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EXHIBIT 9.1
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EXHIBIT 9.1
AGREEMENT
This agreement (the "Agreement") is made and entered into effective as
of March 26, 1996 by and among (i) the holders (the "Senior Holders") of all of
the issued and outstanding shares of Xxxxxx Communications Corporation's (the
"Company") "Existing Senior Preferred Stock" and "New Senior Preferred Stock"
(both as defined in the "Stockholders Agreement" (as defined below)), (ii) the
holders (the "Junior Holders", and with the Senior Holders, collectively, the
"Holders") of all of the issued and outstanding shares of the Company's "Junior
Preferred Stock" (as defined in the Stockholders Agreement), (iii) the "Initial
Management Investors" (as defined in the Stockholders Agreement), and (iv) the
Company. Terms not otherwise defined herein shall have the meanings given in
that certain amended and restated stockholders agreement dated as of December
22, 1994 by and among the parties hereto, including the amended and restated
registration rights provisions (the "Registration Rights Provisions") attached
as Exhibit A thereto (collectively, as heretofore amended, the "Stockholders
Agreement").
RECITALS
A. Effective December 15, 1993, the Company and the Senior
Holders entered into a stock purchase agreement pursuant to which the Company
sold to the Senior Holders 2,000 shares of preferred stock designated as "15%
Cumulative Compounding Redeemable Preferred Stock," par value $0.001 per share
(the "Initial Senior Preferred Stock"), and certain warrants (the "Existing
Warrants") to purchase shares of common stock issued by the Company subject to
a warrant agreement dated December 15, 1993 among the Company, the Senior
Holders and a warrant agent named therein (the "Existing Warrant Agreement").
In connection with the foregoing, the Company, the Senior Holders and the
Initial Management Investors entered into a stockholders agreement dated as of
December 15, 1993 (the "Initial Stockholders Agreement").
B. Effective November 4, 1994, the Company amended its
certificate of incorporation to provide for two classes of common stock, Class
A common stock, par value $0.001 per share with one vote per share ("Class A
Common Stock"), and Class B common stock, par value $0.001 per share with ten
votes per share ("Class B Common Stock"). In connection therewith, the Company
caused each of its outstanding shares of common stock to be split into a
certain number of shares of Class A Common Stock and a certain number of shares
of Class B Common Stock.
C. Effective December 22, 1994, the Company, the Senior Holders
and the Initial Management Investors entered into an
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exchange agreement and consent (the "Exchange Agreement"), pursuant to which
each Senior Holder exchanged certain shares of Class A Common Stock and Class B
Common Stock issued upon the exercise of certain of the Existing Warrants for
all of the shares of the New Senior Preferred Stock, and reached additional
agreements and modified certain then existing agreements.
D. Effective December 22, 1994, the Company amended its
certificate of incorporation to provide for an additional class of common
stock, Class C common stock, par value $0.001 per share with no votes per share
("Class C Common Stock") and increased the number of authorized shares of Class
A Common Stock, Class B Common Stock and preferred stock.
E. Effective December 22, 1994, the Company and the Junior
Holders entered into a security purchase agreement (the "New Purchase
Agreement"), pursuant to which the Junior Holders subscribed for and purchased
pursuant thereto from the Company 33,000 shares of Junior Preferred Stock and
certain warrants (the "New Warrants") to purchase shares of Class C Common
Stock. In connection therewith, the Company, the Senior Holders, the Junior
Holders and the Initial Management Investors entered into the Stockholders
Agreement. The Stockholders Agreement, among other things, amended and
restated the Initial Stockholders Agreement and set forth certain rights of the
parties thereto with respect to certain interests in the Company.
F. Effective January 1, 1995, the Company effected a stock split
by the issuance of a dividend of one share of Class A Common Stock for each two
shares of Class A Common Stock outstanding on such date and one share of Class
B Common Stock for each two shares of Class B Common Stock outstanding on such
date.
G. Effective April 1, 1995, the Holders and Initial Management
Investors executed a consent relating to the issuance of certain shares of
Class A Common Stock by the Company to Plymouth County Retirement Association.
H. Effective June 29, 1995, the Company filed three certificates
of amendment to its certificate of incorporation: (a) amending in its entirety
the designations of the Existing Senior Preferred Stock (as so amended, the
"Existing Senior Certificate of Designations"), (b) amending in its entirety
the designations of the New Senior Preferred Stock (as so amended, the "New
Senior Certificate of Designations"), and (c) changing its name from "Xxxxxx
Communications Corp." to "Xxxxxx Communications Corporation."
I. Effective September 20, 1995, the parties hereto executed a
consent relating to, among other things, the Company's issuance of certain
senior subordinated notes and certain modifications of certain agreements
amongst the parties hereto.
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J. Effective December 22, 1995, the parties hereto executed a
consent relating to, among other things, the pledge of certain Class A Common
Stock by one of the Initial Management Investors.
K. The Company recently began negotiating a proposal with certain
underwriters to commence a public offering of the Company's Class A Common
Stock in connection with a registration statement filed January 23, 1996, on
Form S-1 (the "Proposed Offering"), and pursuant to provisions of the
Registration Rights Provisions sent notification of such proposal to the
parties hereto and others (the "Offering Notification"). All of the parties
hereto, other than Paribas, responded to such notification with a request that
all of their Registrable Shares be registered in connection with the Proposed
Offering (the "Registration Requests").
L. The parties hereto have had various discussions concerning the
Proposed Offering, the Registration Requests and certain of the parties' rights
and obligations under documents referenced in these recitals. Such discussions
have resulted in the parties reaching certain agreements which they desire to
memorialize herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, each party hereto agrees as follows:
1. Proposed Offering. (a) As used in this Section 1, the
following terms shall have the respective meanings set forth in this subsection
(a). Certain additional defined terms used in this Section 1 are defined
elsewhere in this Agreement, including elsewhere in this Section 1.
"Additional Shares" means any and all shares of Class A Common
Stock and Warrants or other securities of the Company exercisable for or
convertible into shares of Class A Common Stock which the Underwriters (as
defined in subsection (b) of this Section 1) or Managers (as defined in
subsection (b) of this Section 1) shall have an option to purchase pursuant to
the U.S. Underwriting Agreement (as defined in subsection (b) of this Section
1) or the International Underwriting Agreement (as defined in subsection (b) of
this Section 1) for the purpose of covering over- allotments in connection with
the Proposed Offering.
"Firm Shares" means any and all shares of Class A Common Stock
and Warrants or other securities of the Company exercisable for or convertible
into shares of Class A Common Stock, other than Additional Shares, which are
purchased pursuant to the U.S. Underwriting Agreement or the International
Underwriting Agreement or otherwise in connection with the Proposed Offering.
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"Unaffiliated Holder" means any Senior Holder or Junior Holder
which is a Participating Holder (as defined in subsection (b) of this Section
1).
(b) The Proposed Offering involves (i) the proposed sale by the
Company and the holders of securities of the Company named on Schedule I hereto
(the "Participating Holders") of shares, or Warrants or other securities of the
Company exercisable for or convertible into shares, of Class A Common Stock to
certain underwriters to be listed in a schedule to the U.S. Underwriting
Agreement referred to below (the "Underwriters"), for whom Xxxxx Xxxxxx Inc.,
PaineWebber Incorporated, CIBC Wood Gundy Securities Corp. and BT Securities
Corporation are expected to act as representatives (the "Representatives"), for
distribution of such shares (such shares, warrants, and other shares to be sold
to the Underwriters, being sometimes hereinafter referred to as the "U.S.
Shares") to the public under a Registration Statement on Form S-1 filed on
January 26, 1996 under the Securities Act of 1933, as amended, as such
Registration Statement is hereafter amended, and (ii) the proposed sale by the
Company and the Participating Holders of shares, or Warrants or other
securities of the Company exercisable for or convertible into shares, of Class
A Common Stock (such shares, warrants, and other shares to be sold to the
Managers, being sometimes hereinafter referred to as the "International
Shares") through arrangements with certain underwriters outside the United
States and Canada (the "Managers"), for whom Xxxxx Xxxxxx Inc., PaineWebber
International, CIBC Wood Gundy Securities Corp. and Bankers Trust International
PLC are expected to act as lead managers (the "Lead Managers"), under such
Registration Statement. Based on its discussions with the Representatives and
the Lead Managers to date, the Company anticipates that pursuant to the U.S.
Underwriting Agreement and the International Underwriting Agreement, and
subject to their respective terms and conditions, the Underwriters and the
Managers will commit to purchase from the Company and the Participating Holders
a specified number of Firm Shares and will be granted an "over-allotment"
option to purchase up to a specified number of Additional Shares.
(c) The parties to this Agreement have agreed that,
notwithstanding any provision of the Stockholders Agreement (including, without
limitation, the Registration Rights Provisions) apparently to the contrary:
(i) Each of the Company and the Participating Holders
(collectively, the "Sellers") shall be entitled to register and sell
to the Underwriters or the Managers (A) the percentage of the total
number of Firm Shares which are registered and sold to the
Underwriters or the Managers by the Sellers which is set forth
opposite the name of such Seller in Column A of Schedule I attached to
this Agreement (such Seller's "Firm Share Allocation Percentage"), and
(B) the
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percentage of the total number of Additional Shares which are
registered and sold to the Underwriters or the Managers by the Sellers
which is set forth opposite the name of such Seller in Column B of
Schedule I attached to this Agreement (such Seller's "Additional Share
Allocation Percentage"). By way of example, and without in any way
limiting the applicability, meaning or intent of the foregoing
sentence in any circumstances not corresponding to those assumed for
purposes of such example, Schedule I attached to this Agreement
contains an illustration of the operation of the foregoing sentence by
setting forth the respective numbers of Firm Shares and Additional
Shares that each of the Sellers would be entitled to register and sell
to the Underwriters pursuant to the U.S. Underwriting Agreement and
each of the Sellers would be entitled to register and sell to the
Managers pursuant to the International Underwriting Agreement if it
were assumed that (x) pursuant to the U.S. Underwriting Agreement, the
Underwriters purchased 9,200,000 Firm Shares and were granted an
over-allotment option for 1,380,000 Additional Shares, and (y)
pursuant to the International Underwriting Agreement, the Managers
purchased 2,300,000 Firm Shares and were granted an over-allotment
option for 345,000 Additional Shares. The respective Firm Share
Allocation Percentages and Additional Share Allocation Percentages of
the Sellers set forth on Schedule I hereto shall apply regardless of
the number of Firm Shares or Additional Shares (if any) which may be
registered or sold in the Proposed Offering, regardless of whether
such Firm Shares or Additional Shares are offered and sold in only one
or both of domestic and international tranches and, if there are both
domestic and international tranches, regardless of the allocation of
such Firm Shares or Additional Shares between such tranches. Unless
all of the Selling Holders otherwise agree, the Company shall not
agree to both (x) a reduction in the number of Additional Shares which
the Underwriters or Managers are to have an option to purchase under
the U.S. Underwriting Agreement or the International Underwriting
Agreement, and (y) an increase in the number of Firm Shares which the
Underwriters or the Managers are to purchase under the U.S.
Underwriting Agreement or the International Underwriting Agreement.
(ii) If any Seller notifies the Company in writing prior
to the execution of the U.S. Underwriting Agreement and the
International Underwriting Agreement that it shall not tender, at the
closing of the sale and purchase of any Firm Shares or Additional
Shares pursuant to and in accordance with the terms of the U.S.
Underwriting Agreement or the International Underwriting Agreement,
the full number of Firm Shares or Additional Shares which such
Participating Holder is entitled to sell pursuant to the U.S.
Underwriting Agreement or the International Underwriting Agreement and
this Agreement, then the aggregate number of Firm Shares or Additional
Shares (as
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the case may be) that the remaining Participating Holders (the "Other
Sellers") shall be entitled to sell pursuant to the U.S. Underwriting
Agreement or International Underwriting Agreement (as the case may be)
shall be increased by the number of such shares that such Seller
failed to tender (the "Extra Shares"). Unless all of the Other
Sellers otherwise agree, the Extra Shares shall be allocated among the
Other Sellers pro rata, based on (A) in the case of Extra Shares which
are Firm Shares, the ratio which the Firm Share Allocation Percentage
of each Other Seller bears to the sum of the Firm Share Allocation
Percentages of all Other Sellers or (B) in the case of Extra Shares
which are Additional Shares, the ratio which the Additional Share
Allocation Percentage of each Other Seller bears to the sum of the
Additional Share Allocation Percentages of all Other Sellers. Each
Other Seller shall have the option, but not the obligation, to elect
to sell its proportionate part of such Extra Shares and may exercise
such option in whole or in part. If any such Other Seller declines or
fails for any reason to exercise such option at all or in full, then
the Extra Shares as to which such option was not exercised shall be
apportioned among the remaining Other Sellers who exercised their
options in full on a similar pro rata basis, and such process shall
continue until either the full number of Extra Shares have been
allocated to one or more Other Sellers or until each of the Other
Sellers has obtained by this process of apportionment the right to
sell the entire percentage of the Extra Shares that it desires. If,
after completion of such process, there remains any Extra Shares which
have not been allocated to one or more Other Sellers, then the Company
may increase by an equivalent number the number of Firm Shares or
Additional Shares (as the case may be) which are to be sold by the
Company pursuant to the U.S. Underwriting Agreement or the
International Underwriting Agreement (as the case may be). If any
Seller fails or refuses for any reason to tender, at the closing of
the sale and purchase of any Firm Shares or Additional Shares pursuant
to and in accordance with the terms of the U.S. Underwriting Agreement
or the International Underwriting Agreement, the full number of Firm
Shares or Additional Shares which such Participating Holder is
entitled to sell pursuant to such agreement and if such agreement is
not terminated in accordance with its terms, then the aggregate number
of Firm Shares or Additional Shares (as the case may be) that the
remaining Sellers shall be entitled to sell pursuant to the U.S.
Underwriting Agreement or the International Underwriting Agreement (as
the case may be) shall be increased in such manner as the Company, the
Senior Holders who are Participating Sellers (excluding any thereof
who is such a nontendering Seller), the Junior Holders who are
Participating Holders (excluding any thereof who is such a
nontendering Seller) and the Representatives and the Managers shall
agree (it being understood that such agreement may not
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be made on behalf of any Holder by any attorney-in-fact without the
specific written authorization of such Holder given at the time).
(iii) The Company covenants and agrees that (A) unless all
of the Holders otherwise agree in writing, no Person not named on
Schedule I hereto shall be entitled to register or sell securities in
the Proposed Offering or either the domestic or international tranche
thereof and (B) no Participating Holder shall be permitted to
participate in the Proposed Offering on any basis which is more
favorable than the basis on which any Holder is permitted to
participate. Without limiting the generality of subclause (B) of this
clause (iii), no Holder shall be required to execute or deliver any
underwriting agreement, custody agreement, power-of- attorney,
"lock-up" agreement or other agreement or instrument which contains
provisions that are materially more adverse to such Holder than the
most favorable form thereof required of any Participating Holder
(disregarding variations which appropriately reflect factual
differences, such as differences in the form of organization of
Participating Holders which are entities or in the number or type of
securities held or being registered and sold by the Participating
Holders). Unless the Holders otherwise agree in writing, no Holder
shall be required to make any representation, warranty, covenant or
agreement to, with or for the benefit of the Company, the
Underwriters, the Managers, the respective Affiliates of the foregoing
or any other Person other than those set forth in the proofs of the
proposed forms of the U.S. Underwriting Agreement, International
Underwriting Agreement, custody agreement and power-of-attorney (the
"Custody Agreement") and lock-up letter (the "Lock-up Letter")
contained in Exhibits "A," "B," "C" and "D"hereto, respectively. The
foregoing, however, shall not be construed as preventing the Holders
from participating in the Proposed Offering on a basis more favorable
than the basis on which Participating Holders who are not Holders
participate. The Company shall not after the consummation of the
Proposed Offering waive or release, or consent to the waiver or
release by or on behalf of the Underwriters or Managers, of any
obligation of any Participating Holder who is not an Unaffiliated
Holder undertaken in connection with the Proposed Offering unless each
Unaffiliated Holder is contemporaneously granted a similar waiver or
release or otherwise treat, or consent to the treatment by the
Underwriters or Managers of, the Unaffiliated Holders otherwise than
on a basis at least as favorable as any Participating Holder who is
not an Unaffiliated Holder.
(iv) The Underwriters or Managers purchasing Warrants from
Selling Holders shall deduct from the purchase price otherwise payable
to each Selling Holder selling Warrants to
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the Underwriters the amount of the exercise price thereof determined
in accordance with the terms thereof. The Company shall take all
actions reasonably necessary or which the Representative or Lead
Manager shall reasonably request to facilitate the registration and
sale to the Underwriters and U.S. Managers by any such Selling Holder
of such Warrants.
(v) Except as expressly modified hereby or by the
definitive underwriting documents, the provisions of the Registration
Rights Provisions applicable to Piggyback Registrations (as defined
therein) generally shall be fully applicable to the Proposed Offering.
Without limiting the generality of the foregoing, the parties
acknowledge and agree that no Holder shall be required to bear any
expenses incurred in connection with the Proposed Offering other than
those which Section 4 of the Registration Rights Provisions expressly
provides are to be paid by such Holder and that all other such
expenses are to be paid by the Company. The Company and the Holders
hereby reaffirm their respective obligations under Section 8 of the
Registration Rights Provisions. In no event shall any securities of
the Company owned beneficially or of record by any Participating
Holder who is not a Senior Holder, a Junior Holder or an Initial
Management Investor be counted for the purposes of any provision of
the Registration Rights Provisions under which any right, power,
privilege or remedy is conferred upon or any action is required or
permitted to be authorized by any Holder, Holders or group of Holders
of any number of percentage of Registrable Shares or other securities.
(vi) Each party hereto, other than the Company and
Paribas, has executed and delivered to the Company herewith a Custody
Agreement substantially in the form of that attached hereto as Exhibit
"C" and a Lock-up Letter substantially in the form of that attached
hereto as Exhibit "D."
(d) To the extent that such waiver is required for such purpose,
each party hereto hereby waives any provision of the Stockholders Agreement, or
any other agreement or instrument referred to therein to which such party
hereto is a party or which otherwise govern the terms of or such party's rights
or obligations with respect to securities of the Company held by such party
which, absent such waiver, would prevent any Holder or Initial Management
Investor from participating in the Proposed Offering on the basis and terms
contemplated hereby and by Exhibits "X," "X" and "C" hereto, impose any
restrictions upon such participation on such basis or terms, cause any of such
Person's representations and warranties contemplated by Exhibits "X," "X" and
"C" hereof to be untrue or prevent such Person from performing its obligations
contemplated by Exhibits "X," "X" and "C" hereof. Such waiver shall terminate
if this Agreement terminates in accordance with its terms.
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(e) The Holders and the Initial Management Investors agree that,
provided that the Proposed Offering complies with the provisions of subsection
(c) of this Section 1, the provisions of the Registration Rights Provisions
referred to in clause (v) of such subsection and the provisions of the
definitive underwriting agreements, the "right of first refusal" provisions of
Section 6 of the Stockholders Agreement shall not apply to the issuance and
sale by the Company in the Proposed Offering of shares of Class A Common Stock
for its own account.
2. Document Modification. Subject to the satisfaction of each
of the conditions set forth in Section 3 hereof and effective automatically
simultaneously with the satisfaction of the last to be satisfied of such
conditions, the documents and instruments referenced below in this Section 2
shall be amended or the interpretation thereof modified as follows:
2.1 Relaxation of Senior Preferred Stock Restrictions On Company's
Authority To Consummate Certain Investments.
(a) The provisions of clause (vii) of Section 7(b) of the
Existing Senior Certificate of Designations shall be applied and interpreted
for all purposes as though it reads in its entirety as follows:
"(vii) the Corporation will not, and will not permit
any Subsidiary to, enter into or engage in or make any
Investment in, directly or through a Subsidiary, any line of
business other than (a) the ownership, operation and
management of radio, television and other broadcast properties
and other closely related ancillary businesses and activities,
which shall be deemed for the purposes hereof to include all
business and activities of the Corporation and its
Subsidiaries described in the "Business" section, other than
the last three paragraphs (the "Excluded Paragraphs") of the
"Infomall TV Network -- Expansion Strategy" section thereof
appearing on page 35, of the preliminary prospectus of the
Corporation dated March 4, 1996 filed with the Securities and
Exchange Commission with respect to the Corporation's proposed
offering of 7,300,000 shares of its Class A Common Stock to be
sold for its own account (Registration Statement No. 333-473),
and (b) other media-related, electronic retailing,
programming, entertainment and other related, similar,
ancillary, supportive or incidental businesses and activities
not described in subclause (a), which shall be deemed for the
purposes hereof to include all businesses and activities of
the Corporation and its Subsidiaries described in the Excluded
Paragraphs, provided that the aggregate amount of Investments
made and costs incurred and expenditures
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made by the Corporation and any of its Subsidiaries in
connection with businesses not described in subclause (a) at
any time or from time to time on or after March 26, 1996
shall not exceed $50,000,000;"
(b) The provisions of clause (vii) of Section 7(a) of the
New Senior Certificate of Designations shall be applied and interpreted for all
purposes as though it reads in its entirety as follows:
"(vii) the Corporation will not, and will not permit
any Subsidiary to, enter into or engage in or make any
Investment in, directly or through a Subsidiary, any line of
business other than (a) the ownership, operation and
management of radio, television and other broadcast properties
and other closely related ancillary businesses and activities,
which shall be deemed for the purposes hereof to include all
business and activities of the Corporation and its
Subsidiaries described in the "Business" section, other than
the last three paragraphs (the "Excluded Paragraphs") of the
"Infomall TV Network -- Expansion Strategy" section thereof
appearing on page 35, of the preliminary prospectus of the
Corporation dated March 4, 1996 filed with the Securities and
Exchange Commission with respect to the Corporation's proposed
offering of 7,300,000 shares of its Class A Common Stock to be
sold for its own account (Registration Statement No. 333-473),
and (b) other media-related, electronic retailing,
programming, entertainment and other related, similar,
ancillary, supportive or incidental businesses and activities
not described in subclause (a), which shall be deemed for the
purposes hereof to include all businesses and activities of
the Corporation and its Subsidiaries described in the Excluded
Paragraphs, provided that the aggregate amount of Investments
made and costs incurred and expenditures made by the
Corporation and any of its Subsidiaries in connection with
businesses not described in subclause (a) at any time or from
time to time on or after March 26, 1996 shall not exceed
$50,000,000;"
2.2 Alteration To Company's Ability To Redeem Senior Preferred
Stock.
(a) Section 6(a) of the Existing Senior Certificate of
Designations shall be applied and interpreted for all purposes as though it
reads in its entirety as follows:
"The Corporation shall not have any right to redeem
any shares of the 15% Preferred Stock prior to the third
anniversary of the Issue Date. On or after such date, subject
to the rights of any Senior Stock in the
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provisions of Section 3 hereof, all of the 15% Preferred Stock
outstanding may be redeemed, at the option of the Corporation,
in whole, but not in part, at any time, at a redemption price
per share equal to: (i) if the Redemption Date is prior to the
fourth anniversary of the Issue Date, 105% of the Liquidation
Price per share, payable in cash, or (ii) if the Redemption
Date is on or after the fourth anniversary of the Issue Date,
the Liquidation Price per share, payable in cash; provided,
however, that in any such case the Corporation simultaneously
redeems all outstanding shares of the Series B Preferred Stock
(as hereinafter defined) in accordance with the terms of the
Series B Preferred Certificate of Designations (as hereinafter
defined). For purposes of this Section, (i) the term `Series
B Preferred Stock' shall mean the Series B 15% Cumulative
Compounding Redeemable Preferred Stock, par value $0.001 per
share, of the Corporation and any capital stock into which
such Series B Preferred Stock may be changed in accordance
with law and the Series B Preferred Certificate of
Designations; and (ii) the term `Series B Preferred
Certificate of Designation' shall mean the amended and
restated certificate of designations filed with the Delaware
Secretary of State pursuant to Section 151 of the General
Corporation Law of the State of Delaware and setting forth the
resolution of the Board of Directors amending the Series B
Preferred Stock and fixing the designation, dividend rights,
voting powers, rights on liquidation or dissolution and other
preferences and relative, participating, optional or other
rights, and the qualifications, limitations and restrictions,
of the shares of Series B Preferred Stock, as the same may at
any time and from time to time be amended in accordance with
its terms and applicable law."
(b) Section 6(a) of the New Senior Certificate of
Designations shall be applied and interpreted for all purposes as though it
reads in its entirety as follows:
"The Corporation shall not have any right to redeem
any shares of the Series B 15% Preferred Stock prior to
December 15, 1996. On or after such date, subject to the
rights of any Senior Stock in the provisions of Section 3
hereof, all of the 15% Preferred Stock outstanding may be
redeemed, at the option of the Corporation, in whole, but not
in part, at any time, at a redemption price per share equal
to: (i) if the Redemption Date is prior to December 15, 1997,
105% of the Liquidation Price per share, payable in cash, or
(ii) if the Redemption Date is on or after December 15, 1997,
the Liquidation Price per share, payable in cash; provided,
however, that in any such case the Corporation simultaneously
redeems
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all outstanding shares of the Existing Senior Preferred Stock
in accordance with the terms of the Existing Senior
Certificate of Designations (as hereinafter defined). For
purposes of this Section, the term Existing Senior Certificate
of Designation shall mean the amended and restated certificate
of designations filed with the Delaware Secretary of State
pursuant to Section 151 of the General Corporation Law of the
State of Delaware and setting forth the resolution of the
Board of Directors amending the Existing Senior Preferred
Stock and fixing the designation, dividend rights, voting
powers, rights on liquidation or dissolution and other
preferences and relative, participating, optional or other
rights, and the qualifications, limitations and restrictions,
of the shares of Existing Senior Preferred Stock, as the same
may at any time and from time to time be amended in accordance
with its terms and applicable law."
(c) Section 6(d) of the Existing Senior Certificate of
Designations shall be applied and interpreted as though the words "Section
6(a), 6(b) or 6(c) hereof" now appearing in the first sentence thereof were
stricken from such sentence and the words "Section 6(b) or 6(c) thereof" were
substituted in the place of such stricken words.
(d) Section 6(d) of the New Senior Certificate of
Designations shall be applied and interpreted as though the words "Section
6(a), 6(b) or 6(c) hereof" now appearing in the first sentence thereof were
stricken from such sentence and the words "Section 6(b) or 6(c) thereof" were
substituted in the place of such stricken words.
2.3 Issuance of Additional Common Stock and Stock Options.
(a) The definition of "Permitted Issuance" in Section 2
of the Existing Senior Certificate of Designations shall be applied and
interpreted for all purposes as though such definition included the following
clauses (iii) and (iv):
"(iii) the issuance by the Corporation of Class A
Common Stock (or deemed issuance by the Corporation by reason
of the issuance of options to purchase Class A Common Stock)
from time to time of up to an aggregate of 2,000,000
additional shares of Class A Common Stock (as such number of
shares may be proportionately increased to reflect any stock
dividend, stock split or other subdivision of the shares of
Class A Common Stock which may be effected after March 26,
1996, and as such number of shares may be proportionately
decreased to reflect a reverse stock split or other
combination of the shares of Class A Common Stock which may be
effected after March 26, 1996), to employees or directors of
the
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Corporation and its Subsidiaries (other than to Xxxxxx X.
Xxxxxx and his Affiliates) after March 26, 1996 pursuant to a
plan or plans adopted by the Board of Directors of the
Corporation (not a committee thereof, other than a
compensation committee, the majority of the members of which
are individuals who are not employees or officers of the
Corporation or its Subsidiaries) and approved or adopted by a
majority vote of the Common Stock stockholders of the
Corporation; provided, that (i) all such shares (and all
shares issuable upon exercise on any options issued under any
such plan) shall be issued for cash and (ii) each issuance of
any such shares (or options or other rights to acquire any
such shares), the price at which such shares are issued and
the other material terms of such issuance shall be approved by
the Board of Directors (and not a committee thereof, other
than a compensation committee, the majority of the members of
which are individuals who are not employees or officers of the
Corporation or its Subsidiaries) and shall be consistent with
the terms of such plan under which such shares are issued.
"(iv) The issuance by the Corporation of options to
purchase Class A Common Stock in one or more transactions of
up to an aggregate of 125,000 shares of Class A Common Stock
(as such number of shares may be proportionately increased to
reflect any stock dividend, stock split or other subdivision
of the shares of Class A Common Stock which may be effected
after March 26, 1996, and as such number of shares may be
proportionately decreased to reflect a reverse stock split or
other combination of the shares of Class A Common Stock which
may be effected after March 26, 1996), to individuals that are
not employees or directors of the Corporation or its
Subsidiaries (or Xxxxxx X. Xxxxxx, an Initial Management
Investor (as defined in the Stockholders Agreement) or an
Affiliate or a Related Party (as defined in the Stockholders
Agreement) of Xxxxxx X. Xxxxxx or an Initial Management
Investor (as defined in the Stockholders Agreement)) after
March 26, 1996 that the Board of Directors deems to have
contributed to the Corporation's efforts; provided, that (i)
shares issuable upon exercise of such options shall be issued
for cash in an amount per share not less than $3.42 (as such
amount may be proportionately decreased to reflect any stock
dividend, stock split or other subdivision of shares of Class
A Common Stock which may be effected after March 26, 1996, and
as such amount may be proportionately increased to reflect any
reverse stock split or other combination of shares of Class A
Common Stock which may be effected after Xxxxx 00, 0000), (xx)
each issuance of any such options, the exercise price of such
options and
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the other material terms of such issuance shall be approved by
the Board of Directors (and not a committee thereof), and
(iii) the provisions of Section 7.1 of the Stockholders
Agreement are complied with."
(b) The definition of "Permitted Issuance" in Section 2
of the New Senior Certificate of Designations shall be applied and interpreted
for all purposes as though such definition included the following clauses (iii)
and (iv):
"(iii) the issuance by the Corporation of Class A
Common Stock (or deemed issuance by the Corporation by reason
of the issuance of options to purchase Class A Common Stock)
from time to time of up to an aggregate of 2,000,000
additional shares of Class A Common Stock (as such number of
shares may be proportionately increased to reflect any stock
dividend, stock split or other subdivision of the shares of
Class A Common Stock which may be effected after March 26,
1996, and as such number of shares may be proportionately
decreased to reflect a reverse stock split or other
combination of the shares of Class A Common Stock which may be
effected after March 26, 1996), to employees or directors of
the Corporation and its Subsidiaries (other than to Xxxxxx X.
Xxxxxx and his Affiliates) after March 26, 1996 pursuant to a
plan or plans adopted by the Board of Directors of the
Corporation (not a committee thereof, other than a
compensation committee, the majority of the members of which
are individuals who are not employees or officers of the
Corporation or its Subsidiaries) and approved or adopted by a
majority vote of the Common Stock stockholders of the
Corporation; provided, that (i) all such shares (and all
shares issuable upon exercise on any options issued under any
such plan) shall be issued for cash and (ii) each issuance of
any such shares (or options or other rights to acquire any
such shares), the price at which such shares are issued and
the other material terms of such issuance shall be approved by
the Board of Directors (and not a committee thereof, other
than a compensation committee, the majority of the members of
which are individuals who are not employees or officers of the
Corporation or its Subsidiaries) and shall be consistent with
the terms of such plan under which such shares are issued.
"(iv) The issuance by the Corporation of options to
purchase Class A Common Stock in one or more transactions of
up to an aggregate of 125,000 shares of Class A Common Stock
(as such number of shares may be proportionately increased to
reflect any stock dividend, stock split or other subdivision
of the shares of Class A Common Stock which may be effected
after March 26, 1996,
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and as such number of shares may be proportionately decreased
to reflect a reverse stock split or other combination of the
shares of Class A Common Stock which may be effected after
March 26, 1996), to individuals that are not employees or
directors of the Corporation or its Subsidiaries (or Xxxxxx X.
Xxxxxx, an Initial Management Investor (as defined in the
Stockholders Agreement) or an Affiliate or a Related Party (as
defined in the Stockholders Agreement) of Xxxxxx X. Xxxxxx or
an Initial Management Investor (as defined in the Stockholders
Agreement)) after March 26, 1996 that the Board of Directors
(not a committee thereof) deems to have contributed to the
Corporation's efforts; provided, that (i) shares issuable upon
exercise of such options shall be issued for cash in an amount
per share not less than $3.42 (as such amount may be
proportionately decreased to reflect any stock dividend, stock
split or other subdivision of shares of Class A Common Stock
which may be effected after March 26, 1996, and as such amount
may be proportionately increased to reflect any reverse stock
split or other combination of shares of Class A Common Stock
which may be effected after Xxxxx 00, 0000), (xx) each
issuance of any such options, the exercise price of such
options and the other material terms of such issuance shall be
approved by the Board of Directors (and not a committee
thereof), and (iii) the provisions of Section 7.1 of the
Stockholders Agreement are complied with."
(c) The definition of "Permitted Management Issuances"
set forth in Section 1.1 of the Stockholders Agreement is amended to add: (i)
the roman numeral "(i)" following the word "mean" on the first line thereof,
and (ii) the following at the end of such definition before the period:
", (ii) the issuance by the Company (or deemed issuance by the
Company, for purposes of the Warrant Agreements, by reason of
the issuance of options to purchase Class A Common), from time
to time, after March 26, 1996, of up to an additional
aggregate of 2,000,000 shares of Class A Common (as such
number of shares may be proportionately increased to reflect
any stock dividend, stock split or other subdivisions of the
shares of Class A Common which may be effected after March 26,
1996, and as such number of shares may be proportionately
decreased to reflect any reverse stock split or other
combination of the shares of Class A Common which may be
effected after March 26, 1996), to employees or directors of
the Company Parties (other than to Xxxxxx X. Xxxxxx and his
Affiliates) pursuant to a plan or plans adopted by the Board
of Directors of the Company (not a Committee thereof, other
than a compensation committee, the majority of the
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members of which are individuals who are not employees or
officers of the Company or its Subsidiaries) and approved or
adopted by a majority vote of the Common Stock stockholders of
the Company; provided, that (A) all such shares (and all
shares issuable upon exercise of such options issued to
purchase Class A Common) shall be issued for cash and (B) each
issuance of any such shares (or options or other rights to
acquire any such shares), the price at which such shares are
issued and the other material terms of such issuance, shall be
approved by the Board of Directors of the Company (and not a
committee thereof, other than a compensation committee, the
majority of the members of which are individuals who are not
employees or officers of the Company or its Subsidiaries) and
shall be consistent with the terms of such plan under which
such shares are issued; and (iii) the issuance by the Company
of options to purchase Class A Common Stock in one or more
transactions of up to an aggregate of 125,000 shares of Class
A Common Stock (as such number of shares may be
proportionately increased to reflect any stock dividend, stock
split or other subdivision of the shares of Class A Common
Stock which may be effected after March 26, 1996, and as such
number of shares may be proportionately decreased to reflect a
reverse stock split or other combination of the shares of
Class A Common Stock which may be effected after March 26,
1996), to individuals that are not employees or directors of
the Company or its Subsidiaries (nor Xxxxxx X. Xxxxxx, the
Initial Management Investors or an Affiliate or Related Party
of Xxxxxx X. Xxxxxx or the Initial Management Investors) after
March 26, 1996 that the Board of Directors (not a committee
thereof) determines have contributed to the Company's efforts;
provided, (A) that shares issuable upon exercise of such
options shall be issued for cash in an amount per share not
less than $3.42 (as such amount may be proportionately
decreased to reflect any stock dividend, stock split or other
subdivision of shares of Class A Common Stock which may be
effected after March 26, 1996, and as such amount may be
proportionately increased to reflect any reverse stock split
or other combination of shares of Class A Common Stock which
may be effected after March 26, 1996), (B) each issuance of
any such options, the exercise price of such options and the
other material terms of such issuance shall be approved by the
Board of Directors (and not a committee thereof), and (C) and
the provisions of Section 7.1 of this Agreement are complied
with."
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2.4 Elimination of Certain Restrictions On Issuance of Class A
Common Stock For Acquisitions.
(a) The definition of "Permitted Issuance" in Section 2
of the Existing Senior Certificate of Designations shall be applied and
interpreted for all purposes as though clause (i) thereof reads in its entirety
as follows:
"(i) the issuance of shares of Class A Common Stock in one or
more transactions as payment of all or a portion of the
purchase price of any business or property, or any ownership
interest in any business, acquired by the Corporation or a
Subsidiary thereof from a party that is not Xxxxxx X. Xxxxxx,
the Initial Management Investors (as defined in the
Stockholders Agreement) or an Affiliate or a Related Party (as
defined in the Stockholders Agreement) of Xxxxxx X. Xxxxxx or
the Initial Management Investors (as defined in the
Stockholders Agreement); provided that in each case (A) such
transaction (including each step thereof) is approved pursuant
to Section 7(b) hereof or, by the express terms of Section
7(b) hereof, such acquisition does not require such approval,
(B) the provisions of Section 7.1 of the Stockholders
Agreement are complied with, and (C) such transaction is
approved by the Board of Directors (not a committee thereof)."
(b) The definition of "Permitted Issuance" in Section 2
of the New Senior Certificate of Designations shall be applied and interpreted
for all purposes as though clause (i) thereof reads in its entirety as follows:
"(i) the issuance of shares of Class A Common Stock in one or
more transactions as payment of all or a portion of the
purchase price of any business or property, or any ownership
interest in any business, acquired by the Corporation or a
Subsidiary thereof from a party that is not Xxxxxx X. Xxxxxx,
an Initial Management Investor (as defined in the Stockholders
Agreement) or an Affiliate or a Related Party (as defined in
the Stockholders Agreement); provided that in each case (A)
such transaction (including each step thereof) is approved
pursuant to Section 7(a) hereof or, by the express terms of
Section 7(a) hereof, such acquisition does not require such
approval, (B) the provisions of Section 7.1 of the
Stockholders Agreement are complied with, and (C) such
transaction is approved by the Board of Directors (not a
committee thereof)."
(c) The modification of adjustments to the "Exercise
Rate" (as defined in the Existing Warrant Agreement) set forth in
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Section 2.4(b) of the Exchange Agreement is modified by deleting subclause (v)
thereof and replacing it with the following:
"(v) The issuance of shares of Class A Common
Stock in one or more transactions if such shares are issued as
payment of all or a portion of the purchase price of any
business or property, or any ownership interest in any
business acquired by the Company or any Subsidiary of the
Company from a party that is not Xxxxxx X. Xxxxxx, an Initial
Management Investor (as defined in the Stockholders Agreement)
or an Affiliate or Related Party (as defined in the
Stockholders Agreement) of Xxxxxx X. Xxxxxx or the Initial
Management Investors (as defined in the Stockholders
Agreement); provided that (A) the provisions of Section 7.1 of
the Stockholders Agreement are complied with, and (B) such
transaction is approved by the Board of Directors (not a
committee thereof)."
(d) Section 11.1(h) of the New Warrant Agreement is
modified by deleting subclause (1) thereof and replacing it with the following:
"(1) The issuance of shares of Class A Common
Stock in one or more transactions if such shares are issued as
payment of all or a portion of the purchase price of any
business or property, or any ownership interest in any
business acquired by the Company or any Subsidiary of the
Company, from a party that is not Xxxxxx X. Xxxxxx, an Initial
Management Investor (as defined in the Stockholders Agreement)
or an Affiliate or Related Party (as defined in the
Stockholders Agreement) of Xxxxxx X. Xxxxxx or the Initial
Management Investors (as defined in the Stockholders
Agreement); provided that (A) the provisions of Section 7.1 of
the Stockholders Agreement are complied with, and (B) such
transaction is approved by the Board of Directors (not a
committee thereof)."
(e) The definition of "Additional Securities" set forth
in Section 6.2 of the Stockholders Agreement is amended by adding the following
at the end of clause (ii) thereof:
"or securities issued in one or more transactions as payment
for all or a portion of the purchase price of any business or
property, or any ownership interest in any business, acquired
by the Company or a Subsidiary from a party that is not Xxxxxx
X. Xxxxxx, the Initial Management Investors or an Affiliate or
Related Party of Xxxxxx X. Xxxxxx or the Initial Management
Investors; provided that in each case (A) the provisions of
Section 7.1 hereof are complied with, and (B) such transaction
is approved by the Board of Directors (not a committee
thereof)."
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2.5 Modification of Exercise of Warrants by Senior Holders.
The Existing Warrant Agreement is amended to provide that upon any exercise of
any of the Existing Warrants by any present or future holder thereof, the
Exercise Price thereof (as defined in the Existing Warrant Agreement) may, at
the option of the holder thereof, be paid in whole or in part in cash or by the
delivery to the Company (or the warrant agent under the Existing Warrant
Agreement on its behalf) of securities of the Company which have a fair market
value equal to such Exercise Price or such portion thereof as to which such
option is exercised, including, without limitation, one or more Existing
Warrants representing in the aggregate the right to receive upon exercise a
number of shares of Common Stock and other Warrant Securities (as defined in
the Existing Warrant Agreement) or other property having such a fair market
value or such number of shares of Common Stock or such kind and amount of other
Warrant Securities or other property deliverable to such Existing Warrantholder
by reason of such exercise having such a fair market value.
2.6 Revisions To Registration Rights. Notwithstanding any
provision of the Registration Rights Provisions to the contrary, the parties
agree:
(a) Any request by any Holder or Holders for a Demand
Registration pursuant to Section 2 of the Registration Rights Provisions may,
at the election of the requesting Holder or Holders by specification in the
applicable Demand Registration Request, include a request that all or any of
the Registrable Shares requested to be included in such Demand Registration be
registered under the Securities Act for offering and sale on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (a "Shelf
Registration"). In the event of any such request for a Shelf Registration, the
Company's Demand Registration Notice shall state that such request was for or
included a Shelf Registration. To the extent that a Demand Registration
Request is for or includes a Shelf Registration, neither the Holder or Holders
requesting such Shelf Registration nor any other Participating Holder
participating in such Shelf Registration shall be required to include in the
applicable Demand Registration Request or any other request for inclusion in
such Shelf Registration made in accordance with subsection 2(a) of the
Registration Rights Provision or otherwise provide information with respect to
the desired price range for the Registrable Shares requested to be included
therein by any Requesting Holder or the intended method or methods of
disposition or distribution thereof except to the extent and at the time or
times required in order to satisfy the requirements of Items 508 and
512(a)(1)(iii) of Regulation S-K promulgated by the SEC. The method or methods
of distribution of the Registrable Shares of any Participating Holder included
in any Shelf Registration may be any method or methods permitted by Rule 415 of
the Securities Act and any such Participating Holder may change such method or
methods of distribution at any time and from time to time while the
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Registration Statement relating to such Shelf Registration is required to
remain effective in accordance with the terms of subsection 2.6(b) hereof,
provided that such Participating Holder provides to the Company the information
reasonably required to permit compliance with Items 508 and 512(a)(1)(iii) of
Regulation S-K promulgated by the SEC.
(b) The Company shall use all reasonable efforts to keep
each Registration Statement filed with respect to any Shelf Registration
continuously effective for a period of two years from the date on which the SEC
declares such Registration Statement effective. Such period shall be
automatically extended by the aggregate number of days, if any, during which
any delay, deferral, postponement or suspension is in effect with respect to
such Registration Statement or any offering or distribution of Registrable
Shares covered by such Shelf Registration pursuant to subsection 2(g) of the
Registration Rights Provisions.
(c) The Company shall effect any Shelf Registration
requested pursuant to the Registration Rights Provisions and this Agreement on
a registration statement of the Company under the Securities Act on any form
for which the Company then qualifies and which permits the offering and
distribution thereunder of the number of Registrable Shares to be included
therein in accordance with the method(s) of distribution determined in
accordance with the Registration Rights Provisions and this Agreement. If, in
connection with any Existing Demand Registration (whether or not for or
including a Shelf Registration), the Company proposes to effect such
registration through the filing of a Registration Statement on a particular
registration form available for such registration under the Securities Act and
the Majority Holders with respect to such registration under the Securities Act
and the Majority Holders with respect to such Demand Registration shall advise
the Company in writing of its or their reasonable and good faith opinion that
the use of another available form is of material importance to the success of
the proposed offering or sale or other distribution contemplated, then such
Demand Registration shall be effected on such other form.
(d) The fact that a Registration Statement with regard to
a Shelf Registration is effective as of a particular time shall not prejudice
or otherwise affect the rights of the Participating Holders or any other Holder
to request a Demand Registration pursuant to Section 2 of the Registration
Rights Provisions, to participate in any such Demand Registration requested by
any other Holder of Registrable Shares or to exercise piggyback registration
rights under Section 3 of the Registration Rights Provisions. Any Holder may
withdraw all or any portion of the Registrable Shares of such Holder from a
Shelf Registration at any time or from time to time or from a Piggyback
Registration at any time prior to the effective date of the Registration
Statement related to such Piggyback Registration.
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(e) Except as otherwise expressly provided in the
Registration Rights Provisions with respect to the participation rights of the
Holders of Registrable Shares, neither the Company nor any other Person except
the Holders exercising a Demand Registration pursuant to subsection 2.6 hereof
shall be permitted to include any shares of Common Stock or other securities
for registration, offering, sale or distribution in any Demand Registration,
and the Company hereby represents, warrants and covenants to the Holders that
the Company has not granted and shall not grant any Person any right to so
include any such shares or other securities.
2.7 Revision To Piggyback Registration Rights Provisions. If, in
the case of any of the three Demand Registrations which may be requested by the
Holders of Existing Registrable Shares pursuant to subsection 2(c) of the
Registration Rights Provisions, any Holder or Holders of Existing Registrable
Shares who is a Participating Holder in such Demand Registration shall be
required, pursuant to subsection 2(d) or 2(e) of the Registration Rights
Provisions, to exclude from such Demand Registration any Registrable Shares
which such Holder or Holders duly requested to be included therein, then,
notwithstanding anything to the contrary contained in the Registration Rights
Provisions, such Holder or Holders may elect to require that Management
Registrable Shares requested to be included therein, if any, be excluded
therefrom before any Existing Registerable Shares are excluded therefrom and,
if such election is made, no Existing Registrable Shares shall be excluded
therefrom unless or until all Management Registrable Shares requested to be
included therein, if any, shall have been excluded therefrom; provided,
however, that such election may be exercised only once (with such one election
by any one Holder of Existing Registrable Shares precluding all other holders
of Existing Registrable Shares from ever making any such election), although
that single exercise may be with respect to any of the three Demand
Registrations which may be requested by the Holders of Existing Registrable
Shares referred to above, it being further agreed that if such election is
exercised with respect to any pending Demand Registration requested by the
Holders of Existing Registrable Shares which, by virtue of subsection 2(c) or
any other provision of the Registration Rights Provisions, does not count as
one of such three Demand Registrations which may be requested by Holders of
Existing Registrable Shares, then such election shall be deemed not to have
been exercised. Accordingly, for purposes of any such Demand Registration as
to which such an election is made, (i) all such Management Registrable Shares
shall be disregarded for purposes of determining the Majority Holders with
respect to such Demand Registration and (ii) the Allocation Percentages for
purposes thereof shall be 73.4% for the Existing Registrable Shares, 24.5% for
the BTIP/FUCV Registrable Shares, 2.1% for the Other New Registrable Share and
0 (zero)% for the Management Registrable Shares.
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2.8 Revisions To Public Sales By The Company and Others. Section
6(a) of the Registration Rights Provisions shall be amended as follows: (i)
the phrase "nor its Affiliates (other than Holders)" in the first sentence of
Section 6(a) of the Registration Rights Provisions is deleted in its entirety
and replaced with ", its Affiliates, nor any Holder" and (ii) the first
sentence of Section 6(a) of the Registration Rights Provisions shall be further
amended by adding the following proviso thereto at the end thereof: "provided,
however, that the foregoing restriction shall in any event apply to Holders
only with respect to a Demand Registration or a Piggyback Registration which is
for an underwritten offering of equity securities of the same class or series
as any class or series as the Registrable Shares, only if and to the extent
requested by the managing underwriter or underwriters of such offering and only
with respect to the public sale or distribution by such Holders of securities
of such class or series."
2.9 Elimination of Warrant Put Rights.
(a) Section 2.4 of the Stockholders Agreement is deleted
in its entirety. The definition in Section 1.1 of the Stockholders Agreement
of the term "Exercise Period" is also deleted in its entirety.
(b) Section 2.5 of the Stockholders Agreement is amended
and restated in its entirety as follows:
"2.5 Limitations on the Company's Obligations to
Repurchase Senior Preferred Stock. The Company will not be
required to purchase Senior Preferred Stock pursuant to an
exercise of any Senior General Put (an "Existing Put") to the
extent that a violation of law or a breach of or a default or
event of default under the Existing Credit Agreement, any
other material credit agreement, indenture or other
contractual obligation of any Company Party would result
(whether with notice, lapse of time or under applicable law);
provided, however, that the Company will comply with Section
2.2(e) hereof and also take, and cause the other Company
Parties to take, all reasonable lawful actions to avoid or
cure such violation, breach, default or event of default and
enable the Company to make such purchase to the fullest extent
reasonably possible without thereby being rendered insolvent,
including, without limitation (subject to the voting and other
rights of the Existing Investors and the New Investors
hereunder and of holders of the Preferred Stock, Warrants and
Warrant Shares generally, including without limitation any
such rights as set forth in the Existing Senior Certificate of
Designations, the new Senior Certificate of Designations, the
Junior Certificate of Designations, the Certificate of
Incorporation of the Company, the bylaws of the Company
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or pursuant to applicable law): (i) the sale of additional
equity securities, (ii) any necessary action under applicable
law to reduce the Company's stated capital or otherwise
increase the Company's surplus or other funds legally
available, (iii) additional borrowings by, or a refinancing
of, any Company Party, (iv) asset sales by any Company Party
and (v) sales of one or more Company Parties to third parties.
Any such actions enumerated in (i)-(v) of the preceding
sentence that are taken by the Company will be subject to
Section 8.
2.10 Acquisition of WFSJ-FM. In connection with the Company's
proposed acquisition of all of the outstanding capital stock
of Xxxx Communications Inc. ("TCI") (by merger with a
Subsidiary of the Company or otherwise), a corporation owned
by members of Xxxxxx X. Xxxxxx'x family that owns WFSJ-FM, in
consideration for the issuance by the Company to the
stockholders of TCI shares of Class A Common Stock having an
approximate value of $1,700,000 (with each such share being
valued at the price which a share of Class A Common Stock is
offered to the public in the Proposed Offering), with the
Company or TCI promptly thereafter repaying TCI's indebtedness
in the approximate amount of $1,600,000 to Xxxxxx X. Xxxxxx,
the Holders agree that:
(a) The appraisal report of substantially all of the
assets of WFSJ-FM, dated December 1, 1995, setting
forth an appraised value therefor of $5,000,000
shall be a sufficient basis for the Board of
Directors' determination of the "Fair Market Value"
of the stock of TCI, in lieu of the Company obtaining
an opinion of an "Investment Banking Firm" as
required by Section 12(e)(i) of the Existing Warrant
Agreement and Section 11(e)(i) of the New Warrant
Agreement.
(b) Any requirement under Subsection 7.1(a) or (b) of the
Stockholders Agreement to obtain the opinion of an
"Appraiser" with respect to the Company's proposed
acquisition of TCI is waived.
(c) The shares of Class A Common Stock to be issued to
the stockholders of TCI in the transaction described
above shall be deemed "Additional Securities" under
the Stockholders Agreement.
2.11 Issuance of Class A Common Stock upon exercise of New
Warrants. For the benefit of any Person who may now or
hereafter hold any New Warrant or any share of Class C Common
Stock issued upon the exercise of any New Warrant, the Company
agrees that, at any time after 90 days after
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the closing of the Proposed Offering and from time to time at
the request of any such holder, the Company will issue to such
holder one (1) validly issued, fully paid and nonassessable
share of Class A Common Stock in exchange for each share of
Class C Common Stock which such holder requests that the
Company exchange therefor, without the payment of any
additional consideration by such holder; provided that any
such holder shall have the right to require the Company to
effect any such issuance and exchange only to that extent
that, after giving effect to such issuance and exchange,
neither such holder nor any of its Affiliates nor any "group"
(as that term is used in Rule 13d-5(b) under the Securities
Exchange Act of 1934 as in effect March 26, 1996) of Persons
of which such holder (or any of its Affiliates) is a member
shall be the "beneficial owner" (as that term is defined in
Rule 13d-3 under the Securities Exchange Act as in effect
March 26, 1996) of 5% or more of the issued and outstanding
shares of Class A Common Stock. Any such exchange shall be
requested by written notice to the Company, which may be given
in connection with the exercise of any New Warrant, and will
be effected by the Company promptly (but in any event within
five (5) business days) thereafter, and any such notice will
be accompanied by the stock certificate, if any, which
evidences the share(s) of Class C Common Stock to be so
exchanged. All provisions of the Stockholders Agreement, the
New Purchase Agreement, the New Warrant Agreement and any
other agreement to which the Company is a party and which
applies to any share of Class C Common Stock which is so
surrendered shall apply to any share of Class A Common Stock
which is so issued as if such share of Class A Common Stock
were still the share of Class C Common Stock exchanged
therefor.
3. Conditions to Effectiveness of Provisions of Section 2. The
provisions of Section 2 shall automatically become effective simultaneously
with each of the following conditions having been satisfied on or prior to May
1, 1996 (and an executive officer executing a certificate on behalf of the
Company to the Holders and making such certificate available at the closing of
the Proposed Offering for receipt by the Holders that such satisfaction has
occurred):
(a) The Company consummating the sale for the Company's
account in the Proposed Offering pursuant to an effective registration
statement under the Securities Act of shares of the Company's Class A Common
Stock, with such sale (i) resulting in the immediate receipt by the Company of
gross cash proceeds of not less than $103,000,000, and (ii) at a price to the
public of at least $10.00 per share of Class A Common Stock sold (as such
amount per
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share may be proportionately decreased to reflect any stock dividend, stock
split or other subdivision of shares of Class A Common Stock which may be
effected after March 26, 1996 and as such per share amount may be
proportionately increased to reflect any reverse stock split or other
combination of shares of Class A Common Stock which may be effected after March
26, 1996).
(b) The Holders having been permitted to register under
such registration statement for sale to the underwriters in connection with the
Proposed Offering the shares of the Class A Common Stock or Warrants owned by
them in accordance with Section 1 hereof at the same net cash price per share
as the shares sold for the Company's account, less, in the case of a sale of
Warrants to the underwriters, an additional amount equal to the aggregate
exercise price payable upon the exercise of any Warrants (determined in
accordance with their terms) sold by such party to the underwriters, and such
sale by the Holders to the underwriters of such shares or Warrants at such net
price being consummated.
(c) All representations and warranties of the Company
contained in this Agreement shall be true and correct when made and on the date
when all other conditions set forth in this Section 3 have been satisfied, and
as of such date the Company shall have performed in all material respects all
obligations and agreements, and complied in all material respects with all
covenants and conditions, contained in this Agreement or in any other
instrument or document referred to herein to be performed or complied with by
it prior to or on such date.
(d) No action, suit, proceeding or investigation will
have been instituted which seeks to restrain, restrict or prohibit or impose
substantial penalties or damages with respect to (or any other materially
adverse relief or remedy in connection with), and no injunction, restraining or
similar order issued by a court of competent jurisdiction or by any federal or
state regulatory or administrative agency will be in effect that restrains,
restricts or prohibits or imposes substantial penalties or damages with respect
to (or any other materially adverse relief or remedy in connection with) the
consummation of any of the transactions contemplated hereby.
(e) No Persons except the Company and the parties named
on Schedule I shall sell Common Stock or Warrants to the underwriters in the
Proposed Offering.
If any of the foregoing conditions shall not have been satisfied on or
prior to May 1, 1996, then a Majority- in-Interest of the Senior Holders, a
Majority-in-Interest of the Junior Holders or a Majority-in-Interest of the
Initial Management Investors, in any of their sole discretion, may at any time
thereafter, but prior to the consummation of the aforementioned public
offering, elect to terminate this Agreement by not fewer than five days'
advance
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written notice to the Company to such effect. If such conditions shall have
been satisfied on or prior to such date or the expiration of any such five-day
period, then the provisions of Section 2 hereof shall take effect as of the
date of satisfaction of the last of such conditions to be satisfied. If such
conditions have not been satisfied on or prior to the expiration of any such
five-day period, the provisions of Sections 1 and 2 hereof shall automatically
without further obligation or liability of any party hereto terminate and none
of the amendments, modifications or interpretations of any of the documents
referenced herein shall become effective.
4. Representations and Warranties of the Company To Each of the
Holders and Initial Management Investors. The Company represents and warrants
to each of the Holders and Initial Management Investors as follows: (i) the
Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby, (ii) the execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate action (including all
stockholder approvals and other action), (iii) this Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, or by principles governing the availability of equitable
remedies), (iv) the execution and delivery of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby and compliance
with the provisions hereof will not conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, claim or encumbrance upon any of the properties or assets of the Company
or any subsidiary of the Company under, (I) the certificate of incorporation or
bylaws of the Company or the comparable organization documents of any
subsidiary of the Company, (II) any contract to which the Company or any
subsidiary of the Company is a party or by which any of them or their
respective properties or assets are bound, or (III) subject to the governmental
filings and other matters referred to in the following sentence, any
Requirement of Law applicable to the Company or any subsidiary of the Company
or its respective properties or assets, and (v) no consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority or other Person is required by or with respect to the Company or any
Subsidiary in connection with the execution, delivery or performance of this
Agreement (excluding Section 1 hereof, the Proposed Offering and the
transactions contemplated
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thereby and by the underwriting documents related to the Proposed Offering) by
the Company or the consummation of any of the transactions contemplated hereby,
except for such consents, approval, orders, authorizations, registrations,
declarations and filings which, if not obtained or made, would not be,
individually or in the aggregate, material.
5. Representations and Warranties of Each Holder and Initial
Management Investor. Each Holder and Initial Management Investor (as
applicable), severally and not jointly, and with respect to itself only and not
with respect to any other Holder or Initial Management Investor, represents and
warrants to the Company and each other Holder and Initial Management Investor
that (i) this Agreement has been duly executed and delivered by such Holder or
Initial Management Investor (as applicable); (ii) the execution, delivery and
performance by such Holder or Initial Management Investor (as applicable) of,
and the consummation by such Holder or Initial Management Investor (as
applicable) of the transactions contemplated by, this Agreement have been duly
and validly authorized by all necessary partnership action on the part of such
Holder or Initial Management Investor (as applicable), if such Holder or
Initial Management Investor (as applicable) is a partnership, or by all
necessary corporate action on the part of such Holder or Initial Management
Investor (as applicable), if such Holder or Initial Management Investor (as
applicable) is a corporation; (iii) this Agreement constitutes a legal, valid
and binding obligation of such Holder or Initial Management Investor (as
applicable) enforceable in accordance with its terms, except that (A) such
enforceability may be subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (B) such enforceability may be subject to
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); (iv) in the case of each Holder, such
Holder owns all of the Preferred Stock and Warrants it acquired from the
Company, except that each Senior Holder no longer owns the Warrants such Senior
Holder exercised pursuant to the Exchange Agreement; (v) no consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person is required by or with respect to such
Holder or Initial Management Investor in connection with the execution and
delivery or performance of this Agreement (excluding Section 1 hereof, the
Proposed Offering and the transactions contemplated thereby and by the
underwriting documents related to the Proposed Offering) by such Holder or
Initial Management Investor, except for such consents, approvals, orders,
authorizations, registrations, declarations and filings which, if not obtained
or made, would not be, individually or in the aggregate, material.
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6. No Joint Obligations of Holders, Initial Management Investors,
and Company. Each Holder, Initial Management Investor and the Company shall be
(i) obligated hereunder only with respect to those covenants and agreements
which by their terms are applicable to such party, and no such party shall have
any liability with respect to any other party's obligations hereunder and (ii)
separately and independently entitled to rely on the representations and
warranties of each other party made to each party in this Agreement, and to the
benefit of all agreements, covenants, obligations and commitments of each other
party made with or to such party herein. Without limiting the generality of
the preceding sentence, no provision of this Agreement shall be construed as
creating any concept of "group" liability.
7. Miscellaneous.
7.1 Survival of Provisions. The representations and warranties of
the parties made in or pursuant to this Agreement shall survive the
consummation of any of the transactions contemplated hereby, in each case
regardless of any investigation that may have been or may be made by or on
behalf of any other party.
7.2 Communications. All notices and other communications required
or permitted by this Agreement shall be in writing, and, (i) if to any Holder
or the Initial Management Investors, addressed to such Investor at such
Holder's or Initial Management Investor's address specified in the Stockholders
Agreement or at such other address as such Holder or Initial Management
Investor may designate in a written notice to the Company and (ii) if to the
Company, to Xxxxxx Communications Corporation, 000 Xxxxxxxxxx Xxxx Xxxx, Xxxx
Xxxx Xxxxx, XX 00000, Attention: General Counsel, or to such other address as
the Company may designate in a written notice to each Holder or Initial
Management Investor. All notices and other communications required or
permitted by this Agreement shall be deemed to have been duly given if
personally delivered to the intended recipient at the proper address determined
pursuant to this Section 7.2 or sent to such recipient at such address by
registered or certified mail, return receipt requested, Express Mail, Federal
Express or similar overnight delivery service for next Business Day delivery or
by telegram, telex or facsimile transmission and will be deemed given, unless
earlier received: (1) if sent by certified or registered mail, return receipt
requested, five calendar days after being deposited in the United States mail,
postage prepaid; (2) if sent by Express Mail, Federal Express or similar
overnight delivery service for next Business Day delivery, the next Business
Day after being entrusted to such service, with delivery charges prepaid or
charged to the sender's account; (3) if sent by telegram or telex or facsimile
transmission, on the date sent, and (4) if delivered by hand, on the date of
delivery.
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7.3 Binding Effect; Successors and Assigns; Entire Agreement.
Except as expressly provided in this Agreement, nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon or give
any Person (including creditors, stockholders, Affiliates of the Company or any
underwriter or prospective underwriter with respect to the Proposed Offering)
other than the parties hereto any remedy or claim under or by reason of this
Agreement or any term, covenant or condition hereof, all of which shall be for
the sole and exclusive benefit of the parties. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors, heirs, executors, legal representatives and
permitted assigns; provided, however, that, except as otherwise specifically
permitted or contemplated by this Agreement, neither this Agreement nor any of
the rights, interests or obligations of the Company hereunder shall be assigned
or delegated by the Company without the prior written consent of the Holders,
other than any provision herein which modifies another agreement referenced
herein, which shall be assignable or delegatable by the Company as permitted in
such other document. The provisions of Section 2.5 hereof shall inure to the
benefit of, and be enforceable by, each present and future holder of any
Existing Warrant. The provisions of Section 2.6 hereof shall inure to the
benefit of, and be enforceable by, each present and future Holder of
Registrable Shares. The provisions of Section 2.7 hereof shall inure to the
benefit of, and be enforceable by, each present and any future Holder of an
Existing Registrable Share. The provisions of Section 2.11 hereof shall inure
to the benefit of, and be enforceable by, each present and future Holder of any
New Warrants or any Class C Common Stock issued upon the exercise of any New
Warrant. This Agreement sets forth the entire agreement and understanding
among the parties hereto as to the specific subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them with respect to such subject matter. In the event of
any conflict or inconsistency between the provisions of this Agreement and the
provisions of the Exchange Agreement or any other Transaction Agreement, the
provisions of this Agreement shall govern.
7.4 Amendments and Waivers. The provisions of this Agreement,
including the provision of this sentence, may not be amended, modified or
supplemented unless approved in writing by each of (a), the Company, (b)
Management Investors holding a Majority-in-Interest of the Common Stock held by
the Management Investor Group, (c) Senior Holders holding a
Majority-in-Interest of the Shares of each Class held by the Senior Holders,
and (d) Junior Holders holding a Majority-in-Interest of the Shares of each
Class held by the Junior Holders. Except as specifically waived and modified
hereby, each of the Certificates of Designations, the Stockholders Agreement,
and all agreements and other documents heretofore executed and delivered among
the Company and/or any or all of the Holders will remain in full force and
effect and are
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hereby ratified and confirmed, and the execution and delivery of this Agreement
will not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Holder under any of the Certificates of
Designations, the Stockholders Agreement, or any such other agreement or
document. Without limiting the foregoing, the agreements and modifications set
forth in this Agreement will be limited precisely as set forth herein, and
nothing in this Agreement will be deemed (i) to constitute a waiver of
compliance by any party hereto with respect to, or modification of, any other
provision or condition of any of the Certificates of Designations, the
Stockholders Agreement, or any such other agreement or document; or (ii) to
prejudice any right or remedy that any party hereto may now have or may have in
the future under or in connection with any of the Certificates of Designations,
the Stockholders Agreement, or any such other agreement or document.
7.5 Governing Law. This Agreement will be governed by, and will
be construed in accordance with, the laws of the state of New York, without
regard to conflict or choice of law principles of the state of New York which
might otherwise cause the internal laws of any other jurisdiction to be
applied.
7.6 Interpretation. The headings of the sections contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect the meaning or interpretation of
this Agreement.
7.7 No Implied Waivers. No action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, agreements,
covenants, obligations or commitments contained herein or made pursuant hereto.
The waiver by any party of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any preceding or succeeding breach
and no failure by any party to exercise any right, privilege or remedy
hereunder shall be deemed a waiver of such party's rights, privileges or
remedies hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.
7.8 Counterparts. This instrument may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument. This Agreement will become effective
when executed by either (a) all of the parties hereto, or (b) each of (i) the
Company, (ii) each Initial Management Investor, (iii) a Majority-in-Interest of
holders of Senior Preferred Stock and (iv) a Majority-in-Interest of holders of
the Junior Preferred Stock, and an opinion of counsel to the Company addressed
to the Holders that the failure of all of the parties hereto executing this
Agreement shall not prevent this
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Agreement from becoming effective against the Company, the Initial Management
Investors and all of the Holders in accordance with the terms hereof.
7.9 Fees and Expenses. Whether or not the Proposed Offering is
consummated or the provisions of Section 2 ever become effective, the Company
covenants and agrees to pay promptly the Holders' reasonable costs and expenses
in connection with the negotiation, preparation, review, execution, delivery
and performance of this Agreement and any and all other agreements,
instruments, certificates and other documents furnished pursuant hereto or in
connection herewith including the fees and disbursements of the Holders'
respective legal counsel; provided, however, that the Company shall not be
required to pay costs and expenses required to be paid by the Holders under
Section 4 of the Registration Rights Provisions or any costs or expenses of a
Holder that breaches any agreement or covenant in this Agreement or any
agreement contemplated to be delivered by or on behalf of such holder hereby.
7.10 Further Assurances. Each party shall cooperate and take such
actions as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby. If the provision of Section 2 hereof becomes effective as provided in
Section 3 hereof, such actions shall include, but not be limited to, the
parties promptly taking (at the Company's expense) all such corporate and other
actions as may be reasonably requested of each such party by the Company
(including action required under any applicable Requirements of Law) to amend
the Existing Senior Certificates of Designations, the New Senior Certificate of
Designations or the Company's certificate of incorporation to provide therein
for the changes thereto set forth herein and to consent to or vote in favor of
each such amendment if the same is presented to it by the Company for a vote or
written consent, as the case may be; provided, the Company shall not be
required to obtain any additional approval of any party hereto to accomplish
any such action.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective as provided herein.
COMPANY
XXXXXX COMMUNICATIONS CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
INITIAL MANAGEMENT INVESTORS
SECOND XXXXXXX XXXXXXX, X.X. XXXXXX ENTERPRISES, INC.
By: Xxxxxx Enterprises, Inc. By:
Its: General Partner ------------------------------
Name:
-------------------------
Title:
------------------------
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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SENIOR HOLDERS
SANDLER MEZZANINE PARTNERS, X.X. XXXXXXX MEZZANINE FOREIGN
PARTNERS, L.P.
By: Sandler Mezzanine General By: Sandler Mezzanine General
Partnership Partnership
Its: General Partner Its: General Partner
By: MJM Media Corp. By: MJM Media Corp.
Its: General Partner Its: General Partner
By: By:
--------------------------------------- -------------------------------------
Name: Name:
---------------------------------- --------------------------------
Title: Title:
--------------------------------- -------------------------------
SANDLER MEZZANINE T-E NATIONAL UNION FIRE INSURANCE
PARTNERS, L.P. COMPANY OF PITTSBURGH, PA
By: Sandler Mezzanine General By:
Partnership ---------------------------------------------
Name:
----------------------------------------
Its: General Partner Title:
---------------------------------------
By: MJM Media Corp.
Its: General Partner
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
JUNIOR HOLDERS
BT INVESTMENT PARTNERS, INC. FIRST UNION CORPORATION OF
VIRGINIA
By: By:
------------------------------------------------ ---------------------------------------------
Name: Name:
------------------------------------------- ----------------------------------------
Title: Title:
------------------------------------------ ---------------------------------------
PARIBAS NORTH AMERICA, INC. UNION VENTURE CORPORATION
By: By:
------------------------------------------------ ---------------------------------------------
Name: Name:
------------------------------------------- ----------------------------------------
Title: Title:
------------------------------------------ ---------------------------------------
33
