EXECUTION COPY
AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT
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This AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT is dated as of
October 18, 2000, by and among Muzak Holdings LLC (f/k/a ACN Holdings, LLC), a
Delaware limited liability company (the "Company"); MEM Holdings, LLC ("MEM
Holdings"); AMFM Systems, Inc. ("AMFM"); BancAmerica Capital Investors I, L.P.
("BACI"); New York Life Capital Partners, L.P. ("New York Life"); and The
Northwestern Mutual Life Insurance Company ("Northwestern").
WHEREAS, the Company, MEM Holdings and Capstar Broadcasting Corporation
("Capstar") entered into that certain Securityholders Agreement, dated as of
March 18, 1999 (the "Original Agreement");
WHEREAS, on November 1, 1999, Capstar transferred all of its Class A
Units to CBC Acqusition Corp., Inc. (n/k/a AMFM), which succeeded to all rights
and obligations of Capstar under the Original Agreement.
WHEREAS, on September 14, 2000, the Company issued Class A-1 Units to
New York Life and Northwestern and in connection with such issuance New York
Life and Northwestern became parties to the Members Agreement and entered into
the New Equityholders Agreement, dated as of September 14, 2000 (the "New
Equityholders Agreement") with the Company and MEM Holdings;
WHEREAS, on the date hereof, the Company issued certain Preferred Units
and Common Units to BACI, New York Life and Northwestern;
WHEREAS, the Company and the Equityholders (as defined below) desire
(i) to amend and restate the Original Agreement in its entirety as set forth
herein; (ii) to terminate the New Equityholders Agreement and, as it relates to
New York Life and Northwestern, the Members Agreement; and (iii) to enter into
this Agreement for the purposes, among others, of (a) establishing the
composition of the Board (as defined below), (b) assuring continuity in the
management and ownership of the Company and (c) limiting the manner and terms by
which the Equityholder Units (as defined below) may be transferred;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Definitions. As used herein, the following terms shall have the
following meanings:
"ABRY" means ABRY Broadcast Partners III, L.P., a Delaware limited
partnership.
"ABRY Investor" means any of (i) MEM Holdings, (ii) a Section 10
Assignee (as hereinafter defined) of an ABRY Investor, or (iii) any of their
respective Permitted Transferees.
"ABRY Management Services Agreement" means the Amended and Restated
Management and Consulting Services Agreement, dated as of March 18, 1999,
between ABRY Partners, LLC (as successor to ABRY Partners, Inc.) and Muzak, as
amended, restated, supplemented or otherwise modified from time to time.
"ABRY Units" means all Equityholder Units owned by any ABRY Investor.
"Affiliate" means, when used with reference to a specified Person, any
Person that directly or indirectly controls or is controlled by or is under
common control with the specified Person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise). With respect to any Person who is an individual, "Affiliates" shall
also include, without limitation, any member of such individual's Family Group.
"AMFM Investor" means any of (i) AMFM, (ii) a Section 10 Assignee (as
hereinafter defined) of any AMFM Investor, (iii) any of their respective
Permitted Transferees.
"AMFM Units" means all Equityholder Units owned by any AMFM Investor.
"Board" means the Company's board of directors.
"Board Observer" has the meaning set forth in Section 2(b) hereof.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law or other governmental action to close.
"Capstar Contribution Agreement" means the Contribution Agreement dated
as of February 19, 1999 between Capstar and the Company.
"Class A Director" shall have the meaning ascribed to such term in the
LLC Agreement.
"Class A Units" means the Company's Class A Units (as such term is
defined in the LLC Agreement).
"Class A-1 Units" means the Company's Class A-1 Units (as such term is
defined in the LLC Agreement).
"Class B Units" means the Company's Class B Units (as such term is
defined in the LLC Agreement).
"Class B Director" shall have the meaning ascribed to such term in the
LLC Agreement.
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"Common Equityholder Units" means (i) all Common Units held, directly
or indirectly, by the Equityholders, and (ii) all equity securities issued
directly or indirectly with respect to any Common Units referred to in clause
(i) above by way of a unit or stock dividend or other distribution, or unit or
stock split, or in connection with a combination of units or shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular units or shares constituting Common Equityholder Units, such units or
shares will cease to be Common Equityholder Units when they have been
Transferred in a Public Sale.
"Common Investment Units" means, collectively, the Class A Units and
the Class A-1 Units.
"Common Units" means collectively the Common Investment Units, the
Class B Units and any other equity securities of the Company which is not
limited to a fixed sum or percentage of par value or stated value in respect of
the rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the issuer of such securities (including, by way of
example and without limitation, the common stock of any Successor Corporation
(as herein defined)).
"Distributions" has the meaning which the LLC Agreement assigns to that
term.
"Equityholder Units" means, collectively, the Common Equityholder Units
and the Preferred Equityholder Units.
"Equityholders" means collectively the ABRY Investors, the AMFM
Investors and the Preferred Investors.
"Family Group" means, with respect to any Person who is an individual,
(i) such Person's spouse, former spouse, ancestors and descendants (whether
natural or adopted), parents and their descendants and any spouse of the
foregoing persons (collectively, "relatives") or (ii) the trustee, fiduciary or
personal representative of such Person and any trust solely for the benefit of
such Person and/or such Person's relatives.
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own in excess of 5% of the number of
Common Units on a fully diluted basis (a "5% Owner"), who is not an Affiliate of
any such 5% Owner and who is not the spouse or descendant (by birth or adoption)
of any such 5% Owner or a trust for the benefit of any such 5% Owner and any/or
such other Persons.
"LLC Agreement" means the Third Amended and Restated Limited Liability
Company Agreement of the Company, dated as of the date hereof, as amended from
time to time.
"Majority in Voting Interest" has the meaning which the LLC Agreement
assigns to that term.
"Members Agreement" means the Amended and Restated Members Agreement,
dated March 18, 1999, among the Company, MEM Holdings and the other
equityholders of the Company named therein, as amended, restated, supplemented
or otherwise modified from time to time.
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"Muzak" means Muzak, LLC, a Delaware limited liability company, the
successor entity to the merger of Muzak Limited Partnership with and into Audio
Communications Network, LLC (f/k/a ACN Operating, LLC) and a wholly-owned
subsidiary of the Company.
"Other Investors" means, collectively, the AMFM Investors and the
Preferred Investors.
"Permitted Transferee" has the meaning set forth in Section 5(d)(iii)
hereof.
"Permitted Sponsor Subordinated Debt" has the meaning set forth in the
Preferred Unit Purchase Agreement.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, a governmental entity or any
department, agency or political subdivision thereof or any other entity or
organization.
"Preferred Default" means a Class A Default or a Class B Default, each
as defined in the Preferred Unit Purchase Agreement.
"Preferred Equityholder Units" means (i) all Preferred Units held,
directly or indirectly, by the Equityholders, and (ii) all equity securities
issued directly or indirectly with respect to any Preferred Units referred to in
clause (i) above by way of a unit or stock dividend or other distribution, or
unit or stock split, or in connection with a combination of units or shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular units or shares constituting Preferred Equityholder Units, such units
or shares will cease to be Preferred Equityholder Units when they have been
Transferred in a Public Sale.
"Preferred Investor" means any of (i) BACI, New York Life or
Northwestern, (ii) a Section 10 Assignee (as hereinafter defined) of BACI, New
York Life or Northwestern or (iii) any of their respective Permitted
Transferees.
"Preferred Investor Units" means all Equityholder Units owned by any
Preferred Investor.
"Preferred Unit Purchase Agreement" means the Securities Purchase
Agreement, dated as of the date hereof, by and among the Company and the
Preferred Investors as amended, restated, supplemented or otherwise modified
from time to time.
"Preferred Units" has the meaning which the LLC Agreement assigns to
that term.
"Public Offering" means an underwritten public offering and sale of
Common Units pursuant to an effective registration statement under the
Securities Act; provided that a Public Offering shall not include an offering
made in connection with a business acquisition or combination pursuant to a
registration statement on Form S-4 or any similar form, or an employee benefit
plan pursuant to a registration statement on Form S-8 or any similar form.
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"Public Sale" means any sale of Equityholder Units to the public
pursuant to an offering registered under the Securities Act or, after the
consummation of an initial Public Offering, to the public pursuant to the
provisions of Rule 144 (or any similar rule or rules then in effect) under the
Securities Act.
"Qualified Public Offering" means the sale in a public offering
registered under the Securities Act of Common Units of the Company or any of its
successors (i) providing net proceeds to the Company or any of its successors
and the selling equity holders of at least $25,000,000 or (ii) where at least
25% (determined after such offering) of the outstanding Common Units of the
Company or any of its successors have been sold in such sale.
"Registration Agreement" means the Second Amended and Restated
Registration Agreement dated as of the date hereof by and among the Company and
the securityholders named therein, as amended, restated, supplemented or
otherwise modified from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, limited liability
company, association or other business entity, a majority of the partnership or
other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that
Person or a combination thereof. For purposes hereof, a Person or Persons shall
be deemed to have a majority ownership interest in a partnership, limited
liability company, association or other business entity if such Person or
Persons shall be allocated a majority of partnership, limited liability Company,
Association or other business entity gains or losses or shall be or control the
managing director, managing member, manager or a general partner of such
partnership, limited liability company, association or other business entity.
"Transfer" means any direct or indirect sale, transfer, assignment,
pledge or other disposition.
"Unpaid Series A Preferred Return" has the meaning which the LLC
Agreement assigns to that term.
"Unpaid Yield" has the meaning which the LLC Agreement assigns to that
term.
"Unreturned Common Investment Unit Capital Value" has the meaning which
the LLC Agreement assigns to that term.
"Unreturned Series A Preferred Unit Capital Value" has the meaning
which the LLC Agreement assigns to that term.
2. Board of Directors.
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(a) To the extent permitted by law, each Equityholder shall vote all
voting securities of the Company over which such Equityholder has voting
control, and shall take all other reasonably necessary or desirable actions
within such Equityholder's control (whether in such Equityholder's capacity as a
equityholder, director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings in person
or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all necessary and desirable
actions within its control (including, without limitation, call special board
and equityholder or member meetings), so that:
(i) at any time no Class A Default is continuing, holders of
record of a majority of the ABRY Units will designate a number of
directors of the Board (whether Class A Directors and/or Class B
Directors or otherwise) which possess a majority of the votes of the
Board (each an "ABRY Director");
(ii) if a Class A Default is continuing, holders of record of
a majority of the ABRY Units will designate a number of directors of
the Board (whether Class A Directors and/or Class B Directors or
otherwise) which possess the number of the votes of the Board equal to
the largest whole number that is less than 50% of the number of votes
entitled to be cast by the members of the Board (also, each an "ABRY
Director");
(iii) so long as the AMFM Investors own a majority of the
number of Equityholder Units issued to Capstar pursuant to the Capstar
Contribution Agreement (such number to be appropriately adjusted for
any split, reverse split, dividend or other subdivision, combination or
restructuring of Common Units after the date hereof), holders of record
of a majority of the AMFM Units shall have the right to designate two
Class B Directors of the Board (each, an "AMFM Director") or, if
applicable, at any time upon the written request of the holders of
record of a majority of the AMFM Units to the ABRY Investors, such
greater number of Class B Directors of the Board (any such additional
Class B Director, also an "AMFM Director") as is necessary so that all
of the then AMFM Directors possess a percentage of the votes of the
then Board (other than the votes entitled to be cast by the Preferred
Directors, if any) approximately equal to the percentage of then
outstanding voting Common Units then owned by the AMFM Investors;
provided that any individual designated as an AMFM Director must be
approved by the holder(s) of record of a majority of the ABRY Units,
which approval shall not be unreasonably withheld; provided, further,
that Xxxxxxx Xxxx and Xxxxx Xxxx shall be deemed approved by the
holders of the ABRY Units (the provisions of this clause (iii) shall
terminate on the date the AMFM Investors cease to own a majority of the
number of Equityholder Units issued to Capstar pursuant to the Capstar
Contribution Agreement (such number to be appropriately adjusted for
any split, reverse split, dividend or other subdivision, combination or
restructuring of Common Units after the date hereof));
(iv) so long as the AMFM Investors own at least twenty percent
(20%), but less than a majority of, the number of Equityholder Units
issued to Capstar pursuant to the Capstar Contribution Agreement (such
numbers to be appropriately adjusted for any split, reverse split,
dividend or other subdivision, combination or restructuring of Common
Units after the date hereof), holders of record of a majority of the
AMFM Units shall have the right
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to designate one Class B Director of the Board (also, a "AMFM
Director") or, if applicable, at any time upon the written request of
the holders of record of a majority of the AMFM Units to the ABRY
Investors, such greater number of Class B Directors of the Board (any
such additional Class B Director, also an "AMFM Director") as is
necessary so that all of the then AMFM Directors possess a percentage
of the votes of the then Board (other than the votes entitled to be
cast by the Preferred Directors, if any,) approximately equal to the
percentage of then outstanding voting Common Units then owned by the
AMFM Investors; provided that any individual designated as an AMFM
Director must be approved by the holder(s) of record of a majority of
the ABRY Units, which approval shall not be unreasonably withheld;
provided, further, that Xxxxxxx Xxxx and Xxxxx Xxxx shall be deemed
approved by the holders of the ABRY Units (the provisions of this
clause (iv) shall terminate on the date the AMFM Investors cease to own
at least twenty percent (20%) of the number of Equityholder Units
issued to Capstar pursuant to the Capstar Contribution Agreement (such
number to be appropriately adjusted for any split, reverse split,
dividend or other subdivision, combination or restructuring of Common
Units after the date hereof));
(v) upon the occurrence of and during the continuance of a
Preferred Default, so long as the Preferred Investors own at least
twenty percent (20%) of the number of Preferred Equityholder Units
issued to the Preferred Investors pursuant to the Preferred Unit
Purchase Agreement (such number to be appropriately adjusted for any
split, reverse split, dividend or other subdivision, combination or
restructuring of Preferred Equityholder Units after the date hereof),
BACI and New York Life shall each have the right to designate one
member of the Board (each, a "Preferred Director"), which Preferred
Directors shall each be (A) Class A Directors if such Preferred Default
is a Class A Default (as defined in the Preferred Unit Purchase
Agreement) or (B) Class B Directors if such Preferred Default is a
Class B Default (as defined in the Preferred Unit Purchase Agreement)
and no Class A Default is then continuing; provided, that (1) if upon
cure or waiver of any Class A Default, a Class B Default is continuing,
the Preferred Directors shall cease to be Class A Directors and shall
become Class B Directors; (2) any individual designated as a Preferred
Director, other than an employee or officer of BACI or New York Life,
must be approved by the holder(s) of record of a majority of the ABRY
Units, which approval shall not be unreasonably withheld; and (3) any
individual acting as a Board Observer (as defined in Section 2(b)) for
BACI or New York Life at the time of the Preferred Default shall be
deemed approved by the holders of the ABRY Units (the provisions of
this clause (v) shall terminate on the date the Preferred Investors
cease to own at least 20% of the number of Equityholder Units issued to
the Preferred Investors pursuant to the Preferred Unit Purchase
Agreement (such number to be appropriately adjusted for any split,
reverse split, dividend or other subdivision, combination or
restructuring of Preferred Equityholder Units after the date hereof));
(vi) any director designated pursuant to clause (i), (ii),
(iii) (iv), or (v) above shall be removed from the Board (with or
without cause) at the written request of the Equityholder or
Equityholders which have the right to designate such director
hereunder, but only upon such written request and under no other
circumstances (in each case, determined on the basis specified in
clause (i), (ii), (iii), (iv) or (v) above, as the case may be);
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(vii) in the event that any director designated hereunder for
any reason ceases to serve as a member of the Board during such
director's term of office, the resulting vacancy on the Board shall be
filled by a director designated by the Equityholders referred to in
clause (i), (ii), (iii), (iv) or (v) above, as the case may be; and
(viii) if, within a reasonable period of time, any
Equityholder(s) fail to designate in writing a representative to fill a
director position pursuant to the terms of this Section 2, and such
failure shall continue for more than 30 days after notice from the
Company to such Equityholder(s) with respect to such failure, the
election of an individual to such director position shall be
accomplished in accordance with the LLC Agreement and applicable law;
provided that such individual shall be removed from such director
position if such Equityholder(s) so direct.
(b) Board Observers. So long as the Preferred Investors own any Units,
BACI, New York Life and Northwestern may each select one representative to
attend all meetings of the Board and each committee thereof, including
telephonic meetings, as an observer (each a "Board Observer"). The Company shall
give BACI, New York Life and Northwestern written notice of each meeting of the
Board and committees thereof at the same time and in the same manner as notice
is given to the directors; provided, that the failure of the Company to provide
such a notice shall not affect the validity of any action taken at that meeting
or constitute a Preferred Default. Such Board Observers shall also be provided
with all written materials and other information (including minutes of meetings)
given to directors in connection with such meetings and any proposed written
consents of the Board at the same time such materials and information are given
to the directors. If the Company proposes to take any action by written consent
in lieu of a meeting of its Board, the Company shall give a copy thereof to
BACI, New York Life and Northwestern within three (3) Business Days following
the effective date of such consent; provided, that the failure of the Company to
provide copies of any written consent shall not affect the validity of any
action taken in that written consent. Notwithstanding anything herein, the
Company shall have the right not to provide information and to exclude a Board
Observer from any meeting or portion thereof if delivery of such information or
attendance at such meeting by such Board Observer (i) would result in disclosure
of trade secrets to such Board Observer; (ii) would adversely affect the
attorney-client privilege between the Company and its counsel (upon advice from
such counsel); (iii) would materially impair deliberations by the Board because
of a conflict of interest between the Company or any of its Subsidiaries and the
party who appointed such Board Observer; or (iv) upon advice from counsel that
such exclusion or failure to provide information is reasonably necessary to
preserve legal or evidentiary privilege with respect to a material matter. Such
Board Observers shall not disclose any confidential information disclosed at a
board meeting or in connection with any written consent of the Board and, if
requested by the Company as a condition to attend any meeting or to the delivery
of any materials, shall execute a confidentiality agreement in the form
customarily executed by other members of the Board.
(c) In the event that, at any time, any provision of the LLC Agreement
is inconsistent with the requirements of any provision of this Section 2, the
Equityholders shall take such action as may be necessary and is within their
legal rights to amend any such provision in the LLC Agreement to conform with
such requirements.
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(d) None of the terms or provisions hereof shall be deemed to limit the
ability of the agents or lenders under the "Senior Loan Documents" (as defined
in the Preferred Unit Purchase Agreement) to exercise any and all rights and
remedies available at law, in equity or under the Senior Loan Documents upon the
occurrence of an Event of Default resulting from a Change of Control (as each
such term is defined in the Senior Loan Agreement).
3. Conflicting Agreements. Each Equityholder represents that such
Equityholder has not granted and is not a party to any proxy, voting trust or
other agreement which is inconsistent with or conflicts with the provisions of
this Agreement, and no holder of Equityholder Units shall grant any proxy or
become party to any voting trust or other agreement which is inconsistent with
or conflicts with the provisions of this Agreement.
4. Restrictions on Transactions with Affiliates. Except (a) for
transactions contemplated by the ABRY Management Services Agreement, (b) for
transactions contemplated by the Preferred Unit Purchase Agreement, (c) for
transactions related to Permitted Sponsor Subordinated Debt and (d) in
connection with the issuance of equity securities of the Company, after the date
hereof, the Company will not, and will not permit any of its Subsidiaries to,
enter into any material transactions with any Equityholder or any employee,
officer, director or Affiliate (other than Xxxxx Xxxxx, Xxxxxx Xxxx, the Company
or any of the Company's Subsidiaries) of any Equityholder on any basis less
favorable, in all material respects, to the Company or its Subsidiary, as the
case may be, than would be the case in an arms-length transaction with an
unrelated third party, unless such transaction has been approved by a majority
of the votes of the directors of the Board without a conflict of interest in
such transaction.
5. Restrictions on Transfer of Equityholder Units.
(a) General Restrictions. Subject to Article XI of the LLC Agreement,
an Equityholder may Transfer Equityholder Units only (i) in Public Sales, (ii)
if such Equityholder has complied with the terms and requirements of Sections
5(b) and 5(c), to the extent applicable, or if such Equityholder is exercising a
participation right granted to such Equityholder pursuant to Section 5(c), then
to any Person, provided, that such Person shall have complied with the
requirements of Section 5(d)(iii), or (iii) pursuant to an Approved Company Sale
(as herein defined).
(b) Right of First Offer granted to the ABRY Investors and the AMFM
Investors. Subject to Section 5(d)(i):
(i) If at any time any ABRY Investor (a "Selling ABRY
Investor") or any AMFM Investor (a "Selling AMFM Investor") proposes to
Transfer any Equityholder Units or any Preferred Investor (a "Selling
Preferred Investor" and, together with each Selling ABRY Investor and
each Selling AMFM Investor, a "Selling Holder") proposes to Transfer
any Common Equityholder Units (other than, in the case of each Selling
Holder, pursuant to a Public Sale, pursuant to an Approved Company
Sale, if such Selling Holder is exercising a participation right
granted to such Selling Holder pursuant to Section 5(c), or if any ABRY
Investor is assigning rights to any Other Investor pursuant to Section
12 hereof), then such Selling Holder will, not fewer than fifteen (15)
Business Days prior to making such Transfer, give notice (the "Proposed
Transfer Notice"), (A) if the Selling Holder is an ABRY Investor,
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then to each of the AMFM Investors, (B) if the Selling Holder is an
AMFM Investor, then to each of the ABRY Investors, or (C) if the
Selling Holder is a Preferred Investor, then to each of the ABRY
Investors and the AMFM Investors, specifying the Equityholder Units
proposed to be Transferred (the "Offered Units").
(ii) At any time within ten (10) Business Days after delivery
of the Proposed Transfer Notice (the "Exercise Period") (A) if the
Selling Holder is an ABRY Investor, then holders of a majority of the
then outstanding number of AMFM Units, (B) if the Selling Holder is an
AMFM Investor, then holders of a majority of the then outstanding
number of ABRY Units or (C) if the Selling Holder is a Preferred
Investor, then holders of a majority of the then outstanding number of
AMFM Units and holders of a majority of the then outstanding number of
ABRY Units (in any case, the "Offering Holders") may each notify the
Selling Holder in writing of their offer (the "Offer") to purchase all
of the Offered Units and the price (the "Offered Price") and the other
terms and conditions upon which such Offering Holder(s) proposes to
purchase such Offered Units (such offer must be solely for cash) (the
"Offer Notice"). The Offer Notice will constitute an irrevocable offer
by the Offering Holder(s) to acquire the Offered Units from the Selling
Holder at the Offered Price and on the terms specified in the Offer
Notice.
(iii) At any time during the 60 day period commencing upon the
expiration of the Exercise Period, the Selling Holder may:
(A) if an Offer Notice has been delivered to the
Selling Holder during the applicable Exercise Period, then
(x) deliver notice (1) to any Offering
Holders accepting the applicable Offer from such
Offering Holder(s) (the "Acceptance Notice");
provided, that the Selling Holder shall not accept
any Offer unless it also accepts all other Offers
made at an equal or higher price and (2) to each
other Offering Holder whose Offer is not being
accepted, a copy of such Acceptance Notice, in which
case each such Offering Holder shall have the right,
by delivery of written notice (the "Matching Notice")
to the Selling Holder within five (5) Business Days
after receipt of the copy of the Acceptance Notice
from the Selling Holder, to match the terms of the
Offer that has been accepted pursuant to such
Acceptance Notice, and upon receipt of a Matching
Notice, the Selling Holder shall be obligated to sell
a portion of the Offered Units to the Offering Holder
having delivered the Matching Notice (the "Matching
Holder"), as set forth below;
(y) provided the Selling Holder has also
complied with any applicable provisions of Section
5(c), Transfer all (unless reduced pursuant to the
exercise of rights granted to other Equityholders in
Section 5(c) and/or, if applicable, to other
equityholders of the Company in the Members
Agreement) of the Offered Units, at a price which is
greater than the highest price specified in Offer
Notices and on other terms and conditions which are
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not in the aggregate more favorable to the transferee
thereof than those specified in the Offer Notice
specifying the highest price, to any Person(s), or
(B) if an Offer Notice has not been delivered to the
Selling Holder during the applicable Exercise Period, then,
provided the Selling Holder has also complied with any
applicable provisions of Section 5(c), Transfer all (unless
reduced pursuant to the exercise of rights granted to other
Equityholders in Section 5(c) and/or, if applicable, to other
equityholders of the Company in the Members Agreement) of the
Offered Units to any Person(s).
(iv) Subject to Section 5(b)(viii) hereof, upon the proper
delivery of an Acceptance Notice, each Offering Holder whose Offer was
accepted by such Acceptance Notice, each Matching Holder and the
Selling Holder shall be firmly bound to consummate the purchase and
sale of all of the Offered Units (subject to adjustment as provided in
Section 5(b)(viii)) in accordance with the terms hereof and the
applicable Proposed Transfer Notice, Offer Notice, Acceptance Notice
and Matching Notice, if any. Subject to the provisions hereof
(including Section 5(b)(viii)), within sixty (60) days after the
Offering Holders' receipt of the applicable Acceptance Notice, each
Offering Holder whose offer was accepted and the Matching Holders, if
any, (collectively "Buying Holders") shall purchase, pro rata based on
the number of Common Units each Buying Holder owns divided by the total
number of Common Units owned by all of the Buying Holders, and the
Selling Holder shall sell all of the Offered Units (subject to
adjustment as provided in Section 5(b)(vii)) at a mutually agreeable
time and place (the "Offered Units Closing").
(v) At the Offered Units Closing, the Selling Holder shall
deliver to the Buying Holder certificates representing the Offered
Units (if certificated) to be purchased by such Buying Holder, duly
endorsed with signature guaranteed, and each Buying Holder shall
deliver to the Selling Holder the Offered Price by wire transfer of
immediately available funds to an account designated by such Selling
Holder.
(vi) Any Offered Units not Transferred within the applicable
time periods specified above will again be subject to the provisions of
this Section 5(b) upon any subsequent proposed Transfer.
(vii) The AMFM Investors and the Preferred Investors
(collectively the "Other Investors") hereby acknowledge and agree that
in connection with any Transfer of Equityholder Units from any ABRY
Investor(s) to any Other Investor (including pursuant to this Section
5(b)), such ABRY Investor(s) must offer the Non-ABRY Members (as such
term is defined in the Members Agreement) the right to participate in
such Transfer pursuant to the terms of Sections 1(b), 1(c) and 1(d) of
the Members Agreement and the applicable Other Investors will include
in any such Transfer any Securities (as such term is defined in the
Members Agreement) that such Non-ABRY Members elect to include in such
Transfer pursuant to Sections 1(b), 1(c) and 1(d) of the Members
Agreement.
(viii) The provisions of this Section 5(b) shall terminate
upon the consummation of a Qualified Public Offering.
11
(c) Participation Rights. Subject to Section 5(d)(i):
(i) Participation Rights in a Sale by ABRY Investors. In the
event of a Transfer of Equityholder Units by any ABRY Investor (a
"Selling ABRY Investor") (other than pursuant to a Public Sale or
pursuant to an Approved Company Sale), at least 15 Business Days prior
to such Transfer, such Selling ABRY Investor will deliver a written
notice (the "ABRY Sale Notice") to the Other Investors specifying in
reasonable detail the Equityholder Units to be sold, the terms and
conditions of the Transfer and the identity of the proposed
transferee(s). Subject to Section 5(c)(iii), such Other Investors may
elect to participate in the contemplated Transfer by delivering written
notice to such Selling ABRY Investor within 10 Business Days after
delivery of the applicable ABRY Sale Notice. If any Other Investor has
elected to participate in such Transfer, each such Other Investor will
be entitled to include in the contemplated Transfer, at the same price
and on the same terms (subject to Sections 5(c)(iv) and 5(c)(v)), (1) a
number of Common Equityholder Units (regardless of the class thereof)
equal to the product of (x) the quotient determined by dividing the
number of such Common Equityholder Units (regardless of the class
thereof) on a fully diluted basis, held by such Other Investor by the
aggregate number of Common Equityholder Units, on a fully diluted
basis, owned by the Other Investors participating in such Transfer and
the Selling ABRY Investor and (y) the number of Common Equityholder
Units (regardless of the class thereof) to be sold in the contemplated
Transfer; and (2) a number of Preferred Equityholder Units of the class
described in the ABRY Sale Notice equal to the product of (x) the
quotient determined by dividing the number of Preferred Equityholder
Units of such class on a fully diluted basis, held by such Other
Investor by the aggregate number of Preferred Equityholder Units of
such class, on a fully diluted basis, owned by the Other Investors
participating in such Transfer and the Selling ABRY Investor and (y)
the number of Preferred Equityholder Units of such class, if any, to be
sold in the contemplated Transfer
For example, if the ABRY Sale Notice contemplated a sale of
100 Class A Units in the aggregate by certain of the ABRY
Investors, and if the Selling ABRY Investor at such time own
80% of all Class A Units (on a fully diluted basis) and if one
Other Investor elects to participate and owns 5% of all Class
A Units and if no Class B Units are then outstanding, such
Other Investor would be entitled to sell 6 Class A Units (5%
(divided by) 85% x 100 Common Units).
Any ABRY Investor Transferring Equityholder Units pursuant to this
Section 5(c)(i) shall use its best efforts to obtain the agreement of
the prospective Transferee(s) to the participation of the Other
Investors in any contemplated Transfer, and such ABRY Investor shall
not Transfer any of its Equityholder Units to the prospective
Transferee(s) if the prospective Transferee(s) declines to allow the
participation of the Other Investors as contemplated by this Section
5(c)(i).
(ii) Participation Rights in a Sale by AMFM Investors. In the
event of a Transfer of Equityholder Units by any AMFM Investor (a
"Selling AMFM Investor") (other than pursuant to a Public Sale, or
pursuant to an Approved Company Sale), at least 15 Business Days prior
to such Transfer, such Selling AMFM Investor will deliver a written
notice (the
12
"AMFM Sale Notice") to the ABRY Investors and the Preferred Investors
specifying in reasonable detail the Equityholder Units to be sold, the
terms and conditions of the Transfer and the identity of the proposed
transferee(s). Subject to Section 5(c)(iii), such Preferred Investors
and, unless the proposed transferee is an ABRY Investor, the ABRY
Investors may elect to participate in the contemplated Transfer by
delivering written notice to such Selling AMFM Investor within 10
Business Days after delivery of the applicable AMFM Sale Notice. If any
ABRY Investor or Preferred Investor has elected to participate in such
Transfer, each such ABRY Investor or Preferred Investor will be
entitled to include in the contemplated Transfer, at the same price and
on the same terms (subject to Sections 5(c)(iv) and 5(c)(v)), (1) a
number of Common Equityholder Units (regardless of the class thereof)
equal to the product of (x) the quotient determined by dividing the
number of such Common Equityholder Units (regardless of the class
thereof) on a fully diluted basis, held by such ABRY Investor or
Preferred Investor by the aggregate number of Common Equityholder
Units, on a fully diluted basis, owned by the ABRY Investors and
Preferred Investors participating in such Transfer and the Selling AMFM
Investor and (y) the number of Common Equityholder Units (regardless of
the class thereof) to be sold in the contemplated Transfer; and (2) a
number of Preferred Equityholder Units of the class described in the
AMFM Sale Notice equal to the product of (x) the quotient determined by
dividing the number of Preferred Equityholder Units of such class on a
fully diluted basis, held by such ABRY Investor or Preferred Investor
by the aggregate number of Preferred Equityholder Units of such class,
on a fully diluted basis, owned by the ABRY Investors and Preferred
Investors participating in such Transfer and the Selling AMFM Investor
and (y) the number of Preferred Equityholder Units of such class, if
any, to be sold in the contemplated Transfer. Any AMFM Investor
Transferring Equityholder Units pursuant to this Section 5(c)(ii) shall
use its best efforts to obtain the agreement of the prospective
Transferee(s) to the participation of the ABRY Investors and Preferred
Investors in any contemplated Transfer, and such AMFM Investor shall
not Transfer any of its Equityholder Units to the prospective
Transferee(s) if the prospective Transferee(s) declines to allow the
participation of the ABRY Investors or Preferred Investors as
contemplated by this Section 5(c)(ii).
(iii) Limitations on Participation Rights. An Equityholder may
exercise its participation rights in accordance with Section 5(c)(i) or
Section 5(c)(ii), as the case may be; provided, that no Class B Unit
may be included by any Equityholder participating in any Transfer
pursuant to Section 5(c) unless the aggregate purchase price to be paid
for all Common Investment Units to be included by the applicable
Selling ABRY Investor, or Selling AMFM Investor in such Transfer is
equal to or greater than the aggregate Unpaid Yield and Unreturned
Common Investment Unit Capital Value for such Common Investment Units
to be included by such Selling ABRY Investor or Selling AMFM Investor.
(iv) Allocation of Transfer Price. In any event, each Person
Transferring Equityholder Units pursuant to Section 5(c)(i) or Section
5(c)(ii) shall receive, in exchange for the Equityholder Units to be
Transferred by such Person, the same portion of the aggregate
consideration from the aggregate Transfer that such Person would have
received if such aggregate consideration had been distributed by the
Company pursuant to Section 7.1 of, subject to Sections 7.2 and 7.3 of,
the LLC Agreement as in effect immediately prior to
13
the Transfer and the Equityholder Units included in such Transfer
constituted all of the outstanding Equityholder Units of the Company at
such time.
(v) Termination of Participation Rights. The provisions of
this Section 5(c) shall terminate upon the consummation of an initial
Public Offering.
(d) Permitted Transfers.
(i) The restrictions contained in Sections 5(a), 5(b) and 5(c)
shall not apply with respect to any Transfer of Equityholder Units by
any Equityholder (A) in the case of an individual Equityholder,
pursuant to applicable laws of descent and distribution or to any
member of such Equityholder's Family Group, (B) in the case of a
non-individual Equityholder, to its employees, consultants and
Affiliates, or (C) in addition to the rights granted in clause (B)
above, in the case of ABRY (if it becomes a Permitted Transferee), in a
pro rata distribution to its partners; provided, in each case, that any
such transferee shall have complied with the requirements of Section
5(d)(ii).
(ii) Prior to any proposed transferee's acquisition of
Equityholder Units pursuant to a Transfer permitted by Section 5(a)(ii)
or Section 5(d)(i), such proposed transferee must agree to take such
Equityholder Units subject to and to be fully bound by the terms of
this Agreement applicable to such Equityholder Units by executing a
joinder to this Agreement substantially in the form attached hereto as
Exhibit A and delivering such executed joinder to the Secretary of the
Company prior to the effectiveness of such Transfer (unless such
Transfer is pursuant to applicable laws of descent and distribution, in
which case, such executed joinder shall be delivered to the Secretary
of the Company as soon as reasonably possible after such Transfer). All
transferees acquiring Equityholder Units and executing a joinder in
compliance with this Section 5(d)(ii) are collectively referred to
herein as "Permitted Transferees".
(e) If (i) any Transfer occurs of a majority interest in the common
equity securities of a Equityholder, other than a Preferred Investor, owning
Equityholder Units to a transferee(s) that is not an Affiliate of such
Equityholder, or (ii) any Equityholder Transfers Equityholder Units to an
Affiliate and an event occurs which causes such Affiliate to cease to be an
Affiliate of such Equityholder, such event or Transfer shall be deemed a
Transfer of Equityholder Units subject to all of the restrictions on Transfers
of Equityholder Units set forth in this Agreement, including without limitation,
this Section 5; provided, that no transfer of Equityholder Units shall be deemed
to occur hereunder by virtue of the issuance and distribution of additional
common equity securities of an Equityholder pursuant to an underwritten public
offering.
6. Approved Company Sale.
(a) If the Board and a Majority in Voting Interest approve a sale of
all or substantially all of the Company's assets determined on a consolidated
basis or a sale of all (or a lesser percentage, if the acquiring Person(s)
reasonably requests for accounting or tax reasons) of the Company's outstanding
Common Units (in either case, whether by merger, recapitalization,
consolidation, reorganization, combination or otherwise) or any other
transaction which has the same effect as any
14
of the foregoing to an Independent Third Party or group of Independent Third
Parties (each such sale or transaction, an "Approved Company Sale"), then each
holder of Equityholder Units will consent to and raise no objections against the
Approved Company Sale. If the Approved Company Sale is structured as a merger or
consolidation, then each holder of Equityholder Units shall waive any dissenters
rights, appraisal rights or similar rights in connection with such merger or
consolidation. If the Approved Company Sale is structured as a Transfer of
Equityholder Units, then subject to the following sentence each holder of
Equityholder Units shall agree to sell all of his or its Equityholder Units and
rights to acquire Equityholder Units on the terms and conditions approved by the
Board and a Majority in Voting Interest. Each holder of Equityholder Units shall
take all necessary or desirable actions in connection with the consummation of
an Approved Company Sale as requested by the Board, including, without
limitation, executing a sale contract pursuant to which each ABRY Investor and
each AMFM Investor will severally (but not jointly) make the same
representations, warranties and indemnities regarding the Company and its
assets, liabilities and business (collectively, the "Company Reps") and each
holder of Equityholder Units will severally (but not jointly) make such
representations and warranties concerning such holder and the Equityholder Units
to be sold by it or him as may be set forth in any agreement approved by the
Board; provided, that if any holder of Equityholder Units pays any amount in
connection with any claim under the Company Reps by the purchaser or purchasers
in such Approved Company Sale (a "Company Loss"), then each other holder of
Equityholder Units will simultaneously contribute to such holder of Equityholder
Units an amount equal to such contributing holder's pro rata share (based upon
the amount of consideration received in such Approved Company Sale with respect
to Common Equityholder Units) of such Company Loss; provided further, that a
holder of Equityholder Units shall be required to make the Company Reps only if
the sale contract which such holder is required to sign provides that such
holder's maximum liability for any breach of the Company Reps shall be the
purchase price received by such holder for the sale of its Equityholder Units.
(b) The obligations of the holders of Equityholder Units pursuant to
Section 6(a) are subject to the satisfaction of the following conditions: (i)
unless the holders of at least sixty percent (60%) of the Preferred Equityholder
Units agree otherwise, the aggregate consideration to be received in respect of
the Preferred Units shall be in immediately available funds in an amount not
less than the aggregate Unpaid Series A Preferred Return plus the Unreturned
Series A Preferred Unit Capital Value; (ii) upon the consummation of the
Approved Company Sale, each holder of Equityholder Units shall receive the same
form of consideration, except as necessary to comply with the provisos set forth
below, and the same portion of the aggregate consideration such holder would
have received if such aggregate consideration had been distributed by the
Company pursuant to Section 7.1 of, subject to Sections 7.2 and 7.3 of, the LLC
Agreement as in effect immediately prior to the consummation of the Approved
Company Sale (and, if less than all of the outstanding Common Units are being
sold in the Approved Company Sale, then the form and portions of aggregate
consideration shall be determined as if the Equityholder Units included in the
Approved Company Sale were all of the outstanding Common Units then
outstanding); (iii) except as necessary to comply with the proviso set forth
below, if any holders of Common Equityholder Units are given an option as to the
form and amount of consideration to be received, each holder of Common
Equityholder Units shall be given the same option; and (iv) each holder of then
currently exercisable rights to acquire Equityholder Units shall be given an
opportunity to exercise such rights prior to the consummation of the Approved
Company Sale and participate in such sale as a holder of such Equityholder
Units; provided, that notwithstanding clauses (i) - (iv) above, if all or part
of the
15
consideration that would otherwise be paid to any holder of Common Equityholder
Units issued pursuant to the Preferred Unit Purchase Agreement is not cash, then
such holder will have the right to elect to receive, in lieu of such non-cash
consideration, cash in an amount equal to the market value of such non-cash
consideration (it is understood that notwithstanding clause (iii) above, the
right to make such an election may not be provided to other holders). If all or
any part of the consideration that would otherwise be paid to any holder of
Common Equityholder Units issued pursuant to the Preferred Unit Purchase
Agreement is not cash, then such holder shall have the right to make the
election described in the foregoing proviso by giving written notice to the
Company to that effect within ten (10) Business Days after such holder receives
written notice from the Company describing in reasonable detail such non-cash
consideration and setting forth the Company's good faith estimate of the market
value thereof, and such election (or lack thereof) will be binding on any
subsequent holder of such Common Equityholder Units issued pursuant to the
Preferred Unit Purchase Agreement as to the Approved Company Sale in question.
(c) If the Board, the Company or any of the holders of Equityholder
Units enter into any negotiation or transaction for which Rule 506 under the
Securities Act (or any similar rule then in effect) promulgated by the
Securities Exchange Commission may be available with respect to such negotiation
or transaction (including a merger, consolidation or other reorganization), each
holder of Equityholder Units who is not an "accredited investor," as that term
is defined in Regulation D as promulgated under the Securities Act, will, at the
request of the Company, appoint either a purchaser representative (as such term
is defined in Rule 501 under the Securities Act) designated by the Company, in
which event the Company will pay the fees of such purchaser representative, or
another purchaser representative (reasonably acceptable to the Company), in
which event such holder will be responsible for the fees of the purchaser
representative so appointed.
(d) All holders of Equityholder Units will bear their pro rata share
(based upon the amount of consideration received or proposed to be received with
respect to Common Equityholder Units in the applicable actual or proposed
Approved Company Sale) of the costs of any actual or proposed Approved Company
Sale to the extent such costs are incurred for the benefit of all such holders
of Equityholder Units and are not otherwise paid by the Company or the acquiring
party. Costs incurred by the holders of Equityholder Units on their own behalf
will not be considered costs of the Approved Company Sale; provided, that in any
event the Company shall pay the reasonable attorney's fees and expenses of one
counsel chosen by a Majority in Voting Interest in connection with the Approved
Company Sale.
(e) Termination of Restrictions and Requirements. The restrictions and
requirements set forth in this Section 6 will continue with respect to the
Equityholders and their Equityholder Units until the consummation of a Qualified
Public Offering.
7. Financial Statements and Information.
(a) Prior to the consummation of an initial Public Offering, the
Company shall deliver to each AMFM Investor who holds more than 5% of the then
outstanding number of Common Units:
(i) within 60 days after the end of each monthly accounting
period in each fiscal year of the Company (other than any monthly
accounting period ending on the last day of a
16
fiscal quarter of the Company) (or such earlier date as such financial
statements are delivered to the providers of any of the Company's debt
financing), unaudited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such monthly period (and, if
otherwise available, unaudited consolidated statements of income of the
Company and its Subsidiaries for the period from the beginning of the
fiscal year to the end of such month) and unaudited consolidated
balance sheets of the Company and its Subsidiaries as of the end of
such monthly period (and, if otherwise available, such financial
statements shall set forth in each case comparisons to the Company's
and its Subsidiaries' corresponding period in the preceding fiscal
year). Such financial statements shall be prepared, in all material
respects, in accordance with generally accepted accounting principles,
consistently applied, subject to the absence of footnote disclosures
and to normal year-end adjustments;
(ii) within 60 days after the end of each quarterly accounting
period in each fiscal year of the Company (other than any quarterly
accounting period ending on the last day of a fiscal year of the
Company) (or such earlier date as such financial statements are
delivered to the providers of any of the Company's debt financing),
unaudited consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period (and, if
otherwise available, unaudited consolidated statements of income of the
Company and its Subsidiaries for the period from the beginning of the
fiscal year to the end of such quarter) and unaudited consolidated
balance sheets of the Company and its Subsidiaries as of the end of
such quarterly period (and, if otherwise available, such financial
statements shall set forth in each case comparisons to the Company's
and its Subsidiaries' corresponding period in the preceding fiscal
year). Such financial statements shall be prepared, in all material
respects, in accordance with generally accepted accounting principles,
consistently applied, subject to the absence of footnote disclosures
and to normal year-end adjustments; and
(iii) within 120 days after the end of each fiscal year of the
Company (or such earlier date as such financial statements are
delivered to the providers of any of the Company's, debt financing),
audited consolidated statements of income and cash flows of the Company
and its Subsidiaries for such fiscal year, and audited consolidated
balance sheets of the Company and its Subsidiaries as of the end of
such fiscal year (and, if otherwise available, such financial
statements shall set forth in each case comparisons to the Company's
and its Subsidiaries' corresponding period in the preceding fiscal
year). Such financial statement shall be prepared, in all material
respects, in accordance with generally accepted accounting principles,
consistently applied.
(b) Prior to the consummation of an initial Public Offering, as may be
reasonably requested from time to time, the Company shall cooperate with and
provide financial information to each AMFM Investor who holds more than 5% of
the then outstanding number of Common Units for purposes of such AMFM Investor's
reporting obligations under the Securities Exchange Act of 1934, as amended, or
as may otherwise be required by such AMFM Investor for disclosure to the
securities analysts who follow such AMFM Investor's publicly traded securities.
8. Legend. From and after the date hereof, each certificate or
instrument evidencing Equityholder Units and each certificate or instrument
issued in exchange for or upon the Transfer of
17
any Equityholder Units (if such securities remain Equityholder Units (as defined
herein) after such Transfer) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT DATED AS OF OCTOBER 18,
2000, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, BY AND AMONG THE
ISSUER AND CERTAIN OF THE ISSUER'S EQUITYHOLDERS. A COPY OF SUCH
SECURITYHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
The legend set forth above shall be removed from the certificates evidencing any
securities which cease to be Equityholder Units.
9. Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Equityholder Units in violation of any provision of this
Agreement or the LLC Agreement shall be null and void, and the Company shall not
record such Transfer on its books or treat any purported transferee of such
Equityholder Units as the owner of such securities for any purpose.
10. Preemptive Rights.
(a) If at any time after the date hereof and prior to the consummation
of a Qualified Public Offering the Company wishes to issue any Preferred Units,
Common Units or any options, warrants or other rights to acquire Preferred
Units, Common Units or any notes or other securities convertible or exchangeable
into Preferred Units, Common Units (all such Preferred Units, Common Units and
other rights and securities, collectively, the "Equity Equivalents") to any
Person or Persons, the Company shall promptly deliver a notice of intention to
sell or otherwise issue (the "Company's Notice of Intention to Sell") to each
Equityholder setting forth a description and the number of the Equity
Equivalents and any other securities proposed to be issued and the proposed
purchase price and terms of sale. Upon receipt of the Company's Notice of
Intention to Sell, each Equityholder shall have the right to elect to purchase,
at the price and on the terms stated in the Company's Notice of Intention to
Sell, a number of the Equity Equivalents equal to the product of (i) such
Equityholder's proportionate ownership of the then outstanding number of Common
Units (calculated on a fully-diluted basis assuming all holders of then
outstanding warrants, options and convertible securities of the Company which
are convertible or exercisable on such date and which have preemptive rights
with respect to the applicable issuance of Equity Equivalents have converted
such convertible securities or exercised such warrants or options) held by all
Persons multiplied by (ii) the number of Equity Equivalents proposed to be
issued (as described in the applicable Company's Notice of Intention to Sell).
Notwithstanding anything contained herein to the contrary, if the Company is
issuing Equity Equivalents together as a unit with the issuance of any debt or
other equity securities of the Company or any of its Subsidiaries, then any
Equityholder who elects to purchase such Equity Equivalents pursuant to this
Section 10 must also purchase a corresponding proportion of such other debt or
equity securities, all at the proposed purchase price and on terms of sale as
specified in the applicable Company's Notice of Intention to Sell. Such election
shall be made by the electing Equityholder by written notice to the Company
within ten (10) Business Days
18
after receipt by such Equityholder of the Company's Notice of Intention to Sell
(the "Acceptance Period"). With respect to any Company's Notice of Intention to
Sell delivered to any Equityholder which is BACI, New York Life, Northwestern,
AMFM or ABRY, or an Affiliate of these entities, such Equityholder may assign in
whole or in part its preemptive rights pursuant to this Section 10 with respect
to the sale or issuance of the Equity Equivalents which are the subject of such
Company's Notice of Intention to Sell to any Affiliate of such Equityholder (a
"Section 10 Assignee"); provided, that as a condition to the sale or issuance of
the applicable Equity Equivalents to such Section 10 Assignee, such Section 10
Assignee must execute and deliver to the Company a joinder to this Agreement
substantially in the form of Exhibit A hereto pursuant to which such Section 10
Assignee shall be deemed to be (A) a "Preferred Investor," an "AMFM Investor,"
or an "ABRY Investor," (B) as applicable for the assignee of any rights from
BACI, New York Life, Northwestern and AMFM, an "Other Investor," and (C) an
"Equityholder" for purposes of this Agreement.
(b) Notwithstanding the foregoing, if the Company intends to issue
Equity Equivalents solely to ABRY, MEM Holdings or any of their respective
Affiliates or would be prohibited under the provisions of any Credit Document
(as defined in the Preferred Unit Purchase Agreement) from issuing such Equity
Equivalents to any other Person, the Company may issue such Equity Equivalents
without following the procedures set forth in Section 10(a) above; provided,
that (i) the Company will provide written notice to the Equityholders not later
than five (5) days after such issuance of Equity Equivalents to ABRY, MEM
Holdings or any of their respective Affiliates; and (ii) notwithstanding such
issuance of Equity Equivalents to ABRY, MEM Holdings or any of their respective
Affiliates, the Company will either issue or provide in the terms of the Equity
Equivalents issued to ABRY, MEM Holdings or any of their respective Affiliates,
as the case may be, that ABRY, MEM Holdings or any of their respective
Affiliates must (A) transfer (so long as the transferee agrees as provided in
Section 13(b)), on identical terms to each Equityholder (to the extent their
rights are exercised under this Section 10 within 10 Business Days of such 5-day
notice), an amount of such Equity Equivalents issued by the Company so that
after giving effect to such issuance or transfer to such Equityholders and any
redemption or any repayment of any such Equity Equivalents issued to ABRY, MEM
Holdings or any of their respective Affiliates, each such Equityholder will have
had the opportunity to purchase its pro rata share of such Equity Equivalents as
required by clause (a) above or (B) to the extent any transfers necessary to
comply with the foregoing proviso would be prohibited by the provisions of any
Credit Document (as defined in the Preferred Unit Purchase Agreement), sell a
participation or similar right in such Equity Equivalents to each Equityholder
(to the extent their rights are exercised under this Section 10 within 10
Business Days of such 5-day notice), so as to provide to such Equityholder, as
nearly as possible, the economic benefits that would arise out of such
Equityholder's ownership of such Equity Equivalents which it would have
otherwise purchased pursuant to the preceding clause (ii); provided, further,
that, if such Equity Equivalents held by ABRY, MEM Holdings or any of their
respective Affiliates pursuant to this clause (ii)(B) convert into or are
exchanged for other securities, the transfer of which is not restricted, ABRY,
MEM Holdings and/or any of their respective Affiliates, as applicable shall
transfer (notwithstanding the provisions of Section 5) the applicable portion of
such other securities to each Equityholder having a participation right therein.
(c) To the extent an effective election to purchase has not been
received from an Equityholder pursuant to subsection (a) above in respect of the
Equity Equivalents proposed to be
19
issued pursuant to the applicable Company's Notice of Intention to Sell, the
Company may, at its election, during a period of one hundred and eighty (180)
days following the expiration of the applicable Acceptance Period, issue and
sell the remaining Equity Equivalents to be issued and sold to any Person at a
price and upon terms not more favorable to such Person than those stated in the
applicable Company's Notice of Intention to Sell; provided, however, that
failure by an Equityholder to exercise its option to purchase with respect to
one issuance and sale of Equity Equivalents shall not affect its option to
purchase Equity Equivalents in any subsequent offering, sale and purchase. In
the event the Company has not sold any Equity Equivalents covered by a Company's
Notice of Intention to Sell within such one hundred and eighty (180) day period,
the Company shall not thereafter issue or sell such Equity Equivalents, without
first offering such Equity Equivalents to each Equityholder in the manner
provided in this Section 10.
(d) If an Equityholder gives the Company notice, pursuant to the
provisions of this Section l0, that such Equityholder desires to purchase any
Equity Equivalents, payment therefor shall be by check or wire transfer of
immediately available funds, against delivery of the securities (which
securities shall be issued free and clear of any liens or encumbrances) at the
executive offices of the Company no later than the last closing date fixed by
the Company for the sale of the applicable Equity Equivalents, which last
closing date shall be no earlier than 20 Business Days after the date the
Company delivers the applicable Company's Notice of Intention to Sell or notice
pursuant to Section 10(b), as applicable. In the event that any proposed sale is
for a consideration other than cash, such Equityholder may pay cash in lieu of
all (but not part) of such other consideration, in the amount determined
reasonably and in good faith by the Board to represent the fair value of such
consideration other than cash.
(e) The preemptive rights contained in this Section 10 shall not apply
to (i) the issuance of shares or units of Common Units or Equity Equivalents
convertible solely into or exercisable solely for Common Units (collectively,
"Common Equity Equivalents") as a stock or unit dividend or other distribution
or upon any subdivision, split or combination of the outstanding Common Units;
(ii) the issuance of Common Equity Equivalents upon conversion, exchange or
redemption of any outstanding convertible or exchangeable securities; (iii) the
issuance of Common Equity Equivalents upon exercise of any outstanding options
or warrants; (iv) the issuance of Common Equity Equivalents to any employee or
director of the Company or any of its Subsidiaries (unless such employee or
director is also an officer or employee of ABRY or any of ABRY's Affiliates
(other than Xxxxx Xxxxx, Xxxxxx Xxxx, the Company or any of the Company's
Subsidiaries)); (v) the issuance of Common Equity Equivalents to any Independent
Third Party or group of Independent Third Parties as consideration (whether
partial or otherwise) for the purchase by the Company or any of its Subsidiaries
from such Independent Third Party or group of Independent Third Parties, as the
case may be, of assets constituting a business unit or of the stock or other
equity securities of any Person or Persons; (vi) the issuance of Class B-4 Units
pursuant to Section 5.6 of the LLC Agreement; (vii) the issuance of Common
Equity Equivalents pursuant to the Preferred Unit Purchase Agreement; or (viii)
the issuance of Common Equity Equivalents pursuant to a Qualified Public
Offering.
(f) The provisions of this Section 10 shall terminate upon the
consummation of a Qualified Public Offering.
20
11. Further Assurances. In the event that the Board approves a
recapitalization of, or a transaction requiring the recapitalization of, the
Company or its Subsidiaries, including, without limitation, an initial Public
Offering, including pursuant to the Registration Agreement, then the Company and
all holders of Equityholder Units shall take all necessary or desirable actions
in connection with the consummation of such recapitalization or transaction as
the Board or a Majority in Voting Interest so request subject to the following
limitation: immediately after any such recapitalization or transaction, each
Equityholder shall hold securities of the applicable surviving entity with
rights, preferences and privileges substantially equivalent to the Equityholder
Units held by such Equityholder immediately prior to such recapitalization or
transaction. Without limiting the generality of the foregoing, if requested as
provided in the immediately preceding sentence, then (i) the Company and each
Equityholder shall take such actions as may be necessary or desirable for the
Company to convert to a corporate form, including without limitation the
approval of a merger of the Company with and into a corporation, with the result
that each Equityholder shall hold capital stock of such surviving corporation
(the "Successor Corporation") with rights, preferences and privileges
substantially equivalent to the Equityholder Units held by such Equityholder,
and (ii) the Company and each Equityholder shall take such actions as may be
necessary or desirable to cause the Successor Corporation to assume all of the
obligations of the Company under this Agreement.
12. Participation Rights Granted to the AMFM Investors. If at any time
any ABRY Investor(s) (collectively, a "Purchasing ABRY Investor") exercises its
right of first refusal pursuant to Section 3 of the Members Agreement with
respect to the transfer by any MHC Member (as such term is defined in the
Members Agreement) of any Securities (as such term is defined in the Members
Agreement) by delivering an Acceptance Notice (as such term is defined in the
Members Agreement) to such MHC Member, then, no later than five (5) Business
Days after delivering such Acceptance Notice to such MHC Member, such Purchasing
ABRY Investor shall give notice (a "Participation Notice") to the AMFM Investors
specifying (x) the Securities to be purchased by such Purchasing ABRY Investor
from such MHC Member and (y) the price and the other terms and conditions upon
which such Purchasing ABRY Investor shall purchase such Securities. Each AMFM
Investor will have five (5) Business Days after its receipt of a Participation
Notice during which to notify the applicable Purchasing ABRY Investor in writing
of its election to participate with such Purchasing ABRY Investor's purchase of
the applicable Securities (an "Election to Participate Notice"). If any AMFM
Investor elects to participate with a Purchasing ABRY Investor in the purchase
of Securities from an MHC Member pursuant to the terms of this Section 12, then
such Purchasing ABRY Investor shall assign to such AMFM Investor the right to
purchase from such MHC Member a number of Securities equal to the product of (x)
the quotient determined by dividing the number of Equityholder Units on a fully
diluted basis owned by such AMFM Investor by the aggregate number of
Equityholder Units on a fully-diluted basis owned by all AMFM Investors
participating in such purchase of Securities from such MHC Member and all of the
ABRY Investors and (y) the number of Securities which the applicable Purchasing
ABRY Investor originally elected to purchase from such MHC Member pursuant to
the applicable Acceptance Notice. Upon delivery of an Election to Participate
Notice, the AMFM Investor which delivered such Election to Participate Notice
shall be firmly bound to consummate the purchase of the applicable Securities in
accordance with the terms of this Section 12 and Section 3 of the Members
Agreement and such purchase shall occur at the applicable Offered Securities
Closing (as such term is defined in the Members Agreement).
21
13. Permitted Sponsor Subordinated Debt. MEM Holdings agrees that (a)
immediately upon the occurrence of any of the events described in Section
12.01(f) or 12.01(g) of the Preferred Unit Purchase Agreement, without regard to
the grace period set forth in Section 12.01(f)(ii) of the Preferred Unit
Purchase Agreement, notwithstanding anything in any instrument evidencing any
Permitted Sponsor Subordinated Debt to the contrary, it shall convert or cause
to be converted into Common Units all Permitted Sponsor Subordinated Debt held
by it and (b) it will not transfer the Permitted Sponsor Subordinated Debt to
any Person unless such transferee expressly agrees to hold such Permitted
Sponsor Subordinated Debt subject to the provisions this Section 13. Muzak LLC
shall be a third party beneficiary of this Section 13.
14. Amendment and Waiver. No modification or amendment of any provision
of this Agreement shall be effective against the Equityholders or the Company
unless such modification or amendment is made in accordance with the provisions
of the Credit and Guaranty Agreement dated as of March 18, 1999 among Audio
Communications Network, LLC (n/k/a Muzak LLC), as borrower, the Company and
certain subsidiaries of Audio Communications Network, LLC, as guarantors,
various lenders, Xxxxxxx Xxxxx Credit Partners L.P., as syndication agent,
Canadian Imperial Bank of Commerce, as administrative agent, and Xxxxxxx Sachs
Credit Partners L.P., and CIBC Xxxxxxxxxxx Corp. as co-lead arrangers, as
amended, restated, supplemented or otherwise modified from time to time, and is
approved in writing by (i) the Company, (ii) the holder(s) of a majority of the
number of then outstanding ABRY Units, (iii) the holder(s) of a majority of the
number of the then outstanding AMFM Units and (iv) the Required Holders (as
defined in the Preferred Unit Purchase Agreement). No waiver of any provision of
this Agreement shall be effective against any Equityholder unless such waiver is
approved in writing by such Equityholder. No waiver of any provision of this
Agreement shall be effective against the Company unless such waiver is approved
in writing by the Company. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms. Each
Equityholder shall remain a party to this Agreement only so long as such person
is the holder of record of Equityholder Units.
15. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity; illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
16. Entire Agreement. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way. Without limitation of the foregoing, (a) this Agreement amends and
restates the Original Agreement in its entirety, (b) the New Equityholders
Agreement is hereby terminated, and
22
(c) New York Life and Northwestern shall have no further rights or obligations
under the Members Agreement.
17. Termination. This Agreement will automatically terminate and be of
no further force or effect immediately after the consummation of an Approved
Company Sale.
18. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Equityholders and any subsequent
holders of Equityholder Units and the respective successors, heirs and assigns
of each of them, so long as they hold Equityholder Units.
19. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
20. Remedies. The parties hereto shall be entitled to enforce their
rights under this Agreement specifically to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the Company and any Equityholder may in his, hers, or its
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief (without posting a bond or
other security) in order to enforce or prevent any violation of the provisions
of this Agreement.
20. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered if delivered
personally, sent via a nationally recognized overnight courier, or sent via
facsimile to the recipient, or if sent by certified or registered mail, return
receipt requested, will be deemed to have been given two Business Days
thereafter. Such notices, demands and other communications will be sent to the
address indicated below:
To the Company:
Muzak Holdings LLC
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxx, XX 00000
Attention: President
With a copy, which shall not constitute notice, to:
ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
23
and:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To MEM Holdings:
MEM Holdings, LLC
ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
With a copy, which shall not constitute notice, to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To AMFM:
AMFM Systems, Inc.
000 X. Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
With a copy, which shall not constitute notice, to:
Clear Channel Communications, Inc.
000 X. Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Legal Department
Telecopy No.: (000) 000-0000
To BACI:
BancAmerica Capital Investors I, L.P.
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
00
Xxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxx Xxxx
Telecopy No.: (000) 000-0000
With a copy, which shall not constitute notice, to:
Kennedy, Covington, Xxxxxxx & Xxxxxxx, L.L.P.
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To New York Life:
New York Life Capital Partners, L.P.
00 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
With a copy, which shall not constitute notice, to:
Office of the General Counsel
New York Life Insurance Company
00 Xxxxxxx Xxxxxx-Xxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
To Northwestern:
The Northwestern Mutual Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxx / Securities Department
Telecopy No.: (000) 000-0000
or such other address, telecopy number or to the attention of such other person
as the recipient party shall have specified by prior written notice to the
sending party.
21. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware, without giving effect to any
rules, principles or provisions of choice of law or conflict of laws.
22. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
25
23. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT
OR ANY ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION OR ENFORCEMENT THEREOF.
* * * * *
26
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Securityholders Agreement as of the date first above written.
MUZAK HOLDINGS LLC
By: /s/ Xxxxxxx X. Xxxxxx XX
--------------------------------------------
Name:
------------------------------------
Title: Vice President and General Counsel
-----------------------------------
MEM HOLDINGS, LLC
By: /s/ Xxxx Xxxxxx
--------------------------------------------
Name:
------------------------------------
Title: Vice President
-----------------------------------
AMFM SYSTEMS, INC.
By: /s/ Xxxxx Xxxx
--------------------------------------------
Name:
------------------------------------
Title: Senior Vice President - Finance
-----------------------------------
BANCAMERICA CAPITAL INVESTORS I, L.P.
By: BancAmerica Capital Management I, L.P.,
Its general partner
By: BACM I GP, LLC, Its general partner
By: /s/ J. Xxxxxx Xxxx
____________________________________
Name: __________________________________
Title: _________________________________
27
[CONTINUATION TO SIGNATURE PAGE TO THIS AMENDED
AND RESTATED SECURITYHOLDERS AGREEMENT]
NEW YORK LIFE CAPITAL PARTNERS, L.P.
By: NYLCAP Manager, LLC, Its Investment
Manager
By: /s/ Xxxxxx Xxxxxxxxx
_________________________________________
Name: _________________________________
Title: ________________________________
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
BY: /s/ Xxxxxxx X. Xxxxxx
_________________________________________
Name: Xxxxxxx X. Xxxxxx
________________________________
Title: Its Authorized Representative
_______________________________
28
EXHIBIT A
FORM OF JOINDER TO AMENDED AND
RESTATED SECURITYHOLDERS AGREEMENT
----------------------------------
THIS JOINDER to the Amended and Restated Securityholders Agreement
dated as of October 18, 2000 by and among Muzak Holdings-LLC, a Delaware limited
liability company (the "Company"), and certain equityholders of the Company (the
"Agreement"), is made and entered into as of ____________ by and between the
Company and ____________________ ("Holder"). Capitalized terms used herein but
not otherwise defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain Equityholder Units and the
Agreement and the Company require Holder, as a holder of such Equityholder
Units, to become a party to the Agreement, and Holder agrees to do so in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Joinder hereby agree as
follows:
1. Agreement to be Bound. Holder hereby agrees that upon execution of
this Joinder, it shall become a party to the Agreement and shall be fully bound
by, and subject to, all of the covenants, terms and conditions of the Agreement
as though an original party thereto and shall be deemed [an ABRY Investor/an
AMFM Investor/a Preferred Investor] and an Equityholder for all purposes
thereof. In addition, Holder hereby agrees that all Common Units held by Holder
shall be deemed [ABRY/AMFM/Preferred Investor] Units and Equityholder Units for
all purposes of the Agreement.
2. Successors and Assigns. Except as otherwise provided herein, this
Joinder shall bind and inure to the benefit of and be enforceable by the Company
and its successors, heirs and assigns and Holder and any subsequent holders of
Equityholder Units and the respective successors, heirs and assigns of each of
them, so long as they hold any Equityholder Units.
3. Counterparts. This Joinder may be executed in separate counterparts
each of which shall be an original and all of which taken together shall
constitute one and the same agreement.
4. Notices. For purposes of Section 20 of the Agreement, all notices,
demands or other communications to the Holder shall be directed to:
[Name]
[Address]
[Facsimile Number]
5. Governing Law. This Joinder shall be governed by and construed in
accordance with the laws of the state of Delaware, without giving effect to any
rules, principles or provisions of choice of law or conflict of laws.
1
6. Descriptive Headings. The descriptive headings of this Joinder are
inserted for convenience only and do not constitute a part of this Joinder.
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as of
the date first above written.
MUZAK HOLDINGS LLC
By: ________________________________________
Title: _____________________________________
(HOLDER)
By: ________________________________________
Name: _________________________________
Title: ________________________________
2
