Document:

exv10w2

 

EXHIBIT 10.2

[Letterhead of IndyMac Bank, F.S.B.]

July 1, 2006

Mr. James Mahoney

Chief Executive Officer

Financial Freedom Senior Funding Corporation

1 Banting

Irvine, California 92618

Amendment; Waiver of Tolling Period by IndyMac Bank, F.S.B.

Dear Jim:

     As you know, we have been discussing various alternatives with respect to Financial Freedom
Senior Funding Corporation, 93.75% of the issued and outstanding shares of capital stock of which
are owned by IndyMac Bank, F.S.B., and have decided to amend, at your request, that certain
Stockholders Agreement (the “Stockholders Agreement”), effective as of the “Closing” under the
IMB/LBB Stock Purchase Agreement (as defined therein), by and among Financial Freedom Senior
Funding Corporation, a Delaware corporation (as successor by merger to Financial Freedom Holdings,
Inc., “FFSFC”), you (“Mahoney” or “you”), and IndyMac Bank, F.S.B. (“IMB”), to waive any time
period requirement restricting you from exercising your “Put Option.” Capitalized terms used
herein without definition shall have the respective meanings assigned to them in the Stockholders
Agreement.

     Accordingly, IMB and you hereby agree as follows:

     1. Amendment; Waiver of Tolling Period; Exercise of Put Option. IMB and Mahoney
hereby amend Section 5 of the Stockholders Agreement prohibiting Mahoney from exercising the Put
Option before the expiration of the Tolling Period by waiving the provisions thereof and, in
connection therewith, Mahoney hereby exercises his right to sell, and IMB hereby agrees to
purchase, all of the Mahoney Interests pursuant to Mahoney’s Put Option under Section 5 of the
Stockholders Agreement. IMB and Mahoney agree that the purchase price for the Mahoney Interests
shall be Forty Million and no/100 Dollars ($40,000,000.00) (the “Purchase Price”), and further
agree that such Purchase Price was agreed upon mutually by the parties hereto based on the actual
results of operations of FFSFC in the first quarter of 2006 and on your representations in
Paragraph 2 of this letter agreement, and notwithstanding any other method of determination thereof
provided for in the Stockholders Agreement.

     2. Net Operating Income for Second Fiscal Quarter. Mahoney represents that the net
operating income of FFSFC, as determined in accordance with the Accounting Principles (as defined
below), for the three month period ended June 30, 2006 was not less than $9 million (after tax).
For purposes of this Paragraph 2 “Accounting Principles” means the accounting

 

 

Mr. James Mahoney

July 1, 2006

Page 2

 

principles, estimating techniques, cost allocations (including, without limitation, internal
allocation of overhead costs), assumptions and other accounting practices and procedures as have
been applied by FFSFC on a consistent basis in the preparation of its financial statements for the
prior four fiscal quarters; provided, however, that net operating income for the
three month period ended June 30, 2006 shall (i) be determined in accordance with FASB 156 as in
effect January 1, 2006 and (ii) not include any one-time, special or non-recurring charges against
earnings, including, without limitation, the charge related to the Roseville sublease expense
incurred in June 2006.

     3. Closing. The purchase of the Mahoney Interests shall occur at a closing (the
“Closing”) at the offices of IMB, 888 East Walnut Street, Pasadena, California, at 9:30 a.m.
(Pacific time) on Monday, July 3, 2006. At the Closing, against delivery to IMB of the
certificates representing all of your shares of FFSFC (consisting of 62.5 shares of common stock of
FFSFC and representing all of the Mahoney Interests), duly endorsed for transfer to IMB or
accompanied by duly executed stock powers and with all stock transfer tax stamps, if required,
affixed thereto, IMB shall deliver to you, by wire transfer of immediately available funds to an
account specified by you, the Purchase Price. You must specify this account in writing to IMB at
least one business day prior to the Closing.

     4. No Encumbrances. Mahoney hereby represents and warrants to IMB that the Mahoney
Interests being conveyed to IMB at the Closing are owned by Mahoney free and clear of all liens,
claims and encumbrances (other than restrictions on the transfer thereof imposed under the
Securities Act of 1933, as amended), as evidenced, in part, by the acknowledgement executed by
Kathleen T. Mahoney, which acknowledgement constitutes a part of this letter agreement.

     5. Mutual Representations and Warranties. IMB represents and warrants to Mahoney, and
Mahoney represents and warrants to IMB, as of the date hereof and as of the date of the Closing,
that:

     (a) It or he has all requisite power, authority and capacity to enter into and perform
its or his obligations under this letter agreement.

     (b) It or he has duly authorized the execution and delivery of this letter agreement,
and this letter agreement constitutes a binding obligation of it or him, enforceable against
it or him in accordance with its terms.

     (c) The execution, delivery and performance of this letter agreement by it or him will
not violate any agreement to which it or he is a party or any order of a governmental body.

     (d) In the case of Mahoney only, there are no agreements to which Mahoney is a party
with respect to the voting or transfer of the capital stock of FFSFC or with respect to any
other aspect of the affairs of FFSFC (including, without limitation, any
arrangement Mahoney has with Kathleen T. Mahoney), other than the Stockholders Agreement and
this letter agreement.

 

 

Mr. James Mahoney

July 1, 2006

Page 3

 

     6. Disclaimer. The parties hereto acknowledge and agree that the Purchase Price was
negotiated at arms’ length and that IMB has no present obligation to purchase the Mahoney Interests
and Mahoney has no present obligation to sell the Mahoney Interests. IMB acknowledges and agrees
that neither Mahoney nor any Person acting on his behalf is making any oral or written
representations or warranties whatsoever, express or implied, with respect to FFSFC or its
business, operations, assets, liabilities, affairs, condition (financial or otherwise) and
prospects, except for the representations and warranties expressly set forth herein. IMB
acknowledges that it is a sophisticated investor and that it has had an opportunity to ask such
questions of Mahoney as IMB deemed relevant to the transactions contemplated hereby and to acquire
such additional information about FFSFC and its business, operations, assets, liabilities, affairs
and condition (financial or otherwise) and prospects as it has requested (and all such information
has been received). In making its determination to allow you to exercise your Put Option early and
proceed with the purchase of the Mahoney Interests as contemplated hereby (including, without
limitation, the Purchase Price), IMB has reached its own independent decision to enter into the
transactions contemplated hereby in reliance upon the results of its own due diligence and the
representations and warranties of Mahoney expressly set forth herein.

     7. Confirmation of Restricted Period Covenant in Stockholders Agreement. Mahoney and
IMB acknowledge that, except as amended hereby, the Stockholders Agreement remains in full force
and effect and that certain provisions of the Stockholders Agreement survive the consummation of
the transactions contemplated hereby (as provided or contemplated therein) and, in furtherance
thereof and without limiting the generality thereof, Mahoney acknowledges and agrees that the
provisions of Section 12 of the Stockholders Agreement shall survive the purchase by IMB of the
Mahoney Interests as contemplated hereby and shall remain binding upon Mahoney during the
Restricted Period in accordance with the terms of the Stockholders Agreement. The parties hereto
further acknowledge and agree that the Restricted Period shall commence on the date of the Closing.

     8. Expenses. IMB shall pay and reimburse you for all of the reasonable fees and
expenses of your professional advisors (including legal fees and expenses) incurred by you in
connection with the transactions contemplated hereby and, prior to the date hereof, the proposed
initial public offering of FFSFC; provided, that IMB shall not be obligated to pay and reimburse
you under this paragraph 8 for any such expenses in excess of $100,000.

     9. Governing Law; Entire Agreement; Successors and Assigns, Etc. This letter
agreement shall be governed by, and construed and enforced in accordance with, the laws of the
State of Delaware without giving effect to the conflict of laws provisions thereof. Each of the
parties hereto hereby submits to personal jurisdiction and waives any objection to venue in the
State of California. Service of process on the parties hereto in any action arising out of or
relating to this letter agreement shall be made pursuant to applicable law. The parties hereto
hereby waive all right to trial by jury in any action or proceeding to enforce or defend any rights
hereunder. This letter agreement, together with the Stockholders Agreement, constitute the

 

 

Mr. James Mahoney

July 1, 2006

Page 4

 

entire agreement and understanding between IMB and Mahoney with respect to the subject matter
hereof and supersedes all other prior agreements or understandings with respect to the subject
matter hereof. No provision of this letter agreement may be amended, modified or supplemented
without the written consent of IMB and Mahoney. No failure or delay on the part of a party in
exercising any right, power or privilege hereunder, and no course of dealings between the parties,
shall operate as a waiver thereof nor shall any single or partial exercise of a right, power or
privilege hereunder preclude the simultaneous or later exercise of any other right, power or
privilege. The rights and remedies provided herein are cumulative and not exclusive of any rights
or remedies which a party may otherwise have. All of the terms and provisions hereof shall inure
to the benefit of and be binding upon IMB and Mahoney and their respective successors and assigns
(including Mahoney’s heirs and legatees).

     10. Severability and Reformation of Covenants. You acknowledge and agree that the
restrictive covenants set forth herein, including in Paragraph 7 hereof (and, by virtue thereof,
the covenants contained in Section 12 of the Stockholders Agreement), are reasonable and valid in
time and scope and in all other respects. The covenants set forth in this letter agreement,
including in Paragraph 7 hereof (and, by virtue thereof, the covenants contained in Section 12 of
the Stockholders Agreement), shall be considered and construed as separate and independent
covenants. Should any part or provision of this letter agreement, including, without limitation,
any covenant (including in Paragraph 7 hereof (and, by virtue thereof, the covenants contained in
Section 12 of the Stockholders Agreement)), be held invalid, void or unenforceable in any court of
competent jurisdiction, such invalidity, voidness or unenforceability shall not render invalid,
void or unenforceable any other part or provision of this letter agreement (or the Stockholders
Agreement). The parties hereto agree that it is their intention that the restrictive covenants set
forth herein, including in Paragraph 7 hereof (and, by virtue thereof, the covenants contained in
Section 12 of the Stockholders Agreement), be enforced in accordance with their terms to the
maximum extent possible under applicable law. The parties hereto further agree that if any portion
of the provisions of this letter agreement, including in Paragraph 7 hereof (and, by virtue
thereof, the covenants contained in Section 12 of the Stockholders Agreement), is found to be
invalid or unenforceable by a court of competent jurisdiction because its duration, territory,
definition of activities or definition of information covered is considered to be invalid or
unreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceable
term provided, such that the intent of IMB and Mahoney in agreeing to the provisions of this letter
agreement, including Paragraph 7 hereof (and, by virtue thereof, the covenants contained in Section
12 of the Stockholders Agreement), will not be impaired and the provision in question shall be
enforceable to the fullest extent of the applicable laws.

     11. Further Assurances. The parties hereto will do, execute, acknowledge and deliver
all and every such further acts, transfers, amendments and assurances as may be required to carry
out the intent or purposes of this letter agreement or to facilitate the performance of the terms
of this letter agreement, including, without limitation, cooperating with each other in connection
with any required regulatory or governmental filings or any filing with respect to any mortgage
licensing laws applicable to the parties’ performance of the terms of this letter agreement.

 

 

Mr. James Mahoney

July 1, 2006

Page 5

 

     If you are in agreement with the foregoing, please sign this letter agreement in the space
provided below.

	 	 	 	 	 
	 	IndyMac Bank, F.S.B.

 
 	 
	 	By:  	/s/ Michael W. Perry
 	 
	 	 	Michael W. Perry 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	Agreed to and accepted this 1st day
of July, 2006 by:

 
 	 	 
	/s/ James Mahoney
 	 	 
	James Mahoney 	 	 
	 	 	 
	 

     In consideration of the execution of the foregoing letter agreement by IMB and Mahoney, which, in part, facilitates the spousal arrangement between the undersigned and James Mahoney,
the undersigned hereby acknowledges that she has read this letter agreement and the Stockholders
Agreement and knows and understands the content hereof and thereof. The undersigned has the right
to consult with counsel of her choosing in connection with this spousal consent and the letter
agreement and she has had ample opportunity to do so. If the undersigned has not consulted with
counsel in connection herewith, the undersigned has knowingly and willingly elected not to do so.
The undersigned acknowledges and understands that this letter agreement conveys all of the Mahoney
Interests, consisting of 62.5 shares of common stock of Financial Freedom Senior Funding
Corporation to IndyMac Bank, F.S.B., including any interest she may have in such Mahoney Interests
(marital or otherwise), including, without limitation, any interest equivalent to a spousal
interest by virtue of her relationship with James Mahoney or other community or quasi-community
property interest.

     The undersigned (i) consents to be bound by the terms and provisions of this letter agreement
(to the extent the provisions of this letter agreement are applicable to the undersigned on account
of her spousal relationship with James Mahoney), including, without limitation, with respect to the
sale and transfer of the Mahoney Interests (it being understood that the undersigned is not bound
by the provisions of Paragraph 7 hereof), (ii) agrees that the undersigned’s spouse or his designee
shall have the sole and exclusive management power with respect to the transfer of the Mahoney
Interests, (iii) agrees that the undersigned will not effect or attempt to effect any sale or other
transfer of the Mahoney Interests, or of any interest therein,
except pursuant to the terms of this letter agreement and (iv) agrees that the undersigned
will not seek to challenge or set aside this transaction as a fraudulent conveyance or on any other
ground.

 

 

Mr. James Mahoney

July 1, 2006

Page 6

 

     The undersigned shall perform any further acts and execute and deliver any further documents
or procure any court orders which may be reasonably necessary to carry out the provisions of this
spousal consent and letter agreement (to the extent the provisions of this letter agreement are
applicable to the undersigned on account of her spousal relationship with James Mahoney).

	 	 	 	 	 
	 	 	 
	 	     /s/ Kathleen T. Mahoney
 	 
	 	Kathleen T. Mahoney 	 
	 	July 1, 2006<PAGE>
                                                                     Exhibit 4.1

                         STOCK TRANSFER RESTRICTION AND
                          REGISTRATION RIGHTS AGREEMENT

                                  JULY 1, 2006

         THIS STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of July 1, 2006, is by and among (1) Clear Channel
Outdoor Holdings, Inc., a Delaware corporation (the "Company"), (2) Mark T.
Lieberman, Deborah S. Lieberman, The Trust (Living) of Marianne Lieberman and
The Trust (Living) of Carolyn M. Grant (collectively, the "Principal
Stockholders"), and (3) Molly A. McGuire Lieberman, Karen Lieberman-Daly,
Richard L. Frick and the Lieberman Business Trust (collectively, and together
with the Principal Stockholders, the "Stockholders"). Reference is made to that
certain Stock Purchase Agreement, dated as of May 20, 2006 (the "Stock Purchase
Agreement"), by and among the Company, Clear Channel Outdoor, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company (the "Buyer"),
IN-TER-SPACE Services Inc., a Pennsylvania corporation ("ISI"), and the
Stockholders (in their capacity as the holders of all of the capital stock of
ISI). All capitalized terms used but not defined in this Agreement will have the
respective meanings ascribed thereto in the Stock Purchase Agreement.

                               W I T N E S S E T H

         WHEREAS, this is the Stock Transfer Restriction and Registration Rights
Agreement referred to in the Stock Purchase Agreement; and

         WHEREAS, pursuant to the Stock Purchase Agreement, the Buyer will
acquire all of the outstanding shares of ISI from the Stockholders; and

         WHEREAS, the purchase price Buyer shall pay to the Stockholders for
their shares of ISI shall consist of cash and shares of CCO Common; and

         WHEREAS, the Stockholders' agreement to certain restrictions on their
subsequent transfer of shares of CCO Common, and the grant by the Company to the
Stockholders of certain registration rights, all as more fully set forth in this
Agreement, are material inducements to the Company and the Stockholders to enter
into the Stock Purchase Agreement and consummate the transactions contemplated
thereby;

         WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the Company's and the Stockholders' obligations, respectively, to
consummate the Stock Purchase Agreement and transactions contemplated thereby;

         NOW, THEREFORE, in consideration of the foregoing and mutual covenants
and agreements hereinafter set forth, and for other consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 1
<PAGE>

                                   ARTICLE I.
               RESTRICTIONS ON TRANSFER OF RESTRICTED SECURITIES.

1.1.     Certain Definitions.  For purposes of this Agreement,

         (a) "Affiliate" means, with respect to a specified person or entity,
any other person or entity that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by or is under common control with,
the specified person or entity. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any entity, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such entity, whether through the
ownership of voting securities, by agreement or otherwise.

         (b) "Permitted Transfer" means any of the following Transfers in which
the transferee executes and delivers to the Company a counterpart signature page
to this Agreement, agreeing that such transferee and the Restricted Securities
Transferred to such transferee will be bound by all of the terms and conditions
of this Agreement: (i) a Transfer by a Stockholder that is a natural person,
without consideration and for bona fide estate planning purposes, to the spouse
of such Stockholder, to a natural or adoptive child of such Stockholder or to a
trust established for the benefit of such spouse and/or children, or (ii) a
Transfer by a Stockholder that is not a natural person to any Affiliate of such
Stockholder or to any beneficiary, officer, director, partner, member or retired
partner or member of such Stockholder or its Affiliates (collectively, "Related
Parties").

         (c) "Restricted Securities" means (i) all shares of CCO Common issued,
or to be issued in the future, to the Stockholders pursuant to the Stock
Purchase Agreement, including without limitation, any shares of CCO Common that
are or were Holdback Shares and any shares of CCO Common that constitute a
portion of any Earnout Amount payable thereunder and (ii) any equity securities
of the Company (and any other securities of the Company that are, or may be with
the passage of time or the occurrence of one or more events, convertible into
equity securities of the Company), issued in respect of the shares described in
clause (i), including without limitation, pursuant to any stock dividend, stock
split or recapitalization of the Company.

         (d) "Transfer" means any sale, assignment, grant of option to purchase
(but only to the extent an optionee's exercise of such option on the first date
on which it becomes exercisable would otherwise be a Transfer hereunder),
pledge, hypothecation, transfer or other disposition or encumbrance of any
Restricted Security, or any beneficial interest therein, or the entry into any
binding contract, agreement or arrangement providing for any of the foregoing.

1.2.     Restrictions on Transfer.

         (a) Restrictions Applicable to All Stockholders. No Stockholder may
voluntarily Transfer any Restricted Security unless (i) the requirements of
Article II have been satisfied in full and (ii) the Transfer is either (A) a
Permitted Transfer or (B) a bona

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 2
<PAGE>

fide Transfer, in which the consideration is payable solely in cash or cash
equivalents, to a third party following full compliance with the requirements of
Section 1.3.

         (b) Restrictions Applicable to Only Principal Stockholders.

                  (i) One Year Restriction. No Principal Stockholder may
         voluntarily Transfer any Restricted Security (other than pursuant to a
         Permitted Transfer) prior to the one-year anniversary of this
         Agreement.

                  (ii) Two Year Restriction. No Principal Stockholder may
         voluntarily Transfer any Restricted Security (other than pursuant to a
         Permitted Transfer) prior to the two-year anniversary of this
         Agreement, other than the Transfer after the one-year anniversary of
         this Agreement of a number of shares of CCO Common that, together with
         all other such Transfers by such Principal Stockholder, does not exceed
         50% of the aggregate number of shares of CCO Common issued to such
         Stockholder on or before the date of such Transfer pursuant to the
         Stock Purchase Agreement, including without limitation, any shares of
         CCO Common that are or were Holdback Shares and any shares of CCO
         Common that constitute a portion of any Earnout Amount payable
         thereunder.

         (c) Non-Compliant Transfers Void. Any voluntary Transfer of Restricted
Securities that is not made in full compliance with the requirements of this
Section 1.2 will be null and void, and the Company (and any transfer agent for
the securities of the Company) will refuse to recognize such attempted Transfer
and to reflect on its records any change in record ownership of Restricted
Securities pursuant to such attempted Transfer.

         (d) Hedging Permitted. Notwithstanding anything to the contrary herein,
the Stockholders shall be permitted to engage, directly or indirectly, in any
zero cost collar or similar type of collar hedging transactions ("Permitted
Hedge Transactions"), in accordance with applicable securities laws and subject
to the provisions of Section 1.4. Stockholders shall not be permitted to engage
in any "short sales" (as defined in Rule 200 of Regulation SHO promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")).
Notwithstanding anything to the contrary herein, in connection with Permitted
Hedge Transactions,

                  (i) short sales engaged in by a brokerage firm solely in
         connection with the Permitted Hedge Transaction(s) shall be permitted;

                  (ii) each Stockholder may pledge Restricted Securities to its
         brokerage firm as security for its obligations in connection with
         Permitted Hedge Transactions; and

                  (iii) each Stockholder may take any further action that is
         reasonably necessary, in the good faith judgment of such Stockholder,
         to effect such Permitted Hedge Transaction.

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 3
<PAGE>

It is the intention of the parties that, subject only to Section 1.4, each
Stockholder be permitted to engage in Permitted Hedge Transactions
notwithstanding any other provision of this Agreement.

1.3.     Rights of First Refusal.

         (a) Sale Notice. Whenever and as often as any Stockholder desires to
sell any Restricted Securities in reliance on Section 1.2(a)(ii)(B), such
Stockholder (the "Selling Holder") must give the Company a notice to such effect
(the "Sale Notice"), setting forth (i) the number of Restricted Securities that
the Selling Holder desires to sell (the "Offered Securities"), (ii) the name of
the person to whom the Selling Holder desires to make such sale (the
"Transferee") or that the Selling Holder desires to effect an open market sale
of the Offered Securities and (iii) the other material terms and conditions of
such sale, if any.

         (b) Company's Right to Purchase.

                  (i) Right to Purchase. Upon receipt of a Sale Notice, the
         Company will have the right and option (but not the obligation) to
         purchase all or any portion of the Offered Securities at the Market
         Price (as defined in Section 1.3(b)(iii)). The Company will be entitled
         to exercise this right at any time before 5:00 pm Central Time on the
         next Trading Day (as defined hereafter) immediately following the day
         on which the Company receives the Sale Notice (the "Company Exercise
         Period"). A "Trading Day" is any day on which the New York Stock
         Exchange is open for trading for at least four hours (excluding any
         period of time during which trading of CCO Common on the New York Stock
         Exchange is suspended or halted).

                  (ii) Manner of Exercise. To exercise such purchase right, the
         Company must give a notice of exercise (a "Company Exercise Notice") to
         the Selling Holder during the Company Exercise Period. The Company
         Exercise Notice must set forth the number of Offered Securities that
         the Company is willing to purchase and must contain the Company's
         irrevocable offer to purchase such Offered Securities in accordance
         with Section 1.3(c). Failure of the Company to deliver a valid Company
         Exercise Notice during the Company Exercise Period will be deemed a
         waiver of the Company's purchase right for the proposed transaction
         described in the Sale Notice.

                  (iii) Market Price. The "Market Price" will be the greater of
         (A) the closing price of the CCO Common on the New York Stock Exchange
         on the Trading Day immediately preceding the day on which the Selling
         Holder delivers the Sale Notice to the Company (or, if the Sale Notice
         is delivered later than 4:00 p.m., New York City time, on a Trading
         Day, the closing price of the CCO Common on the New York Stock Exchange
         on the Trading Day on which the Sale Notice is delivered to the
         Company) and (B) the closing price of the CCO Common on the New York
         Stock Exchange on the Trading Day immediately preceding the day on
         which the Company delivers the Company Exercise Notice

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 4
<PAGE>

         to the Selling Holder (or, if the Company Exercise Notice is delivered
         later than 4:00 p.m., New York City time, on a Trading Day, the closing
         price of the CCO Common on the New York Stock Exchange on the Trading
         Day on which the Company Exercise Notice is delivered to the Selling
         Holder).

         (c) Closing of Rights of First Refusal. If the Company offers to
purchase any or all of the Offered Securities pursuant to Section 1.3(b)(ii),
the closing of the purchase and sale of such Offered Securities will occur on
the third Trading Day immediately following the day on which the Company
delivers the Company Exercise Notice. At least one Trading Day prior to such
date, the Selling Holder must deliver wire transfer instructions (if funds are
to be wired) to the Company. The consummation of the purchase and sale of such
Offered Securities will be effected by the Selling Holder's delivery to the
Company of the Offered Securities (free and clear of any restrictions, liens or
claims) and such other instruments of transfer as the Company may reasonably
request (including delivery of the certificate(s) representing the securities
being purchased, properly endorsed for transfer), against payment by the Company
of the purchase price therefor.

         (d) Failure to Purchase All Offered Securities. If the Company does not
consummate the purchase of all of the Offered Securities pursuant to Section
1.3(c), the Selling Holder may sell the Offered Securities not so purchased. Any
sale pursuant to this Section 1.3(d) must be consummated during the 90-day
period commencing on the expiration of the Company Exercise Period. Any Transfer
of such Offered Securities that does not comply with the terms of this Section
1.3(d) will constitute a new sale that will be subject to the requirements of
this Section 1.3 de novo.

1.4.     Right to Purchase Shares Subject to Permitted Hedge Transactions.

         (a) Permitted Hedge Transaction Notice. Whenever and as often as any
Stockholder has a bona fide good faith intention to enter into a Permitted Hedge
Transaction as contemplated by Section 1.2(d), such Stockholder (the "Hedging
Holder") must give the Company a notice to such effect (the "Hedging Notice"),
setting forth (i) the number of Restricted Securities that the Selling Holder
desires to subject to a Permitted Hedge Transaction (the "Hedged Securities")
and (ii) the other material terms and conditions of such Permitted Hedge
Transaction to the extent ascertainable.

         (b) Company's Right to Purchase.

                  (i) Right to Purchase. Upon receipt of a Hedging Notice, the
         Company will have the right and option (but not the obligation) to
         purchase all or any portion of the Hedged Securities at the Option
         Price (as defined in Section 1.4(b)(iii)). The Company will be entitled
         to exercise this right at any time before 5:00 pm Central Time on the
         fifth Trading Day immediately following the day on which the Company
         receives the Hedging Notice (the "Company Option Period").

                  (ii) Manner of Exercise. To exercise such purchase right, the
         Company must give a notice of exercise (a "Company Option Notice") to
         the

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 5

<PAGE>

         Hedging Holder during the Company Option Period. The Company Option
         Notice must set forth the number of Hedged Securities that the Company
         is willing to purchase and must contain the Company's irrevocable offer
         to purchase such Hedged Securities in accordance with Section 1.4(c).
         Failure of the Company to deliver a valid Company Option Notice during
         the Company Option Period will be deemed a waiver of the Company's
         purchase right for the proposed transaction described in the Hedging
         Notice.

                  (iii) Market Price. The "Option Price" will be the greater of
         (A) the closing price of the CCO Common on the New York Stock Exchange
         on the Trading Day immediately preceding the day on which the Hedging
         Holder delivers the Hedging Notice to the Company (or, if the Hedging
         Notice is delivered later than 4:00 p.m., New York City time, on a
         Trading Day, the closing price of the CCO Common on the New York Stock
         Exchange on the Trading Day on which the Hedging Notice is delivered to
         the Company) and (B) the closing price of the CCO Common on the New
         York Stock Exchange on the Trading Day immediately preceding the day on
         which the Company delivers the Company Option Notice to the Hedging
         Holder (or, if the Company Option Notice is delivered later than 4:00
         p.m., New York City time, on a Trading Day, the closing price of the
         CCO Common on the New York Stock Exchange on the Trading Day on which
         the Company Option Notice is delivered to the Hedging Holder).

         (c) Closing of Right to Purchase. If the Company offers to purchase any
or all of the Hedged Securities pursuant to Section 1.4(b)(ii), the closing of
the purchase and sale of such Hedged Securities will occur on the third Trading
Day immediately following the day on which the Company delivers the Company
Option Notice. At least one Trading Day prior to such date, the Hedging Holder
must deliver wire transfer instructions (if funds are to be wired) to the
Company. The consummation of the purchase and sale of such Hedged Securities
will be effected by the Hedging Holder's delivery to the Company of the Hedged
Securities (free and clear of any restrictions, liens or claims) and such other
instruments of transfer as the Company may reasonably request (including
delivery of the certificate(s) representing the securities being purchased,
properly endorsed for transfer), against payment by the Company of the purchase
price therefor.

         (d) Failure to Purchase All Hedged Securities. If the Company does not
consummate the purchase of all of the Hedged Securities pursuant to Section
1.4(c), the Hedging Holder may enter into the Permitted Hedge Transaction
described in the Hedging Notice with respect to the Hedged Securities not so
purchased. Any Permitted Hedge Transaction pursuant to this Section 1.4(d) must
be established during the 10 Trading Day period commencing on the expiration of
the Company Option Period. In the event such Permitted Hedge Transaction is not
established during such 10 Trading Day period, such Hedged Securities may not
become subject to a Permitted Hedge Transaction without compliance with the
requirements of this Section 1.4 de novo.

         (e) Assignment Permitted. The Company shall have the right and option
to assign all or any portion of its rights to purchase pursuant to this Section
1.4 to Clear

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 6
<PAGE>

Channel Communications, Inc. ("CCU"). In the event, and to the extent, of such
assignment, CCU will be deemed to be the "Company" for all purposes under this
Section 1.4.

         1.5. Indirect Transfers. If a Related Party to which Restricted
Securities have been Transferred in a Permitted Transfer is the subject of any
event or transaction (or series of related events or transactions) by which such
Related Party ceases to be a Related Party of the Stockholder originally holding
such Restricted Securities (an "Indirect Transfer"), then such Indirect Transfer
will be deemed to be a voluntary Transfer of the Restricted Securities held by
such Related Party on the date of such Indirect Transfer and subject to the
requirements and Company purchase rights set forth in Section 1.3.

                                  ARTICLE II.
                           SECURITIES LAWS PROVISIONS.

         2.1. Securities Laws Compliance. No Stockholder may voluntarily
Transfer Restricted Securities unless (a) a registration statement is then in
effect under the Securities Act covering such Transfer and such Transfer is made
in accordance with such registration statement, or (b) (i) the Stockholder
notifies the Company of the proposed Transfer and furnishes the Company with a
written statement of the circumstances surrounding the Transfer, and (ii) if
requested by the Company, the Stockholder furnishes the Company with an opinion
of counsel satisfactory to the Company, at the Stockholder's expense, that such
Transfer will not require registration of the subject Restricted Securities
under the Securities Act or any filing or registration under applicable state
securities and blue sky laws; provided, however, that no opinion of counsel will
be required if the Transfer is pursuant to Rule 144 and the written statement
furnished to the Company pursuant to clause (i) above contains sufficient
information to enable the Company, in consultation with its counsel, to
determine that the transferor has complied with the applicable requirements of
Rule 144.

         2.2. Required Legends. Each certificate representing securities of the
Company will bear a legend substantially in the following form:

         "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE
         SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
         OF WITHOUT SUCH REGISTRATION OR THE DELIVERY TO THE ISSUER OF AN
         OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER, THAT SUCH DISPOSITION
         WILL NOT REQUIRE REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
         ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS."

         The Company will reissue, without such legend, any certificate
representing securities of the Company, at the request of the holder thereof, at
such time as all of the securities represented by such certificate become
eligible for resale without compliance with the registration or qualification
provisions of applicable federal and state securities laws.

      STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 7
<PAGE>
                                  ARTICLE III.
                               REGISTRATION RIGHTS

         3.1. Registrable Stock. "Registrable Stock" means all of the shares of
CCO Common that constitute Restricted Securities; provided, however, that such
shares will cease to be "Registrable Stock" (a) when they have been sold to or
through a broker or dealer or underwriter in a distribution to the public or
otherwise on or through the facilities of the national securities exchange,
national securities association or automated quotation system on which the CCO
Common is listed, (b) when a registration statement with respect to the sale of
such shares has become effective under the Securities Act, and such shares have
been disposed of in accordance with such registration statement, (c) when such
shares have ceased to be outstanding or (d) when held by a person who may sell
all of his, her or its shares of Registrable Stock under Rule 144 within a
90-day period.

         3.2. Demand Registration Rights.

                  (a) Demand Event. For purposes of this Article III, a "Demand
         Event" means the death of any of the Principal Stockholders.

                  (b) Demand. By written notice to the Company within ninety
         (90) days following a Demand Event (a "Demand"), the Stockholders
         holding not less than a majority of the Registrable Stock will have the
         right to demand the registration of the sale of all or any part of
         their Registrable Stock (a "Demand Registration") under the Securities
         Act on Form S-1 (or its equivalent) (a "Long Form Registration") or, if
         available to the Company, on Form S-3 (or its equivalent) (a "Short
         Form Registration"). Each Demand must specify the approximate number of
         shares of Registrable Stock to be registered and the Stockholders'
         intended method of distribution of such shares. The Stockholders,
         collectively, will be entitled to make only one Demand pursuant to this
         Agreement (excluding any Demand that the Company elects to not honor
         pursuant to Section 3.2(c)).

                  (c) Company Right to Dishonor Demand. The Company, at its
         election, may decline to honor a Demand at any time prior to the filing
         of a registration statement with respect to the Demand:

                           (i) if the aggregate expected offering price of the
                  Registrable Stock covered by the Demand (before deduction of
                  underwriting discounts and expenses of sale), calculated on
                  the basis of the average closing price per share of CCO Common
                  on the New York Stock Exchange for the 15 consecutive trading
                  days immediately preceding any day between (and including) the
                  date of the Demand and the date on which the registration
                  statement with respect to the Demand is filed, is less than
                  $10,000,000 (if a Long Form Registration) or $5,000,000 (if a
                  Short Form Registration);

                           (ii) that is made within 180 days after the effective
                  date of any Company registration with respect to which the
                  Company provided a Piggyback Notice to the Stockholders; or

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 8

<PAGE>

                           (iii) if the Company notifies the Stockholders making
                  a Demand that it intends to file a registration statement
                  other than pursuant to this Section 3.2 (a "Company
                  Registration") and in which the Company intends to include the
                  shares of Registrable Stock of such Stockholders that are the
                  subject of the Demand within 60 days. In such event, no
                  further Demand may be made until the first to occur of (A) the
                  date that is 180 days after the effective date of such Company
                  Registration, (B) the date on which such Company Registration
                  is abandoned or withdrawn and (C) the date on which all
                  securities registered pursuant to such Company Registration
                  have been sold in accordance with the intended method of
                  distribution thereof. The Company will promptly notify the
                  Stockholders of the occurrence of any circumstance described
                  in clause (B) or (C) above.

         3.3. Piggyback Registration Rights. If the Company proposes to register
the sale or issuance of any of its equity securities under the Securities Act
(other than (a) a registration solely in connection with an employee benefit or
stock ownership plan, (b) a registration relating to a transaction covered by
Form S-4 (or successor form), including a Rule 145 transaction or (c) a
registration with respect to a transaction relating solely to the sale of debt
or convertible debt instruments) and the registration form to be used may be
used for the registration of the sale of Registrable Stock (a "Piggyback
Registration"), the Company will give at least twenty (20) days prior notice to
the Stockholders of its intention to effect such a registration (each, a
"Piggyback Notice"). Subject to Section 3.4(c), the Company will include in the
Piggyback Registration all Registrable Stock that the Stockholders designate by
notice given to the Company within fifteen (15) days after the Company's
delivery of the Piggyback Notice. The Stockholders will be entitled to
participate in three Piggyback Registrations pursuant to this Agreement.

         3.4. Underwritten Offerings.

                  (a) Selection of Underwriters. The Demand Registration will
         not be underwritten. The lead managing underwriter for any underwritten
         Piggyback Registration will be selected by the Company.

                  (b) Underwriting Agreements. The Stockholders agree that in
         any underwritten registration involving Registrable Stock, the
         Stockholders desiring to have their shares of Registrable Stock
         included in such registration will (i) enter into an underwriting
         agreement in customary form with the underwriter or underwriters
         selected pursuant to Section 3.4(a), (ii) sell such Registrable Stock
         on the basis provided in any underwriting arrangements relating thereto
         and (iii) complete and execute all questionnaires, powers of attorney,
         indemnities, underwriting agreements and other documents required under
         the terms of such underwriting arrangements; provided, however, that
         the Stockholders will not be required to make any representations or
         warranties to the Company or the underwriters other than
         representations and warranties regarding the Stockholders and their
         intended method of distribution of Registrable Stock.

                  (c) Cut Backs on Piggyback Registrations. If the managing
         underwriters of an underwritten Piggyback Registration advise the
         Company in writing that, in their opinion, the number of securities
         requested to be included in such registration exceeds the

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 9

<PAGE>

         number that can be sold in an orderly manner in such offering within a
         price range acceptable to the Company, the Company will include in such
         registration (i) first, the securities proposed to be sold by the
         Company, and (ii) second, the Registrable Stock held by the
         Stockholders and the other securities requested to be included in such
         registration, on a pro rata basis.

         3.5. Withdrawal From and Termination of Registration.

                  (a) Withdrawal by the Stockholders. If the Stockholders make a
         Demand pursuant to Section 3.2 or elect to participate in a Piggyback
         Registration pursuant to Section 3.3, and thereafter one of more of
         such Stockholders elect to withdraw from or reduce their participation
         in such registration such that the Stockholders, collectively, will not
         have covered in the registration statement for such registration at
         least 50% of the Registrable Stock specified in the Demand or in the
         notice of participation in the Piggyback Registration (other than, in
         any such case, as a result of (i) the Company's postponement,
         termination or withdrawal of such registration pursuant to Section
         3.2(c) or Section 3.5(b), (ii) the Company's reduction of the number of
         Stockholder shares eligible for participation in the Piggyback
         Registration pursuant to Section 3.4(c), (iii) any stop order,
         injunction or other order or requirement of the Commission or any other
         governmental agency or court, or (iv) the breach of this Agreement by
         the Company), such event will constitute a "Stockholder Withdrawal." A
         Demand Registration that is subject to a Stockholder Withdrawal will
         constitute the Stockholders' sole available Demand, and a Piggyback
         Registration that is subject to a Stockholder Withdrawal will
         constitute one of the Stockholders' available Piggyback Registrations,
         as the case may be, unless the Stockholders elect to reimburse the
         Company for all Registration Expenses incurred by the Company and its
         Affiliates in connection with such registration.

                  (b) Termination of Piggyback Registration. The Company will
         have the right to terminate or withdraw any Piggyback Registration
         prior to the effectiveness of the registration statement filed in
         connection therewith; provided, however, that the Company must pay all
         Registration Expenses associated with such terminated or withdrawn
         registration and such terminated or withdrawn registration will not be
         deemed to constitute one of the Stockholders' available Piggyback
         Registrations.

         3.6. Registration Procedures. In connection with the Demand
Registration and each Piggyback Registration, the Company will use
commercially-reasonable efforts to effect the registration and the sale of the
securities to be sold therein in accordance with the intended method of
distribution thereof and will:

                  (a) prepare and file with the Commission at the earliest
         practicable time, but, with respect to a Demand Registration in no
         event later that 75 days after the Demand, a registration statement
         with respect to such securities, and use commercially-reasonable
         efforts to cause such registration statement to become effective at the
         earliest practicable time;

                  (b) permit a representative of the Stockholders, the
         underwriters, if any, and any attorney or accountant retained by such
         Stockholders or underwriter to participate, at

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 10

<PAGE>

         each such person's own expense, in the preparation of the registration
         statement, and cause the Company's officers, directors and employees to
         supply all information reasonably requested by any such representative,
         underwriter, attorney or accountant in connection with the
         registration; provided, however, that such representatives,
         underwriters, attorneys or accountants enter into a confidentiality
         agreement, in form and substance reasonably satisfactory to the
         Company, prior to the release or disclosure of any such information;

                  (c) prepare and file with the Commission such amendments and
         post-effective amendments to the registration statement and supplements
         to the prospectus used in connection therewith as may be required by
         the rules, regulations or instructions applicable to the registration
         form used by the Company, or by the Securities Act or rules and
         regulations thereunder, as may be necessary to keep such registration
         statement continuously effective for a period of 120 days in the case
         of a Demand Registration and 90 days in the case of a Piggyback
         Registration or, if less in each case, the period in which the
         Stockholders actually complete the distribution described in the
         registration statement relating thereto (it being understood by the
         Stockholders that the Company will not be obligated to register any
         Registrable Stock on a "shelf" registration pursuant to Rule 415 as
         promulgated pursuant to the Securities Act (or any successor or similar
         rule) or otherwise to register Registrable Stock on a continuous or
         delayed basis);

                  (d) at least three (3) days prior to the filing of any
         registration statement or prospectus, any amendment or supplement to
         such registration statement or prospectus or any document that is to be
         incorporated by reference into such registration statement or
         prospectus, furnish a copy thereof to the Stockholders or their
         counsel;

                  (e) deliver to the Stockholders and the underwriters, if any,
         without charge, as many copies of each prospectus (and each preliminary
         prospectus) as they may reasonably request (the Company hereby
         consenting to the use of each such prospectus (or preliminary
         prospectus) by the Stockholders and the underwriters, if any, in
         connection with the offering and sale of the Registrable Stock covered
         by such prospectus (or preliminary prospectus)) and a reasonable number
         of copies of the then-effective registration statement and any
         post-effective amendments thereto and any supplements to the
         prospectus, including financial statements and schedules, all documents
         incorporated therein by reference and all exhibits (including those
         incorporated by reference);

                  (f) use commercially-reasonable efforts to register or qualify
         such Registrable Stock under such other securities or blue sky laws of
         such jurisdictions as the Stockholders reasonably request and keep such
         registration or qualification effective during the period set forth in
         Section 3.6(c), and do any and all other acts and things that may be
         reasonably necessary or advisable to enable the Stockholders to
         consummate the disposition in such jurisdictions of the Registrable
         Stock owned by the Stockholders; provided, however, that the Company
         will not be required (i) to qualify generally to do business in any
         jurisdiction where it would not otherwise be required to qualify but
         for this clause, (ii) to subject itself to taxation to which it is not
         otherwise subject in any such jurisdiction, (iii) to consent to general
         service of process in any such jurisdiction or (iv) to

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 11

<PAGE>

         comply with requirements under so-called "fair, just and equitable
         standards" under state securities laws;

                  (g) notify the Stockholders, at any time that a prospectus
         covered by a registration statement filed pursuant to a Demand
         Registration or a Piggyback Registration in which the Stockholders
         participate is required to be delivered under the Securities Act, of
         the happening of any event of which it has knowledge and as a result of
         which the prospectus included in such registration statement, as then
         in effect, would 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 not misleading in the light of the
         circumstances then existing, and, at the request of the Stockholders,
         the Company will prepare a supplement or amendment to such prospectus
         so that, as thereafter delivered to the Stockholders, such prospectus
         will not contain an untrue statement of a material fact or omit to
         state any fact necessary to make the statements therein not misleading
         in the light of the circumstances then existing;

                  (h) cause all securities covered by such registration
         statement to be listed on each securities exchange on which similar
         securities issued by the Company are then listed and to be qualified
         for trading on each system on which similar securities issued by the
         Company are from time to time qualified;

                  (i) provide a transfer agent and registrar for all securities
         covered by such registration statement not later than the effective
         date of such registration statement and thereafter maintain such a
         transfer agent and registrar;

                  (j) enter into such customary agreements (including
         underwriting agreements in customary form) and take all such other
         actions as may be reasonably required to expedite or facilitate the
         disposition of the securities covered by such registration statement;

                  (k) otherwise use commercially-reasonable efforts to comply
         with the provisions of the Securities Act and all applicable rules and
         regulations of the Commission, and make available to its security
         holders, as soon as reasonably practicable, an earnings statement,
         satisfying the provisions of Section 11(a) of the Securities Act and
         Rule 158 promulgated thereunder, covering a period of at least twelve
         (12) months beginning with the first day of the Company's first full
         calendar quarter after the effective date of the registration
         statement; and

                  (l) upon the issuance of any stop order suspending the
         effectiveness of a registration statement, or of any order suspending
         or preventing the use of any related prospectus or suspending the
         qualification of any securities included in such registration statement
         for sale in any jurisdiction, the Company will use
         commercially-reasonable efforts promptly to obtain the withdrawal of
         such order.

Each Stockholder agrees that upon receipt of any notice from the Company of the
happening of any event described in Section 3.6(g), he, she or it will
discontinue its disposition of securities pursuant to such registration
statement until it receives copies of the supplemented or amended

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 12

<PAGE>

prospectus contemplated by Section 3.6(g) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Stockholder's possession of the prospectus
that was in effect at the time of receipt of such notice. If the Company gives
such notice under Section 3.6(g), the period specified in Section 3.6(c) for
maintaining the effectiveness of the registration will be extended by the number
of days during the period from and including the date of the giving of such
notice to and including the date when each Stockholder selling securities
covered by such registration statement receives a copy of the supplemented or
amended prospectus contemplated by Section 3.6(g).

         3.7. Registration Expenses. The Company will pay the Registration
Expenses (as defined below) in connection with the Demand Registration and the
Piggyback Registrations in which the Stockholders are entitled to participate
pursuant to this Agreement. All other expenses will be paid by the holders of
securities included in such registrations, pro rata among such holders on the
basis of the number of shares of stock of each such holder included in the
registration. The term "Registration Expenses" means any expenses incident to
the Company's performance of or compliance with this Article III, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, and fees and expenses of counsel for the Company and all
independent certified public accountants, expenses of the underwriters
(excluding discounts and commissions, which will be paid by the Stockholders and
any other selling holders out of the proceeds of the offering to the extent that
they participate in an underwritten sale of their securities) and the fees and
expenses of any other persons retained by the Company in connection with the
registration.

         3.8. Indemnification.

                  (a) Indemnification by the Company. With respect to a
         registration of Registrable Stock pursuant to this Agreement, the
         Company agrees to indemnify, to the extent permitted by law, each
         Stockholder (and, with respect to any Stockholder that is not a natural
         person, its officers, directors and each person who controls (within
         the meaning of the Securities Act) such Stockholder) against all
         losses, claims, damages, liabilities and expenses caused by any untrue
         or alleged untrue statement of material fact contained in any
         registration statement, prospectus or preliminary prospectus in which
         such Stockholder is participating (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 not misleading in the light of the circumstances then existing,
         except insofar as the same are caused by or contained in any
         information furnished in writing to the Company by any one or more
         Stockholders for use therein.

                  (b) Indemnification by the Stockholders. With respect to a
         registration of Registrable Stock pursuant to this Agreement, each
         Stockholder participating in such registration will furnish to the
         Company in writing such information and affidavits as the Company may
         reasonably request for use in connection with any such registration
         statement or prospectus and, to the extent permitted by law, will
         indemnify the underwriters, the Company, and the other selling
         stockholders and their respective directors, officers and controlling
         persons against all losses, claims, damages, liabilities and expenses
         caused by any untrue or alleged untrue statement of material fact
         contained

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 13

<PAGE>

         in the 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 not misleading in the light of the
         circumstances then existing, but only to the extent that such untrue
         statement or omission is contained in any written information or
         affidavit so furnished in writing by such Stockholder in connection
         with such registration statement; provided, however, that each
         Stockholder's obligation to indemnify will be individual to such
         Stockholder and will be limited to the net amount of proceeds received
         by such Stockholder from the sale of Registrable Stock pursuant to such
         registration statement.

                  (c) Notice; Defense of Claims. Any party entitled to
         indemnification hereunder will (i) give prompt written notice to the
         indemnifying party of any claim with respect to which it seeks
         indemnification and (ii) unless in such indemnified party's reasonable
         judgment a conflict of interest between such indemnified and
         indemnifying parties may exist with respect to such claim, permit such
         indemnifying party to assume the defense of such claim with counsel
         reasonably satisfactory to the indemnified party. If such defense is
         assumed, 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). An indemnifying
         party who is not entitled to, or elects not to, assume the defense of a
         claim 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 such
         indemnified party and any other of such indemnified parties with
         respect to such claim.

                  (d) Contribution. If the indemnification provided for herein
         is held by a court of competent jurisdiction to be unavailable to an
         indemnified party with respect to any loss, liability, claim, damage or
         expense referred to herein, then the indemnifying party, in lieu of
         indemnifying such indemnified party hereunder, will contribute to the
         amount paid or payable by such indemnified party as a result of such
         loss, liability, claim, damage or expense in such proportion as is
         appropriate to reflect the relative fault of the indemnifying party, on
         the one hand, and of the indemnified party, on the other, in connection
         with the statements or omissions that resulted in such loss, liability,
         claim, damage or expense, as well as any other relevant equitable
         considerations. The relative fault of the indemnifying party and of the
         indemnified party will be determined by reference to, among other
         things, whether the untrue or alleged untrue statement of a material
         fact or the omission to state a material fact relates to information
         supplied by the indemnifying party or by the indemnified party and the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent such statement or omission. The
         obligation of each Stockholder to contribute will be individual to such
         Stockholder and will be limited to the amount by which the net amount
         of proceeds received by such Stockholder from the sale of Registrable
         Stock exceeds the amount of losses, liabilities, damages and expenses
         that the Stockholder has otherwise been required to pay by reason of
         such statements or omissions.

                  (e) Survival. The indemnification provided for under this
         Agreement will remain in full force and effect regardless of any
         investigation made by or on behalf of the

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 14

<PAGE>

         indemnified party or any officer, director or controlling person of
         such indemnified party and will survive the registration and sale of
         any securities and the expiration or termination of this Agreement.

                  (f) Underwriting Agreement. To the extent that the provisions
         on indemnification and contribution contained in the underwriting
         agreement entered into in connection with an underwritten public
         offering are in conflict with the indemnification provisions of this
         Agreement, the provisions of the underwriting agreement will control.

         3.9. Controlling Person. If any such registration or comparable
statement refers to any Stockholder by name or otherwise as the holder of any
securities of the Company and if, in the reasonable, good faith judgment of such
Stockholder, such Stockholder is or might be deemed to be a controlling person
of the Company, such Stockholder will have the right to (a) participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, that in the
reasonable judgment of such Stockholder and his, her or its counsel should be
included, (b) require the inclusion in such registration statement of language,
in form and substance reasonably satisfactory to such Stockholder, to the effect
that the holding of such securities by such Stockholder is not to be construed
as a recommendation by such Stockholder of the investment quality of the
Company's securities covered thereby and that such holding does not imply that
such Stockholder will assist in meeting any future financial requirements of the
Company or (c) require, if such reference to such Stockholder by name or
otherwise is not required by the Securities Act or any similar federal statute
then in force, the deletion of the reference to such Stockholder; provided,
however, that with respect to this clause (c), such Stockholder must furnish to
the Company an opinion of counsel to such effect, which opinion of counsel must
be reasonably satisfactory to the Company.

         3.10. Market Stand-Off Agreement. For a period of 180 days following
the effective date of any underwritten public offering of equity securities by
the Company (or for such shorter period as may be allowed by the managing
underwriter or underwriters of such offering), the Stockholders will agree to
such restrictions as such managing underwriter or underwriters may request with
respect to the sale, transfer or other disposition of the Company's equity
securities (or derivatives or any interest therein), provided that all directors
and executive officers of the Company agree to similar restrictions. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the CCO Common or other equity securities of the
Stockholders until the end of such period.

         3.11. No Inconsistent Agreements. The Company may not, without the
prior written consent of the Stockholders holding a majority of the Registrable
Stock, hereafter enter into any agreement with respect to its securities that
grants registration rights to any holders of equity securities that would
violate the rights granted to the Stockholders in this Agreement.

                                  ARTICLE IV.
                                    RULE 144

With a view to making available to the Stockholders the benefits of Rule 144
promulgated under the Securities Act (or any other similar rule or regulation of
the Commission that may at any

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 15

<PAGE>

time permit the investors to sell securities of the Company to the public
without registration but excluding Rule 144A promulgated under the Securities
Act or any successor or similar rule as may be enacted by the Commission from
time to time) ("Rule 144"), the Company agrees to:

                  (a) make and keep public information available, as those terms
         are understood and defined in Rule 144;

                  (b) not terminate its status as an issuer required to file
         reports under the Exchange Act, even if the Exchange Act or the rules
         and regulations thereunder would otherwise permit such termination;

                  (c) file with the Commission in a timely manner all reports
         and other documents required of the Company under the Securities Act
         and the Exchange Act and such reports and other documents as is
         required for the applicable provisions of Rule 144; and

                  (d) furnish to the Stockholders so long as such Stockholders
         own any Registrable Stock, promptly upon request, such information as
         may be reasonably requested to permit the Stockholders to sell such
         securities pursuant to Rule 144 without registration.

This Article IV will terminate and be of no further force or effect on the first
date that the Stockholders are able to sell all of the shares of Registrable
Stock owned by them under Rule 144(k).

                                   ARTICLE V.
                            MISCELLANEOUS PROVISIONS.

         5.1. Termination. This Agreement will terminate and be of no further
force or effect (except as provided in Section 3.8(e)) upon the earliest to
occur of (a) the written agreement of the Company and each other party to this
Agreement at the time of such agreement, (b) the date on which no securities are
Restricted Securities or Registrable Stock, and (c) the ten-year anniversary of
the date of this Agreement.

         5.2. Legends on Certificates. During the term of this Agreement, each
certificate or other instrument representing shares of Restricted Securities
will bear, in addition to any legend required pursuant to the terms of Section
2.2, a legend in substantially the following form:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SALE,
         ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION THEREOF ARE SUBJECT
         TO CERTAIN RESTRICTIONS AND AGREEMENTS CONTAINED IN A STOCK TRANSFER
         RESTRICTION AND REGISTRATION RIGHTS AGREEMENT, DATED AS OF JULY 1,
         2006, BY AND AMONG THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS. A COPY
         OF SUCH AGREEMENT WILL BE FURNISHED BY THE COMPANY TO THE RECORD HOLDER
         OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 16

<PAGE>
         COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE."

The Company will make a notation on its records and give instructions to any
transfer agent of its equity securities to implement the restrictions on
transfer established in this Agreement. Each Stockholder agrees and consents to
the entry of stop transfer instructions by the Company or any such transfer
agent in order to enforce the restrictions on transfer established in this
Agreement.

         5.3. Notices. All notices and other communications under this Agreement
must be in writing and will be deemed given (a) when delivered personally or by
courier service, (b) on the third business day after being mailed by certified
mail, return receipt requested or (c) upon transmission and confirmation of
receipt by a facsimile operator if sent by facsimile, to the parties at the
following addresses or facsimile numbers (or to such other address or facsimile
number as such party may have specified by notice given to the other party
pursuant to this provision):

         If to the Company:         Clear Channel Outdoor, Inc.
                                    2850 E. Camelback Road
                                    Phoenix, Arizona  85016
                                    Facsimile:  (602) 957-8602
                                    Attention:  President

                                    with a copy (which will not constitute
                                    notice) to:
                                    Fulbright & Jaworski L.L.P.
                                    300 Convent Street, Suite 2200
                                    San Antonio, Texas 78205-3792
                                    Facsimile: (210) 270-7205
                                    Attention:  Daryl L. Lansdale, Jr.

         If to any Stockholder:     To the address for such Stockholder on
                                    the books and records of the Company as
                                    the same may be changed from time to time
                                    by notice from such Stockholder to the
                                    Company in accordance with this Section
                                    5.3.

                                    with a copy (which will not constitute
                                    notice) to:

                                    Morgan, Lewis & Bockius LLP
                                    1701 Market Street
                                    Philadelphia, PA 19103
                                    Facsimile:  (215) 963-5001
                                    Attention:  Richard B. Aldridge

         5.4. No Third Party Beneficiaries. Nothing in this Agreement will
create, confer or be deemed to create or confer any third party beneficiary
rights in any person or other legal entity not party to this Agreement.

         5.5. Assignment. The rights and obligations of the Stockholders
pursuant to this Agreement are not assignable except that such rights and
obligations as they relate to a particular

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 17

<PAGE>

security will be automatically assigned to any transferee of such security if
such security was Transferred in a Permitted Transfer; provided, however, that
the rights under Article III and Article IV with respect to any securities
subject to a subsequent Indirect Transfer will be null and void and of no
further force and effect upon the consummation of such Indirect Transfer. The
Company may assign its rights and obligations under this Agreement to any
Affiliate or, with the prior written consent of the Stockholders holding a
majority of the Restricted Securities then outstanding, to any other person or
other legal entity. Any attempted assignment of such rights and obligations in
violation of this Section 5.5 will be null and void. The provisions of this
Agreement will be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns.

         5.6. Amendment. No amendment, modification or supplement of or to this
Agreement will be effective unless made in writing and signed by the Company and
the Stockholders holding a majority of the Restricted Securities then
outstanding.

         5.7. Waivers. No waiver of any provision of this Agreement, or consent
to any departure from its terms, will be effective unless made in writing and
signed by the party giving such waiver or consent. No action (other than a
waiver) taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, will be deemed to constitute a
waiver, by the party taking such action, of the other party's compliance with
any covenant or agreement contained in this Agreement. No delay or omission on
the part of any party in exercising any right or remedy under this Agreement
will operate as a waiver thereof or of any other right or remedy. No waiver by
any party of any right or remedy under this Agreement on any one occasion will
be deemed a bar to or waiver of the same or any other right or remedy on any
future occasion. No partial exercise of any right or remedy under this Agreement
by any party will preclude any further exercise thereof or the exercise of any
other right or remedy.

         5.8. Further Assurances. Each party to this Agreement hereby covenants
and agrees, without the necessity of any further consideration, to execute and
deliver any and all such further documents and take any and all such other
actions as may be reasonably necessary or appropriate to carry out the intent
and purposes of this Agreement.

         5.9. Construction of Provisions.

                  (a) Fair Meaning. Every term and provision of this Agreement
         will be construed simply according to its fair meaning and not strictly
         for or against any party because such party or its legal counsel
         drafted this Agreement or such provision.

                  (b) Time. Time is of the essence with respect to this
         Agreement.

                  (c) Variation of Pronouns. All pronouns and any variations
         thereof will be deemed to refer to masculine, feminine, or neuter,
         singular or plural, as the identity of the person may require.

                  (d) Headings. The headings in this Agreement are for reference
         purposes only and are to be given no effect in the construction or
         interpretation of this Agreement.

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 18

<PAGE>

                  (e) References. Except as otherwise specifically provided, any
         reference to any article or section will be deemed to refer to such
         article or section of this Agreement.

                  (f) Severability. If any provision of this Agreement, as
         applied to any party or to any circumstance, is held invalid, illegal
         or unenforceable by any court of competent jurisdiction, (i) such
         provision, as applied to such party or such circumstance, is hereby
         deemed modified to give effect to the original written intent of the
         parties to the greatest extent consistent with being valid and
         enforceable under applicable law, (ii) the application of such
         provision to any other party or to any other circumstance will not be
         affected or impaired thereby and (iii) the validity, legality and
         enforceability of the remaining provisions of this Agreement will
         remain in full force and effect.

         5.10. Business Days. If the last or appointed day for the taking of any
action required under this Agreement, or the expiration of any right granted in
this Agreement, is a Saturday, Sunday or legal holiday in either the State of
Pennsylvania or the State of Texas, then such action may be taken or such right
may be exercised on the next succeeding day that is not a Saturday, Sunday or
legal holiday in either the State of Pennsylvania or the State of Texas.

         5.11. Entire Agreement. This Agreement (together with the Stock
Purchase Agreement) represents, and is intended to be, a complete statement of
all of the terms and the arrangements between the Company and the Stockholders
with respect to the matters provided for herein, supersedes any and all previous
oral or written and all contemporaneous oral agreements, understandings,
negotiations and discussions between the Company and the Stockholders with
respect to those matters.

         5.12. Remedies. All remedies under this Agreement are cumulative and
are not exclusive of any other remedies provided by applicable law. The parties
agree and acknowledge that money damages may not be an adequate remedy for any
breach by a party of the provisions of this Agreement and that the any party may
in its sole discretion apply to a court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief to enforce or prevent violation of
the provisions of this Agreement.

         5.13. Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware without reference to the
principles of conflict of laws or any other principle that could result in the
application of the laws of any other jurisdiction.

         5.14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all of which
will be one and the same instrument.

             * * * REMAINDER OF PAGE INTENTIONALLY LEFT BLANK * * *

     STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - PAGE 19

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date and year first written above.

                                        COMPANY:

                                        CLEAR CHANNEL OUTDOOR HOLDINGS, INC., A
                                             DELAWARE CORPORATION

                                        By:    /s/ Kurt Tingey
                                               --------------------------------
                                        Name:  Kurt Tingey
                                        Title: Executive Vice President,
                                               Americas Chief Financial Officer
                                               and Treasurer

                                        PRINCIPAL STOCKHOLDERS:

                                        MARK T. LIEBERMAN

                                               /s/ Mark T. Lieberman
                                               ---------------------------------

                                        DEBORAH S. LIEBERMAN

                                               /s/ Deborah S. Lieberman
                                               ---------------------------------

                                        THE TRUST (LIVING) OF MARIANNE LIEBERMAN

                                        By:    /s/ Marianne Lieberman
                                               --------------------------------
                                               Marianne Lieberman, Trustee

                                        THE TRUST (LIVING) OF CAROLYN M. GRANT

                                        By:    /s/ Carolyn M. Grant
                                               ---------------------------------
                                               Carolyn M. Grant, Trustee

 STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - SIGNATURE PAGE 1

<PAGE>

                                        ADDITIONAL STOCKHOLDERS:

                                        MOLLY A. MCGUIRE LIEBERMAN

                                               /s/ Molly A. McGuire Lieberman
                                               ---------------------------------

                                        KAREN LIEBERMAN-DALY

                                               /s/ Karen Lieberman-Daly
                                               ---------------------------------

                                        RICHARD L. FRICK

                                               /s/ Richard L. Frick
                                               ---------------------------------

                                        LIEBERMAN BUSINESS TRUST, A PENNSYLVANIA
                                             BUSINESS TRUST

                                        By:    /s/ Deborah S. Lieberman
                                               ---------------------------------
                                               Deborah S. Lieberman, Trustee

 STOCK TRANSFER RESTRICTION AND REGISTRATION RIGHTS AGREEMENT - SIGNATURE PAGE 2

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