1
Exhibit 10.23
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
THIS PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT (the
"Agreement") is made and entered into as of July 3, 1997, among Citadel
Broadcasting Company, a Nevada corporation (the "Company"), Citadel License,
Inc. (the "Subsidiary") and Prudential Securities Incorporated, NationsBanc
Capital Markets, Inc. and BancBoston Securities Inc. (collectively, the
"Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated June 30, 1997 among the Company, Parent and the Initial Purchasers (the
"Purchase Agreement"), which provides for, in relevant part, the sale by the
Company to the Initial Purchasers of 1,000,000 shares of 13 1/4% Series A
Exchangeable Preferred Stock, liquidation preference $100 per share (including
additional shares payable in lieu of cash dividends, the "Exchangeable
Preferred Stock"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, each of the Company and the Subsidiary has agreed to
provide to the Initial Purchasers and their direct and indirect transferees and
assigns the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree
as follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Certificate of Designation" shall mean the Certificate of
Designation of the Company relating to the Exchangeable Preferred Stock.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble of
this Agreement and also includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company, provided, however, that any such
depositary must have an address in the Borough of Manhattan, in the City of New
York.
2
"Holders" shall mean the Initial Purchasers, for so long as
they own any Registrable Preferred Stock, and each of their successors, assigns
and direct and indirect transferees who become registered owners of Registrable
Preferred Stock.
"Initial Purchasers" shall have the meaning set forth in the
preamble of this Agreement.
"Majority Holders" shall mean the Holders of a majority of
the outstanding Registrable Preferred Stock; provided that whenever the consent
or approval of Holders of a specified percentage of Registrable Preferred Stock
is required hereunder, Registrable Preferred Stock held by the Company or any
of its affiliates (as such term is defined in Rule 405 under the 0000 Xxx)
(other than the Initial Purchasers or subsequent holders of Registrable
Preferred Stock if such subsequent holders are deemed to be such affiliates
solely by reason of their holding of such Registrable Preferred Stock) shall be
disregarded in determining whether such consent or approval was given by the
Holders of such required percentage or amount.
"New Preferred Stock" shall mean 13-1/4% Series A
Exchangeable Preferred Stock, no par value, issued by the Company under the
Certificate of Designation containing terms identical in all respects to the
Exchangeable Preferred Stock (except that (i) dividends thereon shall
accumulate from the last dividend payment date or, if no such dividends have
been paid, from July 3, 1997, (ii) the transfer restrictions thereon shall be
eliminated and (iii) certain provisions relating to an increase in the stated
dividend rate thereon shall be eliminated) to be offered to Holders of
Exchangeable Preferred Stock in exchange for Exchangeable Preferred Stock
pursuant to the Preferred Stock Exchange Offer.
"Person" shall mean an individual, partnership, limited
liability company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Preferred Stock Exchange Offer" shall mean the exchange
offer by the Company of Registrable Preferred Stock for New Preferred Stock
pursuant to Section 2(a) hereof.
"Preferred Stock Exchange Offer Registration" shall mean a
registration under the 1933 Act effected pursuant to Section 2(a) hereof.
"Preferred Stock Exchange Offer Registration Statement" shall
mean an exchange offer registration statement on Form S-4 (or, if applicable,
on another appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Preferred Stock Shelf Registration Statement" shall mean a
"shelf" registration statement of the Company pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the then Registrable
Preferred Stock on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case
2
3
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Preferred Stock covered by a Preferred Stock Shelf
Registration Statement, and by all other amendments and supplements to a
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble of this Agreement.
"Registrable Preferred Stock" shall mean the Exchangeable
Preferred Stock; provided, however, that the Exchangeable Preferred Stock shall
cease to be Registrable Preferred Stock when (i) a Registration Statement with
respect to such Exchangeable Preferred Stock shall have been declared effective
under the 1933 Act and such Exchangeable Preferred Stock shall have been
disposed of pursuant to such Registration Statement, (ii) such Exchangeable
Preferred Stock shall have been sold to the public pursuant to Rule 144 (or any
similar provision then in force, but not Rule 144A) under the 1933 Act, (iii)
such Exchangeable Preferred Stock shall have ceased to be outstanding or (iv)
such Exchangeable Preferred Stock has been exchanged for New Preferred Stock
upon consummation of the Preferred Stock Exchange Offer.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company and the Subsidiary with
this Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. ("NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with compliance
with state or other securities or blue sky laws and compliance with the rules
of the NASD (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with state or other securities or blue
sky qualification of any of the New Preferred Stock or Registrable Preferred
Stock), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, certificates
representing the New Preferred Stock and other documents relating to the
performance of and compliance with this Agreement, (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Preferred Stock on any securities exchange or exchanges, (v) the reasonable
fees and disbursements of counsel for the Company and, in the case of a
Preferred Stock Shelf Registration Statement, the reasonable fees and
disbursements (including the expenses of preparing and distributing any
underwriting or securities sales agreement) of one counsel (in addition to
appropriate local counsel, if any) for the Holders (which counsel shall be
selected in writing by the Majority Holders), (vi) the fees and expenses of the
independent public accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, (vii) the fees and expenses of a "qualified
independent underwriter" as defined by Conduct Rule 2720 of the NASD (if
required
3
4
by the NASD rules) in connection with the offering of the Registrable
Preferred Stock, (viii) the fees and expenses of the Transfer Agent (as defined
below), including its counsel, and any escrow agent or custodian and (ix) any
reasonable fees and disbursements of the underwriters customarily required to
be paid by issuers or sellers of securities and the reasonable fees and
expenses of any special experts retained by the Company in connection with any
Registration Statement, but excluding underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of Registrable
Preferred Stock by a Holder.
"Registration Statement" shall mean any registration
statement of the Company which covers any of the New Preferred Stock or
Registrable Preferred Stock pursuant to the provisions of this Agreement, and
all amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Subsidiary" shall have the meaning set forth in the preamble
of this Agreement and also includes the Subsidiary's successors.
"Transfer Agent" shall mean the transfer agent with respect
to the Exchangeable Preferred Stock.
2. Registration Under the 1933 Act. (a) Preferred Stock
Exchange Offer Registration. To the extent not prohibited by any applicable law
or applicable interpretation of the Staff of the SEC, the Company shall (A)
file on or prior to the 90th calendar day following the date hereof a Preferred
Stock Exchange Offer Registration Statement covering the offer by the Company
to the Holders to exchange all of the Registrable Preferred Stock for New
Preferred Stock, (B) use its best efforts to cause such Preferred Stock
Exchange Offer Registration Statement to be declared effective by the SEC on or
prior to the 180th calendar day following the date hereof, (C) use its best
efforts to cause such Preferred Stock Exchange Offer Registration Statement to
remain effective until the closing of the Preferred Stock Exchange Offer and
(D) use its best efforts to consummate the Preferred Stock Exchange Offer on or
prior to the 210th calendar day following the date hereof. The New Preferred
Stock will be issued under the Certificate of Designation. Upon the
effectiveness of the Preferred Stock Exchange Offer Registration Statement, the
Company shall promptly commence the Preferred Stock Exchange Offer, it being
the objective of such Preferred Stock Exchange Offer to enable each Holder
(other than Preferred Stock Participating Brokers (as defined in Section 3(f)
hereof)), eligible and electing to exchange Registrable Preferred Stock for New
Preferred Stock (assuming that such Holder is not an affiliate of the Company
within the meaning of Rule 405 under the 1933 Act, acquires the New Preferred
Stock in the ordinary course of such Holder's business and has no arrangements
or understandings with any Person to participate in the Preferred Stock
Exchange Offer for the purpose of distributing the New Preferred Stock) to
trade such New Preferred Stock from and after their receipt without any
limitations or restrictions under the 1933 Act and without
4
5
material restrictions under the securities laws of a substantial proportion of
the several states of the United States.
In connection with the Preferred Stock Exchange Offer, the
Company shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Preferred Stock Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
(ii) keep the Preferred Stock Exchange Offer open for not
less than 30 days (or longer if required by applicable law) after the date
notice thereof is mailed to the Holders;
(iii) use the services of the Depositary for the Preferred
Stock Exchange Offer with respect to Exchangeable Preferred Stock evidenced by
global certificates;
(iv) permit Holders to withdraw tendered Registrable
Preferred Stock at any time prior to the close of business, New York
City time, on the last business day on which the Preferred Stock
Exchange Offer shall remain open, by sending to the institution
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Registrable Preferred Stock delivered for exchange, and a statement
that such Holder is withdrawing his election to have such Exchangeable
Preferred Stock exchanged; and
(v) otherwise comply in all respects with all applicable
laws relating to the Preferred Stock Exchange Offer.
As soon as practicable after the close of the Preferred Stock
Exchange Offer, the Company shall:
(i) accept for exchange Registrable Preferred Stock duly
tendered and not validly withdrawn pursuant to the Preferred Stock
Exchange Offer in accordance with the terms of the Preferred Stock
Exchange Offer Registration Statement and the letter of transmittal
which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Transfer
Agent for cancellation all Registrable Preferred Stock so accepted for exchange
by the Company; and
(iii) cause the Transfer Agent promptly to deliver New
Preferred Stock to each Holder of Registrable Preferred Stock equal in amount
to the Registrable Preferred Stock of such Holder so accepted for exchange.
Dividends on the New Preferred Stock will accumulate from the
last dividend payment date on which dividends were distributed on the
Registrable Preferred Stock surrendered in exchange therefor or, if no
dividends have been distributed on the Registrable Preferred Stock, from July
3, 1997. The Preferred Stock Exchange Offer shall not be subject to any
conditions, other than that the Preferred Stock Exchange Offer, or the making
of any
5
6
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the Staff of the SEC. Each Holder of Registrable Preferred
Stock (other than Preferred Stock Participating Brokers) who wishes to exchange
such Registrable Preferred Stock for New Preferred Stock in the Preferred Stock
Exchange Offer shall have represented that (i) any New Preferred Stock to be
received by it were acquired in the ordinary course of business, (ii) at the
time of the commencement of the Preferred Stock Exchange Offer it has no
arrangement with any Person to participate in the distribution (within the
meaning of the 0000 Xxx) of the New Preferred Stock, (iii) it is not an
affiliate (as defined in Rule 405 under the 0000 Xxx) of the Company, or if it
is an affiliate it will comply with the registration and prospectus delivery
requirements of the 1933 Act to the extent applicable and (iv) it is not acting
on behalf of any Person who could not make the representations in clauses (i)
through (iii) above. The Company shall inform the Initial Purchasers of the
names and addresses of the Holders to whom the Preferred Stock Exchange Offer
is made, and the Initial Purchasers shall have the right to contact such
Holders and otherwise facilitate the tender of Registrable Preferred Stock in
the Preferred Stock Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law
or applicable interpretations thereof by the Staff of the SEC, the Company is
not permitted to effect the Preferred Stock Exchange Offer as contemplated by
Section 2(a) hereof, or (ii) if for any other reason the Preferred Stock
Exchange Offer cannot be consummated within 210 days following the date hereof,
or (iii) if any Holder (other than an Initial Purchaser) is not eligible to
participate in the Preferred Stock Exchange Offer or (iv) upon the request of
any Initial Purchaser (with respect to any Registrable Preferred Stock which it
acquired directly from the Company) following the consummation of the Preferred
Stock Exchange Offer if any such Initial Purchaser shall hold Registrable
Preferred Stock which it acquired directly from the Company and if such Initial
Purchaser is not permitted, in the reasonable opinion of counsel to such
Initial Purchaser, pursuant to applicable law or applicable interpretation of
the Staff of the SEC to participate in the Preferred Stock Exchange Offer, the
Company shall, at its cost:
(A) as promptly as practicable, and in any event within 90
days after the date on which such filing obligation arises, file with
the SEC a Preferred Stock Shelf Registration Statement relating to the
offer and sale of the then outstanding Registrable Preferred Stock by
the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders of such Registrable
Preferred Stock and set forth in such Preferred Stock Shelf
Registration Statement, and use its best efforts to cause such
Preferred Stock Shelf Registration Statement to be declared effective
by the SEC on or prior to 45 days after the date on which such filing
occurs (or promptly in the event of a request by any Initial Purchaser
pursuant to clause (iv) above). In the event that the Company is
required to file a Preferred Stock Shelf Registration Statement upon
the request of any Holder (other than an Initial Purchaser) not
eligible to participate in the Preferred Stock Exchange Offer pursuant
to clause (iii) above or upon the request of any Initial Purchaser
pursuant to clause (iv) above, the Company shall file and have
declared effective by the SEC both a Preferred Stock Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all
Registrable Preferred Stock and a Preferred Stock Shelf Registration
Statement (which may be a combined Registration Statement
6
7
with the Preferred Stock Exchange Offer Registration Statement) with
respect to offers and sales of Registrable Preferred Stock held by such
Holder or such Initial Purchaser after completion of the Preferred
Stock Exchange Offer;
(B) use its best efforts to keep the Preferred Stock Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period
of two years after its effective date (or one year from the date the
Preferred Stock Shelf Registration Statement is declared effective if
such Preferred Stock Shelf Registration Statement is filed upon the
request of any Initial Purchaser pursuant to clause (iv) above) or
such shorter period which will terminate when all of the Registrable
Preferred Stock covered by the Preferred Stock Shelf Registration
Statement have been sold pursuant to the Preferred Stock Shelf
Registration Statement or all of the Registrable Preferred Stock
become eligible for resale pursuant to Rule 144 under the 1933 Act
without volume restrictions; and
(C) notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Preferred Stock Shelf Registration
Statement and any amendment thereto and any Prospectus forming a part
thereof and any supplement thereto complies in all material respects
with the 1933 Act and the rules and regulations thereunder, (ii) any
Preferred Stock Shelf Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Preferred Stock Shelf
Registration Statement, and any supplement to such Prospectus (as
amended or supplemented from time to time), does not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading.
The Company further agrees, if necessary, to supplement or
amend the Preferred Stock Shelf Registration Statement if reasonably requested
by the Majority Holders with respect to information relating to the Holders and
otherwise as required by Section 3(b) below, to use all reasonable efforts to
cause any such amendment to become effective and such Shelf Registration to
become usable as soon as practicable thereafter and to furnish to the Holders
of Registrable Preferred Stock copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) and 2(b). Each
Holder shall pay all expenses of its counsel other than as set forth in the
preceding sentence, underwriting discounts and commissions (prior to the
reduction thereof with respect to selling concessions, if any) and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Preferred Stock pursuant to the Preferred Stock Shelf Registration Statement.
(d) Effective Registration Statement. (i) The Company will be
deemed not to have used its best efforts to cause a Registration Statement to
become, or to remain, effective
7
8
during the requisite period if the Company voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Preferred Stock covered thereby not being able to
exchange or offer and sell such Registrable Preferred Stock during that period
unless (A) such action is required by applicable law or (B) such action is taken
by the Company in good faith and for valid business reasons (but not including
avoidance of the Company's obligations hereunder), including a material
corporate transaction, so long as the Company promptly complies with the
requirements of Section 3(k) hereof, if applicable.
(ii) A Preferred Stock Exchange Offer Registration Statement
pursuant to Section 2(a) hereof or a Preferred Stock Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
that if, after it has been declared effective, the offering of Registrable
Preferred Stock pursuant to a Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Preferred Stock pursuant to such Registration Statement may
legally resume.
(e) Increase in Dividend Rate. In the event that either (i)
the Preferred Stock Exchange Offer Registration Statement is not filed with the
SEC on or prior to the 90th day following the date hereof, (ii) the Preferred
Stock Exchange Offer is not consummated within 210 days following the date
hereof or a Preferred Stock Shelf Registration Statement with respect to the
Registrable Preferred Stock is not declared effective on or prior to the 210th
day following the date hereof, or (iii) either (A) the Preferred Stock Exchange
Offer Registration Statement ceases to be effective at any time prior to the
time that the Preferred Stock Exchange Offer is consummated or (B) if
applicable, the Preferred Stock Shelf Registration Statement has been declared
effective and such Preferred Stock Shelf Registration Statement ceases to be
effective at any time prior to the second anniversary of its effective date,
the dividend rate borne by the Exchangeable Preferred Stock shall be increased
by one-quarter of one percent per annum following such 90-day period in the
case of clause (i) above, following such 210-day period in the case of clause
(ii) above, or immediately in the case of clause (iii) above, which rate will
be increased by an additional one-quarter of one percent per annum for each
30-day period that any such additional dividends continue to accumulate in the
case of clause (i) above or for each 90-day period that any such additional
dividends continue to accumulate in the case of clauses (ii) and (iii) above;
provided that the aggregate increase in such dividend rate will in no event
exceed one and one-half percent. Upon (w) the filing of the Preferred Stock
Exchange Offer Registration Statement after the 90-day period described in
clause (i) above, (x) consummation of the Preferred Stock Exchange Offer or the
effectiveness of a Preferred Stock Shelf Registration Statement, as the case
may be, after the 210-day period described in clause (ii) above, or (y) the
effectiveness of the Preferred Stock Exchange Offer Registration Statement or
the Preferred Stock Shelf Registration Statement following an event described
in clause (iii) above, the dividend rate borne by the Exchangeable Preferred
Stock from the date of such filing, effectiveness or consummation, as the case
may be, will be reduced to the original dividend rate if the Company is
otherwise in compliance with this paragraph; provided, however, that, if after
8
9
any such reduction in dividend rate, a different event specified in clauses
(i), (ii) or (iii) above occurs, the dividend rate will again be increased and
thereafter reduced pursuant to the foregoing conditions. If the Company issues
a notice that the Preferred Stock Shelf Registration Statement is unusable
pending the announcement of a material corporate transaction or otherwise
pursuant to Section 3(k) hereof, or such a notice is required under applicable
securities laws to be issued by the Company, and the aggregate number of days
in any consecutive twelve-month period for which all such notices are issued or
required to be issued exceeds 30 days in the aggregate, then the dividend rate
borne by the Exchangeable Preferred Stock will be increased by one-quarter of
one percent per annum following the date that such Preferred Stock Shelf
Registration Statement ceases to be usable beyond the 30-day period permitted
above, which rate shall be increased by an additional one-quarter of one
percent per annum for each 90-day period that such additional dividends
continue to accumulate; provided that the aggregate increase in such annual
dividend rate may in no event exceed one and one-half percent. Upon the Company
declaring that the Preferred Stock Shelf Registration Statement is usable after
the dividend rate has been increased pursuant to the preceding sentence, the
dividend rate borne by the Exchangeable Preferred Stock will be reduced to the
original dividend rate if the Company is otherwise in compliance with this
paragraph; provided, however, that if after any such reduction in dividend rate
the Preferred Stock Shelf Registration Statement again ceases to be usable
beyond the period permitted above, the dividend rate will again be increased
and thereafter reduced pursuant to the foregoing provisions.
(f) Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, each of the Company and
the Subsidiary acknowledges that any failure by each of the Company and the
Subsidiary to comply with its respective obligations under Sections 2(a) and
2(b) hereof may result in material irreparable injury to the Initial Purchasers
or the Holders for which there is no adequate remedy at law, that it will not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Sections 2(a) and 2(b) hereof.
3. Registration Procedures. In connection with the
obligations of the Company and the Subsidiary with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement,
within the time period specified in Section 2, on the appropriate form
under the 1933 Act, which form (i) shall be selected by the Company,
(ii) shall, in the case of a Shelf Registration, be available for the
sale of the Registrable Preferred Stock by the selling Holders thereof
and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by
reference all financial statements required by the SEC to be filed
therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to (i) the Preferred Stock Exchange Offer
Registration Statement as may be
9
10
necessary under applicable law to keep such Preferred Stock Exchange
Offer Registration Statement effective for the period required to
comply with Section 2(a) (except to the extent the Company is unable to
consummate the Preferred Stock Exchange Offer and the Company complies
with Section 2(b), subject in all respects to Section 3(f) hereof), and
(ii) the Preferred Stock Shelf Registration Statement as may be
necessary under applicable law to keep such Preferred Stock Shelf
Registration Statement effective for the period required pursuant to
Section 2(b) hereof; cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the 1933 Act; and comply with the provisions
of the 1933 Act with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Preferred Stock, at least ten days prior to
filing, that a Preferred Stock Shelf Registration Statement with
respect to the Registrable Preferred Stock is being filed and advising
such Holders that the distribution of Registrable Preferred Stock will
be made in accordance with the method elected by the Majority Holders;
and (ii) furnish to each Holder of Registrable Preferred Stock, to
counsel for the Initial Purchasers, to counsel for the Holders and to
each underwriter of an underwritten offering of Registrable Preferred
Stock, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and,
if the Holder so requests, all exhibits (including those incorporated
by reference) in order to facilitate the public sale or other
disposition of the Registrable Preferred Stock; and (iii) subject to
the last paragraph of Section 3, hereby consent to the use of the
Prospectus, including each preliminary Prospectus, or any amendment or
supplement thereto by each of the selling Holders of Registrable
Preferred Stock in connection with the offering and sale of the
Registrable Preferred Stock covered by the Prospectus or any amendment
or supplement thereto;
(d) use its best efforts to register or qualify the
Registrable Preferred Stock under all applicable state securities or
"blue sky" laws of such jurisdictions as any Holder of Registrable
Preferred Stock covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Preferred Stock
shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, to cooperate with the
Holders in connection with any filings required to be made with the
NASD, keep each such registration or qualification effective during
the period such Registration Statement is required to be effective and
do any and all other acts and things which may be reasonably necessary
or advisable to enable such Holder to consummate the disposition in
each such jurisdiction of such Registrable Preferred Stock owned by
such Holder; provided, however, that the Company shall not be required
to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d) or (ii) take any action which
10
11
would subject it to general service of process or taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of a Shelf Registration, notify each Holder
of Registrable Preferred Stock and counsel for such Holders promptly
and, if requested by such Holder or counsel, confirm such advice in
writing promptly (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to
a Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale
of Registrable Preferred Stock covered thereby, the representations
and warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any,
relating to such offering cease to be true and correct in all material
respects, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Preferred Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (vi) of the happening
of any event or the discovery of any facts during the period a
Preferred Stock Shelf Registration Statement is effective which makes
any statement made in such Preferred Stock Shelf Registration
Statement or the related Prospectus untrue in any material respect or
which requires the making of any changes in such Preferred Stock Shelf
Registration Statement or Prospectus in order to make the statements
therein not misleading and (vii) of any determination by the Company
that a post-effective amendment to a Registration Statement would be
appropriate;
(f) (A) in the case of the Preferred Stock Exchange Offer,
(i) include in the Preferred Stock Exchange Offer Registration
Statement a "Plan of Distribution" section covering the use of the
Prospectus included in the Preferred Stock Exchange Offer Registration
Statement by broker-dealers who have exchanged their Registrable
Preferred Stock for New Preferred Stock for the resale of such New
Preferred Stock, (ii) furnish to each broker-dealer who desires to
participate in the Preferred Stock Exchange Offer, without charge, as
many copies of each Prospectus included in the Preferred Stock
Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such
broker-dealer may reasonably request, (iii) include in the Preferred
Stock Exchange Offer Registration Statement a statement that any
broker-dealer who holds Registrable Preferred Stock acquired for its
own account as a result of market-making activities or other trading
activities (a "Preferred Stock Participating Broker"), and who
receives New Preferred Stock for Registrable Preferred Stock pursuant
to the Preferred Stock Exchange Offer, may be a statutory underwriter
and must deliver a prospectus meeting the requirements of the 1933 Act
in connection with any resale of such New Preferred Stock, (iv)
subject to the last paragraph of Section 3, hereby consent to the use
of the Prospectus forming part of the Preferred Stock Exchange Offer
Registration Statement or any amendment or supplement thereto, by any
broker-
11
12
dealer in connection with the sale or transfer of the New Preferred
Stock covered by the Prospectus or any amendment or supplement thereto,
and (v) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the
Preferred Stock Exchange Offer (x) the following provision:
"If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to
engage in, a distribution of New Preferred Stock. If the
undersigned is a broker-dealer that will receive New
Preferred Stock for its own account in exchange for
Registrable Preferred Stock, it represents that the
Registrable Preferred Stock to be exchanged for New Preferred
Stock was acquired by it as a result of market-making
activities or other trading activities and acknowledges that
it will deliver a prospectus meeting the requirements of the
1933 Act in connection with any resale of such New Preferred
Stock pursuant to the Preferred Stock Exchange Offer;
however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in subclause (x) and by delivering a
Prospectus in connection with the exchange of Registrable Preferred
Stock, the broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the 1933 Act; and
(B) to the extent any Preferred Stock Participating Broker
participates in the Preferred Stock Exchange Offer, the Company shall
use its best efforts to cause to be delivered at the request of an
entity representing the Preferred Stock Participating Brokers (which
entity shall be one of the Initial Purchasers, unless it elects not to
act as such representative) only one, if any, "cold comfort" letter
with respect to the Prospectus in the form existing on the last date
for which exchanges are accepted pursuant to the Preferred Stock
Exchange Offer and with respect to each subsequent amendment or
supplement, if any, effected during the period specified in clause (C)
below; and
(C) to the extent any Preferred Stock Participating Broker
participates in the Preferred Stock Exchange Offer, the Company shall
use its best efforts to maintain the effectiveness of the Preferred
Stock Exchange Offer Registration Statement for a period of 120 days
following the closing of the Preferred Stock Exchange Offer; and
(D) the Company shall not be required to amend or supplement
the Prospectus contained in the Preferred Stock Exchange Offer
Registration Statement as would otherwise be contemplated by Section
3(b), or take any other action as a result of this Section 3(f), for a
period exceeding 120 days after the last date for which exchanges are
accepted pursuant to the Preferred Stock Exchange Offer (as such period
may be extended by the Company) and Preferred Stock Participating
Brokers shall not be authorized by the Company to, and shall not,
deliver such Prospectus after such period in connection with resales
contemplated by this Section 3;
12
13
(g) (A) in the case of a Preferred Stock Exchange Offer,
furnish counsel for the Initial Purchasers and (B) in the case of a
Shelf Registration, furnish counsel for the Holders of Registrable
Preferred Stock copies of any request by the SEC or any state
securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement as
soon as practicable and provide immediate notice to each Holder of the
withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Preferred Stock, without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference
or exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Preferred Stock to facilitate the
timely preparation and delivery of certificates representing
Registrable Preferred Stock to be sold and not bearing any restrictive
legends; and cause such Registrable Preferred Stock to be in such
denominations (consistent with the provisions of the Certificate of
Designation) and registered in such names as the selling Holders or
the underwriters, if any, may reasonably request at least one business
day prior to the closing of any sale of Registrable Preferred Stock;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts, each as contemplated by
Section 3(e)(vi) hereof, use its best efforts to prepare a supplement
or post-effective amendment to a Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Preferred Stock, such Prospectus will
not contain at the time of such delivery any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The Company agrees to notify each Holder to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and each Holder hereby agrees to suspend
use of the Prospectus until the Company has amended or supplemented
the Prospectus to correct such misstatement or omission. At such time
as such public disclosure is otherwise made or the Company determines
that such disclosure is not necessary, in each case to correct any
misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such numbers of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably
request;
(l) obtain a CUSIP number for all New Preferred Stock, or
Registrable Preferred Stock, as the case may be, not later than the
effective date of a Registration Statement, and provide the Transfer
Agent with printed certificates for the New Preferred
13
14
Stock or the Registrable Preferred Stock, as the case may be, in a form
eligible for deposit with the Depositary;
(m) in the case of a Shelf Registration, enter into
agreements (including underwriting agreements) and take all other
customary and appropriate actions (including those reasonably
requested by the Majority Holders) in order to expedite or facilitate
the disposition of such Registrable Preferred Stock and in such
connection whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration:
(i) make such representations and warranties to the
Holders of such Registrable Preferred Stock and the
underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in similar
underwritten offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and the holders of a majority
in principal amount of the Registrable Preferred Stock being
sold) addressed to each selling Holder and the underwriters,
if any, covering the matters customarily covered in opinions
requested in sales of securities or underwritten offerings;
(iii) obtain "cold comfort" letters and updates
thereof from the Company's independent certified public
accountants addressed to the underwriters, if any, and will
use best efforts to have such letters addressed to the
selling Holders of Registrable Preferred Stock, such letters
to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters
in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with
the Holders and an agent of the Holders providing for, among
other things, the appointment of such agent for the selling
Holders for the purpose of soliciting purchases of
Registrable Preferred Stock, which agreement shall be in
form, substance and scope customary for similar offerings;
and
(v) deliver such documents and certificates as
may be reasonably requested and as are customarily delivered
in similar offerings.
The above shall be done at (i) the effectiveness of such Preferred
Stock Shelf Registration Statement (and, if appropriate, each
post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required
thereunder. In the case of any underwritten offering, the Company
shall provide written notice to the Holders of all Registrable
Preferred Stock of such underwritten offering at least 30 days prior
to the filing of a prospectus supplement for such underwritten
offering. Such notice shall (x) offer each such Holder the right to
participate in such underwritten offering, (y) specify a date, which
shall be no earlier than 10 days following the date of
14
15
such notice, by which such Holder must inform the Company of its intent
to participate in such underwritten offering and (z) include the
instructions such Holder must follow in order to participate in such
underwritten offering;
(n) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable
Preferred Stock and any underwriters participating in any disposition
pursuant to a Preferred Stock Shelf Registration Statement and any
counsel or accountant retained by such Holders or underwriters, at
reasonable times and in a reasonable manner, all financial and other
records, pertinent corporate documents and properties of the Company
reasonably requested by any such persons, and cause the respective
officers, directors, employees, and any other agents of the Company to
supply all information reasonably requested by any such representative,
underwriter, special counsel or accountant in connection with such
Preferred Stock Shelf Registration Statement; provided, however, that
such Persons shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by the
Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such Persons, unless (i)
disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to Federal securities
laws in connection with the filing of such Preferred Stock Shelf
Registration Statement or the use of any Prospectus), (iii) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard such information by such
Person or (iv) such information becomes available to such Person from a
source other than the Company and its subsidiaries and such source is
not bound by a confidentiality agreement; provided, further, that the
foregoing investigation shall be coordinated on behalf of the Holders
by one representative designated by and on behalf of such Holders and
any such confidential information shall be available from such
representative to such Holders so long as any Holder agrees to be bound
by such confidentiality agreement;
(o) (i) a reasonable time prior to the filing of any
Preferred Stock Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to a Preferred Stock Exchange
Offer Registration Statement or amendment or supplement to a
Prospectus, provide copies of such document to the Initial Purchasers,
and make such changes in any such document prior to the filing thereof
as any of the Initial Purchasers or their counsel may reasonably
request; (ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Preferred Stock Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to such Preferred
Stock Shelf Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Holders of
Registrable Preferred Stock, to the Initial Purchasers, to counsel on
behalf of the Holders and to the underwriter or underwriters of an
underwritten offering of Registrable Preferred Stock, if any, and make
such changes in any such document prior to the filing thereof as the
Holders of Registrable Preferred Stock, the Initial Purchasers on
behalf of such Holders, their counsel and any underwriter may
reasonably request; and (iii) cause the representatives of the Company
to be
15
16
available for discussion of such document as shall be reasonably
requested by the Holders of Registrable Preferred Stock, the Initial
Purchasers on behalf of such Holders or any underwriter and shall not
at any time make any filing of any such document of which such Holders,
the Initial Purchasers on behalf of such Holders, their counsel or any
underwriter shall not have previously been advised and furnished a copy
or to which such Holders, the Initial Purchasers on behalf of such
Holders, their counsel or any underwriter shall reasonably object, each
of which actions in this clause (iii) by the Holders shall be
coordinated by one representative for all the Holders at reasonable
times and in a reasonable manner;
(p) in the case of a Shelf Registration, use its best efforts
to cause all Registrable Preferred Stock to be listed on any
securities exchange on which similar equity securities issued by the
Company are then listed if requested by the Majority Holders or by the
underwriter or underwriters of an underwritten offering of Registrable
Preferred Stock, if any;
(q) in the case of a Shelf Registration, unless the rating in
effect for the Exchangeable Preferred Stock applies to the New
Preferred Stock and the Exchangeable Preferred Stock to be sold
pursuant to a Shelf Registration, use its best efforts to cause the
Registrable Preferred Stock to be rated with the appropriate rating
agencies, if so requested by the Majority Holders or by the
underwriter or underwriters of an underwritten offering of Registrable
Preferred Stock, if any, unless the Registrable Preferred Stock are
already so rated;
(r) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
and
(s) cooperate and assist in any filings required to be made
with the NASD.
In the case of a Preferred Stock Shelf Registration
Statement, the Company may (as a condition to such Holder's participation in
the Shelf Registration) require each Holder of Registrable Preferred Stock to
furnish to the Company such information regarding such Holder and the proposed
distribution by such Holder of such Registrable Preferred Stock and make such
representations, in each case, as the Company may from time to time reasonably
request in writing.
In the case of a Preferred Stock Shelf Registration
Statement, each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event or the discovery of any facts, each of the kind
described in Section 3(e)(ii)-(vi) hereof, such Holder will forthwith
discontinue disposition of Registrable Preferred Stock pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(k) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Preferred
16
17
Stock current at the time of receipt of such notice. If the Company shall give
any such notice to suspend the disposition of Registrable Preferred Stock
pursuant to a Preferred Stock Shelf Registration Statement as a result of the
happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(vi) hereof, the Company shall be deemed to have used its best
efforts to keep the Preferred Stock Shelf Registration Statement effective
during such period of suspension provided that the Company shall use its best
efforts to file and have declared effective (if an amendment) as soon as
practicable an amendment or supplement to the Preferred Stock Shelf Registration
Statement and shall extend the period during which the Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days
during the period from and including the date of the giving of such notice to
and including the date when the Holders shall have received copies of the
supplemented or amended Prospectus necessary to resume such dispositions.
4. Underwritten Registrations. If any of the Registrable
Preferred Stock covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will manage the offering will be selected by the Majority
Holders of such Registrable Preferred Stock included in such offering and shall
be reasonably acceptable to the Company.
No Holder of Registrable Preferred Stock may participate in
any underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Preferred Stock on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) Each of the Company
and the Subsidiary agrees to indemnify and hold harmless each Holder and each
Person, if any, who controls any Holder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any losses, claims, damages or
liabilities, joint or several, to which such Holder or such controlling Person
may become subject under the 1933 Act, the 1934 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Registration Statement or
Prospectus or any amendments or supplements thereto or (B) any
application or other document, or any amendments or supplements
thereto, executed by the Company or the Subsidiary or based upon
written information furnished by or on behalf of the Company or the
Subsidiary filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the SEC or any securities association or securities exchange (each an
"Application") or
17
18
(ii) the omission or alleged omission to state in any
Registration Statement or Prospectus or any amendment or supplement thereto, or
any Application a material fact required to be stated therein or necessary to
make the statements therein not misleading,
and will reimburse, as incurred, each Holder and each such controlling Person
for any legal or other expenses reasonably incurred by such Holder or such
controlling Person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Subsidiary will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Registration Statement or Prospectus or any amendment or supplement thereto or
any Application in reliance upon and in conformity with written information
relating to any Holder furnished to the Company by any Holder specifically for
use therein. This indemnity agreement will be in addition to any liability which
the Company and the Subsidiary may otherwise have. The Company will not, without
the prior written consent of each Holder, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any Holder or any Person who controls any such Holder within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of such Holder and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
(b) Each Holder, severally and not jointly, agrees to
indemnify and hold harmless each of the Company and the Subsidiary, each of
their respective directors, each of their respective executive officers and
each Person, if any, who controls the Company or the Subsidiary within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
losses, claims, damages or liabilities to which the Company, the Subsidiary,
any such director, officer or controlling Person may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement or Prospectus or any amendment or supplement thereto or
any Application or (ii) the omission or alleged omission to state therein a
material fact required to be stated in any Registration Statement or Prospectus
or any amendment or supplement thereto, or any Application or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information relating to any Holder furnished to the Company by any Holder
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company, the Subsidiary or any such
director, officer or controlling Person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Holder may otherwise have. The Holders will not, without the prior written
consent of the Company or the Subsidiary, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
18
19
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Company, the Subsidiary or any person who controls the Company or
the Subsidiary within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Company, the Subsidiary and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 5, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 5. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel approved by
such indemnified party (which approval will not be unreasonably withheld);
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action (which
approval will not be unreasonably withheld), the indemnifying party will not be
liable to such indemnified party under this Section 5 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred
by such indemnified party in connection with the defense thereof, unless (i)
the indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however, that
in connection with such action the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition to local counsel,
if any) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by such Holder in the case of paragraph (a) of this Section 5,
representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party does not promptly
retain counsel approved by the indemnified party (which approval will not be
unreasonably withheld) or (iii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the written consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 5 is unavailable or
insufficient, for any reason, to hold
19
20
harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Subsidiary on the one hand and such Holder on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Subsidiary bear to
the total underwriting discounts and commissions received by such Holder. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Holder, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Subsidiary, on the one hand, and each Holder
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to above in this paragraph (d). Notwithstanding any other provision of this
paragraph (d), no Holder shall be obligated to make contributions hereunder that
in the aggregate exceed the total offering price of the Securities purchased by
such Holder, less the aggregate amount of any damages that such Holder has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each Person, if any, who controls a Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Holder, and each director of the Company
or the Subsidiary, each officer of the Company or the Subsidiary who signed the
Registration Statement and each Person, if any, who controls the Company or the
Subsidiary within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, shall have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 5, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 5
fairly allocate the risks in light of the ability of the parties to investigate
each of the Company and the Subsidiary and its business in order to assure that
adequate disclosure is made in the Offering Memorandum as required by the 1933
Act.
20
21
6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as
the Company is subject to the reporting requirements of Section 13 or 15 of the
1934 Act, the Company covenants that it will file the reports required to be
filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder, that if it ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Preferred Stock (i) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the 1933 Act and it will take such further action as any
Holder of Registrable Preferred Stock may reasonably request, and (iii) take
such further action that is reasonable in the circumstances, in each case, to
the extent required from time to time to enable such Holder to sell its
Registrable Preferred Stock without registration under the 1933 Act within the
limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (y) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time, or (z) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Preferred Stock, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. Neither the Company nor the
Subsidiary has entered into nor will the Company or the Subsidiary on or after
the date of this Agreement enter into any agreement which is inconsistent with
the rights granted to the Holders of Registrable Preferred Stock in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Preferred Stock affected by such amendment, modification,
supplement, waiver or departure; provided, however, that no amendment,
modification, supplement or waiver or consent to any departure from the
provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Preferred Stock unless consented to in writing by such Holder.
(d) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder (other than an Initial Purchaser), at the most
current address set forth on the records of the Transfer Agent, (ii) if to an
Initial Purchaser, at the most current address given by such Initial Purchaser
to the Company by means of a notice given in accordance with the provisions of
this Section 6(d), which address initially is the address set forth in the
Purchase Agreement and (iii) if to the Company or the Subsidiary, initially at
the Company's address set forth in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with the provisions
of this Section 6(d).
21
22
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Transfer
Agent, at the address specified by the Company.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Preferred Stock in violation of the terms hereof or of the Purchase Agreement
or the Certificate of Designation. If any transferee of any Holder shall
acquire Registrable Preferred Stock, in any manner, whether by operation of law
or otherwise, such Registrable Preferred Stock shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Preferred Stock, such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Subsidiary, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
22
23
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CITADEL BROADCASTING COMPANY
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President
CITADEL LICENSE, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President
Confirmed and accepted as of the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------
Authorized Signatory
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
------------------------------
Authorized Signatory
Xxxxxx X. Xxxxxxxxxxxx
Managing Director
BANCBOSTON SECURITIES INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Authorized Signatory
