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WARRANTHOLDERS' AGREEMENT
By and Among
Radio One, Inc.,
Radio One of Maryland, Inc.,
Radio One License, Inc.,
Radio One of Maryland License, Inc.
Xxxxxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxx,
Xxxxx X. Xxxxx, III
and
The New Investors and the
Original Investors as defined and set forth herein
and on the signature pages hereto
Dated as of June 6, 1995
This agreement is subject to an Intercreditor and Subordination Agreement
dated as of the date hereof among RADIO ONE, INC., the Subsidiaries of Radio
One, Inc. from time to time, the Subordinated Lenders (as defined therein),
the Lenders (as defined therein) and NationsBank of Texas, N.A., as Agent to
the Lenders (as defined therein) and individually as a Lender. By its
acceptance of this agreement, each party hereto agrees to be bound by the
provisions of such Intercreditor and Subordination Agreement to the same
extent that each Subordinated Lender is bound. In the event of any
inconsistency between the terms of this agreement and the terms of such
Intercreditor and Subordination Agreement, the terms of the Intercreditor
and Subordination Agreement shall govern and be controlling.
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TABLE OF CONTENTS
Page
ARTICLE I. REPRESENTATIONS AND WARRANTIES............................................................. 2
Section 1.01. Representations and Warranties of the Original Investors...............................2
Section 1.02. Representations and Warranties of the Management
Stockholders...........................................................................4
ARTICLE II. REGISTRATION RIGHTS.........................................................................6
Section 2.01. "Piggy-Back" Registration Rights.......................................................6
Section 2.02. Required Registration Rights...........................................................7
Section 2.03. Form S-3...............................................................................8
Section 2.04. Registrable Securities.................................................................9
Section 2.05. Further Obligations of the Company.....................................................9
Section 2.06. Indemnification; Contribution.........................................................10
Section 2.07. Rule 144 Requirements.................................................................12
Section 2.08. Market Stand-Off......................................................................12
Section 2.09. Transfer of Registration Rights.......................................................12
ARTICLE III. MANAGEMENT STOCKHOLDER AND INVESTOR
COVENANTS..................................................................................12
Section 3.01. Prohibited and Permitted Transfers; Definitions.......................................13
Section 3.02. Right of First Refusal................................................................14
Section 3.03. Right of Participation in Sales.......................................................15
ARTICLE IV. RIGHT TO PARTICIPATE IN SALES BY COMPANY OF
ADDITIONAL SECURITIES......................................................................17
Section 4.01. Offer to Investors....................................................................17
Section 4.02. Sale to Offeror.......................................................................18
Section 4.03. Right to Participate Inapplicable.....................................................18
ARTICLE V. PUT AND CALL RIGHTS........................................................................18
Section 5.01. Investors' Put Right..................................................................18
Section 5.02. Company Call Right....................................................................19
Section 5.03. Put/Call Price........................................................................19
Section 5.04. Put/Call Closing......................................................................21
ARTICLE VI. INVESTORS GO-ALONG RIGHT...................................................................21
ARTICLE VII. SPECIAL COVENANTS..........................................................................23
(i)
ARTICLE VIII. ELECTION OF DIRECTORS OF THE COMPANY.......................................................24
8.01. Election of Directors of the Company and the Subsidiaries.............................24
8.02. Vacancies.............................................................................25
ARTICLE IX. MISCELLANEOUS PROVISIONS...................................................................25
Section 9.01. Survival of Representations and Covenants; No Third Party
Beneficiaries.........................................................................25
Section 9.02. Indemnification.......................................................................25
Section 9.03. Amendment and Waiver..................................................................27
Section 9.04. Intercreditor Matters.................................................................27
Section 9.05. Notices...............................................................................29
Section 9.06. Headings..............................................................................29
Section 9.07. Gender................................................................................29
Section 9.08. Counterparts..........................................................................29
Section 9.09. Remedies; Severability................................................................29
Section 9.10. Entire Agreement......................................................................29
Section 9.11. Government Law; Jurisdiction; Venue...................................................30
Section 9.12. Term..................................................................................30
SCHEDULES
Schedule A New Investors
Schedule B Original Investors
Schedule 1.02(a) Capital Stock Held By Management Stockholders
Schedule 1.02(c) Claims
EXHIBITS
Exhibit A Form of Promissory Note for ROFR Notes
Exhibit B Form of Irrevocable Proxy
(ii)
WARRANTHOLDERS' AGREEMENT
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This Warrantholders' Agreement is made as of this 6th day of June,
1995, by and among Radio One, Inc., a District of Columbia corporation (the
"Company"), Radio One of Maryland, Inc., a Delaware corporation, Radio One
License, Inc., a District of Columbia corporation, Radio One of Maryland
License, Inc., a District of Columbia corporation (collectively, the
"Subsidiaries"), Xxxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxx,
III (collectively, the "Management Stockholders"), the investors listed on
Schedule A hereto (the "New Investors"), and the additional investors listed
on Schedule B hereto (the "Original Investors") (the New Investors and the
Original Investors being referred to herein collectively as the "Investors"
and individually as an "Investor," and the Investors and the Management
Stockholders being referred to herein collectively as the "Securityholders"
and individually as a "Securityholder").
The capitalized terms used herein which are defined in the Securities
Purchase Agreement and not otherwise defined herein shall have the meanings
set forth in the Securities Purchase Agreement (the "Securities Purchase
Agreement"), dated as of June 6, 1995, by and among the Company, the
Subsidiaries and the Securityholders.
W I T N E S S E T H
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WHEREAS, reference is made to the Securities Purchase Agreement,
whereby the Investors will, subject to the terms and conditions set forth in
the Securities Purchase Agreement, acquire an aggregate principal amount of
$17,000,000 of Subordinated Promissory Notes of the Company (the "Notes")
and the New Investors will acquire warrants (the "New Warrants") to purchase
an aggregate of up to 17.84% of the fully-diluted Common Equity (as defined
in the Securities Purchase Agreement) of the Company;
WHEREAS, reference is made to the Exchange Agreement, dated as of June
6, 1995, by and among the Company and the Original Investors, pursuant to
which the Original Investors will exchange their outstanding warrants (the
"Old Warrants") to purchase 50.39% of the Common Stock on a fully-diluted
basis for new warrants (the "Exchange Warrants," and together with the New
Warrants, the "Warrants") to purchase an aggregate of up to 33.66% of the
fully diluted Common Equity and $6,251,094 in cash, subject to the terms and
conditions set forth in the Exchange Agreement;
WHEREAS, the effectiveness of this Agreement is a condition to the
consummation of the Securities Purchase Agreement and the Exchange
Agreement; and
WHEREAS, the parties hereto desire to provide for the orderly
management of the Company and the Subsidiaries and the ownership of
outstanding securities of the Company and the Subsidiaries following the
closing of the transactions contemplated hereby.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I. REPRESENTATIONS AND WARRANTIES
Section l.01. Representations and Warranties of the Original Investors. Each
Original Investor hereby makes the following representations and warranties
and covenants to the Company and each New Investor:
(a) Such Original Investor, by reason of its business and financial
experience, has such knowledge, sophistication and experience in business
and financial matters as to be capable of evaluating the merits and risks of
its investment in the Notes and Warrants, and is purchasing the Notes and
Warrants being acquired by it for its own account, for investment only and
not with a view to, or any present intention of, distributing or reselling
such securities or any part thereof. Each of the Original Investors
acknowledges that its respective Notes and Warrants have not been registered
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), or the securities laws of any
state or other jurisdiction and cannot be disposed of unless they are
subsequently registered under the Securities Act and any applicable state
laws or an exemption from such registration is available.
(b) Such Original Investor has full authority and power under its governing
charter or comparable document to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by or on
behalf of such Original Investor pursuant to or as contemplated by this
Agreement and to carry out the transactions contemplated hereby and thereby.
This Agreement and each agreement, document and instrument to be executed
and delivered by such Original Investor pursuant to or as contemplated by
this Agreement constitute, or when executed and delivered by such Original
Investor will constitute, valid and binding obligations of such Original
Investor enforceable in accordance with their respective terms. The
execution, delivery and performance by such Original Investor of this
Agreement and each such agreement, document and instrument:
(i) do not and will not violate any laws, rules or regulations
of the United States or any state or other jurisdiction applicable to
such Original Investor, or require such Original Investor to obtain any
approval, consent or waiver of, or to make any filing with, any Person
that has not been obtained or made; and
(ii) do not and will not result in a breach of, constitute a
default under, accelerate any obligation under or give rise to a right
of termination of any indenture or loan or credit agreement or any
other agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination
or arbitration award to which such Original Investor, the Company or
any of the Subsidiaries is a party or by which the property of such
Original Investor, the Company or any of the Subsidiaries is bound or
affected, or result in the creation or imposition of any mortgage,
pledge, lien, security interest or other charge or encumbrance on any
of the assets or properties of such Original Investor or of the Company
or any of the Subsidiaries.
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(c) Such Original Investor hereby acknowledges that, except
for the Notes and Warrants issued pursuant to the Securities Purchase Agreement
and the Exchange Agreement and its rights under this Agreement, it has no claims
against the Company or the Subsidiaries and their respective affiliates and such
Original Investor hereby agrees on behalf of itself and its agents,
representatives, successors, and assigns to remise, release and forever
discharge the Company, the Subsidiaries, their respective affiliates, and the
present and future agents, representatives, heirs, successors and assigns of the
Company and the Subsidiaries of and from all actions, causes of action,
contributions, indemnities, apportionments, duties, debts, sums, sums of money,
suits, omissions, bonds, bond specialties, covenants, contracts, controversies,
restitutions, understandings, agreements, promises, commitments, damages,
responsibilities and any and all claims, demands, executions, liabilities and
accounts of whatsoever kind, nature or description, direct or indirect, oral or
written, known or unknown, matured or unmatured, suspected or unsuspected at the
present time, in law or in equity (including, without limitation, those in
contract or in tort or otherwise, or under the laws and regulations of the
United States or any state or other jurisdiction or public administrative board
or agency), and which may be based upon, result from, relate to or arise out of
the existing state of things, or matters arising prior to the date of execution
and delivery hereof, which such Original Investor ever had, now has or ever has
from time to time to the date hereof. Such Original Investor further represents
and agrees that the representations in this Section l.0l.(c) are freely and
voluntarily given by it without reliance on any inducements, promises or
representations which are not described herein and after the receipt of advice
from its legal counsel as to the meaning and consequences of such
representations and acknowledges its understanding of the terms contained herein
and the consequences thereof.
(d) Each Original Investor hereby acknowledges that it is a
sophisticated investor accustomed to making valuations of investments such as
the Old Warrants, the Exchange Warrants and the Notes and agrees that, in
entering into this Agreement, the Securities Purchase Agreement, the Exchange
Agreement and any other agreement contemplated hereby or thereby, each Original
Investor has relied upon its own valuation of the Old Warrants held, and
Exchange Warrants to be received, by such Original Investor and not upon a
valuation provided by the Company or any other party hereto. In this regard,
each Original Investor also acknowledges that (i) it has had complete
opportunity to ask such questions, and receive such information and material,
regarding the Company's business, assets, condition and prospects as it has
deemed relevant to its determination of the value of the Old Warrants, the
Exchange Warrants and the Notes and (ii) it has had an opportunity to consult
with its own counsel regarding the terms of the transactions contemplated hereby
and is not relying upon the Company, the New Investors or any of the respective
agents or affiliates with respect to the terms of such transactions, or the
impact of any statutes, regulations or policies applicable to it as a
Specialized Small Business Investment Company licensed by the Small Business
Administration under ss.30l(d) of the Small Business Investment Act of 1958, as
amended. Further, each Original Investor acknowledges that the terms of the
exchange of such Original Investor's Old Warrants for Exchange Warrants and (if
applicable) cash pursuant to the terms of the Exchange Agreement and the
purchase and sale of Notes pursuant to the Securities Purchase Agreement were
negotiated in arm's length transactions and that such Original Investor is aware
of the terms of each other Original
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Investor's exchange of Old Warrants for Exchange Warrants pursuant to the
Exchange Agreement and purchase of Notes pursuant to the Securities Purchase
Agreement.
(e) Each Original Investor hereby acknowledges that the
transactions contemplated hereby, by the Securities Purchase Agreement, by the
Exchange Agreement and by any other agreement contemplated hereby or thereby may
involve state, Federal or other tax implications, and that such implications may
not be the same for all of the Original Investors. In this regard, each Original
Investor also acknowledges that it has relied upon its own evaluation of such
tax implications or it has consulted its own tax adviser(s) regarding such tax
implications, and that such Original Investor has not relied upon the Company or
any other party hereto in evaluating such tax implications.
Section 1.02. Representations and Warranties of the Management
Stockholders. Each of Xxxxxxx and Xxxxxx hereby makes the following
representations, warranties and covenants to each Investor, and Xxxxx X. Xxxxx,
III hereby makes the following representations and warranties to the best of his
knowledge and covenants to each Investor:
(a) Such Management Stockholder owns beneficially and of
record the number of shares of, or options or warrants to purchase shares of,
capital stock ("Management Shares") of the Company and the subsidiaries set
forth opposite such Management Stockholder's name on Schedule 1.02(a) attached
hereto, free and clear of any and all liens, claims, options, charges,
encumbrances, rights or restrictions of any nature, except as contemplated by
the Loan Documents (as defined in both the Securities Purchase Agreement and the
Senior Loan Agreement).
(b) Such Management Stockholder has full authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Management
Stockholder pursuant to or as contemplated by this Agreement and to carry out
the transactions contemplated hereby and thereby. This Agreement and each
agreement, document and instrument to be executed and delivered by such
Management Stockholder pursuant to or as contemplated by this Agreement
constitute, or when executed and delivered by such Management Stockholder will
constitute, valid and binding obligations of such Management Stockholder
enforceable in accordance with their respective terms. The execution, delivery
and performance by such Management Stockholder of this Agreement and each such
agreement, document and instrument:
(i) do not and will not violate any laws, rules or regulations
of the United States or any state or other jurisdiction applicable to
such Management Stockholder, which such violation could reasonably be
expected to have a material adverse effect on the assets, prospects,
business or financial condition of the Management Stockholders, the
Company or the Subsidiaries, or require such Management Stockholder to
obtain any approval, consent or waiver of, or to make any filing with,
any Person that has not been obtained or made, except where the failure
to make any such filing or obtain any such consent or approval could
not reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated by this Agreement or on
the assets, prospects, business or
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financial condition of the Management Stockholders, the Company or the
Subsidiaries; and
(ii) do not and will not result in a material breach of, constitute a
default under, accelerate any material obligation under or give rise to a
right of termination of any indenture or loan or credit agreement or any
other agreement, contract, instrument, mortgage, lien, lease, permit,
authorization, order, writ, judgment, injunction, decree, determination or
arbitration award to which such Management Stockholder, the Company or any
of the Subsidiaries is a party or by which the property of such Management
Stockholder, the Company or any of the Subsidiaries is bound or affected, or
result in the creation or imposition of any mortgage, pledge, lien, security
interest or other charge or encumbrance on any of the assets or properties
of such Management Stockholder or of the Company or any of the Subsidiaries,
except for those under the Pledge Agreements (as defined in the Securities
Purchase Agreement and the Senior Loan Agreement, respectively).
(c) Such Management Stockholder hereby acknowledges that, except as
described on Schedule 1.02(c) hereof and except for the Management Shares and
its rights under this Agreement, it has no claims against the Company or the
Subsidiaries and their respective affiliates and such Management Stockholder
hereby agrees on behalf of itself and its agents, representatives, successors,
and assigns to remise, release and forever discharge the Company, the
Subsidiaries, their respective affiliates, and the present and future agents,
representatives, heirs, successors and assigns of the Company and the
Subsidiaries of and from all actions, causes of action, contributions,
indemnities, apportionments, duties, debts, sums, sums of money, suits,
omissions, bonds, bond specialties, covenants, contracts, controversies,
restitutions, understandings, agreements, promises, commitments, damages,
responsibilities and any and all claims, demands, executions, liabilities and
accounts of whatsoever kind, nature or description, direct or indirect, oral or
written, known or unknown, matured or unmatured, suspected or unsuspected at the
present time, in law or in equity (including, without limitation, those in
contract or in tort or otherwise, or under the laws and regulations of the
United States or any state or other jurisdiction or public administrative board
or agency), and which may be based upon, result from, relate to or arise out of
the existing state of things, or matters arising prior to the date of execution
and delivery hereof, which such Management Stockholder ever had, now has or ever
has from time to time to the date hereof. Such Management Stockholder further
represents and agrees that the representations in this Section 1.02(c) are
freely and voluntarily given by it without reliance on any inducements, promises
or representations which are not herein andafter the receipt of advice from its
legal counsel as to the meaning and consequences of such representations and
acknowledges its understanding of the terms contained herein and the
consequences thereof.
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ARTICLE II. REGISTRATION RIGHTS
Section 2.01. "Piggy-Back" Registration Rights. If at any time or times
after the date hereof, the Company shall determine or be required to register
any shares of its Common Stock for sale under the Securities Act (whether in
connection with a public offering of securities by the Company (a "primary
offering"), a public offering of securities by stockholders of the Company (a
"secondary offering"), or both, but not in connection with a registration
effected solely to implement an employee benefit plan or a transaction to which
Rule 145 or any other similar rule of the Securities and Exchange Commission
(the "Commission") under the Securities Act is applicable, the Company will
promptly give written notice thereof to the Investors that hold Registrable
Securities or Non-Voting Common Stock at that time. In connection with any such
registration, if within 30 days after the receipt of such notice, one or more
Investors request the inclusion of some or all of the Registrable Securities
(but not any other shares) held by them in such registration, the Company will
use its best efforts to effect the registration under the Securities Act of all
Registrable Securities which such Investors request to be registered. In the
case of the registration of shares of Common Stock by the Company in connection
with an underwritten public offering, (i) the Company shall not be required to
include any Registrable Securities in such underwriting which are held by an
Investor that does not accept the terms of the underwriting as reasonably agreed
upon between the Company and the managing underwriter(s) for such offering, and
(ii) if the managing underwriter(s) reasonably determine(s) in writing that
marketing factors require a limitation on the number of Registrable Securities
to be offered, the Company shall not be required to register Registrable
Securities in excess of the amount, if any, of shares of capital stock which the
managing underwriter(s) for such offering shall reasonably and in good faith
agree to include in such offering in excess of any amount to be registered for
the Company; provided, however, that: (a) any Common Stock or other securities
of the Company held by any persons other than the Investors shall be the first
securities to be so excluded from such offering; (b) other than with respect to
the initial public offering of the Company, the Registrable Securities to be
registered in such offering may not be reduced below the lesser of (i) the
aggregate amount which the Investors have requested to register in such
offering; or (ii) an amount representing 30% of the aggregate number of shares
to be registered in such offering; and (b) in the event that the aggregate
amount of Registrable Securities that the Investors have requested to be
registered hereunder exceeds the amount which may be registered hereunder, each
Investor shall be entitled to register up to the lesser of (i) the amount of
Registrable Securities for which it requested registration; or (ii) its pro rata
share of the Registrable Securities which may be registered hereunder (based
upon the number of Warrants or Registrable Securities issued upon exercise of
the Warrants held by each Investor). All expenses relating to the registration
and offering of Registrable Securities pursuant to this-Section 2.01 (including
the reasonable fees and expenses of not more than one independent counsel for
the Investors) shall be borne by the Company, except that the Investors shall
bear underwriting and selling commissions attributable to their Registrable
Securities being registered and any transfer taxes on shares being sold by such
Investors. Without in any way limiting the types of registrations to which this
Section 2.01 shall apply, in the event that the Company shall effect a "shelf
registration" under Rule 415 promulgated under the Securities Act, or any other
similar rule or regulation ("Rule 415") (other than a
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shelf registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable), the Company shall take all necessary action,
including, without limitation, the filing of post-effective amendments, to
permit the Investors to include their shares in such registration in accordance
with the terms of this Section 2.01.
Section 2.02. Required Registration Rights. If on any two (2) occasions
after the earlier of (a) 180 days after the initial public offering of the
Company and (b) the third anniversary of the date hereof, Investors holding at
least 66 2/3% in outstanding principal amount of the Notes (the "Initiating
Investors") notify the Company in writing that they intend to offer or cause to
be offered for public sale all or any portion of their Registrable Securities,
the Company shall immediately notify in writing all of the Investors that hold
Registrable Securities or Non-Voting Common Stock at that time of its receipt of
such notification from such Initiating Investors. Within 30 days after receipt
from the Company of the notification from the Initiating Investors, the Company
will either (i) elect to make a primary offering, in which case the rights of
such Investors shall be as set forth in Section 2.01 above (except that any
Common Stock or other securities to be issued by the Company in such offering
shall, in the event of any limitation in the amount of securities to be
registered, be excluded from such offering prior to any of the Registrable
Securities being so excluded), or (ii) use its best efforts to cause such of the
Registrable Securities as may be requested in a written notice delivered by any
Investors (including the Initiating Investors) to the Company within 30 days
after its receipt of the initial demand notice to be registered under the
Securities Act in accordance with the terms of this Section 2.02. If so
requested by the Initiating Investors, the Company shall take such steps as are
required to register the relevant Registrable Securities for sale on a delayed
or continuous basis under Rule 415, and to keep such registration effective for
180 days or until all of such Registrable Securities registered thereunder are
sold, whichever is shorter. All expenses of such registrations and offerings
(other than underwriting and selling commissions attributable to the Registrable
Securities) and the reasonable fees and expenses of not more than one
independent counsel for the Investors in connection with any registration
pursuant to this Section 2.02 shall be borne by the Company. The Company may
postpone the filing of any registration statement required under this Section
2.02 for a reasonable period of time, not to exceed 60 days during any
twelve-month period, if the Company has been advised by legal counsel that such
filing would require disclosure of a material impending transaction or other
matter and the Company determines reasonably in good faith that such disclosure
would have a material adverse effect on the Company. The Company shall not be
required to cause a registration statement requested pursuant to this Section
2.02 to become effective prior to 180 days following the effective date of a
registration statement initiated by the Company if the request for registration
has been received by the Company subsequent to the giving of written notice by
the Company, made in good faith, to the Investors to the effect that the Company
is commencing to prepare a Company-initiated registration statement (other than
a registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable); provided, however, that the Company shall use
its best efforts to achieve such effectiveness promptly following such 180-day
period if the request pursuant to this Section 2.02 has been made prior to the
expiration of such 18O-day period. Any registration effected pursuant to this
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Section 2.02 and so designated by the Investors shall be subject to this Section
2.02, regardless of the form in which such registration is effected. In the
event that the offering requested by the Investors shall be the initial public
offering of the Company's Common Stock, the closing of such initial public
offering and the transactions related thereto shall be conditioned upon the
Senior Debt being paid in full or the consent of the Senior Lender.
Section 2.03. Form S-3. If the Company becomes eligible to use Form S-3
under the Securities Act or a comparable successor form, the Company shall use
its best efforts to continue to qualify at all times for registration of its
capital stock on Form S-3 or such successor form. In addition to their rights
under Section 2.02 hereof, one or more of the Investors shall have the right to
request and have effected registrations of Registrable Securities on Form S-3 or
such successor form for a public offering of shares of Registrable Securities
having an aggregate proposed offering price of not less than $1,000,000 (such
requests shall be in writing and shall state the number of shares of Registrable
Securities to be disposed of and the intended method of disposition of such
shares by such Investors). The Company shall give notice to all of the Investors
that hold Registrable Securities or Non-Voting Common Stock at that time of the
receipt of a request for registration pursuant to this Section 2.03 and upon the
written request of any such Investor delivered to the Company within 30 days
after receipt from the Company, the Company shall use its best efforts to cause
such of the Registrable Securities as may be requested by any Investor to be
registered under the Securities Act on Form S-3 (or any successor form). If so
requested by Investors holding a majority in interest of the Registrable
Securities to be registered under this Section 2.03, the Company shall take such
steps as are required to register such Registrable Securities for sale on a
delayed or continuous basis under Rule 415, and to keep such registration
effective for 180 days or until all of such Registrable Securities registered
thereunder are sold, whichever is shorter. All expenses incurred in connection
with a registration requested pursuant to this Section 2.03 (other than
underwriting and selling commissions attributable to the Registrable Securities)
and the reasonable fees and expenses of not more than one independent counsel
for the Investors shall be borne by the Company. The Company may postpone the
filing of any registration statement required hereunder for a reasonable period
of time, not to exceed 60 days during any twelve-month period, if the Company
has been advised by legal counsel that such filing would require disclosure of a
material impending transaction or other matter and the Company determines
reasonably in good faith that such disclosure would have a material adverse
effect on the Company. The Company shall not be required to cause more than two
registration statements requested pursuant to this Section 2.03 to become
effective in any twelve-month period. The Company shall not be required to cause
a registration statement requested pursuant to this Section 2.03 to become
effective prior to 180 days following the effective date of a registration
statement initiated by the Company, if the request for registration has been
received by the Company subsequent to the giving of written notice by the
Company, made in good faith, to the Investors initiating a demand under this
Section 2.03 to the effect that the Company is commencing to prepare a
Company-initiated registration statement (other than a registration effected
solely to implement an employee benefit plan or a transaction to which Rule 145
or any other similar rule of the Commission under the Securities Act is
applicable); provided, however, that the Company shall use its best efforts to
achieve such effectiveness promptly
8
following such 180-day period if the request pursuant to this Section 2.03 has
been made prior to the expiration of such 180-day period.
Section 2.04. Registrable Securities. For the purposes of this Article
II, the term "Registrable Securities" shall mean (i) any shares of Common Stock
of the Company issued or issuable upon exercise of any of the Warrants or ROFR
Warrants (as defined in section 3.02(b) hereof), (ii) any Common Stock issued or
issuable with respect to any of the shares of Common Stock referred to in clause
(i) above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization, (iii) any shares of Common Stock issued or issuable upon
conversion of any shares of Non-Voting Common Stock held by the Investors, and
(iv) any shares of Common Stock issued or issuable upon conversion of shares of
Non-Voting Common Stock issued or issuable upon exercise of any of the Warrants.
In no event shall Non-Voting Common Stock be considered Registrable Securities
hereunder.
Section 2.05. Further obligations of the Companv. Whenever under the
preceding Sections of this Article II the Company is required hereunder to
register any Registrable Securities, it agrees that it shall also do the
following:
(a) Use its best efforts (with due regard to the management of
the ongoing business of the Company) to diligently prepare and file with the
Commission a registration statement and such amendments and supplements to said
registration statement and the prospectus used in connection therewith as may be
necessary to keep said registration statement effective and to comply with the
provisions of the Securities Act with respect to the sale of securities covered
by said registration statement for the lesser of: (i) 180 days or (ii) the
period necessary to complete the proposed public offering;
(b) Furnish to each selling Investor such copies of each
preliminary and final prospectus and such other documents as such Investor may
reasonably request to facilitate the public offering of its Registrable
Securities;
(c) Enter into any reasonable underwriting agreement required
by the proposed underwriter for the selling Investors, if any;
(d) Use its best efforts to register or qualify the
Registrable Securities covered by said registration statement under the
securities or "blue-sky" laws of such jurisdictions as any selling Investors may
reasonably request, provided that the Company shall not be required to register
or qualify the Registrable Securities in any jurisdictions which require it to
qualify to do business or subject itself to general service of process therein;
(e) Immediately notify each selling Investor, at any time when
a prospectus relating to its or his Registrable Securities is required to be
delivered under the Securities Act, of the happening of any event as a result of
which such prospectus contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein not misleading, and,
at the request of any such selling Investor, prepare a supplement
9
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading;
(f) Cause all such Registrable Securities to be listed on each
securities exchange or quoted in each quotation system on which similar
securities issued by the Company are then listed or quoted; and
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to each selling Investor, in each case as soon as practicable, but not later
than 45 days after the close of the period covered thereby (or 90 days in case
the period covered corresponds to a fiscal year of the Company), an earnings
statement of the Company which will satisfy the provisions of Section ll(a) of
the Securities Act.
Section 2.06. Indemnification: Contribution.
(a) Incident to any registration statement referred to in this
Article II, and subject to applicable law, the Company will, subject to the
terms of the Intercreditor and Subordination Agreement, indemnify and hold
harmless each underwriter, each Investor who holds any Registrable Securities
(including its respective directors or partners, officers, employees and agents)
so registered, and each person who controls any of them within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"), from and against any and all losses, claims, damages, expenses and
liabilities, joint or several (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
on (i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement (including any related preliminary or
definitive prospectus, or any amendment or supplement to such registration
statement or prospectus), (ii) any 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, or (iii) any violation by the Company of the
Securities Act, any state securities or "blue sky" laws or any rule or
regulation thereunder in connection with such registration, provided, however,
that the Company will not be liable to the extent that such loss, claim, damage,
expense or liability arises from and is based on an untrue statement or omission
or alleged untrue statement or omission made in reliance on and in conformity
with information furnished in writing to the Company by such underwriter,
Investor or controlling person expressly for use in such registration statement.
With respect to such untrue statement or omission or alleged untrue statement or
omission in the information furnished in writing to the Company by such Investor
expressly for use in such registration statement, such Investor will indemnify
and hold harmless each underwriter, the Company (including its directors,
officers, employees and agents), each other Investor
10
holding Registrable Securities (including its respective directors or partners,
officers, employees and agents) so registered, and each person who controls any
of them within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages, expenses
and liabilities, joint or several, to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise to the same extent
provided in the immediately preceding sentence. In no event, however, shall the
liability of an Investor for indemnification under this Section 2.06(a) exceed
the lesser of (i) that proportion of the total of such losses, claims, damages
or liabilities indemnified against equal to the proportion of the total
Registrable Securities sold under such registration statement which is being
sold by such Investor or (ii) the proceeds received by such Investor from its
sale of Registrable Securities under such registration statement.
(b) If the indemnification provided for in Section 2.06(a)
above for any reason is held by a court of competent jurisdiction to be
unavailable to an indemnified party in respect of any losses, claims, damages,
expenses or liabilities referred to therein, then each indemnifying party under
this Section 2.06, in lieu of indemnifying such indemnified party thereunder,
shall, subject to the terms of the Subordination Agreement, contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, expenses or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the other
selling Investors and the underwriters from the offering of the Registrable
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the other selling Investors and the underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
selling Investors and the underwriters shall be deemed to be in the same
respective proportions as the net proceeds from the offering (before deducting
expenses) received by the Company and the selling Investors and the underwriting
discount received by the underwriters, in each case as set forth in the table on
the cover page of the applicable prospectus, bear to the aggregate public
offering price of the Registrable Securities. The relative fault of the Company,
the selling Investors and the underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the selling Investors or the underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Investors, and the underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 2.06(b) were determined by pro rata or per
capita allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. In no event, however, shall an Investor be required to contribute any
amount under this Section 2.06(b) in excess of the lesser of (i) that proportion
of the total of such losses, claims, damages or liabilities indemnified against
equal to the proportion of the total Registrable Securities sold under such
registration statement which is being sold by such Investor or (ii) the proceeds
received by such Investor from its sale of Registrable Securities under such
registration statement. No
11
person found guilty of fraudulent misrepresentation (within the meaning of
Section 9(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(c) The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in this
Section 2.06 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. The
indemnification and contribution provided for in this Section 2.06 will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified parties or any director or partner, officer, employee, agent or
controlling person of the indemnified parties.
Section 2.07. Rule 144 Requirements. If the Company becomes subject to
the reporting requirements of either Section 13 or 15(d) of the Exchange Act,
the Company will use its best efforts to file with the Commission such
information as the Commission may require under either of said Sections; and in
such event, the Company shall use its best efforts to take all action as may be
required as a condition to the availability of Rule 144 under the Securities Act
(or any successor or similar exemptive rules hereafter in effect). The Company
shall furnish to any Investor upon request a written statement executed by the
Company as to the steps it has taken to comply with the current public
information requirement of Rule 144 or such successor rules.
Section 2.08. Market Stand-off. Each Investor and Management
Stockholder: (a) agrees, if requested by the Company and the managing
underwriter(s) for the Company's initial public offering or any offering in
which Registrable Securities are permitted to be included hereunder, not to sell
or otherwise transfer or dispose of any Registrable Securities held by it for up
to 180 days following the effective date of the registration statement relating
to such offering; and (b) acknowledges that the Company may impose stop transfer
restrictions on any such Registrable Securities held by such Investor or
Management Stockholder as a means of enforcing the provisions hereof regardless
of whether such Person executes a "lock-up" agreement reflecting the terms
hereof.
Section 2.09. Transfer of Registration Rights. The registration rights
and related obligations under this Article II of the Investors with respect to
their Registrable Securities may only be assigned to an affiliate or a
transferee of all of the Warrants and Registrable Securities held by the
transferring Investor and upon such transfer the relevant transferee shall be
deemed to be included within the definition of an "Investor" for purposes of
this Article II. Any transferring Investor shall notify the Company at the time
of such transfer.
ARTICLE III. MANAGEMENT STOCKHOLDER AND INVESTOR COVENANTS.
Until the Company shall successfully complete a Qualified Public
Offering (defined below), each of the Management Stockholders shall comply with
the covenants described in Sections 3.01, 3.02 and 3.03 and each of the
Investors shall comply with the covenants
12
described in Section 3.04 during the period that any of the Notes, Warrants or
Registrable Securities remain outstanding. The Company shall ensure that the
stock certificates held by the Management Stockholders and their Permitted
Transferees and the Warrant certificates and any stock certificates held by the
Investors (as defined below) are properly legended to reference these
restrictions on transfer. For purposes of this Agreement, a "Qualified Public
Offering" shall mean the closing of the first underwritten public offering
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of Common Stock to the public in which the proceeds
received by the Company, net of underwriting discounts and commissions, equal or
exceed $15,000,000 at a per share sale price to the public which reflects a
market capitalization of no less than $100 million on a fully-diluted basis.
Section 3.01. Prohibited and Permitted Transfers;Definitions.
(a) From and after the date hereof, none of the Management
Stockholders shall sell, assign, transfer, pledge, hypothecate, mortgage,
encumber or dispose of all or any of his or her Shares (as defined below) except
to the Senior Lender pursuant to the terms of the Loan Documents (as defined in
the Senior Loan Agreement) or in compliance with the terms of this Article III.
Notwithstanding the foregoing, Shares may be transferred without complying with
Section 3.02 and 3.03 hereof as set forth in the following clauses (individuals
receiving Shares from the Management Stockholders pursuant to any of the
following permitted transfers are collectively referred to as the "Permitted
Transferees"): (i) by way of gift to their respective spouses or to their
siblings or lineal descendants or ancestors or to any qualified trust under Code
Section 1361(c)(2) for the benefit of any one or more of the foregoing or to an
unleveraged partnership, limited liability company or corporation in which all
of the equity interests are beneficially owned by any one or more of the
foregoing; provided, that any such Permitted Transferee shall agree in writing
with the Investors, as a condition to such transfer, to be bound by all of the
provisions of this Agreement with respect to such Shares to the same extent as
the Management Stockholders and provided, further, that such transfers in the
aggregate represent less than 5% of the Shares held by the applicable Management
Stockholder; (ii) by any sale or disposition of Shares pursuant to a registered
public offering in which the Investors have rights to participate under Article
II hereof; (iii) any transfer, disposition, assignment, sale or hypothecation of
Management Shares pursuant to a merger or consolidation of the Company which is
permitted under the Securities Purchase Agreement; (iv) any transfer by will or
laws of descent upon the death of a Management Stockholder; provided, that any
such Permitted Transferee shall agree in writing with the Investors, as a
condition to such transfer, to be bound by all of the provisions of this
Agreement with respect to such Shares to the same extent as the Management
Stockholders; (v) by any sale or disposition of Shares in connection with the
exercise of the Senior Lender's remedies under the Senior Loan Agreement
(including sales or dispositions of the Shares to third parties or subsequent
sales by such third parties); or (vi) by any sale, disposition or other transfer
of Shares from Xxxxxx to Xxxxxxx, provided, that Xxxxxxx shall agree in writing
with the Investors as a condition to such transfer, to be bound by all of the
terms of this Agreement with respect to such Shares to the same extent as
Xxxxxx. Notwithstanding the foregoing, if the Company is required to continue to
qualify as an S corporation under the Securities Purchase Agreement, the
transferee (excluding however
13
transferees from the sale or disposition of the Shares pursuant to the rights of
the Senior Lender under the Senior Loan Agreement and the Subordination
Agreement) must be a permitted stockholder in an S corporation and the transfer
must not otherwise disqualify the Company as an S corporation under Code
Sections 1361 et seq.
(b) "Shares" shall mean and include: (i) with respect to the
Investors, all Warrants, ROFR Warrants, if any, and all shares of Registrable
Securities or Non-Voting Common Stock for which the Warrants and ROFR Warrants,
if any, are ultimately exercisable; and (ii) with respect to the Management
Stockholders (which term, for the purpose of this Article III shall be deemed to
include all Permitted Transferees of the Management Stockholders), all shares of
Common Stock and any option or other securities exercisable or convertible into
Common Stock and/or other capital stock of the Company now owned or hereafter
acquired by any of the Management Stockholders or their Permitted Transferees
and, in each case together with any securities acquired as a result of any
conversion, stock split, stock dividend, recapitalization or the like. For all
purposes of this Article III, options and other securities convertible into or
exchangeable for capital stock shall be deemed to be equivalent to the number of
shares of capital stock which they may be exercised for or converted into, as of
the applicable date, with appropriate adjustments to reflect applicable exercise
prices, if any.
Section 3.02. Right of First Refusal.
(a) If at any time any of the Management Stockholders desires
to sell or otherwise transfer all or any part of his or her Shares pursuant to a
bona fide offer from a third party (the "Proposed Transferee") such Management
Stockholders shall submit a written offer (the "offer") to sell such Shares (the
"offered Shares") to the Investors on terms and conditions, including price, not
less favorable than those on which such Management Stockholders proposed to sell
such offered Shares to the Proposed Transferee; provided, however, that the
Management Stockholder(s) shall not, so long as the Company is required to
qualify as an S corporation under the Securities Purchase Agreement, be
permitted to accept or entertain any offer from a Person that is not a permitted
stockholder of an S corporation or if the proposed transfer would otherwise
disqualify the Company as an S corporation for federal income tax purposes. The
offer shall be submitted to the Investors at least 45 days prior to the proposed
transfer and shall disclose the identity of the Proposed Transferee, the number
of offered Shares proposed to be sold, the total number of Shares owned by such
Management Stockholder(s), the terms and conditions, including price, of the
proposed sale, and any other material facts relating to the proposed sale. The
offer shall further state that the Investors may purchase all, but not less than
all, of the offered Shares for the price and upon the other terms and
conditions, including deferred payment (if applicable), set forth therein and
shall also advise the Investors of their co-sale rights pursuant to Section 3.03
hereof; each Investor who desires to purchase any of the offered Shares shall
communicate in writing its election to purchase to the applicable Management
Stockholder(s), which communication shall state the number of offered Shares
that such Investor desires to purchase, and shall be given within 30 days of the
date on which notice of the offer is given. In the event that the Investors
elect to purchase an aggregate number of offered Shares that is greater than the
number of offered Shares, then each Investor will be
14
deemed to have elected to purchase that number of offered Shares that is equal
to the total number of offered Shares multiplied by a fraction, the numerator of
which is the total number of offered Shares that such Investor elected to
purchase and the denominator of which is the total number of offered Shares that
all of the Investors electing to purchase offered Shares elected to purchase.
(b) Any communication of acceptance from the Investors shall,
when taken in conjunction with the offer and except as provided in Section
3.02(c) hereof, be deemed to constitute a valid, legally binding and enforceable
agreement for the sale and purchase of such offered Shares. Sales of the offered
Shares to be sold to the Investors shall be made at the offices of the Company
within 60 days after the offer was first made. Such sale shall be effected by
the applicable Management Stockholder's delivery of a certificate or
certificates evidencing the offered Shares to be sold, duly endorsed for
transfer against payment of the purchase price therefor; provided, however, that
if (i) the Company is a duly qualified Subchapter S corporation for federal
income tax purposes at the time of such transfer and (ii) Investors holding a
majority in outstanding principal amount of the Notes do not in writing
expressly allow such Subchapter S election to be terminated, the Management
Stockholder(s) shall endorse the certificate(s) evidencing the offered Shares to
the Company in exchange for (i) promissory notes in the form of Exhibit A hereof
and in a principal amount equal to the purchase price for the offered Shares
(the "ROFR Notes"), and (ii) warrants ("ROFR Warrants") exercisable for Common
Stock equal in amount to the number of offered Shares and having a per share
exercise price equal to the purchase price of the offered Shares, which such
ROFR Notes and ROFR Warrants, upon payment by the Investors to the applicable
Management Stockholder(s) of the purchase price therefor, shall then be
delivered to the Investors in lieu of the Offered Shares.
(c) If the Investors collectively do not elect to purchase all
of the Offered Shares, none of the Offered Shares shall be sold to or purchased
by the Investors, and the Offered Shares may be sold by the applicable
Management Stockholder(s) at any time within the 90-day period after the
expiration of all applicable periods referred to in Section 3.03(b) hereof. Any
such sale shall be to the Proposed Transferee(s), on terms and conditions,
including price, not more favorable to the Proposed Transferee(s) than those
specified in the offer and shall, in any event, be subject to Section 3.03
hereof. Any Offered Shares not sold within such 90-day period shall continue to
be subject to the requirements of this Section 3.02 and Section 3.03 hereof. If
offered Shares are sold pursuant to this Section 3.02 to any person who is not a
party to this Agreement, the offered Shares so sold shall no longer be subject
to the restrictions or benefits imposed by this Section 3.02.
Section 3.03. Right of Participation in Sales.
(a) If at any time any Management Stockholder(s) or his, her
or their Permitted Transferees desire to sell all or any part of the Shares
owned by them to any person other than to a Permitted Transferee or to the
Investors pursuant to Section 3.02 (such person or entity referred to herein as
a "Third Party Purchaser"), each Investor shall have the right to sell to the
Third Party Purchaser, as a condition to such sale by the applicable Management
Stockholder(s), at the same price per share and otherwise upon other terms and
15
conditions that are in the aggregate the same as involved in such sale by such
Management Stockholder(s), up to such Investor's Pro Rata Share (as defined
below) of the total number of Shares proposed to be sold by such Management
Stockholder(s) and/or his, her or their Permitted Transferees (subject to
subsection (b) below). For purposes of this Section 3.03, the term "Pro Rata
Share" shall mean the percentage of all Common Equity that the Shares held by an
Investor then represent on a fully-diluted basis.
(b) At the time of the initial notice described in Section
3.02(a) above, any transferring Management Stockholder(s) shall also provide
each Investor with a calculation as to the number of Shares that may be sold by
them to the Third Party Purchaser pursuant to this Section 3.03. Each Investor
wishing to participate in any sale under this Section 3.03 shall notify the
transferring Management Stockholder(s) in writing within 30 days after the
giving of the notice described in Section 3.02(a). Except as provided in Section
3.03(d) below, no Shares may be purchased by the Third Party Purchaser from the
transferring Management Stockholder(s) unless the Third Party Purchaser
simultaneously purchases from the Investors all Shares which they have elected
to sell pursuant to this Section 3.03, with the sales to such Third Party
Purchaser to be consummated not prior to the expiration of all notice periods
described in this Section 3.03(b) and (in the case of the transferring
Management Stockholder(s)) not after the expiration of the 90-day period
described in Section 3.02(c).
(c) Any Shares sold to a Third Party Purchaser pursuant to
this Section 3.03 shall no longer be subject to the restrictions or benefits
imposed by this Section 3.03.
(d) If the Investors do not hold securities of the type being
offered under this Section 3.03 by the transferring Management Stockholder(s),
(i) the Investor shall have the right to sell such portion of either their
Warrants, their ROFR Warrants and ROFR Notes as a unit and/or Non-Voting Common
Stock as is equivalent to the number of shares of Common Stock (or equivalent
securities) which the Investors would otherwise have been entitled to sell under
this Section 3.03 to the Third Party Purchaser (with appropriate adjustments to
reflect the exercise price of such Warrants or ROFR Warrants, as the case may
be).
Section 3.04. New Investor Tag-Along Right. In the event that any of
the New Investors receives or makes a bona fide offer upon specific terms and
conditions for the transfer of any Notes, Warrants and/or Shares (the "Co-Sale
Securities") held by it or him to a third party which is exempt from
registration under the Securities Act and which is not made in connection with
an offering subject to Article II hereof (a "Transaction offer"), the New
Investor may, subject to the terms of the Subordination Agreement, transfer such
Co-Sale Securities pursuant to and in accordance with the following provisions
of this Section 3.04.
(a) Such New Investor shall cause the Transaction Offer to be
reduced to writing and shall notify the other New Investors in writing of its
wish to accept or effect the Transaction Offer and otherwise comply with the
provisions of this Section 3.04.
16
(b) Each of the other New Investors shall have the right,
exercisable upon written notice to the selling New Investor within ten (10) days
after receipt of the notice referred to in clause (a) above, to participate in
the Transaction offer on the terms and conditions herein stated.
(c) Each of the other New Investors may sell all or any
portion of its applicable Co-Sale Securities as is equal to the product obtained
by multiplying (i) the aggregate amount of Co-Sale Securities covered by the
Transaction offer by (ii) a fraction, the numerator of which is the amount of
applicable Co-Sale Securities owned by such other New Investor and the
denominator of which is the amount of applicable Co-Sale Securities owned by all
of the New Investors.
(d) Each of the other New Investors may effect its
participation in any Transaction offer hereunder by delivery of title to the
relevant purchaser, or to the selling New Investor for transfer to the relevant
purchaser, of one or more certificates or promissory notes, as the case may be,
properly endorsed for transfer, representing the applicable Co-Sale Securities
it elects to sell therein; provided, however, that such relevant purchaser shall
not take possession of Co-Sale Securities which shall be subject to a Pledge
Agreement (as defined in the Senior Loan Agreement) until such Pledge Agreement
has been terminated or the Senior Lenders otherwise consent. At the time of
consummation of the Transaction offer, the relevant purchaser shall remit
directly to the other New Investors that portion of the sale proceeds to which
the other New Investors are entitled by reason of their participation therein.
ARTICLE IV. RIGHT TO PARTICIPATE IN SALES BY COMPANY OF ADDITIONAL
SECURITIES.
Section 4.01. Offer to Investors. The Company covenants and agrees that
it will not, except as contemplated by this Agreement or the Securities Purchase
Agreement, sell or issue any shares of capital stock of the Company or any
Subsidiary, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for capital stock of the Company or
any Subsidiary, or options, warrants or rights carrying any rights to purchase
capital stock or convertible or exchangeable securities of the Company or any
Subsidiary or any other equity interests in the Company or any Subsidiary, other
than in connection with an initial public offering of the Company's Common
Stock, unless (i) the Company shall have received a bona fide arm's-length offer
to purchase such stock, bonds, certificates of indebtedness, debentures,
securities, options, warrants, rights or other equity interests from a third
party, and (ii) the Company first submits a written offer to the Investors
identifying the third party to whom such stock, bonds, certificates of
indebtedness, debentures, securities, options, warrants, rights or other equity
interests are proposed to be sold and the terms of the proposed sale, and
offering to the Investors the opportunity to purchase their proportionate share
of such securities on terms and conditions, including price, not less favorable
to the Investors than those on which the Company proposes to sell such
securities to the third party. Each Investor shall have the right to purchase
its Pro Rata Share (as defined in Section 3.03(a)) of such securities. The
Company's offer to the
17
Investors shall remain open and irrevocable for a period of at least 45 days.
Any Investor may only transfer its right of participation under this Section
4.01 to a transferee of its Shares who (A) is an affiliate of such Investor
(including a partner of an Investor or a stockholder, partner or other investor
in such Investor which is an investment fund and who receives Investor Shares as
a distribution from such Investor) or (B) receives all of the Shares held by the
transferring Investor.
Section 4.02. Sale to Offeror. Any securities so offered to the
Investors which are not purchased pursuant to such offer may be sold by the
Company to the third party originally named in the offer to the Investors on
terms and conditions, including price, not more favorable to the third party
than those set forth in such offer at any time within 60 days following the date
of such offer, but may not be sold to any other person or after such 60-day
period without renewed compliance with this Article IV.
Section 4.03. Right to Participate Inapplicable. The right of
participation granted in this Article IV shall not apply to: (i) issuances of
options or Common Stock to employees of the Company which are permitted under
the Securities Purchase Agreement; (ii) the issuance of Registrable Securities
or Non-Voting Common Stock upon the exercise of any Warrants or ROFR Warrants
held by the Investors, the issuance of Common Stock upon any conversion of
Non-Voting Common Stock and the issuance of Non-Voting Common Stock upon any
conversion of Common Stock; (iii) issuances of securities in a registered public
offering; (iv) issuances of securities upon a stock split or stock dividend with
respect to the Common Equity; and (v) sales or transfers of any shares of
capital stock of the Company or any Subsidiary or options, warrants, rights or
other securities of the Company or any Subsidiary by the Senior Lender (or any
transferee, assignee or purchaser of or from the Senior Lender) pursuant to the
exercise of its remedies in connection with a foreclosure under the Loan
Documents (as defined in the Senior Loan Agreement).
ARTICLE V. PUT AND CALL RIGHTS.
Section 5.01. Investors' Put Right. Subject to the provisions of the
Subordination Agreement, Investors holding a majority in outstanding principal
amount of the Notes may elect, upon 120 days prior written notice, to require
the Company to purchase (subject to the provisions of the Subordination
Agreement) all outstanding Warrants, Registrable Securities, Non-Voting Common
Stock, ROFR Warrants and ROFR Notes held by all of the Investors (collectively,
"Put/Call Securities") pursuant to this Article V (the "Put") at any time on or
after (i) the payment in full or acceleration of the Notes, (ii) the merger or
consolidation of the Company (other than with a Subsidiary or as permitted under
the Securities Purchase Agreement), or (iii) the sale of all or substantially
all of the capital stock or assets of the Company or any Subsidiary (other than
to a Subsidiary or as permitted under the Securities Purchase Agreement). The
Company agrees to give the Investors at least 180 days' prior written notice of
any of the foregoing events. Each Investor may also elect to Put their Put/Call
securities to the Company on the Maturity Date upon 120 days prior written
notice to the Company. Investors whose Put/Call Securities are subject to a Put
hereunder shall be referred to as the "Put Investors." In connection with any
Put, all Put Investors shall be
18
obligated to sell their Put/Call Securities to the Company on the terms set
forth in this Article V and, upon tender by the Company of the applicable
Put/Call Price (as defined in Section 5.04)(subject to the terms of the
Subordination Agreement) to each Put Investor, such Put Investor's Put/Call
Securities shall be deemed to no longer be outstanding and such Put Investor's
only right shall be to receive the Put/Call Price in accordance with the terms
hereof; provided, however, that the failure of any Put Investor(s) to transfer
its or their Put/Call Securities in accordance with the terms of this Section
5.01 shall not relieve the Company of its obligation to purchase the Put/Call
Securities tendered by all other Put Investors hereunder.
Section 5.02. Company Call Right.
(a) Exercise of Call Right. At the election of the Company,
the Company may repurchase all, but not less than all, of the Put/Call
Securities then outstanding at any time after the Maturity Date (a "Call"), so
long as: (i) the Investors do not have outstanding a request for a demand
registration under Section 2.02 hereof; and (ii) the Senior Debt and the Notes
shall have been repaid in full, together with all accrued but unpaid interest
thereon, on or prior to the Put/Call Closing (as defined below). If the Company
elects to repurchase the Put/Call Securities, it shall give written notice of
such election at least 90 days prior to the Put/Call Closing and all Put/Call
Securities shall be repurchased on the Put/Call Closing date specified in the
Company's notice for an aggregate cash purchase price equal to the Put/Call
Price. Each Investor shall receive at the Put/Call Closing the Put/Call Price
for their Put/Call Securities, taking into account the exercise price of any
Warrants held by such Investor.
(b) Recapture. From and after the Put/Call Closing, unless
there shall have been a default in payment or tender by the Company of the
Put/Call Price, all rights of the holders with respect to such repurchased
Put/Call Securities (except the right to receive the Put/Call Price in
accordance with the terms hereof upon surrender of their certificates) shall
cease and such shares shall not thereafter be transferred on the books of the
Company or be deemed to be outstanding for any purpose whatsoever; provided,
however, that, with respect to this Section 5.02, each Investor shall, in the
event of an offering by the Company of equity securities or securities
convertible into or exchangeable for equity securities, a sale of all or any
substantial portion of the assets or outstanding capital stock of the Company or
any Subsidiary or a merger or consolidation of the Company or any Subsidiary
with or into another corporation or entity, in any such case occurring within
two years of the Put/Call Closing, be entitled upon the consummation of such
transaction to receive the excess of: (i) the consideration which such Investor
would have been entitled to receive on his, her or its Put/Call Securities had
they been outstanding on such date or, in the event of a securities offering,
been sold in such offering; over (ii) that portion of the Put/Call Price
previously received by such Investor.
Section 5.03. Put/Call Price. The purchase price for any Put/Call
Securities hereunder (the "Put/Call Price") shall be equal to the product of (x)
the number of Shares represented by such Put/Call Securities (with each unit of
ROFR Warrants and the corresponding principal amount of ROFR Notes constituting
one Share), multiplied by (y) the
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Per Share Net Equity Value of the Company reduced, in the case of the
Warrants and ROFR Warrants, by the per share exercise price therefor. The "Per
Share Net Equity Value" of the Company shall be the quotient of (a) the Net
Equity Value of the Company (as determined below) divided by (b) the total
number of outstanding shares of Common Equity (determined on a fully-diluted
basis and after giving effect to the exercise of any Warrants, ROFR Warrants or
other options for Common Equity and the conversion and exchange of any
securities convertible into or exchangeable for Common Equity). "Net Equity
Value" of the Company shall mean the aggregate of: (A) the fair market value of
the Company as determined below; plus (B) all accounts receivable, cash and cash
equivalents held by the Company as of the date of determination and the
aggregate exercise price of all outstanding Warrants, ROFR Warrants or options
for Common Equity; reduced by (C) the aggregate of all Indebtedness for borrowed
money and current liabilities of the Company required to be included on a
balance sheet in accordance with generally accepted accounting principles
(excluding the current maturities of Indebtedness). In connection with a Put or
Call occurring in connection with a sale or transfer to a third party of all or
substantially all of the Common Equity in, or the assets of, the Company and the
Subsidiaries, the fair market value of the Company shall be the aggregate amount
of consideration paid to the Company, the Management Stockholders and any other
holders of outstanding capital stock of the Company, including any payments made
to the Management Stockholders under any consulting, noncompetition or
employment agreements. Otherwise, the applicable Investors as a group (with
decision-making power belonging to Investors holding a majority in outstanding
principal amount of the Notes held by all Investors, in the case of a Call, and
the Put Investors in the case of a Put) and the Company shall in good faith seek
to reach agreement as to the fair market value of the Company at least sixty
(60) days prior to any Put/Call Closing. If the applicable Investors and the
Company are unable to reach agreement within such time frame, the fair market
value of the Company shall be determined by an appraisal process and the Company
and the applicable Investors as a group (with decision-making power belonging to
Investors holding a majority in outstanding principal amount of the Notes held
by all Investors, in the case of a Call, and the Put Investors in the case of a
Put) shall, within seven (7) days thereafter, each select an independent,
non-affiliated investment banking firm of recognized national standing or a
brokerage firm having not less than five (5) years of experience in the radio
broadcasting industry (each an "Independent Appraiser"). Within twenty (20) days
after selection, each Independent Appraiser shall prepare and deliver to the
Company and the applicable Investors an appraisal of the fair market value of
the Company in accordance with the terms set forth below and, in the absence of
manifest error or fraud and so long as the lower appraisal is no less than 90%
of the higher appraisal, the two appraisals shall be averaged and the result
shall be the fair market value of the Company. If the lower appraisal is less
than 90% of the higher appraisal, the two Independent Appraisers shall, within
seven (7) days thereafter, choose a third Independent Appraiser who shall
deliver its own appraisal of the fair market value of the Company within twenty
(20) days thereafter. The two appraisals that are closest in value shall then be
averaged and the result shall, in the absence of manifest error or fraud, be the
fair market value of the Company (unless the third appraisal is equal to the
average of the first two appraisals, in which case it shall be the fair market
value of the Company). All appraisals hereunder will appraise the fair market
value of the Company (i) as a going concern and valued as if debt-free and
without regard to the illiquidity of the Company's
20
capital stock or to any discount attributable to the minority interest
represented by the Put/Call Securities, if applicable, or other considerations
relating to the nonpublic status of the Company's securities, (ii) on the basis
of what a willing buyer, with recourse to any necessary financing, would pay to
a willing seller who is under no compunction to sell, (iii) assuming a form of
transaction which will maximize such value and (iv) without diminution for any
taxes that might otherwise be viewed by the Company or any Securityholder in
connection with any hypothetical sale of the Common Equity in, or the assets of,
the Company and the Subsidiaries. All costs of any appraisals shall be borne by
the Company. If the appraisal process has not been completed by the Put/Call
Closing date or the Company otherwise fails to meet its Put or Call obligations
by such date, the applicable Investors shall continue to have all of the rights
and benefits of this Agreement until the Net Equity Value has been determined
and the Put/Call Securities have been redeemed in full; provided, however, that
the applicable Investors shall be entitled to receive interest on the Put/Call
Price that is ultimately determined hereunder from the Put/Call Closing date at
the rate of fifteen percent (15%) per annum, compounded annually.
Section 5.04. Put/Call Closing. The closing for a Put or a Call (the
"Put/Call Closing") shall take place on the date set for such Put or Call in the
notice referred to in Section 5.01 or 5.02 above, as the case may be, at the
offices of the Company or on such other date and at such other place as the
parties shall mutually agree. At the Put/Call Closing, the Company shall pay to
each Investor (or, in the case of a Put, each Put Investor) the Put/Call Price
for its Put/Call Securities by wire transfer or in other immediately available
funds upon delivery by such Investor of the certificates representing the
Put/Call Securities held by it, or, in lieu thereof, an indemnification and loss
certificate in form and substance reasonably satisfactory to the Company. In
connection with a Put or Call, each Investor (or, in the case of a Put, each Put
Investor) shall transfer its Put/Call Securities to the Company without
representation or recourse other than as to its title to such Put/Call
Securities, which title shall be free and clear of any and all claims, liens and
encumbrances created or incurred by such Investor. Prior to any Put/Call
Closing, the Company shall use reasonable efforts to obtain any financing
approvals, consents or waivers necessary or desirable for the consummation of
such Put or Call and shall provide the applicable Investors with evidence that
any such financing approvals, consents or waivers have been obtained.
ARTICLE VI. INVESTORS GO-ALONG RIGHT.
Investors holding a majority in outstanding principal amount of the
Notes shall have the option, exercisable upon 30 days' prior written notice to
the Company and all the other Securityholders and subject to the terms of the
Subordination Agreement, to cause the sale or refinancing of either the entire
business and assets of the Company or all of the Common Stock, Warrants and
other equity interests in the Company, upon the first to occur of the following:
(i) a breach by the Company of its obligations under Article V with respect to a
Put which has not been cured within 30 days after written notice thereof; (ii) a
breach by the Company of Section 10 of the Securities Purchase Agreement, and
(iii) any breach by the Company of its obligations under Section 2.O2 hereof
(the "Go-Along Right"); provided, however, that any sale of either the entire
business and assets of the Company or all of the
21
Common Stock, Warrants and other equity interests in the Company to an Affiliate
of Investors holding a majority in outstanding principal amount of the Notes or
a majority in interest of the Warrants shall not be for less than ninety percent
(90%) of the Fair Market Value of the Company (as determined below). The
Go-Along Right granted hereunder includes the power and authority to negotiate
and consummate the sale of all or any substantial part of the assets of or
capital stock, partnership interests and/or other equity interests in the
Company and its Subsidiaries. By their execution hereof, each of the parties to
this Agreement hereby consents to the taking of any action by the Investors
exercising the Go-Along Right, including without limitation, the right to seek
to take control, or appoint a receiver, trustee, transferee or other official to
take control, of the Company and each Subsidiary (and/or the right to expand the
Board of Directors of the Company and each Subsidiary to up to nine (9)
Directors and appoint individuals to the vacancies created by such expansions)
solely for the purpose of effecting the Go-Along Right and to consummate the
transactions contemplated thereby, subject to necessary FCC approval, and agrees
to cooperate fully in the taking of any such action (including, without
limitation, the execution and delivery of agreements, assignments and other
instruments relating to such action and full cooperation and assistance in
obtaining third-party consents), and using its best efforts in connection
therewith, and hereby irrevocably appoints the Investors who exercise the
Go-Along Right and each of them as proxies and attorneys-in-fact with full power
and substitution, in order to accomplish such action, which power-of-attorney
shall be deemed to be coupled with an interest and shall be irrevocable. The
Go-Along Right shall not be deemed to constitute a de facto transfer of control
for FCC purposes and shall be subject to the requirements that (i) the Company
and/or its Subsidiaries obtain any necessary FCC approvals for the actions taken
hereunder and (ii) prior to or upon consummation of any sale or refinancing
hereunder the Company and its Subsidiaries repay in full the Senior Debt and the
Notes and that the Senior Loan Agreement shall have terminated prior to the
transfer of any assets of, or equity interest in, the Company and its
Subsidiaries, and shall be subject to the requirement that all express terms of
any such sale be equivalent with respect to all Securityholders (other than
differences reflecting the exercise price of the Warrants and the ROFR Warrants
and the fact that the Management Stockholders may be required to enter into a
reasonable noncompetition agreement subject to the payment of reasonable
compensation to them in exchange therefor).
For purposes of this Article VI, the Fair Market Value of the Company
shall be determined as follows:
Within ten (10) days of the delivery of the written notice to the
Company of the exercise of the Go-Along Right, Investors holding a
majority in outstanding principal amount of the Notes shall select an
independent, non-affiliated investment banking firm of recognized
national standing or a brokerage firm having not less than five (5)
years of experience in the radio broadcasting industry (the
"Appraiser"). Within twenty (20) days after selection, the Appraiser
shall prepare and deliver to the Company and the Investors an appraisal
of the Fair Market Value of the Company in accordance with the terms
set forth below and, in the absence of manifest error or fraud, the
appraisal shall be the Fair Market Value of the Company. Any appraisal
hereunder will appraise the Fair Market Value of the Company as a going
concern
22
and valued as if debt-free on the basis of what a willing buyer, with
recourse to any necessary financing, would pay to a willing seller who
is under no compunction to sell. All costs of any appraisals shall be
borne by the Company.
ARTICLE VII. SPECIAL COVENANTS
So long as the Notes, Warrants or Shares issued upon exercise of the
Warrants are outstanding and subject to the terms of the Subordination
Agreement: (a) each of the Interested Parties (as such term is defined in the
Securities Purchase Agreement) will take any action which the Investors may
reasonably request in order to obtain and enjoy the full rights and benefits
granted to the Investors under this Agreement and the agreements contemplated
hereby, including, without limitation, the use of his, her or its best efforts,
consistent with the rules, regulations and policies of the FCC and any other
Regulatory Agencies, to obtain any necessary approvals for any action or
transaction contemplated by this Agreement or any agreement contemplated hereby,
for which such approval is then required or prudent, including, without
limitation, preparing, signing and filing, with the FCC or any other pertinent
Regulatory Agency or authority, any applications, notices, filings or reports
necessary or prudent for approval of any such actions or transactions; (b) none
of the Interested Parties will take any action to obstruct, impede or infringe
upon the Investors' enforcement of their rights, benefits and remedies under
this Agreement and any agreement contemplated hereby; (c) each of the Interested
Parties agrees to cooperate fully with any and all actions taken by the
Investors, including without limitation the full and complete cooperation and
assistance in all proceedings, correspondence and other communications before or
with the FCC, and any other state, local or other authority in connection with
obtaining the approvals referred to above, all using its best efforts; and (d)
each of the Interested Parties agrees to exercise its voting and consent rights
with respect to its shares of capital stock or partnership interests in the
Company and the Subsidiaries (i) to comply with their respective
representations, warranties, covenants and other obligations under this
Agreement and any agreement contemplated hereby and to not otherwise take any
action that would or could conflict with or impair the rights and benefits of
the Investors under this Agreement or any agreement contemplated hereby; and
(ii) to cooperate with, and use their respective best efforts to help
effectuate, any actions taken by the Investors to enforce their rights, benefits
and remedies hereunder, and under this Agreement and any agreement contemplated
hereby.
The Interested Parties hereto acknowledge that the foregoing provisions
are, inter alia, intended to ensure that, subject to the terms and provisions of
the Subordination Agreement, upon the occurrence of one of the events specified
in Article VI hereof, the Investors receive, to the fullest extent permitted by
applicable law and governmental policy (including, without limitation, the
rules, regulations and policies of the FCC), all rights necessary or desirable
to sell either the entire business and assets of the Company or all of the
Common Stock, Warrants and other equity interests in the Company as described in
Article VI hereof (including, without limitation, the FCC Licenses), and to
exercise all remedies available to them under this Agreement and the other
agreements contemplated hereunder, the Uniform Commercial Code of Massachusetts
or other applicable law. The Interested Parties also
23
acknowledge and agree that the Investors have the right under this Agreement,
subject to the terms of the Subordination Agreement, to seek appointment of a
receiver, trustee, transferee or similar official to effect the transactions
contemplated by Article IV of this Agreement, including without limitation, the
transfer of the FCC Licenses, in connection with foreclosure or enforcement
proceedings, subject to necessary FCC approval, and that the Investors are
entitled to seek such relief and the Interested Parties agree not to object
thereto on any grounds other than that such action is expressly prohibited under
the Subordination Agreement. The Interested Parties further acknowledge and
agree that, in the event of changes in law or governmental policy occurring
subsequent to the date hereof that affect in any manner the Investors' rights as
described in Article VI, or the procedures necessary to enable the Investors to
obtain such rights, the parties hereto shall amend this Agreement and the
agreements contemplated hereunder, in such manner as the Investors shall
reasonably request, in order to provide such rights to the greatest extent
possible, consistent with then-applicable law and governmental policy.
Notwithstanding anything to the contrary contained herein, the
Investors will not take any action pursuant to this Warrantholders' Agreement or
the Warrants which would constitute or result in any change of control of the
Company or any of its Subsidiaries if such change of control would require,
under then existing law, the prior approval of any federal, state or local
governmental or regulatory authority (the "Authority") without first obtaining
such approval of such Authority.
ARTICLE VIII. ELECTION OF DIRECTORS OF THE COMPANY.
Section 8.01. Election of Directors of the Company and the Subsidiaries.
(a) With respect to each election or removal of members of the Board of
Directors of the Company and each of the Subsidiaries which is a corporation
(including, without limitation, any replacement members), whether at an annual
or special meeting of stockholders or by written consent of stockholders, each
of the parties to this Agreement (to the extent they have voting rights at any
time) and all transferees of their shares agrees to vote his, her or its shares
of capital stock of the Company ("Capital Stock") or shares of capital stock of
the Subsidiaries ("Subsidiary Capital Stock"), as the case may be (and any
shares of Capital Stock or Subsidiary Capital Stock, as the case may be, over
which he, she or it exercises voting control), and to take such other action
necessary so as to fix the number of members of the Boards of Directors of the
Company and each of the Subsidiaries at five (5) members and to elect and
thereafter continue in office as Directors of the Company and the Subsidiaries
one (1) individual designated for such directorship by ASDP (the "ASDP
Designee"), one (1) individual designated for such directorship by the Original
Investors holding a majority in interest of the Exchange Warrants (the "Original
Investor Designee") and three (3) individuals designated for such directorships
by a majority in interest of the Management Stockholders (the "Management
Designees"). Each of the parties hereto and/or their transferees, if any,
further agrees to vote such shares of Capital Stock or Subsidiary Capital Stock
for the removal of any such designee upon the request of the investor group
entitled to designate him or her and for the election of a substitute designee
24
nominated by such investor group. The parties hereto acknowledge that the
initial ASDP Designee shall be Xxxxx XxXxxxx, the initial Original Investor
Designee shall be Xxxxx Xxxxx and the initial Management Designees shall be
Xxxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx and an individual to be nominated later.
(b) In connection with the foregoing, the Management Stockholders and
the Company shall each grant to ASDP and the Original Investors an irrevocable
proxy in the form of Exhibit B hereto.
Section 8.02. Vacancies. Each of the parties to this Agreement and all
transferees of their shares agrees to vote the shares of Capital Stock or
Subsidiary Capital Stock described in Section 8.01 in such manner as shall be
necessary or appropriate so as to ensure that any vacancy occurring for any
reason in any one of the board positions held by designees of an investor group
as contemplated by Section 8.01 shall be filled only by an individual who (a) is
nominated directly or indirectly by such investor group and (b) causes the
requirements described in Section 8.01 relating to the composition of the
Company's and Subsidiaries' Boards of Directors to be satisfied.
ARTICLE IX. MISCELLANEOUS PROVISIONS.
Section 9.01. Survival of Representations and Covenants; No Third Party
Beneficiaries. Each of the parties hereto agree that each representation,
warranty, covenant and agreement made by each of them in this Agreement or in
any certificate, instrument or other document delivered pursuant to this
Agreement is material, shall be deemed to have been relied upon by the other
parties, shall remain operative and in full force and effect after the date
hereof regardless of any investigation or the acceptance of securities hereunder
and payment therefor. All such representations, warranties, covenants and
agreements shall be binding upon any successors and assigns of the relevant
parties.
This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties hereto and their respective
successors and permitted assigns to the extent contemplated herein.
Section 9.02. Indemnification
(a) The Company shall, subject to the terms of the
Subordination Agreement, to the full extent permitted by law, and in addition to
any such rights which any Indemnified Party (as defined herein) may have
pursuant to statute, the Company's charter, the Company's by-laws, or otherwise,
indemnify and hold harmless each Investor (including its respective directors,
officers, partners, employees and agents, an "Indemnified Investor") and each
person (a "Controlling Person" and collectively with Indemnified Investors, the
"Indemnified Parties") who controls any of them within the meaning of Section 15
of the Securities Act, or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, expenses and liabilities, joint or several,
including any investigation, legal and other expenses incurred in connection
with the investigation, defense, settlement or appeal of, and any amount paid in
settlement of, any action, suit or proceeding or any claim
25
asserted ("Losses" or "Loss"), to which they, or any of them, may become subject
by reason of their status as a securityholder, creditor, director, agent,
representative or controlling person of the Company, (including, without
limitation, any and all Losses under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise,
which relates directly or indirectly to the registration, purchase, sale or
ownership of any securities of the Company or to any fiduciary obligation owed
with respect thereto); provided, however, that the Company will not be liable to
the extent that such Loss arises from and is based on an untrue statement or
omission or alleged untrue statement or omission in a registration statement or
prospectus which is made in reliance on and in conformity with written
information furnished to the Company in an instrument duly executed by or on
behalf of such Indemnified Party specifically stating that it is for use in the
preparation thereof. The indemnification and contribution provided for in this
Section 9.02 will remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Parties or any officer,
director, employee, agent or Controlling Person of the Indemnified Parties.
(b) If the indemnification provided for in Section 9.02(a)
above for any reason is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party in respect of any Losses referred to
therein, then the Company, in lieu of indemnifying such Indemnified Party
thereunder, shall, subject to the terms of the Subordination Agreement,
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Investors, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Investors in connection with the action or inaction which resulted in such
Losses, as well as any other relevant equitable considerations. In connection
with the registration of the Company's securities, the relative benefits
received by the Company and the Investors shall be deemed to be in the same
respective proportions that the net proceeds from the offering (before deducting
expenses) received by the Company and the Investors, in each case as set forth
in the table on the cover page of the applicable prospectus, bear to the
aggregate public offering price of the securities so offered. The relative fault
of the Company and the Investors shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Investors and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Investors agree that it would not be just
and equitable if contribution pursuant to this Section 9.02(b) were determined
by pro rata or per capita allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. In connection with the registration of the
Company's securities, in no event shall an Investor be required to contribute
any amount under this Section 9.02(b) in excess of the lesser of (i) that
proportion of the total of such Losses indemnified against equal to the
proportion of the total securities sold under such registration statement which
is being sold by such Investor or (ii) the
26
proceeds received by such Investor from its sale of securities under such
registration statement. No person found guilty of fraudulent misrepresentation
(within the meaning of Section ll(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.
Section 9.03. Amendment and Waiver. Any party may waive any provision
hereof intended for its benefit in writing. No failure or delay on the part of
any party hereto in exercising any right, power or remedy hereunder shall
operate as a waiver thereof. The remedies provided for herein are cumulative and
are not exclusive of any remedies that may be available to any party hereto at
law or in equity or otherwise. Subject to the terms of the Subordination
Agreement, this Agreement may be amended with the prior written consent of the
Company, and if required pursuant to the terms of the Subordination Agreement,
the Senior Lender (until payment in full of the Senior Debt and termination of
the Senior Loan Agreement), a majority in interest of the Management
Stockholders and the holders of a majority in outstanding principal amount of
the Notes, in which event such amendment shall be binding on all parties hereto;
provided, however, that if such amendment would amend any provision requiring a
consent or approval of the Investors, such amendment shall require the consent
of Investors holding that percentage in outstanding principal amount of the
Notes required pursuant to the provision to be amended; and provided further,
that if such amendment would have a disproportionately negative impact on any
party hereto, such amendment shall require the consent of such party.
With respect to any action hereunder requiring the consent or approval
of the Investors, if the outstanding principal amount of the Notes has been paid
in full, such action shall then require the consent or approval of Investors
that held, immediately prior to such payment, at least that percentage of the
outstanding principal amount of the Notes that is otherwise required to secure
the consent or approval of such action under the terms of this Agreement.
Section 9.04. Intercreditor Matters. The Investors hereby acknowledge
that their rights to receive any payments hereunder are, pursuant to the terms
of the Subordination Agreement, subordinate in right of payment to the
Indebtedness of the Company to the Senior Lender under the Senior Loan
Agreement. In addition, in the event of any conflict between any term or
provision of this Agreement and any term or provision of the Subordination
Agreement, the term or provision of the Subordination Agreement will control and
govern.
Section 9.05. Notices. All notices and other communications provided
for herein shall be in writing and shall be deemed to have been duly given (a)
if delivered personally or (b) if sent by telex or telecopier, registered or
certified mail (return receipt requested) with postage prepaid, or by courier
guaranteeing next day delivery, in each case to the party to whom it is directed
at the following addresses (or at such other address for any party as shall be
specified by notice given in accordance with the provisions hereof, provided
that notices of a change of address shall be effective only upon receipt
thereof). Notices delivered personally shall be effective on the day so
delivered, notices sent by registered or certified mail shall be effective three
days after mailing, notices sent by telex shall be effective when
27
answered back, notices sent by telecopier shall be effective when receipt is
acknowledged and notices sent by courier guaranteeing next day delivery shall be
effective on the earlier of the second business day after timely delivery to the
courier or the day of actual delivery by the courier:
(a) if to the New Investors, at the following address:
(i) Alta Subordinated Debt Partners III, L.P.
Burr, Egan, Deleage & Co.
Xxx Xxxx xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxx XxXxxxx
(ii) BancBoston Investments Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
(iii) Xxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to:
(i) Xxxxxxx, Procter & Xxxx
Exchange Place
Boston, Massachusetts 02109
Attention: Xxxx X. Xxxx, Esq.
(ii) Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx
(b) if to the Management Stockholders, the Company or the
Subsidiaries, at the following address:
Radio One, Inc.
000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx and Xxxxxxxxx X. Xxxxxx
28
with a copy to:
Arent Fox Xxxxxxx Xxxxxxx & Xxxx
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
(iii) if to the Original Investors, to the address set forth
next to their respective names on Schedule B hereto.
Section 9.06. Headings. The Article and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
Section 9.07. Gender. As used herein, the masculine, feminine or neuter
gender, and the singular or plural number, shall be deemed to be or to include
the other genders or number, as the case may be, whenever the context so
indicates or requires.
Section 9.08. Counterparts. This Agreement may be executed in one or
more counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement.
Section 9.09. Remedies: Severability. It is specifically understood and
agreed that any breach of the provisions of this Agreement by any Person subject
hereto will result in irreparable injury to the other parties hereto, that the
remedy at law alone will be an inadequate remedy for such breach, and that, in
addition to any other legal or equitable remedies which they may have, such
other parties may enforce their respective rights by actions for specific
performance (to the extent permitted by law).
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
Section 9.10. Entire Agreement. This Agreement, together with the
Securities Purchase Agreement, the Subordination Agreement and the Exchange
Agreement and other agreements contemplated hereby and thereby, is intended by
the parties as a final expression of their agreement and intended to be the
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
This Agreement, the Securities Purchase Agreement, the Subordination Agreement,
the Exchange Agreement and the other agreements contemplated hereby and thereby
(including the exhibits hereto and thereto) supersede all prior agreements and
understandings between the parties with respect to such subject matter,
including without limitation those
29
agreements listed on Appendix B to the Securities Purchase Agreement, all
related agreements and any other agreement entered into among (i) any of the
Company, the Subsidiaries or the Managing Stockholders and (ii) the Original
Investors or any original Investor.
Section 9.11. Governing Law: Jurisdiction: Venue. THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. EACH OF THE PARTIES HERETO
HEREBY REPRESENTS, WARRANTS AND AGREES THAT THE NEGOTIATION OF THIS AGREEMENT
AND ALL OTHER PRINCIPAL TRANSACTIONS BETWEEN THE PARTIES HERETO HAVE TAKEN PLACE
IN THE COMMONWEALTH OF MASSACHUSETTS. EACH OF THE PARTIES HERETO HEREBY
ACKNOWLEDGES THAT HE, SHE OR IT HAS CAREFULLY REVIEWED AND UNDERSTANDS THE TERMS
OF THIS AGREEMENT, HAS OBTAINED AND CONSIDERED THE ADVICE OF COUNSEL WITH
RESPECT TO SUCH TERMS AND HAS HAD AN OPPORTUNITY TO FULLY NEGOTIATE SUCH TERMS.
Each party hereto hereby agrees that the state and federal courts of the
Commonwealth of Massachusetts or, at the option of the Investors, as
appropriate, any other court in which the Investors, as appropriate, shall
initiate legal or equitable proceedings, to the extent such court otherwise has
jurisdiction, shall have jurisdiction to hear and determine any claims or
disputes between any of the parties hereto pertaining directly or indirectly to
this agreement and all documents, instruments and agreements executed pursuant
hereto, or to any matter arising therefrom (unless otherwise expressly provided
for therein). To the extent permitted by law, each party hereto hereby expressly
submits and consents in advance to such jurisdiction in any action or proceeding
commenced by any party hereto in any of such courts, and agrees that service of
such summons and complaint or other process or papers may be made by registered
or certified mail addressed to such other party or parties hereto at the address
to which notices are to be sent pursuant to this agreement. Each party hereto
waives any claim that Boston, Massachusetts is an inconvenient forum or an
improper forum based on lack of venue. To the extent permitted by law, should
any party hereto, after being so served, fail to appear or answer to any
summons, complaint, or process or papers so served within 30 days after the
mailing thereof, such party shall be deemed in default and an order and/or
judgment may be entered by the other party or parties to such actions, as
appropriate, against such party, as demanded or prayed for in such summons,
complaint, process or papers. The exclusive choice of forum set forth in this
Section 9.11 shall not be deemed to preclude the enforcement of any judgment
obtained in such forum or the taking of any action to enforce the same in any
other appropriate jurisdiction.
Section 9.12. Term. This Agreement shall remain in effect so long as
any of the Investors hold Warrants or Registrable Securities; provided, however,
that the provisions of Articles III, IV and VIII shall terminate upon the
closing of a Qualified Public offering by the Company; and, provided, further,
that the provisions of Articles VIII hereof shall, in any event, terminate on
the tenth anniversary of the date hereof.
30
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
--------
RADIO ONE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X Xxxxxxx
Title: President
SUBSIDIARIES:
-------------
RADIO ONE OF MARYLAND, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
RADIO ONE LICENSE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
RADIO ONE OF MARYLAND LICENSE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
S-1
MANAGEMENT STOCKHOLDERS:
------------------------
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxx, individually
/s/ Xxxxxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxxxxx X. Xxxxxx, individually
Xxxxx X. Xxxxx III
---------------------------------------------
Xxxxx X. Xxxxx III, individually
NEW INVESTORS:
--------------
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
By: Alta Subordinated Debt
Management III, L.P., its
General Partner
By: /s/ Xxxxx X. XxXxxxx
----------------------------------------
Name: Xxxxx X. XxXxxxx
Title: General Partner
BANCBOSTON INVESTMENTS INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Vice President
/s/ Xxxxx X. Xxxxxx
---------------------------------------------
Xxxxx X. Xxxxxx, individually
S-2
ORIGINAL INVESTORS:
-------------------
SYNCOM CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ALLIANCE ENTERPRISE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Exec. V.P.
GREATER PHILADELPHIA VENTURE
CAPITAL CORPORATION, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Manager
OPPORTUNITY CAPITAL CORPORATION
By: /s/ J. Xxxxx Xxxxxxxx
----------------------------------------
Name: J. Xxxxx Xxxxxxxx
Title: President
CAPITAL DIMENSIONS VENTURE
FUND, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: President
S-3
TSG VENTURES INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Principal
FULCRUM VENTURE CAPITAL
CORPORATION
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
S-4
Schedule A
New Investors
-------------
New Investors
-------------
Alta Subordinated Debt III, L.P.
BancBoston Investments Inc.
Xxxxx X. Xxxxxx
SS-1
Schedule B
Original Investors Address
------------------ -------
Syncom Capital Corporation 0000 Xxxxxxxxxx Xxxx #000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Alliance Enterprise Corporation 00000 X. Xxxxxxx Xxxxx.
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Greater Philadelphia Venture 000 X. Xxxxxxxxxx Xxxx
Capital Corporation, Inc. Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Opportunity Capital Corporation 0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: J. Xxxxx Xxxxxxxx
Capital Dimensions Venture 0 Xxxxxxxxx Xxxxxx #000
Fund, Inc. Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxxx
TSG Ventures Inc. 0000 Xxxxxxxxxx Xxxx., 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Fulcrum Venture Capital Corporation 000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
XX-0
Schedule 1.02(a)
Capital Stock Held by Management Stockholders
---------------------------------------------
Preferred Stock Common Stock Options Warrants
--------------- ------------ ------- --------
Xxxxxxxxx X. Xxxxxx -0- 75 -0- -0-
Xxxxxx X. Xxxxxxx -0- 5 57.45/1/ -0-
Xxxxx X. Xxxxx, III -0- 1 -0- -0-
--------------------------------------
1 This does not include an option or restricted stock grant for up to 5.71
shares of Common Stock which may become exercisable or vested in the future.
SS-3
Schedule l.02(c)
NONE.
-----
SS-4
FIRST AMENDMENT TO THE
WARRANTHOLDERS' AGREEMENT
This First Amendment to the Warrantholders' Agreement (this
"Amendment") is made as of this 19th day of May, 1997, by and among Radio One,
Inc., a Delaware corporation (the "Company"), Radio One Licenses, Inc., a
Delaware corporation and the surviving corporation of the merger with Radio One
License LLC ("ROL"), Xxxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxx,
III (collectively, the "Management Stockholders"), the investors listed on the
signature pages hereto as Series B Preferred Investors (the "Series B Preferred
Investors"), and the investors listed on the signature pages hereto as Series A
Preferred Investors (the "Series A Preferred Investors") (the Series B Preferred
Investors and the Series A Preferred Investors being collectively referred to
herein as the "Investors" and each individually as an "Investor," and the
Investors and the Management Stockholders being collectively referred to herein
as the "Securityholders" and each individually as a "Securityholder").
W I T N E S S E T H
WHEREAS, the Company, the subsidiaries of the Company then existing,
the Management Stockholders and the Investors entered into a Securities Purchase
Agreement dated as of June 6, 1995 (the "Securities Purchase Agreement"),
pursuant to which (i) the Company sold and the Investors purchased from the
Company subordinated promissory notes due in the year 2003 in an aggregate
principal amount of $17,000,000 (the "Subordinated Notes"), and (ii) the Company
sold and the Series B Preferred Investors purchased from the Company warrants
(the "Original Warrants") for an aggregate of 50.93 shares of the Common Equity
of the Company on a fully-diluted basis;
WHEREAS, simultaneously with the execution of the Securities Purchase
Agreement, the Company and the Series A Preferred Investors entered into an
Exchange Agreement, dated as of June 6, 1995, pursuant to which the Series A
Preferred Investors exchanged all of their then existing warrants for $6,251,094
in cash and new warrants (the "Exchange Warrants") to purchase an aggregate of
up to 96.11 shares of the Common Equity of the Company on a fully-diluted basis;
WHEREAS, simultaneously with the execution of the Securities Purchase
Agreement, the Company, the subsidiaries of the Company then existing, the
Management Stockholders and the Investors entered into a Warrantholders'
Agreement, dated as of June 6, 1995 (the "Warrantholders' Agreement"), to govern
the rights connected to the Original Warrants and Exchange Warrants;
WHEREAS, simultaneously with the Closing, the Company will issue 12%
Senior Subordinated Notes due 2004 (the "Senior Subordinated Notes") to certain
investors pursuant to an offering under Rule 144A of the Securities Act, the
gross proceeds of which will be approximately $75,000,000 (the "Senior
Subordinated Debt Financing");
1
WHEREAS, as of the date hereof, the Company, ROL, the Management
Stockholders and the Investors have entered into a Preferred Stockholders'
Agreement (the "Preferred Stockholders' Agreement"), pursuant to which, and as a
necessary condition to the Senior Subordinated Debt Financing: (i) the Series A
Preferred Investors will exchange all of their Subordinated Notes (including all
accrued but unpaid interest thereon) for the number of shares of Series A 15%
Senior Cumulative Exchangeable Redeemable Preferred Stock of the Company (the
"Series A Preferred Stock") listed on Schedule A to the Preferred Stockholders'
Agreement; and (ii) the Series B Preferred Investors will exchange all of their
Subordinated Notes (including all accrued but unpaid interest thereon) for the
number of shares of Series B 15% Senior Cumulative Exchangeable Redeemable
Preferred Stock of the Company (the "Series B Preferred Stock," and together
with the Series A Preferred Stock, the "Preferred Stock") listed on Schedule A
to the Preferred Stockholders' Agreement (the exchanges of Subordinated Notes
for Preferred Stock referred to in (i) and (ii) of this paragraph are
hereinafter collectively referred to as the "Exchanges"). The Preferred
Stockholders' Agreement generally provides for representations and warranties,
covenants and rights relating to all parties thereto which are substantially
similar to those provided for in the Securities Purchase Agreement;
WHEREAS, in connection with the Exchanges, (i) the Company will replace
the certificates held by the Series B Preferred Investors representing all of
their Original Warrants with amended and restated warrant certificates (the
"Series B Amended and Restated Warrants") in order to conform the Original
Warrants to reflect the transactions contemplated herein, and (ii) the Company
will similarly replace the certificates held by the Series A Preferred Investors
representing all of their Exchange Warrants with amended and restated warrant
certificates (the "Series A Amended and Restated Warrants," and, collectively
with the Series B Amended and Restated Warrants, the "Warrants") in order to
conform such Exchange Warrants to reflect the transactions contemplated herein;
and
WHEREAS, in connection with the Senior Subordinated Debt Financing and
the related Exchanges, the Company, ROL, the Management Stockholders and the
Investors now desire to amend the Warrantholders' Agreement as set forth herein,
and each party hereto agrees and is willing to amend the Warrantholders'
Agreement on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree to amend the Warrantholders' Agreement as follows:
1. Amendment to Certain Terms of the Warrantholders' Agreement. The
Warrantholders' Agreement is hereby amended as follows: (i) each reference
therein to the terms "Original Investor" and "Original Investors" shall be
deleted, and in their place shall be inserted the terms "Series A Preferred
Investor" and "Series A Preferred Investors," respectively; (ii) each reference
therein to the terms "New Investor" and "New Investors"
2
shall be deleted, and in their place shall be inserted the terms "Series B
Preferred Investor" and "Series B Preferred Investors," respectively; (iii) each
reference therein to the term "Notes" shall be deleted, and in its place shall
be inserted the term "Preferred Stock;" (iv) each reference therein to the term
"Intercreditor and Subordination Agreement" or to the term "Subordination
Agreement" shall be deleted, and in its place shall be inserted the term
"Standstill Agreement;" and (v) each reference to the term "Securities Purchase
Agreement" in Articles II through VIII shall be deleted, and in its place shall
be inserted the term "Preferred Stockholders' Agreement."
2. Amendment to the Legend on the Warrantholders' Agreement. The legend
on the cover page to the Warrantholders' Agreement is hereby amended by deleting
the existing legend in its entirety, and replacing it with the following:
This instrument/agreement is subject to a Standstill Agreement dated as
of the Closing Date among RADIO ONE, INC., the Subsidiaries of Radio
One, Inc. from time to time, the Investors (as defined therein), the
Senior Lenders (as defined therein) and NationsBank of Texas, N.A., as
Agent to the Senior Lenders (as defined therein) and individually as a
Lender, and United States Trust Company of New York, as Trustee for the
Senior Subordinated Noteholders (as defined therein). By its acceptance
of this instrument/agreement, the holder hereof agrees to be bound by
the provisions of such Standstill Agreement to the same extent that
each Investor is bound. In the event of any inconsistency between the
terms of this instrument/agreement and the terms of such Standstill
Agreement, the terms of the Standstill Agreement shall govern and be
controlling.
3. Amendment to the Preamble of the Warrantholders' Agreement. The
Preamble of the Warrantholders' Agreement is hereby amended by deleting the
existing second paragraph of the Preamble in its entirety, and replacing it with
the following:
The capitalized terms used and not otherwise defined herein which are
defined in the Preferred Stockholders' Agreement, dated as of May 14,
1997, by and among the Company, ROL and the Securityholders (the
"Preferred Stockholders' Agreement"), shall have the meanings ascribed
to them in the Preferred Stockholders' Agreement. Any capitalized term
used and not otherwise defined herein which is not defined in the
Preferred Stockholders' Agreement but which is defined in the
Securities Purchase Agreement, dated as of June 6, 1995, by and among
the Company, the subsidiaries of the Company then existing and the
Securityholders (the "Securities Purchase Agreement"), shall have the
meaning ascribed to such term in the Securities Purchase Agreement.
4. Amendment to Section 2.02 of the Warrantholders' Agreement. Section
2.02 of the Warrantholders' Agreement is hereby amended by deleting the existing
first sentence of Section 2.02 in its entirety, and replacing it with the
following:
3
If on any two (2) occasions after the earlier of (a) 180 days after the
consummation of an initial public offering of the Company and (b) the
third anniversary of the date hereof, Investors holding at least 662/3
of the outstanding shares of Preferred Stock (the "Initiating
Investors") notify the Company in writing that they intend to offer or
cause to be offered for public sale all or any portion of their
Registrable Securities, the Company shall immediately notify in writing
all of the Investors that hold Registrable Securities or Non-Voting
Common Stock at the time of its receipt of such notification from such
Initiating Investors.
5. Amendment to Section 5.01 of the Warrantholders' Agreement. Section
5.01 of the Warrantholders' Agreement is hereby amended by deleting the existing
Section 5.01 in its entirety, and replacing it with the following:
Section 5.01. Investors' Put Right. Subject to the provisions
of the Standstill Agreement, dated as of May 19, 1997, by and among the
Company, ROL, the Investors, the Senior Lender and the Trustee for the
benefit of the holders of Senior Subordinated Notes (the "Standstill
Agreement"), Investors holding a majority of the outstanding shares of
Preferred Stock may elect, upon 120 days prior written notice, to
require the Company to purchase (subject to the provisions of the
Standstill Agreement) all outstanding Warrants, Registrable Securities,
Non-Voting Common Stock, ROFR Warrants and ROFR Notes held by all of
the Investors (collectively, "Put/Call Securities") pursuant to this
Article V (the "Put") at any time on or after (i) the redemption in
full of all of the outstanding shares of Preferred Stock, together with
all accumulated and accrued but unpaid dividends thereon, (ii) the
merger or consolidation of the Company (other than with a Subsidiary or
as permitted under the Preferred Stockholders' Agreement), or (iii) the
sale of all or substantially all of the capital stock or assets of the
Company or any Subsidiary (other than to a Subsidiary or as permitted
under the Preferred Stockholders' Agreement). The Company agrees to
give the Investors at least 150 days' prior written notice of any of
the foregoing events. Each Investor may also elect to Put their
Put/Call Securities to the Company on the tenth day after the eighth
anniversary of the date of the original issuance of the shares of
Preferred Stock issuable under the Preferred Stockholders' Agreement
(the "Mandatory Redemption Date"), upon 120 days prior written notice
to the Company. Investors whose Put/Call Securities are subject to a
Put hereunder shall be referred to as the "Put Investors." In
connection with any Put, all Put Investors shall be obligated to sell
their Put/Call Securities to the Company on the terms set forth in this
Article V and, upon tender by the Company of the applicable Put/Call
Price (as defined in Section 5.03) (subject to the provisions of the
Standstill Agreement) to each Put Investor, such Put Investor's
Put/Call Securities shall be deemed to no longer be outstanding and
such Put Investor's only right shall be to receive the Put/Call Price
in accordance with the terms hereof; provided, however, that the
failure of any Put Investor(s) to transfer its or their Put/Call
Securities in accordance with the terms of this Section 5.01 shall not
relieve the Company of its obligation to purchase the Put/Call
Securities tendered by all other Put Investors hereunder.
4
6. Amendment to Section 5.02(a) of the Warrantholders' Agreement.
Section 5.02(a) of the Warrantholders' Agreement is hereby amended by deleting
the existing Section 5.02(a) in its entirety, and replacing it with the
following:
(a) Exercise of Call Right. At the election of the Company,
the Company may repurchase all, but not less than all, of the Put/Call
Securities then outstanding at any time after the Mandatory Redemption
Date (a "Call"), so long as: (i) the Investors do not have outstanding
a request for a demand registration under Section 2.02 hereof; and (ii)
the Senior Debt shall have been paid in full, together with all accrued
but unpaid interest thereon, and all outstanding shares of Preferred
Stock shall have been redeemed in full, together with all accumulated
and accrued but unpaid dividends thereon, on or prior to the Put/Call
Closing (as defined below). If the Company elects to repurchase the
Put/Call Securities, it shall give written notice of such election at
least 90 days prior to the Put/Call Closing and all Put/Call Securities
shall be repurchased on the Put/Call Closing date specified in the
Company's notice for an aggregate cash purchase price equal to the
Put/Call Price. Each Investor shall receive at the Put/Call Closing the
Put/Call Price for their Put/Call Securities.
7. Amendment to Section 5.03 of the Warrantholders' Agreement. Section
5.03 of the Warrantholders' Agreement is hereby amended by deleting the existing
Section 5.03 in its entirety, and replacing it with the following:
Section 5.03. Put/Call Price. The purchase price for any
Put/Call Securities hereunder (the "Put/Call Price") shall be equal to
the product of (x) the number of Shares represented by such Put/Call
Securities (with each unit of ROFR Warrants and the corresponding
principal amount of ROFR Notes constituting one Share), multiplied by
(y) the Per Share Net Equity Value of the Company reduced, in the case
of the Warrants and ROFR Warrants, by the per share exercise price
therefor. The "Per Share Net Equity Value" of the Company shall be the
quotient of (a) the Net Equity Value of the Company (as determined
below) divided by (b) the total number of outstanding shares of Common
Equity (determined on a fully-diluted basis and after giving effect to
the exercise of any Warrants, ROFR Warrants or other options for Common
Equity and the conversion and exchange of any securities convertible
into or exchangeable for Common Equity). "Net Equity Value" of the
Company shall mean the aggregate of: (A) the fair market value of the
Company as determined below; plus (B) all accounts receivable, cash and
cash equivalents held by the Company as of the date of determination
and the aggregate exercise price of all outstanding Warrants, ROFR
Warrants or options for Common Equity; reduced by (C) the aggregate of
all Indebtedness for borrowed money and current liabilities of the
Company required to be included on a balance sheet in accordance with
generally accepted accounting principles (excluding the current
maturities of Indebtedness). In connection with a Put or Call occurring
in connection with a sale or transfer to a third party of all or
substantially all of the Common Equity in, or the assets of, the
5
Company or any Subsidiary, the fair market value of the Company shall
be the aggregate amount of consideration paid to the Company, the
Management Stockholders and any other holders of outstanding capital
stock of the Company, including any payments made to the Management
Stockholders under any consulting, noncompetition or employment
agreements. Otherwise, the applicable Investors as a group (with
decision-making power belonging to Investors holding a majority of the
outstanding shares of Preferred Stock held by all Investors, in the
case of a Call, and the Put Investors in the case of a Put) and the
Company shall in good faith seek to reach agreement as to the fair
market value of the Company at least sixty (60) days prior to any
Put/Call Closing. If the applicable Investors and the Company are
unable to reach agreement within such time frame, the fair market value
of the Company shall be determined by an appraisal process and the
Company and the applicable Investors as a group (with decision-making
power belonging to Investors holding a majority of the outstanding
shares of Preferred Stock held by all Investors, in the case of a Call,
and the Put Investors in the case of a Put) shall, within seven (7)
days thereafter, each select an independent, non-affiliated investment
banking firm of recognized national standing or a brokerage firm having
not less than five (5) years of experience in the radio broadcasting
industry (each an "Independent Appraiser"). Within twenty (20) days
after selection, each Independent Appraiser shall prepare and deliver
to the Company and the applicable Investors an appraisal of the fair
market value of the Company in accordance with the terms set forth
below and, in the absence of manifest error or fraud and so long as the
lower appraisal is no less than 90% of the higher appraisal, the two
appraisals shall be averaged and the result shall be the fair market
value of the Company. If the lower appraisal is less than 90% of the
higher appraisal, the two Independent Appraisers shall, within seven
(7) days thereafter, choose a third Independent Appraiser who shall
deliver its own appraisal of the fair market value of the Company
within twenty (20) days thereafter. The two appraisals that are closest
in value shall then be averaged and the result shall, in the absence of
manifest error or fraud, be the fair market value of the Company
(unless the third appraisal is equal to the average of the first two
appraisals, in which case it shall be the fair market value of the
Company). All appraisals hereunder will appraise the fair market value
of the Company (i) as a going concern and valued as if debt-free,
without including the Company's cash balances and without regard to
accounts receivable or the illiquidity of the Company's capital stock
or to any discount attributable to the minority interest represented by
the Put/Call Securities, if applicable, or other considerations
relating to the nonpublic status of the Company's securities, (ii) on
the basis of what a willing buyer, with recourse to any necessary
financing, would pay to a willing seller who is under no compunction to
sell, (iii) assuming a form of transaction which will maximize such
value to the extent such form could be realistically and reasonably
achieved, and (iv) without diminution for any taxes that might
otherwise be incurred by the Company or any Securityholder in
connection with any hypothetical sale of the Common Equity in, or the
assets of, the Company or any Subsidiary. All costs of any appraisals
shall be borne by the Company. If the appraisal process has not been
completed by the Put/Call Closing
6
date or the Company otherwise fails to meet its Put or Call obligations
by such date, the applicable Investors shall continue to have all of
the rights and benefits of this Agreement until the Net Equity Value
has been determined and the Put/Call Securities have been redeemed in
full; provided, however, that the applicable Investors shall be
entitled to receive interest on the Put/Call Price that is ultimately
determined hereunder from the Put/Call Closing date at the rate of
fifteen percent (15%) per annum, compounded annually.
8. Amendment to Article VI of the Warrantholders' Agreement. Article VI
of the Warrantholders' Agreement is hereby amended by deleting the existing
Article VI in its entirety, and replacing it with the following:
ARTICLE VI. INVESTORS GO-ALONG RIGHT.
Investors holding a majority of the outstanding shares of
Preferred Stock shall have the option (the "Go-Along Right"),
exercisable upon 30 days' prior written notice to the Company and all
the other Securityholders and subject to the terms of the Standstill
Agreement, to cause the sale or refinancing of either the entire
business and assets of the Company or all of the Common Stock, Warrants
and other equity interests in the Company, upon the first to occur of
the following: (i) a breach by the Company of its obligations under
Article V with respect to a Put which has not been cured within 30 days
after written notice thereof; (ii) a breach by the Company of Section
10 of the Preferred Stockholders' Agreement, and (iii) any breach by
the Company of its obligations under Section 2.02 hereof; provided,
however, that any sale of either the entire business and assets of the
Company or all of the Common Stock, Warrants and other equity interests
in the Company to an Affiliate of the Investors holding a majority of
the outstanding shares of Preferred Stock or a majority in interest of
the Warrants shall not be for less than ninety percent (90%) of the
Fair Market Value of the Company (as determined below). The Go-Along
Right granted hereunder includes the power and authority to negotiate
and consummate the sale of all or any substantial part of the assets of
or capital stock, partnership interests and/or other equity interests
in the Company and its Subsidiaries. By their execution hereof, each of
the parties to this Agreement hereby consents to the taking of any
action by the Investors exercising the Go-Along Right, including
without limitation, the right to seek to take control, or appoint a
receiver, trustee, transferee or other official to take control, of the
Company and each Subsidiary (and/or the right to expand the Board of
Directors of the Company and each to up to nine (9) Directors and
appoint individuals to the vacancies created by such expansions) solely
for the purpose of effecting the Go-Along Right and to consummate the
transactions contemplated thereby, subject to necessary FCC approval,
and agrees to cooperate fully in the taking of any such action
(including, without limitation, the execution and delivery of
agreements, assignments and other instruments relating to such action
and full cooperation and assistance in obtaining third-party consents),
and using its best efforts in connection therewith (provided, however,
that in the case of the Management Stockholders, "best
7
efforts" shall not include or require the payment of money), and hereby
irrevocably appoints the Investors who exercise the Go-Along Right and
each of them as proxies and attorneys-in-fact with full power and
substitution, in order to accomplish such action, which
power-of-attorney shall be deemed to be coupled with an interest and
shall be irrevocable. The Go-Along Right shall not be deemed to
constitute a de facto transfer of control for FCC purposes and shall be
subject to the requirements that (i) the Company and/or its
Subsidiaries obtain any necessary FCC approvals for the actions taken
hereunder and (ii) prior to or upon consummation of any sale or
refinancing hereunder the Company and its Subsidiaries repay in full
all indebtedness for money borrowed including, but not limited to, the
Senior Indebtedness (as defined in the Standstill Agreement) and that
the Senior Loan Agreement and the Indenture shall have terminated prior
to the transfer of any assets of, or equity interest in, the Company
and its Subsidiaries, and shall be subject to the requirement that all
express terms of any such sale be equivalent with respect to all
Securityholders (other than differences reflecting the exercise price
of the Warrants and the ROFR Warrants and the fact that the Management
Stockholders may be required to enter into a reasonable noncompetition
agreement subject to the payment of reasonable compensation to them in
exchange therefor).
For purposes of this Article VI, the Fair Market Value of the
Company shall be determined as follows:
Within ten (10) days of the delivery of the written
notice to the Company of the exercise of the Go-Along Right,
Investors holding a majority of the outstanding shares of
Preferred Stock shall select an independent, non-affiliated
investment banking firm of recognized national standing or a
brokerage firm having not less than five (5) years of
experience in the radio broadcasting industry (the
"Appraiser"). Within twenty (20) days after selection, the
Appraiser shall prepare and deliver to the Company and the
Investors an appraisal of the Fair Market Value of the Company
in accordance with the terms set forth below and, in the
absence of manifest error or fraud, the appraisal shall be the
Fair Market Value of the Company. Any appraisal hereunder will
appraise the Fair Market Value of the Company as a going
concern and valued as if debt-free on the basis of what a
willing buyer, with recourse to any necessary financing, would
pay to a willing seller who is under no compunction to sell.
All costs of any appraisals shall be borne by the Company.
9. Amendment to Article VII of the Warrantholders' Agreement. Article
VII of the Warrantholders' Agreement is hereby amended to insert the following
clause after the words "best efforts" each time such words are used in such
Article VII:
(provided, however, that in the case of the Management Stockholders,
"best efforts" shall not include or require the payment of money)
8
10. Amendment to Section 8.01(a) of the Warrantholders' Agreement.
Section 8.01(a) of the Warrantholders' Agreement is hereby amended by adding the
following sentence as the last sentence of such Section 8.01(a):
Notwithstanding the provisions of this Section 8.01(a), the Board of
Directors may be expanded to up to nine (9) members in a manner
consistent with Article VI hereof, Section 10 of the Preferred
Stockholders' Agreement, and the Company's Bylaws.
11. Amendment to Section 8.02 of the Warrantholders' Agreement.
Section 8.02 of the Warrantholders' Agreement is hereby amended to add
the following sentence as the last sentence of such Section 8.02:
Vacancies created or occurring as a result of the exercise of the
rights granted to the Investors under Article VI of this Agreement or
under Section 10 of the Preferred Stockholders' Agreement shall be
filled as provided in such Article VI or Section 10, as applicable.
12. Amendment to Section 9.03 of the Warrantholders' Agreement. Section
9.03 of the Warrantholders' Agreement is hereby amended by deleting the existing
Section 9.03 in its entirety, and replacing it with the following:
Section 9.03. Amendment and Waiver. Any party may waive any
provision hereof intended for its benefit in writing. No failure or
delay on the part of any party hereto in exercising any right, power or
remedy hereunder shall operate as a waiver thereof. The remedies
provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law or in equity
or otherwise. Subject to the terms of the Standstill Agreement, this
Agreement may be amended with the prior written consent of the Company,
and if required pursuant to the terms of the Standstill Agreement, the
Senior Lender and the Trustee, on behalf of the holders of the Senior
Subordinated Notes (until payment in full of the Senior Debt and the
Senior Subordinated Notes and termination of the Senior Loan Agreement
and the Indenture), a majority in interest of the Management
Stockholders and the holders of a majority of the outstanding shares of
Preferred Stock, in which event such amendment shall be binding on all
parties hereto; provided, however, that if such amendment would amend
any provision requiring a consent or approval of the Investors, such
amendment shall require the consent of Investors holding that
percentage of the outstanding shares of Preferred Stock required
pursuant to the provision to be amended; and provided further, that if
such amendment would have a disproportionately negative impact on any
party hereto, such amendment shall require the consent of such party.
9
With respect to any action hereunder requiring the consent or
approval of the Investors, if all of the outstanding shares of the
Preferred Stock, together with all accumulated and accrued but unpaid
dividends thereon, have been redeemed in full for any reason, such
action shall then require the consent or approval of Investors that
held, immediately prior to such redemption, at least that percentage of
the outstanding shares of Preferred Stock that would otherwise have
been required to secure the consent or approval of such action under
the terms of this Agreement.
13. Amendment to Section 9.04 of the Warrantholders' Agreement. Section
9.04 of the Warrantholders' Agreement is hereby amended to add the following
clause at the end of the first sentence of such Section 9.04:
and the Indebtedness of the Company under the Senior Subordinated
Notes and the Indenture.
14. Amendment to Section 9.05 of the Warrantholders' Agreement. Section
9.05 of the Warrantholders' Agreement is hereby amended by deleting the existing
Section 9.05 in its entirety, and replacing it with the following:
Section 9.05. Notices. All notices and other communications
provided for herein shall be in writing and shall be deemed to have
been duly given (a) if delivered personally or (b) if sent by telex or
telecopier, registered or certified mail (return receipt requested)
with postage prepaid, or by courier guaranteeing next day delivery, in
each case to the party to whom it is directed at the following
addresses (or at such other address for any party as shall be specified
by notice given in accordance with the provisions hereof, provided that
notices of a change of address shall be effective only upon receipt
thereof). Notices delivered personally shall be effective on the day so
delivered, notices sent by registered or certified mail shall be
effective three days after mailing, notices sent by telex shall be
effective when answered back, notices sent by telecopier shall be
effective when receipt is acknowledged, and notices sent by courier
guaranteeing next day delivery shall be effective on the earlier of the
second business day after timely delivery to the courier or the day of
actual delivery by the courier:
(a) if to the Series B Preferred Investors, at the following
address:
(i) Alta Subordinated Debt Partners III, L.P.
c/o Burr, Egan, Deleage & Co.
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx XxXxxxx
10
(ii) BancBoston Investments Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
(iii) Xxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to:
(i) Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxx III, Esq.
(ii) Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
(b) if to the Management Stockholders, the Company or ROL, at
the following address:
Radio One, Inc.
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxx and Xxxxxxxxx X. Xxxxxx
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
(c) if to the Series A Preferred Investors, to the address set
forth next to their respective names on Schedule B hereto.
15. Amendment to Section 9.10 of the Warrantholders' Agreement. Section
9.10 of the Warrantholders' Agreement is hereby amended by deleting the existing
Section 9.10 in its entirety, and replacing it with the following:
11
Section 9.10. Entire Agreement. This Agreement, together with
the Securities Purchase Agreement, the Preferred Stockholders' Agreement, the
Standstill Agreement, and the Exchange Agreement and other agreements
contemplated hereby and thereby, is intended by the parties as a final
expression of their agreement and intended to be the complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. This Agreement, the Securities
Purchase Agreement, the Preferred Stockholders' Agreement, the Standstill
Agreement, the Exchange Agreement and the other agreements contemplated hereby
and thereby (including the exhibits hereto and thereto) supersede all prior
agreements and understandings between the parties with respect to such subject
matter, including without limitation those agreements listed on Appendix B to
the Securities Purchase Agreement and Appendix B to the Preferred Stockholders'
Agreement, all related agreements and any other agreement entered into among (i)
any of the Company, the Subsidiaries or the Managing Stockholders and (ii) the
Series A Preferred Investors or any Series A Preferred Investor.
16. Amendment to Schedule B to the Warrantholders' Agreement. Schedule B
to the Warrantholders' Agreement is hereby amended by deleting the existing
address given for TSG Ventures Inc. in its entirety, and replacing it with the
following:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxx
17. Documents Otherwise Unchanged. Except as provided herein, the
Warrantholders' Agreement shall remain unchanged and in full force and effect.
18. Waiver of Preemptive Rights. The Investors hereby waive the
requirements of and any rights they may have under Article IV of the
Warrantholders' Agreement with respect to the issuance by the Company of the
Preferred Stock.
19. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be identical and all of which, when taken
together, shall constitute one and the same instrument, and any of the parties
hereto may execute this Amendment by signing any such counterpart.
20. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and any respective successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties have executed this First Amendment to
the Warrantholders' Agreement as of the date first above written.
COMPANY:
RADIO ONE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
SUBSIDIARY:
RADIO ONE LICENSES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
MANAGEMENT STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx, individually
Xxxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxxx X. Xxxxxx, individually
/s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx III, individually
[Signature Pages Continue]
S-1
SERIES B PREFERRED INVESTORS:
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
By: Alta Subordinated Debt
Management III, L.P., its
General Partner
By: /s/ Xxxxxx XxXxxxxx
--------------------------------
Name: Xxxxxx XxXxxxxx
Title:
BANCBOSTON INVESTMENTS INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title:Vice President
/s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, individually
SERIES A PREFERRED INVESTORS:
SYNCOM CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ALLIANCE ENTERPRISE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
[Signature Page to First Amendment to Warrantholders' Agreement]
[Signature Pages Continue]
X-0
XXXXXXX XXXXXXXXXXXX VENTURE
CAPITAL CORPORATION, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Manager
OPPORTUNITY CAPITAL CORPORATION
By: /s/ X.X. Xxxxxxxx
--------------------------------
Name: J. Xxxxx Xxxxxxxx
Title: President
CAPITAL DIMENSIONS VENTURE
FUND, INC.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxx
Title: President
TSG VENTURES INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------
Name: Xxxxx X. Xxxx
Title: Principal
FULCRUM VENTURE CAPITAL
CORPORATION
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President
[Signature Page to First Amendment to Warrantholders' Agreement]
S-3
