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Exhibit 10.4
COMMON STOCK REGISTRATION RIGHTS
AND STOCKHOLDERS AGREEMENT
Dated as of March 15, 1997
among
SPANISH BROADCASTING SYSTEM, INC.
and
CERTAIN MANAGEMENT STOCKHOLDERS
and
CIBC WOOD GUNDY SECURITIES CORP.
(as Initial Purchaser)
THIS COMMON STOCK REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT (the
"Agreement") is made and entered into as of March 15, 1997 among Spanish
Broadcasting System, Inc., a Delaware corporation (the "Company"), the
Management Stockholders (as defined herein) and CIBC Wood Gundy Securities
Corp., as Initial Purchaser (the "Initial Purchaser"). This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of March 24, 1997, among
the Company, the Guarantors named therein and the Initial Purchaser (the
"Purchase Agreement"), relating, among other things, to the sale by the Company
to the Initial Purchaser of an aggregate of 175,000 Units, each Unit consisting
of one share of the Company's 14 1/4 % Senior Exchangeable Preferred Stock (the
"Senior Preferred Stock") and one Warrant (collectively, "Warrants") to purchase
.428 shares of Class A Common Stock, par value $0.01 per share ("Class A Common
Stock"), of the Company. In order to induce the Initial Purchaser to enter into
the Purchase Agreement, the Company has agreed to provide to the Initial
Purchaser and the Holders (as defined herein) among other things, the
registration rights for the Class A Common Stock set forth in this Agreement and
the Management Stockholders (as defined) have agreed to provide the Holders,
among other things, the take-along rights for the Class A Common Stock set forth
herein. In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Affiliate" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, the referent Person or such other Person, as the
case may be.
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For the purposes of this definition, "control" (including, with correlative
meanings, the term "controlling," "controlled by," and "under common control
with"), when used with respect to any specified Person means the power to direct
or cause the direction of management or policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control.
"Business Day" shall mean a day that is not a Legal Holiday.
"Capital Stock" shall mean with respect to any Person any and all
shares or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in nature of an
equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing. "Certificate of Designation" means the
certificate of designation governing the Senior Preferred Stock as in effect
on the date hereof.
"Change of Control" means (i) an event whereby at any time any "person"
or "group" (within the meaning of Section 13(d) and 14(d)(2) of the Exchange
Act), excluding the Management Stockholders and their Affiliates, acquires, in
one or more transactions, (a) beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of more than 50% of the total voting power
represented by all then outstanding Capital Stock of the Company ordinarily (and
a part from rights exercisable under certain circumstances) having the right to
vote in the election of directors or (b) the power to elect a majority of the
board of directors of the Company or (ii) so long as Senior Preferred Stock
remains outstanding, the occurrence of a "Change of Control" as such term is
defined in the Certificate of Designation governing the Senior Preferred Stock
or the certificate of designation governing the Exchange Preferred Stock and
Stock Exchange Preferred Stock (each as defined in such Certificate of
Designation).
"Class A Common Stock" shall mean the Class A Common Stock, par value
$.01 per share, of the Company.
"Class B Common Stock" shall mean the Class B Common Stock, par value
$.01 per share, of the Company.
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"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Common Stock" shall mean the Class A Common Stock and Class B Common
Stock.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Contingent Class A Shares" means shares of Class A Common Stock issued
to holders of Senior Preferred Stock, Exchange Preferred Stock (as defined in
the Purchase Agreement), Private Exchange Preferred Stock (as defined in the
Purchase Agreement) and Debentures (as defined in the Purchase Agreement)
pursuant to the terms thereof.
"Demand Registration" shall have the meaning set forth in Section 2.1.
"Depository" shall mean, with respect to Warrant Shares represented by
one or more Global Certificates, The Depository Trust Company or another person
designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exempt Transfer" shall mean a transfer by a Management Stockholder to
another Management Stockholder.
"Fair Market Value" shall mean the value of any securities as
determined (without any discount for lack of liquidity, the amount of Warrants
and Class A Common Stock proposed to be sold or the fact that the shares of
Warrants and Class A Common Stock held by any Holder of such security may
represent a minority interest in a private company) by a nationally recognized
investment banking firm selected by the Company for the determination of such
value.
"Global Certificate" shall mean a certificate representing all or part
of the Warrant Shares issued to the Depository and bearing the legend set forth
in Exhibit A hereto.
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"Holder" shall mean a holder of Warrants and/or Warrant Shares as the
context may require.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required by law, regulation or
executive order to remain closed. If a payment date is a Legal Holiday, payment
may be made on the next succeeding day that is not a Legal Holiday.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Physical Certificate" shall mean a certificate representing Warrant
Shares in definitive registered form, other than a Global Certificate.
"Piggy-Back Registration" shall have the meaning set forth in Section
2.2.
"Management Stockholder" shall mean (i) Mr. Pablo Raul Alarcon, Sr.,
Raul Alarcon, Jr., or Jose Grimalt, (ii) any employee benefit plan of the
Company or any participants therein, (iii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any person described in (i)
or (ii), and (iv) a trust the beneficiaries of which include only persons
described in (i) and their respective spouses and lineal descendants.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean Warrant Shares and the shares of
Class A Common Stock issuable upon exercise of the Warrants. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such securities
shall have been declared effective under the Securities Act and such securities
shall have been disposed of pursuant to such Registration Statement, (ii) such
securities have been sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act, (iii) such
securities shall have been otherwise transferred by such Holder and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such
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securities shall not require registration or qualification under the Securities
Act or any similar state law then in force or (iv) such securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all SEC and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees and expenses, fees and expenses of
compliance with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), rating agency fees,
printing expenses, messenger, telephone and delivery expenses, fees and
disbursements of counsel for the Company and all independent certified public
accountants, the fees and disbursements of underwriters customarily paid by
issuers or sellers of securities (but not including any underwriting discounts
or commissions or transfer taxes, if any, attributable to the sale of
Registrable Securities by Holders of such Registrable Securities) and other
reasonable out-of-pocket expenses of Holders.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Warrant Shares pursuant to the provisions of
this Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Requisite Shares" shall mean a number of Registrable Securities and
Warrants to purchase Registrable Securities equal to not less than 25% of the
outstanding Warrants and Registrable Securities held in the aggregate by all
Holders.
"Restricted Security" shall have the meaning set forth in Rule
144(a)(3) under the Securities Act. "Rule 144" shall mean Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing
for offers and sales of securities made in compliance therewith resulting in
offers and sales by subsequent holders that are not affiliates of an issuer of
such securities being free of the
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registration and prospectus delivery requirements of the Securities Act.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission. "Securities
Act" shall mean the Securities Act of 1933, as amended from time to time.
"Selling Holder" shall mean a Holder who is selling Warrant Shares in
accordance with the provisions of Section 2.2, 2.3, 3.3 or 3.4 hereof.
"Stockholder" means, collectively, each Holder and each Management
Stockholder.
"Transfer Agent" means any transfer agent or registrar appointed by the
Company for the Class A Common Stock.
"Triggering Event" shall have the meaning set forth in Section 2.1
hereof.
"Warrant Shares" means the shares of Class A Common Stock issued and
issuable upon exercise of the Warrants.
2. Registration Rights.
2.1 Demand Registration.
(a) Request for Registration. At any time and from time to
time on or after the earliest of (i) a Change of Control shall have occurred,
(ii) seven days prior to consummation of a Public Equity Offering (as defined in
the Certificate of Designation), (iii) the date on which any class of equity
securities of the Company is listed on a national securities exchange or
authorized for quotation on the National Association of Securities Dealers, Inc.
Automated Quotation System, (iv) the date of any Change of Control or (v) June
29, 1998 (each a "Triggering Event"), Holders owning, individually or in the
aggregate, at least the Requisite Shares may make a written request for
registration under the Securities Act of their Registrable Securities (a "Demand
Registration"). Any such
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request will specify the number of Registrable Securities proposed to be sold
and will also specify the intended method of disposition thereof. Subject to
Section 2.1(b), upon a demand, the Company will prepare, file and cause to be
effective within 180 days of such demand a registration statement in respect of
all the Registrable Securities. The Company shall give written notice of such
registration request within 10 days after the receipt thereof to all other
Holders. Within 20 days after receipt of such notice by any Holder, such Holder
may request in writing that Registrable Securities be included in such
registration and the Company shall include in the Demand Registration the
Registrable Securities of any such Selling Holder requested to be so included
(the "Included Shares"). Each such request by such other Selling Holders shall
specify the number of Included Shares proposed to be sold and the intended
method of disposition thereof. Subject to Section 2.1(c), the Company shall be
required to register Registrable Securities pursuant to this Section 2.1 on a
maximum of two separate occasions.
(b) Repurchase Election.
(i) Notwithstanding the foregoing provisions of
Section 2.1(a), the Company shall not be obligated to effect a Demand
Registration if the Company elects to make an offer to repurchase (a "Purchase
Offer") all of the Warrants and Registrable Securities (a "Purchase Election")
by mailing notice of such Purchase Offer to all Holders of Warrants and
Registrable Securities on a date (the "Purchase Election Date") not more than 20
days after the receipt of any request for a Demand Registration made pursuant to
Section 2.1(a) and indicating in such Purchase Offer that the Purchase Election
will be consummated on a Business Day (the "Purchase Offer Payment Date") not
more than 60 days after the Purchase Election Date at a price per share equal to
the Fair Market Value per Warrant and per Registrable Security (without any
discount for lack of liquidity, the amount of Warrants and Class A Common Stock
proposed to be sold or the fact that the Warrants and shares of Class A Common
Stock held by the Holders may represent a minority interest in a private
company).
(ii) Notice of a Purchase Offer shall be mailed by
the Company (or caused to be mailed by the
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Company), not less than 30 days nor more than 40 days before the Purchase Offer
Payment Date to each Holder of Warrants and Registrable Securities at its last
registered address. The Purchase Offer shall remain open from the time of
mailing for at least 20 Business Days and until 5:00 p.m., New York City time,
on the Business Day next preceding the Purchase Offer Payment Date. The notice,
which shall govern the terms of the Purchase Offer, shall include such
disclosures as are required by law and shall state:
(1) that the Purchase Offer is being made pursuant to this
Section 2.1(b) and that all Warrants and Registrable Securities
tendered for repurchase will be accepted for payment;
(2) the purchase prices per Warrant and per Registrable
Security and the Purchase Offer Payment Date;
(3) that any Warrants and Registrable Securities accepted for
payment pursuant to the Purchase Offer shall cease to be outstanding
after the Purchase Offer Payment Date unless the Company defaults in
making payment therefor of the respective purchase price;
(4) that Holders electing to have Warrants and Registrable
Securities purchased pursuant to a Purchase Offer will be required to
surrender such Warrants and Registrable Securities, together with a
completed letter of transmittal, to the Company (or its agent as
designated by the Company in such notice) at the address specified in
the notice no later than 5:00 p.m. New York City time on the Business
Day prior to the Purchase Offer Payment Date;
(5) that Holders will be entitled to withdraw their election
if the Company (or such designated agent) receives, not later than 5:00
p.m. New York City time on the Business Day prior to the Purchase Offer
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the number of Warrants and/or
Registrable Securities delivered for purchase and a statement that such
Holder is withdrawing its election to have such Warrants
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and/or Registrable Securities purchased and promptly thereafter the
Company (or such designated agent) shall redeliver the withdrawn
Warrants and/or Registrable Securities to the Holder;
(6) that a Holder electing not to tender such Holder's
Warrants and/or Registrable Securities for purchase pursuant to such
Purchase Offer by 5:00 p.m. New York City time on the Business Day
prior to the Purchase Offer Payment Date will have no continuing right
to require the Company to repurchase such Holder's Warrants and
Registrable Securities; and
(7) that Holders whose Warrants and/or Registrable Securities
are tendered for purchase in part only will be issued new certificates
representing the number of the unpurchased Warrants and/or Registrable
Securities surrendered.
On the Purchase Offer Payment Date, the Company shall (i) accept for
payment Warrants and Registrable Securities or portions thereof tendered
pursuant to the Purchase Offer, (ii) promptly deliver to Holders of Warrants and
Registrable Securities so accepted payment of the purchase price therefor and
(iii) issue and mail or deliver to such Holders new certificates representing a
number of Warrants and Registrable Securities equal to the unpurchased portion
of the Warrants and Registrable Securities surrendered. Upon payment for all
Warrants and Registrable Securities tendered pursuant to a Purchase Offer the
Company shall be deemed to have effected the Demand Registration.
The Company shall comply, to the extent applicable, with the
requirements of Sections 13 and 14 of the Exchange Act, and any other securities
laws or regulations in connection with the repurchase of Warrants and
Registrable Securities pursuant to a Purchase Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 2.1(b), the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 2.1(b) by virtue thereof.
(c) Effective Registration. A registration will not be deemed to have
been effective as a Demand Registration unless
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it has been declared effected by the SEC and the Company has complied in all
material respects with its obligations under this Agreement with respect
thereto; provided that if, after it has become effective, the offering of the
Registrable Securities pursuant to such registration is or becomes the subject
of any stop order, injunction or other order or requirement of the SEC or any
other governmental or administrative agency, or if any court prevents or
otherwise limits the sale of Registrable Securities pursuant to the registration
(for any reason other than the act or omissions of the Selling Holders), such
registration will be deemed not to have been effected. If (i) a registration
requested pursuant to this Section 2.1 is deemed not to have been effected or
(ii) the registration requested pursuant to this Section 2.1 does not remain
effective for a period of at least 90 days beyond the effective date thereof or
until the consummation of the distribution by the Selling Holders of the
Included Shares, then the Company shall continue to be obligated to effect an
additional registration pursuant to this Section 2.1. The Selling Holders of
Registrable Securities shall be permitted to withdraw all or any part of the
Included Shares from a Demand Registration at any time prior to the effective
date of such Demand Registration. If at any time a Registration Statement is
filed pursuant to a Demand Registration, and subsequently a sufficient number of
Included Shares are withdrawn from the Demand Registration so that such
Registration Statement does not cover at least 25% of the Registrable Securities
held by all Holders, the Selling Holders who have not withdrawn their Included
Shares shall have the opportunity to include an additional number of Registrable
Securities in the Demand Registration so that such Registration Statement covers
at least 25% of the Registrable Securities held by all Holders. If an additional
number of Registrable Securities is not so included, the Company may withdraw
the Registration Statement. Such withdrawn Registration Statement will not count
as a Demand Registration and the Company shall continue to be obligated to
effect a registration pursuant to this Section 2.1.
(d) Priority in Demand Registrations Pursuant to Section 2.1. If a
Demand Registration pursuant to this Section 2.1 involves an underwritten
offering and the managing underwriter advises the Company in writing that, in
its opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Securities) exceeds the number which can be sold in
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such offering, the Company will include in such registration only the
Registrable Securities requested to be included in such registration. In the
event that the number of Registrable Securities requested to be included in such
registration exceeds the number which, in the opinion of such managing
underwriter, can be sold, the number of such Registrable Securities to be
included in such registration shall be allocated pro rata among all requesting
Holders on the basis of the relative number of shares of Registrable Securities
then held by each such Holder (provided that any shares thereby allocated to any
such Holder that exceed such Holder's request shall be reallocated among the
remaining requesting Holders in like manner). In the event that the number of
Registrable Securities requested to be included in such registration is less
than the number which, in the opinion of the managing underwriter, can be sold,
the Company may include in such registration the securities the Company proposes
to sell up to the number of securities that, in the opinion of the underwriter,
can be sold.
(e) Selection of Underwriter. If the Selling Holders so elect, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Selling Holders making
such Demand Registration shall select one or more nationally recognized firms of
investment bankers, who shall be reasonably acceptable to the Company, to act as
the managing Underwriter or Underwriters in connection with such offering and
shall select any additional investment bankers and managers to be used in
connection with the offering.
(f) Expenses. The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to Section 2.1(a). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to a registration statement requested pursuant to this
Section 2.1.
2.2 Piggy-Back Registration. If at any time the Company proposes to
file a Registration Statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of any of its
respective securityholders of any class of its common equity securities (other
than (i) a Registration Statement on Form S-4 or S-8 (or any
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substitute form that may be adopted by the SEC), (ii) a Registration Statement
filed in connection with an offer or offering of securities solely to the
Company's existing securityholders, or (iii) a Demand Registration, then the
Company shall give written notice of such proposed filing to the Holders of
Registrable Securities as soon as practicable (but in no event less than 20
Business Days before the anticipated filing date), and such notice shall offer
such Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request (which request shall specify the
Registrable Securities intended to be disposed of by such Selling Holder and the
intended method of distribution thereof) (a "Piggy-Back Registration"). The
Company shall use its best efforts to cause the managing Underwriter or
Underwriters of such proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company or any
other securityholder included therein and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Selling Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.2 by giving written notice to
the Company of its request to withdraw. The Company may withdraw a Piggy-Back
Registration at any time prior to the time it becomes effective; provided that
the Company shall give prompt notice thereof to participating Selling Holders.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2,
and each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a registration statement effected pursuant to
this Section 2.2.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Section 2.1, and no failure to effect a registration under this Section 2.2 and
to complete the sale of shares of Class A Common Stock in connection therewith
shall relieve the Company of any other obligation under this Agreement.
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2.3 Reduction of Offering.
(a) Piggy-Back Registration.
(i) If the managing Underwriter or Underwriters of
any underwritten offering described in Section 2.2 have informed, in writing,
the Selling Holders of the Registrable Securities requesting inclusion in such
offering that it is their opinion that the total number of shares which the
Company, the Selling Holders and any other Persons desiring to participate in
such registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, including the price at which
such securities can be sold, then the number of shares to be offered for the
account of the Selling Holders and all such other Persons (other than the
Company) participating in such registration shall be reduced or limited pro rata
in proportion to the respective number of shares requested to be registered to
the extent necessary to reduce the total number of shares requested to be
included in such offering to the number of shares, if any, recommended by such
managing Underwriters; provided, however, that if such offering is effected for
the account of any securityholder of the Company other than the Selling Holders,
pursuant to the demand registration rights of any such securityholder, then the
number of shares to be offered for the account of the Company (if any) and the
Selling Holders (but not such securityholders who have exercised their demand
registration rights) shall be reduced or limited pro rata in proportion to the
respective number of shares requested to be registered to the extent necessary
to reduce the total number of shares requested to be included in such offering
to the number of shares, if any, recommended by such managing Underwriters.
(ii) If the managing Underwriter or Underwriters of
any underwritten offering described in Section 2.2 notify the Selling Holders
requesting inclusion of Registrable Securities in such offering, that the kind
of securities that the Selling Holders, the Company and any other Persons
desiring to participate in such registration intend to include in such offering
is such as to materially and adversely affect the success of such offering, (x)
the Registrable Securities to be included in such offering shall
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be reduced as described in clause (i) above or (y) if a reduction in
the Registrable Securities pursuant to clause (i) above would, in the
judgment of the managing Underwriter or Underwriters, be insufficient
to substantially eliminate the adverse effect that inclusion of the
Registrable Securities requested to be included would have on such
offering, such Registrable Securities will be excluded from such
offering.
(b) If, as a result of the proration provisions of
this Section 2.3, any Selling Holder shall not be entitled to include all
Registrable Securities in a Piggy-Back Registration that such Selling Holder has
requested to be included, such Selling Holder may elect to withdraw his request
to include Registrable Securities in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and, after making a Withdrawal Election, a Selling Holder shall no longer have
any right to include Registrable Securities in the registration as to which such
Withdrawal Election was made.
3. Transfers of Warrant Shares.
3.1 Generally. All Warrant Shares at any time and from time to
time outstanding that are Registrable Securities shall be held subject to the
conditions and restrictions set forth in this Section 3. All shares of Common
Stock now or hereafter held by a Management Stockholder shall be held subject to
the conditions and restrictions set forth in this Section 3. Each Holder of
Warrant Shares and each Management Stockholder by executing this Agreement or by
accepting a certificate representing Common Stock or other indicia of ownership
therefor from the Company agrees with the Company and with each other
Stockholder to such conditions and restrictions.
3.2 Restrictions on Transfer.
(a) No Management Stockholder shall sell, assign, give,
transfer, exchange, convert, devise, bequeath, pledge or otherwise dispose of
(collectively, "Transfer") any Common Stock or any interest therein except (A)
in compliance with Section 3.3 or (B) to another Management Stockholder. Each
certificate representing Warrants and/or Warrant Shares shall contain
conspicuous notation on such certificate indicating that
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the transfer of such Warrant Shares is subject to the terms and restrictions of
this Agreement, and each Holder consents to the placement of such legend on the
certificate or certificates representing the Warrant Shares owned by such
Holder.
(b) Each Holder agrees that it will not transfer any
Warrant Shares or any interest therein except in compliance with Sections 3.3
and 3.4 and prior to any Transfer of Common Stock by a Management Stockholder,
such Management Stockholder shall give notice to the Company of its intent to so
Transfer.
3.3 TakeAlong Rights.
(a) In the event of any proposed Transfer of Common
Stock by any of the Management Stockholders (other than in a bona fide public
distribution pursuant to an effective Registration Statement under the
Securities Act) in a single transaction or a series of related transactions
involving shares of Common Stock aggregating at least 15% of the shares of
Common Stock collectively owned by the Management Stockholders on the date
hereof to a person (such other person being hereinafter referred to as the
"proposed purchaser"), other than pursuant to an Exempt Transfer, each of the
Holders of Warrants, Warrant Shares and Contingent Class A Shares (the
"Non-Selling Stockholders") each shall have the irrevocable and exclusive right,
but not the obligation (the "Take-Along Right"), to require the proposed
purchaser to purchase from each of them up to such number of Warrants, Warrant
Shares and/or Contingent Class A Shares (the "Take-Along Shares") determined in
accordance with Section 3.3(c). The Company shall give written notice at least
20 days prior to the date of the proposed transfer to the Non-Selling
Stockholders stating
(i) the name and address of the proposed purchaser,
(ii) the proposed amount of consideration and terms
and conditions of payment offered by such proposed purchaser (if the proposed
consideration is not cash, the notice shall describe the terms of the proposed
consideration),
(iii) the number of shares of Common Stock proposed
to be transferred and
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(iv) that either the proposed purchaser has been
informed of the TakeAlong Right and has agreed to purchase Warrants, Warrant
Shares and/or Contingent Class A Shares in accordance with the terms hereof or
that the Management Stockholders will make such purchase. The TakeAlong Right
shall be exercised by any or all of the NonSelling Stockholders by giving
written notice to the Company ("TakeAlong Notice") within ten Business Days of
receipt of the notice specified in the preceding sentence, indicating its
election to exercise the TakeAlong Right (the "Participating Stockholders"). The
TakeAlong Notice shall state the amount of Warrants, Warrant Shares and/or
Contingent Class A Shares that such Holder proposes to include in such transfer
to the proposed purchaser. Failure by any NonSelling Stockholder to give such
notice within the ten Business Day period shall be deemed an election by such
NonSelling Stockholder not to sell its Warrants, Warrant Shares and/or
Contingent Class A Shares pursuant to that TakeAlong Notice. The closing with
respect to any sale to a proposed purchaser pursuant to this Section shall be
held at the time and place specified in the TakeAlong Notice but in any event
within 30 days of the date the TakeAlong Notice is given; provided that if
through the exercise of reasonable efforts the Management Stockholders are
unable to cause such transaction to close within 30 days, such period may be
extended for such reasonable period of time as may be necessary to close such
transaction. Consummation of the sale of Common Stock by any Management
Stockholder to a proposed purchaser shall be conditioned upon consummation of
the sale by each Participating Stockholder to such proposed purchaser of the
TakeAlong Shares, if any. As used in this Section 3.3(a), the term "Transfer"
shall be deemed to include all transactions or series of transactions pursuant
to which beneficial ownership of Common Stock is transferred, directly or
indirectly, to a proposed purchaser, regardless of the number or type of
intermediate entities or transactions between a Management Stockholder and such
proposed purchaser.
(b) In the event that the proposed purchaser does not purchase
TakeAlong Shares from the Holders on the same terms and conditions as purchased
from the Management Stockholders, then the Management Stockholders making such
Transfer shall purchase on such terms and conditions such TakeAlong Shares if
the Transfer occurs.
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(c) The number of TakeAlong Shares to be purchased from each
Participating Stockholder and the number of shares of Common Stock to be
purchased from each Management Stockholder shall be determined by multiplying
the aggregate number of shares of Common Stock proposed to be purchased from the
Management Stockholders by a proposed purchaser by a fraction, the numerator of
which is (i) with respect to each Participating Stockholder, the number of
TakeAlong Shares of such Participating Stockholder or (ii) with respect to each
Management Stockholder, the number of shares of Common Stock proposed to be sold
by such Management Stockholder and, in each case, the denominator of which is
the total number of TakeAlong Shares and shares of Common Stock proposed to be
sold by the Management Stockholders. In the event that any Participating
Stockholder shall elect to sell less than the maximum number of Warrants,
Warrant Shares and/or Contingent Class A Shares he is entitled to sell pursuant
to the provisions of this Section 3.3(b) then each other Participating
Stockholder shall have the right to sell additional Warrants, Warrant Shares
and/or Contingent Class A Shares, pro rata according to the respective number of
Warrants, Warrant Shares and/or Contingent Class A Shares offered for sale by
the Participating Stockholders.
(d) The Management Stockholders who are parties to a sale to a
proposed purchaser shall arrange for payment directly by the proposed purchaser
to each Participating Stockholder, upon delivery of the certificate or
certificates representing the Warrants, Warrant Shares and/or Contingent Class A
Shares duly endorsed for transfer, together with such other documents as the
proposed purchaser may reasonably request. The reasonable costs and expenses
incurred by the Management Stockholders and Participating Stockholders in
connection with a sale of Common Stock, Warrants, Warrant Shares and/or
Contingent Class A Shares subject to this Section 3.3 shall be allocated pro
rata based upon the number of shares of Common Stock, Warrants, Warrant Shares
and/or Contingent Class A Shares sold by each Stockholder to a proposed
purchaser; provided, that the costs and expenses shall not include the fees and
expenses of more than one law firm, which firm shall be selected by the
Management Stockholders, unless representation of the Management Stockholders
and the Participating Stockholders by the same counsel, due to actual or
potential differing interests between them, shall create a conflict of interest,
in which case the costs and expenses shall include the reasonable fees and
expenses
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of one additional law firm designated by Participating Stockholders proposing to
sell a majority of the TakeAlong Shares proposed to be sold by all
Participating Stockholders.
(e) If at the end of 30 days following the date on which a
TakeAlong Notice was given, or as otherwise extended pursuant to the provisions
of Section 3.3(a), the sale of Common Stock by the Management Stockholders and
the sale of the TakeAlong Shares have not been completed in accordance with the
terms of the proposed purchaser's offer, all certificates representing the
TakeAlong Shares shall be returned to the Participating Stockholders, and all
the restrictions on sale, transfer or assignment contained in this Agreement
with respect to Common Stock owned by the Management Stockholders shall again be
in effect.
(f) TakeAlong Rights shall terminate upon the effectiveness
of any Registration Statement filed with the SEC with respect to shares of Class
A Common Stock in an initial public offering or subsequent public offering if,
after giving effect to such offering, (i) at least 20% of the Company's Class A
Common Stock on a fully-diluted basis would be held by persons unaffiliated with
the Company and without restriction on transfer under the Act and (ii) the Class
A Common Stock is listed on a national securities exchange or included for
trading in the NASDAQ National Market System.
3.4 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Certificates. When
Physical Certificates are presented to the Transfer Agent with a request:
(i) to register the transfer of the Physical
Certificates; or
(ii) to exchange such Physical Certificates for an
equal number of Physical Certificates of other authorized denominations, the
Transfer Agent shall register the transfer or make the exchange as requested if
the requirements under this Agreement as set forth in this Section 3.4 for such
transactions are met; provided, however, that the Physical Certificates
presented or surrendered for registration of transfer or exchange:
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(I) shall be duly endorsed or accompanied by a
written Instrument of transfer in form satisfactory to the Transfer Agent, duly
executed by the Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Certificates the offer
and sale of which have not been registered under the Securities, such Physical
Certificates shall be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable:
(A) if such Physical Certificates are being
delivered to the Transfer Agent by a holder for registration in the name of such
holder, without transfer, a certification from such holder to that effect (in
substantially the form of Exhibit B hereto); or
(B) if such Physical Certificates are being
transferred to a "qualified Institutional buyer" (as defined in Rule 144A under
the Securities Act (a "Qualified Institutional Buyer")) in accordance with Rule
144A under the Securities Act, a certification to that effect (in substantially
the form of Exhibit B hereto); or
(C) if such Physical Certificates are being
transferred to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor")) delivery of a certification to that effect (in
substantially the form of Exhibit B hereto) and a Transferee Certificate for
Institutional Accredited Investors in substantially the form of Exhibit C
hereto; or
(D) if such Physical Certificates are being
transferred in reliance on Regulation S under the Securities Act ("Regulation
S"), delivery of a certification to that effect (in substantially the form of
Exhibit B hereto) and a Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an opinion of counsel reasonably
satisfactory to the Company to the effect that such transfer is in compliance
with the Securities Act; or
(E) if such Physical Certificates are being
transferred in reliance on Rule 144 under the
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Securities Act, delivery of a certification to that effect (in substantially the
form of Exhibit B hereto) and an opinion of counsel reasonably satisfactory to
the Company to the effect that such transfer is in compliance with the
Securities Act; or
(F) if such Physical Certificates are being
transferred in reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect (in substantially the form
of Exhibit B hereto) and an opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of Physical Certificates for a
Beneficial Interest in a Global Certificate. A Physical Certificate may not be
exchanged for a beneficial interest in a Global Certificate except upon
satisfaction of the requirements set forth below. Upon receipt by the Transfer
Agent of a Physical Certificate, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Transfer Agent, together
with:
(A) a certification, in substantially the form of
Exhibit B hereto, that such Physical Certificate is being
transferred to a Qualified Institutional Buyer; and
(B) written instructions directing the Transfer Agent
to make, or to direct the Depositary to make, an endorsement
on the Global Certificate to reflect an increase in the
aggregate amount of the shares represented by the Global
Certificate, then the Transfer Agent shall cancel such
Physical Certificate and cause, or direct the Depositary to
cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Transfer
Agent, the number of shares represented by the Global
Certificate to be increased accordingly. If no Global
Certificate is then outstanding, the Company shall issue a new
Global Certificate in the appropriate amount.
(c) Transfer and Exchange of Global Certificates. The transfer
and exchange of Global Certificates or beneficial
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interests therein shall be effected through the Depositary, in accordance with
this Agreement (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Certificate
for a Physical Certificate.
(i) Any person having a beneficial interest in a
Global Certificate may upon request exchange such beneficial interest for a
Physical Certificate. Upon receipt by the Transfer Agent of written instructions
or such other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a beneficial interest
in a Global Certificate and upon receipt by the Transfer Agent of a written
order or such other form of instructions as is customary for the Depositary or
the person designated by the Depositary as having such a beneficial interest
containing registration instructions and, in the case of any such transfer or
exchange of a beneficial interest in a Global Certificate the offer and sale of
which have not been registered under the Securities Act, the following
additional information and documents:
(A) if such beneficial interest is being transferred
to the person designated by the Depositary as being the
beneficial owner, a certification from such person to that
effect (in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred
to a Qualified Institutional Buyer in accordance with Rule
144A under the Securities Act, a certification to that effect
(in substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred
to an Institutional Accredited Investor, delivery of a
certification to that effect (in substantially the form of
Exhibit B hereto) and a Certificate for Institutional
Accredited Investors in substantially the form of Exhibit C
hereto; or
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(D) if such beneficial interest is being transferred
in reliance on Regulation S, delivery of a certification to
that effect (in substantially the form of Exhibit B hereto)
and a Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an opinion of
counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act;
or
(E) if such beneficial interest is being transferred
in reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (in substantially the form of
Exhibit B hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit B hereto) and an
opinion of counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act, then the Transfer Agent will cause, in
accordance with the standing instructions and procedures
existing between the Depositary and the Transfer Agent, the
aggregate amount of the Global Certificate to be reduced and,
following such reduction, the Company will execute and deliver
to the transferee a Physical Certificate.
(ii) Physical Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Transfer Agent in writing. The Transfer Agent shall deliver such Physical
Certificates to the persons in whose names such Physical Certificates are so
registered.
(e) Restrictions on Transfer and Exchange of Global
Certificates. Notwithstanding any other provisions of this Agreement, a Global
Certificate may not be transferred as a
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whole except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(f) Authentication of Definitive Certificates in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Certificates
notifies the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Certificates and a successor Depositary for the Global
Certificates is not appointed by the Company within 90 days after delivery of
such notice; or
(ii) the Company, at its sole discretion, notifies
the Transfer Agent in writing that it elects to cause the issuance of Physical
Certificates, then the Company will execute, and the Transfer Agent, upon
written instructions from the Company, will authenticate and deliver Definitive
Certificates, in an aggregate number equal to the aggregate number of shares
represented by the Global Certificates, in exchange for such Global
Certificates.
(g) Legends.
(i) Each Warrant Share (and all shares of Class A
Common Stock issued in exchange therefor or substitution thereof) which is a
Restricted Security shall bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
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WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRANSFER
AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT), (D) OUTSIDE THE
UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS
MEETING THE REQUIREMENTS OF RULE 904 UNDER REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(h) Cancellation and/or Adjustment of a Global Certificate. At
such time as all beneficial interests in a Global Certificate have either been
exchanged for Physical Certificates, redeemed, repurchased or cancelled, such
Global Certificate shall be returned to or retained and cancelled by the
Transfer Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Physical Certificates,
redeemed, repurchased or cancelled, the number of shares of Common Stock
represented by such Global Certificate shall be reduced and an endorsement shall
be made on such Global Certificate, by the Transfer Agent to reflect such
reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Physical Certificates.
(i) To permit registrations of transfers and
exchanges, the Company shall execute, at the Transfer Agent's request, and the
Transfer Agent shall countersign and register Physical Certificates and Global
Certificates.
(ii) All Physical Certificates and Global
Certificates issued upon any registration, transfer or exchange of Physical
Certificates or Global Certificates shall be validly issued, fully paid and
nonassessable.
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4. Registration Procedures. In connection with the obligations of the
Company with respect to any Registration Statement pursuant to Sections 2.1 and
2.2 hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the Securities Act, which form (i) shall be selected
by the Company and (ii) shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and the Company shall use its best
efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement effective for the applicable period, cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act;
(c) furnish to each Holder of Registrable Securities and to
each underwriter of an underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities;
(d) use their best efforts to register or qualify the
Registrable Securities under all applicable state securities or Blue Sky laws of
such jurisdictions as any Holder thereof covered by a Registration Statement
shall reasonably request in writing by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall not
be required to
(i) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d),
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(ii) file any general consent to service of process
or (iii) subject itself to taxation in any such jurisdiction if it is not so
subject;
(e) notify each Holder of Registrable Securities promptly and,
if requested by such Holder, confirm such advice in writing
(i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective,
(ii) of any request by the SEC or any state
securities authority for amendments and supplements to a Registration Statement
and Prospectus or for additional information after the Registration Statement
has become effective,
(iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered thereby,
the representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material respects
or if the Company receives any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in any jurisdiction or
the initiation of any proceeding for such purpose and
(v) of the happening of any event during the period a
Registration Statement is effective which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material respect
or which requires the making of any changes in such Registration Statement or
Prospectus in order to make the statements therein not misleading;
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(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) furnish to each Holder of Registrable Securities and to
the Initial Purchaser, without charge, at least one conformed copy of each
Registration Statement and any posteffective amendment thereto (with documents
incorporated therein by reference or exhibits thereto);
(h) cooperate with the Selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends and registered in such names as the selling Holders may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities;
(i) upon the occurrence of any event contemplated by Section
4(e)(v) hereof, use reasonable efforts to prepare a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company shall not be required to amend or supplement a Registration
Statement, any related Prospectus or any document incorporated therein by
reference in the event that, and for so long as, an event occurs and is
continuing as a result of which the Registration Statement, any related
Prospectus or any document incorporated therein by reference as then amended or
supplemented would, in the Company's good faith judgment, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in light of the circumstances
under which they are made. The Company agrees to notify each Holder to suspend
use of the Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission. At such time as such public disclosure is otherwise made or the
Company
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determines in good faith that such disclosure is not necessary, the Company
agrees promptly to notify each Holder of such determination, to amend or
supplement the Prospectus if necessary to correct any untrue statement or
omission therein and to furnish each Holder such numbers of copies of the
Prospectus as so amended or supplemented as each Holder may reasonably request;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus after
initial filing of a Registration Statement, provide copies of such document to
the Holders and make available for discussion of such document the
representatives of the Company as shall be reasonably requested by the Holders
of Registrable Securities;
(k) obtain a CUSIP number for the Class A Common Stock;
(l) (i) make reasonably available for inspection by a
representative of, and counsel for, any underwriter participating in any
disposition pursuant to a Registration Statement, all relevant financial and
other records, pertinent corporate documents and properties of the Company and
(ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably requested by such
representative, counsel or any such underwriter in connection with any such
Registration Statement; and
(m) if requested by the Holders in connection with any
Registration Statement, shall use its best efforts to cause (w) counsel for the
Company to deliver an opinion relating to the Registration Statement and the
Common Stock, in customary form, (x) its officers to execute and deliver all
customary documents and certificates requested by a representative of the
Holders or any underwriter, as applicable and (y) its independent public
accountants to provide a comfort letter in customary form. The Company may, as a
condition to such Holder's participation in any Registration Statement, require
each Holder of Registrable Securities to (i) furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder
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of such Registrable Securities as the Company may from time to time reasonably
request in writing and (ii) agree in writing to be bound by this Agreement.
5. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who controls
such Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, or is under common control with, or is
controlled by, such Holder, from and against all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Holder or any such controlling or affiliated person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act, or caused by
any omission or alleged omission to state therein a material fact necessary to
make the statements therein in light of the circumstances under which they were
made not misleading, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Holder furnished to the Company in writing by such Holder
expressly for use in any such Registration Statement or Prospectus.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Holder, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
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(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against which such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel relating to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed in writing to the retention of such
counsel or (ii) the indemnifying party fails promptly to assume the defense of
such proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party or parties or (iii) the named parties to any such proceeding
(including any impleaded parties) include both such indemnified party or parties
and the indemnifying parties or an affiliate of the indemnifying parties or such
indemnified parties, and there may be one or more defenses available to such
indemnified party or parties that are different from or additional to those
available to the indemnifying parties, in which case, if such indemnified party
or parties notifies the indemnifying parties in writing that it elects to employ
separate counsel of its choice at the expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying parties, it being
understood, however, that unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with any one such
proceeding or separate but substantially similar or related proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified party
or parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by
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reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is a
party, and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 5 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holders on the other hand from the offering of
such Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Holders on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations
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set forth above, any legal or other expenses reasonably incurred (and not
otherwise reimbursed) by such indemnified party in connection with investigating
or defending any such action or claim. 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 remedies provided for in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
6. Miscellaneous. (a) No Inconsistent Agreements. The Company has not
entered into nor will the Company on or after the date of this Agreement enter
into any agreement which is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities, if any, under any such
agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority of the outstanding Warrants, Warrant Shares and Contingent Class A
Shares affected by such amendment, modification, supplement, waiver or consent;
provided, however, a waiver or consent to departure from the provisions hereof
that relates exclusively to the rights of Holders of Registrable Securities
whose securities are being sold pursuant to a registration statement and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by the Holders of a majority of the
Registrable Securities proposed to be sold.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to the Initial Purchaser, at its address set forth in the
Purchase Agreement; (ii) if to the Company or a Management Stockholder, at the
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Company's address set forth in the Purchase Agreement; (iii) if to a holder of
Warrants, as set forth in the register of the Warrants; and (iv) if to a holder
of Warrant Shares or Contingent Class A Shares, at such holder's address as set
forth in the stock books of the Company. All such notices and communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered, five business days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including without limitation and without the need for an express
assignment, subsequent Holders as holders of Contingent Class A Shares;
provided, however, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Securities in violation of the
terms of the Purchase Agreement. If any transferee of any Holder shall acquire
Warrants and Warrant Shares, in any manner, whether by operation of law or
otherwise, such Warrants and Warrant Shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such Warrants and Warrant
Shares such person shall be conclusively deemed to have agreed to be bound by
and to perform all of the terms and provisions of this Agreement and such person
shall be entitled to receive the benefits hereof.
(e) Third Party Beneficiary. The Holders as holders of
Contingent Class A Shares shall be a third party beneficiary to the agreements
made hereunder between the Company and the Management Stockholders, on the one
hand, and the Initial Purchaser, on the other hand, and the Initial Purchaser
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(i) Severability. In the event that any on or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impair thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
--------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
/s/ Pablo Raul Alarcon, Sr.
--------------------------------
Pablo Raul Alarcon, Sr.
Raul Alarcon, Jr.
--------------------------------
Raul Alarcon, Jr.
Jose Grimalt
--------------------------------
Jose Grimalt
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CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter McLallen
--------------------------------
Name: Walter McLallen
Title: Managing Director
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EXHIBIT A
THIS SECURITY IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY
IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN LIMITED CIRCUMSTANCES, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES DESCRIBED.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF WARRANTS
Re: Class A Common Stock (the "Securities"), of Spanish
Broadcasting System, Inc.
This Certificate relates to _______ Securities held in the form of* ___
a beneficial interest in a Global Certificate or* _______ Physical Certificates
by ______ (the "Transferor").
The Transferor:*
- has requested by written order that the Transfer Agent deliver
in exchange for its beneficial interest in the Global
Certificate held by the Depositary a Physical Certificate or
Physical Certificates in definitive, registered form of
authorized denominations and an aggregate number equal to its
beneficial interest in such Global Certificate (or the portion
thereof indicated above); or
- has requested that the Transfer Agent by written order to
exchange or register the transfer of a Physical Certificate or
Physical Certificates. In connection with such request and in
respect of each such Security, the Transferor does hereby
certify that the Transferor is familiar with the Common Stock
Registration Rights and Stockholders Agreement relating to the
above captioned Securities and the restrictions on transfers
thereof as provided in Section 3.4 of such Common Stock
Registration Rights and Stockholders Agreement, and that the
transfer of these Securities does not require registration
under the Securities Act of 1933, as amended (the "Act")
because*:
- Such Security is being acquired for the Transferor's own
account, without transfer.
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- Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Act),
in reliance on Rule 144A.
- Such Security is being transferred to an institutional
"accredited investor" (within the meaning of subparagraphs
(a)(1), (2), (3) or (7) of Rule 501 under the Act.
- Such Security is being transferred in reliance on Regulation S
under the Act.
- Such Security is being transferred in reliance on Rule 144
under the Act.
- Such Security is being transferred in reliance on and in
compliance with an exemption from the registration
requirements of the Act other than Rule 144A or Rule 144 or
Regulation S under the Act to a person other than an
institutional "accredited investor."
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------
[Authorized Signatory]
Date:
----------------------------------
*Check applicable box.
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EXHIBIT C
Form of Certificate To Be Delivered in Connection
with Transfers to Institutional Accredited
Investors
_______________, ____
[Transfer Agent]
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc. (the "Company")
Class A Common Stock (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of Securities of the
Company, we confirm that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
Common Stock Registration Rights and Stockholders Agreement relating to the
Securities and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Securities, we will do so only
(A) to the Company or any subsidiary thereof, (B) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) inside the United States to an institutional
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"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. brokerdealer) to the Trustee a signed
letter substantially in the form hereof, (D) outside the United States in
accordance with Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing
Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
4. We understand that, on any proposed resale of Securities, we will be
required to furnish to the Transfer Agent and the Company, such certification,
legal opinions and other information as the Transfer Agent and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or
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legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:
---------------------------
[Authorized Signatory]
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EXHIBIT D
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
[Transfer Agent]
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc. (the "Company")
Class A Common Stock (the "Securities")
Dear Sirs:
In connection with our proposed sale of ________ of the Securities, we
confirm that such sale has been effected pursuant to and in accordance with
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee
was outside the United States, or (b) the transaction was
executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person
acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
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(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------
[Authorized Signature]
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