Exhibit 7.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of June ___, 1998 (the
"Agreement"), is made by and among Cumulus Media Inc., an Illinois
corporation (the "Company"), NationsBanc Capital Corp. ("NationsBanc"),
▇▇▇▇▇▇ Equity Capital Corporation ("▇▇▇▇▇▇"), the State of Wisconsin
Investment Board ("SWIB") and The Northwestern Mutual Life Insurance Company
("NML"). Each of NationsBanc, ▇▇▇▇▇▇, SWIB and NML and their respective
transferees (as provided in Section 7(f)) shall sometimes be referred to
herein as a "Shareholder" and collectively as the "Shareholders".
R E C I T A L S:
WHEREAS, the Shareholders and Cumulus Media, LLC, a Wisconsin
limited liability company ("Media LLC"), are parties to that certain Amended
and Restated Registration Rights Agreement dated as of November 14, 1997 (the
"Media LLC Registration Rights Agreement") pursuant to which Media LLC agreed
to provide the Shareholders with certain registration rights; and
WHEREAS, Media LLC currently holds all of the issued and outstanding
common stock of the Company; and
WHEREAS, Media LLC is to be dissolved and all of the shares of
common stock of the Company held by Media LLC are to be distributed to the
Shareholders in a liquidating distribution; and
WHEREAS, the Company intends to consummate an initial public
offering of its Class A Common Stock; and
WHEREAS, the Media LLC Registration Rights Agreement contemplates
that in the event of an initial public offering of equity securities by the
Company, the Company would enter into a registration rights agreement with
the Shareholders on terms similar to those set forth in the Media LLC
Registration Rights Agreement prior to the consummation of such initial
public offering; and
WHEREAS, the Company and the Shareholders have agreed to enter into
this Registration Rights Agreement to set forth the registration rights to be
provided to the Shareholders by the Company.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
promises herein contained and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Definitions. The following capitalized terms have the
following meanings:
Class A Common Stock: The Class A Common Stock, $.01 par value per
share, issued by the Company.
Class B Common Stock: The Class B Common Stock, $.01 par value per
share, issued by the Company.
Class C Common Stock: The Class C Common Stock, $.01 par value per
share, issued by the Company.
Commission: The United States Securities and Exchange Commission or
any other United States federal agency administering the Securities Act or
the Exchange Act.
Common Stock: Class A Common Stock and/or Class B Common Stock
and/or Class C Common Stock and any securities issued thereafter with respect
to such Common Stock by way of a stock dividend, stock split, or in
connection with a combination of shares, recapitalization, merger, share
exchange, consolidation or similar transaction.
Exchange Act: The United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, as in
effect from time to time.
NASD: The National Association of Securities Dealers, Inc. and any
successor organization.
Person: An individual, corporation, partnership, limited liability
company, association, joint-stock company, trust where the interests of the
beneficiaries are evidenced by a security, unincorporated organization,
estate, governmental or political subdivision thereof or governmental agency.
Public Offering: The closing of an underwritten public offering of
Class A Common Stock, or securities convertible into or exchangeable or
exercisable for Class A Common Stock, registered with the Commission under
the Securities Act.
Registrable Securities: Shares of Class A Common Stock that (i) are
owned by any Shareholder immediately after the dissolution of Media LLC and
any securities issued thereafter with respect to such Class A Common Stock by
way of a stock dividend, stock split or in connection with a combination of
shares, recapitalization, merger, share exchange, consolidation or similar
transaction, or (ii) are issued to any Shareholder upon conversion of any
Class B Common Stock owned by such Shareholder immediately after the
dissolution of Media LLC (or upon conversion of any Class C Common Stock
received by such Shareholder upon conversion of any Class B Common Stock
owned by such Shareholder immediately after the dissolution of Media LLC),
and any securities issued thereafter with respect to such Class B Common
Stock or Class C Common Stock by way of a stock dividend, stock split or in
connection with a combination of shares, recapitalization, merger, share
exchange, consolidation or similar transaction.
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Registration Statement: A registration statement provided for in
Section 6 of the Securities Act under which securities are registered under
the Securities Act, together with any preliminary, final or summary
prospectus contained therein, any amendment or supplement thereto, and any
document incorporated by reference therein.
Securities Act: The United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect from time to time.
Terms defined in the Exchange Act or the Securities Act and not otherwise
defined herein have the meanings herein as therein defined.
2. Demand Registration.
(a) Right to Demand. After the date of the initial Public
Offering, or, if earlier, the date on which the Company first becomes subject to
the reporting obligations under Section 13(a) of the Exchange Act, the holders
of Registrable Securities shall have the right, exercisable by written notice to
the Company signed by (i) Person(s) holding more than 25% of the Registrable
Securities outstanding in the case of the first notice, (ii) in the case of the
second notice, Person(s) holding more than 25% of the Registrable Securities
outstanding, excluding Registrable Securities held by the Person(s) initiating
the first notice, and (iii) in the case of the third notice, Person(s) holding
more than 20% of the Registrable Securities, excluding Registrable Securities
held by Person(s) initiating the first or second notice, to request that the
Company effect the registration under the Securities Act of all or part of such
Person(s)' Registrable Securities (a "Demand Registration"); provided, however,
that excluding any Demand Registration under Section 2(d) hereof, the holders of
Registrable Securities shall only have the right to make three (3) requests for
a Demand Registration. Upon receipt of such notice, the Company shall, as
expeditiously as reasonably possible and in any event, within ten (10) days of
receipt of such notice, give written notice of such Demand Registration to all
registered holders of Registrable Securities, and shall use all commercially
reasonable efforts to effect all such registrations under the Securities Act
(including, without limitation, the execution of an undertaking to file
post-effective amendments and appropriate qualifications and approvals under the
laws and regulations of any governmental agencies and authorities applicable to
the Company, including the relevant blue sky or other state securities laws) of:
(i) the Registrable Securities that the Company has been
requested to register as specified in the demand given pursuant to this
Section 2(a) (including, without limitation, an offering on a delayed
or continuous basis pursuant to Rule 415 (or any successor rule to
similar effect) under the Securities Act); and
(ii) all other Registrable Securities that the Company has
been requested to register by the holders thereof, by written request
given to the Company within thirty (30) days after the giving of such
written notice by the Company,
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all to the extent required to permit the disposition of the Registrable
Securities so to be registered.
(b) Selection of Underwriters. The underwriters of any
underwritten offering pursuant to a Demand Registration shall be selected by
the Company, subject, however, to the approval of the holders of Registrable
Securities participating in such Demand Registration, which approval shall
not be unreasonably withheld; provided, however, that the holders of the
Registrable Securities shall not be required to pursue an underwritten
offering upon exercise of the Demand Registration.
(c) Participation in Demand Registrations. If the
managing underwriter advises the Company in writing, with a copy to the
Shareholders that, in its opinion, the number of Registrable Securities
requested to be included in a Demand Registration exceeds what can be sold in
such offering without a material adverse effect on the offering, then the
Company will advise the Shareholders and will include in such Demand
Registration up to the maximum number of Registrable Securities requested to
be included in such Demand Registration which the managing underwriter
advises the Company can be sold in such offering and such Registrable
Securities shall be allocated among the holders of Registrable Securities who
have requested to be included in such Demand Registration, pro rata among
such Persons on the basis of the number of Registrable Securities requested
to be included in such Registration. If any holder of Registrable Securities
disapproves of the number of reduced Registrable Securities that can be
included on behalf of such holder, he may elect to withdraw therefrom by
written notice to the Company, the underwriter and the other Shareholders.
(d) Additional Demand Registrations.
(i) If the Company effects the registration of less than all
of the Registrable Securities requested to be included in a Demand
Registration under Subsection 2(a) solely as a result of the operation
of Subsection 2(c), the holders of such Registrable Securities may at
any time request an additional Demand Registration with respect to such
Registrable Securities (which Demand shall not count as the second or
third Demand Right contemplated in Section 2(a)), provided that at
least six (6) months have elapsed since the effective date of the most
recent Demand Registration. Any such Demand Registration shall be
requested and effected in the manner and subject to the procedures that
applied with respect to the Demand Registration which was the subject
of the cutback in Subsection 2(c).
(ii) If the no-action request being submitted by Media LLC to
the Commission results in a finding that NationsBanc is unable to
"tack" the holding period of Media LLC to its own holding period with
respect to the shares of Common Stock distributed to NationsBanc upon
dissolution of Media LLC, then NationsBanc shall have the right,
exercisable by written notice to the Company and in addition to any
rights provided under Section 2(a) hereof, to request that the Company
effect the registration under the Securities Act of all or part of the
Registrable Securities held by NationsBanc; provided, however, that
NationsBanc shall only have the right to make one (1) request for an
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additional Demand Registration under this Section 2(d)(ii). Upon
receipt of such notice, the Company shall, as expeditiously as
reasonably possible and in any event within ten (10) days of receipt of
such notice, give written notice of such additional Demand Registration
to all other registered holders of Registrable Securities, and shall
use all commercially reasonable efforts to effect all such
registrations under the Securities Act (including, without limitation,
the execution of an undertaking to file post-effective amendments and
appropriate qualifications and approvals under the laws and regulations
of any governmental agencies and authorities applicable to the Company,
including the relevant blue sky or the state securities laws) of (x)
the Registrable Securities that the Company has been requested to
register as specified in the demand given by NationsBanc pursuant to
this Section 2(d)(ii); and (y) all other Registrable Securities that
the Company has been requested to register by the other holders of
Registrable Securities, by written request given to the Company within
thirty (30) days after the giving of such written notice by the
Company, all to the extent required to permit the disposition of the
Registrable Securities so to be registered. The underwriters shall be
selected in accordance with Section 2(b). If the managing underwriter
advises the Company in writing that, in its opinion, the number of
Registrable Securities requested to be included in such additional
Demand Registration exceeds what can be sold in such offering without a
material adverse effect on the offering, then the Company will advise
the Shareholders and will include in such Demand Registration up to the
maximum number of Registrable Securities requested to be included in
such Demand Registration which the managing underwriter advises the
Company can be sold at such offering and such Registrable Securities
shall be allocated first to NationsBanc to the extent set forth in its
notice of Demand Registration and second, among the holders of
Registrable Securities other than NationsBanc who have requested to be
included in such Demand Registration, pro rata among such persons on
the basis of the number of Registrable Securities requested to be
included in such registration. If the no-action request submitted to
the Commission results in a finding that NationsBanc may tack the
holding period of Media LLC to its own holding period with respect to
the shares of Company Common Stock received upon dissolution of Media
LLC, the provisions of this Section 2(d)(ii) shall be null and void and
of no force or effect.
(e) Restrictions on Demand Registrations. The Company may
postpone for up to (but not exceeding) six (6) months the filing or the
effectiveness of a Registration Statement for a Demand Registration, whether
pursuant to Subsection 2(a) or 2(d), if the Company's Board of Directors
determines that such Demand Registration would reasonably be expected to have an
adverse effect on any proposal or plan by the Company or any of its subsidiaries
to engage in any acquisition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer or similar transaction or
that the Demand Registration will adversely interfere with other Company events
or would require disclosure of material nonpublic information relating to the
Company which, in the reasonable opinion of the Board of Directors of the
Company, should not be disclosed; provided that (i) the Company may postpone the
filing or effectiveness of a Demand Registration Statement pursuant hereto not
more than once during any twelve consecutive month period, and (ii) the Company
may postpone or withdraw the filing or effectiveness of a Demand Registration
Statement pursuant hereto not more than twice during
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the term of this Agreement. In addition, the Company shall not be required to
comply with this Section 2 within one hundred eighty (180) days after the
effective date of an initial Public Offering or within ninety (90) days of
another Registration Statement subject to this Section 2 or Section 3. In any
such event, the holders of Registrable Securities requesting such Demand
Registration will be entitled to withdraw their request for the Demand
Registration. If the request for the Demand Registration is so withdrawn, such
Demand Registration request shall not count as a Demand Registration request
hereunder; provided, however, that the holders of Registrable Securities shall
not be permitted to request another Demand Registration until such postponement
would have ended had the request not been withdrawn. The Company shall reimburse
each holder of Registrable Securities for all costs and expenses reasonably
incurred by it in connection with a proposed and withdrawn Demand Registration.
(f) Other Registration Rights. The Company shall not,
without the prior written consent of the holders of 75% of the then
outstanding Registrable Securities, grant to any Persons the right to request
the Company to register any equity securities of the Company, or any
securities convertible or exchangeable into or exercisable for such
securities, if such rights could reasonably be expected to conflict with or
be in parity with, the registration rights of the holders of Registrable
Securities granted hereunder. The granting by the Company of registration
rights to a third party shall not be deemed to be in conflict or parity with
the registration rights of the holders of Registrable Securities granted
hereunder as long as the provisions of Section 3(c) hereof are complied with
at all times during which the piggyback registration rights provided to the
Shareholders under said Section 3 are in effect and have not been terminated
in accordance with Section 3(d) hereof.
(g) Effective Registration Statement. Before filing a
Registration Statement or any amendments or supplements thereto, the Company
will (i) furnish to the holders of Registrable Securities which are to be
included in such registration, copies of all such documents proposed to be
filed, which documents will be subject to the review of the holders and their
counsel (which review shall be conducted at the Company's expense except that
in no event shall the Company be required to pay the expenses of more than
one counsel for the holders of Registrable Securities), and (ii) give the
holders of the Registrable Securities to be included in such Registration
Statement and their representatives, at the Company's expense (except that in
no event shall the Company be required to pay the expenses of more than one
counsel for the holders of Registrable Securities), the opportunity to
conduct a reasonable investigation of the records and the business of the
Company and to participate in the preparation of any such Registration
Statement or any amendments or supplements thereto. With respect to any
registrations requested pursuant to Sections 2(a) or 2(d), the Company may
include in such registration any other equity securities of the Company,
subject to the restrictions set forth in Section 2(f). A Demand Registration
pursuant to this Section 2 shall not be deemed to have been effected (i)
unless a Registration Statement with respect thereto has become effective and
the sale of Registrable Securities contemplated thereby (if underwritten) has
been consummated (unless not consummated for any reason not due to any action
or failure to act by the Company or because of a material adverse change with
respect to the Company), or (ii) if after it has become effective, such
Demand Registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court
for any reason.
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3. Piggyback Registration.
(a) Right to Piggyback. If the Company at any time
proposes to register any securities under the Securities Act (other than
registrations on Form S-4 or S-8 or the equivalent thereof) with respect to a
Public Offering (whether for its own account or for the account of other
security holders) and the form of Registration Statement to be used may be
used for the registration of Registrable Securities, the Company will give
prompt written notice to all holders of Registrable Securities of its intent
to do so and the proposed method of distribution, which notice shall state
whether such registration has been initiated by the Company (a "Company
Registration") or by another Person (a "Third-Party Registration"). Within
thirty (30) days after receipt of such notice, any holder of Registrable
Securities may by written notice to the Company request the registration by
the Company under the Securities Act of Registrable Securities in connection
with such proposed registration by the Company under the Securities Act of
securities (a "Piggyback Registration"). Such written notice to the Company
shall specify the Registrable Securities intended to be disposed of by such
holders. Upon receipt of such request, the Company will use all commercially
reasonable efforts to register under the Securities Act all Registrable
Securities which the Company has been so requested to register, to the extent
requisite to permit the disposition of the Registrable Securities so to be
registered in accordance with the proposed method of distribution; provided,
however, that if at any time after giving notice of its intent to register
securities and before the effective date of the Registration Statement filed
in connection with such Piggyback Registration, the Company determines for
any reason not to register or to delay registration of such securities, the
Company may, at its election, give notice of such determination to the
holders of Registrable Securities requesting such Piggyback Registration,
and, thereupon, (i) in the case of a determination not to register, the
Company shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration (but not from its
obligation to pay registration expenses pursuant to Section 5 hereof) without
prejudice, however, to the rights of any holder(s) of Registrable Securities
entitled to do so to request that such registration be effected as a Demand
Registration under Section 2 hereof, and (ii) in the case of a determination
to delay registering, the Company may delay registering any Registrable
Securities for the same period as the delay in registering such other
securities. No registration effected under this Section 3 shall relieve the
Company of its obligation to effect any Demand Registration upon request
under Section 2 hereof.
(b) Selection of Underwriters. The underwriters, if any,
of any offering pursuant to a Piggyback Registration shall be one or more
nationally-recognized investment banking firms selected by the Company.
(c) Participation in Piggyback Registrations. If the
managing underwriter informs the Company in writing of its judgment that
including the Registrable Securities in the Piggyback Registration creates a
substantial risk that the proceeds or price per unit to be received from such
offering might be reduced or that the number of Registrable Securities to be
registered is too large to be reasonably sold, then the Company will include
in such Piggyback Registration, to the extent of the number which the Company
is so advised can be sold in such offering: first,
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all securities proposed by the Company to be sold for its own account;
second, such other securities (if any) proposed to be included as a result of
the exercise of demand registration rights by the holders thereof; third,
such Registrable Securities requested by the holders thereof to be included
in such Piggyback Registration, pro rata on the basis of the number of shares
of such Registrable Securities requested to be included in such Registration
Statement; and fourth, such other securities requested to be included therein
pro rata on the basis of the number of shares of such other securities
requested to be included in the Registration Statement.
(d) Termination of Piggyback Rights. The piggyback
registration rights provided to the Shareholders under this Section 3 shall
terminate as to any Shareholder at such time as such Shareholder is permitted
to dispose of all of its Registrable Securities in any six (6) month period
under Rule 144 of the Securities Act (including Rule 144(k)).
4. Registration Procedures.
(a) Company Covenants. Whenever the Company is hereunder
required to use all commercially reasonable efforts to effect the
registration under the Securities Act of any Registrable Securities as
provided in Section 2 or 3, the Company will:
(i) prepare and file (in the case of a Demand Registration,
within forty-five (45) days of the initial notice from the requisite
holders of Registrable Securities) with the Commission the requisite
Registration Statement to effect such registration and thereafter use
all commercially reasonable efforts to cause such Registration
Statement to become effective, provided that the Company may
discontinue any registration of its securities which are not
Registrable Securities (and, under the circumstances specified in
Subsection 3(a), its securities which are Registrable Securities) at
any time prior to the effective date of the Registration Statement
relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such Registration Statement until the earlier of (a) such
time as all such securities have been disposed of in accordance with
the intended methods of disposition by the sellers thereof set forth in
such Registration Statement and (b) the expiration of one hundred
eighty (180) days from the date such Registration Statement first
becomes effective (exclusive of any period during which the holders of
Registrable Securities are prohibited or impaired from disposition of
Registrable Securities by reason of the occurrence of any event
described in Section 4(a)(v)(a) or (b) or 4(a) (vii)), at which time
the Company shall have the right to deregister any of such securities
which remain unsold;
(iii) furnish to each seller of Registrable Securities covered
by such Registration Statement such number of conformed copies of the
Registration Statement, and of each amendment and supplement thereto,
such number of copies of the prospectus contained in such Registration
Statement and any other prospectus filed under Rule 424
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under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably
request;
(iv) use all commercially reasonable efforts to register or
qualify all securities covered by such Registration Statement under
such other securities or blue sky laws of jurisdictions as each seller
thereof shall reasonably request, to keep such registration or
qualification in effect for so long as the Registration Statement
remains in effect, and to take any other action which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such
seller, except that the Company shall not for any such purpose be
required to (a) qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not be obligated to be
so qualified but for the requirements of this subsection; (b) subject
itself to taxation in any such jurisdiction; or (c) consent to general
service of process in any such jurisdiction;
(v) se all commercially reasonable efforts to (a) obtain the
withdrawal of any order suspending the effectiveness of such
Registration Statement or sales thereunder at the earliest possible
time and (b) cause all Registrable Securities covered by such
Registration Statement to be registered with or approved by such other
governmental agencies or authorities of United States jurisdictions as
may be necessary to enable the seller thereof to consummate the
disposition of such Registrable Securities;
(vi) in connection with any registration pursuant to this
Agreement, furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller and the underwriters, of:
(a) an opinion of counsel for the Company dated the
effective date of the Registration Statement (and dated the
closing date under any underwriting agreement), reasonably
satisfactory in form and substance to such seller, and
(b) a "comfort letter" or a "procedures letter" dated
the effective date of the Registration Statement (and dated
the date of the closing under any underwriting agreement),
signed by the independent public accountants who have audited
the Company's financial statements included in such
Registration Statement,
covering substantially the same matters with respect to such
Registration Statement and, in the case of the "comfort letter," with
respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten
public offerings of securities, and, in the case of the legal opinion,
such other legal matters, and, in the case of the "comfort letter,"
such other financial matters, as such seller or the underwriter may
reasonably request;
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(vii) at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, notify each seller
of Registrable Securities covered by such Registration Statement
promptly after the Company discovers that the prospectus included in
such Registration Statement as then in effect includes an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made, and at the request of any such seller promptly prepare and
furnish to such seller a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include 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 in the light of
the circumstances under which they were made;
(viii) otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission;
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such Registration
Statement from and after a date not later than the effective date of
such Registration Statement;
(x) use all commercially reasonable efforts to list all
Registrable Securities covered by such Registration Statement on a
securities exchange on which similar securities issued by the Company
are then listed and shall take any other action necessary or advisable
to facilitate the disposition of such Registrable Securities;
(xi) use all commercially reasonable efforts to facilitate
timely preparation and delivery (under regular-way settlement
procedures) of certificates representing Registrable Securities to be
sold free of restrictions; and
(xii) take all steps reasonably necessary to assure compliance
with any applicable provisions of the Investment Company Act of 1940,
as amended, including, but not limited to, registration of the Company,
or the election on behalf of the Company to be regulated as a business
development company, under that Act.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities (which, in the case of a
non-underwritten offering, may include sales under Rule 144 under the Securities
Act) as the Company may reasonably request, in writing. Any Person participating
in any Demand Registration or Piggyback Registration must (a) agree to sell
their Registrable Securities on the basis provided in the underwriting
agreement, if any, and (b) complete and execute all documents required under
this Agreement or the underwriting agreement, if any.
Each holder of Registrable Securities agrees that upon receipt of any notice
from the Company of the happening of any event of the kind described in
subparagraph (vii) of this Subsection 4(a),
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such holder will discontinue immediately such holder's disposition of securities
pursuant to the Registration Statement until such holder receives copies of the
supplemented or amended prospectus contemplated by such subparagraph (vii) and,
if so directed by the Company, will deliver to the Company all copies, other
than permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
(b) Underwriting Agreements. The Company will enter into
an underwriting agreement with the underwriters for any underwritten offering
pursuant to a Demand Registration or Piggyback Registration if requested by
the holders of Registrable Securities and the underwriters to do so. The
underwriting agreement will contain such representations and warranties by
the Company and such other terms as are generally prevailing at such time in
underwriting agreements. The holders of Registrable Securities to be
distributed by the underwriters shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations, warranties, and other agreements by the Company to and for
the benefit of the underwriters also be made to and for the benefit of such
holders of Registrable Securities and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such holders of
Registrable Securities. No holder of Registrable Securities shall be required
to make representations or warranties to, or agreements with, the Company or
the underwriters other than representations, warranties or agreements
regarding such holder, such holder's Registrable Securities, such holder's
intended method of distribution and any representations required by law.
(c) Holdback Agreement. Each holder of Registrable
Securities agrees by acquisition of such holder's Common Stock not to effect
any public sale or distribution of any Registrable Securities during the
thirty (30) days prior to and the one hundred eighty (180) days after the
initial Public Offering or ninety (90) days after any other underwritten
(firm commitment or best efforts) Public Offering, Demand Registration or
Piggyback Registration has become effective, except as part of such Public
Offering, Demand Registration or Piggyback Registration, as the case may be,
unless the managing underwriter of the Public Offering, Demand Registration
or Piggyback Registration otherwise agrees to such sale or distribution.
Notwithstanding the foregoing, it is acknowledged and agreed that the
immediately preceding sentence shall not prohibit ▇▇▇▇▇▇ or NML from
effecting any public sale or distribution of any Registrable Securities
during the one hundred eighty (180) day period after the initial Public
Offering.
(d) Preparation; Reasonable Investigation. In connection
with the preparation and filing of each Registration Statement under the
Securities Act pursuant to this Agreement, the Company will give the holders
of Registrable Securities to be registered under such Registration Statement,
the underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in preparing the Registration Statement. The
Company will also give each of such Persons such access to its books and
records and opportunities to discuss the business of the Company with the
Company's officers and independent public accountants who have certified the
Company's financial statements as shall, in the opinion of such holders' and
such under-
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writers' respective counsel, be necessary to conduct a reasonable investigation
within the meaning of the Securities Act.
(e) Rule 144. From and after the date of the initial
Public Offering, the Company will file the reports required to be filed by it
under the Securities Act and the Exchange Act to enable the holders thereof
to sell their Registrable Securities without registration under the
Securities Act and within the exemptions provided under the Securities Act by
Rule 144 or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
5. Registration Expenses. The Company will bear all expenses
incident to the Company's performance of or compliance with this Agreement,
including, without limitation, all registration, filing, qualifying and NASD
fees, all securities and blue sky compliance fees and expenses (including
related legal fees and disbursements and other expenses pertaining thereto),
all word processing expenses, duplicating expenses, printing expenses,
engraving expenses, messenger and delivery expenses, all Company general and
administrative expenses, all Company counsel and accountants fees and
disbursements, all special audit, financial statement and reconstruction
costs, all comfort letter costs, the reasonable fees and disbursements of one
counsel acting on behalf of the sellers of the Registrable Securities being
registered, all underwriter fees and disbursements customarily paid by
issuers or sellers of securities (including fees paid to a "qualified
independent underwriter" required by the rules of the NASD in connection with
a distribution), all "road show" expenses and allocations and the expense for
other Persons retained by the Company, but excluding discounts, commissions
or fees of underwriters, selling brokers, dealer managers, sales agents or
similar securities industry professionals relating to the distribution of
Registrable Securities and applicable transfer taxes, if any, and fees for
more than one special counsel to the sellers of Registrable Securities, which
shall be borne by the sellers of the Registrable Securities being registered
on a pro rata basis based on the number of Registrable Securities sold by
each of them or upon such other basis upon which such sellers may mutually
agree.
6. Indemnification.
(a) Indemnification by the Company. In the event of any
Demand Registration or Piggyback Registration of any Registrable Securities
under the Securities Act, the Company shall, and hereby does, indemnify and
hold harmless each seller of any Registrable Securities covered by the
Registration Statement with respect thereto, such seller's partners,
directors, trustees, officers, advisors, employees and agents, and each
Person who controls or is controlled by such seller within the meaning of the
Securities Act, against any losses, claims, damages or liabilities to which
such seller, partner, director, officer, or controlling Person, as the case
may be, may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of material fact
contained in the Registration Statement under which such Registrable
Securities were sold (including all documents incorporated therein by
reference) as originally filed or in any amend-
12
ment thereto, any preliminary or final prospectus contained therein or any
amendments or supplements thereto, or an omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or a violation by the Company of
any rule or regulation promulgated pursuant to any federal, state or common
law rule, including, without limitation, the Securities Act, applicable to
the Company and relating to any action or inaction required of the Company in
connection with such registration, qualification or compliance, and the
Company will reimburse each such indemnified Person for expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided that the Company
shall not be liable in any such case for any losses, claims, damages,
liabilities (or actions or proceedings in respect thereof) or expenses which
arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made by the Company in such
Registration Statement in reliance upon and in strict conformity with
information furnished to the Company by such Person through an instrument
duly executed by such Person specifically stating that it is for use in the
preparation thereof. This indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an indemnified party,
and shall survive the transfer of such Registrable Securities by the seller
thereof.
(b) Indemnification by the Sellers. The Company may
require, as a condition to including any Registrable Securities in any
Registration Statement, that the Company receive an undertaking satisfactory
to it from the prospective seller of such Registrable Securities, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in subsection (a) of this Section 6) the Company, its directors, its
officers, and each other Person who controls the Company within the meaning
of the Securities Act, with respect to any statement or alleged statement in
or omission or alleged omission from such Registration Statement, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically
stating that it is for use in the preparation of such Registration Statement.
The prospective sellers' obligation to indemnify will be several, not joint
and several, among such sellers and the liability of each such seller of
Registrable Securities shall be in proportion to the net amount received by
such seller from the sale of Registrable Securities pursuant to such
Registration Statement. Notwithstanding the foregoing, the liability of any
such seller shall not exceed an amount equal to the proceeds realized by each
such seller from the sale of Registrable Securities pursuant to such
Registration Statement. This indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company, its
directors, officers or controlling Persons, and shall survive the transfer of
such Registrable Securities by the seller thereof.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Subsection 6(a) or (b), such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to such indemnifying party of the
commencement of such action. The failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 6, except to the
extent that the indemnifying party is materially prejudiced by the failure to
give
13
such notice. In case any such action is brought against an indemnified party,
the indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to the
indemnified party, unless a conflict of interest exists between such
indemnified and indemnifying parties that would make representation by the
same counsel inappropriate in the circumstances. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable for any
settlement made by the indemnified party without its consent (which consent
will not be unreasonably withheld or delayed) or for any legal or other
expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation and the
legal expenses (if allowed under the previous sentence). No indemnifying
party shall, without the consent of the indemnified party, consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation or imposes action or limitation on action on such indemnified
party.
(d) Indemnification Payments. The indemnification
required by this Section 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills
are received or expense, loss, damage or liability is incurred upon
submission of reasonably sufficient documentation that such expenses have
been incurred.
(e) Contribution. If the indemnification provided for in
this Agreement shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party in respect of any loss, claim, damage, expense
or liability, or any action in respect thereof, referred to herein, then the
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as is appropriate to reflect the relative fault
of the Company and the Shareholders, respectively, with respect to the
statements or omissions which resulted in such loss, claim, damage, expense
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault of each party shall be
determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Shareholder, the
interest of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Shareholders agree that it would not be just and equitable if
contributions pursuant to this Agreement were to be determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Agreement
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions herein, a Shareholder shall
not be required to contribute any amount in excess of the amount by which the
proceeds received by the Shareholder from the sale of the Registrable
Securities pursuant to the Registration Statement exceeds the amount of any
damage which such Shareholder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
14
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act or the Exchange Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Miscellaneous.
(a) Effectiveness. This Agreement shall become effective
only upon the distribution by Media LLC of all shares of Common Stock of the
Company held by it to the Shareholders and the other members of Media LLC as
and to the extent provided in the Agreement Regarding Dissolution dated as of
June 29, 1998 among Cumulus Media, LLC, the Shareholders, QUAESTUS Management
Corporation, DBBC of Georgia, LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. If,
for any reason, such dissolution has not occurred on or before July 15, 1998,
this Agreement shall be null and void and of no force or effect. Upon this
Agreement becoming effective, the Media LLC Registration Rights Agreement
shall be deemed terminated and of no further force or effect.
(b) Initial Public Offering. Subject to the terms and
provisions of the Operating Agreement, nothing in this Agreement shall
otherwise create any obligation on the part of the Company to effect an
initial Public Offering.
(c) Amendments and Waivers. This Agreement may be amended
or waived by the consent of the Company and each of the Shareholders. Each
holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this Subsection 7(c), whether or
not such Registrable Securities shall have been marked to indicate such
consent.
(d) Nominees for Beneficial Owners. If Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of
such Registrable Securities for purposes of (i) any action by holders of
Registrable Securities pursuant to this Agreement and (ii) any determination
of number of Registrable Securities held by any holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances of such
beneficial owner's ownership of such Registrable Securities.
(e) Notices. Any consent, notice or other communication
provided for hereunder shall be in writing and shall be deemed given or made:
(i) when delivered in person; (ii) one (1) business day after delivered via
reputable overnight courier service or guaranteed next day service; or (iii)
upon confirmation of delivery when sent by facsimile transmission to a Person
at the address or facsimile number as shown in the records of the Company.
The following shall be prima facie evidence of the giving or making of any
notice in accordance with the provisions of this Section 7(e): (i) in the
case of personal delivery, an affidavit, executed by the person effecting
personal delivery, of the giving or making of such notice; (ii) in the case
of a courier service, a certificate of delivery by the courier service; and
(iii) in the case of a facsimile transmission, an electronically generated
written confirmation of the successful transmission thereof. Any notice to be
given or made to any Shareholder shall be deemed conclusively to
15
have been given or made, and the obligation to give such notice or report
shall be deemed conclusively to have been fully satisfied, upon sending of
such notice to the Shareholder at his address or facsimile number shown in
the records of the Company. If any notice to a Person at the address of such
Person appearing in the books and records of the Company is returned by the
United States Postal Service or overnight courier service marked to indicate
that the United States Postal Service or overnight courier service has been
unable to deliver it, such notice and any subsequent notices, shall be deemed
to have been duly given or made without further mailing (until such time as
such person notifies the Company of a change in his address) if they are
available for the Person at the principal office of the Company for a period
of one (1) year from the date of the giving or making of such notice.
(f) Assignment. This Agreement is personal to the parties
hereto and not assignable and may not be enforced by any subsequent holder of
securities of the Company; provided, however, that upon execution and
delivery to the Company of a commitment to be bound by the terms of this
Agreement, this Agreement may be assigned to, and may be enforced by, a
transferee of Registrable Securities, which transferee shall thereupon have
all of the rights and obligations of its transferor hereunder.
(g) Descriptive Headings. The descriptive headings of the
sections and paragraphs of this Agreement are for reference only and shall
not limit or otherwise affect the meaning hereof.
(h) Governing Law. The rights and duties of the parties
hereto under this Agreement shall be governed by the law of the State of
Wisconsin.
(i) Specific Performance. The parties hereto acknowledge
that there may be no adequate remedy at law if any party fails to perform any
of its obligations hereunder, and accordingly agree that each party, in
addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of any
other party under this Agreement in accordance with the terms and conditions
of this Agreement, in any court of the United States or any state thereof
having jurisdiction.
(j) Counterparts. This Agreement may be executed in any
number of counterparts. Each counterpart is an original, but all counterparts
shall together constitute one and the same instrument.
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
CUMULUS MEDIA INC.
By: ______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Chairman
THE STATE OF WISCONSIN INVESTMENT BOARD
By: __________________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Portfolio Manager
NATIONSBANC CAPITAL CORP.
By: ___________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III, Senior Vice President
▇▇▇▇▇▇ EQUITY CAPITAL CORPORATION
By: ___________________________________________
(Title)
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By: ___________________________________________
(Title)
17