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EXHIBIT 4(h)
REGENT COMMUNICATIONS, INC.
FIRST AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
THIS FIRST AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this "Agreement"),
is made and entered into as of December 8, 1997 by and among REGENT
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), RIVER CITIES CAPITAL FUND LIMITED
PARTNERSHIP, a Delaware limited partnership ("River Cities"), BMO FINANCIAL,
INC., a Delaware corporation ("BMO"), and GENERAL ELECTRIC CAPITAL CORPORATION
("GE CAPITAL").
W I T N E S S E T H:
THAT, WHEREAS, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and River Cities, the holders of all of the
Company's issued and outstanding capital stock, are parties to a Stockholders'
Agreement among them, dated as of May 20, 1997; and
WHEREAS, GE Capital and BMO have agreed to purchase 1,000,000 shares of the
Company's Series B Preferred Stock and Series D Preferred Stock (as defined
below), respectively, pursuant to Stock Purchase Agreements dated December 8,
1997 (the "Stock Purchase Agreement"); and
WHEREAS, ▇▇▇▇▇▇ has agreed to purchase 60,000 additional shares of the
Company's Series A Preferred Stock and ▇▇▇▇▇▇▇▇ has agreed to purchase 20,000
shares of the Company's Series A Preferred Stock; and
WHEREAS, the Company and the Stockholders deem it desirable to enter into
this Agreement in order to establish certain agreements among themselves
granting certain rights and imposing certain restrictions on themselves, the
Company and the shares of capital stock in the Company held by the Stockholders
(collectively, the "Shares").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. As used in this Agreement:
"Affiliate" as applied to any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. The term "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power
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to vote 10% or more of the Voting Stock (or in the case of a Person which is not
a corporation, 10% or more of the ownership interest, beneficial or otherwise)
of such Person or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of Voting Stock or
other ownership interest, by contract or otherwise.
"Common Shares" means shares of the Company's Common Stock that have not
been sold pursuant to a registration statement effective with the Securities and
Exchange Commission including any that have been issued upon conversion of the
Series A, B, C or D Preferred Stock. For the purposes of this Agreement, a
Stockholder will be deemed to own, in addition to any Common Shares such
Stockholder actually owns, any Common Shares which would then be directly or
indirectly issuable upon the conversion or exercise of any other securities
owned by such Stockholder and such other securities shall be deemed to represent
such Common Shares.
"Common Stock" means the common stock of the Company, $.01 par value.
"Indebtedness" of any Person shall mean the principal of, premium, if any,
and unpaid interest on: (a) indebtedness for money borrowed from others; (b)
indebtedness guaranteed, directly or indirectly, in any manner by such Person,
or in effect guaranteed, directly or indirectly, in any manner by such Person
through an agreement, contingent or otherwise, to supply funds to, or in any
other manner invest in, the debtor, or to purchase indebtedness, or to purchase
and pay for property if not delivered or pay for services if not performed,
primarily for the purpose of enabling the debtor to make payment of the
indebtedness or to assure the owners of the indebtedness against loss; (c) all
indebtedness secured by any mortgage, lien, pledge, charge or other encumbrance
upon property owned by such Person, even though such Person has not in any
manner become liable for the payment of such indebtedness; (d) all indebtedness
of such Person created or arising under any conditional sale, lease (intended
primarily as a financing device) or other title retention or security agreement
with respect to property acquired by such Person even though the rights and
remedies of the seller, lessor or lender under such agreement or lease in the
event of default may be limited to repossession or sale of such property; and
(e) renewals, extensions and refundings of any such indebtedness.
"Person" means a natural person, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"Qualified Public Offering" means an underwritten initial public offering
of Common Stock of the Company of not less than $10,000,000 in gross proceeds.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Series A Preferred Stock" means the Company's 7% Series A Convertible
Preferred Stock, $.01 par value, together with all shares of the Company's
common stock issued upon conversion of such shares.
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"Series B Preferred Stock" means the Company's 7% Series B Convertible
Preferred Stock, $.01 par value, together with all shares of the Company's
common stock issued upon conversion of such shares.
"Series C Preferred Stock" means the Company's 7% Series C Convertible
Preferred Stock, $.01 par value, together with all shares of the Company's
common stock issued upon conversion of such shares.
"Series D Preferred Stock" means the Company's 7% Series D Convertible
Preferred Stock, $.01 par value, together with all shares of the Company's
common stock issued upon conversion of such shares.
"Stockholder" means any holder (or deemed holder) of Common Shares or
Series A Preferred Stock, Series B Preferred Stock, or Series D Preferred Stock
who is a party to this Agreement or is a successor and assign or subsequent
holder contemplated by Section 12 below.
"Voting Stock" of any Person means securities of any class or classes of
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the directors of such Person.
2. Disposition of Shares. No Stockholder shall transfer, sell, convey,
exchange, pledge or otherwise dispose of ("Transfer") any share of the capital
stock of the Company except in compliance with Section 3 of this Agreement.
Notwithstanding the foregoing, Section 3 of this Agreement shall not apply to
any of the following transfers (each an "Exempt Transfer"): (i) Transfers by a
Stockholder to its Affiliate, (ii) Transfers to any partner of a Stockholder
that is a venture capital partnership (such as River Cities) in the event of a
dissolution or liquidation of the partnership or in conjunction with a Qualified
Public Offering, (iii) Transfers by any Stockholder who is an individual
pursuant to applicable laws of descent and distribution to members of such
Stockholder's immediate family, or to a trust whose beneficiaries are a
Stockholder during his or her lifetime, his or her spouse or one or more of his
or her descendants and whose sole trustee during his or her lifetime is such
Stockholder, (iv) Transfers pursuant to a pledge to a bank or other lending
institution to secure indebtedness of a Stockholder, (v) transfers pursuant to a
Qualified Public Offering, (vi) Transfers pursuant to the exercise of
registration rights granted by the Company applicable to such shares, and (vii)
Transfers pursuant to Rule 144 under the Securities Act (except Rule 144(k)),
provided that, in the case of Exempt Transfers of the types referenced in
clauses (i) through (iv) above, the restrictions contained in this Section 2
will continue to be applicable to Shares and the transferee of such Shares must
have agreed in writing to be bound by the terms and conditions of this Agreement
applicable to the Stockholder.
3. Right of First Offer. Prior to making any Transfer other than an Exempt
Transfer, a Stockholder (the "Offering Stockholder") will deliver a written
notice ("Notice") to the Company and the remaining Stockholders, disclosing in
reasonable detail the terms and conditions of the proposed Transfer. Upon
receipt of such Notice, each of the remaining Stockholders shall have twenty
(20) days (the "Offer Period") within which to submit a proposal to the Offering
Stockholder, which proposal shall provide for the purchase of all and not less
than all of the
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Offered Shares. The Offering Stockholder shall then have ten (10) days from the
end of the Offer Period to either accept or reject the proposal in its sole
discretion. In the event the Offering Stockholder rejects each proposal, the
Offering Stockholder may, within ninety (90) days after the expiration of the
Offer Period, Transfer the Shares on terms that are, in the Offering
Stockholder's good faith reasonable judgment, more favorable to the Offering
Stockholder than the terms contained in each proposal submitted during the Offer
Period. At the expiration of such ninety (90) day period, the Offering
Stockholder shall not Transfer the Shares without again complying with these
provisions. In the event none of the remaining Stockholders submits a proposal
during the Offer Period, the Offering Stockholder shall be free to Transfer the
Shares of capital stock of the Company for a period of ninety (90) days after
the Offer Period. After such ninety (90) day period, the Offering Stockholder
shall not Transfer the Shares without again complying with these provisions.
4. Tag-Along Right. In the event that Stockholders owning more than
sixty-seven percent (67%) of the outstanding capital stock of the Company
subject to this Agreement (each a "Selling Stockholder"), desire to Transfer any
Shares pursuant to a bona fide offer from a third party (the "Buyer"), then such
Selling Stockholders shall notify the Stockholders who are not Selling
Stockholders ("Tag-Along Stockholders"), in writing, of such offer and its terms
and conditions (the "Transfer Notice"). Upon receipt of such Transfer Notice,
each Tag-Along Stockholder shall have the right to sell to the Buyer, on the
same terms and conditions as the Selling Stockholders, that number of Shares of
the Company's capital stock subject to this Agreement equal to the product
attained by multiplying (a) the number of Shares held by the Tag-Along
Stockholder times (b) the quotient derived by dividing (i) the number of Shares
which otherwise would have been sold by the Selling Stockholders to the Buyer by
(ii) the total number of Shares held by such Selling Stockholders and the number
of Shares held by the Tag-Along Stockholders who have elected to participate in
such Transfer (assuming, in the case of sales of Common Stock of the Company,
full conversion of all shares of Preferred Stock of the Company held by the
Selling Stockholders and each Tag-Along Stockholder exercising its rights under
this Section 4). If more than one Tag-Along Stockholder elects to sell Shares
pursuant to this Section 4, they may do so pro rata based on the number of
Shares held by each of them or in such other proportions as they may agree. The
Tag-Along Stockholders' right to sell pursuant to this Section 4 can be
exercised by delivery of a written notice to the Selling Stockholders within ten
(10) business days following the delivery of the Transfer Notice. Any Tag-Along
Stockholder who fails to notify the Selling Stockholders within such ten (10)
business day period shall be deemed to have waived its rights under this
Section 4.
5. Drag-Along Right. In the event any Stockholders owning more than
sixty-seven percent (67%) of the capital stock of the Company subject to this
Agreement (each a "Transferring Stockholder") wish to Transfer in a bona fide
arms' length sale all of the capital stock held by the Transferring Stockholders
to any person or persons who are not Affiliates of the Transferring Stockholders
(the "Proposed Transferee"), the Transferring Stockholders shall have the right,
subject to applicable law, to require all the remaining Stockholders to sell to
the Proposed Transferee all of the capital stock of the Company subject to this
Agreement then owned by such remaining Stockholders (including any warrants or
options to acquire capital stock of the Company). The per share consideration to
be paid by the Proposed Transferee to the Transferring
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Stockholders and the remaining Stockholders shall be the same (less, in the case
of options or warrants, the exercise price for such options or warrants, and in
the case of any convertible preferred stock shall be based on the conversion of
the convertible preferred stock into Common Stock immediately prior to the
closing of such Transfer). In any sale of Series A Preferred Stock, Series B
Preferred Stock, or Series D Preferred Stock pursuant to the provisions of this
Section 5, such Preferred Stock will be converted into Common Stock.
6. Subscription Right. If at any time the Company proposes to issue equity
securities of any kind (the term "equity securities" shall include for these
purposes any warrants, options or other rights to acquire equity securities and
debt securities convertible into equity securities) of the Company (other than
the issuance of securities (i) upon conversion of any Preferred Stock
outstanding on the date of this Agreement pursuant to the Company's Certificate
of Incorporation, (ii) to the public in a firm commitment underwriting pursuant
to a registration statement filed under the Securities Act of 1933, as amended,
(iii) pursuant to the acquisition of another corporation by the Company by
merger, purchase of substantially all of the assets or other form of
reorganization or (iv) pursuant to an employee stock option plan, stock bonus
plan, stock purchase plan or other management equity program), then, as to each
Stockholder who then holds in excess of 5% of the then outstanding shares of
Common Stock (on an as converted basis), the Company shall: (i) give written
notice setting forth in reasonable detail (1) the designation and all of the
terms and provisions of the securities proposed to be issued (the "Proposed
Securities"), (2) the price and other terms of the proposed sale of such
securities, (3) the amount of such securities proposed to be issued and (4) such
other information as the Stockholder may reasonably request in order to evaluate
the proposed issuance; and (ii) offer to issue to each such Stockholder a
portion of the Proposed Securities equal to a percentage determined by dividing
(x) the number of shares of Common Stock held by such Stockholder and issuable
to such Stockholder, assuming conversion in full of any convertible securities
then held by such Stockholder, by (y) the total number of Shares of Common Stock
then outstanding, including for purposes of this calculation all Shares of
Common Stock issuable upon conversion in full of any then outstanding
convertible securities.
Each such Stockholder must exercise its purchase rights hereunder within
ten (10) days after receipt of such notice from the Company. If all of the
Proposed Securities offered to such Stockholder are not fully subscribed by such
Stockholder, the remaining Proposed Securities will not be reoffered to the
Stockholders purchasing their full allotment. To the extent that the Company
offers two or more securities in units, Stockholders must purchase such units as
a whole and will not be given the opportunity to purchase only one of the
securities making up such unit.
Upon the expiration of the offering periods described above, the Company
will be free to sell such Proposed Securities that the Stockholders have not
elected to purchase during the ninety (90) days following such expiration on
terms and conditions not more favorable to the purchasers thereof than those
offered to such holders. Any Proposed Securities offered or sold by the Company
after such ninety (90) day period must be reoffered to the Stockholders pursuant
to these terms.
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7. Representations and Warranties.
(a) Each Stockholder represents and warrants the following with respect
to himself, herself or itself, as the case may be:
(i) Authorization. All corporate action on the part of each
Stockholder which is not an individual necessary for the authorization,
execution, delivery and performance by such Stockholder of this Agreement has
been taken. This Agreement is a legal, valid and binding obligation of each
Stockholder, enforceable against such Stockholder in accordance with its terms.
(ii) No Violation. The execution and delivery of this Agreement will
not (with or without notice or passage of time or both) (a) conflict with or
result in a breach of any provision of the certificate of incorporation or
bylaws of a Stockholder which is not an individual, (b) result in a default,
give rise to any right of termination, cancellation or acceleration, or require
any consent or approval, under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, loan, factoring arrangement, license,
agreement, lease or other instrument or obligation to which a Stockholder is a
party or by which it or any of its assets may be bound or (c) violate any law,
judgment, order, writ, injunction, decree, statute, rule or regulation of any
court, administrative agency, bureau, board, commission, office, authority,
department or other governmental entity applicable to such Stockholder or any of
its, his or her assets.
8. Term. This Agreement will terminate upon the earlier of: (a) the closing
of a Qualified Public Offering, or (b) the written agreement of the holders of
more than seventy-five percent (75%) of the outstanding shares of the Company's
capital stock subject to this Agreement to terminate this Agreement.
9. Consent to Amendments; Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of the Company and Stockholders holding not less
than seventy-five percent (75%) of the Shares issued and outstanding at the
time. Any waiver, permit, consent or approval of any kind or character on the
part of any such holder of any provisions or conditions of this Agreement must
be made in writing and shall be effective only to the extent specifically set
forth in such writing.
10. Successors and Assigns. Except as otherwise expressly provided herein,
all covenants and agreements contained in this Agreement by or on behalf of any
of the parties hereto will bind and inure to the benefit of the respective
successors and assigns of the parties hereto, whether so expressed or not.
11. Legend on Certificates. All Series A Preferred Stock, Series B
Preferred Stock and Series D Preferred Stock of the Company and all Common
Shares of the Company now or hereafter owned by the parties to this Agreement
shall be subject to the provisions of this Agreement and the certificates
representing said shares shall bear substantially the following legend:
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"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of
any State (the "Securities Laws"). These securities may not be offered,
sold, transferred, pledged or hypothecated in the absence of
registration under applicable Securities Laws, or the availability of an
exemption therefrom. This certificate will not be transferred on the
books of the Corporation or any transfer agent acting on behalf of the
Corporation except upon the receipt of an opinion of counsel,
satisfactory to the Corporation, that the proposed transfer is exempt
from the registration requirements of all applicable Securities Laws, or
the receipt of evidence, satisfactory to the Corporation, that the
proposed transfer is the subject of an effective registration statement
under all applicable Securities Laws."
"The issuer is subject to restrictions contained in the Federal
Communications Act, as amended. The securities evidenced by this
certificate may not be sold, transferred, assigned or hypothecated if,
as a result thereof, the issuer would be in violation of that act."
"The securities represented by this certificate are subject to the terms
of that certain Stockholders' Agreement dated as of May 20, 1997 among
Regent Communications, Inc. and its stockholders, as the same may be
amended from time to time."
12. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
13. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.
14. Notices. Any notices required or permitted to be sent hereunder shall
be delivered personally or mailed, certified mail, return receipt requested,
facsimile transmission, or delivered by overnight courier service to the
addresses shown on the signature pages hereof, or such other address as any
party hereto designates by written notice to the Company, and shall be deemed to
have been given upon delivery, if delivered personally, three days after
mailing, if mailed, upon the transmission thereof if sent by facsimile (with
telephonic confirmation), or one business day after delivery to the courier, if
delivered by overnight courier service.
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15. Governing Law. All questions concerning the construction, validity, and
interpretation of this Agreement, and the performance of the obligations imposed
by this Agreement, shall be governed by the laws of the State of Delaware.
16. Final Agreement. This Agreement constitutes the complete agreement of
the parties concerning the matters referred to herein.
17. Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument.
18. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be used against any party.
19. Remedies. The parties hereto shall have all rights and remedies set
forth in this Agreement and all rights and remedies available under any
applicable law. The parties hereto agree and acknowledge that money may not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may, in its sole discretion, apply to any court of law or equity of
competent jurisdiction for specific performance or injunctive relief (without
posting bond or other security) in order to enforce, or prevent any violations
of, the provisions of this Agreement.
The parties hereto have executed this Agreement on the date first set forth
above.
THE COMPANY:
REGENT COMMUNICATIONS, INC.
By:
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Title:
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Address:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
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RIVER CITIES CAPITAL FUND LIMITED
PARTNERSHIP
By: River Cities Management Limited
Partnership, General Partner
y: ▇▇▇▇▇▇, Inc., General Partner
By:
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R. ▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Address:
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BMO FINANCIAL, INC.
By:
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Address:
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GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Address:
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