Exhibit 4.2
FORM OF STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement") is made as of November [ ],
2003 by and among Nexstar Broadcasting Group, Inc., a Delaware corporation (the
"Company"), ABRY Broadcast Partners II, L.P., a Delaware limited partnership
("ABRY II"), ABRY Broadcast Partners III, L.P., a Delaware limited partnership
("ABRY III", and collectively with ABRY II, "ABRY"), Banc of America Capital
Investors I, L.P., a Delaware limited partnership ("BACI"), Xxxxx X. Xxxx
("Xxxx") each of the executives signatory hereto, and certain holders of Old
Class B Shares (as defined below) signatory hereto.
WHEREAS, Nexstar Broadcasting Group, L.L.C., the Company's predecessor (the
"LLC"), ABRY, BACI, Sook and the other signatories thereto are parties to a
Fourth Amended and Restated Investors Agreement, dated as of August 7, 2001, as
amended (the "Investors Agreement");
WHEREAS, the Company intends to conduct an initial public offering prior to
which the LLC will merge with and into the Company;
WHEREAS, the LLC issued Class D-1 Interests to the Company for the benefit
of the holders of Old Class B Shares;
WHEREAS, the Investors Agreement granted holders of Class D-1 Interests
certain registration rights and the holder of Class D-1 Interests agreed to,
among other things, certain restrictions on the transfer of the Class D-1
Interests;
WHEREAS, the LLC and BACI are parties to a Registration Rights Agreement
dated as of August 7, 2001 (the "Registration Rights Agreement"); and
WHEREAS, the parties hereto desire to terminate the Investors Agreement,
the Securities Purchase Agreement and the Registration Rights Agreement and to
enter into with this Agreement in connection with (i) the merger of the LLC and
certain of its direct and indirect subsidiaries with and into the Company and
(ii) the Company's initial public offering.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Advice" has the meaning set forth in the last paragraph of Section 2.6
of this Agreement.
(b) "Affiliate" means with respect to any Person, any other Person
controlling, controlled by, or under common control with such first Person.
(c) "Agreement" has the meaning set forth in the first paragraph of this
Agreement.
(d) "BACI Registrable Securities" means the Shares and any other securities
issued or issuable with respect to the Class D-2 Interests of the LLC by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, in each case,
to the extent held by BACI upon consummation of the Initial Public Offering;
provided, however, that a security ceases to be a BACI Registrable Security when
it is no longer a Transfer Restricted Security.
(e) "Blue Sky" has the meaning set forth in Section 6(d).
(f) "Board" means, with respect to any Person other than an individual, the
board of directors or similar managing body of such Person.
(g) "Company" has the meaning set forth in the first paragraph of this
Agreement.
(h) "DTC" has the meaning set forth in Section 2.6(i) of this Agreement.
(i) "Effectiveness Date" has the meaning set forth in Section 2.1(a) of
this Agreement.
(j) "Effectiveness Period" has the meaning set forth in Section 2.1(a) of
this Agreement.
(k) "Exchange Act" has the meaning set forth in Section 2.6(a) of this
Agreement.
(l) "FCC" means the Federal Communications Commission.
(m) "Filing Date" has the meaning set forth in Section 2.1(a) of this
Agreement.
(n) "Holder" means any holder of a BACI Registrable Security.
(o) "Incidental Registration" has the meaning set forth in Section 2.2(a)
of this Agreement.
(p) "Inspectors" has the meaning set forth in Section 2.6(n) of this
Agreement.
(q) "Initial Public Offering" means the initial registered underwritten
public offering of the capital stock of the Company providing net proceeds to
the Company of at least $15 million.
(r) "Merger Effective Time" Means the occurrence of the Effective Time as
such term is defined in that certain Agreement of Merger adopted on
November [ ], 2003 by
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each of Nexstar Broadcasting Group, L.L.C. and Nexstar Finance Holdings II,
L.L.C., Nexstar Broadcasting Of Northeastern Pennsylvania, Inc., Nexstar
Broadcasting Of Joplin, Inc., Nexstar Broadcasting Of Erie, Inc., KBTV
Broadcasting Inc., KFDX Broadcasting Inc., Nexstar Broadcasting Of Rochester,
Inc., KTAB Broadcasting Inc., Erc Holdings, Inc., Nexstar Midwest Holdings,
Inc., Nexstar Broadcasting Of Champaign, Inc., Nexstar Broadcasting Of Peoria,
Inc., KMID Broadcasting Inc., KTAL Broadcasting Inc., Nexstar Alabama Holdings,
Inc., Nexstar Arkansas Holdings, Inc., and the Company.
(s) "NASD" has the meaning set forth in Section 2.7 of this Agreement.
(t) "Non-BACI Registrable Securities" the Shares and any other securities,
in each case held by Sook, any Executive, or ABRY immediately upon the
consummation of the Initial Public Offering, issued or issuable with respect to
the Shares by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization,; provided, however, that a security ceases to be a Registrable
Security when it is no longer a Transfer Restricted Security.
(u) "Old Class B Shares" means the shares of Class B Common Stock, par
value $0.01 per share, of the Company that are issued and outstanding prior to
the Merger Effective Time.
(v) "Person" means any individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
(w) "Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
(x) "Registrable Securities" means the BACI Registrable Securities, the
Non-BACI Registrable Securities, and the Shares distributed solely with respect
to the Class D-1 Interests of the LLC.; provided, however, that a security
ceases to be a Registrable Security when it is no longer a Transfer Restricted
Security.
(y) "Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
(z) "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith
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resulting in offers and sales by subsequent holders that are not affiliates of
an issuer of such securities being free of the registration and prospectus
delivery requirements of the Securities Act.
(aa) "SEC" means the Securities and Exchange Commission.
(bb) "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
(cc) "Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as August 7, 2001, by and between the Company and BACI, as
amended.
(dd) "Shareholder" means any holder of Shares who is subject to the terms
of this Agreement.
(ee) "Shares" means shares of the Company's Class A Common Stock, Class B
Common Stock and Class C Common Stock (each as defined in the Company's
certificate of incorporation).
(ff) "Subsidiaries" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of such Person or entity or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.
(gg) "Transfer" means sell, transfer, assign, pledge or otherwise dispose
of any interest in any Shares.
(hh) "Transfer Restricted Security" means a Share until such Share (i) has
been effectively registered under the Securities Act and disposed of in
accordance with a registration statement filed under the Securities Act covering
it or (ii) is distributed to the public pursuant to Rule 144 or (iii) may be
transferred without registration under the Securities Act pursuant to subsection
(k) of Rule 144.
(ii) "underwritten registration" or "underwritten offering" means a
registration under the Securities Act in which securities of the Company
(including, without limitation, Registrable Securities) are sold to an
underwriter for reoffering to the public.
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Section 2. Demand Registrations.
(a) Demand Registration Right.
(i) The Company covenants and agrees with (i) each Holder of BACI
Registrable Securities that if on or after 12 months following the consummation
of an Initial Public Offering, the Company receives a written request from
Holders of not less than a majority of the then outstanding BACI Registrable
Securities, and (ii) each Holder of Non-BACI Registrable Securities, that if on
or after 180 days following the consummation of an Initial Public Offering, the
Company receives a written request from Holders of not less than a majority of
the then outstanding BACI Registrable Securities or Non-BACI Registrable
Securities, as the case may be, then within sixty (60) days after receipt of
such notice (the 60th day after such notice, the "Filing Date") the Company
shall use its best efforts to file a Registration Statement and cause such
Registration Statement to become effective under the Securities Act at the
earliest possible date after such notice (such date, the "Effectiveness Date")
with respect to the offering and sale or other disposition of such BACI
Registrable Securities or Non-BACI Registrable Securities, as the case may be,
as such Holders desire to have covered by such Registration Statement. The
Company shall use its best efforts to continuously maintain the effectiveness of
such Registration Statement until the earlier of (i) 270 days after the
effective date of the Registration Statement or (ii) the consummation of the
distribution by the Holders of all of the Registrable Securities covered by such
Registration Statement (the "Effectiveness Period"). If such Registration is an
underwritten registration, and the managing underwriters thereof advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration (i) first, the Registrable Securities
pursuant to this Section 2.1 requested to be included in such registration and
(ii) second, other securities requested to be included in such registration pro
rata among the holders of such securities on the basis of the number of shares
owned by each such holder.
Notwithstanding anything in this Agreement to the contrary,
(1) the Company shall not be required pursuant to this Section 2.1 to
effect more than (i) one registration pursuant to this Section 2.1 with
respect to the BACI Registrable Securities and (ii) three registrations
pursuant to this Section 2.1 with respect to the Non-BACI Registrable
Securities that can not be registered by the Company on Form S-3 and (b)
one registration every six months with respect to Non-BACI Registrable
Securities which the Company can register on Form S-2 or Form S-3;
(2) if the intended method of distribution is an underwritten public
offering, the Company shall not be required to effect such registration
pursuant to this Section 2.1(a) unless such underwriting shall be conducted
on a "firm commitment" basis, and
(3) any Holder whose Registrable Securities were to be included in any
such registration, by written notice to the Company, may
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withdraw such request and, if upon receipt of such notice of the withdrawal
of such request the Holders that have not elected to withdraw do not hold,
in the aggregate, the requisite percentage of the Registrable Securities to
initiate a request under this Section 2.1(a), then the Company shall not
effect such registration and if the Holders of such Registrable Securities
reimburse the Company for the out-of-pocket costs of such registration,
such registration shall not be deemed effected for the purpose of clause
(1) above.
Each notice to the Company requesting registration to be effected shall set
forth (A) the number of Shares to be included; (B) the name of the Holders of
the Registrable Securities and the amount to be sold; and (C) the proposed
manner of sale. Within 10 (ten) days after receipt of such notice, the Company
shall notify each Holder of Registrable Securities who is not a party to the
written notice served on the Company (or the transferee(s) of such Holder) and
offer to them the opportunity to include their Registrable Securities in such
registration. A Registration Statement will not count as complying with the
terms hereof unless it is declared effective by the SEC and remains continuously
effective for the Effectiveness Period.
(b) Each Holder of Registrable Securities agrees, if requested by the
managing underwriter or underwriters in an underwritten offering of securities
of the Company, not to effect any public sale or distribution of Registrable
Securities or of securities of the Company of the same class as any securities
included in such Registration Statement, including a sale pursuant to Rule 144
under the Securities Act (except as part of such underwritten registration),
during the 10-day period prior to, and during the 180-day period beginning on,
the closing date of each underwritten offering made pursuant to such
Registration Statement, to the extent timely notified in writing by the Company
or the managing underwriter or underwriters and provided that such period is no
longer than the hold-back period agreed to by any other person in connection
with such registration.
(c) Notwithstanding the foregoing, (i) the Company's obligation to file a
Registration Statement pursuant to this Section 2.1 and (ii) following the date
on which a Registration Statement pursuant to this Section 2.1 first becomes
effective under the Securities Act, the effectiveness of such Registration
Statement may be suspended by the Company by prior written notice to the Holders
for a period not to exceed 90 days in any twelve month period if (x) an event
occurs and is continuing as a result of which the Registration Statement would,
in the reasonable good faith judgment of the Company (or its Board), contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading and (y)(1) the Company
(or its Board) reasonably determines in good faith that the disclosure of such
event at such time would have a material adverse effect on the business,
operations or prospects of the Company and its subsidiaries, taken as a whole,
or (2) the disclosure otherwise relates to a previously undisclosed pending
material business transaction, the disclosure of which would, in the reasonable
good faith judgment of the Company (or its Board), impede the Company's ability
to consummate such transaction.
Section 2.2 Incidental Registration.
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(a) If, at any time when Registrable Securities are outstanding, the
Company proposes to register any of its equity securities under the Securities
Act (other than a registration on Form S-4 or S-8 or any successor form
thereto), whether or not for sale for its own account, and the registration form
to be used therefor may be used for the registration of Registrable Securities,
it will each such time give prompt written notice to all Holders of Registrable
Securities of the Company's intention to do so and, upon the written request of
any such Holder to the Company made within 10 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Holder and the intended method of disposition thereof), the
Company will use its best efforts to effect the registration (an "Incidental
Registration") under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holders thereof.
(b) Subject to Section 2.2(c) of this Agreement, if an Incidental
Registration is an underwritten registration, and the managing underwriters
thereof advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of the offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell for its own account in such
registration, and (ii) second, the securities of the holders requesting such
registration and the Registrable Securities of Holders requested to be included
in such registration pursuant to this Section 2.2, pro rata among the holders of
such securities on the basis of the number of shares owned by each such holder,
and (iii) third, other securities requested to be included in such registration,
pro rata among the holders of such securities on the basis of the number of
shares owned by each such holder.
(c) Notwithstanding Section 2.2(b), if an Incidental Registration is an
underwritten secondary registration solely on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company will include
in such registration (i) first, the securities requested to be included therein
by the holders requesting such registration, the securities of all other holders
of securities effecting a demand registration in connection therewith and the
Registrable Securities of Holders requested to be included in such registration
pursuant to this Section 2.2, pro rata among the holders of such securities on
the basis of the number of shares owned by each such holder, and (ii) second,
other securities requested to be included in such registration, pro rata among
the holders of such securities on the basis of the number of shares owned by
each such holder.
Section 2.3 Supplements and Amendments. If a Registration Statement ceases to
be effective for any reason at any time during the period for which it is
required to be effective under this Agreement, the Company shall use its best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof and shall in connection therewith promptly supplement and
amend any such Registration Statement in a manner reasonably and in good faith
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, and the Company shall use its best efforts to cause any such
Registration Statement to be declared effective as soon as practicable after
such amendment or supplement and to keep such Registration Statement
continuously effective for a period equal to the period for which it is
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required to be effective under this Agreement less the aggregate number of days
during which any predecessor Registration Statement was previously effective.
The Company shall supplement and amend a Registration Statement if required by
the rules, regulations or instructions applicable to the applicable registration
form for such Registration Statement or, if required by the Securities Act or
the SEC.
Section 2.4 Restrictions on Public Sale by the Company and Others. The
Company agrees (i) that it shall not, and that it shall not cause or permit any
of its subsidiaries to, effect any public sale or distribution of any securities
of the same class as any of the Registrable Securities or any securities
convertible into or exchangeable or exercisable for such securities (or any
option or other right for such securities) (except for any securities issued to
officers, directors and/or employees of the Company or its subsidiaries pursuant
to options or agreements entered into with such officers, directors and/or
employees in connection with their employment or pursuant to the Company's stock
option, stock bonus and other stock plans and arrangements for officers,
directors and employees) during the 10-day period prior to, and during the
180-day period beginning on, the commencement of any underwritten offering of
Registrable Securities which has been scheduled prior to the Company or any of
its subsidiaries publicly announcing its intention to effect any such public
sale or distribution; (ii) that any agreement entered into after the date of
this Agreement pursuant to which the Company (or, if applicable, any subsidiary
of the Company) issues or agrees to issue any securities which have registration
rights shall contain (x) a provision under which the holders of such securities
agree, in the event of an underwritten offering of Registrable Securities, not
to effect any public sale or distribution of any securities of the same class as
any of the Registrable Securities (or any securities convertible into or
exchangeable or exercisable for any such securities), or any option or other
right for such securities, during the periods described in clause (i) of this
Section 2.4, in each case including a sale pursuant to Rule 144 under the
Securities Act (or any similar provision then in effect) and (y) a provision
that effects, upon notice given pursuant to Section 2.1 of this Agreement to the
Company that an underwritten offering of Registrable Securities is to be
undertaken, the lapse of any demand registration rights with respect to any
securities of the Company (or, if applicable, of any subsidiary of the Company)
until the expiration of 180 days after the date of the completion of any such
underwritten offering; and (iii) that the Company (and, if applicable, each
subsidiary of the Company) will not after the date hereof enter into any
agreement or contract wherein the exercise by any Holder of its right to an
Incidental Registration hereunder would result in a breach thereof or a default
thereunder or would otherwise conflict with any provision thereof.
Section 2.5 Underwritten Registrations. If any of the Registrable Securities
covered by a Registration Statement filed pursuant to Section 2.1 of this
Agreement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of not less than a majority of the Registrable
Securities covered by such Registration Statement and will be reasonably
acceptable to the Company. If the managing underwriter or underwriters advise
the Company and the Holders in writing that in the opinion of such underwriter
or underwriters the amount of Registrable Securities proposed to be sold in such
offering exceeds the amount of securities that can be sold in such offering,
there shall be included in such underwritten offering the amount of Registrable
Securities which in the opinion of such underwriter or underwriters can be sold,
and such amount shall be allocated pro rata among the Holders of Registrable
Securities on the basis
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of the number of Registrable Securities requested to be included by each such
Holder and all Holders. The Holders of Registrable Securities sold in any such
offering shall pay all underwriting discounts and commissions of the underwriter
or underwriters pro rata; provided, however, that this Section 2.5 shall not
relieve the Company of its obligations under Section 2.7 of this Agreement.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Holders of not less than a majority of the Registrable
Securities to be included in the Registration Statement and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
Section 2.6 Registration Procedures. In connection with any Registration
Statement required to be filed pursuant to Section 2.1 of this Agreement, the
Company shall effect such registration to permit the offering and sale of the
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:
(a) Prepare and file with the SEC as soon as practicable each such
Registration Statement and cause such Registration Statement to become effective
and remain effective as provided herein; provided, however, that before filing
any such Registration Statement or any Prospectus or any amendments or
supplements thereto (including documents that would be incorporated or deemed to
be incorporated therein by reference, including such documents filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that would be
incorporated therein by reference), the Company shall afford promptly to the
Holders of the Registrable Securities covered by such Registration Statement,
their counsel and the managing underwriter or underwriters, if any, an
opportunity to review copies of all such documents proposed to be filed a
reasonable time prior to the proposed filing thereof and the Company shall give
reasonable consideration in good faith to any comments of such Holders, counsel
and underwriters.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods prescribed
hereby; cause the related Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
in all material respects with the provisions of the Securities Act, the Exchange
Act and the rules and regulations of the SEC promulgated thereunder applicable
to it with respect to the disposition of all securities covered by such
Registration Statement as so amended or in such prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities, their counsel and the
managing underwriter or underwriters, if any, promptly, and confirm such notice
in writing, (i) when a Prospectus or any prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective (including in such
notice a written statement that any Holder may, upon
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request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and
schedules and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of such Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the initiation
or threatening of any proceedings for that purpose, (iii) if at any time when a
prospectus is required by the Securities Act to be delivered in connection with
sales of the Registrable Securities the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated by Section 2.6(m) of this Agreement, to the knowledge of the
Company, cease to be true and correct in any material respect, (iv) of the
receipt by the Company of any notification with respect to (A) the suspension of
the qualification or exemption from qualification of the Registration Statement
or any of the Registrable Securities covered thereby for offer or sale in any
jurisdiction, or (B) the initiation or threatening of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or
information becoming known to the Company that requires the making of any
changes in such Registration Statement, Prospectus or documents so that, in the
case of such Registration Statement, it will conform in all material respects
with the requirements of the Securities Act and 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 conform in all material respects
with the requirements of the Securities Act and 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 light of the
circumstances under which they were made, not misleading, and (vi) of the
Company's reasonable determination that a post-effective amendment to such
Registration Statement would be appropriate.
(d) Use every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities covered
thereby for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest practicable moment.
(e) If requested by the managing underwriter or underwriters, if any, or
the Holders of a majority of the Registrable Securities being sold in connection
with an underwriting offering, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as is reasonably
necessary to be included therein to comply with applicable law and (ii) make all
required filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment.
(f) Furnish to each Holder of Registrable Securities who so requests and to
counsel for the Holders of Registrable Securities and each managing underwriter,
if any, without charge, upon request, one conformed copy of the Registration
Statement and each post-effective amendment thereto, including financial
statements and schedules, and of all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (including exhibits
incorporated by reference).
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(g) Deliver to each Holder of Registrable Securities, their counsel and
each underwriter if any, without charge, as many copies of each Prospectus
(including each form of prospectus) and each amendment or supplement thereto as
such Holders may reasonably request but only for so long as the Company is
required to keep such registration statement effective; and, subject to the last
paragraph of this Section 2.6, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the Holders of
Registrable Securities and the underwriter or underwriters or agents, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Registrable Securities, cooperate with the
Holders of Registrable Securities, the underwriter or underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of, such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as may be required to permit the resale
thereof by the Holders of Registrable Securities, or as the managing underwriter
or underwriters reasonably request in writing; provided, however, that where
Registrable Securities are offered other than through an underwritten offering,
the Company agrees to cause its counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 2.6(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be effective hereunder and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
securities covered thereby; provided, however, that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) become subject to taxation in any jurisdiction where it is not then so
subject.
(i) Cooperate with the Holders of Registrable Securities and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends whatsoever and shall be in a
form eligible for deposit with The Depository Trust Company ("DTC"); and enable
such Registrable Securities to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
reasonably request at least two business days prior to any sale of Registrable
Securities in a firm commitment underwritten public offering.
(j) Use its reasonable best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be reasonably necessary to
enable the seller or sellers thereof or the underwriter or underwriters, if any,
to consummate the disposition of such Registrable Securities, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of the Registration Statement and the granting of such
approvals.
(k) Upon the occurrence of any event contemplated by Section 2.6(c)(v) or
2.6(c)(vi) of this Agreement, as promptly as practicable prepare a supplement or
post-effective
11
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and, subject to Section 2.6(a) hereof, file such with the SEC so
that, as thereafter delivered to the purchasers of Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and will otherwise comply with law.
(l) Prior to the effective date of a Registration Statement, (i) provide
the registrar for the Shares or such other Registrable Securities with printed
certificates for such securities in a form eligible for deposit with DTC and
(ii) provide a CUSIP number for such securities.
(m) Enter into an underwriting agreement in form, scope and substance as is
customary in underwritten offerings and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to
expedite or facilitate the registration or disposition of such Registrable
Securities in any underwritten offering to be made of the Registrable Securities
in accordance with this Agreement, and in such connection, (i) make such
representations and warranties to the underwriter or underwriters, with respect
to the business of the Company and the subsidiaries of the Company, and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (ii) obtain an opinion of
counsel to the Company (which counsel shall be Xxxxxxxx & Xxxxx LLP or another
counsel reasonable satisfactory to the managing underwriting or underwriters and
which opinion (in form, scope and substance) shall be reasonably satisfactory to
the managing underwriter or underwriters), addressed to the underwriter or
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings with respect to secondary distributions and such other
matters as may be reasonably requested by underwriters; (iii) use its reasonable
best efforts to obtain "cold comfort" letters and updates thereof (which letters
and updates shall be reasonably satisfactory in form, scope and substance to the
managing underwriter or underwriters) from the independent certified public
accountants of the Company (and, if applicable, the subsidiaries of the Company)
and, to the extent reasonably practicable, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement, addressed to each of the
underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 3 hereof (or such other provisions and
procedures acceptable to Holders of a majority of Registrable Securities covered
by such Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(n) Make available for inspection by a representative of the Holders of
Registrable Securities being sold, any underwriter participating in any such
disposition of
12
Registrable Securities, if any, and any attorney or accountant retained by such
representative of the Holders or underwriter (collectively, the "Inspectors"),
at the offices where normally kept, during reasonable business hours, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company and the subsidiaries of the Company, and cause the
officers, directors and employees of the Company and the subsidiaries of the
Company to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement; provided, however,
that any information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information, shall be
kept confidential by such Inspector and not used by such Inspector for any
purpose other than in connection with such Inspector's review of the
Registration Statement for such registration except to the extent (i) disclosure
of such information is required by court or administrative order, (ii)
disclosure of such information, is required by law, (iii) disclosure of such
information is in the written opinion of counsel for any such Inspector (a copy
of which is furnished to the Company), necessary or advisable in connection with
any action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Inspector and arising out of, based upon, relating to
or involving this Agreement or any of the transactions contemplated hereby or
arising hereunder, or (iv) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by such
Inspector; without limiting the foregoing, no such information shall be used by
such Inspector as the basis for any market transactions in securities of the
Company or the subsidiaries of the Company in violation of applicable law. Each
selling Holder of such Registrable Securities agrees that information obtained
by it as a result of such inspections shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the securities of the
Company or of any of its Affiliates unless and until such is made generally
available to the public. Each selling Holder of such Registrable Securities
further agrees that it will, upon learning that disclosure of such information
is sought in a court of competent jurisdiction, give prompt notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the information deemed confidential.
(o) Comply in all material respects with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earnings statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than forty-five (45) days after the end of any 12-month
period (or ninety (90) days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to an underwriter or to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to an
underwriter or to underwriters in such an offering, commencing on the first day
of the first fiscal quarter of the Company after the effective date of the
relevant Registration Statement, which statements shall cover said 12-month
periods.
(p) Use its reasonable best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed.
Each seller of Registrable Securities as to which any registration is being
effected agrees, as a condition to the registration obligations with respect to
such Holder provided herein, to furnish promptly to the Company such information
regarding such seller and the distribution of such
13
Registrable Securities as the Company may, from time to time, reasonably request
in writing to comply with the Securities Act and other applicable law. The
Company may exclude from such registration the Registrable Securities of any
seller who unreasonably fails to furnish such information within a reasonable
time after receiving such request. If the identity of a seller of Registrable
Securities is to be disclosed in the Registration Statement, such seller shall
be permitted to include all information regarding such seller as it shall
reasonably request.
Each Holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 2.6(c)(ii), 2.6(c)(iv), 2.6(c)(v) or
2.6(c)(vi) of this Agreement, such Holder will forthwith discontinue disposition
of such Registrable Securities covered by the Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 2.6(k), or until it is advised in
writing (the "Advice") by the Company that the use of the applicable prospectus
may be resumed, and has received copies of any amendments or supplements
thereto, and, if so directed by the Company, such Holder will either (i) deliver
to the Company, or (ii) destroy, all copies, other than permanent file copies,
then in such Holder's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the period of time for which a Registration
Statement is required hereunder to be effective shall be extended by the number
of days during such periods from and including the date of the giving of such
notice to and including the date when each seller of Registrable Securities
covered by such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 2.6(k) or (y) the
Advice.
Section 2.7 Registration Expenses. All fees and expenses incident to the
performance of or compliance with the provisions of Section 2 of this Agreement
by the Company shall be borne by the Company whether or not any Registration
Statement is filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with an underwritten
offering and (B) fees and expenses of compliance with state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the underwriter or underwriters in connection with Blue Sky qualifications of
the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
provided in Section 2.6(h)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with DTC and of printing prospectuses if the printing
of prospectuses is requested by the managing underwriter or underwriters, if
any, or, in respect of Registrable Securities, by the Holders of a majority of
Registrable Securities included in any Registration Statement), (iii) reasonable
fees and disbursements of all independent certified public accountants referred
to in Section 2.6(m)(iii) of this Agreement (including, without limitation, the
reasonable expenses of any special audit and "cold comfort" letters required by
or incident to such performance), (iv) the fees and expenses of any "qualified
independent underwriter" or other independent appraiser participating in an
offering pursuant to Schedule E to the By-laws of the NASD, (v) liability
insurance under the Securities Act, if the Company so desires such insurance,
(vi) fees and expenses of all attorneys, advisors, appraisers and other persons
retained by the Company or any subsidiary of the Company, (vii) internal
expenses of the Company and the subsidiaries of the Company (including, without
limitation, all salaries and
14
expenses of officers and employees of the Company and the subsidiaries of the
Company performing legal or accounting duties), (viii) the expense of any annual
audit and (ix) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, securities
sales agreements, indentures and any other documents necessary in order to
comply with this Agreement. Anything herein to the contrary notwithstanding, all
underwriting and brokerage discounts and commissions shall be paid by the
Holders of Registrable Securities.
In connection with any Registration Statement hereunder or any amendment
thereto, the Company shall reimburse the Holders of the Registrable Securities
being registered in such registration for the reasonable fees and disbursements
of not more than one counsel (together with appropriate local counsel) chosen by
the Holders of a majority of the Registrable Securities to be included in such
Registration Statement.
Section 2.8 Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner and, if
at any time the Company is not required to file such reports, it will, upon the
reasonable request of any Holder of Registrable Securities, make publicly
available other information so long as necessary to permit sales pursuant to
Rule 144 and Rule 144A under the Securities Act. The Company further covenants
that it will take such further action as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
and Rube 144A under the Securities Act, as such Rules may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such information requirements.
Section 3. Indemnification
Section 3.1 Indemnification by the Company. The Company agrees to indemnify
and hold harmless each Holder and each Person, if any, who controls any Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities, joint or several, to which such Holder or controlling Person may
become subject, under the Securities Act or otherwise, caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus or any amendment or supplement thereto
or any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Holder for any
legal or other expenses reasonably incurred by such Holder in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not be
liable insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information furnished in writing to the Company by any Holder expressly for
use therein; and provided further that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or
15
alleged omission in the Prospectus, if such untrue statement or alleged untrue
statement or omission or alleged omission is completely corrected in an
amendment or supplement to the Prospectus and the seller of Registrable
Securities thereafter fails to deliver such Prospectus as so amended or
supplemented prior to or concurrently with the sale of Registrable Securities to
the person asserting such loss, claim, damage, or liability after the Company
had furnished such seller with a sufficient number of copies of the same or if
the seller received written notice from the Company of the existence of such
untrue statement or alleged untrue statement or omission or alleged omission and
the seller continued to dispose of Registrable Securities prior to the time of
the receipt of either (A) an amended or supplemented Prospectus which completely
corrected such untrue statement or omission or (B) a notice from the Company
that the use of the existing Prospectus may be resumed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Holder or any Person controlling such Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act.
Section 3.2 Indemnification by Holder of Registrable Securities. Each Holder
agrees, severally and not jointly, to indemnify and hold harmless the Company,
the Company's directors, the Company's officers who sign the Registration
Statement and any person controlling the Company to the same extent as the
foregoing indemnity from the Company to each Holder set forth in Section 3.1,
but only with reference to, and in conformity with, information furnished in
writing by such Holder expressly for use in a Registration Statement, the
Prospectus or any preliminary prospectus, or any amendment or supplement thereto
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Company or any such director, officer or Person controlling the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act and shall survive the transfer of such securities by such
Holder. Notwithstanding anything to the contrary herein, no Holder shall be
required to pay any amount to meets its indemnity obligation hereunder in excess
of the amount of the total proceeds of the sale of such Holder's Registrable
Securities in the offering to which the indemnity claim relates.
Section 3.3 Conduct of Indemnification Proceeding. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to either Section
3.1 or Section 3.2, such Person (the "indemnified party") shall promptly notify
the Person against whom such indemnity may be sought (the "indemnifying party")
in writing; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than as provided above. In case any such proceeding is instituted
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to retain
counsel satisfactory to such indemnified party to defend against such proceeding
and shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and
16
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them or (iii) the indemnifying
party has not retained counsel to defend such proceeding, notwithstanding
anything to the contrary in this Section 3. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Holders of a majority of the
Registrable Securities included in such Registration Statement in the case of
parties indemnified pursuant to Section 3.1 and by the Company in the case of
parties indemnified pursuant to Section 3.2. All fees and expenses which an
indemnified party is entitled to receive from an indemnifying party under this
Section 3 shall be reimbursed as they are incurred. No indemnifying party shall,
without prior written consent of the indemnified party (which shall not be
unreasonably withheld or delayed), effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
Section 3.4 Contribution. If the indemnification provided for in Section 3.1
or Section 3.2 is unavailable as a matter of law to an indemnified party in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under either such Section, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, judgments or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and of the Holders of Registrable Securities
covered by the Registration Statement in question on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the Company, or by the
Holders of Registrable Securities covered by the Registration Statement in
question and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 3 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph of this Section 3.4 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 3, no Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by such Holder and
distributed to the public were offered to the public exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f)
17
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
Section 3.5 Other Indemnities. The obligations of the Company and of each of
the Holders under this Section 3 shall be in addition to any liability which the
Company or which any of the Holders may otherwise have.
Section 4. Legend. Each certificate evidencing Shares held by XXXX, Xxxx and
any Executive (to the extent the Shares are in certificated form) and each
certificate issued in exchange for or upon the Transfer of any such Shares shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER [ ], 2003
AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND
CERTAIN OF THE COMPANY'S SECURITY HOLDERS. A COPY OF SUCH
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY
THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
The legend set forth above shall be removed from the certificates
evidencing Shares (to the extent the Shares are in certificated form) which
cease to be subject to the terms of this Agreement.
Section 5. Investment Representations. Each of the Shareholders represents
and warrants (as to himself, herself or itself only) to the Company as follows:
(a) Such Shareholder is an "accredited investor" as that term is defined in
Regulation D as promulgated under the Securities Act.
(b) Such Shareholder has acquired solely for investment, for his own
account, and not with a view to resell or otherwise distribute such Shares. Such
Shareholder understands that such Shares will constitute "restricted securities"
within the meaning of Rule 144 as promulgated under the Securities Act, and as
such, such Shares may not be immediately resold or transferred by such
Shareholder. Such Shareholder understands and agrees that an appropriate
restrictive transfer legend will be placed on any instrument or certificate
representing the Shares.
(c) Such Shareholder covenants and agrees that the Company has made
available to him/her the opportunity to obtain information regarding the
business and financial condition of the Company and to evaluate the merits and
risks of his/her prospective investments in Shares. Such Shareholder
acknowledges that he/she has asked questions of ABRY Partners, Inc. and the
Company regarding the financial condition and prospects of the Company and other
matters related to the merits and risks of an investment in Shares and has been
provided detailed financial projections relating thereto, and he/she has
received satisfactory answers concerning such matters. Such Shareholder
acknowledges that the Company and/or its officers have made
18
available to him/her all documents and information that he/she has requested
relating to his prospective purchase of Shares.
(d) Such Shareholder acknowledges that the Shares have not been registered
(nor is registration contemplated) under the Securities Act or any applicable
state securities laws ("Blue Sky Laws"). Accordingly, such Shares must be held
indefinitely unless (y) they are subsequently registered under the Act and/or
the Blue Sky Laws or (z) in the opinion of legal counsel for the Company, a sale
or transfer may be made without registration thereunder.
Section 6. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
Section 7. Board of Directors.
(a) From and after the date hereof and until the provisions of this Section
7 cease to be effective, each of Sook and ABRY shall vote all of the voting
securities of the Company over which such party has voting control and shall
take all other necessary or desirable actions within such party's control, and
the Company shall take all necessary and desirable actions within its control
and shall cause each of its Subsidiaries to take all necessary and desirable
actions within its control, so that:
(i) the authorized number of directors on the Board of the Company shall
be established at nine (9) directors;
(ii) the following individuals shall be elected to the Board of the
Company:
(1) five (5) representatives (subject to adjustment pursuant to
Section 7(c) below) designated by ABRY; and
(2) Sook.
(iii) at all times, the composition of the board of directors of each of
the Company's direct and indirect Subsidiaries (a "Sub Board") shall be the same
as that of the Board;
(iv) the removal from the Board (with or without cause) of any
representative designated by ABRY pursuant to subparagraph (ii)(A) above shall
be at ABRY's written request, but only upon such written request and under no
other circumstances;
(v) if Sook ceases to be an employee of the Company and its Subsidiaries,
he shall be removed as a director promptly after his employment ceases; and
(vi) in the event that any representative designated by ABRY pursuant to
subparagraph (a)(ii)(1) above ceases to serve as a member of the Board during
his term of
19
office, the resulting vacancy on the Board shall be filled by a
representative designated by ABRY as provided hereunder.
(b) The Company shall pay the reasonable out-of-pocket expenses incurred by
each director in connection with attending the meetings of the Board, any Sub
Board and any committee thereof. In addition, the Company shall pay to each
Director a nominal fee for his or her service on the audit and compensation
committees of the Board. So long as any ABRY Director serves on the Board and
for five years thereafter, the Company shall maintain directors and officers
indemnity insurance coverage satisfactory to ABRY, and the Company's certificate
of incorporation and bylaws shall provide for indemnification and exculpation of
directors to the fullest extent permitted under applicable law.
(c) The rights of ABRY under this Section 7 shall terminate at such time as
ABRY and its Affiliates hold in the aggregate voting securities representing
less than 20% of the voting power of the Company held by such Persons on the
date hereof; provided, that if ABRY and its Affiliates hold in the aggregate
voting securities representing less than 25% (but greater than 20%) of the
voting power of the Company, ABRY shall only be entitled to designate three (3)
representatives of the Board of Directors, provided, further, that ABRY may
assign its right to designate directors hereunder to any Person or group of
affiliated Persons who acquire securities representing more than 25% of the
voting power of the Company held by ABRY as of the date hereof.
(d) If any party fails to designate a representative to fill a directorship
pursuant to the terms of this Section 7, the election of an individual to such
directorship shall be accomplished in accordance with the Company's bylaws and
applicable law.
Section 8. Effectiveness of this Agreement.
This Agreement shall de deemed effective and in full force and effect upon
the consummation of the Initial Public Offering (the "Effective Time").
Section 9. Termination of Investors Agreement, Securities Purchase
Agreement and Registration Rights Agreement.
The parties hereto hereby agree that, to the extent such party is a party
to or is entitled to the benefits of such agreement, immediately upon the
occurrence of the Effective Time, the Investors Agreement, the Securities
Purchase Agreement, and the Registration Rights Agreement shall be terminated
and shall have no further force or effect, provided, however, that the Investors
Agreement shall remain in full force and effect as between the Company and any
party thereto (including any assignee of a party thereto of securities subject
to the Investors Agreement) that is not a party to this Agreement, provided,
further, however, that the Investors Agreement shall be terminated and have no
further force and effect between the Company and any party thereto (including
any assignee of a party thereto of securities subject to the Investors
Agreement) that becomes a signatory to this Agreement after the date hereof.
Section 10. Transfer of Shares by ABRY. ABRY hereby agrees that prior to
the transfer of any Shares or other securities that result in ABRY having less
than a majority of the voting power of the Company, the Company and ABRY shall
have received any necessary consent from the Federal Communications Commission.
20
Section 11. Miscellaneous Amendment and Waiver. Except as otherwise
provided herein, any modification, amendment or waiver of any provision of this
Agreement will be effective against the Company and the Shareholders only if
such modification, amendment or waiver is approved in writing by the Company and
ABRY, any by any other party hereto but only to the extent such party is
adversely effected by such amendment. The failure of any party to enforce any of
the provisions of this Agreement will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
(a) 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 invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Entire Agreement. Except as otherwise expressly set forth herein,
this agreement and the other agreements referred to herein embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
(c) Successors and Assigns. Except as otherwise provided herein, this
Agreement will bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and any subsequent holders of Shares
subject to this Agreement and the respective successors and assigns of each of
them, so long as they hold Shares.
(d) Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
shall constitute one and the same agreement.
(e) Remedies. The parties hereto shall be entitled to enforce their
rights under this Agreement specifically to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto may in its sole discretion apply to any
court of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation of the provisions of this Agreement.
(f) Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, sent by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address indicated on
the schedules hereto and to any subsequent holder of Shares subject to this
Agreement at such address as is indicated in the Company's records, or at such
address or to the attention of such other Person as the recipient party has
specified by prior
21
written notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally, three days after deposit in the U.S. mail
and one day after deposit with a reputable overnight courier service.
(g) Governing Law. The Business Corporation Law of the State of
Delaware will govern all issues concerning the relative rights of the Company
and its shareholders. All other questions concerning the construction, validity
and interpretation of this Agreement will be governed by the internal law, and
not the law of conflicts, of the State of New York.
(h) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Additional Parties. With the Company's consent, any holder of
Shares may become a party to this Agreement, by executing a counterpart to this
Agreement whereby such holder of Shares agrees to be bound by the terms of this
Agreement.
* * * * *
22
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.
NEXSTAR BROADCASTING GROUP, INC.
By:
--------------------------------------
Name: Xxxxx Xxxx
Title: President and Chief Executive Officer
ABRY BROADCAST PARTNERS II, L.P.
By: ABRY Capital, L.P.
Its: General Partner
By: ABRY Holdings, LLC
Its: General Partner
By: ABRY Holdings Co.
Its: Sole Member
By:
---------------------------
Name:
--------------------------
Title:
---------------------------
ABRY BROADCAST PARTNERS III, L.P.
By: ABRY Equity Investors, L.P.
Its: General Partner
By: ABRY Holdings III, LLC
Its: General Partner
By: ABRY Holdings III Co.
Its: Sole Member
By:
---------------------------
Name:
-----------------------
Title:
---------------------------
------------------------------------
Xxxxx X. Xxxx
23
BANC OF AMERICA CAPITAL INVESTORS I, L.P.
By: BANCAMERICA CAPITAL
MANAGEMENT I, L.P., its general partner
By: BACM I GP, LLC, its general partner
By: _____________________
Name: Xxxxxx X. Xxxxxxxx III
Title: Managing Director
ABACUS MASTER FUND
By: ___________________________
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By: ___________________________
Name:
Title:
24
-------------------------------
G. Xxxxxx Xxxxxxxx
-------------------------------
Xxxxxxx Xxxxx
-------------------------------
Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxxx
-------------------------------
Xxxxxx Xxxxx
-------------------------------
Xxxxx Xxxxxxxx
25
EXISTING OTHER HOLDERS OF OLD CLASS B SHARES
-------------------------
Name:
Title
26
SCHEDULE OF ADDRESSES FOR NOTICE
1. NEXSTAR BROADCASTING GROUP, INC.
000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
with a copy (which will not constitute notice) to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
2. ABRY BROADCAST PARTNERS II, L.P.
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxxx
with a copy (which will not constitute notice) to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
3. ABRY BROADCAST PARTNERS III, L.P.
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxxx
with a copy (which will not constitute notice) to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
27
4. BancAmerica Capital Investors I, L.P.
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, III
Xxxx X. Xxxxx
with a copy (which shall not constitute notice) to:
Kennedy, Covington, Xxxxxxx & Xxxxxxx, L.L.P.
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: T. Xxxxxxx Xxxxxxxxxxx
5. Xxxxx X. Xxxx
c/o Nexstar Broadcasting Group, Inc.
000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
with a copy (which will not constitute notice) to:
[---------------]
6. [EXISTING HOLDERS OF OLD CLASS B SHARES]
7. G. Xxxxxx Xxxxxxxx
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxxxx
c/o Nexstar Broadcasting Group, Inc.
000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
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