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Exhibit 4(c)
REGENT COMMUNICATIONS, INC.
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SECOND AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
THIS SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this
"Agreement"), is made and entered into as of June 15, 1998 by and among REGENT
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), TERRY S. JACOBS
("Jacobs"), WILLIAM L. STAKELIN ("Stakelin"), PNC BANK, N.A., a national banking
association, as trustee ("PNC"), WALLER-SUTTON MEDIA PARTNERS, L.P., a Delaware
limited partnership ("Waller-Sutton"), WILLIAM H. INGRAM ("Ingram"), WPG
CORPORATE DEVELOPMENT ASSOCIATES V, L.P., a Delaware limited partnership, and
WPG CORPORATE DEVELOPMENT ASSOCIATES V (OVERSEAS), L.P., a Delaware limited
partnership (collectively, "WP&G"), RIVER CITIES CAPITAL FUND LIMITED
PARTNERSHIP, a Delaware limited partnership ("River Cities"), BMO FINANCIAL,
INC., a Delaware corporation ('"BMO"), GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation ("GE Capital"), JOEL M. FAIRMAN ("Fairman"), MIAMI VALLEY
VENTURE FUND L.P., an Ohio limited partnership ("Miami Valley"), and BLUE CHIP
CAPITAL FUND II LIMITED PARTNERSHIP, an Ohio limited partnership ("Blue Chip").
W I T N E S S E T H:
WHEREAS, Jacobs, Stakelin, River Cities, BMO and GE Capital, the
holders of all of the Company's capital stock which is issued and outstanding
immediately prior to the consummation of the transactions described below, are
parties to a First Amended and Restated Stockholders' Agreement among them,
dated as of December 8, 1997 (the "Existing Stockholders' Agreement");
WHEREAS, pursuant to the consummation, on the date hereof (the "Closing
Date"), of the merger (the "Merger") of Faircom Inc. ("Faircom") and Regent
Merger Corp. ("RMC") pursuant to that certain Agreement of Merger, dated as of
December 5, 1997, among Faircom, RMC and the Company, as amended, the
outstanding shares of common stock of Faircom have been converted into the right
to receive shares of Series C Preferred Stock;
WHEREAS, as holders of record of Faircom common stock on the Closing
Date, Fairman, Miami Valley, Blue Chip and Waller-Sutton are to receive shares
of Series C Preferred Stock as a result of the Merger;
WHEREAS, on the Closing Date, Waller-Sutton, Ingram, WP&G, GE Capital
and River Cities (collectively, the "Series F Purchasers") are to purchase
certain shares of Series F Preferred Stock pursuant to the terms of a Stock
Purchase Agreement, dated as of June 15, 1998, by and among the Company and the
Series F Purchasers (the "Series F Preferred Stock Purchase Agreement");
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WHEREAS, pursuant to the terms of the Series F Preferred Stock Purchase
Agreement, the Series F Purchasers are obligated to purchase, from time to time
after the Closing Date, certain additional shares of Series F Preferred Stock,
subject to the terms and provisions thereof;
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of December
8, 1997, BMO has heretofore purchased 220,000 shares of Series D Preferred Stock
and on the Closing Date, BMO shall purchase an additional 780,000 shares of
Series D Preferred Stock;
WHEREAS, on or prior to the Closing Date, GE Capital shall pay all
amounts due to the Company in connection with the purchase by it of 1,000,000
shares of Series B Preferred Stock pursuant to a Stock Purchase Agreement dated
as of December 8, 1997 (the "Series B Preferred Stock Purchase Agreement");
WHEREAS, in connection with the foregoing transactions and certain
matters related thereto on the Closing Date, the Company is to issue certain
warrants to the Series F Purchasers and is to issue certain stock options to
Jacobs and Stakelin; and
WHEREAS, the Company and the Stockholders deem it desirable to enter
into this Agreement in order to amend and restate in its entirety the Existing
Stockholders' Agreement, to add certain additional parties thereto and to set
forth certain agreements among themselves granting certain rights and imposing
certain restrictions on themselves, the Company and the shares of capital stock
in the Company now or at any time held by the Stockholders or issuable to the
Stockholders upon the exercise of any options or warrants now or at any time
held by the Stockholders (collectively, the "Shares").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree that the Existing Stockholders' Agreement is hereby amended and restated
in its entirety as follows:
1. DEFINITIONS. As used in this Agreement:
"Additional Put Notice" as defined in Section 7(b).
"Additional Put Stockholder" as defined in Section 7(b).
"Affiliate" as applied to any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. The term "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to vote
10% or more of the Voting Stock (or in the case of a Person which is not a
corporation, 10% or more of the ownership interest, beneficial or otherwise) of
such Person or otherwise to direct or cause the
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direction of the management and policies of that Person, whether through the
ownership of Voting Stock or other ownership interest, by contract or otherwise.
"Agreed Value" means such amount as shall be agreed to by the Required
Stockholders and the Company as the total fair market value of the Company,
valued as a going-concern; provided, however, that such agreement by the Company
to the amount determined as Agreed Value must be approved by a majority of the
directors of the Company who are not nominated by Waller-Sutton or any
Additional Put Stockholder.
"Amended and Restated Charter" shall mean the amended and restated
certificate of incorporation of the Company, as in effect on the date hereof or
as hereinafter further amended in accordance with the provisions hereof and
thereof.
"Beneficially Own" or "Beneficial Ownership" shall, as to any Person,
be determined or computed in the manner provided under Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended, but on a fully-diluted
and as converted basis.
"Change of Control" means the appointment of any person other than
Jacobs or Stakelin as President, Chief Executive Officer or Chief Operating
Officer of the Company or the acquisition by any Person or related group of
Persons of direct or indirect beneficial ownership of more than 35% of the
outstanding Voting Stock.
"Closing Date" means the date hereof.
"Common Stock" means the common stock of the Company, $.01 par value.
"Common Stock Value" as defined in Section 7(d)(i)(3) below.
"Eligible Put Shares" means any Shares other than (i) Series C
Preferred Stock, (ii) Common Stock (other than (1) Common Stock issued to
Waller-Sutton upon conversion of Series C Preferred Stock, (2) Common Stock
issued on exercise of the GE Warrant or (3) Common Stock issued on exercise of
the Series F Warrants, which exercise occurs after the date the Triggering Put
Notice is given and provided that the Warrants so exercised were included among
the Put Shares), (iii) warrants or options other than the Series F Warrants,
(iv) the Company's 7% Series E Convertible Preferred Stock, $.01 par value, and
(v) any series of preferred stock first created by the Board of Directors after
the date hereof.
"Exempt Transfer" as defined in Section 8 below.
"Existing Loan Agreement" shall mean the Credit Agreement, dated as of
November 14, 1997, among the Company, the lenders listed therein, GE Capital as
Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent, as amended
by a First Amendment thereto dated February 16, 1998 and a Second Amendment
dated June 11, 1998, as in effect on the date hereof.
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"Fairman Employment Period" means the "Employment Period," as defined
in that certain employment agreement, dated as of the Closing Date, between the
Company and Joel M. Fairman, as originally executed or thereafter amended with
the consent of Waller-Sutton (the "Fairman Agreement").
"Indebtedness" of any Person shall mean the principal of, premium, if
any, and unpaid interest on: (a) indebtedness for money borrowed from others;
(b) indebtedness guaranteed, directly or indirectly, in any manner by such
Person, or in effect guaranteed, directly or indirectly, in any manner by such
Person through an agreement, contingent or otherwise, to supply funds to, or in
any other manner invest in, the debtor, or to purchase indebtedness, or to
purchase and pay for property if not delivered or pay for services if not
performed, primarily for the purpose of enabling the debtor to make payment of
the indebtedness or to assure the owners of the indebtedness against loss; (c)
all indebtedness secured by any mortgage, lien, pledge, charge or other
encumbrance upon property owned by such Person, even though such Person has not
in any manner become liable for the payment of such indebtedness; (d) all
indebtedness of such Person created or arising under any conditional sale, lease
(intended primarily as a financing device) or other title retention or security
agreement with respect to property acquired by such Person even though the
rights and remedies of the seller, lessor or lender under such agreement or
lease in the event of default may be limited to repossession or sale of such
property; and (e) renewals, extensions and refundings of any such indebtedness.
"Immediate Family" means, as to any individual, (i) such individual's
spouse, children, parents or siblings, and (ii) the respective executors,
administrators, conservators, guardians or custodians during the minority of
such persons.
"Jacobs Employment Period" means the "Employment Period," as defined in
that certain Executive Employment Agreement, effective as of March 1, 1998,
between the Company and Jacobs as in effect on the Closing Date or thereafter
amended with the consent of Waller-Sutton.
"Management Stockholder" means either or both of Jacobs and Stakelin
and any Transferee of either of them, other than pursuant to an Exempt Transfer
of the type referred to in clauses (iii) and (iv) of the definition thereof.
"Maximum Number" means, in the case of each of Jacobs and Stakelin, the
lesser of (i) 733,333 (subject to adjustment in the case of stock splits, stock
dividends, reverse stock splits and the like occurring from and after the
Closing Date) and (ii) a number of shares of Common Stock equal to 5.5% of the
sum of (x) the number of shares of Common Stock then outstanding and (y) the
number of shares of Common Stock issuable upon the conversion of all outstanding
shares of capital stock of the Company convertible into Common Stock or issuable
upon the exercise of all outstanding options or warrants to acquire Common Stock
or preferred stock convertible into Common Stock.
"Permitted Indebtedness" means (i) Indebtedness incurred by the Company
under the Existing Loan Agreement in accordance with (and without giving effect
to any material waiver or modification
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of), the terms thereof, and (ii) Indebtedness to the extent permitted under the
Existing Loan Agreement (without giving effect to any material waiver or
modification thereof).
"Permitted Issuances" means any of the following: (i) the issuance of
additional shares of Series F Preferred Stock pursuant to the Series F Preferred
Stock Purchase Agreement; (ii) the issuance of shares of Common Stock on the
conversion of any shares of Preferred Stock or any other shares of convertible
securities of the Company which are outstanding as of the date hereof or the
issuance of which is approved by Waller-Sutton; (iii) the issuance of shares of
Common Stock or Preferred Stock upon the exercise of currently outstanding
options or warrants to purchase Common Stock or Preferred Stock, or upon the
exercise of options or warrants which are issued after the date hereof with the
approval of Waller-Sutton; and (iv) the grant and/or exercise of options under
the Company's 1998 Management Stock Option Plan (provided that the number of
shares of Common Stock issued or issuable to either Stakelin or Jacobs in
respect of all options granted under the Company's 1998 Management Stock Option
Plan shall not exceed the Maximum Number).
"Person" means a natural person, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"Preferred Stock" means any or all of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or
Series F Preferred Stock.
"Put Closing" as defined in Section 7(a).
"Put Shares" as defined in Section 7(c).
"Qualified Financing" as defined in Section 7(g)(ii) below.
"Qualified Public Offering" means an underwritten public offering of
Common Stock of the Company (i) at not less than $12 per share of Common Stock
(equitably adjusted for any stock splits, reverse stock splits or stock
dividends occurring after the date hereof), and (ii) generating not less than
$25,000,000 of gross proceeds payable to the Company (excluding the effect of
any over-allotment option).
"Redemption and Warrant Agreement" means that certain Amended and
Restated Redemption and Warrant Agreement, dated as of March 31, 1998, among the
Company, Blue Chip, Miami Valley and Faircom.
"Required Stockholders" means Waller-Sutton and such other Stockholders
as shall (together with Waller-Sutton) Beneficially Own more than 50% of the Put
Shares (other than Put Shares Beneficially Owned by the Management
Stockholders).
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
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"Series A Director" means the one director entitled to be nominated to
serve by the holders of Series A Preferred Stock, voting separately as a class,
pursuant to the provisions of Article FOURTH, Paragraph D, Section 11, of the
Amended and Restated Charter.
"Series A Preferred Stock" means the Company's 7% Series A Convertible
Preferred Stock, $.01 par value, together with all shares of Common Stock issued
upon conversion of such shares.
"Series B Preferred Stock" means the Company's 7% Series B Senior
Convertible Preferred Stock, $.01 par value, together with all shares of Common
Stock issued upon conversion of such shares.
"Series B Preferred Stock Purchase Agreement" as defined in the
recitals hereto.
"Series C Director" means the one director entitled to be nominated to
serve by the holders of Series C Preferred Stock, voting separately as a class,
pursuant to the provisions of Article FOURTH, Paragraph F, Section 11, of the
Amended and Restated Charter.
"Series C Preferred Stock" means the Company's 7% Series C Convertible
Preferred Stock, $.01 par value, together with all shares of Common Stock issued
upon conversion of such shares.
"Series D Preferred Stock" means the Company's 7% Series D Convertible
Preferred Stock, $.01 par value, together with all shares of Common Stock issued
upon conversion of such shares.
"Series F Directors" means the two directors entitled to be nominated
to serve by the holders of Series F Preferred Stock, voting separately as a
class, pursuant to the provisions of Article FOURTH, Paragraph I, Section 11, of
the Amended and Restated Charter.
"Series F Preferred Stock" means the Company's 10% Series F Convertible
Preferred Stock, $.01 par value, together with all shares of Common Stock issued
upon conversion of such shares.
"Series F Preferred Stock Purchase Agreement" as defined in the
recitals hereto.
"Shares" as defined in the recitals hereto; provided, however, that as
to any particular securities of the Company, such shall cease to be "Shares"
hereunder, when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act, and such
securities shall have been disposed of under such registration statement, (ii)
they shall have been distributed to the public pursuant to Rule 144 under the
Securities Act in accordance with the terms hereof or (iii) they shall have
ceased to be outstanding.
"Stakelin Employment Period" means the "Employment Period," as defined
in that certain Executive Employment Agreement, effective as of March 1, 1998,
between the Company and Stakelin, as in effect on the Closing Date or thereafter
amended with the consent of Waller-Sutton.
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"Stockholder" means any Person who is a party to this Agreement or is a
successor or assign thereof contemplated by Section 13 below.
"Triggering Put Notice" as defined in Section 7(a).
"Voting Stock" of any Person means securities of any class or classes
of such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to elect or vote for the election of the directors of
such Person.
"Warrants" means (i) the warrants to purchase 860,000 shares of Common
Stock (subject to adjustment as provided therein) issued to the Series F
Purchasers pursuant to the terms of the Series F Stock Purchase Agreement (the
"Series F Warrants"), and (ii) the warrant to purchase 50,000 shares of Common
Stock (subject to adjustment as provided therein) issued to GE Capital pursuant
an Agreement to Issue Warrant, dated the date hereof, between the Company and GE
Capital (the "GE Warrant").
2. BOARD OF DIRECTORS.
(a) From and after the date of this Agreement and until the
provisions of this Section 2 cease to be effective, each Stockholder shall vote
or cause to be voted all Voting Stock and any other voting securities of the
Company over which such Stockholder has Beneficial Ownership or voting control
and shall take all other necessary or desirable actions within its control
(whether in its capacity as a stockholder, director, member of a committee of
the Board of Directors or officer of the Company or otherwise, and including,
without limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the Company shall take all necessary and desirable actions within its control
(including, without limitation, calling special board and stockholder meetings),
so that:
(i) the number of directors constituting the entire Board of
Directors of the Company (the "Board") shall be the number of persons entitled
to be designated to serve on the Board in accordance with the provisions of
Section 2(a)(ii) below (subject to increase as provided in Section 7(j) below);
(ii) the following persons shall at all times constitute the
members of the Board and shall be elected to the Board at each annual meeting of
the Stockholders of the Company:
(1) Jacobs, during the Jacobs Employment Period;
(2) Stakelin, during the Stakelin Employment Period;
(3) Fairman, during the Fairman Employment Period and for
up to two years thereafter if his nomination as a director shall be approved by
the Board of Directors;
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(4) two persons designated by Waller-Sutton, who initially
shall be William H. Ingram and Richard Patterson (and who shall constitute the
Series F Directors);
(5) one person designated by River Cities, who shall
initially be R. Glen Mayfield (and who shall constitute the Series A Director);
and
(6) one person designated by Blue Chip, who shall initially
be John H. Wyant (and who shall constitute the Series C Director); and
(7) such additional persons who Waller-Sutton shall have
the right to designate pursuant to Section 7(j) below;
(iii) the removal from the Board (with or without cause) of any
representative designated hereunder by any person or group of persons at any
time while such person or group shall be entitled to serve on, or designate a
representative to serve on, the Board under clause (ii) above, shall only be at
such person's or group's written request (and at times when the person or
representative is not entitled to so serve on the Board, such person or
representative may be removed, with or without cause, by vote of the Board or
the Stockholders, or if requested by Waller-Sutton, shall resign immediately);
and
(iv) if any representative designated hereunder by any person or
group for any reason ceases to serve as a member of the Board during his term of
office at any time while such person or group shall be entitled to serve on, or
designate a representative to serve on, the Board under clause (ii) above, the
resulting vacancy on the Board shall be filled by a representative designated by
such person or group, as provided hereunder.
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with his duties as a director,
including, without limitation, attending the meetings of the Board and any
committee thereof.
(c) Each of GE Capital, BMO and WP&G shall have the right, so long
as it Beneficially Owns at least 50% of the Shares owned by it as of the date
hereof (computed on an "as converted basis" and including, in the case of each
of WP&G and GE Capital, Shares which it may be obligated to purchase under the
Series F Preferred Stock Purchase Agreement and Shares issuable upon the
exercise of outstanding warrants) to have a non-voting observer present at each
meeting of the Board. The Company shall pay the reasonable out-of-pocket
expenses incurred by each non-voting observer in connection with his or her
attendance at Board meetings.
(d) If any party fails to designate a representative to fill a
directorship or if any directorship remains unfilled following the designation
of persons pursuant to the terms of this Section 2, or if a party is no longer
entitled or available to serve as a director as provided in this Section 2, the
number of directors constituting the entire Board shall be reduced accordingly.
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3. CONFLICTING AGREEMENTS. Each Stockholder represents that he has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
Stockholder shall grant any proxy or become party to any voting trust or other
agreement which is inconsistent with or conflicts with the provisions of this
Agreement. No Stockholder shall act, for any reason, as a member of a group or
in concert or enter into any agreement or arrangement with any other person in
connection with the acquisition, disposition or voting of Shares in any manner
which is inconsistent with the provisions of this Agreement. Without limitation,
GE Capital hereby agrees that, so long as the Merger shall have occurred, the
provisions of Section 11(f) of the Series B Preferred Stock Purchase Agreement
relating to certain redemption obligations of the Company are null and void and
of no further force or effect and Blue Chip and Miami Valley agree that the
provisions of paragraphs 3 through 6 of the Redemption and Warrant Agreement are
null and void and of no further force or effect, and no warrants have been
issued or are issuable by the Company thereunder. In addition, the Company and
each Stockholder shall, from time to time, grant such waivers and execute such
consents, proxies or other instruments, and make such filings with and seek such
consents and approvals from governmental authorities or other Persons, as may be
necessary to give effect to or carry out the provisions of this Agreement.
4. CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and bylaws of the Company may be amended in any manner permitted
thereunder, except that neither the certificate nor the bylaws shall be amended
in any manner that would conflict with, or be inconsistent with, the provisions
of this Agreement.
5. ACTIONS CONSISTENT WITH AGREEMENT. The Company shall not circumvent
this Agreement by taking any action through a subsidiary or affiliate that would
be prohibited under this Agreement.
6. WALLER-SUTTON APPROVAL RIGHTS. The Company and each Stockholder
hereby covenants and agrees that, for so long as the Series F Purchasers,
together with: (i) any Person that is a direct or indirect partner of any Series
F Purchaser that is a partnership, (ii) any Person that is a direct or indirect
member of any Series F Purchaser that is a limited liability company, and (iii)
any Affiliate of any thereof (the Persons referred to in clauses (i), (ii) and
(iii) above shall hereinafter be called "Waller-Sutton Permitted Transferees"),
collectively Beneficially Own, 10% or more of the Voting Stock, the Company
shall not take or permit to occur, and the Stockholders shall not consent to,
authorize or vote for, any of the following events or actions, unless such has
been approved in advance, in writing, by Waller-Sutton:
(a) any merger or consolidation of the Company with any other
entity, and any merger or consolidation of any subsidiary of the Company with
any other entity other than the Company or another wholly-owned subsidiary of
the Company;
(b) the purchase or lease by the Company or any subsidiary
thereof of any business or assets, other than the purchase or lease of assets in
the ordinary course of business (it being
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understood, however, that the purchase or lease of any radio broadcasting
station or Federal Communications Commission ("FCC") license is not a purchase
or lease in the ordinary course), or the execution of any agreement providing
for the purchase, lease, construction or management of or in respect of radio
broadcasting stations (including time brokerage agreements and local marketing
agreements and the like);
(c) the sale of any assets of the Company or any subsidiary
thereof, or the execution of any agreement in respect thereof (other than the
sale of advertising time and excess or obsolete furniture, fixtures or equipment
in the ordinary course of business);
(d) the issuance or sale of any equity or debt securities of the
Company or any subsidiary thereof or any rights to acquire any of such equity or
debt securities (including options and warrants) or the issuance or sale of
stock appreciation or other "phantom" stock rights, other than Permitted
Issuances, or the execution of any agreements in respect thereof;
(e) the incurrence or assumption of any Indebtedness by the
Company or any Subsidiary thereof, other than Permitted Indebtedness;
(f) any Change of Control;
(g) any amendment to the Company's 1998 Management Stock Option
Plan or the adoption of any other stock option, stock purchase or restricted
stock or stock appreciation right plan;
(h) any amendment to the Amended and Restated Charter or to the
by-laws of the Company;
(i) the execution by the Company or any Stockholder of any
voting, voting trust, registration rights or stockholders agreements with
respect to the Company or any of its shares of capital stock (other than this
Agreement and the Registration Rights Agreement); and
(j) the execution by the Company of any contract or agreement
for the construction or management of radio stations.
Subject to compliance by the Company and the other Stockholders with
the provisions of the final two sentences of this paragraph, Waller-Sutton
agrees that, upon receipt by the Company of an opinion of counsel reasonably
acceptable to Waller-Sutton, that the exercise of one or more of its rights
under this Section 6 is reasonably likely to constitute a transfer of control by
the Company within the meaning of the Communications Act of 1934, as amended
(the "Communications Act") or the rules and regulations of the FCC thereunder (a
"Transfer Opinion"), Waller-Sutton shall forbear from exercising such rights
until such time as the FCC has (a) agreed that such exercise would not
constitute a transfer of control or (b) given its consent to such transfer of
control (either event hereinafter referred to as "FCC Approval"). In the event
that the Company receives a Transfer
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Opinion, the Company and the other Stockholders shall promptly take such
actions, or cause such actions to be taken, that may be necessary or desirable
to obtain FCC Approval, including, without limitation, the execution and
delivery of all applications, certificates, instruments and other documents that
may be requested by the FCC or Waller-Sutton in connection with obtaining FCC
Approval, and the filing of petitions for rehearing, reconsideration and/or
judicial review, all at the cost and expense of the Company. The Company and the
other Stockholders each hereby further agrees that, at all times during the
period in which Waller-Sutton is required to forbear from exercising its rights
under this Section 6, each will take all actions necessary to prevent the
occurrence of any of the events set forth in subsections 6(a) through 6(j)
above.
7. PUT RIGHTS.
(a) At any time after the fifth anniversary of the date hereof,
Waller-Sutton shall have the right to send a written notice to the Company (the
"Triggering Put Notice"), advising the Company that Waller-Sutton and the
Affiliates of Waller-Sutton named in such Triggering Put Notice require the
Company to purchase all of the Eligible Put Shares Beneficially Owned by such
parties pursuant to the provisions of this Section 7. The Triggering Put Notice
shall specify the place and date for the closing (the "Put Closing") of the
purchase of Shares by the Company, which shall be no less than 90 days after the
date of the Triggering Put Notice.
(b) The Company shall send a copy of the Triggering Put Notice to
each of the other Stockholders within 5 days of the receipt thereof by the
Company, and each such Stockholder shall have a period of twenty (20) days from
the date of the Triggering Put Notice to send a written notice to the Company
(each, an "Additional Put Notice") advising the Company that such Stockholder
(each Stockholder delivering an Additional Put Notice, an "Additional Put
Stockholder") desires the Company to purchase all of the Eligible Put Shares
Beneficially Owned by such Stockholder, such purchases to occur at the Put
Closing.
(c) The Triggering Put Notice and each Additional Put Notice shall
specify the exact number and class of Eligible Put Shares which the Stockholder
transmitting the same shall desire the Company to purchase, (which shall
constitute all of the Eligible Put Shares Beneficially Owned by such
Stockholders), including all Warrants held by the Stockholder (the Eligible Put
Shares to be so purchased by the Company are hereinafter referred to as the "Put
Shares").
(d) (i) If an Agreed Value has been determined and the Put Closing
does not occur in connection with or following the sale of all or substantially
all of the assets of the Company, the purchase price to be paid by the Company
for each Put Share shall be as follows:
(1) the purchase price for each Put Share which constitutes
a share of Preferred Stock shall equal the sum of the accrued and unpaid
dividends in respect of such share of Preferred Stock through the date of the
Put Closing and the greater of (x) the liquidation preference in respect of such
share of Preferred Stock (excluding accrued and unpaid dividends) and
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(y) the Common Stock Value of the number of shares of Common Stock into which a
share of Preferred Stock may be converted as of the date of the Triggering Put
Notice;
(2) the purchase price for a Warrant shall equal the Common
Stock Value minus the exercise price per share of Common Stock payable upon
exercise of such Warrant, times the number of whole shares of Common Stock
issuable upon the exercise of such Warrant; and
(3) the purchase price for each Put Share which constitutes
a share of Common Stock shall equal the Common Stock Value thereof computed
under (A), (B) or (C) below, as applicable.
(A) The "Common Stock Value" of a share of Common Stock
will equal the amount that would be distributed to a holder of a share of Common
Stock if the Company were liquidated following the sale by the Company of all of
its assets for an amount equal to the Agreed Value of the Company, assuming that
no preferred stock is converted and no options or warrants have been exercised,
and following (i) the payment by the Company of all accrued and unpaid dividends
in respect of all outstanding preferred stock of the Company as of the date the
Agreed Value is determined, and (ii) the amount of all other liquidating
distributions that would be payable in respect of outstanding preferred stock
upon liquidation thereof.
(B) In the event the Common Stock Value computed
pursuant to clause (A) above is greater than the Stated Value (as defined in the
Certificate of Incorporation of the Company) of any class of preferred stock, or
is twice the Stated Value of the Series B Preferred Stock, then the Common Stock
Value shall be recomputed assuming that all preferred stock with a Stated Value
which is lower than the Common Stock Value (or one-half the Common Stock Value,
in the case of the Class B Preferred Stock) has been converted (such preferred
stock shall be referred to as being "in-the-money"). Such recomputed value shall
be equal to the amount that would be distributed to a holder of a share of
Common Stock if the Company were liquidated following the sale by the Company of
all of its assets for an amount equal to the Agreed Value of the Company, and
following (i) the payment by the Company of all accrued and unpaid dividends in
respect of all outstanding preferred stock of the Company (including
"in-the-money" Preferred Stock) as of the date the Agreed Value is determined,
and (ii) the amount of all other liquidating distributions that would be payable
in respect of such outstanding preferred stock that is not "in-the-money" upon
liquidation thereof.
(C) In the event the Common Stock Value determined
pursuant to clause (A) above, or, if applicable, clause (B) above, is greater
than the exercise price of any outstanding options or warrants, then the Common
Stock Value shall be recomputed assuming that all outstanding options or
warrants with an exercise price which is lower than the Common Stock Value have
been exercised immediately prior to such liquidating distribution and that the
purchase price paid upon any such exercise was available to the Company for
distribution in liquidation.
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(ii) If an Agreed Value has not been determined or if the Put
Closing is to occur in connection with or following the sale of all or
substantially all of the assets of the Company, the purchase price for the Put
Shares shall equal the amount distributable in respect thereof under the Amended
and Restated Charter in connection with the liquidation and dissolution of the
Company following the sale of all or substantially all of its assets.
(iii) The Company will notify each Stockholder in writing of the
determination of Agreed Value promptly after the determination thereof.
(e) The purchase price for the Put Shares shall be payable in full
at the Put Closing, by wire transfer of immediately available funds to such
accounts as shall be designated by the respective Stockholders, or in such other
form of consideration as shall be acceptable to Waller-Sutton. Subject to the
provisions of section 7(f) below, the Put Closing shall occur on the date
designated by Waller-Sutton in the Triggering Put Notice. Subject to the
provisions of Section 7(f) below, the Company shall be obligated to purchase all
of the Put Shares on such closing date, and simultaneously with such purchase
the Company shall (to the extent such are not among the Put Shares) pay all
accrued and unpaid dividends on the outstanding Series B Preferred Stock.
(f) The date of the Put Closing shall be postponed in the following
circumstances: (i) if the Company and Waller-Sutton are unable to agree upon the
Agreed Value of the Company within 90 days of the date of the Triggering Put
Notice (in which case the Board of Directors shall promptly proceed to sell the
Company, and the Put Closing shall be held on such date or dates as shall be
selected by Waller- Sutton, no later than the day following the date that the
Company shall have been sold (whether pursuant to a merger, a sale of all or
substantially all of its capital stock, assets or otherwise), or (ii) if, within
10 days after an Agreed Value has been determined, the Company shall send a
written notice to Waller-Sutton and the Additional Put Stockholders advising
such parties that (x) the Company believes that it will be necessary for the
Company to be sold (whether pursuant to a merger, a sale of all or substantially
all of its capital stock, assets or otherwise) to pay the purchase price for the
Put Shares, or (y) the Company will seek to pay the purchase price for the Put
Shares out of the proceeds of a Qualified Financing. Any notice sent pursuant to
this Section 7(f) shall be approved by the Board of Directors (excluding
Waller-Sutton's and the Additional Put Stockholders' nominees to the Board of
Directors).
(g) (i) If the date of the Put Closing shall have been postponed
pursuant to notice from the Company pursuant to Section 7(f)(ii)(y) above, then
the Company shall be obligated to take such steps as are necessary to cause a
Qualified Financing to be consummated within 3 months of the date of the notice
given under Section 7(f)(ii)(y), and within one business day after the
consummation of a Qualified Financing, the Company shall have used the net
available proceeds therefrom to pay the full purchase price for the Put Shares
and to pay all accrued and unpaid dividends on the outstanding Series B
Preferred Stock as required pursuant to the last sentence of Section 7(e).
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(ii) As used herein, a Qualified Financing shall mean a debt or
equity financing, the net proceeds of which are sufficient (after repayment of
any Indebtedness required to be repaid in connection therewith) to pay the
purchase price of the Put Shares in full.
(h) In all other circumstances where the date of the Put Closing
shall have been postponed pursuant to Section 7(f) above, the Company shall be
obligated to take the following steps within the time periods specified below:
(i) within 4 months after the date of the Triggering Put Notice,
the Company shall have engaged a broker to market, solicit bids and the form of
bids to be solicited for and otherwise facilitate the sale of the Company,
whether by way of merger of the Company with any other Person, by way of a
single sale of all or substantially all of the capital stock or assets of the
Company, or as separate sales of one or more of the Company's radio stations
(every such transaction, a "sale transaction"), such broker to be experienced in
the marketing and sale of radio stations, and such broker, the terms of its
engagement and the form of bids to be solicited and the structure of the
transaction to be reasonably acceptable to Waller-Sutton, and the broker and the
Company shall have prepared an offering memorandum for the sale of the Company
(which offering memorandum shall specify the date that bids must be received)
and shall have distributed such offering memorandum to all Persons who are
reasonably likely to have a bona fide interest in engaging (and the financial
capacity to engage) in such sale transaction or transactions (as reasonably
determined by the broker and Waller-Sutton);
(ii) within 6 months after the date of the Triggering Put
Notice, the Company shall have received any and all bids from potential buyers,
shall have sent copies of all such bids to Waller- Sutton, and, unless otherwise
consented to by Waller-Sutton, shall have closed the solicitation for bids, and,
if such solicitation for bids is closed, the Company shall have received at
least one (or one set, in the case of bids for less than all of its radio
stations) covering all or substantially all of its assets or capital stock;
(iii) within 8 months after the date of the Triggering Put
Notice, the Company shall have entered into one or more Qualified Purchase and
Sale Agreements for the sale of the Company or all or substantially all of its
assets. A "Qualified Purchase and Sale Agreement" shall mean one or more
purchase and sale agreements, duly executed by one or more financially
responsible purchasers, reasonably acceptable to Waller-Sutton, providing for
the purchase of the Company or one or more radio stations in a sale transaction
for an aggregate purchase price, payable in full in cash or in such other form
of consideration as shall be acceptable to Waller-Sutton at closing, and which
provides for a final "drop dead" date for closing, including all extensions for
transfer approvals, of no later than four months after the date of execution
thereof, and which provides no financing contingency therein for the benefit of
the purchaser and is otherwise in form and substance acceptable to
Waller-Sutton; and
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(iv) within one business day after the closing of Qualified
Purchase and Sale Agreements for the Company or all or substantially all of the
Company's radio stations, the Company shall have used the net available proceeds
therefrom to purchase all of the Put Shares.
(i) Waller-Sutton shall have the right, by written notice to the
Company and each other Additional Put Stockholder (the "Rescission Notice"), to
rescind the Triggering Put Notice and all Additional Put Notices (and upon the
giving of such Rescission Notice in accordance with the terms hereof, the
Triggering Put Notice and each Additional Put Notice shall automatically be null
and void and of no further force or effect), provided, however, that the
Rescission Notice may not be given at any time (x) while the Company is a party
to a binding agreement in respect of or after the Company has consummated a
Qualified Financing, or (y) while the Company is a party to a binding Qualified
Purchase and Sale Agreement(s) or has consummated transactions pursuant thereto
providing for aggregate consideration to the Company equal to more than $25
million. If a Rescission Notice is given, Waller-Sutton shall have the right at
any time after the expiration of 12 months from the date of the Rescission
Notice to again invoke the provisions of this Section 7, and the Stockholders
shall have the right to give Additional Put Notices in respect thereof.
(j) If the Company shall fail to take any of the actions set forth
above within the time frames required or shall otherwise default in any of its
obligations under this Section 7, and such action shall not be taken or such
default shall not be cured to the satisfaction of Waller-Sutton, within 15 days
of the date of any written notice from Waller-Sutton to the Company with respect
thereto, such shall be deemed a "Put Default." During the continuation of a Put
Default, Waller-Sutton may require the Company and the other Stockholders to
elect such additional designees of Waller-Sutton to the Board such that, after
giving effect thereto, the designees of Waller-Sutton elected to the Board
pursuant to the provisions of Section 2(a)(ii)(4) above and this Section 7(j)
shall constitute a majority of the members of the Board. Without limitation, to
the extent then required under applicable law, the Company shall, if so
requested by Waller- Sutton, make such filings with the Federal Communications
Commission and/or the Securities and Exchange Commission and mail such materials
to its Stockholders as shall be necessary to enable Waller- Sutton to designate
a majority of the members of the Board, and the Stockholders shall vote their
shares of Voting Stock in such manner as shall be necessary to give effect to
the foregoing. It is expressly agreed that the designees of Waller-Sutton on the
Board shall be empowered to take such action as shall be necessary or
appropriate to cause the Put Closing to occur as soon as possible, including
causing a sale of all or substantially all of the assets of the Company, or
alternatively to effect a sale of the Company or a merger by the Company with
another entity.
(k) In no event shall the Company be required to consummate any sale
pursuant to this Section 7 which would require repayment of any outstanding
indebtedness of the Company unless (i) such indebtedness of the Company is
repaid on the date of consummation of such sale, (ii) the holders of the
indebtedness required to be repaid out of the proceeds of any such sale consent
to such sale, or (iii) the purchaser agrees to assume all such indebtedness not
being repaid, in accordance with the terms of the agreements governing such
indebtedness, and no default or event of default under such agreements results
from such assumption.
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8. DISPOSITION OF SHARES. No Management Stockholder shall transfer,
sell, convey, exchange, pledge or otherwise dispose of ("Transfer") any Shares
of the Company except in connection with a sale of all or substantially all of
the outstanding stock of the Company or a merger of the Company with another
Person. Notwithstanding the foregoing, a Management Stockholder shall be
entitled to effect any of the following transfers (each an "Exempt Transfer"):
(i) Transfers by a Management Stockholder to an entity wholly owned by him at
all times following such Transfer; (ii) Transfers pursuant to applicable laws of
descent and distribution to members of such Management Stockholder's Immediate
Family, or Transfers during the lifetime of such Management Stockholder to such
Management Stockholder's spouse, adult children or to a trust whose
beneficiaries are members of such Management Stockholder's Immediate Family,
(iii) Transfers approved by a majority of the Board of Directors of the Company
(which, for as long as Waller-Sutton shall have approval rights pursuant to
Section 6 above, shall include the Series F Directors), (iv) prior to a
Qualified Public Offering, Transfers of a number of Shares up to the "Maximum
Amount" (as defined below), computed cumulatively for all Transfers made under
this clause (iv) from and after the date hereof, and (v) following a Qualified
Public Offering, the greater of the Maximum Amount or 25% of the sum of (1) the
number of shares of Common Stock that such Management Stockholder would have
owned as of such date had he not effected any Transfers prior to such date and
(2) the number of shares of Common Stock issuable on conversion of Series A
Preferred Stock that such Management Stockholder would have owned as of such
date had he not effected any Transfers prior to such date, but excluding any
shares of Common Stock issuable on exercise of any options or warrants held by
such Management Stockholder on such date (the sum of (1) and (2) being such
Management Stockholder's "Holdings"), computed cumulatively for all Transfers
made under this clause (v) from and after the date hereof; provided that, in the
case of Exempt Transfers of the types referenced in clauses (i) and (ii) above,
the restrictions contained in this Section 8 will continue to be applicable to
Shares and the transferee of such Shares must have agreed in writing to be bound
by the terms and conditions of this Agreement applicable to the Stockholder. For
purposes hereof, the "Maximum Amount" shall be equal to such Management
Stockholder's Holdings, multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock (computed on an as-converted and
fully-diluted basis) sold or otherwise disposed of by Waller-Sutton (other than
to Waller-Sutton Permitted Transferees) since the date hereof, and the
denominator of which shall be the number of shares of Common Stock (computed on
an as-converted and fully-diluted basis but excluding any shares of Common Stock
that may become issuable on exercise of a Series F Warrant) that would have been
held by Waller-Sutton on the date of such Transfer, if Waller- Sutton had not
previously sold or otherwise disposed of any Shares. The foregoing shall not
apply to or prevent the exercise by a Management Stockholder of the options
granted to him under the 1998 Management Stock Option Plan on a "cashless" or
net basis.
9. SALE OF THE COMPANY.
(a) If a majority of the Board (including in such majority the
directors appointed by Waller-Sutton), and Waller-Sutton and other Stockholders
Beneficially Owning, together with Waller- Sutton, a majority of the Voting
Stock, approve a sale of all or substantially all of the assets or capital stock
of the Company (the "Approved Sale"), then each Stockholder shall vote for,
consent
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to and raise no objections against such Approved Sale. If the Approved Sale is
structured as (i) a merger or consolidation, each Stockholder shall waive any
dissenters rights, appraisal rights or similar rights such holder may have in
connection with such merger or consolidation or (ii) a sale of stock, each shall
agree to sell all of his Shares and rights to acquire Shares on the terms and
conditions so approved. Each Stockholder shall take all necessary or desirable
actions in connection with the consummation of the Approved Sale as reasonably
requested by the Company and Waller-Sutton.
(b) The obligations of the Stockholders with respect to an Approved
Sale are subject to the satisfaction of the following conditions: (i) upon the
consummation of the Approved Sale, each Stockholder holding the same class of
Shares shall receive the same form of consideration and the same amount of
consideration (based on the number of Shares held) and (ii) each holder of then
currently exercisable rights to acquire shares of Common Stock shall be given an
opportunity to do one of the following: (A) to exercise such rights prior to the
consummation of the Approved Sale, (B) to receive in exchange for such rights
consideration equal to the amount determined by multiplying (1) the same amount
of consideration per share of Common Stock received by holders of Common Stock
in connection with the Approved Sale less the exercise price per share of Common
Stock of such rights to acquire such Common Stock by (2) the number of shares of
Common Stock represented by such rights or (C) to receive in exchange for such
rights, rights to acquire shares of common stock of the surviving corporation
under equivalent terms through a tax-free exchange with the surviving
corporation if the Approved Sale is structured as a merger or consolidation
which otherwise constitutes a tax-free reorganization as to such Stockholder and
such exchange does not adversely affect the tax-free treatment of the Approved
Sale.
(c) In no event shall the Company be required to consummate any sale
pursuant to this Section 9 which would require repayment of any outstanding
indebtedness of the Company unless (i) the net proceeds of such sale would be
sufficient to repay all of such indebtedness of the Company, (ii) the holders of
the indebtedness required to be repaid out of the proceeds of any such sale
consent to such sale, or (iii) the purchaser agrees to assume all such
indebtedness not being repaid, in accordance with the terms of the agreements
governing such indebtedness, and no default or event of default under such
agreements results from such assumption.
10. TAG-ALONG RIGHT. In addition to the rights granted under Section 7
above, in the event that Waller-Sutton and other Stockholders (including
Waller-Sutton) Beneficially Owning more than fifty percent (50%) of the Common
Stock subject to this Agreement (each a "Selling Stockholder"), desire to
transfer, sell, convey, exchange or otherwise dispose of ("Transfer") any Shares
pursuant to a bona fide offer from a third party (the "Buyer"), then such
Selling Stockholders shall notify the Stockholders who are not Selling
Stockholders ("Tag-Along Stockholders"), in writing, of such offer and its terms
and conditions (the "Transfer Notice"). Upon receipt of such Transfer Notice,
each Tag-Along Stockholder shall have the right to sell to the Buyer, on the
same terms and conditions as the Selling Stockholders, that number of Shares of
the Company's capital stock subject to this Agreement equal to the product
attained by multiplying (a) the number of Shares held by the Tag-Along
Stockholder times (b) the quotient derived by dividing (i) the number of Shares
which otherwise would have been sold by the Selling Stockholders to the Buyer by
(ii) the total number of
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Shares held by such Selling Stockholders and the number of Shares held by the
Tag-Along Stockholders who have elected to participate in such Transfer
(assuming, in the case of sales of Common Stock of the Company, full conversion
of all shares of preferred stock of the Company held by the Selling Stockholders
and each Tag-Along Stockholder exercising its rights under this Section 10). If
more than one Tag-Along Stockholder elects to sell Shares pursuant to this
Section 10, they may do so pro rata based on the number of Shares held by each
of them or in such other proportions as they may agree. The Tag-Along
Stockholders' right to sell pursuant to this Section 10 can be exercised by
delivery of written notice to the Selling Stockholders within 10 business days
following delivery of the Transfer Notice. Any Tag-Along Stockholder who fails
to notify the Selling Stockholders within such 10 business days shall be deemed
to have waived its rights under this Section 10.
11. DRAG-ALONG RIGHT. In the event that Waller-Sutton and other
Stockholders (including Waller-Sutton) Beneficially Owning more than fifty
percent (50%) of the Common Stock subject to this Agreement (each a
"Transferring Stockholder") wish to Transfer in a bona fide arms' length sale
all of the Shares held by the Transferring Stockholders to any person or persons
who are not Affiliates of the Transferring Stockholders (the "Proposed
Transferee"), the Transferring Stockholders shall have the right, subject to
applicable law, to require all the remaining Stockholders to sell to the
Proposed Transferee all of the Shares then owned by such remaining Stockholders
(including any warrants or options to acquire capital stock of the Company). The
amount and type of consideration to be paid by the Proposed Transferee to the
Transferring Stockholders and the remaining Stockholders shall be the same
(less, in the case of options or warrants, the exercise price for such options
or warrants, and in the case of convertible preferred stock shall be based on
the greater of the liquidation preference thereof or on the amount that would be
received if such preferred stock were converted into Common Stock immediately
prior to the closing of such Transfer). In addition, the terms and conditions
upon which the remaining Stockholders shall Transfer their Shares shall be the
same as those received by Transferring Stockholders holding the same class of
capital stock.
12. SUBSCRIPTION RIGHT. If at any time the Company proposes to issue
equity securities of any kind (the term "equity securities" shall include for
these purposes any warrants, options or other rights to acquire equity
securities and debt securities convertible into equity securities) of the
Company and any Series F Purchaser is to be a purchaser thereof (other than the
issuance of equity securities (i) upon conversion of any preferred stock
pursuant to the Company's Certificate of Incorporation, (ii) to the public in a
firm commitment underwriting pursuant to a registration statement filed under
the Securities Act, (iii) pursuant to the acquisition of another Person by the
Company by merger, purchase of substantially all of the assets or outstanding
capital stock or other form of transaction or (iv) pursuant to an employee stock
option plan, stock bonus plan, stock purchase plan or other management equity
program), then, as to each Stockholder, the Company shall: (i) give written
notice setting forth in reasonable detail (1) the designation and all of the
terms and provisions of the securities proposed to be issued (the "Proposed
Securities"), (2) the price and other terms of the proposed sale of such
securities, (3) the amount of such securities proposed to be issued and (4) such
other information as the Stockholder may reasonably request in order to evaluate
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the proposed issuance; and (ii) offer to issue to each such Stockholder a
portion of the Proposed Securities equal to a percentage determined by dividing
(x) the number of shares of Common Stock Beneficially Owned by such Stockholder,
assuming conversion in full of any convertible securities held by such
Stockholder and exercise of any options or warrants held by such Stockholder, by
(y) the total number of shares of Common Stock then outstanding, including for
purposes of this calculation all shares of Common Stock issuable upon conversion
in full of any then outstanding convertible securities or upon exercise in full
of any outstanding options or warrants.
Each such Stockholder must exercise its purchase right hereunder within
10 days after receipt of such notice from the Company. If all of the Proposed
Securities offered to such Stockholder are not fully subscribed by such
Stockholder, the remaining Proposed Securities will not be reoffered to the
Stockholders purchasing their full allotment. To the extent that the Company
offers two or more securities in units, Stockholders must purchase such units as
a whole and will not be given the opportunity to purchase only one of the
securities making up such unit.
Upon expiration of the offering period described above, the Company
will be free to sell such Proposed Securities that the Stockholders have not
elected to purchase during the 90 days following such expiration on terms and
conditions not more favorable to the purchasers thereof than offered to such
holders. Any Proposed Securities offered or sold by the Company to Persons
including a Series F Purchaser after such 90 day period must be reoffered to the
Stockholders pursuant to these terms.
13. REPRESENTATIONS AND WARRANTIES.
(a) Each Stockholder represents and warrants the following with
respect to himself, herself or itself, as the case may be:
(i) AUTHORIZATION. All corporate action on the part of each
Stockholder which is not an individual necessary for the authorization,
execution, delivery and performance by such Stockholder of this Agreement has
been taken. This Agreement is a legal, valid and binding Obligation of each
Stockholder, enforceable against such Stockholder in accordance with its terms.
(ii) NO VIOLATION. The execution and delivery of this Agreement
will not (with or without notice or passage of time or both) (a) conflict with
or result in a breach of any provision of the certificate of incorporation or
bylaws of a Stockholder which is not an individual, (b) result in a default,
give rise to any right of termination, cancellation or acceleration, or require
any consent or approval, under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, loan, factoring arrangement, license,
agreement, lease or other instrument or obligation to which a Stockholder is a
party or by which it or any of its assets may be bound, or (c) violate any law,
judgment, order, writ, injunction, decree, statute, rule or regulation of any
court, administrative agency, bureau, board, commission, office, authority,
department or other governmental entity applicable to such Stockholder or any of
its, his or her assets.
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14. TERMINATION OF CERTAIN PROVISIONS. The provisions of Sections 2, 7,
10, 11 and 12 of this Agreement will terminate upon the closing of a Qualified
Public Offering. In addition, this Agreement, or any portion thereof, may be
terminated with the written agreement of the Company, Waller-Sutton and
Stockholders (including Waller-Sutton) Beneficially Owning more than 50% of the
Common Stock Beneficially Owned by all Stockholders.
15. VOTING. The Stockholders agree that GE Capital shall not vote its
shares of Series F Preferred Stock (or any shares of Common Stock issued on
conversion thereof) and that such shares will not be counted as shares of Series
F Preferred (or Common Stock, as the case may be) that are entitled to vote on
any matters except in respect of the following extraordinary events which are
submitted to the holders of the Preferred Stock of the Company for vote or
approval under the Amended and Restated Charter upon which GE Capital shall be
entitled to vote:
(a) any amendment to the Amended and Restated Charter;
(b) a sale of all or substantially all of the assets of the
Company;
(c) the dissolution, liquidation or termination of the Company;
(d) any acquisition of, or merger of the Company with, another
corporation or other entity, whether or not the Company is a survivor of such
transaction;
(e) any change in the fundamental nature of the business of the
Company;
(f) any transaction with affiliates, except upon fair and
reasonable terms comparable to an arms-length transaction; and
(g) any change in the Company's capital structure in a manner that
dilutes the ownership interest of the holders of the Series F Preferred Stock.
The provisions of this Section 15 shall remain in effect with respect to GE
Capital's shares of Series F Preferred Stock (and the shares of Common Stock
issued on conversion thereof) until the occurrence of either of the following:
(1) transfer of such Series F Preferred Stock (or the shares of Common Stock
issued on conversion thereof) to a third party unaffiliated with GE Capital or
(2) delivery to the Company of an opinion of counsel, in form reasonably
satisfactory to the Stockholders, to the effect that, as a result of (a) changes
in the ownership or attribution rules ("Rules") of the FCC or (b) changes in GE
Capital's circumstances, there is no longer a need or desire on the part of GE
Capital to insulate its ownership interest in the Series F Preferred Stock (or
the shares of Common Stock issued on conversion thereof) from attribution under
the FCC Rules.
16. CONSENT TO AMENDMENTS; WAIVERS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived at
any time only by the written agreement of the Company, Waller-Sutton and
Stockholders (including Waller-Sutton) holding not less than fifty
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percent (50%) of the Common Stock Beneficially Owned by all Stockholders. Any
waiver, permit, consent or approval of any kind or character on the part of any
such holder of any provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in such
writing.
17. WALLER-SUTTON. The term Waller-Sutton, as used herein, shall mean
Waller-Sutton or any Permitted Waller-Sutton Transferee to whom Waller-Sutton
has transferred any Shares; provided, however, that in the event Waller-Sutton
sells all or substantially all of its Shares to Persons other than Permitted
Waller-Sutton Transferees, then (i) the term "Waller-Sutton," as used in Section
7 hereof (and in respect of defined terms used in said Section 7), shall refer
to any Stockholder or Stockholders Beneficially Owning more than 30% of the
Series F Preferred Stock then outstanding, and (ii) the term "Waller-Sutton," as
used in any other Section of this Agreement (and in respect of defined terms
used therein), shall refer to any Stockholder or Stockholders Beneficially
Owning more than 50% of the Series F Preferred Stock then outstanding.
18. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not, provided, that in the case of an assignment, such assignment shall be made
in conjunction with a Transfer of Shares, such assignment shall specifically
provide that the assignee shall assume all obligations of the assigning
Stockholder, and such assignee shall execute and deliver to the Company and the
other Stockholders a counterpart of this Agreement. Notwithstanding the
foregoing, no purchaser of Shares sold pursuant to an effective registration
statement filed by the Company or in an unsolicited open market transaction
effected pursuant to Rule 144 shall be subject to the provisions hereof or
deemed a Stockholder hereunder.
19. LEGEND ON CERTIFICATES. All Series A Preferred Stock, Series B
Preferred Stock, Series D Preferred Stock and Series F Preferred Stock of the
Company, and all Series C Preferred Stock and all Common Stock of the Company
now or hereafter owned by the parties to this Agreement, shall be subject to the
provisions of this Agreement and the certificates representing said shares shall
bear substantially the following legends (except that the certificate
representing the Series C Preferred Stock shall not bear the first legend set
forth below):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any State (the "Securities Laws"). These
securities may not be offered, sold, transferred, pledged or
hypothecated in the absence of registration under applicable
Securities Laws, or the availability of an exemption therefrom.
This certificate will not be transferred on the books of the
Corporation or any transfer agent acting on behalf of the
Corporation except upon the receipt of an opinion of counsel,
satisfactory to the Corporation, that the proposed transfer is
exempt from the registration requirements of all applicable
Securities Laws,
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or the receipt of evidence, satisfactory to the Corporation, that
the proposed transfer is the subject of an effective registration
statement under all applicable Securities Laws."
"The Corporation is subject to restrictions contained in the
Federal Communications Act, as amended. The securities evidenced by
this certificate may not be sold, transferred, assigned or
hypothecated if, as a result thereof, the issuer would be in
violation of that act."
"The securities represented by this certificate are subject to the
terms of that certain Second Amended and Restated Stockholders'
Agreement dated as of June 15, 1998, among Regent Communications,
Inc. and certain of its stockholders, as the same may be amended
from time to time."
20. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
21. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.
22. NOTICES. Any notices required or permitted to be sent hereunder
shall be delivered personally or mailed, certified mail, return receipt
requested, or delivered by overnight courier service to the addresses shown on
the signature pages hereof, or such other address as any party hereto designates
by written notice to the Company, and shall be deemed to have been given upon
delivery, if delivered personally, three days after mailing, if mailed, or one
business day after delivery to the courier, if delivered by overnight courier
service.
23. GOVERNING LAW. All questions concerning the construction, validity,
and interpretation of this Agreement, and the performance of the obligations
imposed by this Agreement, shall be governed by the laws of the State of
Delaware.
24. FINAL AGREEMENT. This Agreement constitutes the complete agreement
of the parties concerning the matters referred to herein.
25. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of Counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one
instrument.
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23
26. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be used against any party.
27. REMEDIES. The parties hereto shall have all rights and remedies set
forth in this Agreement and all rights and remedies available under any
applicable law. The parties hereto agree and acknowledge that money may not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may, in its sole discretion, apply to any court of law or equity of
competent jurisdiction for specific performance or injunctive relief (without
posting bond or other security) in order to enforce, or prevent any violations
of, the provisions of this Agreement.
28. CERTAIN EXPENSES. The Company agrees to pay all reasonable expenses
of Waller-Sutton (including reasonable fees, charges and disbursements of its
counsel) incurred in connection with (i) any amendment, supplement, modification
or waiver of or to any provisions of this Agreement (including, without
limitation, a response to a request by the Company or any Stockholder for a
consent to any action otherwise prohibited hereunder), or consent to any
departure by the Company or any Stockholder from, the terms of any provision of
this Agreement; and (ii) any matters arising hereunder, including without
limitation the reasonable expenses of Waller-Sutton incurred to monitor or
confirm the performance by the Company or any Stockholder of or compliance by
the Company or any Stockholder with all agreements and covenants on its part to
be performed or complied with or incurred in connection with or in respect of
any of the rights granted to Waller-Sutton hereunder. The Company shall also pay
all costs and expenses incurred in connection with or arising out of the
purchase by it of the Put Shares.
29. WALLER-SUTTON CONSENT. Whenever this Agreement shall require or
contemplate the consent or approval of Waller-Sutton to or in respect of any
matter, such consent or approval may be given or withheld in the sole discretion
of Waller-Sutton and, if given, must be evidenced by a written instrument duly
executed by or on behalf of Waller-Sutton expressly setting forth the specific
matter approved or consented to.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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The parties hereto have executed this Agreement on the date first set
forth above.
THE COMPANY:
REGENT COMMUNICATIONS, INC.
By:
---------------------------------------
Title: CHAIRMAN & CEO
------------------------------------
Address: 50 E. RIVER CENTER BLVD.
----------------------------------
SUITE #180
------------------------------------------
COVINGTON, KY 41011
------------------------------------------
TELECOPIER NO: (606) 292-0352
------------------------------------------
------------------------------------------
TERRY S. JACOBS
Address: 6561 MADEIRA HILLS DR.
---------------------------------
CINCINNATI, OH 45243
------------------------------------------
TELECOPIER NO: ( ) -
------------------------------------------
------------------------------------------
WILLIAM L. STAKELIN
Address: 1870 MADISON ROAD
---------------------------------
CINCINNATI, OHIO 45231
------------------------------------------
TELECOPIER NO: ( ) -
------------------------------------------
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RIVER CITIES CAPITAL FUND LIMITED
PARTNERSHIP
By: River Cities Management Limited Partnership,
General Partner
By: Mayson, Inc., General Partner
By:
------------------------------------
R. Glen Mayfield, Vice President
Address: 221 East Fourth Street
------------------------------------
Suite 2250
------------------------------------
Cincinnati, Ohio 45202
------------------------------------
BMO FINANCIAL, INC.
By:
---------------------------------------------
Title:
---------------------------------------
Address: 430 Park Avenue
------------------------------------------------
New York, New York 10028
------------------------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
---------------------------------------------
Senior Vice President
Address: 3379 Peachtree Road, N.E.
---------------------------------------
Suite 600
------------------------------------------------
Atlanta, GA 30326
------------------------------------------------
PNC BANK, N.A., as Trustee
By:
---------------------------------------------
Address: 201 East Fifth Street
---------------------------------------
Fifth Floor
------------------------------------------------
Cincinnati, OH 45202
------------------------------------------------
Attn: Patricia S. Grelle
------------------------------------------------
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WALLER-SUTTON MEDIA PARTNERS, L.P.
By: Waller-Sutton Media, L.L.C., its General
Partner
By:
----------------------------------------
Address: c/o Waller-Sutton Management
---------------------------------------
Group, Inc.
------------------------------------------------
1 Rockefeller Plaza, Suite 3300
------------------------------------------------
New York, NY 10020
------------------------------------------------
Attention: Cathy M. Brienza
------------------------------------------------
Telecopier No: (212) 218-4355
------------------------------------------------
with a copy (which shall not constitute notice) to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, NY 10112
Attention: Ronald Greenberg, Esq.
Telecopier No: (212) 698-7825
------------------------------------------------
WILLIAM H. INGRAM
Address: c/o Waller-Sutton Management
---------------------------------------
Group, Inc.
------------------------------------------------
1 Rockefeller Plaza, Suite 3300
------------------------------------------------
New York, NY 10020
------------------------------------------------
Telecopier No: (212) 218-4355
------------------------------------------------
with a copy (which shall not constitute notice) to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, NY 10112
Attention: Ronald Greenberg, Esq.
Telecopier No: (212) 698-7825
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WPG CORPORATE DEVELOPMENT
ASSOCIATES V, L.P.,
By:
---------------------------------------------
Address: One New York Plaza
---------------------------------------
New York, New York 10004-1950
------------------------------------------------
WPG CORPORATE DEVELOPMENT
ASSOCIATES V (OVERSEAS), L.P.
By:
---------------------------------------------
Address: c/o BankAmerica Trust & Banking Corp.
---------------------------------------
(Cayman) Ltd.
------------------------------------------------
BankAmerica House
------------------------------------------------
Fort Street
------------------------------------------------
George Town, Grand Cayman
------------------------------------------------
Cayman Islands
------------------------------------------------
BLUE CHIP CAPITAL FUND II LIMITED
PARTNERSHIP
By: Blue Chip Venture Company, Ltd.,
its general partner
By:
----------------------------------------
Address: 2000 PNC Center
----------------------------------
201 East Fifth Street
-------------------------------------------
Cincinnati, Ohio 45202
-------------------------------------------
Attn: John H. Wyant
-------------------------------------------
Telecopier No: (513) 723-2306
-------------------------------------------
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MIAMI VALLEY VENTURE FUND L.P.
By: Blue Chip Venture Company of Dayton, Ltd.,
its special limited partner
By:
----------------------------------------
John H. Wyant
Manager
Address: 2000 PNC Center
----------------------------------
201 East Fifth Street
-------------------------------------------
Cincinnati, Ohio 45202
-------------------------------------------
Attn: John H. Wyant
-------------------------------------------
Telecopier No: (513) 723-2306
-------------------------------------------
------------------------------------------------
JOEL M. FAIRMAN
Address: 333 Glen Head Road
----------------------------------------
Suite 220
------------------------------------------------
Old Brookville, NY 11545
------------------------------------------------
Telecopier no: (516) 676-2631
------------------------------------------------
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