, 
if the purchaser or any other Person is granted an option to 
purchase additional securities of the Company in connection with 
such Third-Party Sale, then the Company shall be entitled to offer 
additional shares of Common Stock in full satisfaction of such 
option, such election to be made in the Company's Election Notice 
described above.
    (c) The Company shall not have any Co-Sale Right involving a 
block trade, other than as set forth in this Section 3.1(c). In the 
event that the Selling AMFM Holders engage in a transaction 
involving a block trade of Common Stock or Common Stock Equivalents, 
the Selling AMFM Holders will use their reasonable best efforts to 
give the

[[Page 12552]]

Company advance notice of such block trade (a ``Block Trade Notice'' 
and a Co-Sale Right in connection with such block trade, so long as: 
(i) The Block Trade Notice will not have a material adverse effect 
on the Selling AMFM Holders' ability to consummate the block trade, 
and (ii) there is sufficient capacity in the block trade to enable 
the Company to exercise its Co-Sale Right.
    (d) The Company shall not have any Co-Sale Right pursuant to 
this Section 3.1 in connection with any sale or disposition of 
Common Stock or Common Stock Equivalents by the Selling AMFM Holders 
(or their successors or assigns) in a transaction pursuant to Rule 
144 under the Securities Act to which the provisions of paragraphs 
(e) and (f) of Rule 144 are applied.
    (e) Upon the Company's election to participate in a Third-Party 
Sale pursuant to this Section 3.1, and subject to Section 3.1(b), 
the closing of such sale shall be held at the time and place 
designated by the Selling AMFM Holders and the proposed purchaser. 
At the closing of such sale, the Company shall deliver to the 
purchaser, against payment of the purchase price, the shares of 
Common Stock or Common Stock Equivalents to be issued and sold by 
the Company to the purchaser, free and clear of all liens, charges, 
pledges and other encumbrances.
    Section 3.2  Lock-Up.
    (a) In connection with an Underwritten Offering (including any 
block trade) by the AMFM Holders of any Common Stock or Common Stock 
Equivalents having an aggregate offering price of $200 million or 
more, if the managing underwriters of such offering reasonably 
request, the Company shall enter into a lock-up or comparable 
agreement pursuant to which the Company will not sell or otherwise 
transfer any shares of Common Stock or Common Stock Equivalents for 
a fixed period of time (the ``Lock-Up Period''). The AMFM Holders 
and the Company shall use reasonable best efforts to cause the 
underwriters to agree to a Lock-Up Period not to exceed sixty (60) 
days, but the Company agrees to accept a longer Lock-Up Period to 
the extend reasonably required by the underwriters, not to exceed 
ninety (90) days.
    (b) In connection with an Underwritten Offering by the Company 
of any Common Stock or Common Stock Equivalents having an aggregate 
offering price of $200 million or more, if the managing underwriters 
of such offering reasonably request, the AMFM Holders shall enter 
into a lock-up or comparable agreement pursuant to which the AMFM 
Holders will not sell or otherwise transfer any shares of Common 
Stock or Common Stock Equivalents during the Lock-Up Period. The 
Company and the AMFM Holders shall use reasonable best efforts to 
cause the underwriters to agree to a Lock-Up Period not to exceed 
sixty (60) days, but the AMFM Holders agree to accept a longer Lock-
Up Period to the extent reasonably required by the underwriters, not 
to exceed ninety (90) days; provided, however, that the AMFM Holders 
(and their successors and assigns) shall not be subject to any lock-
up or comparable agreement pursuant to this Section 3.2(b): (i) at 
any time during the 60-day period commencing on the Effectiveness 
Date (as defined in the Registration Rights Agreement) or (ii) at 
any time during the 90-day period preceding December 31, 2002. The 
foregoing shall not prohibit the transfer of any shares of Common 
Stock or Common Stock Equivalents during a Lock-Up Period (x) to any 
Affiliate of the AMFM Holders (so long as such Affiliate is bound by 
the provisions of this Stockholders Agreement, including the lock-up 
agreement contemplated by this Section 3.2(b)) or (y) pursuant to a 
bona fide pledge of such shares to a lender or in connection with a 
foreclosure (or similar proceeding or remedy) effected with respect 
to any such pledge (so long as such lender agrees to be bound by the 
lock-up agreement contemplated by this Section 3.2(b)).
    Section 3.3  Due Diligence. In connection with any offer or sale 
by the AMFM Holders of Common Stock or Common Stock Equivalents, if 
the AMFM Holders so request, the Company shall give the AMFM 
Holders, a single representative of the proposed purchasers of 
Common Stock or Common Stock Equivalents, and their respective 
counsel, accountants, bankers and advisors, reasonable and customary 
access to the Company's books, records and properties and such 
opportunities to discuss the business and affairs of the Company 
with its officers and the independent public accounts who have 
certified the Company's financial statements; provided, however, 
that (i) the AMFM Holders and any such proposed purchasers shall 
have entered into a confidentiality agreement reasonably acceptable 
to the Company which shall include, without limitation, an agreement 
not to use or disclose to any other person, including any competitor 
of the Company, any non-public information disclosed as a result of 
such investigation, and (ii) the AMFM Holders, the representatives 
of the proposed purchasers and their respective counsel, 
accountants, bankers and advisors shall use their reasonable best 
efforts to minimize the disruption to the Company's business and 
shall to the extent practicable coordinate any such investigation of 
the Company's books, records and properties any such discussions 
with the Company's officers and accountants so that all such 
investigations and discussions occur at the same time.''
    (D) Section 4.1 of the Stockholders Agreement shall be deleted 
in its entirety and the following provisions shall be substituted 
therefor:
    ``Section 4.1  Transactions with Affiliates. The Company will 
not, nor will it permit any of its Subsidiaries to, directly or 
indirectly, enter into or engage in any transaction with or for the 
benefit of any of its Affiliates (other than transactions between 
the Company and a wholly owned Subsidiary of the Company or among 
wholly owned Subsidiaries of the Company), except for any such 
transaction which is on terms no less favorable than those that 
might reasonably have been obtained in a comparable transaction on 
an arm's-length basis from a person that is not an Affiliate. With 
respect to the requirement set forth in the immediately preceding 
sentence, for a transaction or series of related transactions 
involving a value of $1,000,000 or more, such determination will be 
made in good faith by a majority of the members of the Company's 
Board of Directors and a majority of the disinterested members of 
the Company's Board of Directors, and for a transaction or series of 
transactions involving a value of $5,000,000 or more, the Company's 
Board of Directors must receive an opinion from a nationally 
recognized investment banking firm that such transaction is (or that 
such series of transactions are) fair, from a financial point of 
view, to the Company or such Subsidiary, as applicable. 
Notwithstanding the foregoing, the restrictions set forth in this 
Section 4.1 shall not apply to reasonable and customary directors' 
fees, reasonable and customary directors' or officers' 
indemnification arrangements, or reasonable and customary 
compensatory arrangements with officers of the Company.''
    (E) Section 7.3 of the Stockholders Agreement shall be deleted 
in its entirety and the following provisions shall be substituted 
therefor:
    ``Section 7.3.1  Voting of AMFM Holders. The AMFM Holders shall 
take such action as may be required so that all shares of Voting 
Stock beneficially owned by them shall be present for quorum 
purposes, in person or represented by proxy, at any regular or 
special meeting of stockholders of the Company, and shall vote such 
shares of Voting Stock at any such meeting of stockholders or in any 
written consent executed in lieu of such a meeting of stockholders 
in the same proportion as the vote of all holders of Voting Stock 
not held by the AMFM Holders that are present, in person or by 
proxy, at such meeting and voting with respect to any matter. The 
AMFM Holders hereby grant the Company an irrevocable proxy to vote 
the shares of Voting Stock beneficially owned by them in accordance 
with the provision of this Section 7.3.1. The provisions of this 
Section 7.3.1 shall have no further force or effect with respect to 
any shares of Voting Stock following the disposition of such shares 
to any Person that is not an Affiliate of the AMFM Holders.
    ``Section 7.3.2  Certain Restricted Actions. Without the consent 
of the Company's Board of Directors, neither the AMFM Holders nor 
any of their respective Affiliates shall:
    (a) make, or in any way participate in, any ``solicitation'' of 
``proxies'', or become a ``participant'' in any ``election contest'' 
(as such terms are defined in Rule 14a-1 of Regulation 14A 
promulgated by the Commission pursuant to Section 14 of the Exchange 
Act, disregarding clause (iv) of Rule 14a-1(l)(2) and including any 
exempt solicitation pursuant to Rule 14a-2(b)(1) relating to Voting 
Stock; call, or in any way participate in a call for, any special 
meeting of the Company's stockholders; request, or take any action 
to obtain or retain any list of holders of any of the Company's 
securities; execute any written consent in lieu of a meeting of 
stockholders for the purpose of acquiring control of the Company; 
initiate or propose any stockholder proposal or participate in the 
making of, or solicit stockholders for the approval of, or seek to

[[Page 12553]]

advise or influence any other person (who, together with the AMFM 
Holders or their Affiliates, would constitute a group for purposes 
of Section 13(d)(3) of the Exchange Act) with respect to voting, on 
one or more stockholder proposals relating to the Company;
    (b) deposit any Voting Stock in a voting trust or subject any 
Voting Stock to any voting agreement or arrangements (other than as 
provided herein);
    (c) form, join or in any way participate in a group with respect 
to any Voting Stock (or any securities the ownership of which would 
cause the owner thereof to Beneficially Own any Voting Stock); or
    (d) otherwise act to control the Company or the Company's 
management, board of directors, policies or affairs including, 
without limitation: (i) making any offer or proposal to acquire any 
securities or assets of the Company or any of its affiliates or 
soliciting or proposing to effect or negotiate any form of business 
combination, any tender offer or exchange offer for any debt or 
equity securities of the Company, or any restructuring, 
recapitalization or other extraordinary transaction involving, or 
any change in control of, the Company, its affiliates or any of 
their respective securities or assets or (ii) seeking board 
representation or the removal of any directors or management or a 
change in the composition or size of the Company's Board of 
Directors.
    (e) disclose any intention to do any of the foregoing or seek to 
modify any provision of this Section 7.3.2.
    (F) Notices to the parties shall be sent to the addresses listed 
on the signature pages hereof.
    2. No Other Changes. Except as specifically set forth herein, 
the Stockholders Agreement shall remain unmodified and in full force 
and effect in accordance with its terms.
    3. Governing Law. This Amendment shall be governed by and 
construed in accordance with the laws of the State of Delaware, 
without regard to principles of conflict of laws.
    4. Successors and Assigns. This Amendment shall be binding upon 
the parties hereto, and their respective successors and permitted 
assigns.
    5. Counterparts. This Amendment may be executed in counterparts, 
each of which shall be deemed to be an original, but all of which, 
taken together, shall constitute one and the same agreement.
    6. Severability. In case any provision in this Amendment shall 
be held invalid, illegal or unenforceable in any respect for any 
reason, the validity, legality and enforceability of any such 
provision in affected or impaired thereby.
    7. Entire Agreement. This Amendment, together with the 
Stockholders Agreement, as amended hereby, contains the entire 
agreement among the parties with respect to the subject matter 
hereof and, upon the effectiveness of this Amendment in accordance 
with Section 9, shall supersede all prior agreements and 
understandings with respect to such subject matter, including, 
without limitation, the letter agreement dated as of June 1, 2000 
among the Company, AMFM and Clear Channel.
    8. Execution: Amendments. This Amendment is executed by the 
parties pursuant to the provisions of Section 7.8.2 of the 
Stockholders Agreement. Any provision of this Amendment may be 
amended or waived if, but only if such amendment or waiver is in 
writing and is signed by the Company, the Holders holding at least a 
majority of the Fully-Diluted Common Stock held by all Holders and 
the Majority AMFM Holders.
    9. Effective Date: Consummation of Merger. The terms and 
conditions of this Amendment shall become effective and enforceable 
only upon the consummation of the Merger. In the event that the 
Merger has not been consummated on or before March 31, 2001, or if 
the Merger Agreement is terminated prior to March 31, 2001 then, 
unless the parties hereto mutually agree to an extension hereof, 
this Amendment shall be null and void and the Original Agreement 
shall continue in accordance with its terms as if this Amendment had 
not been executed and delivered.
    10. Guaranty By Clear Channel. Clear Channel agrees to guaranty 
the performance of all obligations of the AMFM Holders hereunder.
    In Witness Whereof, this Amendment has been duly executed by the 
parties as of the date first set forth above.

Lamar Advertising Company:

By:--------------------------------------------------------------------
Name: Kevin P. Reilly, Jr.
Title: President & CEO

    Address: 5551 Corporate Boulevard, Baton Rouge, LA 70808, 
Attention: Kevin P. Reilly, Jr., Fax: (225) 923-0658.
    With copies to: Palmer Dodge LLP, One Beacon Street, Boston, MA 
02108, Attention: George Ticknor, Esq., Fax: (617) 227-4420.

AMFM Operating Inc. (f/k/a Chancellor Media Corporation of Los 
Angeles):

By:--------------------------------------------------------------------
Name: William S. Banowsky, Jr.
Title: Executive Vice President

    Address: 200 East Basse, San Antonio, TX 78209, Attention: 
General Counsel, Fax: (210) 822-2299.
    With copies to: Akin, Gump, Strauss, Hauer & Feld, LLP., 300 
Convent Street, Suite 1500, San Antonio, TX 78205, Attention: 
Stephen C. Mount, Fax: (210) 224-2035.

AMFM Holdings Inc. (f/k/a Chancellor Mezzanine Holdings 
Corporation):

By:--------------------------------------------------------------------
Name: William S. Banowsky, Jr.
Title: Executive Vice President

    Address: 200 East Basse, San Antonio, TX 78209-3428, Attention: 
General Counsel, Fax: (210) 832-3428.
    With copies to: Akin, Gump, Strauss, Hauer & Feld, LLP., 300 
Convent Street, Suite 1500, San Antonio, TX 78205, Attention: 
Stephen C. Mount, Fax: (210) 224-2035.

Clear Channel Communications, Inc.:

By:--------------------------------------------------------------------
Name: Juliana Hill
Title: Senior Vice President--Finance

    Address: 200 East Basse, San Antonio, TX 78209-3428, Attention: 
General Counsel, Fax: (210) 832-3428.
    With copies to: Akin, Gump, Strauss, Hauer & Feld, LLP., 300 
Convent Street, Suite 1500, San Antonio, TX 78205, Attention: 
Stephen C. Mount, Fax: (210) 224-2035.

The Reilly Family Limited Partnership:

By:--------------------------------------------------------------------
Name: Kevin P. Reilly, Jr.
Title: Managing Gen. Ptnr.

    Address: c/o Lamar Advertising Company, 5551 Corporate 
Boulevard, Baton Rouge, LA 70808, Attention: Kevin P. Reilly, Jr., 
Fax: (225) 923-0658.
    With copies to: Palmer Dodge LLP, One Beacon Street, Boston, MA 
02108 Attention: George Ticknor, Esq., Fax: (617) 227-4420.

Schedule D--Amended and Restated Registration Rights Agreement

    This Amended and Restated Registration Rights Agreement (this 
``Agreement''), dated as of July 19, 2000, by and among Lamar 
Advertising Company, a Delaware corporation (the ``Issuer''), AMFM 
Operating Inc. (f/k/a Chancellor Media Corporation of Los Angeles), 
a Delaware corporation (``AMFM Operating''), AMFM Holdings Inc. (f/
k/a/ Chancellor Mezzanine Holdings Corporation), a Delaware 
corporation (``AMFM Holdings'') and Clear Channel Communications, 
Inc., a Texas corporation (``Clear Channel'').

Witnesseth

    Whereas, the Issuer, AMFM Operating and AMFM Holdings are 
parties to that certain Registration Rights Agreement dated as of 
September 15, 1999 (the ``Original Agreement'');
    Whereas, AMFM Holdings has transferred to AMFM Operating all of 
the Issuer's Common Stock held by AMFM Holdings;
    Whereas, AMFM Inc., a Delaware corporation (``AMFM''), is the 
indirect parent company of AMFM Operating;
    Whereas, pursuant to a certain Agreement and Plan of Merger 
dated October 2, 1999 (the ``Merger Agreement''), by and among Clear 
Channel, CCU Merger Sub, Inc., a Delaware corporation and wholly-
owned subsidiary of Clear Channel (``Merger Sub''), and AMFM, Merger 
Sub will be merged with and into AMFM (the ``Merger''), and AMFM 
Operating will become a wholly-owned indirect subsidiary of Clear 
Channel;
    Whereas, the Issuer, AMFM Operating, AMFM Holdings and Clear 
Channel desire to amend and restate the Original Agreement in 
connection with and upon the consummation of the Merger, on the 
terms and conditions hereinafter set forth.
    Now, Therefore, in consideration of the premises and the mutual 
covenants contained herein, and for other good, valuable and binding 
consideration, the receipt and sufficiency of which are hereby 
acknowledged, the parties hereto, intending to be legally bound 
hereby, agree as follows:

Article 1--Definitions

    Section 1.1  Definitions. The following terms, and used herein, 
shall have the following respective meanings:
    ``Affiliate'' means, with respect to any Person, any Person who, 
directly or indirectly, controls, is controlled by or is under 
common control with that Person. For

[[Page 12554]]

purposes of this definition, ``control'' when used with respect to 
any Person means the power to direct the management and policies of 
such Persons, directly or indirectly, whether through the ownership 
of voting securities, by contract or otherwise.
    ``Business Day'' means any day except Saturday, Sunday and any 
day which shall be a legal holiday or a day on which banking 
institutions in the State of Texas and/or the State of Louisiana 
generally are authorized or required by law or other government 
actions to close.
    ``Commission'' means the Securities and Exchange Commission or 
any successor governmental body or agency.
    ``Common Stock'' means the Issuer's Class A Common Stock, par 
value $0.001 per share, and any capital stock into which such Common 
Stock thereafter may be changed.
    ``Disadvantageous Condition'' has the meaning ascribed thereto 
in Section 2.4.
    ``Effectiveness Date'' means the date on which the Commission 
declares the Shelf Registration Statement to be effective under the 
Securities Act, which date shall not occur prior to the consummation 
of the Merger.
    ``Effectiveness Period'' has the meaning ascribed thereto in 
Section 2.1.
    ``Exchange Act'' means the Securities Exchange Act of 1934, as 
amended.
    ``Filing Date'' has the meaning ascribed thereto in Section 2.1.
    ``Holder'' means (1) AMFM Operating, (ii) any Affiliate of AMFM 
Operating to whom Registrable Securities shall be transferred and 
who shall agree to be bound by the terms of this Agreement, and 
(iii) any successor to any such Person described in clauses (i) and 
(ii).
    ``Majority Holders'' means Holders owning Registrable Securities 
representing a majority of the Registrable Securities then owned by 
all of the Holders.
    ``Person'' or ``person'' means any individual, corporation, 
partnership, limited liability company, joint venture, association, 
joint-stock company, trust, unincorporated organization or 
government or other agency or political subdivision thereof.
    ``Prospectus'' means the prospectus included in the Shelf 
Registration Statement, as amended or supplemented by any prospectus 
supplement, with respect to the terms of the offering of any portion 
of the Registrable Securities covered by the Shelf Registration 
Statement, and all other amendments and supplements to the 
Prospectus, including post-effective amendments, and all material 
incorporated by reference in such Prospectus.
    ``Purchase Agreement'' means the Second Amended and Restated 
Stock Purchase Agreement dated as of August 11, 1999 among Lamar 
Media Corp. (a wholly-owned subsidiary of the Issuer), AMFM 
Operating and AMFM Holdings.
    ``Register'', ``registered'' and ``registration'' shall refer to 
a registration effected by preparing and filing a registration 
statement or statements or similar documents in compliance with the 
Securities Act and pursuant to rule 415 under the Securities Act or 
any successor rule providing for offering securities on a continuous 
basis and the declaration or ordering of effectiveness of such 
registration statement or document by the Commission.
    ``Registrable Securities'' means, at any time, any shares of 
Common Stock issued by the Issuer to AMFM Operating and AMFM 
Holdings pursuant to the Purchase Agreement, and owned by the 
Holders (or any shares of stock or other securities of the Issuer 
into which or for which such Common Stock may hereafter be changed, 
converted or exchanged; any other shares or securities issued by the 
Issuer to the Holders of such Common Stock; or any such shares of 
stock or other securities of the Issuer into which or for which such 
shares are so changed, converted or exchanged) upon any 
reclassification, share combination, share subdivision, share 
dividend, share exchange, merger, consolidation or similar 
transaction or event); provided, however, the Registrable Securities 
shall not include any shares of Common Stock (i) the sale of which 
has been registered pursuant to the Shelf Registration Statement and 
which shares have been sold pursuant to the Shelf Registration 
Statement or (ii) which have been sold pursuant to Rule 144 under 
the Securities Act.
    ``Registration Expenses'' means any and all expenses incident to 
performance of or compliance with any registration of securities 
pursuant to Article 2, including, without limitation, (i) all 
registration and filing fees, (ii) all fees and expenses associated 
with filings required to be made with the NASD (including, if 
applicable, the fees and expenses of any ``qualified independent 
underwriter'' as such term is defined in rule 2720(b)(15) of the 
NASD Conduct Rules, and of its counsel), as may be required by the 
rules and regulations of the NASD, (iii) reasonable 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), (iv) rating agency fees, (v) printing expenses 
(including expenses of printing certificates for the Registrable 
Securities in a form eligible for deposit with the Depository Trust 
Company and of printing prospectuses or prospectus supplements if 
the printing prospectuses or prospectus supplements is requested by 
a holder of Registrable Securities), (vi) messenger and delivery 
expenses, (vii) the fees and expenses incurred in connection with 
any listing of the Registrable Securities, (viii) reasonable fees 
and expenses of counsel for the Issuer and its independent certified 
public accountants (including the expenses for any required consents 
and opinions and of any special audit or ``cold comfort'' letters 
required by or incident to such performance) and (ix) out-of-pocket 
expenses of the Issuer incurred in connection with the participation 
of officers of the Issuer in any marketing activities contemplated 
by Section 2.6(j); provided, however, that in the event the Issuer 
registers securities pursuant to article 2 on Form S-1, Registration 
Expenses shall not include the Issuer's costs of: (x) preparing and 
filing any post-effective amendments to such Form S-1 that the 
Issuer would not otherwise have had to prepare and file had the 
issuer registered such securities on Form S-3, and (y) converting 
the Form S-1 registration statement to a Form S-3 registration 
statement pursuant to Section 2.9; provided, further, that 
Registration Expenses shall not include Issuer's internal 
administration expenses and general overhead incurred as a result of 
efforts by Issuer's employees in connection with any of the 
foregoing.
    ``Registration Termination Date'' means December 31, 2002.
    ``Rule 144'' means Rule 144 promulgated by the Commission 
pursuant to the Securities Act, as such Rule may be amended from 
time to time, or any similar rule or regulation hereafter adopted by 
the Commission having substantially the same effect as such Rule.
    ``Rule 415'' means Rule 415 promulgated by the Commission 
pursuant to the Securities Act, as such Rule may be amended from 
time to time, or any similar rule or regulation hereafter adopted by 
the Commission having substantially the same effect as such Rule.
    ``Securities Act'' means the Securities Act of 1933, as amended.
    ``Seller Affiliates'' has the meaning ascribed thereto in 
Section 2.8.
    ``Selling Holder'' means any Holder who sells Registrable 
Securities pursuant to the Shelf Registration Statement.
    ``Shelf Registration Statement'' has the meaning ascribed 
thereto in Section 2.1, and includes the Prospectus, amendments and 
supplements to such registration statement or Prospectus, including 
pre- and post-effective amendments, all exhibits thereto, and all 
material incorporated by reference in such registration statement.
    ``Stockholders Agreement'' means the Stockholders Agreement 
dated as of September 15, 1999, by and among the Issuer, AMFM 
Operating, AMFM Holdings and The Reilly Family Limited Partnership, 
as amended by the First Amendment to Stockholders Agreement dated 
July __, 2000, by and among the Issuer, AMFM Operating, AMFM 
Holdings, Clear Channel and The Reilly Family Limited Partnership.
    ``Underwritten Offering'' means any firmly underwritten offering 
in which all or part of the Registrable Securities or securities 
convertible into, exchangeable for, or exercisable for Registrable 
Securities are sold to an underwriter for reoffering pursuant to the 
Shelf Registration Statement.
    Section 1.2  Internal References. Unless the context indicates 
otherwise, references to Articles, Sections and paragraphs shall 
refer to the corresponding articles, sections and paragraphs in this 
Agreement, and references to the parties shall means the parties to 
this Agreement.

Article 2--Registration Rights

    Section 2.1  Shelf Registration.
    (a) If the Issuer shall not have previously filed the Shelf 
Registration Statement pursuant to the Original Agreement, then 
within ten (10) Business Days after the effective date of this 
Agreement (the ``Filing Date''), the Issuer shall prepare and file 
with the Commission a Registration Statement (the ``Shelf 
Registration Statement'') on Form S-3 (or if the Issuer is not then 
eligible to use Form S-3, then Form S-1) (or any successor forms 
thereto) which shall cover all of the Registrable Securities for an 
offering to be made on a continuous basis pursuant to Rule 415 under 
the Securities Act. The Issuer (i) except as permitted by Section 
3.1 of the

[[Page 12555]]

Stockholders Agreement, shall not permit any securities other than 
the Registrable Securities to be included in the Shelf Registration 
Statement and (ii) shall use its best efforts to cause the Shelf 
Registration Statement to be declared effective under the Securities 
Act as promptly as possible after the filing thereof, and to keep 
the Shelf Registration Statement continuously effective under the 
Securities Act until the Registration Termination Date, or such 
earlier date when all Registrable Securities cease to be Registrable 
Securities for purposes of this Agreement (the ``Effectiveness 
Period'').
    (b) The Issuer shall (i) not later than three (3) business Days 
prior to the filing of the Shelf Registration Statement or any 
related Prospectus or any amendment or supplement thereto, furnish 
to the Holders, their counsel and any managing underwriters, copies 
of all such documents proposed to be filed (but excluding for such 
purpose any documents incorporated by reference into the Shelf 
Registration Statement or the Prospectus), which documents will be 
subject to the review of such Holders, their counsel and such 
managing underwriters, and copies of all ``comment letters'' with 
respect to any such filed documents received by the Issuer from the 
Commission and (ii) cause its officers and directors, counsel and 
independent certified public accountants to respond to such 
inquiries as shall be necessary, in the reasonable opinion of 
respective counsel to such Holders and such underwriters, to conduct 
a reasonable investigation within the meaning of the Securities Act. 
The Issuer shall not file the Shelf Registration Statement or any 
such Prospectus or any amendments or supplements thereto (but 
excluding for such purpose documents incorporated by reference 
therein) to which the Majority Holders, their counsel or any 
managing underwriters shall reasonably object, and will not request 
acceleration of the Shelf Registration Statement without prior 
notice to such counsel. The Issuer shall furnish the Holders and 
their counsel and any managing underwriters with copies of any 
documents incorporated by reference into the Shelf Registration 
Statement or the Prospectus promptly after filing any such document 
with the Commission. The sections of the Shelf Registration 
Statement covering information with respect to the Holders, the 
Holders' beneficial ownership of securities of the Issuer or the 
Holders' intended method of disposition of Registrable Securities 
shall conform to the written information provided to the Issuer by 
each of the Holders specifically for use therein. The provisions of 
this Section 2.1(b) shall be effective upon the execution hereof 
(notwithstanding anything contained in Section 3.13 to the contrary) 
and also shall be applicable to the Required Shelf Registration to 
be prepared and filed pursuant to Section 2.1 of the Original 
Agreement, if any.
    Section 2.2  Underwritten Offering. Upon the election of the 
Majority Holders, one or more offerings of Registrable Securities 
pursuant to the Shelf Registration Statement may be effected in the 
form of an Underwritten Offering. In such event, the underwriters 
that will administer the offering will be selected by the Holders of 
a majority of the Registrable Securities included in such offering. 
No Holder (or the Issuer, as provided in Section 3.1 of the 
Stockholders Agreement) may participate in any Underwritten Offering 
hereunder unless such Holder (or the Issuer) (i) agrees to sell its 
Registrable Securities (or other securities) on the basis provided 
in any underwriting agreements approved by the Holders of a majority 
of the Registrable Securities included in such offering and (ii) 
completes and executes all questionnaires, powers of attorney, 
indemnities, underwriting agreements and other documents required 
under the terms of such arrangements.
    Section 2.3  Inclusion of Common Stock by Issuer. Except as 
provided in Section 3.1 of the Stockholders Agreement, the Issuer 
shall not permit any securities other than the Registrable 
Securities to be included in the Shelf Registration Statement. If 
the Issuer elects to include additional shares of Common Stock in an 
Underwritten Offering pursuant to Section 3.1 of the Stockholders 
Agreement, then the Holders of the Registrable Securities to be 
offered in an Underwritten Offering may require that any such 
additional shares of Common Stock to be included by the Issuer in 
such offering be sold and issued on the same terms and conditions as 
the Registrable Securities that are included therein.
    Section 2.4  Certain Delay Rights. If at any time while the 
Shelf Registration Statement is effective the Issuer provides 
written notice to each Holder that in the good faith and reasonable 
judgment of the Issuer's Board of Directors, it would be materially 
disadvantageous to the Issuer (because the sale of Registrable 
Securities covered by such registration statement or the disclosure 
of information therein or in any related prospectus or prospectus 
supplement would materially interfere with (i) any acquisition or 
other material third-party transaction in connection with which a 
registration of securities under the Securities Act for the Issuer's 
account is then intended or (ii) the public disclosure of which at 
the time would be materially prejudicial to the Issuer (a 
``Disadvantageous Condition'')) for sales of Registrable Securities 
thereunder to then be permitted, and setting forth the general 
reasons for such judgment, the Issuer may refrain from maintaining 
current the Prospectus contained in the Shelf Registration Statement 
until such Disadvantageous Condition no longer exists (notice of 
which the Issuer shall deliver in writing to each Holder on the 
first date such Disadvantageous Condition no longer exists). With 
respect to each Holder, upon the receipt by such Holder of any such 
notice of a Disadvantageous Condition in connection with the Shelf 
Registration Statement, (x) such Holder shall forthwith discontinue 
use of the Prospectus under the Shelf Registration Statement and 
shall suspend sales of Registrable Securities until such 
Disadvantageous Condition no longer exists and (y) if so directed by 
the Issuer by notice as aforesaid, such Holder will deliver to the 
Issuer all copies, other than permanent file copies then in such 
Holder's possession, of the Prospectus then covering such 
Registrable Securities at the time of receipt of such notice as 
aforesaid. Notwithstanding anything else contained in this 
Agreement, (X) neither the Filing Date nor the Effectiveness Date of 
the Shelf Registration Statement may be delayed pursuant to this 
Section 2.4 (Y) there shall be no suspension of sales of Registrable 
Securities pursuant to this Section 2.4 at any time during the sixty 
(60) day period commencing on the Effectiveness Date or at any time 
during the ninety (90) day period preceding the Registration 
Termination Date, and (Z) the suspension of sales of Registrable 
Securities pursuant to this Section 2.4 shall not exceed a total of 
sixty (60) days in the aggregate in any twelve (12) month period.
    Section 2.5  Expenses. Except as provided herein, the Holders 
shall pay all Registration Expenses with respect to the Shelf 
Registration Statement and shall promptly reimburse the Issuer for 
any such expenses paid by the Issuer upon presentation of reasonably 
detailed invoices therefor, provided such registration statement 
becomes effective in accordance with the terms of this Agreement. 
Notwithstanding the foregoing, if the Issuer shall include in an 
Underwritten Offering additional shares of Common Stock for the 
account of the Issuer in accordance with Section 3.1 of the 
Stockholders Agreement, then (i) the Issuer shall pay (or reimburse 
the Holders, as applicable) a pro rata share of the Registration 
Expenses (based on the ratio that the number of additional shares of 
Common Stock actually sold for the Issuer's account bears to the 
aggregate number of shares actually sold in the Underwritten 
Offering), and (ii) the Issuer shall be responsible for all 
underwriting discounts and commissions, selling or placement agent 
or broker fees and commissions, and transfer taxes, if any, in 
connection with any sale of securities by the Issuer.
    Section 2.6  Registration and Qualification. If and whenever the 
Issuer is required to effect the registration of any Registrable 
Securities under the Securities Act as provided in this Agreement, 
the Issuer shall as promptly as practicable:
    (a) prepare and file with the Commission such amendments 
(including post-effective amendments) and supplements to the Shelf 
Registration Statement and the Prospectus used in connection 
therewith as may be necessary to keep the Shelf Registration 
Statement effective, including any amendment or supplement with 
respect to an Underwritten Offering of Registrable Securities and 
including any amendment or supplement to reflect any transfer of 
Registrable Securities to any subsequent Holder (which will have the 
right to be named as a selling shareholder in the Shelf Registration 
Statement), at all times during the Effectiveness Period, and, 
during such period, comply with the provisions of the Securities Act 
applicable to the Issuer in order to permit the disposition by the 
Holders of all Registrable Securities;
    (b) furnish to the Holders of Registrable Securities and to any 
underwriter of such Registrable Securities (i) such number of 
conformed copies of the Shelf Registration Statement and of each 
such amendment and

[[Page 12556]]

supplement thereto (in each case including financial statements and 
schedules, and all exhibits), (ii) such number of copies of the 
Prospectus included in the Shelf Registration Statement (including 
each preliminary prospectus), in conformity with the requirements of 
the Securities Act, and (iii) such documents incorporated by 
reference in the Shelf Registration Statement or Prospectus as the 
Holders of Registrable Securities or such underwriter may reasonably 
request in order to facilitate the disposition of the Registrable 
Securities owned by such Holder or the sale of such securities by 
such underwriter (it being understood that, subject to Section 2.4 
of this Agreement and the requirements of the Securities Act and 
applicable state securities laws, the Issuer consents to the use of 
the Prospectus and any amendment or supplement thereto by each 
Holder of Registrable Securities and any underwriter of such 
Registrable Securities in connection with the offering and sale of 
the Registrable Securities covered by the Shelf Registration 
Statement of which such Prospectus, amendment or supplement is a 
part);
    (c) in the case of any Underwritten Offering, furnish to each 
Selling Holder and any underwriter of Registrable Securities an 
opinion of counsel for the Issuer and ``cold comfort'' letters and 
updates thereof signed by the independent public accountants who 
have audited the Issuer's financial statements included in the Shelf 
Registration Statement, in each such case covering substantially 
such matters with respect to such registration statement (and the 
prospectus included therein) and the related offering as are 
customarily covered in opinions of issuer's counsel with respect 
thereto and in accountants' letters delivered to underwriters in 
underwritten public offerings of securities, together with any 
consents required in connection therewith;
    (d) promptly notify each Holder and each underwriter of 
Registrable Securities in writing (i) at any time when a prospectus 
relating to a registration pursuant to this Agreement is required to 
be delivered under the Securities Act, of the happening of any event 
as a result of which the prospectus included in such registration 
statement, as then in effect, includes an untrue statement of a 
material fact or omits 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 
(ii) of any request by the Commission or any other regulatory body 
having jurisdiction for any additional information or amendment or 
supplement to the Shelf Registration Statement or Prospectus, and in 
either such case, at the request of any Holder or underwriter, 
promptly prepare and furnish to each Holder and underwriter a 
reasonable number of copies of a supplement to or an amendment of 
such prospectus as may be necessary so that, as thereafter delivered 
to the purchasers of such Registrable Securities, such prospectus 
shall not include an untrue statement of a material fact or omit to 
state a material fact required to be stated therein or necessary to 
make the statements therein, in light of the circumstances under 
which they are made, not misleading;
    (e) cause all such Registrable Securities covered by such 
registration to be listed on the Nasdaq National Market, or if other 
than the Nasdaq National Market, on the principal securities 
exchange or automated interdealer quotation system on which the 
Common Stock is then listed or included for quotation;
    (f) cooperate with each Selling Holder and each underwriter 
participating in the disposition of Registrable Securities and their 
respective counsel in connection with any filings required to be 
made with the NASD;
    (g) subject to Section 2.4 of this Agreement, timely file all 
documents required to be filed with the Commission pursuant to 
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act during the 
period when a prospectus is required to be delivered under the 
Securities Act;
    (h) subject to Section 2.4 of this Agreement, promptly prepare 
and file with the Commission any amendments or supplements to the 
Shelf Registration Statement or Prospectus which, in the opinion of 
the Issuer's counselor managing underwriter, are required in 
connection with the distribution of the Registrable Securities;
    (i) advise each Selling Holder, promptly after it shall receive 
notice or obtain knowledge thereof, of the issuance of any stop 
order by the Commission suspending the effectiveness of the Shelf 
Registration Statement or the initiation or threatening of any 
proceeding for such purpose and promptly use its reasonable best 
efforts to prevent the issuance of any stop order or to obtain its 
withdrawal at the earliest possible moment if such stop order should 
be issued;
    (j) use reasonable best efforts to assist the Holders in the 
marketing of the Registrable Securities in connection with any 
Underwritten Offering hereunder (including but not limited to using 
reasonable best efforts to have officers of the Issuer attend ``road 
shows'' and analyst or investor presentations scheduled in 
connection with such registration);
    (k) make generally available to its security holders as soon as 
practicable, but not later than ninety (90) days after the close of 
the period covered thereby, an earning statement (in form complying 
with the provisions of Rule 158 under the Securities Act) covering a 
twelve (12) month period beginning not later than the first day of 
the Issuer's fiscal quarter next following the effective date of the 
Shelf Registration Statement;
    (l) to the extent applicable, use its reasonable best efforts to 
(i) register and qualify the Registrable Securities under the 
securities or ``blue sky'' laws of such jurisdiction as any Holder 
may reasonably request, (ii) prepare and file in those jurisdictions 
such amendments (including post-effective amendments) and 
supplements to such registrations and qualifications as may be 
necessary to maintain the effectiveness thereof at all times during 
the Effectiveness Period, (iii) take such other actions as may be 
necessary to maintain such registrations and qualifications and as 
may be necessary to maintain the effectiveness thereof at all times 
during the Effectiveness Period, and (iv) take all other actions 
reasonably necessary or advisable to qualify the Registrable 
Securities for sale by the Holders in such jurisdictions (provided 
that the Issuer shall not be required in connection therewith or as 
a condition thereto to qualify generally to do business or file a 
general consent to service of process in any jurisdiction where it 
would not otherwise be required to qualify but for this Section 
2.6(l));
    (m) cooperate with each Holder and the managing underwriters to 
facilitate the timely preparation and delivery of certificates (not 
bearing any restrictive legends) representing Registrable Securities 
sold pursuant to the Shelf Registration Statement or in a 
transaction pursuant to Rule 144 and enable such certificates to be 
in such denominations or amounts as any Holder and the managing 
underwriter may reasonably request and registered in such names as 
such Holder and the managing underwriters may reasonably request. 
The Issuer shall give appropriate instructions to the Issuer's 
transfer agent to cause the transfer agent to deliver certificates 
representing the Registable Securities without any restrictive 
legends upon receipt of the Holder's certification that such 
Registrable Securities have been sold pursuant to the Shelf 
Registration Statement or in a transaction pursuant to Rule 144 and 
shall cause the Issuer's legal counsel to deliver to the transfer 
agent an opinion in customary form as required to remove such 
restrictive legends provided that such counsel may reasonably 
require such certifications from Holders; and
    (n) within two (2) Business Days after the Shelf Registration 
Statement is declared effective by the Commission, deliver, and 
shall cause the Issuer's legal counsel to deliver, to the transfer 
agent for such Registrable Securities, confirmation that the Shelf 
Registration Statement has been delivered effective by the 
Commission.
    The Issuer may require each Selling Holder to furnish to the 
Issuer such information regarding the Selling Holder and the 
distribution of such Registrable Securities as the Issuer may from 
time to time reasonably request in writing and such other 
information as may be legally required in connection with such 
registration. Each Selling Holder also agrees to notify the Issuer 
of any event relating to the Selling Holder that occurs that would 
require the preparation of a supplement or amendment to the 
Prospectus so that the information furnished or required to be 
furnished by such Selling Holder that is contained in the Prospectus 
will not contain an untrue statement of a material fact or omit to 
state a material fact required to be stated therein or necessary to 
make the statements therein not misleading.
    In no event shall the Issuer be required to amend the Shelf 
Registration Statement filed after it has become effective or to 
amend or supplement the Prospectus to permit the continued 
disposition of shares of Common Stock owned by a Selling Holder 
registered under the Shelf Registration Statement at any time after 
the Effectiveness Period.
    Each Selling Holder agrees that, upon receipt of any notice from 
the Issuer of the happening of any event of the kind described in 
paragraph (d)(i) above, the Selling Holder will forthwith 
discontinue disposition of Registrable Securities pursuant to the 
Shelf

[[Page 12557]]

Registration Statement until the Selling Holder's receipt of the 
copies of the supplement or amended prospectus contemplated by 
paragraph (d) above, and, if so directed by the Issuer, the Selling 
Holder will deliver to the Issuer (at the Issuer's expense) all 
copies, other than permanent file copies then in the Selling 
Holder's possession, of the prospectus covering such Registrable 
Securities at the time of receipt of such notice.
    Section 2.7  Underwriting; Due Diligence.
    (a) If requested by the underwriters for any Underwritten 
Offering of Registrable Securities pursuant to this Article 2, the 
Issuer shall enter into an underwriting agreement with such 
underwriters for such offering, which agreement will contain such 
representations and warranties by the Issuer and such other terms 
and provisions as are customarily contained in underwriting 
agreements with respect to secondary distributions, and confirm the 
same if and when requested in accordance with customary practice. If 
an underwriting agreement is entered into, the same shall contain 
indemnification provisions and procedures no less favorable to the 
Selling Holders and the underwriters than those set forth in Section 
2.8 of this Agreement (or such other provisions and procedures 
acceptable to the managing underwriters and Holders of a majority of 
Registrable Securities participating in such Underwritten Offering).
    (b) In connection with the preparation and filing of the Shelf 
Registration Statement pursuant to this Article 2, the Issuer shall 
give the Holders of such Registrable Securities and the 
underwriters, if any, and their respective counsel and accountants, 
such reasonable and customary access to its books, records and 
properties and such opportunities to discuss the business and 
affairs of the Issuer with its officers and the independent public 
accounts who have certified the financial statements of the Issuer 
as shall be necessary, in the reasonable opinion of such Holders and 
such underwriters or their respective counsel, to conduct a 
reasonable investigation within the meaning of the Securities Act; 
provided that (i) each Holder and the underwriters and their 
respective counsel and accountants shall have entered into a 
confidentiality agreement reasonably acceptable to the Issuer and 
(ii) the Holders of such Registrable Securities and the underwriters 
and their respective counsel and accountants shall use their 
reasonable best efforts to minimize the disruption to the Issuer's 
business and coordinate any such investigation of the books, records 
and properties of the Issuer and any such discussions with the 
Issuer's officers and accountants so that all such investigations 
occur at the same time and all such discussions occur at the same 
time.
    (c) The Issuer shall be subject to the lock-up provisions 
contained in Section 3.2 of the Stockholders Agreement.
    Section 2.8  Indemnification.
    (a) The Issuer agrees to indemnify and reimburse, to the fullest 
extent permitted by law, each Selling Holder, and each Selling 
Holder's employees, advisors, agents, representatives, partners, 
officers, and directors and each Person who controls the Selling 
Holder (within the meaning of the Securities Act or the Exchange 
Act) (collectively, the ``Seller Affiliates''), and each 
underwriter, if any, and each person who controls each such 
underwriter (within the meaning of the Securities Act or the 
Exchange Act) against any and all losses, claims, damages, 
liabilities, and expenses, joint or several (including, without 
limitation, reasonable attorneys' fees and disbursements except as 
limited by Section 2.8(c) below) based upon, arising out of, related 
to or resulting from any untrue or allegedly untrue statement of a 
material fact contained in the Shelf Registration Statement, 
Prospectus, or preliminary prospectus or any amendment thereof or 
supplement thereto, or any omission or alleged omission of a 
material fact required to be stated therein or necessary to make the 
statements therein, in light of the circumstances under which they 
were made, not misleading, except insofar as the same are made in 
reliance upon and in conformity with information furnished in 
writing to the Issuer by such Selling Holder or any Seller Affiliate 
specifically for use therein or arise from such Selling Holder's or 
any Seller Affiliate's failure to deliver a copy of the Shelf 
Registration Statement or Prospectus or any amendments or 
supplements thereto after the Issuer has furnished such Selling 
Holder or Seller Affiliate with a sufficient number of copies of the 
same. The reimbursements required by this Section 2.8(a) will be 
made by periodic payments during the course of the investigation or 
defense, as and when bills are received or expenses incurred.
    (b) Each Selling Holder will jointly and severally indemnify the 
Issuer and its directors and officers and each of its employees, 
advisors, agents, representatives, partners, officers, and directors 
and each Person who controls the Issuer (within the meaning of the 
Securities Act or the Exchange Act) against any and all losses, 
claims, damages, liabilities, and expenses (including, without 
limitation, reasonable attorneys' fees and disbursements except as 
limited by Section 2.8(c) below) resulting from: (i) any untrue 
statement or alleged untrue statement of a material fact contained 
in the Shelf Registration Statement, Prospectus, or any preliminary 
prospectus or any amendment thereof or supplement thereto, or any 
omission or alleged omission of a material fact required to be 
stated therein or necessary to make the statements therein, in light 
of the circumstances under which they were made, not misleading, but 
only to the extent that such untrue statement or alleged untrue 
statement or omission or alleged omission is contained in any 
information or affidavit so furnished in writing by a Selling Holder 
or any of its Seller Affiliates specifically for inclusion in the 
Shelf Registration Statement, Prospectus, preliminary prospectus, 
amendments or supplements; or (ii) a Selling Holder's or any Seller 
Affiliate's failure to deliver a copy of the Shelf Registration 
Statement or Prospectus or any amendments or supplements thereto 
after the Issuer has furnished the Selling Holder or Seller 
Affiliate with a sufficient number of copies of the same; provided, 
however, that such liability will be limited to the net amount 
received by the Selling Holders from the sale of Registrable 
Securities pursuant to the Shelf Registration Statement; provided, 
further, that the Selling Holders shall not be liable in any such 
case to the extent that, prior to the filing of the Shelf 
Registration Statement or Prospectus or amendment thereof or 
supplement thereto, the Selling Holders furnished in writing to the 
Issuer information expressly for use in such registration statement 
or prospectus or any amendment thereof or supplement thereto which 
corrected or made not misleading information previously furnished to 
the Issuer.
    (c) Any Person entitled to indemnification hereunder will give 
prompt written notice to the indemnifying party of any claim with 
respect to which it seeks indemnification (provided that the failure 
to give such notice shall not limit the rights of such Person except 
to the extent such failure prejudiced the indemnifying party) and 
permit such indemnifying party to assume the defense of such claim; 
provided, however, that any Person entitled to indemnification 
hereunder shall have the right to employ separate counsel and to 
participate in the defense of such claim, but the fees and expenses 
of such counsel shall be at the expense of such Person unless (i) 
the indemnifying party has agreed to pay such fees or expenses, (ii) 
the indemnifying party shall have failed to assume the defense of 
such claim or (iii) in the reasonable opinion of counsel to such 
indemnified party, a conflict of interest between such indemnified 
and indemnifying parties may exist with respect to such claim. The 
indemnifying party will not be subject to any liability for any 
settlement made by the indemnified party without its consent (but 
such consent will not be unreasonably withheld or delayed). The 
indemnifying party shall not settle or otherwise compromise the 
applicable claim unless (A) such settlement or compromise contains a 
full and unconditional release of the indemnified party or (B) the 
indemnified party otherwise consents in writing. The indemnifying 
party will not be obligated to pay the fees and expenses of more 
than one counsel for all parties indemnified by such indemnifying 
party with respect to such claim unless in the reasonable judgment 
of any indemnified party, a conflict of interest may exist between 
the indemnifying party and any indemnified party with respect to 
such claim, in which event the indemnifying party shall be obligated 
to pay the reasonable fees and disbursements of one counsel for such 
indemnified party.
    (d) Each party hereto agrees that, if for any reason the 
indemnification provisions contemplated by Section 2.8(a) or Section 
2.8(b) are unavailable to or insufficient to hold harmless an 
indemnified party in respect of any losses, claims, damages, 
liabilities, or expenses (or actions in respect thereof) referred to 
therein, then each indemnifying party shall contribute to the amount 
paid or payable by such indemnified party as a result of such 
losses, claims, liabilities, or expenses (or actions in respect 
thereof) in such proportion as is appropriate

[[Page 12558]]

to reflect the relative fault of the indemnifying party and the 
indemnified party in connection with the actions which resulted in 
the losses, claims, damages, liabilities or expenses as well as any 
other relevant equitable considerations. The relative fault of such 
indemnifying party and indemnified party shall be determined by 
reference to, among other things, whether the untrue or alleged 
untrue statement of a material fact or omission or alleged omission 
to state a material fact relates to information supplied by such 
indemnifying party or indemnified party, and the parties' relative 
intent, knowledge, access to information and opportunity to correct 
or prevent such statement or omission. The parties hereto agree that 
it would not be just and equitable if contribution pursuant to this 
Section 2.8(d) were determined by pro rata allocation (even if the 
Selling Holders or any underwriters or all of them were treated as 
one entity for such purpose) or by any other method of allocation 
which does not take account of the equitable considerations referred 
to in this Section 2.8(d). The amount paid or payable by an 
indemnified party as a result of the losses, claims, damages, 
liabilities, or expenses (or actions in respect thereof) referred to 
above shall be deemed to include any legal or other fees or expenses 
reasonably incurred by such indemnified party in connection with 
investigating or, except as provided in Section 2.8(c) above, 
defending any such action or claim. Notwithstanding the provisions 
of this Section 2.8(d), no Holder shall be required to contribute an 
amount greater than the dollar amount by which the net proceeds 
received by such Selling Holder with respect to the sale of any 
Registrable Securities exceeds the amount of damages which such 
Selling Holder has otherwise been required to pay by reason of such 
statement or 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. The Selling 
Holders' obligations in this Section 2.8(d) to contribute shall be 
joint and several in proportion to the amount of Registrable 
Securities registered by them.
    If indemnification is available under this Section 2.8, the 
indemnifying parties shall indemnify each indemnified party to the 
full extent provided in Section 2.8(a) and Section 2.8(b) without 
regard to the relative fault of said indemnifying party or 
indemnified party or any other equitable consideration provided for 
in this Section 2.8(d) subject, in the case of the Holders, to the 
limited dollar amounts set forth in Section 2.8(b).
    The indemnification and contribution provided for under this 
Agreement shall be in addition to any liability which any party may 
otherwise have to any other party and shall remain in full force and 
effect regardless of any investigation made by or on behalf of the 
indemnified party or any officer, director, or controlling Person of 
such indemnified party and will survive the transfer of the Common 
Stock and the termination of this Agreement.
    Section 2.9  Form S-3 Eligibility; Conversion. In the event that 
the Shelf Registration Statement is filed on Form S-1 because the 
Issuer does not, at the time of such registration, meet the 
registrant eligibility and transaction requirements for the use of 
Form S-3 (for secondary offerings), the Issuer shall convert such 
Form S-1 to a Form S-3 immediately upon its satisfaction of the 
registrant eligibility and transaction requirements for the use of 
Form S-3. Upon such conversion, the Issuer shall file all reports 
required to be filed by the Company with the Commission in a timely 
manner so as to maintain such eligibility for the use of Form S-3.
    Section 2.10  Rule 144 Reporting. With a view to making 
available the benefits of certain rules and regulations of the 
Commission that may permit the sale of the Registrable Securities to 
the public without registration, the Issuer agrees to use its 
reasonable best efforts to:
    (a) make any keep public information regarding the Issuer 
available as those terms are understood and defined in Rule 144 
under the Securities Act;
    (b) file with the Commission in a timely manner all reports and 
other documents required of the Issuer under the Securities Act and 
the Exchange Act; and
    (c) furnish to any Holder forthwith upon written request a 
written statement by the Issuer as to its compliance with the 
reporting provisions contained in rule 144(c) under the Securities 
Act, a copy of the most recent annual or quarterly report of the 
Issuer, and such other reports and documents so filed as any Holder 
may reasonably request in availing itself of any rule or regulation 
of the Commission allowing a Holder to sell any of the Registrable 
Securities without registration.
    The Issuer shall give appropriate instructions to the Issuer's 
transfer agent to cause the transfer agent to deliver certificates 
representing the Registrable Securities without any restrictive 
legends upon receipt of the Holder's certification that such 
Registrable Securities have been sold pursuant to Rule 144 under the 
Securities Act. Each Holder shall cause its legal counsel to deliver 
to the transfer agent for the Registrable Securities an opinion in 
customary form as may be required to remove such restrictive legends 
following a sale pursuant to Rule 144.

Article 3--Miscellaneous

    Section 3.1  Entire Agreement. This Agreement constitutes the 
entire agreement between the parties with respect to the subject 
matter hereof and upon the effectiveness of this Agreement in 
accordance with Section 3.13, this Agreement shall superside all 
other prior agreements and understandings, both written and oral, 
between the parties with respect to the subject matter hereof, 
including, without limitation, the Original Agreement and the letter 
agreement dated as of June 1, 2000 among the Issuer, AMFM and Clear 
Channel.
    Section 3.2  Successors and Assigns. The provisions of this 
Agreement are not assignable to any Person other than another 
Holder. Whether or not an express assignment has been made, 
provisions of this Agreement that are for the Holders' benefit as 
the Holders of any Common Stock are, except as otherwise expressly 
provided herein, also for the benefit of, and enforceable by, all 
subsequent Holders of such Common Stock, except as otherwise 
expressly provided herein. This Agreement shall be binding upon the 
Issuer, each Holder, and, except as otherwise expressly provided 
herein, their respective heirs, devisees, successors and permitted 
assigns.
    Section 3.3  Amendments, Waivers, Etc. This Agreement may not be 
amended, changed, supplemented, waived or otherwise modified or 
terminated, except upon the execution and delivery of a written 
agreement executed by the Issuer and Holders representing a majority 
of the Registrable Securities then hold by all Holders.
    Section 3.4  Notices. All notices, requests, claims, demands and 
other communications hereunder shall be in writing and shall be 
given (and shall be deemed to have been duly received if given) by 
hand delivery or telecopy, or by any courier service, such as 
Federal Express, providing proof of delivery. All communications 
hereunder shall be delivered to the respective parties at the 
address or telecopy number set forth on the signature pages hereto 
(unless such contact information in the case of the Holders is 
updated by written notice from the affected Holder to the Issuer).
    Section 3.5  Remedies. The Issuer recognizes and agrees that the 
Holders of Registrable Securities shall not have an adequate remedy 
at law if the Issuer fails to comply with the provisions of this 
Agreement, and that damages will not be readily ascertainable, and 
the Issuer expressly agrees that in the event of such failure any 
Holder of Registrable Securities shall be entitled to seek specific 
performance of the Issuer's obligations hereunder.
    Section 3.6  Severability. Whenever possible, each provision or 
portion of any provision of this Agreement will be interpreted in 
such manner as to be effective and valid under applicable law, but 
if any provision or portion of any provision of this Agreement is 
held to be invalid, illegal or unenforceable in any respect under 
any applicable law or rule in any jurisdiction, such invalidity, 
illegality or unenforceability will not affect any other provision 
or portion of any provision in such jurisdiction, and this Agreement 
will be reformed, construed and enforced in such jurisdiction as if 
such invalid, illegal or unenforceable provision or portion of any 
provision had never been contained herein.
    Section 3.7  No waiver. The failure of any party hereto to 
exercise any right, power or remedy provided under this Agreement or 
otherwise available in respect hereof at law or in equity, or to 
insist upon compliance by any other party hereto with its 
obligations hereunder, and any custom or practice of the parties at 
variance with the terms hereof, shall not constitute a waiver by 
such party of its right to exercise any such or other right, power 
or remedy or to demand such compliance.
    Section 3.8  No Third Party Beneficiaries. Except as expressly 
provided in Sections 2.8 and 3.2, this Agreement is not intended to 
be

[[Page 12559]]

for the benefit of, and shall not be enforceable by, any Person who 
or which is not a party hereto; provided, that, this Agreement is 
also intended to be for the benefit of and is enforceable by each 
Holder.
    Section 3.9  Several Obligations. Except as set forth in Section 
2.8, the obligations of the Holders herein are several and not 
joint. No Holder shall be responsible for the performance or failure 
on the part of any other Holder to perform its obligations.
    Section 3.10  Governing Law. This agreement shall be governed by 
and construed in accordance with the laws of the State of Delaware, 
without regard to principles of conflict of laws.
    Section 3.11  Descriptive Headings. The descriptive headings 
used herein are inserted for convenience of referenced only and are 
not intended to be part of or to affect the meaning or 
interpretation of this Agreement.
    Section 3.12  Counterparts. This Agreement may be executed in 
counterparts, each of which shall be deemed to be an original, but 
all of which, taken together, shall constitute one and the same 
agreement.
    Section 3.13  Effective Date: Consummation of Merger. The terms 
and conditions of this Agreement shall become effective and 
enforceable only upon the consummation of the Merger. In the event 
that the Merger has not been consummated on or before March 31, 
2001, or if the Merger Agreement is terminated prior to March 31, 
2001 then, unless the parties hereto mutually agree to an extension 
hereof, this Agreement shall be null and void and the Original 
Agreement shall continue in accordance with its terms as if this 
Agreement had not been executed and delivered.
    Section 3.14  Guaranty by Clear Channel. Clear Channel agrees to 
guaranty the performance of all obligations of the Holders and the 
Selling Holders hereunder.
    In Witness Whereof, the Issuer and the Holders have caused this 
Agreement to be duly executed as of the day and year first above 
written.

Issuer: Lamar Advertising Company:

By:--------------------------------------------------------------------
Name: Kevin P. Reilley, Jr.
Title: President & CEO

    Address: 5551 Corporate Boulevard, Baton Rouge, Louisiana 70808, 
Attention: Keith Istre, Fax: (225) 923-0658.
    With copies to: Palmer Dodge LLP, One Beacon Street, Boston, MA 
02108, Attention: George Ticknor, Esq., Facsimile: (617) 227-4420.

Holders: AMFM Operating Inc. (f/k/a Chancellor Media Corporation of 
Los Angeles):

By:--------------------------------------------------------------------
Name: William S. Banowsky, Jr.
Title: Executive Vice President

    Address: 200 East Basse, San Antonio, TX 78209, Attention: 
General Counsel, Fax: (210) 822-2299.
    With copies to: Akin, Gump, Strauss, Hauer & Feld, L.L.P., 300 
Convent Street, Suite 1500, San Antonio, TX 78205, Attention: 
Stephen C. Mount, Fax: (210) 224-2035.

AMFM Holdings Inc. (f/k/a Chancellor Mezzanine Holdings 
Corporation):

By:--------------------------------------------------------------------
Name: William S. Banowsky, Jr.
Title: Executive Vice President

    Address: 200 East Basse Road, San Antonio, TX 78209, Attention: 
General Counsel, Fax: (210) 832-3428.
    With copies to: Akin, Gump, Strauss, Hauer & Feld, L.L.P., 300 
Convent Street, Suite 1500, San Antonio, TX 78205, Attention: 
Stephen C. Mount, Fax: (210) 224-2035.

Clear Channel Communications, Inc.:

By:--------------------------------------------------------------------
Name: Juliana Hill,
Title: Senior Vice President--Finance

    Address: 200 East Basse Road, San Antonio, TX 78209, Attention: 
General Counsel, Fax: (210) 832-3428.

LaMar Advertising Company

5551 Corporate Boulevard, Baton Rouge, LA 70808, July 19, 2000.

By Electronic Mail and Facsimile

AMFM Inc., 1845 Woodall Rogers Freeway, Suite 1300, Dallas, TX 
75201.
AMFM Operating Inc., AMFM Holdings Inc., 200 East Basse, San 
Antonio, TX 78209.
Clear Channel Communications, Inc., 200 Concord Plaza, Suite 600, 
San Antonio, TX 78216-6940.

Re: Registration Rights Agreement dated as of September 15, 1999.

    Ladies and Gentlemen: Reference is made to that certain 
Registration Rights Agreement dated of September 15, 1999 (the 
``Registration Rights Agreement'') among Lamar Advertising Company 
(the ``Issuer''), a Delaware corporation, Chancellor Media 
Corporation of Los Angeles (predecessor-in-interest to AMFM 
Operating Inc., ``AMFM Operating''), a Delaware corporation and 
Chancellor Mezzanine Holdings Corporation (now known as AMFM 
Holdings Inc., ``AMFM Holdings''), a Delaware corporation. Subject 
to the terms and conditions of the Registration Rights Agreement, 
the Issuer agreed to effect the registration under the Securities 
Act of the 26,227,273 shares (the ``Lamar Shares'') of Lamar Class A 
common stock, $0.001 par value per share issued by the Issuer in 
connection with the acquisition of the capital stock of Chancellor 
Outdoor Media Corporation and Chancellor Whiteco Outdoor 
Corporation. AMFM Holdings subsequently transferred the Lamar Shares 
held by it to AMFM Operating.
    Capitalized terms used but not defined herein shall have the 
respective meanings set forth in the Registration Rights Agreement.
    On October 2, 1999, AMFM Inc., (``AMFM''), a Delaware 
corporation and the parent corporation of AMFM Operating and AMFM 
Holdings, entered into an agreement and plan of merger (the ``Merger 
Agreement'') with Clear Channel Communications, Inc., (``Clear 
Channel''), a Texas corporation contemplating the merger (the 
``Merger'') of a wholly-owned subsidiary of Clear Channel with and 
into AMFM. Following the Merger, AMFM Operating and AMFM Holdings 
will be indirect wholly-owned subsidiaries of Clear Channel.
    This Letter shall terminate and shall be of no further force or 
effect upon the earlier of (i) the completion of the Merger, (ii) 
the termination of the Merger Agreement, or (iii) March 31, 2001 
(unless the parties mutually agree to extend same).
    This Letter shall be executed concurrently with the Amended 
Registration Rights Agreement and the First Amendment to the 
Stockholders Agreement.

LaMar Advertising Company:

Kevin P. Reilly, Jr.,
President and Chief Executive Officer.

Accepted and Agreed to:

AMFM Inc., 1845 Woodall Rogers Freeway, Suite 1300, Dallas, TX 
75201.

By: William S. Banowsky, Jr.,
Executive Vice President.

AMFM Operating Inc., (f/k/a Chancellor Media Corporation of Los 
Angeles), 200 East Basse, San Antonio, TX 78209.

By: William S. Banowsky, Jr.,
Executive Vice President.

AMFM Holdings Inc., (f/k/a Chancellor Mezzanine Holdings 
Corporation), 200 East Basse Road, San Antonio, TX 78209-3428.

By: William S. Banowsky, Jr.,
Executive Vice President.

Clear Channel Communications, Inc., 200 East Basse Road, San 
Antonio, TX 78209-3428.

By: Juliana Hill,
Senior Vice President--Finance.

Schedule E--Other Radio Stations That Cannot Be Reacquired

1. Denver, CO
    KXPK-FM
    KDJM-FM
    KIMN-FM
    KXKL-FM
    KALC-FM
2. Houston-Galveston, TX
    KKBQ-FM
    KKTL-FM
    KLDE-FM
    KBXX-FM
    KMJQ-FM

Certificate of Service

    I, John C. Filippini, of the Antitrust Division of the United 
States Department of Justice, do hereby certify that true copies of 
the Complaint For Injunctive Relief, Stipulation and Order, Final 
Judgment, and United States' Explanation of Consent Decree 
Procedures in this matter were served this 29th day of August 2000, 
by United States first-class mail, to the following:

Charles E. Biggio, Akin, Gump, Strauss, Hauer & Feld, 590 Madison 
Avenue--20th Floor, New York, NY 10022, (212) 872-1010. Counsel for 
Clear Channel Communications, Inc.
Phillip E. Proger, Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, 
NW., Washington, DC 20001-2113, (202) 879-4668. Counsel for Clear 
Channel Communications, Inc.
Neil W. Imus, Vinson & Elkins, The Willard Office Building, 1455 
Pennsylvania Avenue, NW., Washington, DC 20004-1008, (202) 639-6675. 
Counsel for AMFM Inc.

----------------------------------------------------------------------
Signed: John C. Filippini

[[Page 12560]]

Competitive Impact Statement

    The United States, pursuant to section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files 
this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    The United States filed a civil antitrust Complaint on August 29, 
2000, alleging that the proposed merger between Clear Channel 
Communications, Inc. (``Clear Channel'') and AMFM Inc. (``AMFM'') would 
violate section 7 of the Clayton Act, as amended, 15 U.S.C. 18. The 
Complaint alleges that Clear Channel's and AMFM's $23.8 billion merger 
would have the effect of lessening competition substantially in the 
provision of radio advertising time and of out-of-home advertising 
services in several areas of the United States.
    Clear Channel and AMFM are two of the three largest operators of 
broadcast radio stations in the United States. Clear Channel's and 
AMFM's radio stations compete head-to-head against one another for the 
business of local and national companies seeking to advertise on radio 
stations in many cities throughout the United States, including 
Allentown, Pennsylvania; Denver, Colorado; Harrisburg, Pennsylvania; 
Houston, Texas; and Pensacola, Florida.
    In addition, Clear Channel, through its subsidiary, Eller Media 
Company (``Clear Channel/Eller''), is a major provider of out-of-home 
advertising of various types, including billboards, bulletins and 
posters. AMFM has an approximately 28.6 percent equity interest in 
Lamar Advertising Company (``Lamar''), another major provider of out-
of-home advertising that competes directly with Clear Channel/Eller. 
Clear Channel/Eller and Lamar compete vigorously in out-of-home 
advertising in numerous markets across the country.
    The Complaint alleges that Clear Channel and AMFM's merger, unless 
blocked, would substantially lessen competition and would result in 
many advertisers paying higher prices for radio advertising time and 
out-of-home advertising. The prayer for relief seeks: (a) Adjudication 
that Clear Channel's proposed merger with AMFM would violate section 7 
of the Clayton Act; (b) preliminary and permanent injunctive relief 
preventing the consummation of the proposed merger; (c) an award to the 
United States of the costs of this action; and (d) such other relief as 
is just and proper.
    Before this suit was filed, the Department of Justice 
(``Department'') reached an agreement with Clear Channel and AMFM, 
under which the parties agreed to divest 99 stations in 27 markets to 
other radio operators approved by the Department in order to preserve 
competition in those markets. The majority of those stations were to be 
sold under what is commonly referred to as the ``fix-it-first'' 
approach utilized by the Department's Antitrust Division, which 
requires divestiture of certain assets before parties consummate their 
merger. The remaining stations are to be divested in accordance with 
the terms of a proposed Final Judgment agreed to by the parties. In 
addition, the defendants are required to divest completely AMFM's 
previously held equity interest in Lamar, now held by Clear Channel, 
under the terms of the proposed Final Judgment.
    A Stipulation and proposed Final Judgment were filed simultaneously 
with the Complaint on August 29, 2000. The United States and defendants 
have stipulated that the proposed Final Judgment may be entered after 
compliance with APPA. Entry of the proposed Final Judgment would 
terminate this action, except that the Court would retain jurisdiction 
to construe, modify, or enforce the provisions of the proposed Final 
Judgment, and to punish violations thereof.

II. The Alleged Violation

A. The Defendants

    Clear Channel, headquartered in San Antonio, Texas, is one of the 
largest radio broadcast companies in the United States. For 1999, the 
company reported net television and radio revenues of approximately 
$1.4 billion. Clear Channel, through its wholly owned subsidiary, Eller 
Media Company, is also one of the largest providers of out-of-home 
advertising services (such as billboard advertising) in the United 
States. In 1999, Clear Channel/Eller reported revenues in excess of 
$1.25 billion.
    AMFM, headquartered in Dallas, Texas, is also one of the largest 
radio broadcast companies in the United States. For 1999, the company 
reported radio group net revenues of approximately $1.7 billion. In 
addition, prior to the merger, AMFM owned approximately 28.6 percent of 
the total outstanding securities of Lamar, giving it rights to 
participate in the operation of Lamar, including representation on 
Lamar's Board of Directors. Lamar provides out-of-home advertising in 
many markets across the country. In 1999, Lamar had revenues of 
approximately $444 million.

B. Description of the Events Giving Rise to the Alleged Violation

    On October 2, 1999, Clear Channel and AMFM entered into an 
Agreement and Plan of Merger, worth approximately $23.8 billion, that 
would create the largest radio broadcast company in the United States 
and eliminate head-to-head competition between Clear Channel and AMFM 
in several markets. Attempting to resolve the Department's competitive 
concerns prior to the filing of the Complaint, Clear Channel and AMFM 
sold 85 radio stations in 24 markets to buyers approved by the 
Department. These stations were purchased by buyers who will compete 
against Clear Channel after the merger, thereby restoring much of the 
competition that would have been lost as a result of the merger. Clear 
Channel and AMFM, however, did not sell enough radio stations in the 
Allentown, Denver, Harrisburg, Houston, and Pensacola Metropolitan 
Survey Areas (``MSA''),\1\ to resolve the Department's concerns.
---------------------------------------------------------------------------

    \1\ An MSA is the geographical unit for which Arbitron, a 
company that surveys radio listeners, provides data to radio 
stations, advertisers and advertising agencies to aid in evaluating 
radio audience size and composition. Advertisers use this data in 
making decisions about which radio station or combination of radio 
stations can deliver their target audiences in the most efficient 
and cost-effective way.
    The Allentown MSA is comprised of Carbon, Lehigh, and 
Northampton counties in Pennsylvania and Warren County in New 
Jersey. The Denver MSA is comprised of Adams, Arapahoe, Boulder, 
Denver, Douglas, and Jefferson counties in Colorado. The Harrisburg 
MSA is comprised of Cumberland, Dauphin, Lebanon, and Perry counties 
of Pennsylvania. The Houston MSA is comprised of Brazoria, Chambers, 
Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller 
counties of Texas. The Pensacola MSA is comprised of Escambia and 
Santa Rosa counties of Florida.
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C. Anticompetitive Consequences of the Proposed Acquisition

1. Radio Advertising
    The Complaint alleges that the provision of advertising time on 
radio stations is a relevant product market and that the Allentown, 
Denver, Harrisburg, Houston and Pensacola MSAs (``Divestiture Cities'') 
are each a relevant geographic market.
    a. Relevant Product Market. Radio stations earn their revenues from 
the sale of advertising time to local and national advertisers. Many 
local and national advertisers purchase radio advertising time in the 
Divestiture Cities because they find such advertising preferable to 
advertising in other media for their specific needs. For such 
advertisers, radio time (a) may be less expensive and more cost-
efficient than other media in reaching the advertiser's

[[Page 12561]]

target audience (individuals most likely to purchase the advertiser's 
products or services); (b) may reach certain target audiences that 
cannot be reached as effectively through other media; or (c) may offer 
promotional opportunities to advertisers that they cannot exploit as 
effectively using other media. For these and other reasons, many local 
and national advertisers in the Divestiture Cities who purchase radio 
advertising time view radio either as a necessary advertising medium 
for them or as a necessary advertising complement to their media.
    Although some local and national advertisers may switch some of 
their advertising to other media rather than absorb a price increase in 
radio advertising time in the Divestiture Cities, the existence of such 
advertisers would not prevent radio stations from profitably raising 
their prices a small but significant amount. At a minimum, stations 
could raise prices profitably to those advertisers who view radio 
either as a necessary advertising medium, or as a necessary advertising 
complement to other media. Radio stations, which negotiate prices 
individually with advertisers, can generally identify those advertisers 
with strong radio preferences. Consequently, radio stations can charge 
different advertisers different rates. Because of this ability to price 
discriminate between different customers, radio stations may charge 
higher rates to advertisers that view radio as particularly effective 
for their needs, while maintaining lower rates for other advertisers. 
For these reasons, the sale of radio advertising time is a relevant 
product market for purposes of section 7 of the Clayton Act.
    b. Relevant Geographic Markets. Local and national advertising 
placed on radio stations in the Allentown, Denver, Harrisburg, Houston, 
and Pensacola MSAs is aimed at reaching listening audiences within each 
of those respective MSAs, and other radio stations do not provide 
effective access to those audiences. If there were a small but 
significant increase in radio advertising prices within any one of 
these MSAs, advertisers would not buy enough advertising time from 
radio stations outside of the MSA to defeat the increase. Thus, the 
Allentown, Denver, Harrisburg, Houston, and Pensacola MSAs are each a 
relevant geographic market for purposes of section 7 of the Clayton 
Act.
    c. Harm to Competition in Radio Advertising Markets. The Complaint 
alleges that the Clear Channel/AMFM merger would lessen competition 
substantially in the sale of advertising time on radio broadcast 
stations in the Divestiture Cities. In particular, the merger would 
further concentrate markets that are already highly concentrated. The 
Complaint alleges that Clear Channel's market share in each of the 
Divestiture Cities would exceed 41 percent, and in some markets would 
be more than 69 percent, after the merger. Using a measure of market 
concentration called the Herfindahl-Hirschman Index (``HHI''), which is 
explained in Appendix A to the Complaint, the merger would result in 
concentration in each of these markets from about 2262 to 6231 points, 
well above the 1800 threshold at which the United States normally 
considers a market to be highly concentrated.
    Furthermore, the Complaint alleges that the merger would eliminate 
head-to-head competition between Clear Channel and AMFM for advertisers 
seeking to reach specific audiences. Advertisers select radio stations 
to reach a large percentage of their target audience based upon a 
number of actors, including, inter alia, the size of the station's 
audience, the characteristics of its audience, and the geographic reach 
of a station's signal. Many advertisers seek to reach a large 
percentage of their target listeners by selecting those stations whose 
audience best correlates to their target listeners. Today, several 
Clear Channel and AMFM stations in the Divestiture Cities compete head-
to-head to reach the same audiences and, for many local and national 
advertisers buying time in those markets, the stations are close 
substitutes for each other based on their specific audience 
characteristics. The proposed transaction would eliminate such 
competition.
    Format changes are unlikely to deter the anticompetitive 
consequences of this transaction. Successful radio stations are 
unlikely to undertake a format change solely in response to small but 
significant increases in price being charged to advertisers by a multi-
station firm such as Clear Channel because they would likely lose a 
substantial portion of their existing audiences. Even if less 
successful stations did change format, they still would be unlikely to 
attract enough listeners to provide suitable alternatives to the Clear 
Channel stations in their markets. Finally, new entry into radio 
advertising markets in the Divestiture Cities is highly unlikely in 
response to a small but significant price increase by Clear Channel 
because of the general lack of capacity to add additional signals in 
metropolitan markets. Also, it is unlikely that stations located in 
adjacent communities would be permitted to boost their power 
sufficiently so as to enter the MSAs in the Divestiture Cities without 
interfering with other stations on the same or similar frequencies in 
violation of Federal Communications Commission (``FCC'') regulations.
    For all of these reasons, the Complaint alleges that the proposed 
merger would lessen competition substantially in the sale of 
advertising time on radio stations serving the Divestiture Cities, 
eliminate competition between Clear Channel and AMFM, and result in 
increased prices and reduced quality of service for radio advertisers 
in the Divestiture Cities, all in violation of section 7 of the Clayton 
Act.
2. Out-of-Home Advertising
    a. Relevant Markets. Out-of-home advertising companies, such as 
Clear Channel/Eller and Lamar, generate revenue from the sale of out-
of-home advertising, such as billboards, to local and/or national 
businesses that want to promote their products and services. 
Advertisers select out-of-home advertising based upon a number of 
factors, including the size of the target audience (individuals most 
likely to purchase the advertiser's products or services), the traffic 
patterns of the audience, as well as other audience characteristics.
    Out-of-home advertising has unique characteristics that distinguish 
it from other advertising media. Among other things, out-of-home 
advertising is particularly suitable for highly visual, limited-
information advertising and is typically less expensive and more cost-
efficient than other media in reaching an advertiser's target audience. 
For many advertisers, there is no close substitute for out-of-home 
advertising. Such advertisers would not switch to another advertising 
medium if out-of-home advertising prices increased by a small but 
significant amount. Thus, the complaint alleges that out-of-home 
advertising is a relevant product market for purposes of section 7 of 
the Clayton Act.
    In addition, out-of-home advertising is typically offered on a 
localized, market-by-market basis rather than nationally or regionally 
and is sold at prices based on local market conditions. It is typically 
sold by local sales forces and targeted to reach consumers in a 
specific city, county or metropolitan area. For advertisers seeking to 
reach consumers in a specific local area, advertising outside the local 
area is not an adequate substitute because most of the target audience 
may not even see the advertising. Thus, the relevant geographic markets 
within the meaning of Section 7 of the Clayton Act for out-

[[Page 12562]]

of-home advertising are typically localized, often no larger than a 
city, county or metropolitan area.
    b. Harm to Competition. Clear Channel/Eller is one of only a few 
providers of out-of-home advertising services competing with Lamar in 
several markets across the United States, including Atlanta, Georgia, 
and Chicago, Illinois. The proposed merger between Clear Channel and 
AMFM would give Clear Channel unfettered ownership and control of the 
assets and holdings of AMFM, including AMFM's approximately 28.6 
percent equity interest in Lamar.
    Clear Channel's acquisition of AMFM's significant equity interest 
in Lamar may substantially lessen competition in the areas in which 
Clear Channel/Eller and Lamar compete to provide out-of-home 
advertising. By acquiring a partial ownership interest in Lamar, Clear 
Channel will have reduced incentives to compete against Lamar for out-
of-home advertisers and will have incentives to charge higher prices 
than it otherwise would. This is because Clear Channel will indirectly 
benefit even when a customer chooses Lamar rather than Eller. In 
addition, Clear Channel's post-merger ownership in Lamar, which would 
include voting rights, board representation, and certain other rights, 
would give it the ability directly or indirectly to influence Lamar's 
business decisions, and would further lessen competition in out-of-home 
advertising. With these rights, Clear Channel could gain access to 
competitively sensitive information, which could be used by Clear 
Channel in an anticompetitive way. Entry into the out-of-home 
advertising would not be timely, likely or sufficient to mitigate the 
competitive harm resulting from this aspect of the merger. Hence, the 
Complaint alleges that the merger would lessen substantially 
competition between Clear Channel/Eller and Lamar in the provision of 
out-of-home advertising in local markets, and would result in increased 
prices and reduced quality of service for advertisers, in violation of 
section 7 of the Clayton Act.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment will preserve competition in both the 
sale of radio advertising time in the Divestiture Cities and the sale 
of out-of-home advertising in local markets by requiring substantial 
radio station divestitures and a complete divestiture of AMFM's 
ownership interest in Lamar (``the Lamar Holdings'').

A. Radio Divestitures

    The proposed Final Judgment requires Clear Channel to divest 14 
radio stations in five markets in the Divestiture Cities (the ``Radio 
Assets'') to buyers approved by the United States within one hundred 
and fifty (150) days after the filing of the Complaint, or five (5) 
days after notice of the entry of the Final Judgment by the Court, 
whichever is later. The United States, in the exercise of its sole 
discretion, may extend this time for two additional thirty (30) days 
periods.
    The divestitures required by the proposed Final Judgment will 
maintain or reduce Clear Channel's resulting post-merger market shares 
in radio advertising at levels that either Clear Channel or AMFM 
possessed (whichever was greater) in each of the Divestiture Cities 
before the merger,\2\ thereby effectively restoring the pre-merger 
competitive situation to each of these markets.\3\ Thus, these 
divestitures will preserve choices for advertisers and will ensure that 
radio advertising prices do not increase and services do not decline as 
a result of the merger.
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    \2\ In Allentown, AMFM's premerger share was 49.90 percent; 
Clear Channel's post-merger share will be 49.90 percent. In 
Harrisburg, AMFM's premerger share was 41.03 percent; the post-
merger share will be 35.90 percent. In Pensacola, AMFM's premerger 
share was 49.61 percent; the post-merger share will be 19.69 
percent. In Denver and Houston, the defendants were able to sell 
some of the stations required to be divested prior to consummation 
of their merger. In Denver, without any divestitures, the defendants 
would have held a post-merger market share of 66.51 percent. They 
sold five stations before the merger, which brought their market 
share down to 45.99 percent. After they sell the additional radio 
station required to be divested under the proposed Final Judgment, 
they will hold a 45.46 percent share, which is equal to AMFM's 
original share (i.e., before the merger and any divestitures). In 
Houston, the parties sold all but five stations before the merger, 
reducing their combined market share to 41.15 percent. After they 
make the additional divestitures called for by the proposed Final 
Judgment, they will hold only a 38.04 revenue share, which is less 
than AMFM's original share of the Houston market.
    \3\ As noted above, the parties also divested a number of radio 
stations prior to the filing of the Complaint in order to resolve 
the Department's concerns about the merger. A similar approach was 
employed by the Department with respect to those markets: Clear 
Channel was required to either divest down to its (or AMFM's) 
premerger market share or to a level that would not warrant 
competitive concern.
---------------------------------------------------------------------------

    Under the terms of the proposed Final Judgment, the Radio Assets 
must be sold to purchasers acceptable to the United States, in its sole 
discretion. Unless the United States otherwise consents in writing, the 
divestitures will include all the assets of the stations being 
divested, and will be accomplished in way that will satisfy the United 
States, in its sole discretion, that such assets can and will be used 
as viable, ongoing commercial radio businesses. The proposed Final 
Judgment also requires the defendants to maintain the independence of 
the Radio Assets, and requires those stations to be kept separate and 
apart from the defendants' other radio stations. The proposed Final 
Judgment also contains provisions intended to ensure that these 
stations will remain viable and aggressive competitors after 
divestiture.
    In addition, the proposed Final Judgment prohibits Clear Channel 
from entering into certain agreements with other radio stations in the 
Divestiture Cities without providing at least thirty (30) days' notice 
to the United States. First, Clear Channel must notify the United 
States before acquiring any assets of or interest in any other radio 
station in the Divestiture Cities. Such acquisitions could raise 
competitive concerns but might be too small to be reported under the 
Hart-Scott-Rodino (``HSR'') premerger notification statute, 15 U.S.C. 
18a. Second, Clear Channel may not enter into any joint sales or 
cooperative selling arrangement with any other radio station in the 
Divestiture Cities without providing the United States with advance 
notice. Such arrangements include any Joint Sales Agreement (``JSA''), 
where one station takes over another station's advertising time, and 
any Local Marketing Agreement (``LMA''), where one station takes over 
another station's broadcasting and advertising time, as well as other 
comparable arrangements. Arrangements whereby Clear Channel would 
manage, or sell advertising on behalf of, other radio stations in the 
Divestiture Cities would effectively increase its market share in those 
cities. Despite their competitive significance, such arrangements also 
might not be reportable under the HSR Premerger Notification Act. Thus, 
this provision of the proposed Final Judgment ensures that the United 
States will receive advance notice of and be able to act, if 
appropriate to prevent any agreements that might have anticompetitive 
effects in the Divestiture Cities.

B. Divestiture of the Lamar-Holdings

    The proposed Final Judgment also requires the defendants to divest 
completely, by December 31, 2002, the approximately 28.6 percent equity 
interest held by AMFM in the Lamar Holdings that Clear Channel acquired 
as a result of the merger. This divestiture may be made by public 
offering, private sale, or a combination thereof. However, such stock 
may not be sold: (1) to any entity that is currently in the out-of-home 
advertising business without the United States's written approval; or 
(2)

[[Page 12563]]

in a manner that the United States believes could significantly impair 
Lamar as an effective competitor in the sale of out-of-home 
advertising.
    In merger cases in which the Antitrust Division seeks a divestiture 
remedy, it requires completion of the divestiture within the shortest 
time period reasonable under the circumstances. While the time period 
for divestiture of the Lamar Holdings in this case is significantly 
longer than the United States ordinarily would accept, the Division has 
agreed to a longer time in this case because of concerns that a more 
rapid divestiture of such a large amount of relatively thinly traded 
stock might harm competition. A complete divestiture in the time period 
required by the Antitrust Division in the typical case (e.g., four 
months or less) potentially could adversely affect the price of Lamar 
stock, thereby increasing the cost of raising additional capital and 
limiting Lamar's ability to maintain and augment its outdoor 
advertising portfolio. This would have the effect of reducing Lamar's 
ability to compete effectively.
    The terms of the proposed Final Judgment reflect a balancing of the 
potential harm to competition that might arise from a divestiture that 
proceeds either too slowly or too rapidly. By permitting the 
divestiture of the Lamar Holdings to be accomplished by December 31, 
2002, the proposed Final Judgment will accomplish the required 
divestiture so as to minimize the risk of significant anticompetitive 
effects from Clear Channel's acquisition of a partial ownership stake 
in Lamar while at the same time minimizing the risk of any potential 
adverse effect on Lamar's ability to raise capital and compete 
effectively. Moreover, other supplementary provisions in the Final 
Judgment, described below, are designed to reduce the risk that Clear 
Channel's partial ownership of Lamar could create incentives for 
anticompetitive activity during the interim period before the 
completion of the required divestiture.

C. Corporate Governance Restrictions Relating to the Lamar Holdings

    During the period that Clear Channel possesses the Lamar Holdings, 
its ability to participate in the governance of Lamar will be 
restricted by the proposed Final Judgment. In particular, it must abide 
by two agreements reached between Clear Channel and Lamar (the ``First 
Amendment to Stockholders Agreement'' and the ``Amended and Restated 
Registration Rights Agreement,'' both of which are attached to the 
proposed Final Judgment as Schedules C and D, respectively), which set 
out the rights and obligations of the parties with respect to issues 
relating to the governance of Lamar and the sale of its stock. In 
addition, until the divestiture of the Lamar Holdings, Clear Channel 
must treat that equity interest in Lamar as a passive investment, and 
must hold it separate and apart from Clear Channel's other activities 
and interest. Neither Clear Channel nor its representatives may: 
exercise any voting rights except as provided in the First Amendment to 
Stockholders Agreement; participate as officers or directors of Lamar, 
participate in the selection of Lamar's officers or directors, or 
participate in any board of directors meetings or committees; exercise 
any veto rights over Lamar's activities; or obtain nonpublic 
information about Lamar. In addition, the proposed Final Judgment 
provides that the two AMFM representatives on the Lamar board--Thomas 
O. Hicks and R. Steven Hicks--must resign those seats within two days 
after the merger is consummated.\4\ Collectively, these provisions are 
intended to promote a ``hold separate'' relationship between Clear 
Channel and the Lamar Holdings during the pre-divestiture period and 
reduce the risk that Clear Channel will influence Lamar's business 
decisions.
---------------------------------------------------------------------------

    \4\ The United States has confirmed that these two individuals 
resigned on August 30, 2000.
---------------------------------------------------------------------------

    Other provisions in the proposed Final Judgment require that the 
defendants may not take any action that will in any way impede the 
divestiture of the Lamar Holdings. In addition, the defendants may not 
acquire any additional shares of Lamar stock except as a results of 
certain events, such as a stock split or dividend, where the percentage 
of their equity interest in Lamar does not increase. Any additional 
shares so acquired must be divested as part of the Lamar Holdings. 
Finally, the defendants must appoint someone to oversee the Lamar 
Holdings, who will be responsible for the defendant's compliance with 
this portion of the decree.
    As a general matter, the Antitrust Division does not believe that 
decree restrictions dealing with corporate governance arrangements are 
an appropriate remedy for the anticompetitive effects that might arise 
from mergers and acquisitions. Such restrictions will have only limited 
efficacy as long-term protections against anticompetitive effects, and 
may require ongoing oversight of the conduct of a corporation's 
internal affairs that neither the Antitrust Division nor a Court is 
well-suited to perform. The proposed Final Judgment in this matter 
adopts such provisions only because of the unique factors that are 
present here, and only as an interim measure designed to mitigate any 
anticompetitive incentives that could otherwise arise during the 
unusually lengthy period permitted for complete divestiture of the 
Lamar Holdings.

D. Trustee Provisions

    In the event that the defendants fail to make any required 
divestitures of either the Radio Assets or the Lamar Holdings 
(collectively the ``Divestiture Assets'') within the time periods set 
forth in the proposed Final Judgment, a trustee(s) will be appointed by 
the Court to effect such divestitures. Clear Channel will pay all costs 
and expenses of any trustee and of any professionals and agents 
retained by the trustee(s), and may not object to any sale by the 
trustee(s) on any ground other than malfeasance. After appointment, the 
trustee(s) will report monthly to the United States and the Court on 
its efforts to accomplish the required divestitures. If the trustee(s) 
has not accomplished the divestitures within six (6) months of his or 
her appointment, the trustee(s) shall inform the Court of his or her 
efforts to accomplish the required divestitures, the reasons the 
required divestitures have not been accomplished and the trustee's 
recommendations.

E. Ban on Reacquisition

    The defendants may not reacquire any of the Divestiture Assets or 
the assets used in the operation of the radio stations listed in 
Schedule E of the proposed Final Judgment \5\ during the term of the 
consent decree, which is for ten years unless extended by the Court. 
Reacquisition of any of the Divestiture Assets would undermine, if not 
negate, the benefits of the relief obtained in these markets. 
Accordingly, this provision is necessary to protect the integrity of 
the relief.
---------------------------------------------------------------------------

    \5\ Schedule E lists the other radio stations in the Denver and 
Houston MSAs that the parties have already divested under the ``fix-
it-first'' arrangement. Since all the required divestitures in 
Denver and Houston did not occur under the ``fix-it-first'' 
approach, the defendants may not reacquire any of the stations 
divested in these markets, including those that they divested prior 
to consummating their merger.
---------------------------------------------------------------------------

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable

[[Page 12564]]

attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final 
Judgment

    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register. All comments will be given 
due consideration by the United States Department of Justice, which 
remains free to withdraw its consent to the proposed Final Judgment at 
any time prior to its entry. The United States will evaluate and 
respond to the comments. The comments and the response of the United 
States will be filed with the Court and published in the Federal 
Register.
    Any such written comments should be submitted to: J. Robert Kramer, 
II, Chief, Litigation II Section, Antitrust Division, United States 
Department of Justice, 1401 H Street, NW, Suite 3000, Washington, DC 
20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment, as well as to 
punish violations of its provisions.

VI. Alternatives to the Proposed Final Judgment

    The United States considered as an alternative to the proposed 
Final Judgment, a full trial on the merits against the defendants. The 
United States could have brought suit and sought a preliminary and 
permanent injunction against the merger of Clear Channel and AMFM. The 
United States is satisfied, however, that the radio station 
divestitures, the complete divestiture of the Lamar Holdings, and the 
other relief contained in the proposed Final Judgment will preserve 
competition in the sale of radio advertising and out-of-home 
advertising. Thus, the United States is convinced that the proposed 
Final Judgment, once implemented by the Court, will prevent the Clear 
Channel/AMFM merger from having adverse competitive effects.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to sixty (60) day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment is ``in the public interest.'' In making that 
determination, the Court may consider--

    (1) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including considerations of 
the public benefit, if any, to be derived from a determination of 
the issues at trail.

15 U.S.C. 16(e) (emphasis added). As the United States Court of Appeals 
for the District of Columbia Circuit held, the APPA permits a court to 
consider, among other things, the relationship between the remedy 
secured and the specific allegations set forth in the government's 
Complaint, whether the decree is sufficiently clear, whether 
enforcement mechanisms are sufficient, and whether the decree may 
positively harm third parties. See United States v. Microsoft Corp., 56 
F.3d 1448, 1458-62 (D.C. Cir. 1995).
    In conducting this inquiry, ``the Court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' \6\ Rather,
---------------------------------------------------------------------------

    \6\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court 
need not invoke any of them unless it believes that the comments 
have raised significant issues and that further proceedings would 
aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd 
Cong. 2d Sess. 8-9 (1974), reprinted in 1974 U.S.C.C.A.N. 6535, 
6538.

    [a]bsent a showing of corrupt failure of the government to 
discharge its duty, the Court, in making its public interest 
finding, should * * * carefully consider the explanations of the 
government in the competitive impact statement and its responses to 
comments in order to determine whether those explanations are 
---------------------------------------------------------------------------
reasonable under the circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988) (quoting United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083 
(1981)); see also Microsoft, 56 F.3d at 1458-62. Precedent requires 
that:

    The balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\7\
---------------------------------------------------------------------------

    \7\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis 
added); see BNS, 858 F.2d at 463; United States v. National Broad. 
Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. 
Supp. at 716 See also Microsoft, 56 F.3d at 1461 (whether ``the 
remedies [obtained in the decree are] so inconsonant with the 
allegations charged as to fall outside of the `reaches of the public 
interest' '') (citations omitted).

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' '' \8\
---------------------------------------------------------------------------

    \8\ United States v. American Tel. and Tel Co., 552 F. Supp. 
131, 151 (D.D.C. 1982), aff'd. sub nom. Maryland v. United States, 
460 U.S. 1001 (1983) (quoting Gillette Co., 406 F. Supp. at 716); 
see also United States v. Alcan Aluminum, Ltd., 605 F. Supp. 619, 
622 (W.D. Ky. 1985).

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[[Page 12565]]

    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Since the ``Court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that the court is only authorized to review the 
decree itself, and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States might have but did 
not pursue. Id.

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: November 15, 2000.

Respectfully submitted,
John C. Filippini,
Trial Attorney, Litigation II Section, Antitrust Division, U.S. 
Department of Justice, 1401 H Street, N.W., Suite 3000, Washington, 
D.C. 20530, (202) 307-5782.

Certificate of Service

    I, John C. Filippini, of the Antitrust Division of the United 
States Department of Justice, do hereby certify that true copies of the 
foregoing Competitive Impact Statement were served this 15th day of 
November, 2000, by first-class mail, to the following:

Charles E. Biggio, Akin, Gump, Strauss, Hauer & Feld, 590 Madison 
Avenue--20th Floor, New York, NY 10022, (212) 872-1010, Counsel for 
Clear Channel Communications, Inc.
Phillip E. Proger, Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, 
N.W., Washington, D.C. 20001-2113, (202) 879-4668, Counsel for Clear 
Channel Communications, Inc.
Neil W. Imus, Vinson & Elkins, The Willard Office Building, 1455 
Pennsylvania Avenue, N.W., Washington, D.C. 20004-1008, (202) 639-6675, 
Counsel for AMFM Inc.

John C. Filippini.
[FR Doc. 01-87 Filed 2-26-01; 8:45 am]
BILLING CODE 4410-11-M