EXHIBIT 2.1
FORM OF
CONTROLLED EQUITY OFFERING(SM)
SALES AGREEMENT
__________, 2003
CANTOR XXXXXXXXXX & CO.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs/Ladies:
Cumulus Media Inc., a Delaware corporation (the "Company"), confirms
its agreement (this "Agreement") with Cantor Xxxxxxxxxx & Co. ("CF&Co"), as
follows:
1. Issuance and Sale of Shares. The Company agrees that, from time to
time during the term of this Agreement, on the terms and subject to the
conditions set forth herein, it will issue and sell through CF&Co, acting as
agent and/or principal, 4,500,000 shares (the "Shares") of the Company's Class A
Common Stock, $.01 par value ("Class A Common Stock"). Notwithstanding anything
to the contrary contained herein, the parties hereto agree that compliance with
the limitations set forth in this Section 1 on the number and aggregate sale
price of Shares issued and sold under this Agreement shall be the sole
responsibility of the Company, and CF&Co shall have no obligation in connection
with such compliance. The issuance and sale of Shares through CF&Co will be
effected pursuant to a registration statement on Form S-3 filed by the Company
and declared effective by the Securities and Exchange Commission (the
"Commission").
2. Placements. Each time that the Company wishes to issue and sell
Shares hereunder (each, a "Placement"), it will notify CF&Co of the proposed
terms of such Placement. If CF&Co wishes to accept such proposed terms (which it
may decline to do for any reason in its sole discretion) or, following
discussions with the Company, wishes to accept amended terms, CF&Co will issue
to the Company a written notice setting forth the terms that CF&Co is willing to
accept, including without limitation the number of Shares ("Placement Shares")
to be issued, the manner(s) in which sales are to be made, the date or dates on
which such sales are anticipated to be made, any minimum price below which sales
may not be made, and the capacity in which CF&Co may act in selling Shares
hereunder (as principal, agent or both) (a "Placement Notice"), the form of
which is attached hereto as Schedule 1. The amount of compensation to be paid by
the Company to CF&Co shall be two and one-half percent (2.5%) of gross proceeds
on the first
2,000,000 Shares and two percent (2%) on the next 2,500,000 Shares. The terms
set forth in a Placement Notice will not be binding on the Company or CF&Co
unless and until the Company delivers written notice of its acceptance of all of
the terms of such Placement Notice (an "Acceptance"); provided, however, that
neither the Company nor CF&Co will be bound by the terms of a Placement Notice
unless the Company delivers to CF&Co an Acceptance with respect thereto prior to
4:30 p.m. (New York time) on the Business Day (as defined below) following the
Business Day on which such Placement Notice is delivered to the Company. It is
expressly acknowledged and agreed that neither the Company nor CF&Co will have
any obligation whatsoever with respect to a Placement or any Placement Shares
unless and until CF&Co delivers a Placement Notice to the Company and the
Company accepts such Placement Notice by means of an acceptance, and then only
upon the terms specified therein and herein. In the event of a conflict between
the terms of this Agreement and the terms of a Placement Notice, the terms of
the Placement Notice will control.
3. Sale of Placement Shares by CF&Co. Subject to the terms and
conditions of this Agreement, upon the Acceptance of a Placement Notice, and
unless the sale of the Placement Shares described therein has been suspended or
otherwise terminated in accordance with the terms of this Agreement, CF&Co will
use its commercially reasonable efforts consistent with its normal trading and
sales practices to sell such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. CF&Co will
provide written confirmation to the Company no later than the opening of the
Trading Day next following the Trading Day on which it has made sales of
Placement Shares hereunder setting forth the number of Placement Shares sold on
such day, the compensation payable by the Company to CF&Co with respect to such
sales, and the Net Proceeds (as defined below) payable to the Company. CF&Co may
sell any Placement Shares in privately negotiated transactions and/or any other
method permitted by law deemed to be an "at the market" offering as defined in
Rule 415 of the Securities Act of 1933, as amended (the "Act"), including sales
made directly on the Nasdaq National Market, the existing trading market for the
Class A Common Stock or sales made to or through a market maker. The Company
acknowledges and agrees that (i) there can be no assurance that CF&Co will be
successful in selling Placement Shares, and (ii) CF&Co will incur no liability
or obligation to the Company or any other person or entity if it does not sell
Placement Shares for any reason other than a failure by CF&Co to use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares as required under this Section 3. For
the purposes hereof, "Trading Day" means any day on which Class A Common Stock
is purchased and sold on the principal market on which the Class A Common Stock
is listed or quoted.
4. Suspension of Sales. The Company or CF&Co may, upon notice to the
other party in writing or by telephone (confirmed immediately by verifiable
facsimile transmission), suspend any sale of Placement Shares; provided,
however, that such suspension shall not affect or impair either party's
obligations with respect to any Placement Shares sold hereunder prior to the
receipt of such notice. The Company agrees that no such notice shall be
effective against CF&Co unless it is made to one of the individuals named on
Schedule 2.1 hereto, as such Schedule may be amended from time to time. CF&Co
agrees that no such notice shall be effective against the Company unless it is
made to one of the individuals based on Schedule 2.2 hereto, as such Schedule
may be amended from time to time.
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5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Business Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each a
"Settlement Date"). The amount of proceeds to be delivered to the Company on a
Settlement Date against the receipt of the Placement Shares sold ("Net
Proceeds") will be equal to the aggregate sales price at which such Placement
Shares were sold, after deduction for (i) CF&Co's commission, discount, or other
compensation for such sales payable by the Company pursuant to Section 2 hereof,
(ii) any other amounts due and payable by the Company to CF&Co hereunder
pursuant to Section 7(h) hereof, and (iii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such sales.
(b) Delivery of Shares. On or before each Settlement Date, the Company
will, or will cause its transfer agent to, electronically transfer the Placement
Shares being sold by crediting CF&Co's or its designee's account at The
Depository Trust Company through its Deposit Withdrawal Agent Commission System
or by such other means of delivery as may be mutually agreed upon by the parties
hereto and, upon receipt of such Placement Shares, which in all cases shall be
freely tradeable, transferable, registered shares in good deliverable form,
CF&Co will deliver the related Net Proceeds in same day funds delivered to an
account designated by the Company prior to the Settlement Date. If the Company
defaults in its obligation to deliver Placement Shares on a Settlement Date, the
Company agrees that in addition to and in no way limiting the rights and
obligations set forth in Section 9(a) hereto, it will (i) hold CF&Co harmless
against any loss, claim, damage, or expense (including reasonable legal fees and
expenses), as incurred, arising out of or in connection with such default by the
Company and (ii) pay to CF&Co any commission, discount, or other compensation to
which it would otherwise have been entitled absent such default.
6. Representations and Warranties of the Company. As of the date hereof,
each Filing Date (as defined below) and each Settlement Date the Company
represents and warrants to, and agrees with, CF&Co that:
(a) The Class A Common Stock is registered pursuant to Section 12(g) or
12(b) of the Exchange Act (as hereinafter defined) and the Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the Commission (the "Commission Documents") for at least two (2)
years, and all of such filings have been made on a timely basis. The Class A
Common Stock is currently quoted on the Nasdaq National Market under the trading
symbol "CMLS". The Company meets the requirements of Form S-3 under the Act and
the rules and regulations thereunder ("Rules and Regulations") including but not
limited to the transaction requirements for a primary offering. The Company has
filed a post-effective amendment to its registration statement on Form S-3
(Registration Statement No. 333-94323) with respect to an aggregate of
20,000,000 shares of Class A Common Stock (as heretofore or hereafter amended or
supplemented, the "Registration Statement"), including the form of prospectus
contained therein for use in one or more Placements (the "Base Prospectus"). A
prospectus supplement (the "Prospectus Supplement", and together with the Base
Prospectus and any amendment thereto and all documents incorporated therein by
reference, the "Prospectus")
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will be prepared by the Company in conformity with the requirements of the Act
and the Rules and Regulations and will be filed with the Commission, and the
Company will use its best efforts to cause it to become effective as soon as
reasonably practicable. Any amendment or supplement to the Registration
Statement or Prospectus required by this Agreement will be so prepared and filed
by the Company, and the Company will use its best efforts to cause it to become
effective as soon as reasonably practicable. No stop order suspending the
effectiveness of the Registration Statement has been issued, and no proceeding
for that purpose has been instituted or threatened by the Commission. Any
reference herein to the Registration Statement, the Prospectus, or any amendment
or supplement thereto shall be deemed to refer to and include the documents
incorporated (or deemed to be incorporated) by reference therein, and any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement or Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.
(b) The Registration Statement, on the date it became or becomes
effective, and the Prospectus, as of its date and at each Settlement Date,
conformed or will conform with the requirements of the Act and the Rules and
Regulations; each part of the Registration Statement, on the date it became or
becomes effective, did not or will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and the Prospectus, as of its
date and at each Settlement Date, did not or will not include an 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; except that the foregoing shall not apply to statements or
omissions in any such document made in reliance on information furnished to the
Company by CF&Co expressly for use in the Registration Statement, the
Prospectus, or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Prospectus, or any
amendment or supplement thereto (the "Disclosure Documents"), when they became
effective under the Act or were filed with the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be,
conformed with the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as the case
may be, will conform to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; except that the foregoing will not apply to statements or
omissions in any such document made in reliance on information furnished to the
Company by CF&Co expressly for use in any such document.
(d) The consolidated financial statements and financial schedules of
the Company and each of the subsidiaries of the Company listed on Schedule 3
hereto (collectively, the "Subsidiaries", and each, individually, a
"Subsidiary"), together with the related notes set forth
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or incorporated by reference in the Prospectus, have been and will be prepared
in accordance with Regulation S-X under the Act and with generally accepted
accounting principles consistently applied at the times and during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present and will fairly present the financial position of the Company
as of the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end adjustments).
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus; and the Company is duly
qualified to transact business in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure, individually or in the aggregate,
to be so qualified would not have a material adverse effect on (i) the
consolidated business, operations, properties, financial condition or results of
operations of the Company and its Subsidiaries taken as a whole, or (ii) the
ability of the Company to perform its obligations under this Agreement
(collectively, a "Material Adverse Effect").
(f) Each Subsidiary of the Company has been duly incorporated or formed
and is validly existing as a corporation or other entity in good standing under
the laws of the jurisdiction of its incorporation or formation, has corporate
power and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to be so qualified
would not have a Material Adverse Effect.
(g) The Company and each Subsidiary has good and marketable title to
all of the properties and assets that are material to the business of the
Company and the Subsidiaries and reflected as owned by it in the consolidated
financial statements of the Company hereinabove described or described in the
Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind (collectively, "Encumbrances") except those arising under the Company's
credit agreement (the "Credit Agreement"), as reflected in such financial
statements or described in the Prospectus, or that do not, individually or in
the aggregate, materially interfere with the use made and proposed to be made of
such properties by the Company and the Subsidiaries. The Company and the
Subsidiaries occupy their leased properties under valid and binding leases, with
such exceptions as would not reasonably be expected to have a Material Adverse
Effect.
(h) The Company has an authorized capitalization as set forth on its
Consolidated Balance Sheet as of December 31, 2002 in its most recent Annual
Report on Form 10-K and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the outstanding shares of capital stock membership or
equity interests of each Subsidiary have been duly authorized and validly issued
and are fully paid and non-assessable and the shares or other ownership
interests of such
5
Subsidiary are owned directly or indirectly by the Company and are held free and
clear of all Encumbrances, except those arising under the Credit Agreement or
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(i) The Shares have been duly authorized and, when issued, delivered
and paid for pursuant to and in accordance with the terms and conditions of this
Agreement, will be validly issued and fully paid and non-assessable, free and
clear of all Encumbrances; the Class A common stock of the Company conforms as
to legal matters in all material respects to the description thereof contained
in the Prospectus and the Placement Shares will conform as to legal matters in
all material respects to the description thereof contained in the Prospectus as
amended or supplemented. No preemptive rights of stockholders exist with respect
to the issue and sale of the Shares, and no person has the right, contractual or
otherwise (other than those which have been waived or satisfied, if any), to
cause the Company to issue to it, or register pursuant to the Act, any shares of
capital stock or other securities or assets of the Company in connection with
the issuance or sale of the Placement Shares.
(j) Neither the Company nor any of its Subsidiaries has sustained since
the date of the latest audited financial statements included in its most recent
Annual Report on Form 10-K (and after the date hereof included or incorporated
by reference in the Prospectus) any material loss or interference with the
business of the Company and its Subsidiaries, taken as a whole, including
without limitation, from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree; subsequent to the respective dates as of which
information is given in the Prospectus; neither the Company nor any of its
Subsidiaries has incurred any liabilities or obligations, direct or contingent,
or entered into any transactions, not in the ordinary course of business, that
are material to the Company and its Subsidiaries taken as a whole; and since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus there has not been any material change, on a
consolidated basis, in the authorized capital stock of the Company and its
Subsidiaries, any material increase in the short-term debt or long-term debt of
the Company and its Subsidiaries, on a consolidated basis, or any Material
Adverse Effect, or any development reasonably likely to cause a Material Adverse
Effect.
(k) Except as set forth in the Prospectus, there is no claim,
litigation or administrative proceeding or inquiry pending, or, to the Company's
knowledge, threatened against the Company or any of its Subsidiaries, or, to the
Company's knowledge, against any officer, director or employee of the Company or
any such Subsidiary in connection with such person's employment therewith that
if determined adversely to the Company or any of its Subsidiaries would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to or
subject to the provisions of, any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality which could reasonably be
expected to have a Material Adverse Effect.
(l) This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
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(m) Neither the Company nor any of its Subsidiaries is in violation of
any provisions of its charter, bylaws or any other governing document as amended
and in effect on and as of the date hereof, or in default (and no event has
occurred which, with notice or lapse of time or both, would constitute a
default) under any material indenture, mortgage, deed of trust, loan or credit
agreement or any provision of any instrument or contract to which it is a party
or by which it is bound which default would reasonably be expected to have a
Material Adverse Effect.
(n) The execution and delivery of this Agreement and the issuance and
sale of the Shares and the compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions contemplated herein
will not result in (i) a breach or violation of any of the terms and provisions
of, or constitute a default under, any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound or to which any of the
property of the Company or any of its Subsidiaries is subject or (ii) a
violation of the Company's charter or by-laws, or any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its Subsidiaries or any of its properties. Neither
the Company nor any of its Subsidiaries or affiliates, nor any person acting on
its or their behalf, has issued or sold any shares of Class A Common Stock or
securities or instruments convertible into, exchangeable for and/or otherwise
entitling the holder thereof to acquire shares of Class A Common Stock which
would be integrated with the offer and sale of the Shares hereunder, including,
without limitation, for purposes of any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated.
(o) The Company and its Subsidiaries possess, or can acquire on
reasonable terms, such licenses, permits, consents, orders, certificates or
authorizations issued by the appropriate federal, state, foreign or local
regulatory agencies or bodies necessary to conduct their business as described
in the Prospectus except for licenses, permits, consents, orders, certificates,
authorizations, approvals, franchises or rights, the absence of which,
individually or in the aggregate, would not have a Material Adverse Effect; the
Company and its Subsidiaries have not received any notice of proceedings or
investigations relating to the revocation or modification of any such licenses,
permits, consents, orders, certificates, authorizations, approvals, franchises
or rights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect. No consent,
approval, authorization or order of, or filing with, any court or governmental
agency or body is required for the issue and sale of the Shares and the
consummation by the Company of the transactions contemplated by this Agreement,
except the filing with the Commission of the Registration Statement (including
the Prospectus) and amendments and supplements to the Registration Statement and
Prospectus related to the issue and sale of the Shares and such consents,
approvals, authorizations, registrations or qualifications as have already been
obtained or made or as may be required under state securities or Blue Sky laws.
(p) Other than as set forth in the Prospectus, to the best of the
Company's knowledge, the Company and its Subsidiaries carry, or are covered by,
insurance in such amounts and covering
7
such risks as is prudent, reasonable and customary for companies engaged in
similar businesses in similar industries.
(q) The Company is not in violation of any federal, state, foreign or
local law or regulation relating to the storage, handling, disposal, release or
transportation of hazardous or toxic materials except for such violations or
noncompliance which, individually or in the aggregate, would not have a Material
Adverse Effect.
(r) KPMG LLP, which has audited the financial statements of the Company
and its Subsidiaries included in the Prospectus, is an independent public
accountant as required by the Act and the Rules and Regulations.
(s) No forward looking statement within the meaning of Section 27A of
the Act and Section 21E of the Exchange Act contained in the Commission
Documents or Registration Statement has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(t) The Company and each of its Subsidiaries own or possess sufficient
legal rights to all patents, trademarks, service marks, tradenames, copyrights,
trade secrets, licenses, information and proprietary rights and processes
necessary for their respective businesses as now conducted (collectively, the
"Company Intellectual Property Rights"). Neither the Company nor any of its
Subsidiaries has infringed or has received any written communications alleging
that the Company or any of its Subsidiaries has violated or, by conducting its
business, would violate any of the patents, trademarks, service marks,
tradenames, copyrights, trade secrets or other proprietary rights or processes
of any other person or entity, with such exceptions as would not reasonably be
expected to have a Material Adverse Effect. The Company has taken all reasonable
steps necessary to secure interests in such Company Intellectual Property Rights
from its contractors, with such exceptions as would not reasonably be expected
to have a Material Adverse Effect. There are no material outstanding options,
licenses or agreements of any kind relating to the Company Intellectual Property
Rights that are required to be described in the Prospectus and are not
described. The Company is not a party to or bound by any material options,
licenses or agreements with respect to the Intellectual Property of any other
person or entity that are required to be set forth in the Prospectus and are not
described. None of the technology employed by the Company has been obtained or
is being used by the Company in violation of any contractual obligation binding
on the Company or, to the knowledge of the Company, any of its officers,
directors or employees or otherwise in violation of the rights of any persons or
entities, with such exceptions as would not reasonably be expected to have a
material adverse effect on the Company and the Subsidiaries, taken as a whole.
To the knowledge of the Company, all Company Intellectual Property Rights are
enforceable and there is no existing infringement by any person of such Company
Intellectual Property Rights, with such exceptions as would not reasonably be
expected to have a Material Adverse Effect.
(u) The Company and the Subsidiaries validly hold licenses issued by
the Federal Communications Commission ("FCC") for each of the radio stations
owned or operated by the Company and the Subsidiaries (the "Owned Station
Licenses"). With respect to each station to which programming or sales marketing
services are provided by the Company or the
8
Subsidiaries, but which are not owned by the Company and the Subsidiaries, to
the Company's knowledge, the parties (each, a "Third Party Licensee") with which
the Company and the Subsidiaries have entered into such programming or marketing
arrangements validly hold the licenses issued by the FCC (the "Programmed
Station Licenses") for such stations. Except as set forth in the Prospectus, and
except for matters which would not reasonably be expected to result in a
material adverse change in the earnings, business, management, properties,
assets, rights, operations, financial condition or prospects of the Company and
the Subsidiaries taken as a whole, there is not pending or threatened against
the Company or the Subsidiaries, any application, action, petition, objection or
other pleading, or any proceeding (each, an "Action") before any governmental or
judicial authority, including, without limitation, the FCC, which questions or
contests the validity of, or seeks the revocation, non-renewal or suspension of,
or which seeks an involuntary adverse modification of, any of the Owned Station
Licenses or the Programmed Station Licenses. To the Company's knowledge, and
except for matters which would not reasonably be expected to result in a
material adverse change in the earnings, business, management, properties,
assets, rights, operations, financial condition or prospects of the Company and
the Subsidiaries taken as a whole, there is not pending or threatened against
any Third Party Licensee any Action before any governmental or judicial
authority, including, without limitation, the FCC, which questions or contests
the validity of, or seeks the revocation, non-renewal or suspension of, or which
seeks an involuntary adverse modification of, any of the Programmed Station
Licenses. Except as set forth in the Prospectus, and except for matters which
would not reasonably be expected to result in a material adverse change in the
earnings, business, management, properties, assets, rights, operations,
financial conditions or prospects of the Company and the Subsidiaries taken as a
whole, there is not pending or threatened against the Company or the
Subsidiaries or, to the Company's knowledge, any Third Party Licensee, any
Action before any governmental or judicial authority, including without
limitation the FCC, which could cause the Company or the Subsidiaries to be
ineligible to hold any of the Owned Station Licenses or provide programming or
sales marketing services to any Third Party Licensee. Except as set forth in the
Prospectus, the Company and the Subsidiaries and, to the Company's knowledge,
the Third Party Licensees, have submitted to the FCC all material documents,
applications, fees and other payments and reports required pursuant to the
Communications Act of 1934, as amended, and the rules, regulations and policies
of the FCC and are in material compliance therewith with respect to the
ownership and operation of the Owned Station Licenses and the Programmed Station
Licenses, as the case may be, and the provision of programming or sales
marketing services by the Company and the Subsidiaries to the Third Party
Licensees. The Company and Subsidiaries, and, to the Company's knowledge, the
Third Party Licensees, possess adequate certificates, authorizations, consents,
orders, approvals, licenses or permits which are in full force and effect issued
by appropriate governmental agencies or bodies other than the FCC necessary to
the ownership of their respective properties and the conduct of the businesses
now operated by them and have not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority, consent,
order, approval, license or permit.
(v) [On each Settlement Date and each Filing Date (as defined in
paragraph 7(m) below), the Company shall be deemed to have confirmed (i) the
accuracy and completeness, as of such date, of each representation and warranty
made by it in this Agreement, as if each such
9
representation and warranty were made on and as of such date, and (ii) that the
Company has complied with all of the agreements to be performed by it hereunder
at or prior to such date.]
(w) The Company is not a party to any agreement with an agent or
underwriter for any other "at-the-market" or continuous equity transaction.
(x) The Company acknowledges that CF&Co has informed the Company that
CF&Co may, to the extent permitted under the Act and the Exchange Act, purchase
and sell shares of Class A Common Stock for its own account while this Agreement
is in effect provided that (i) no such purchase or sales shall take place while
a Placement Notice is in effect (except to the extent CF&Co. may engage in sales
of Placement Shares purchased or deemed purchased from the Company as a
"riskless principal" or in a similar capacity), (ii) in no circumstances shall
CF&Co have a short position in the Class A Common Stock and (iii) the Company
shall not be deemed to have authorized or consented to any such purchases or
sales by CF&Co.
7. Covenants of the Company. The Company covenants and agrees with CF&Co
that:
(a) After the date of this Agreement, with regard to the filing of the
Registration Statement with the Commission, and until such Registration
Statement is declared effective, and during the period in which a prospectus
relating to the Shares is required to be delivered by CF&Co under the Act, the
Company will notify CF&Co promptly of the time when any subsequent amendment to
the Registration Statement has been filed with the Commission and has become
effective or any subsequent supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional information; it will
prepare and file with the Commission, promptly upon CF&Co's reasonable request,
any amendments or supplements to the Registration Statement or Prospectus that
may be necessary or advisable in connection with the distribution of the Shares
by CF&Co (provided, however that the failure of CF&Co to make such request shall
not relieve the Company of any obligation or liability hereunder, or affect
CF&Co's right to rely on the representations and warranties made by the Company
in this Agreement); the Company will not file any amendment or supplement to the
Registration Statement or Prospectus unless a copy thereof has been submitted to
CF&Co a reasonable period of time before the filing and CF&Co has not reasonably
objected thereto (provided, however that the failure of CF&Co to make such
objection shall not relieve the Company of any obligation or liability
hereunder, or affect CF&Co's right to rely on the representations and warranties
made by the Company in this Agreement); and the Company will cause each
amendment or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to the Exchange
Act, within the time period prescribed.
(b) The Company will advise CF&Co, promptly after it receives notice or
obtains knowledge thereof, of the issuance or threatened issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and it will promptly use its commercially reasonable
efforts to
10
prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(c) Within the time during which a prospectus relating to the Shares is
required to be delivered by CF&Co under the Act, the Company will comply with
all requirements imposed upon it by the Act and by the Rules and Regulations, as
from time to time in force, and will file on or before their respective due
dates all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Sections 13(a), 13(c),
14, 15(d) or any other provision of or under the Exchange Act. If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Act, the Company will promptly notify CF&Co to suspend the
offering of Shares during such period until such time as the Company has amended
or supplemented the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance,
or has notified CF&Co that the event or circumstances that gave rise to such
suspension is no longer applicable.
(d) The Company will use its best efforts to cause the Shares to be
listed, subject to notice of issuance, on the Nasdaq National Market will
cooperate with CF&Co in endeavoring and to qualify the Shares for sale under the
securities laws of such jurisdictions as CF&Co designates and to continue such
qualifications in effect so long as required for the distribution of the Shares;
provided that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(e) The Company will furnish to CF&Co and its counsel (at the expense
of the Company) copies of the Registration Statement, the Prospectus (including
all documents incorporated by reference therein) and all amendments and
supplements to the Registration Statement or Prospectus that are filed with the
Commission during the period in which a prospectus relating to the Shares is
required to be delivered under the Act (including all documents filed with the
Commission during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in such quantities
as CF&Co may from time to time reasonably request and, at CF&Co's request, will
also furnish copies of the Prospectus to each exchange or market on which sales
of Shares may be made.
(f) The Company will furnish to CF&Co for a period of one year from the
date of the termination or expiration of this Agreement such information as
reasonably requested by CF&Co regarding the Company or its Subsidiaries.
(g) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company's current fiscal quarter, an earnings statement covering a
12-month period that satisfies the provisions of Section 11(a) of the Act and
Rule 158 of the Rules and Regulations.
11
(h) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses incident
to the performance of its obligations hereunder, including, but not limited to,
expenses relating to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of each
Prospectus and of each amendment and supplement thereto, (ii) the preparation,
issuance and delivery of the Shares, (iii) the fees and disbursements of the
Company's counsel and accountants and the reasonable fees and expenses of
CF&Co's counsel in connection with negotiating this agreement and performing its
obligations hereunder, (iv) the qualification of the Shares under securities
laws in accordance with the provisions of Section 7(d) of this Agreement,
including filing fees and any reasonable fees or disbursements of counsel for
CF&Co in connection therewith, (v) the printing and delivery to CF&Co of copies
of the Prospectus and any amendments or supplements thereto, and of this
Agreement, (vi) the fees and expenses incurred in connection with the listing or
qualification of the Shares for trading on the Nasdaq National Market, or (vii)
filing fees and expenses, if any, of the Commission and the National Association
of Securities Dealers, Inc. Corporate Finance Department. Except as provided in
clauses (iii) and (iv) above, CF&Co shall be responsible for bearing all costs
and expenses (including costs and expenses of its legal counsel) incurred by
CF&Co in connection with entering into this Agreement and in connection with the
transactions contemplated hereunder.
(i) The Company will use the Net Proceeds as described in the
Prospectus and, in any case, shall not use such proceeds to make a loan to any
employee, officer, director or stockholder of the Company, to repay any loan or
other obligation of the Company to any such person or to repurchase or pay a
dividend on shares of Class A Common Stock of the Company (in any such case,
regardless of whether such loan or payment was authorized by the Company's Board
of Directors prior to the date hereof).
(j) Without the written consent of CF&Co, which consent shall not
unreasonably be withheld the Company will not, directly or indirectly, offer to
sell, sell, contract to sell, grant any option to sell or otherwise dispose of
any shares of Class A Common Stock (other than the Shares offered pursuant to
the provisions of this Agreement) or securities convertible into or exchangeable
for Class A Common Stock, warrants or any rights to purchase or acquire, Class A
Common Stock during the period beginning on the fifth (5th) Trading Day
immediately prior to the date on which any Acceptance of a Placement Notice is
delivered to CF&Co hereunder and ending on the fifth (5th) Trading Day
immediately following the final Settlement Date with respect to Shares sold
pursuant to such Placement Notice; and will not directly or indirectly in any
other "at the market" or continuous equity transaction offer to sell, sell,
contract to sell, grant any option to sell or otherwise dispose of any shares of
Class A Common Stock (other than the Shares offered pursuant to the provisions
of this Agreement) or securities convertible into or exchangeable for Class A
Common Stock, warrants or any rights to purchase or acquire, Class A Common
Stock prior to the sixtieth (60th) day immediately following the final
Settlement Date with respect to Shares sold pursuant to such Placement Notice;
provided, however, that such restrictions will not be required in connection
with the Company's issuance or sale of (i) Class A Common Stock, options to
purchase shares of Class A Common Stock or Class A Common Stock issuable upon
the exercise of options, pursuant to any employee or director stock option or
benefits plan, stock ownership plan or dividend reinvestment plan (but not
shares subject to a waiver to exceed plan limits in its stock purchase plan) of
the Company now in effect, and (ii)
12
Class A Common Stock issuable upon conversion of securities or the exercise of
warrants, options or other rights in effect or outstanding, and (iii) Class A
Common Stock, or others thereof, made in connection with acquisitions.
(k) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise CF&Co. immediately after it shall have
received notice or obtain knowledge thereof, of any information or fact that
would alter or affect any opinion, certificate, letter or other document
provided to CF&Co pursuant to this Agreement.
(l) The Company will cooperate with any reasonable due diligence review
conducted by CF&Co or its agents, including, without limitation, providing
information and making available documents and senior corporate officers, as
CF&Co may reasonably request; provided, however, that the Company shall be
required to make available documents and senior corporate officers only (i) at
the Company's principal offices and (ii) during the Company's ordinary business
hours.
(m) The Company agrees that on such dates as the Rules and Regulations
shall require, the Company will (i) file a prospectus supplement with the
Commission under the applicable paragraph of Rule 424(b) under the Act (each and
every filing under Rule 424(b), a "Filing Date"), which prospectus supplement
will set forth, within the relevant period, the amount of Shares sold through
CF&Co, the Net Proceeds to the Company and the compensation payable by the
Company to CF&Co and (ii) deliver such number of copies of each such prospectus
supplement to each exchange or market on which such sales were effected as may
be required by the rules or regulations of such exchange or market.
(n) [On each Filing Date and each time that (i) the Registration
Statement shall be amended or the Prospectus supplemented (other than a
supplement filed pursuant Rule 424(b) under the Act that contains solely the
information confirmed to the Company by CF&Co pursuant to paragraph (m) above)
or (ii) there is filed with the Commission any document incorporated by
reference into the Prospectus,] [to be discussed] the Company shall furnish or
cause to be furnished to CF&Co forthwith a certificate dated the date of filing
with the Commission of such supplement, or other document, or the date of the
effectiveness of the Registration Statement or such amendment, as the case may
be, in the form attached hereto as Exhibit 8(h) to the effect that the
representations and warranties made by the Company in this Agreement are true
and correct on such date as though made at and as of such date (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) and that the Company has
complied with all of the agreements to be performed by it at or prior to such
date.
(o) [On each time after the date of this Agreement that (i) the
Registration Statement is amended or the Prospectus supplemented (other than a
supplement filed pursuant Rule 424(b) under the Act that contains solely the
information confirmed to the Company by CF&Co pursuant to paragraph (m) above)
or (ii) there is filed with the Commission any document incorporated by
reference into the Prospectus,] the Company shall furnish or cause to be
furnished forthwith to CF&Co and to counsel to CF&Co a written opinion of Xxxxx
Day, counsel to the Company ("Company Counsel") and [_____________], special
communications counsel
13
to the Company ("Special Counsel"), each dated [the date of effectiveness of the
Registration Statement or amendment], or the [date of filing] with the
Commission of such supplement or other document, as the case may be, in form and
substance satisfactory to CF&Co and its counsel, in substantially the forms
attached hereto as Exhibits 8(e)(1) and 8(f)(1) respectively (for the date of
effectiveness of the Registration Statement) and Exhibits 8(e)(2) and 8(f)(2)
respectively (for subsequent dates), but modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion.
(p) [On the date that the Registration Statement is declared effective
and each time that the Registration Statement is amended or the Prospectus
supplemented to include additional amended financial information or there is
filed with the Commission any document incorporated by reference into the
Prospectus which contains additional amended financial information,] the Company
shall cause its independent accountant forthwith to furnish CF&Co a letter (the
"Comfort Letters"), [dated the date of effectiveness of the Registration
Statement or such amendment], or the [date of filing] of such supplement or
other document with the Commission, as the case may be, in form and substance
satisfactory to CF&Co, (i) confirming that it is an independent public
accountant within the meaning of the Act and is in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of such date, the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings (the first such
letter, the "Initial Comfort Letter") and (iii) updating the Initial Comfort
Letter with any information which would have been included in the Initial
Comfort Letter had it been given on such date and modified as necessary to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.
(q) The Company will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or (ii)
sell, bid for, or purchase the Shares, or pay anyone any compensation for
soliciting purchases of the Shares other than CF&Co.
8. Conditions to CF&Co's Obligations. The obligations of CF&Co hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Company herein,
to the due performance by the Company of its obligations hereunder, to the
completion by CF&Co of a due diligence review satisfactory to CF&Co in its
reasonable judgment, and to the continuing satisfaction (or waiver by CF&Co in
its sole discretion) of the following additional conditions:
(a) The Registration Statement shall have become effective and shall be
available for the sale of (i) all Placement Shares issued pursuant to all prior
Placements and not yet sold by CF&Co and (ii) all Placement Shares contemplated
to be issued by the Placement Notice relating to such Placement.
14
(b) None of the following events shall have occurred and be continuing:
(i) receipt by the Company of any request for additional information from the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement, the response to which
would require any amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; (iv) the occurrence of any event that makes any statement made in
the Registration Statement or the Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and (v) the Company's reasonable determination that a post-effective amendment
to the Registration Statement would be appropriate.
(c) CF&Co shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in CF&Co's opinion is material, or omits to state
a fact that in CF&Co's opinion is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(d) Except as contemplated in the Prospectus, or disclosed in the
Company's reports filed with the Commission, there shall not have been any
material change, on a consolidated basis, in the authorized capital stock of the
Company and its Subsidiaries, or any Material Adverse Effect, or any development
that may reasonably be expected to cause a Material Adverse Effect, or a
downgrading in or withdrawal of the rating assigned to any of the Company's
securities by any rating organization or a public announcement by any rating
organization that it has under surveillance or review its rating of any of the
Company's securities, the effect of which, in the case of any such action by a
rating organization described above, in the sole judgment of CF&Co (without
relieving the Company of any obligation or liability it may otherwise have), is
so material as to make it impracticable or inadvisable to proceed with the
offering of the Placement Shares on the terms and in the manner contemplated in
the Prospectus.
(e) CF&Co shall have received the opinions of Company Counsel required
to be delivered pursuant Section 7(o) on or before the date on which such
delivery of such opinion is required pursuant to Section 7(o).
(f) CF&Co shall have received the opinions of Special Counsel required
to be delivered pursuant Section 7(o) on or before the date on which such
delivery of such opinion is required pursuant to Section 7(o).
15
(g) CF&Co shall have received the Comfort Letters required to be
delivered pursuant Section 7(p) on or before the date on which such delivery of
such opinion is required pursuant to Section 7(p).
(h) CF&Co shall have received the certificates required to be delivered
pursuant to Section 7(n) on or before the date on which delivery of such opinion
is required pursuant to Section 7(n).
(i) The Shares shall have been duly listed, subject to notice of
issuance, on the Nasdaq National Market, and trading in the Class A Common Stock
shall not have been suspended on such market.
(j) On each date on which the Company is required to deliver a
certificate pursuant to Section 7(n), the Company shall have furnished to CF&Co
such appropriate further information, certificates and documents as CF&Co may
reasonably request. All such certificates and documents will be in compliance
with the provisions hereof. The Company will furnish CF&Co with such conformed
copies of such certificates and documents as CF&Co shall reasonably request.
(k) There shall not have occurred any event that would permit CF&Co to
terminate this Agreement pursuant to Section 11(a).
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless CF&Co, the
directors, officers, partners, employees and agents of CF&Co and each person, if
any, who (i) controls CF&Co within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or (ii) is controlled by or is under common
control with CF&Co (a "CF&Co Affiliate") from and against any and all losses,
claims, liabilities, expenses and damages (including, but not limited to, any
and all investigative, legal and other expenses reasonably incurred in
connection with, and any and all amounts paid in settlement of, any action, suit
or proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise, or
any claim asserted), on demand, to which CF&Co, or any such person, may become
subject under the Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based, directly or
indirectly, on (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or in any application or other document executed by
or on behalf of the Company or based on written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Shares
under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading (in
the case of the Prospectus, not misleading in light of the circumstances under
which they were made); or (iii) any breach by any of the indemnifying parties of
any of their respective representations, warranties and agreements contained in
this Agreement or any Placement Notice provided that
16
this indemnity agreement shall not apply to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares pursuant to this
Agreement and is caused, directly or indirectly, by an untrue statement or
omission made in reliance on and in conformity with information relating to
CF&Co and furnished by CF&Co to the Company specifically for inclusion in any
document described in clause (a)(i) above. This indemnity agreement will be in
addition to any liability that the Company might otherwise have.
(b) CF&Co agrees to indemnify and hold harmless the Company and its
directors, officers, employees and agents, and each person, if any, who (i)
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act or (ii) is controlled by or is under common control with the
Company (a "Company Affiliate") against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendments thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information relating to CF&Co furnished to the Company by CF&Co specifically for
inclusion in any document described in clause (a)(i) above or any breach by
CF&Co of any representation, warranty or agreement contained in this Agreement
or any Placement Notice issued to the Company and which has been accepted by the
Company pursuant to this Agreement.
(c) Any party that proposes to assert the right to be indemnified under
this Section 9 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 9 and (ii) any liability
that it may have to any indemnified party under the foregoing provision of this
Section 9 unless, and only to the extent that, such omission results in the
forfeiture of or materially prejudices substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the
17
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. If it is
ultimately determined that this indemnified party is not entitled to
indemnification hereunder for such action, such indemnified party hereby
undertakes to repay the indemnifying party any and all fees and expenses paid by
the indemnifying party in defense of such action. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent. No indemnifying party shall, without the prior written consent
of each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 9 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 9(c), if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel for which it is entitled to reimbursement pursuant to
this Section 9(c), such indemnifying party agrees that it shall be liable for
any settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into, and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party, at least
five days prior to the date of such settlement, (1) reimburses such indemnified
party in accordance with such request for the amount of such fees and expenses
of counsel as the indemnifying party believes in good faith to be reasonable and
(2) provides written notice to the indemnified party that the indemnifying party
disputes in good faith the reasonableness of the unpaid balance of such fees and
expenses.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or CF&Co, the Company and
CF&Co will contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than CF&Co, such as persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and CF&Co may be subject in such
18
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and CF&Co on the other. The relative benefits
received by the Company on the one hand and CF&Co on the other hand shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
compensation (before deducting expenses) received by CF&Co from the sale of
Shares on behalf of the Company. If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and CF&Co, on the other, with
respect to the statements or omission which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or CF&Co, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and CF&Co agree that it would not be just and equitable if
contributions pursuant to this Section 9(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense, or
damage, or action in respect thereof, referred to above in this Section 9(d)
shall be deemed to include, for the purpose of this Section 9(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim to the extent consistent
with Section 9(c) hereof. Notwithstanding the foregoing provisions of this
Section 9(d), CF&Co shall not be required to contribute any amount in excess of
the commissions received by it under this Agreement and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9(d), any person who
controls a party to this Agreement within the meaning of the Act, and any
officers, directors, partners, employees or agents of CF&Co, will have the same
rights to contribution as that party, and each officer of the Company who signed
the Registration Statement will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 9(d), will notify any such party or parties from whom
contribution may be sought, but the omission to so notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 9(d) except to the extent that the
failure to so notify such other party materially prejudiced the defenses of the
party from whom contribution is sought. Except for a settlement entered into
pursuant to the last sentence of Section 9(c) hereof, no party will be liable
for contribution with respect to any action or claim settled without its written
consent if such consent is required pursuant to Section 9(c) hereof.
10. Representations and Agreements to Survive Delivery. All representations
and warranties of the Company herein or in certificates delivered pursuant
hereto shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of CF&Co, any
19
controlling persons, or the Company (or any of their respective officers,
directors or controlling persons) or (ii) delivery and acceptance of the Shares
and payment therefor.
11. Termination.
(a) CF&Co shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) any Material Adverse
Effect, or any development that has actually occurred and that is reasonably
expected to cause a Material Adverse Effect has occurred which, in the
reasonable judgment of CF&Co, may materially impair the investment quality of
the Shares, (ii) the Company shall have failed, refused or been unable, at or
prior to any Settlement Date, to perform any agreement on its part to be
performed hereunder, (iii) any other condition of CF&Co's obligations hereunder
is not fulfilled, (iv) any suspension or limitation of trading in the Shares or
in securities generally on the Nasdaq National Market shall have occurred, (v)
any banking moratorium shall have been declared by federal or New York
authorities or (vi) an outbreak or material escalation of major hostilities in
which the United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in the sole reasonable judgment of CF&Co, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Shares to be sold by CF&Co on behalf of the Company. Any such termination shall
be without liability of any party to any other party except that the provisions
of Section 7(f), 7(h), Section 9, Section 16 and Section 17 hereof shall remain
in full force and effect notwithstanding such termination. If CF&Co elects to
terminate this Agreement as provided in this Section, CF&Co shall provide the
required notice as specified herein.
(b) The Company shall have the right, by giving twenty (20) days'
notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 7(f), Section
7(h), Section 7(j), Section 9, Section 16 and Section 17 hereof shall remain in
full force and effect notwithstanding such termination.
(c) CF&Co shall have the right, by giving twenty (20) days' notice as
hereinafter specified to terminate this Agreement in its sole discretion. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 7(f), Section 7(h), Section 7(j), Section
9, Section 16 and Section 17 hereof shall remain in full force and effect
notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 11(a), (b) or (c) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 7(f), Section 7(h), Section
7(j), Section 9, Section 16 and Section 17 shall remain in full force and
effect.
(e) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by CF&Co or the Company, as the case may be. If
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such termination shall occur prior to the Settlement Date for any sale of
Placement Shares, such Placement Shares shall settle in accordance with the
provisions of this Agreement.
12. Notices. All notices or other communications required or permitted
to be given by any party to any other party pursuant to the terms of this
Agreement shall be in writing and if sent to CF&Co, shall be delivered to CF&Co
at Cantor Xxxxxxxxxx & Co., 000 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax
no. (000) 000-0000, Attention: Xxxx Xxxxxx, Managing Director, ITD-Investment
Banking, with a copy to Xxxxxxx Xxxxxx, General Counsel at the same address,
with a copy to Xxxxx Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX
00000, fax no. (000) 000-0000, Attention: Xxxxx X. Xxxxx; or if sent to the
Company, shall be delivered to Cumulus Media Inc., 0000 Xxxxxxxx Xxxx, Xxxxxxxx
00, Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, fax no. (000) 000-0000, Attention:
Chief Financial Officer, with a copy to Xxxxx Day, 3500 SunTrust Plaza, 000
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, fax no. (000) 000-0000,
Attention: Xxxx X. Xxxxxx. Each party to this Agreement may change such address
for notices by sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication shall be
deemed given (i) when delivered personally or by verifiable facsimile
transmission (with an original to follow) on or before 4:30 p.m., eastern time,
on a Business Day or, if such day is not a Business Day, on the next succeeding
Business Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this Agreement, "Business
Day" shall mean any day on which the Nasdaq National Market and commercial banks
in the city of New York are open for business.
13. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Company and CF&Co and their respective successors and
the affiliates, controlling persons, officers and directors referred to in
Section 9 hereof. References to any of the parties contained in this Agreement
shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither party
may assign its rights or obligations under this Agreement without the prior
written consent of the other party, provided, however, that CF&Co may assign its
rights and obligations hereunder to an affiliate of CF&Co without obtaining the
Company's consent.
14. Adjustments for Stock Splits. The parties acknowledge and agree
that all share related numbers contained in this Agreement (including, without
limitation, the Maximum Amount) shall be adjusted to take into account any stock
split, stock dividend or similar event effected with respect to the Shares.
15. Entire Agreement; Amendment; Severability. This Agreement
constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument
executed by the Company and CF&Co. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or
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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 impaired thereby.
16. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the principles of conflicts of laws. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof (certified or registered mail, return
receipt requested) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
17. Waiver of Jury Trial. The Company and CF&Co each hereby irrevocably
waives any right it may have to a trial by jury in respect of any claim based
upon or arising out of this agreement or any transaction contemplated hereby.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile transmission.
[SIGNATURE PAGE TO FOLLOW]
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If the foregoing correctly sets forth the understanding between the
Company and CF&Co, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and CF&Co.
Very truly yours,
CUMULUS MEDIA INC.
By:
---------------------------------
ACCEPTED as of the date
first-above written:
CANTOR XXXXXXXXXX & CO.
By:
---------------------------------
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