UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report (Date of earliest event reported)
June 30, 2009
(June 29, 2009)
CUMULUS MEDIA INC.
(Exact name of registrant as specified in its charter)
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Delaware
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000-24525
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36-4159663
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS employer
Identification No.)
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3280 Peachtree Road, N.W., Suite 2300, Atlanta GA
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30305
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
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(404) 949-0700
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n/a
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section 1 Registrants Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On June 29, 2009, Cumulus Media Inc. (the Company) entered into an amendment to its existing
credit agreement, dated June 7, 2006, by and among the Company, Bank of America, N.A., as
administrative agent, and the lenders party thereto, and amended June 11, 2007. The credit
agreement, as amended, is referred to herein as the Amended Credit Agreement.
The Amended Credit Agreement maintains the pre-existing term loan facility of $750 million,
which has an outstanding balance of approximately $647.9 million, and reduces the pre-existing
revolving credit facility from $100 million to $20 million. Incremental facilities are no longer
permitted under the Amended Credit Agreement.
The Companys obligations under the Amended Credit Agreement are collateralized by
substantially all of its assets in which a security interest may lawfully be granted (including FCC
licenses held by its subsidiaries), including, without limitation, intellectual property and all of
the capital stock of the Companys direct and indirect subsidiaries, including Broadcast Software
International, Inc., which was formerly an excluded subsidiary. The Companys obligations under the
Amended Credit Agreement continue to be guaranteed by all of its subsidiaries.
The Amended Credit Agreement contains terms and conditions customary for financing
arrangements of this nature. The term loan facility will mature on June 11, 2014. The revolving
credit facility will mature on June 7, 2012.
Borrowings under the term loan facility and revolving credit facility will bear interest, at
the Companys option, at a rate equal to LIBOR plus 4.00% or the Alternate Base Rate (defined as
the higher of the Bank of America Prime Rate and the Federal Funds rate plus 0.50%) plus 3.00%.
Once the Company reduces the term loan facility by $25 million through mandatory prepayments of
Excess Cash Flow (as defined in the Amended Credit Agreement), as described below, the Company will
bear interest, at the Companys option, at a rate equal to LIBOR plus 3.75% or the Alternate Base
Rate plus 2.75%. Once the Company reduces the term loan facility by $50 million through mandatory
prepayments of Excess Cash Flow, as described below, the Company will bear interest, at the
Companys option, at a rate equal to LIBOR plus 3.25% or the Alternate Base Rate plus 2.25%.
In connection with the closing of the Amendment Credit Agreement, the Company made a voluntary
prepayment in the amount of $32.5 million. The Company will also be required to make quarterly
mandatory prepayments of 100% of Excess Cash Flow beginning with the fiscal quarter ending
September 30, 2009 and continuing through December 31, 2010, before reverting to annual prepayments
of a percentage of Excess Cash Flow, depending on the Companys leverage, beginning in 2011.
Certain other mandatory prepayments of the term loan facility will be required upon the occurrence
of specified events, including upon the incurrence of certain additional indebtedness and upon the
sale of certain assets.
The representations, covenants and events of default in the Amended Credit Agreement are
customary for financing transactions of this nature and are substantially the same as those in
existence prior to the amendment, except as follows:
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the Total Leverage Ratio and Fixed Charge Coverage Ratio covenants for the
fiscal quarters ending June 30, 2009 through and including December 31, 2010 (the
Covenant Suspension Period) have been suspended;
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during the Covenant Suspension Period, the Company must: (1) maintain minimum
trailing twelve month consolidated EBITDA (as defined in the Amended Credit
Agreement) of $60 million for fiscal quarters ended June 30, 2009 through March
31, 2010, increasing incrementally to $66 million for fiscal quarter ended
December 31, 2010, subject to certain adjustments; and (2) maintain minimum cash
on hand (defined as unencumbered consolidated cash and cash equivalents) of at
least $7.5 million;
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the Company is restricted from incurring additional intercompany debt or making
any intercompany investments other than to the parties to the Amended Credit
Agreement;
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the Company may not incur additional indebtedness or liens, or make permitted
acquisitions or restricted payments, during the Covenant Suspension Period. (after
the Covenant Suspension Period, the Amended Credit Agreement will permit
indebtedness, liens, permitted acquisitions and restricted payments, subject to
certain leverage ratio and liquidity measurements); and
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the Company must provide monthly unaudited financial statements to the lenders
within 30 days after each calendar-month end.
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Events of default in the Amended Credit Agreement include, among others, (a) the failure to
pay when due the obligations owing under the credit facilities; (b) the failure to perform (and not
timely remedy, if applicable) certain covenants; (c) cross default and cross acceleration; (d) the
occurrence of bankruptcy or insolvency events; (e) certain judgments against the Company or any of
its subsidiaries; (f) the loss, revocation or suspension of, or any material impairment in the
ability to use of or more of, any of the Companys material FCC licenses; (g) any representation or
warranty made, or report, certificate or financial statement delivered, to the lenders subsequently
proven to have been incorrect in any material respect; and (h) the occurrence of a Change in
Control (as defined in the Amended Credit Agreement). Upon the occurrence of an event of default,
the lenders may terminate the loan commitments, accelerate all loans and exercise any of their
rights under the Amended Credit Agreement and the ancillary loan documents as a secured party.
A copy of the Amendment No. 3 to the Credit Agreement is attached hereto as Exhibit 10.1 and
is incorporated herein by reference.
The lenders consenting to the Amended Credit Agreement (the Consenting Lenders) also
received warrants (the Warrants), exercisable within ten years, to acquire an aggregate of
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up to 1.25 million shares of the Companys Class A common stock. The Warrants were issued in
a private transaction exempt from the registration requirements of the Securities Act of 1933 (the
Securities Act), pursuant to Section 4(2) thereof, and have not been registered under the
Securities Act or any state securities laws. Therefore, the Warrants (and the common stock
underlying the Warrants) may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the Securities Act and any applicable
state securities laws.
In
connection with the issuance of the Warrants, on June 29, 2009, the Company entered into a
Warrant Agreement, with Lewis W. Dickey, Jr., our Chairman, President and Chief Executive Officer,
John W. Dickey, our Executive Vice President and Co-Chief Operating Officer, Lewis W. Dickey, Sr.,
Michael W. Dickey, David W. Dickey, the Lewis W. Dickey Revocable Trust, DBBC, LLC (collectively,
the Dickey Family), and the Consenting Lenders thereto (the Warrant Agreement). Pursuant to
the Warrant Agreement, each Warrant is immediately exercisable to purchase all or part of the
number of shares of the Companys Class A Common Stock underlying such Warrant, at an exercise
price of $1.17 per share. The Warrants will expire on June 29, 2019. The Warrants will have
appropriate adjustments for stock splits, stock dividends and other recapitalization events.
Pursuant to the Warrant Agreement, holders of the Warrants are also entitled to (i) cashless
exercise of the Warrants; (ii) certain tag-along rights to participate pro-rata in any sale,
transfer or disposition to the Company or a third party (other than permitted transferees) of 50%
or more of the Class A common stock owned by the Dickey Family as of the date of the Warrant
Agreement; and (iii) certain registration rights if Rule 144 of the Securities Act (or such other
available rule or regulation) is not fully available to allow the Class A common stock underlying
the Warrants to be sold to the public without registration.
Copies of the Form of Warrant Certificate and Warrant Agreement are attached hereto as
Exhibits 4.1 and 10.2 and are incorporated herein by reference.
The Company has various relationships with Bank of America, N.A., the administrative agent
under the Amended Credit Agreement, and its affiliates. Two affiliates of Bank of America, N.A.
together beneficially own 100%, of the Companys nonvoting Class B Common Stock, which are
convertible on a one-for-one basis into shares of the Companys Class A Common Stock. Assuming
conversion of those shares, together with existing holdings of the Companys Class A Common Stock,
those two affiliates would beneficially own approximately 16% of the total voting power of the
Companys common stock. One such affiliate, BA Capital Company, L.P., has the right to designate
one member of the Companys board of directors, and Robert H. Sheridan, III currently serves as BA
Capitals designee. Finally, as previously disclosed, the Company is a party to an interest rate
swap agreement with Bank of America, N.A.
In addition, some of the other lenders under the Amended Credit Agreement, or their
affiliates, have various relationships with the Company involving the provision of financial
services, including cash management, investment banking and brokerage services. These lenders or
their affiliates receive, and expect to receive, customary fees and expenses for these services.
Section 2 Financial Information
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information disclosed under Items 1.01 of this Current Report on Form 8-K is incorporated
herein by reference.
Section 3 Securities and Trading Markets
Item 3.02 Unregistered Sales of Equity Securities.
The information disclosed under Item 1.01 of this Current Report on Form 8-K is incorporated
herein by reference.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed with this report:
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Exhibit No.
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Description
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4.1
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Form of Warrant Certificate
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10.1
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Amendment No. 3 to Credit Agreement, dated as of June 29,
2009, by and among, the Company, Bank of America, N.A., as
administrative agent, the Lenders party thereto, and the
Subsidiary Loan Parties thereto
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10.2
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Warrant Agreement, dated as of June 29, 2009, by and among,
the Company, Lewis W. Dickey, Jr., Lewis W. Dickey, Sr., John
W. Dickey, Michael W. Dickey, David W. Dickey, Lewis W.
Dickey, Sr. Revocable Trust, DBBC, LLC and the Consenting
Lenders party thereto
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99.1
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Press release, dated as of June 29, 2009
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CUMULUS MEDIA INC.
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By:
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/s/ Martin R. Gausvik
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Name:
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Martin R. Gausvik
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Title:
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Executive Vice President, Treasurer
and Chief Financial Officer
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Date:
June 30, 2009
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EXHIBIT INDEX
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Exhibit No.
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Description
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4.1
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Form of Warrant Certificate
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10.1
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Amendment No. 3 to Credit Agreement, dated as of June 29,
2009, by and among, the Company, Bank of America, N.A., as
administrative agent, the Lenders party thereto, and the
Subsidiary Loan Parties thereto
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10.2
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Warrant Agreement, dated as of June 29, 2009, by and among,
the Company, Lewis W. Dickey, Jr., Lewis W. Dickey, Sr., John
W. Dickey, Michael W. Dickey, David W. Dickey, Lewis W.
Dickey, Sr. Revocable Trust, DBBC, LLC and the Consenting
Lenders party thereto
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99.1
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Press release, dated as of June 29, 2009
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7
Exhibit 10.1
Execution Copy
AMENDMENT NO. 3 TO CREDIT AGREEMENT
Amendment
No. 3, dated as of June 29, 2009 (this
Third Amendment
), to the Credit
Agreement, dated as of June 7, 2006 (as amended, supplemented or otherwise modified prior to the
date hereof, the
Credit Agreement
), among CUMULUS MEDIA INC., a Delaware corporation (the
Borrower
), the several banks and other financial institutions parties thereto (the
Lenders
), and BANK OF AMERICA, N.A., a national banking organization organized and
existing under the laws of the United States as administrative agent for the Lenders thereunder (in
such capacity, the
Administrative Agent
).
WITNESSETH:
WHEREAS
, the Borrower desires to amend the Credit Agreement to provide for certain changes to
the Credit Agreement, and the parties signatory hereto are willing to agree to the requested
amendments on the terms and conditions contained herein;
NOW, THEREFORE
, in consideration of the premises and further valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Defined Terms
. Unless otherwise defined herein, capitalized terms that are defined in the
Credit Agreement are used herein as therein defined.
A.
Amendments to Credit Agreement
.
1.
Amendments to Section 1.01 of the Credit Agreement
.
(i) The following new definitions shall hereby be added to
Section 1.01
of the Credit
Agreement in appropriate alphabetical order:
Applicable Commitment Fee Rate
means for any day with respect to the
commitment fees payable hereunder, 0.375% per annum.
CSMS Agreement
means an agreement between the Borrower or a
Subsidiary Loan Party to manage, or provide one or more management services for a
CSMS Counterparty.
CSMS Counterparty
means a Person engaged in a line or lines of
business reasonably related (ancillary or complementary) to the line of business or
lines of business of the Borrower or any Subsidiary Loan Party.
Liquidity
means, on any date, the sum of (i) cash and Permitted
Investments of the Loan Parties on hand as of such date plus (ii) (A) the aggregate
principal amount of the Revolving Commitments as of such date less (B) the Revolving
Exposure of all Lenders on such date.
Third Amendment
means the Amendment No. 3 to Credit Agreement dated
as of June 29, 2009 by and among the Borrower and the Lenders party thereto.
Third Amendment Covenant
Suspension Period
means the fiscal quarter
ending June 30, 2009 and each fiscal quarter ending thereafter through and including
the fiscal quarter ending December 31, 2010.
Third Amendment
Effective Date
means the date on which each of the
conditions set forth in Section B.1. of the Third Amendment have been satisfied.
(ii)
Section 1.01
of the
Credit Agreement is hereby amended by deleting the following
definitions in their entirety:
Additional Lender
and
Excluded Subsidiary
.
(iii) The definition of
Applicable
Rate
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Applicable Rate
means, as of any day, (a) 3.00% per annum with
respect to any ABR Loan that is a Term Loan or Revolving Loan, and (b) 4.00% per
annum with respect to any Eurodollar Loan that is a Term Loan or Revolving Loan;
provided
,
however
, that effective as of the date that the aggregate
principal amount of the Term Loan has been prepaid by at least $25,000,000 after the
Third Amendment Effective Date solely pursuant to Section 2.10(d) of this Agreement,
the Applicable Rate shall be reduced to (a) 2.75% per annum with respect to any ABR
Loan that is a Term Loan or Revolving Loan and (b) 3.75% per annum with respect to
any Eurodollar Loan that is a Term Loan or Revolving Loan;
provided
,
further
,
however
, that effective as of the date that the aggregate
principal amount of the Term Loan has been prepaid by at least $50,000,000 after the
Third Amendment Effective Date solely pursuant to Section 2.10(d) of this Agreement,
the Applicable Rate shall be reduced to (a) 2.25% per annum with respect to any ABR
Loan that is a Term Loan or Revolving Loan and (b) 3.25% per annum with respect to
any Eurodollar Loan that is a Term Loan or Revolving Loan.
(iv) The definition of
Consolidated EBITDA
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Consolidated EBITDA
means, for any period, Consolidated Net Income
for such period
plus
(a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) consolidated interest
expense for such period
plus
(ii) consolidated income tax expense for such
period
plus
(iii) all amounts attributable to depreciation and amortization
for such period
plus
(iv) any extraordinary, unusual or non-recurring
expenses or losses, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period
plus
(v) each of
(A) losses on sales of assets outside of the ordinary course of business, (B)
impairment of assets (other
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than current assets), (C) restructuring charges, (D) transaction costs required
to be expenses in connection with Permitted Acquisitions, (E) employee stock
compensation charges, (F) non-cash contractual obligations, and (G) write-offs of
deferred costs for such period
plus
(vi) any other non-cash charges (other
than write-offs or write-downs during such period of inventory, accounts receivable
or any other current assets in the ordinary course of business),
provided
that in the event that the Borrower or any Subsidiary makes any cash payment in
respect of any such non-cash charge, such cash payment shall be deducted from
Consolidated EBITDA in the period in which such payment is made,
minus
(b)
without duplication and to the extent included in determining such Consolidated Net
Income, the sum of (i) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the statement
of such Consolidated Net Income for such period, gains on the sales of assets
outside of the ordinary course of business) for such period
plus
(ii) any
other non-cash income, all determined on a consolidated basis in accordance with
GAAP,
plus
(c) without duplication and to the extent not included in
determining such Consolidated Net Income, cash actually received by the Borrower or
any Subsidiary from Cumulus Media Partners, LLC or any of its subsidiaries,
including without limitation, cash distributions and cash payments of management
fees,
less
(d) without duplication and to the extent not included in
determining such Consolidated Net Income, cash expenses paid in connection with cash
distributions and cash payments received from Cumulus Media Partners, LLC or any of
its subsidiaries;
plus
(e) without duplication and to the extent not
included as accrued revenue or otherwise in determining such Consolidated Net
Income, prepaid management fees actually received by the Borrower or any Subsidiary
in cash upon the execution of any CSMS Agreement executed during such period, in an
amount not to exceed the management fees payable to the Borrower and the Subsidiary
Loan Parties under such CSMS Agreement on or prior to the first anniversary of such
CSMS Agreement,
less
(f) without duplication and to the extent not deducted
in determining such Consolidated Net Income, (i) any prepaid management fees
refunded by the Borrower and the Subsidiary Loan Parties under the terms of any such
CSMS Agreements during such period and (ii) any amount expended by the Borrower or
any Subsidiary attributable to such CSMS Agreement, including any such amounts that
may be capitalized.
(v) The definition of
Consolidated Net Income
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Consolidated Net Income
means, for any period, the net income or loss
of the Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP;
provided
that
there shall be excluded
from such net income or loss (a) the income of any Person (other than the Borrower)
in which any other Person (other than the Borrower or any Subsidiary or any director
holding qualifying shares in compliance with applicable law) owns an Equity
Interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries during such
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period, (b) the income or loss of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or
the date that such Persons assets are acquired by the Borrower or any Subsidiary
and (c) the income, loss or gains of any Person attributable to any forgiveness,
cancellation, or early extinguishment of Indebtedness.
(vi) The definition of
Excess Cash Flow
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Excess Cash Flow
means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for any fiscal period, the difference of (i)
Consolidated EBITDA for such period (including therein any net cash gain or loss, as
applicable, of an extraordinary nature otherwise excluded from the calculation
thereof in the definition of Consolidated Net Income, but excluding any tax
refunds received by the Borrower or its Subsidiaries), minus (ii) the sum of
(without duplication) (A) the change in Consolidated Working Capital as at the end
of such fiscal year,
plus
(B) Capital Expenditures paid in cash by the
Borrower and its Subsidiaries during such period not prohibited hereunder,
plus
(C) Consolidated Interest Expense for such period,
plus
(D)
taxes paid in cash during such period,
plus
(E) (x) the aggregate amount of
any prepayments of the Term Loans made by the Borrower pursuant to
Section
2.10(a)
during such period, (y) the aggregate amount of required repayments of
principal of the Term Loans during such period, and (z) the aggregate amount of
scheduled payments made during such period in respect of Indebtedness of the
Borrower and the Subsidiary Loan Parties described in
Section 6.01(a)(ii)
,
(v)
,
(vi)
,
(vii)
and
(viii)
.
(vii) The definition of
Excess Cash Flow Prepayment Percentage
in
Section
1.01
of the Credit Agreement is hereby amended by deleting the text of such definition in its
entirety and replacing it with the following:
Excess Cash Flow Prepayment Percentage
means (i) 100% for any
mandatory prepayments from Excess Cash Flow required pursuant to Section 2.10(d)(i),
and (ii) for any mandatory prepayments from Excess Cash Flow required pursuant to
Section 2.10(d)(ii), if the Total Leverage Ratio of the Borrower and its
Subsidiaries as of the last day of the fiscal year of the Borrower for which Excess
Cash Flow is being measured is (a) greater than or equal to 5.50 to 1.00, an amount
equal to 50%, (b) greater than or equal to 4.00 to 1.00 but less than 5.50 to 1.00,
an amount equal to 25%, and (c) less than 4.00 to 1.00, an amount equal to 0%.
(viii) The definition of
Permitted Acquisition
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Permitted Acquisition
means any Asset Swap Transaction or any other
acquisition of all or substantially all the assets of, or Equity Interests in, a
Person
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or division or line of business of a Person that is engaged in a line or lines
of business reasonably related (ancillary or complementary) to the line of business
or lines of business of the Borrower or any Subsidiary Loan Party if, immediately
after giving effect thereto,
(a) no Default has occurred and is continuing or would result therefrom,
(b) all transactions related thereto are consummated in accordance with
applicable laws,
(c) in the case of an acquisition of Equity Interests in a Person, 100% of the
Equity Interests in such Person, and any other Subsidiary resulting from such
acquisition, shall be owned directly or indirectly by the Borrower or a Subsidiary
Loan Party and all actions required to be taken, if any, with respect to each
Subsidiary resulting from such acquisition under
Sections 5.12
and
5.13
have been taken,
(d) the Borrower and the Subsidiary Loan Parties are in compliance, on a pro
forma basis after giving effect to such acquisition, with the covenants contained in
Sections 6.13
,
6.14
and
6.16
recomputed as of the last day
of the most recently ended fiscal quarter of the Borrower for which financial
statements are available as if such acquisition had occurred on the first day of
each relevant period for testing such compliance (using Adjusted EBITDA in lieu of
Consolidated EBITDA for the relevant period),
(e) the Total Leverage Ratio, measured prior to giving effect to such
acquisition (or series or group of related acquisitions), and the Pro Forma Total
Leverage Ratio, measured after giving effect to such acquisition (or series or group
of related acquisitions), does not exceed 5.50 to 1.00,
(f) the Loan Parties have Liquidity of at least $20,000,000,
(g) the aggregate fair market value of all consideration paid for such
acquisition (or series or group of related acquisitions), together with all previous
acquisitions permitted hereunder and consummated after the Third Amendment Effective
Date, does not exceed (1) $50,000,000, less the aggregate amount of all investments
made pursuant to
Section 6.04(k)
after the Third Amendment Effective Date,
plus (2) to the extent such consideration takes the form of Equity Interests of the
Borrower or is paid solely from the proceeds of an issuance of Equity Interests of
the Borrower, $100,000,000,
(h) the Person, division or line of business acquired shall have Consolidated
EBITDA (measured for such Person, division or line of business in substantially the
same manner as calculated herein for the Borrower and its Subsidiaries) for the
four-quarter period most recently ended greater than $0, and
(i) in the case of any such acquisition (or series or group of related
acquisitions) in which the aggregate fair market value of the assets acquired
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exceeds $7,500,000, the Borrower has delivered to the Administrative Agent an
officers certificate to the effect set forth in clauses (a), (b), (d), (e), (f) and
(g) above, together with all relevant financial information for the business or
entity being acquired.
Notwithstanding clause (c) above, in the case of an acquisition of 100% of the
Equity Interests in a Person that satisfies the other conditions applicable to a
Permitted Acquisition, such acquisition shall not fail to qualify as a Permitted
Acquisition solely by reason of such Person having subsidiaries that are not wholly
owned by such Person immediately prior to such acquisition, provided that, at the
time of such acquisition, the Adjusted EBITDA attributable to all such non-wholly
owned subsidiaries for the period of four consecutive fiscal quarters most recently
ended prior to the date of such acquisition for which financial information is
available does not exceed 10% of Adjusted EBITDA of such acquired Person for the
same period.
(ix) The definition of
Prepayment Event
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Prepayment Event
means:
(a) any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of the Borrower or any Subsidiary
Loan Party, other than (i) dispositions described in clauses (a) and (b) of
Section 6.05
and (ii) other dispositions resulting in aggregate Net Proceeds
not exceeding $250,000 during any fiscal year of the Borrower; or
(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or asset of
the Borrower or any Subsidiary Loan Party, but only to the extent that (i) the Net
Proceeds therefrom have not been applied or committed by contract to be applied to
repair, restore or replace such property or asset within 180 days after such event
or (ii) in the case of any such Net Proceeds committed to be so applied (but not yet
applied) as of the date that is 180 days after such event, such Net Proceeds have
not been so applied within 360 days after such event; or
(c) the incurrence by the Borrower or any Subsidiary Loan Party of any
Indebtedness or the sale or issuance of Equity Interests by the Borrower or any
Subsidiary Loan Party, but excluding (i) the incurrence of any Indebtedness
permitted by clauses (a)(iii), (iv) and (v) of
Section 6.01,
(ii) issuance
of Equity Interests of Subsidiary Loan Parties to the Borrower or another Subsidiary
Loan Party and (iii) issuance of Equity Interests of the Borrower to the extent that
the proceeds thereof are applied to finance Permitted Acquisitions to the extent
permitted in
Section 6.04(g).
6
(x) The definition of
Subsidiary
in
Section 1.01
of the Credit Agreement is
hereby amended by deleting the text of such definition in its entirety and replacing it with the
following:
Subsidiary
means any subsidiary of the Borrower;
provided
that, so long as the Borrower owns no more than 50% of the equity interest in and
has no more than 50% of the ordinary voting power of Cumulus Media Partners, LLC or
CSMS Counterparty, neither Cumulus Media Partners, LLC nor any such CSMS
Counterparty shall be considered a Subsidiary of the Borrower.
(xi) The definition of
Subsidiary Loan Party
in
Section 1.01
of the Credit
Agreement is hereby amended by deleting the text of such definition in its entirety and replacing
it with the following:
Subsidiary Loan Party
means any Subsidiary that has executed and
delivered to the Administrative Agent the Collateral Agreement.
2.
Amendment to Section 1.04 of the Credit Agreement
.
Section 1.04
of the
Credit Agreement is amended by deleting the text of clause (b) thereof in its entirety and
replacing it with the following:
(b) Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all computations
of amounts and ratios referred to herein shall be made, without giving effect to any
election under Statement of Financial Accounting Standards 159 (or any other
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of any Loan Party or any Subsidiary of any Loan
Party at fair value, as defined therein.
3.
Amendment to Section 2.10 of the Credit Agreement
.
Section 2.10
of the
Credit Agreement is hereby amended by deleting the text of clauses (c) and (d) thereof in their
entirety and replacing them with the following:
(c) In the event and on each occasion that any Net Proceeds are received by or
on behalf of the Borrower or any Subsidiary Loan Party in respect of any Prepayment
Event, the Borrower shall, immediately after such Net Proceeds are received, prepay
Borrowings in accordance with paragraph (f) below in an aggregate amount equal to
such Net Proceeds.
(d) In the event there exists any Excess Cash Flow (i) for the fiscal quarter
ending September 30, 2009 and each fiscal quarter thereafter through and including
December 31, 2010, and (ii) for any fiscal year of the Borrower, commencing with its
2011 fiscal year, the Borrower shall prepay Borrowings in accordance with paragraph
(f) below in an amount equal to the product of such Excess Cash Flow for such period
multiplied by the applicable Excess Cash Flow Prepayment Percentage, which amount
shall be computed as of the end of each such fiscal period of the Borrower, as the
case may be, and set forth in a certificate of Financial Officer delivered on or
prior to the date the financial statements are required to be delivered pursuant to
Section 5.01(a) or (b), as the
7
case may be (which date may be after the actual date of delivery of such financial
statements, if such financial statements are delivered prior to their required
delivery date), and paid not later than the date of the delivery of such
certificate.
4.
Amendment to Section 2.11 of the Credit Agreement
.
Section 2.11
of the
Credit Agreement is hereby amended by replacing all references to Applicable Rate contained in
clause (a) thereof with references to Applicable Commitment Fee Rate.
5.
Amendment to Section 2.19 of the Credit Agreement
.
Section 2.19
of the
Credit Agreement is hereby amended by adding the following sentence at the end of such Section:
Notwithstanding anything contained herein to the contrary, from and after the
Third Amendment Effective Date, no Incremental Facilities may be issued or funded
hereunder and the foregoing provisions of this Section 2.19 shall be of no further
force and effect.
6.
Amendment to Section 5.01 of the Credit Agreement
. Section 5.01 of the Credit
Agreement is hereby amended by relettering clause (f) to clause (g) and adding the following as a
new clause (f):
(f) with respect to each fiscal month of each fiscal year of the Borrower,
within 30 days after the last day of such fiscal month, its monthly unaudited
consolidated balance sheet and related statements of operations, stockholders
equity and cash flows, in substantially the form attached as
Exhibit A
to
the Third Amendment, as of the end of and for such month, all certified by one of
its Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis, subject to normal year-end audit adjustments
and the absence of footnotes;
7.
Amendment to Section 5.11 of the Credit Agreement
. Section 5.11 of the Credit
Agreement is hereby amended by deleting the text of clause (c) thereof in its entirety.
8.
Amendment to Section 5.12 of the Credit Agreement
. Section 5.12 of the Credit
Agreement is hereby amended by deleting the parenthetical (if it is a Subsidiary Loan Party) that
appears therein.
9.
Article V
of the Credit Agreement is hereby further amended by inserting the
following new Section 5.17 at the end thereof:
SECTION 5.17
Cash Accounts
. The Borrower will, and will cause of each
of its Subsidiaries to, do or cause to be done all things necessary to maintain all
of its cash and Permitted Investments in bank accounts or securities accounts in
which the Administrative Agent has a first priority perfected Lien, other than those
bank accounts and securities accounts maintained by one or more Lenders and their
affiliates at all times.
8
10.
Amendments to Section 6.01 of the Credit Agreement
.
Section 6.01
of the
Credit Agreement is hereby amended by replacing clauses (a)(i), (a)(iv) and (a)(vi) thereof in
their entirety with the following:
(i) Indebtedness created under the Loan Documents;
(iv) Guarantees by the Borrower of Indebtedness of any Subsidiary Loan Party
and by any Subsidiary Loan Party of Indebtedness of the Borrower or any other
Subsidiary Loan Party;
(vi) Indebtedness of any Person that becomes a Subsidiary Loan Party after the
Effective Date;
provided
that (A) such Indebtedness exists at the time such
Person becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary, (B) the aggregate principal amount of
Indebtedness permitted by this clause (vi) shall not exceed $15,000,000 at any time
outstanding and (C) before and after giving effect to such Indebtedness, the Total
Leverage Ratio would not be more than 5.50 to 1.0;
provided
,
however
, that no Indebtedness shall be permitted to be incurred under this
clause (vi) during the Third Amendment Covenant Suspension Period.
11.
Amendment to Section 6.02 of the Credit Agreement
.
Section 6.02
of the
Credit Agreement is hereby amended by adding the following proviso at the end of clause (d) thereof
provided
,
however
, that no Lien shall be permitted to be
incurred under this clause (d) during the Third Amendment Covenant Suspension
Period.
12.
Amendment to Section 6.03 of the Credit Agreement
.
Section 6.03
of the
Credit Agreement is hereby amended by deleting the text of clause (b) thereof in its entirety and
replacing it with the following:
(b) The Borrower will not, and will not permit any of the Subsidiary Loan
Parties to, engage to any material extent in any business other than businesses of
the type conducted by the Borrower and the Subsidiary Loan Parties on the Effective
Date and businesses reasonably related thereto;
provided
that this
Section 6.03(b)
shall not restrict or limit the ability of any such Loan
Party to provide management services to CSMS Counterparties under CSMS Agreements so
long as all revenue earned from such management services is earned by the Borrower
and the Guarantors.
13.
Amendment to Section 6.04 of the Credit Agreement
.
Section 6.04
of the
Credit Agreement is amended by replacing clauses (c), (d), (e), (g) and (k) thereof in their
entirety with the following:
(c) investments by the Borrower and the Subsidiary Loan Parties in Equity
Interests in their respective Subsidiary Loan Parties;
provided
that any
such Equity Interests of a Subsidiary Loan Party shall be pledged pursuant to the
Collateral Agreement (subject to the limitations applicable to common stock of a
9
Foreign Subsidiary referred to in the definition of Collateral and Guarantee
Requirement);
(d) loans or advances made by the Borrower to any Subsidiary Loan Party and
made by any Subsidiary Loan Party to the Borrower or any other Subsidiary Loan
Party;
provided
that any such loans and advances made by a Loan Party shall
be evidenced by a promissory note and shall be pledged pursuant to the Collateral
Agreement;
(e) Guarantees made by the Borrower or any Subsidiary Loan Party constituting
Indebtedness permitted by
Section 6.01
; provided that a Subsidiary Loan
Party shall not Guarantee any Indebtedness of the Borrower unless (A) such
Subsidiary Loan Party also has Guaranteed the Obligations pursuant to the Collateral
Agreement, (B) if such Indebtedness is subordinated to the Obligations, then such
Guarantee of such Indebtedness also shall be subordinate to such Guarantee of the
Obligations on terms no less favorable to the Lenders than the subordination
provisions of such Indebtedness and (C) such Guarantee of such Indebtedness provides
for the release and termination thereof, without action by any party, upon any
release and termination of such Guarantee of the Obligations;
(g) Permitted Acquisitions;
provided
that the consideration for each
Permitted Acquisition shall consist solely of cash, Equity Interests of the
Borrower, the assumption of Indebtedness of the acquired Person or encumbering the
acquired assets or Indebtedness referred to in clause (vi) of
Section
6.01(a)
or a combination thereof (and, if such Permitted Acquisition is or
includes an Asset Swap Transaction, a Broadcasting Asset or all the Equity Interests
in a Subsidiary owning a Broadcasting Asset);
provided
,
however
,
that no Permitted Acquisition shall be permitted under this clause (g) during the
Third Amendment Covenant Suspension Period; and
(k) other investments made on or after the Effective Date in an aggregate
amount not exceeding (i) (A) $50,000,000
minus
(B) the amount of Permitted
Acquisitions made after the Third Amendment Effective Date utilizing the basket in
clause (g)(1) of the definition of Permitted Acquisitions,
provided
that (x)
neither the Total Leverage Ratio, measured prior to giving effect to such
investment, nor the Pro Forma Total Leverage Ratio, measured after giving effect to
such investment, is greater than or equal to 5.50 to 1.00 and (y) both before and
after giving effect to such investment, the Loan Parties have Liquidity of at least
$20,000,000;
provided
,
however
, that no investments shall be
permitted under this clause (k) during the Third Amendment Covenant Suspension
Period.
14.
Amendment to Section 6.05 of the Credit Agreement
.
Section 6.05
of the
Credit Agreement is hereby amended by replacing clause (b) in its entirety with the following:
(b) sales, transfers and dispositions to the Borrower or a Subsidiary Loan
Party;
10
15.
Amendment to Section 6.08 of the Credit Agreement
.
(i)
Section 6.08
of the Credit Agreement is hereby amended by replacing clause (a) in
its entirety with the following:
(a) The Borrower will not, and will not permit any of the Subsidiary Loan
Parties to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except, to the extent that no Default has occurred and is continuing or would result
therefrom:
(i) the Borrower may declare and pay dividends with respect to its
Equity Interests payable solely in additional Equity Interests of the same
class;
(ii) Subsidiary Loan Parties may declare and pay dividends ratably with
respect to their Equity Interests;
(iii) the Borrower may make Restricted Payments, not exceeding $500,000
during any fiscal year, pursuant to and in accordance with stock option
plans or other benefit plans for management or employees of the Borrower and
its Subsidiaries; and
(iv) the Borrower may make Restricted Payments in cash on and after the
Third Amendment Effective Date, so long as
(A) the aggregate amount of such cash Restricted Payments paid in any
fiscal year of the Borrower, determined at the time of each such Restricted
Payment, does not to exceed 50% of the Excess Cash Flow for the immediately
preceding fiscal year of the Borrower;
(B) both the Total Leverage Ratio, measured prior to giving effect to
such Restricted Payment and any Indebtedness incurred to finance such
Restricted Payment, and the Pro Forma Total Leverage Ratio, measured after
giving effect to such Restricted Payment and any Indebtedness incurred to
finance such Restricted Payment, does not exceed 4.50 to 1.00;
(C) both before and after giving effect to such cash Restricted
payment, the Loan Parties would have Liquidity of at least $20,000,000;
(D) no Default or Event of Default has occurred and is continuing; and
(E) such cash Restricted Payments are not paid until after the
expiration of the Third Amendment Covenant Suspension Period.
16.
Amendment to Section 6.13 of the Credit Agreement
.
Section 6.13
of the
Credit Agreement is hereby amended by adding the following language at the end of such Section:
11
Notwithstanding anything contained herein to the contrary, the foregoing covenant
will be suspended for the Third Amendment Covenant Suspension Period.
17.
Amendment to Section 6.14 of the Credit Agreement
.
Section 6.14
of the
Credit Agreement is hereby amended by replacing such Section in its entirety with the following:
6.14.
Total Leverage Ratio
. The Borrower will not permit the Total
Leverage Ratio, as of the last day of any fiscal quarter ending after the expiration
of the Third Amendment Covenant Suspension Period, to be greater than 6.50 to 1.00.
18.
Amendment to Section 6.15 of the Credit Agreement
.
Section 6.15
of the
Credit Agreement is hereby amended by replacing such Section in its entirety with the following:
(a) The Borrower shall not permit the Consolidated EBITDA of the Borrower and
its Subsidiaries for the twelve trailing month period ending on the last day of any
fiscal quarter of the Borrower, commencing with the fiscal quarter ending June 30,
2009 and continuing thereafter through and including the fiscal quarter ending
December 31, 2010, to be less than the amounts set forth below measured as of last
day of each fiscal quarter of the Borrower set forth below:
$60,000,000 as of June 30, 2009
$60,000,000 as of September 30, 2009
$60,000,000 as of December 31, 2009
$60,000,000 as of March 31, 2010
$62,000,000 as of June 30, 2010
$64,000,000 as of September 30, 2010
$66,000,000 as of December 31, 2010
(b) The Borrower shall not permit (i) the unencumbered cash and Cash
Equivalents on hand of the Borrower and its Subsidiaries,
less
(ii) the
Revolving Exposure of all Lenders, to be less than $7,500,000, in each case measured
as of the last day of each fiscal quarter of the Borrower ending during the Third
Amendment Covenant Suspension Period
.
19.
Amendment to Section 6.17 of the Credit Agreement.
Section 6.17
of the
Credit Agreement is hereby amended by deleting such Section in its entirety.
20.
Amendment to Article VII of the Credit Agreement
.
Article VII
of the
Credit Agreement is hereby amended by replacing the reference to $15,000,000 in subclause (k)(i)
with $10,000,000.
12
B.
Miscellaneous.
1.
Effectiveness; Conditions Precedent
. This Third Amendment shall become effective
and binding upon satisfaction of the following conditions precedent:
(i) Receipt by the Administrative Agent of counterparts of this Third Amendment
duly executed by the Borrower, each Subsidiary of the Borrower, and the Required
Lenders;
(ii) Receipt by the Administrative Agent of counterparts to a Supplement to the
Collateral Agreement from any Subsidiary of the Borrower that is not presently a
party thereto, together with the satisfaction of the Collateral and Guarantee
Requirement with respect to each such Subsidiary;
(iii) Receipt by the Administrative Agent for the account of the Term Loan
Lenders of a prepayment in respect of the Term Loans in an aggregate amount equal to
the greater of (A) $32,500,000 and (B) (1) cash on hand and Permitted Investments on
the Third Amendment Effective Date less (2) $10,000,000, such prepayment to be
applied in accordance with Section 2.09(c) of the Credit Agreement;
(iv) Receipt by the Administrative Agent for the account of each Lender that
has executed this Third Amendment on or prior to 5:00 p.m., New York City time, on
June 29, 2009 (each such Lender, a
Consenting Lender
) of (A) a fee equal
to $3,000,000 for ratable distribution to the Consenting Lenders based on their
respective Revolving Commitments and outstanding Term Loans, and (B) warrants, in
substantially the form of
Exhibit B
attached hereto, to purchase an
aggregate of 1,250,000 freely tradable shares (including without limitation or
restriction under federal or state securities laws) of the Borrowers common stock
exercisable for ten years (the
Warrants
), to be allocated to the
Consenting Lenders ratably based upon their respective Revolving Commitments and
outstanding Term Loans;
(v) Receipt by the Administrative Agent of executed counterparts of to a
warrant agreement, in substantially the form of
Exhibits C
(the
Warrant
Agreement
), governing the terms of the warrants referred to in clause (iii)(B)
above, include, among others, a cashless exercise option, tag-along rights (tied to
Dickey family selling a majority of their collective equity in Borrower),
anti-dilution protection (stock splits, stock dividends and the like) and other
customary warrant provisions;
(vi) Receipt by the Administrative Agent of certified copies of resolutions or
other action, incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Required Lenders may reasonably require
evidencing the identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this
13
Third Amendment, the Warrants and the Warrant Agreement together with certified
copies of the organization documents of the Loan Parties;
(vii) Receipt by the Administrative Agent of counterparts of an opinion from
Jones Day, counsel to the Loan Parties, in the form attached hereto as
Exhibit
D
; and
(viii) Receipt by all appropriate parties of fees and expenses due and payable
in connection with this Third Amendment.
If the foregoing conditions are not satisfied on or prior to June 30, 2009, this Third
Amendment shall not be effective.
2.
Reduction of Revolving Commitment
. Immediately upon the Third Amendment becoming
effective, the Revolving Commitments shall be reduced automatically to an aggregate amount equal to
$20,000,000, such reduction to be applied ratably to the Revolving Commitments. In furtherance of
the foregoing, each of the Lenders party hereto hereby waives the notice requirement under Section
2.07(c) of the Credit Agreement.
3.
Consent of the Subsidiary Loan Parties
. Each Subsidiary Loan Party hereby
consents, acknowledges and agrees to the amendments set forth herein and hereby confirms and
ratifies in all respects the Collateral Agreement to which such Subsidiary Loan Party is a party
(including without limitation the continuation of such Subsidiary Loan Partys payment and
performance obligations thereunder upon and after the effectiveness of this Third Amendment) and
the enforceability of such Collateral Agreement against such Subsidiary Loan Party in accordance
with its terms.
4.
Acknowledgment of Perfection of Liens
. Each Loan Party hereby acknowledges that,
as of the date hereof, the security interests and liens granted to the Administrative Agent and the
Lenders under the Credit Agreement and the other Loan Documents are in full force and effect, are
properly perfected and are enforceable in accordance with the terms of the Credit Agreement and the
other Loan Documents.
5.
Representations and Warranties
. In order to induce the Administrative Agent and
the Lenders to enter into this Third Amendment, the Borrower represents and warrants to the
Administrative Agent and the Lenders as follows:
(i) The representations and warranties made by the Borrower in
Article
III
of the Credit Agreement are true and correct in all material respects on and
as of the date hereof, both before and after giving effect to the transactions
contemplated by this Third Amendment, except to the extent that such representations
and warranties expressly relate to an earlier date;
(ii) No Default or Event of Default has occurred and is continuing on the date
hereof, both before and after giving effect to the transactions contemplated by this
Third Amendment.
14
(iii) This Third Amendment and the transactions contemplated hereby are within
the power and authority of the Borrower and the Subsidiary Loan Parties and have
been duly authorized by all necessary corporate and, if required, stockholder
action. This Third Amendment and the Warrants have been duly executed and delivered
by the Borrower and the Subsidiary Loan Parties and constitute a legal, valid and
binding obligation of the Borrower or such Subsidiary Loan Party (as the case may
be), enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
(iv) This Third Amendment and the consummation of the transactions contemplated
hereby (a) do not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority (including the FCC) or any other
Person, except (i) such as have been obtained or made and are in full force and
effect and (ii) filings necessary to perfect Liens created under the Loan Documents,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of the Subsidiary Loan Parties
or any order of any Governmental Authority (including the FCC, (c) will not violate
or result in a default under any indenture, agreement or other material instrument
binding upon the Borrower or any of its Subsidiaries or any of the respective
assets, or give rise to a right thereunder to require any payment to be made by the
Borrower or any of its Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of the subsidiary Loan
Parties, except Liens created under the Loan Documents.
(v) Neither the Borrower, any Subsidiary Loan Party nor any agent acting on its
behalf has taken or will take any action which would subject the issuance of the
Warrants to the provisions of section 5 of the Securities Act, the Trust Indenture
Act of 1939, as amended, or to the provisions of any securities or Blue Sky law of
any applicable jurisdiction.
(vi) The Borrower has authorized the issuance of the Warrants. The Borrower
has authorized and unissued, and has reserved for issuance, a sufficient number of shares of its common stock to permit, after giving effect to the exercise of the
Warrants and all other options, warrants and rights exercisable or convertible into
common stock of the Borrower. Each share of common stock of the Borrower reserved
for issuance upon exercise of the Warrants, when issued, will be, fully paid and
nonassessable, free and clear of any Lien and not subject to any preemptive rights;
and other than the agreements referenced in section B(3)(iv) above, there is no
other agreement or understanding between or among the holders of the Equity
Interests of the Borrower or the holders of rights to acquire such Equity Interests,
regarding the Equity Interests of the Borrower or any other matter covered by such
agreements. The issuance of the Warrants on the terms and conditions herein does
not violate any applicable law or governmental regulation (including, without
limitation, section 5 of the Securities
15
Act or Regulation T, U or X of the Board of Governors of the Federal Reserve
System) and shall not subject any Lender to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation.
(vii)
Schedule 7
correctly sets forth, after giving effect to the
issuance of the Warrants:
(A) the authorized and outstanding shares of the Equity Interests and other
Securities of the Borrower (specifying the type, class or series of all such
Equity Interests and other Securities and whether such Equity Interests and
other Securities);
(B) the aggregate number of shares of Equity Interests held by the Dickey
family by type, class or series; and
(C) the aggregate amount of Equity Interests of the Borrower issuable
pursuant to all options, warrants and other rights to purchase any Equity
Interests of the Borrower.
All outstanding shares of Equity Interest of the Borrower are duly authorized and
validly issued and are fully paid, non-assessable, and such Equity Interests have
been issued in compliance with all applicable laws and regulations. There are no
obligations (contingent or otherwise) of the Borrower to repurchase or otherwise
acquire or retire any shares of its respective Equity Interests (or options to
purchase the same) held by the Dickey Family, and there are no preemptive rights,
subscription rights, or other contractual rights similar in nature to preemptive
rights with respect to any Equity Interests of the Borrower.
6.
Modifications to this Amendment
. None of the terms or conditions of this Third
Amendment may be changed, modified, waived or canceled orally or otherwise, except in writing and
in accordance with
Section 9.02
of the Credit Agreement.
7.
Full Force and Effect of Agreement
. Except as hereby specifically amended,
modified or supplemented, the Credit Agreement and all other Loan Documents are hereby confirmed
and ratified in all respects and shall be and remain in full force and effect according to their
respective terms. Except as expressly set forth herein, this Third Amendment (a) shall not by
implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and
remedies of the Lenders, the Administrative Agent or the Loan Parties under the Credit Agreement or
any other Loan Document and (b) shall not alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document, all of which are ratified and affirmed in all respects and shall continue in
full force and effect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or
a waiver, amendment, modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or
different circumstances. This Third Amendment shall be deemed a
16
Loan Document, and the Borrower reaffirms its obligations under Section 9.03(b) of the Credit
Agreement with respect to this Third Amendment and the transactions contemplated hereby.
8.
No Novation
. This Third Amendment is not intended by the parties to be, and shall
not be construed to be, a novation of the Credit Agreement and the other Loan Documents or an
accord or satisfaction in regard thereto.
9.
Counterparts
. This Third Amendment may be executed in any number of counterparts,
each of which shall be deemed an original as against any party whose signature appears thereon, and
all of which shall together constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Third Amendment by telecopy or electronic delivery
(including by pdf) shall be effective as delivery of a manually executed counterpart of this Third
Amendment.
10.
Waiver of Claims
. By its execution hereof and in consideration of the covenants
contained herein and other accommodations granted to the Loan Parties hereunder, each Loan Party,
on behalf of itself and each of its Subsidiaries, and its or their successors, assigns and agents,
hereby expressly forever waives, releases and discharges any and all claims (including, without
limitation, cross-claims, counterclaims, and rights of setoff and recoupment), causes of action
(whether direct or derivative in nature), demands, suits, costs, expenses and damages any of them
may have or allege to have as of the date of this Amendment (collectively, the
Claims
)
(and all defenses that may arise out of any of the foregoing) of any nature, description, or kind
whatsoever, based in whole or in part on facts, whether actual, contingent or otherwise, now known,
unknown, or subsequently discovered, whether arising in law, at equity or otherwise, against the
Administrative Agent or any Lender executing this Third Amendment, their respective affiliates,
agents, principals, managers, managing members, members, stockholders, controlling persons
(within the meaning of the United States federal securities laws), directors, officers, employees,
attorneys, consultants, advisors, agents, trusts, trustors, beneficiaries, heirs, executors and
administrators of each of the foregoing (collectively, the
Released Parties
) arising out
of this Third Amendment, the Credit Agreement, the other Loan Documents and any or all of the
actions and transactions contemplated hereby or thereby, including any actual or alleged
performance or non-performance of any of the Released Parties hereunder or under the Loan
Documents. Each Loan Party hereby acknowledges that the agreements in this
Section 13
are
intended to be in full satisfaction of all or any alleged injuries or damages arising in connection
with the Claims. In entering into this Third Amendment, each Loan Party expressly disclaims any
reliance on any representations, acts, or omissions by any of the Released Parties and hereby
agrees and acknowledges that the validity and effectiveness of the releases set forth above does
not depend in any way on any such representation, acts and/or omissions or the accuracy,
completeness, or validity thereof. The provisions of this paragraph shall survive the termination
of the Credit Agreement and the Loan Documents and the payment in full of all Obligations of the
Loan Parties under or in respect of the Credit Agreement and other Loan Documents and all other
amounts owing thereunder.
11.
Severability
. Any provision of this Third Amendment which is invalid, prohibited
or unenforceable for any reason shall be ineffective to the extent of such invalidity, prohibition
or unenforceability without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provisions.
17
12.
Governing Law
. This Third Amendment shall be construed in accordance with and
governed by the law of the State of New York.
13.
References
. All references in any of the Loan Documents to the Credit Agreement
shall mean the Credit Agreement, as amended hereby and as further amended, supplemented or
otherwise modified from time to time.
14.
Successors and Assigns
. This Third Amendment shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, each of the Subsidiary Loan Parties and
Lenders, and their respective successors, legal representatives, and assignees to the extent such
assignees are permitted assignees as provided in
Section 9.04
of the Credit Agreement.
[Signature pages follow.]
18
IN WITNESS WHEREOF
, the parties hereto have caused this instrument to be made, executed and
delivered by their duly authorized officers as of the day and year first above written.
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BORROWER
:
CUMULUS MEDIA INC., as Borrower
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By:
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/s/ Lewis W. Dickey, Jr.
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Name:
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Lewis W. Dickey, Jr.
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Title:
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Chairman, President & Chief Executive Officer
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SUBSIDIARY LOAN PARTIES
:
CUMULUS BROADCASTING LLC
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By:
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/s/ Lewis W. Dickey, Jr.
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Name:
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Lewis W. Dickey, Jr.
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Title:
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Chairman, President & Chief Executive Officer
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CUMULUS LICENSING LLC
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By:
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/s/ Lewis W. Dickey, Jr.
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Name:
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Lewis W. Dickey, Jr.
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Title:
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Chairman, President & Chief Executive Officer
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LENDERS and ADMINISTRATIVE AGENT
:
BANK OF AMERICA, N.A., as a Lender, Administrative Agent and Issuing Bank
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By:
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/s/ Charles S. Francavilla
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Name:
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Charles S. Francavilla
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Title:
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Senior Vice President
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LENDERS
[Lender
signatures omitted]
Exhibit 10.2
CUMULUS MEDIA INC.
WARRANT AGREEMENT
Dated
As Of June 29, 2009
Warrants To Purchase 1,250,000
Shares Of Class A Common Stock
TABLE OF CONTENTS
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Page
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1.
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ISSUANCE OF WARRANTS.
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2
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2.
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FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.
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2
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2.1
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Form of Warrant Certificates.
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2
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2.2
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Execution of Warrant Certificates; Registration Books
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2
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2.3
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Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Lost or Stolen Warrant Certificates
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3
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3.
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EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE
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4
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3.1
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Exercise of Warrants
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4
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3.2
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Issuance of Common Stock
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5
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3.3
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Unexercised Warrants
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5
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3.4
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Cancellation and Destruction of Warrant Certificates
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6
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3.5
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Expiration
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6
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3.6
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Fractional Shares
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6
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4.
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AGREEMENTS OF THE COMPANY
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6
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4.1
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Reservation of Common Stock
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6
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4.2
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Common Stock To Be Duly Authorized and Issued, Fully Paid
and Nonassessable etc.
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6
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4.3
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Transfer Taxes
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7
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4.4
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Common Stock Record Date
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7
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4.5
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Rights in Respect of Common Stock
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7
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4.6
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Right of Action
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8
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4.7
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Form D
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8
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5.
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ANTI-DILUTION ADJUSTMENTS
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8
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5.1
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Mechanical Adjustments
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8
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5.2
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Stock Dividends, Subdivisions and Combinations
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8
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5.3
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Dividends and Distributions
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9
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5.4
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Consolidation; Merger; Sale; Reclassification
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9
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5.5
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Miscellaneous
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9
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5.6
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Other Securities
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10
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5.7
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Additional Agreement of the Company
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10
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5.8
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Information Concerning Anti-Dilution Adjustments
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10
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-i-
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Page
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6.
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REPRESENTATIONS AND WARRANTIES
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11
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6.1
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Company Representations and Warranties
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11
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6.2
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Representations and Warranties of the Dickey Family
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12
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6.3
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Representations and Warranties of the Purchasers
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12
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7.
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TAG-ALONG RIGHTS
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13
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8.
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REGISTRATION RIGHTS
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15
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8.1
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Shelf Registration
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15
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8.2
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Registration Procedures
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15
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8.3
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Indemnity and Contribution
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17
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8.4
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Rule 144 Reporting
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19
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9.
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INTERPRETATION OF THIS AGREEMENT.
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19
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9.1
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Certain Defined Terms
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19
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9.2
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Section Heading and Table of Contents and Construction
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23
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9.3
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Directly or Indirectly
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24
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9.4
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Governing Law
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24
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10.
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MISCELLANEOUS
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24
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10.1
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Amendment and Waiver
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25
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10.2
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Entire Agreement
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25
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10.3
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Successors and Assigns
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25
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10.4
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Notices
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25
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10.5
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Severability
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26
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10.6
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Execution in Counterpart
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26
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10.7
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Waiver of Jury Trial; Consent to Jurisdiction, Etc.
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26
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Exhibit A
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Form of Joinder Agreement
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Exhibit B
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Warrant Allocation
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Attachment A
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Form of Warrant Certificate
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Schedule 6.2(a)
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Dickey Family Shares
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-ii-
CUMULUS MEDIA INC.
Warrant Agreement
Warrants for Class A Common Stock
This
WARRANT AGREEMENT
, dated as of June 29, 2009, is made among CUMULUS MEDIA INC., a
corporation incorporated under the laws of the State of Delaware (together with its successors and
assigns, the
Company"
), each of the Consenting Lenders (as defined below) that have signed a
joinder agreement in the form attached hereto as Exhibit A agreeing to be a party to this Agreement
(and together with each of their successors and assigns, individually a
Purchaser
and together
the
Purchasers"
) and certain of the shareholders of the Company listed on the signature page
hereto (the
Dickey Family"
). Capitalized terms shall have the meaning specified in Section 9.1
hereof.
RECITALS
WHEREAS,
simultaneously with the execution and delivery of this Agreement, the Company has
entered into Amendment No. 3 (the
Third Amendment"
), to the Credit Agreement, dated as of June 7,
2006 (as amended, supplemented or otherwise modified prior to the date hereof, the
Credit
Agreement"
), among the Company, the several banks and other financial institutions parties thereto
(the
Lenders"
), and Bank of America, N.A., a national banking organization organized and existing
under the laws of the United States as administrative agent for the Lenders thereunder;
WHEREAS
, certain of the Lenders under the Credit Agreement have consented to the Third
Amendment (such consenting lenders, the
Consenting Lenders"
);
WHEREAS
, it is a condition precedent to entering into, or otherwise consenting to, the Third
Amendment by the Consenting Lenders that the Company issue to the Consenting Lenders warrants
exercisable into an aggregate of One Million Two Hundred Fifty Thousand (1,250,000) shares of Class
A Common Stock, which warrants will be allocated ratably to the Consenting Lenders based on
Revolving Commitments (as defined in the Credit Agreement, and after giving effect to the Third
Amendment) and Term Loans (as defined in the Credit Agreement, and after giving effect to the Third
Amendment) of the Consenting Lenders, as such allocation is more specifically set forth on
Exhibit B
of this Agreement; and
WHEREAS
, the parties desire to set forth in this Agreement the terms and provisions of the
Warrants and the conditions to the issuance and sale of the Warrants to the Purchasers;
AGREEMENTS
NOW, THEREFORE
, in consideration of the premises and the mutual agreements set forth herein,
the parties to this Agreement hereby agree as follows:
1. ISSUANCE OF WARRANTS.
At the Closing and in connection with the execution of the Third Amendment, the Company hereby
agrees to issue and sell to each Purchaser, and each Purchaser agrees to purchase from the Company,
for a purchase price of $1.00 and other good and valuable consideration, all of which is deemed to
have been received by the Company upon execution and delivery of the Third Amendment, warrants to
purchase that number of shares of Class A Common Stock set forth next to such Purchasers name on
Exhibit B hereto
for an initial exercise price equal to the Initial Exercise Price per
share (together with any warrants issued in substitution or replacement therefor, the
Warrants"
).
The closing of the transactions contemplated hereby (the
Closing)
shall take place simultaneously
with the execution of the Amendment at such place as the parties may agree. At the Closing, the
Company will deliver to each Purchaser Warrant Certificates evidencing the Warrants purchased by
such Purchaser.
2. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.
2.1 Form of Warrant Certificates.
The Warrant Certificates shall be in the forms set forth in Attachment A. The Warrant
Certificates may have such letters, numbers or other marks of identification or designation as may
be required to comply with any law or with any rule or regulation of any governmental authority,
stock exchange or self-regulatory organization made pursuant thereto. Each Warrant Certificate
shall be dated the date of issuance thereof by the Company, either upon initial issuance or upon
transfer or exchange. Each Warrant Certificate shall represent the right to purchase the number of
shares of Class A Common Stock set forth in such Warrant Certificate at a price per share of Class
A Common Stock equal to the Exercise Price;
provided
, that the number of shares of Class A Common
Stock issuable upon exercise of the Warrants and the Exercise Price thereof shall be subject to
adjustment as provided herein.
2.2 Execution of Warrant Certificates; Registration Books.
(a)
Execution of Warrant Certificates
. The Warrant Certificates shall be executed on
behalf of the Company by an officer of the Company authorized by the Board of Directors.
In case the officer of the Company who shall have signed any Warrant Certificate shall
cease to be such an officer of the Company before issuance and delivery by the Company of
such Warrant Certificate, such Warrant Certificate nevertheless may be issued and delivered
with the same force and effect as though the individual who signed such Warrant Certificate
had not ceased to be such an officer of the Company, and any Warrant Certificate may be
signed on behalf of the Company by any individual who, at the actual date of the execution
of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Agreement any such individual
was not such an officer.
(b)
Registration Books.
The Company will keep or cause to be kept at its office,
maintained at the address of the Company referred to in
Section 10.5
hereof or at
such other office of the Company in the United States of America of which the Company shall
have given notice to each holder of Warrant Certificates, books for
-2-
registration and transfer of the Warrant Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Warrant Certificates,
the registration number and date of each of the Warrant Certificates and the Denomination
thereof.
2.3 Transfer, Split Up, Combination and Exchange of Warrant Certificates; Lost or Stolen
Warrant Certificates.
(a)
Transfer, Split Up, etc.
(i)
Transfer
. Subject to compliance with the Securities Act and any
applicable state securities laws, any Warrant Certificate, with or without other
Warrant Certificates, may be transferred to any Person for a Warrant Certificate or
Warrant Certificates in an aggregate like Denomination as the Warrant Certificate or
Warrant Certificates surrendered then entitled such registered holder to purchase.
Any registered holder desiring to transfer any Warrant Certificate shall make such
request in writing delivered to the Company, which request shall include the
identity of the transferee and the aggregate number of Warrants to be transferred,
and shall surrender the Warrant Certificate or Warrant Certificates to be
transferred at the office of the Company referred to in
Section 2.2
hereof,
whereupon the Company shall deliver promptly to such transferee a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested, which
Warrant Certificate or Warrant Certificates shall evidence, collectively, the same
aggregate number of Warrants as the Warrant Certificate or Warrant Certificates so
surrendered for transfer.
(ii)
Split Up, Combination, Exchange, etc.
Any Warrant Certificate,
with or without other Warrant Certificates, may be split up, combined or exchanged
for another Warrant Certificate or Warrant Certificates, in an aggregate like
Denomination as the Warrant Certificate or Warrant Certificates surrendered then
entitle such registered holder to purchase. Any registered holder desiring to split
up, combine or exchange any Warrant Certificate shall make such request in writing
delivered to the Company, and shall surrender the Warrant Certificate or Warrant
Certificates to be split up, combined or exchanged at the office of the Company
referred to in
Section 2.2
hereof, whereupon the Company shall deliver
promptly to such registered holder a Warrant Certificate or Warrant Certificates, as
the case may be, as so requested, which Warrant Certificate or Warrant Certificates
shall evidence, collectively, the same aggregate Denomination as the Warrant
Certificate or Warrant Certificates so surrendered for split-up, combination or
exchange.
(b)
Loss, Theft, etc.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the ownership of, and the loss, theft, destruction or mutilation of, any Warrant
Certificate (which evidence shall be, in the case of a Purchaser, notice from such
Purchaser of such ownership (or of ownership by such Purchasers nominee) and such loss,
theft, destruction or mutilation), and:
-3-
(i) in the case of loss, theft or destruction, an affidavit of loss, together
with indemnity reasonably satisfactory to the Company;
provided, however
, that if
the holder of such Warrant Certificate is a Purchaser, or a nominee of such
Purchaser, such Purchasers own unsecured agreement of indemnity together with its
affidavit of loss, shall be deemed to be satisfactory; or
(ii) in the case of mutilation, upon surrender and cancellation thereof;
the Company at its own expense will execute and deliver, in lieu thereof, a new Warrant
Certificate, dated the date of such lost, stolen, destroyed or mutilated Warrant Certificate
and of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate
and evidencing the same Denomination as the Warrant Certificate so lost, stolen, destroyed
or mutilated.
3. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.
3.1 Exercise of Warrants.
(a)
Manner of Exercise
. At any time and from time to time prior to the Expiration
Date, the holder of any Warrant Certificate may exercise the Warrant evidenced thereby, in
whole or in any part, by surrender of such Warrant Certificate, with an election to
purchase (a form of which is attached to each Warrant Certificate) attached thereto duly
executed, to the Company at its office referred to in
Section 2.2
hereof, together
with payment of the Exercise Price for each share of Common Stock with respect to which the
Warrants are then being exercised. Such Exercise Price shall be payable either:
(i) in cash pursuant to
Section 3.1(b)
hereof;
(ii) by cashless exercise by delivery of Warrant Certificates pursuant to
Section 3.1(c)
hereof; or
(iii) or any combination of the above.
(b)
Payment in Cash
. Upon exercise of any Warrants, the holder of a Warrant
Certificate may pay the Exercise Price in cash or by certified or official bank check
payable to the order of the Company or by wire transfer of immediately available funds to
the account of the Company.
(c)
Cashless Exercise
. In the event that any holder of Warrant Certificates delivers
such Warrant Certificates to the Company and notifies the Company in writing that such
holder intends to exercise all, or any portion of, the Warrants represented by such Warrant
Certificates to satisfy its obligation to pay the Exercise Price in respect thereof by
virtue of the provisions of this
Section 3.1(c)
, such holder shall become entitled
to receive, instead of the number of shares of Class A Common Stock such holder would have
received had the Exercise Price been paid pursuant to
Section 3.1(b)
, a number of
shares of Class A Common Stock in respect of the exercise of such Warrants equal to the
product of:
-4-
(i) the number of shares of Class A Common Stock issuable upon such exercise of
such Warrant Certificate (or, if only a portion of such Warrant Certificate is being
exercised, issuable upon the exercise of such portion);
multiplied by
(ii) the quotient of:
(A) the difference of:
(I) the Market Price per share of Common Stock at the
time of such exercise;
minus
(II) the Exercise Price per share of Class A Common
Stock at the time of such exercise;
divided by
(B) the Market Price per share of Common Stock at the time of such
exercise.
(d)
Fractional Shares
. The Company may, in accordance with
Section 3.6
, pay
the exercising holder cash in lieu of issuing a fractional share in connection with an
exercise of Warrants;
provided
that if it does not issue a fractional share in such
circumstances, it will make such cash payment.
3.2 Issuance of Common Stock.
Upon timely receipt of a Warrant Certificate, with the form of election to purchase duly
executed, accompanied by payment of the Exercise Price for each of the shares of the Common Stock
to be purchased in the manner provided in
Section 3.1(a)
hereof and an amount equal to any
applicable transfer tax (if not payable by the Company as provided in
Section 4.3
hereof),
the Company shall thereupon promptly cause certificates representing the number of whole shares of
Class A Common Stock then being purchased to be delivered to or upon the order of the registered
holder of such Warrant Certificate, registered in such name or names as may be designated by such
holder, and, promptly after such receipt deliver the cash, if any, to be paid in lieu of fractional
shares pursuant to
Section 3.6
hereof to or upon the order of the registered holder of such
Warrant Certificate.
3.3 Unexercised Warrants.
In case the registered holder of any Warrant Certificate shall exercise less than all the
Warrants evidenced thereby, a new Warrant Certificate evidencing Warrants equal in number to the
number of Warrants remaining unexercised shall be issued by the Company to the registered holder of
such Warrant Certificate or to its duly authorized assigns.
-5-
3.4 Cancellation and Destruction of Warrant Certificates.
All Warrant Certificates surrendered to the Company for the purpose of exercise, exchange,
substitution or transfer shall be cancelled by it, and no Warrant Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company
shall cancel and retire any other Warrant Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof.
3.5 Expiration.
All Warrants that have not been exercised or purchased in accordance with the provisions of
this Agreement shall expire and all rights of holders of such Warrants shall terminate and cease on
the Expiration Date.
3.6 Fractional Shares.
The Company shall not be required to issue fractional shares of Class A Common Stock upon the
exercise of any Warrant. If fractional shares are not issued upon the exercise of any Warrant,
there shall be paid to the holder thereof, in lieu of any fractional share of Class A Common Stock
resulting therefrom, an amount of cash equal to the product of:
(a) the fractional amount of such share of Class A Common Stock;
times
(b) the Market Price, as determined on the trading day immediately prior to the date
of exercise of such Warrant.
4. AGREEMENTS OF THE COMPANY.
4.1 Reservation of Common Stock.
The Company covenants and agrees that it will at all times cause to be reserved and kept
available out of its authorized and unissued shares of Class A Common Stock such number of shares
of Class A Common Stock as will be sufficient to permit the exercise in full of all Warrants issued
hereunder into Class A Common Stock and the exercise of all other Rights exercisable or convertible
into Class A Common Stock.
4.2 Common Stock To Be Duly Authorized and Issued, Fully Paid and Nonassessable etc.
The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Class A Common Stock delivered upon the exercise of any Warrant and the
payment of the Exercise Price pursuant to
Section 3.1
hereof (in each case, at the time of
delivery of the certificates representing such shares of Class A Common Stock), shall be duly and
validly authorized and issued and fully paid and nonassessable, free of any preemptive rights in
favor of any Person in respect of such issuance and free of any Lien created by, or arising out of
actions of, the Company, any Subsidiary or any Affiliate of the Company (other than such rights and
Liens, if any, arising out of the provisions of this Agreement).
-6-
4.3 Transfer Taxes.
The Company covenants and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the initial issuance or delivery
of:
(a) each Warrant Certificate;
(b) each Warrant Certificate issued in exchange for any other Warrant Certificate
pursuant to the terms of this Agreement; and
(c) each share of Class A Common Stock issued upon the exercise of any Warrant.
The Company shall not, however, be required to:
(i) pay any transfer tax that may be payable in respect of the transfer or
delivery of Warrant Certificates in a name other than that of the registered holder
of the Warrant Certificate surrendered for exercise, conversion, transfer or
exchange (any such tax being payable by the holder of such certificate at the time
of surrender); or
(ii) issue or deliver any such certificates referred to in the foregoing clause
(i) until any such tax referred to in the foregoing clause (i) shall have been paid.
4.4 Common Stock Record Date.
Each Person in whose name any certificate for shares of Class A Common Stock is issued upon
the exercise of Warrants shall for all purposes be deemed to have become the holder of record of
the Class A Common Stock represented thereby on, and such certificates (if any) shall be dated, the
date upon which the Warrant Certificate evidencing such Warrants was duly surrendered with an
election to purchase attached thereto duly executed and payment of the aggregate Exercise Price
(and any applicable transfer taxes, if payable by such Person) was made.
4.5 Rights in Respect of Common Stock.
Except as otherwise set forth herein, prior to the exercise of the Warrants evidenced thereby,
the holder of a Warrant Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to the Class A Common Stock into which the Warrants shall be exercisable,
including, without limitation, the right to vote in respect of any matter upon which the holders of
Common Stock may vote, the right to receive any distributions of cash or property (except as
provided in
Section 5
) and, except as expressly set forth herein, the right to receive any
notice of any proceedings of the Company. Prior to the exercise of the Warrants evidenced thereby,
the holders of the Warrant Certificates shall not have as such any obligation in respect of any
assessment or any other obligation or liability as a stockholder of the Company, whether such
obligations or liabilities are asserted by the Company or by creditors of the Company.
-7-
4.6 Right of Action.
All rights of action in respect of the Warrants are vested in the respective registered
holders of the Warrant Certificates, and any registered holder of any Warrant Certificate, without
the consent of the holder of any other Warrant Certificate, may, on its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, its right to exercise the Warrants evidenced by such
Warrant Certificate in the manner provided in such Warrant Certificate and in this Agreement.
4.7 Form D.
The Company covenants and agrees to file with the Securities and Exchange Commission (the
Commission) a complete Form D in respect of the grant of the Warrants, to the extent each
Purchaser furnishes the Company with all information requested by the Company necessary for such
purpose.
5. ANTI-DILUTION ADJUSTMENTS.
5.1 Mechanical Adjustments.
The number of shares of Class A Common Stock purchasable upon the exercise of each Warrant,
and the Exercise Price, shall be subject to adjustment as set forth in this
Section 5
.
5.2 Stock Dividends, Subdivisions and Combinations.
In the event that the Company shall, on or after the date hereof:
(a) pay a dividend in shares of Additional Common Stock or make a distribution in shares of Additional Common Stock;
(b) reclassify by subdivision of its outstanding shares of Common Stock into a greater
number of shares; or
(c) reclassify by combination of its outstanding shares of Common Stock into a smaller
number of shares;
then, and in each such case, the number of shares of Class A Common Stock for which a Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted to equal the
number of shares of Class A Common Stock for which such Warrant is exercisable immediately before
the occurrence of any such event multiplied by a fraction (x) the numerator of which is the total
number of outstanding shares of Common Stock immediately after the occurrence of such event and (y)
the denominator of which is the total number of outstanding shares of Common Stock immediately
before the occurrence of such event.
Any adjustment made pursuant to this
Section 5.2
shall become effective on the effective
date of such event.
-8-
5.3 Dividends and Distributions.
In the event that the Company shall make any dividend or distribution of any kind in respect
of its Common Stock (other than as described in
Section 5.2
), no adjustment to the Exercise
Price or the number of shares issuable upon exercise of a Warrant shall be made.
5.4 Consolidation; Merger; Sale; Reclassification.
In the event that there shall be:
(a) any consolidation of the Company with, or merger of the Company with or into,
another Person (other than a merger in which the Company is the surviving corporation and
that does not result in any reclassification or change of shares of Common Stock
outstanding immediately prior to such merger);
(b) any sale or conveyance to another Person of the property, business or assets of
the Company substantially as an entirety; or
(c) any reclassification of the Common Stock of the Company that results in the
issuance of other Securities of the Company;
then, in each such case, lawful provision shall be made as a part of the terms of such transaction
so that the holders of Warrants shall thereafter have the right to purchase the number and kind of
shares of stock, other Securities, cash, property and Rights receivable upon such consolidation,
merger, sale, conveyance or reclassification by a holder of such number of shares of Class A Common
Stock as the holder of a Warrant would have had the right to acquire upon the exercise of such
Warrant immediately prior to such consolidation, merger, sale, conveyance or reclassification, at
the Exercise Price then in effect, and, without further action on the part of any Person, each
Warrant will thereafter represent the right to receive, upon payment of the Exercise Price, such
shares of stock, other Securities, cash, property and Rights as are so receivable. The Company
agrees that, as a condition of proceeding with such consolidation, merger or sale, it shall cause
the Person surviving such merger or consolidation, the Person or Persons holding the shares of the
Class A Common Stock immediately after such transaction or the Person to whom such sale or
conveyance is made, as the case may be, at the time of such consolidation, merger or sale, to
expressly assume the due and punctual observance and performance of each and every provision of
this Agreement and all obligations and liabilities of the Company hereunder (subject to the
foregoing sentence), in each case, pursuant to such agreements and instruments as are reasonably
acceptable to the Required Warrantholders.
5.5 Miscellaneous.
(a) Adjustments shall be made pursuant to this
Section 5
successively whenever
any of the events referred to in
Section 5.2
or
Section 5.4
shall occur.
(b) If any Warrant shall be exercised subsequent to the record date for any of the
events referred to in
Section 5.2
or in
Section 5.4
but prior to the
effective date thereof, appropriate adjustments shall be made immediately after such
effective date so that the holder of such Warrant on such record date shall have received,
in the
-9-
aggregate, the kind and number of shares of Common Stock or other Securities or
property that it would have owned or been entitled to receive on such effective date had
such Warrant been exercised prior to such record date.
(c) Shares of Common Stock owned by or held for the account of the Company or any
Subsidiary shall not, for purposes of the adjustments set forth in this
Section 5
,
be deemed outstanding.
5.6 Other Securities.
In the event that at any time, as a result of an adjustment made pursuant to this
Section
5
, each holder of Warrants shall become entitled to purchase any Securities of the Company
other than shares of Common Stock, the number or amount of such other Securities so purchasable and
the Exercise Price of such Securities shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions contained in
Section 5.2
and in
Section 5.4
hereof, and all other relevant provisions of this
Section 5
that
are applicable to shares of Common Stock shall be applicable to such other Securities.
5.7 Additional Agreement of the Company.
The Company covenants and agrees that it shall not, by amendment to its charter documents as
in effect on the date hereof, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, liquidation, issuance or sale of Securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, or which would have the effect of circumventing or avoiding the
provisions of this
Section 5
, but shall at all times in good faith assist in the carrying
out of all the provisions of this
Section 5
and in the taking of all such actions as may be
necessary or appropriate in order to protect the rights of the holders of the Warrant Certificates
against dilution or other impairment.
5.8 Information Concerning Anti-Dilution Adjustments.
(a)
Notice of Adjustment
. Whenever the number of shares of Class A Common Stock
issuable upon the exercise of Warrants is adjusted or the Exercise Price in respect thereof
is adjusted, as provided in this Agreement, the Company shall promptly give to each holder
of Warrants notice of such adjustment or adjustments and shall promptly deliver to each
holder of Warrants a certificate of the Chief Financial Officer of the Company setting
forth:
(i) the number of shares of Class A Common Stock issuable upon the exercise of
each Warrant and the Exercise Price of such shares after such adjustment;
(ii) a brief statement of the facts requiring such adjustment; and
(iii) the computation by which such adjustment was made.
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(b)
Confirmation by Accountants.
At the request of any holder of Warrants, a
certificate of the Chief Financial Officer of the Company pursuant to
Section 5.8(a)
shall be confirmed by a certificate from the independent certified public accountants
of the Company.
6. REPRESENTATIONS AND WARRANTIES
6.1 Company Representations and Warranties.
The Company represents and warrants to each Purchaser as follows:
(a)
Capitalization and Ownership of the Company
. The authorized capital stock of the
Company consists of (i) 20,262,000 shares of Preferred Stock, par value $0.01 per share, 0
shares of which are issued and outstanding as of the date hereof, (ii) 200,000,000 shares
of Class A common stock, par value $0.01 per share (
Class A Common Stock
), 35,260,532
shares of which are issued and outstanding as of the date hereof, (iii) 20,000,000 shares
of Class B common stock, par value $0.01 per share (
Class B Common Stock
), 5,809,191
shares of which are issued and outstanding as of the date hereof and (iv) 30,000,000 shares
of Class C common stock, par value $0.01 per share (
Class C Common Stock
), 644,871 shares
of which are issued and outstanding as of the date hereof. Each share of Class C Common
Stock is convertible into exactly one share of Class A Common Stock. As of the date
hereof, prior to the grant of the Warrants, 43,701,180 shares of Common Stock are
outstanding on a Fully Diluted Basis.
(b)
Authorization and Issuance of Warrants
. The issuance of the Warrants has been
duly authorized and, upon delivery to each Purchaser of the Warrant Certificates therefor
in accordance with the terms hereof, the Warrants will have been validly issued and fully
paid and nonassessable, free and clear of all Liens and the issuance thereof will not give
rise to any preemptive rights.
(c)
Securities Laws
. The offer, issuance, sale and delivery of the Warrants, as
provided in this Agreement, are and will be exempt from the registration requirements of
the Securities Act and all applicable state securities laws.
(d)
Authority
. The Company has the right, power, authority and capacity to execute
and deliver this Agreement and the Warrants and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by the Company and constitutes the valid and
binding agreement of the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors rights generally and except that the availability
of the remedy of specific performance or other equitable relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
(e)
Absence of Restrictions and Conflicts
. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
-11-
hereby do not or will not (as the case may be), with the passing of time or the giving
of notice or both, violate or conflict with, constitute a breach of or default under,
result in the loss of any benefit under, permit the acceleration of any obligation under or
create in any party the right to terminate, modify or cancel, (a) any term or provision of
the charter documents of the Company or any of its Subsidiaries, (b) any contract,
agreement, permit, franchise, license or other instrument applicable to the Company or any
of its Subsidiaries, (c) any judgment, decree or order of any court or Governmental Entity
or agency to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any of their respective properties are bound or (d)
any Law or arbitration award applicable to the Company or any of its Subsidiaries.
6.2 Representations and Warranties of the Dickey Family.
Each Person included in the Dickey Family, severally, represents and warrants to each
Purchaser as follows:
(a)
Ownership
.
Schedule 6.2(a)
of this Agreement sets forth a true and
accurate description of the number of shares of Class A Common Stock, Class B Common Stock,
Class C Common Stock and any other share of capital stock of the Company or Right directly
or indirectly Beneficially Owned by such Person, any Affiliate of such Person, any family
member in the household of such Person or any trust of which such Person is a beneficiary
or trustee, together with the name of the record holder of such Security. The aggregate
number of shares of Common Stock on a Fully Diluted Basis represented on
Schedule
6.2(a)
is 14,947,948 (the
Base Dickey Share Amount
).
(b)
Authority
. Such Person has the right, power, authority and capacity to execute
and deliver this Agreement and to perform his/her obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and delivered
by such Person and constitutes the valid and binding agreement of such Person enforceable
against such Person in accordance with its respective terms.
(c)
Absence of Restrictions and Conflicts
. The execution, delivery and performance of
this Agreement, the consummation of the transactions contemplated hereby and the
fulfillment of and compliance with the terms and conditions hereof do not or shall not, as
the case may be, with the passing of time or the giving of notice or both, violate or
conflict with (a) any contract, agreement, permit, franchise, license or other instrument
applicable to such Person, (b) any judgment, decree or order of any Governmental Entity to
which such Person is a party or by which such Person or any of his/her respective
properties are bound or (c) any Law or arbitration award applicable to such Person.
6.3 Representations and Warranties of the Purchasers.
Each Purchaser severally and not jointly represents and warrants to the Company as follows:
-12-
(a)
Purchase Entirely for Own Account
. The Warrant will be acquired for investment
for such Purchasers own account, not as nominee or agent, and not with a view to the
resale, distribution or offering of any part thereof, and such Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing the same;
provided
,
however
, that the foregoing representation will not be construed
as imposing any limitation on such Purchasers right to transfer any of the Warrants or the
Warrant Shares that is not otherwise set forth in this Agreement or required under
applicable law.
(b)
Accredited Investor; Investment Experience
. Such Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits
and risks of the prospective investment in the securities, it has obtained sufficient
information from the Company as such Purchaser deems appropriate to evaluate an investment
in the Warrants, it is able to bear the economic consequences thereof, and it qualifies as
an accredited investor as such term is defined in Rule 501 of Regulation D promulgated
under the Securities Act. Such Purchaser is experienced in evaluating and investing in
securities of publicly traded companies and acknowledges that it can bear the economic risk
of its investment.
(c)
Reliance by Company.
Each Purchaser understands that the Company will be relying
on the representations made in this Section 6.3. Each Purchaser further acknowledges and
agrees that the Company has made no representations or warranties other than as
specifically set forth in this Agreement. Each Purchaser understands that the Warrants are
being offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and such Purchasers compliance with, the
representations, warranties, agreements, acknowledgments and understandings of such
Purchaser set forth herein in order to determine the availability of such exemptions and
the eligibility of such Purchaser to acquire the Warrants.
7. TAG-ALONG RIGHTS.
(a)
Right.
If at any time any Person included in the Dickey Family (the
Selling
Person
) shall determine to enter into a transaction or a series of transactions with any
third party or the Company (any such third party or the Company, as the case may be, a
Prospective Purchaser
) involving the sale, transfer or other disposition by such Person
or Persons of an aggregate number of shares of Class A Common Stock of the Company on a
Fully Diluted Basis (including the number of such shares as have been so transferred by the
Dickey Family prior to the date of such transaction, but after the Closing) that is greater
than fifty percent (50%) of the Base Dickey Share Amount, such Person or Persons shall
first give written notice (the
Offer Notice
) to all of the holders of Warrant Securities,
specifying the name and address of the Prospective Purchaser and the number of shares, if
any, of Class A Common Stock of the Company proposed to be sold, transferred or otherwise
disposed of (the
Subject Shares
) and setting forth in reasonable detail the price,
structure and other terms and conditions of the proposed transaction. The Offer Notice
shall represent the offer (the
Offer
) from the Selling Person to each holder of Warrant
Securities to include in the proposed
-13-
transfer described in the Offer Notice, in substitution for an equal number of Subject
Shares, a number of Warrant Shares equal to a
pro
rata
portion of Warrant
Shares then owned by such holder and on the same terms and conditions (including price and
form of consideration) as are being offered by the Selling Person in the proposed
transaction. The holders
pro
rata
portion shall be determined by
multiplying the number of Warrant Shares actually owned by such holder or represented by a
Warrant owned by such holder by a fraction, the numerator of which is the lesser of (a) the
Base Dickey Share Amount and (b) the number of shares of Common Stock proposed to be sold
by the members of the Dickey Family (including such shares as have been so transferred by
the Dickey Family prior to the date of such transaction, but after the Closing and
including for this purpose any shares of Common Stock issuable upon exercise of any options
or conversion of any preferred stock, or any other Right), and the denominator of which
shall be the Base Dickey Share Amount. Each holder shall have thirty (30) days from the
date of receipt of the Offer Notice to give written notice of its intention to accept or
reject the Offer. Failure to respond within such thirty-day period shall be deemed notice
of rejection. In the event that any holder(s) of the Warrant Securities gives written
notice to the Selling Person of its or their intention to accept such Offer, then such
written notice, taken in conjunction with the Offer Notice, shall constitute a valid and
legally binding agreement, and each of the holders so giving such written notice shall be
entitled to sell to the Prospective Purchaser, contemporaneously with the consummation of
the proposed transaction, on the same terms and conditions as are being offered by the
Prospective Purchaser to the Selling Person. In the event the proposed sale, transfer or
other disposition is not consummated within ninety (90) days after receipt by the holders
of an Offer Notice, such transaction or transactions shall again be subject to the
provisions of this
Section 7(a)
. In the event that in connection with any Offer
Notice the Prospective Purchaser is unwilling to include in the entire number of shares of
Class A Common Stock it is willing to purchase the entire number of Warrant Shares of Class
A Common Stock that the holders have elected to include in such transaction pursuant to
this
Section 7(a)
, then the Selling Person shall simultaneously purchase from the
Warrant Securities holders that have elected to sell in such transaction pursuant to this
Section 7(a)
the number of offered Warrant Shares that such Warrant Securities
holders have elected to include in such transaction on the same terms and conditions as set
forth in the Offer Notice. The Company shall cooperate in any reasonable way necessary to
enable such holders electing such option to exercise their Warrants for the described
number of shares of Class A Common Stock so as to participate in the proposed transfer on
the basis specified in the Offer Notice.
(b)
Permitted Transferees.
The rights described in
Section 7(a)
shall not
apply to (i) any transfer of capital stock of the Company by a Peron included in the Dickey
Family to another Person included in the Dickey Family; (ii) any pledge of shares of
capital stock of the Company made pursuant to a
bona
fide
loan transaction
that creates a mere security interest; (iii) any transfer of shares of Class A Common Stock
by gift or bequest or through inheritance to, or for the benefit of, any ancestor,
descendent or the spouse of a Person included in the Dickey Family; (iv) any transfer of shares of Class A Common Stock by a Person included in the Dickey Family to a trust for the
benefit of any person described in clause (iii) (persons to whom or which the transfers
described in this paragraph are made being referred to herein as
Permitted
-14-
Transferees
); provided, however, that each Permitted Transferee shall be required as
a condition of such transfer to agree in writing that he, she, or it will receive and hold
the shares of capital stock or interest therein subject to the provisions of this
Section 7
.
8. REGISTRATION RIGHTS
8.1 Shelf Registration.
(a) If at any time after six months following the date of this Agreement, (i) the
holders of Warrant Securities do not have available to them the full benefits of Rule 144
under the Securities Act (or its successor rule) or any other rule or regulation of the
Commission that may at any time permit such holder to sell Warrant Shares to the public
without registration and (ii) the Company receives a request from the Required
Warrantholders that the Company file a registration statement on Form S-3 with respect to
the Warrant Shares, then the Company shall use its best efforts to file a registration
statement on a Form S-3 or other available form with the Commission, within twenty (20)
days after the date such request is given, to effect a registration covering all Warrant
Shares subject to this Agreement (the
Registrable Securities
) and any related
qualification or compliance under applicable state securities or Blue Sky laws with respect
to the Registrable Securities, which shall be a resale shelf offering pursuant to Section
415 under the Securities Act, and to cause such registration statement to be declared
effective by the Commission as promptly as practicable, but in no event later than sixty
(60) days of the date such request is given by the Required Warrantholders. The Company
shall notify each Purchaser by facsimile or e-mail as promptly as practicable, and in any
event, within twenty-four (24) hours, after the registration statement is declared
effective and shall simultaneously provide such Purchaser with copies of any related
prospectus to be used in connection with the sale or other disposition of the securities
covered thereby.
(b) The Company shall bear all expenses in connection with the procedures of this
Section 8
and the registration of the resale of the Warrant Shares pursuant to such
registration statement.
(c) The Company shall provide to each Purchaser and its representatives, if requested,
the opportunity to conduct a reasonable inquiry of the Companys financial and other
records during normal business hours and make available its officers, directors and
employees for questions regarding information which such Purchaser may reasonably request
in order to fulfill any due diligence obligation on its part.
8.2 Registration Procedures.
In connection with registration of Company securities under this
Section 8
, the
Company shall use its reasonable best efforts to effect the registration and the sale of such
securities in accordance with the intended method of disposition thereof as quickly as practicable,
and, in connection with any such request:
-15-
(a) The Company shall as expeditiously as possible prepare and file with the
Commission a shelf registration statement on Form S-3, and use its best efforts to cause
such filed registration statement to become and remain effective until the disposition of
the Registrable Securities by the holders thereof.
(b) Prior to filing a registration statement or prospectus or any amendment or
supplement thereto, the Company shall, if requested, furnish to each Purchaser copies of
such registration statement as proposed to be filed, and thereafter the Company shall
furnish to each Purchaser such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act and such
other documents as such Purchaser may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Purchaser. Each Purchaser shall
have the right to request that the Company modify any information contained in such
registration statement, amendment and supplement thereto pertaining to such Purchaser, and
the Company shall use its reasonable best efforts to comply with such request,
provided,
however
, that the Company shall not have any obligation to so modify any information if the
Company reasonably expects that so doing would cause the prospectus to contain an untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(c) After the filing of the registration statement, the Company shall (i) cause the
related prospectus to be supplemented by any required prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with
the provisions of the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during the applicable period in
accordance with the intended methods of disposition by each Purchaser set forth in such
registration statement or supplement to such prospectus and (iii) promptly notify each
Purchaser of any stop order issued or threatened by the Commission or any state securities
commission and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered.
(d) The Company shall use its best efforts (i) to register or qualify the securities
covered by such registration statement under such other securities or blue sky laws of
such jurisdictions in the United States as each Purchaser reasonably (in light of the
Purchasers intended plan of distribution) requests and (ii) cause such securities to be
registered with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable each Purchaser to
consummate the disposition of its securities,
provided
that the Company shall not be
required to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this
Section 8.02(d)
, (B) subject itself
to taxation in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
-16-
(e) The Company shall immediately notify each Purchaser, at any time when a prospectus
relating to such registration statement is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of such securities,
such prospectus will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein
not misleading and promptly prepare and make available to each Purchaser and file with the
Commission any such supplement or amendment. The Company shall use its reasonable best
efforts to cause such supplement or amendment to be declared effective and such
registration statement and the related prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter.
(f) The Company shall furnish to each Purchaser, on the date such Warrant Shares are
delivered to the underwriters for sale pursuant to such registration or, if such Warrant
Shares are not being sold through underwriters, on the date that the applicable
registration statement becomes effective, (i) an opinion or opinions of counsel to the
Company and (ii) a comfort letter or comfort letters from the Companys independent public
accountants, each in customary form and covering such matters of the kind customarily
covered by opinions or comfort letters, as the case may be, as such Purchaser or the
managing underwriter therefor reasonably requests.
(g) The Company shall otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission.
(h) The Company may require each Purchaser to promptly furnish in writing to the
Company such information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as may be
legally required in connection with such registration.
(i) The Company shall use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange or quotation system on which the
Common Stock is then listed or traded.
8.3 Indemnity and Contribution.
(a)
Indemnification by the Company
. The Company agrees to indemnify and hold harmless
each Purchaser to the extent beneficially owning any Registrable Securities covered by a
registration statement, its officers, directors, employees, partners, Affiliates and
agents, and each Person, if any, who controls such Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable expenses of
investigation and reasonable attorneys fees and expenses) (
Damages
) caused by or
relating to any untrue statement or alleged untrue statement of a material fact contained
in any registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by or relating to any omission or alleged
omission to state therein a material
-17-
fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such Damages are caused by or related to any such untrue
statement or omission or alleged untrue statement or omission so made based upon
information furnished in writing to the Company by such Purchaser or on such Purchasers
behalf expressly for use therein.
(b)
Indemnification by Buyer
. Each Purchaser, to the extent holding Registrable
Securities included in any registration statement, agrees, severally and not jointly, to
indemnify and hold harmless the Company, its officers, directors and agents and each
Person, if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Purchaser, but only with respect to information
furnished in writing by such Purchaser or on such Purchasers behalf expressly for use in
any registration statement or prospectus relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary prospectus. For purposes of
clarification, a Purchaser shall not be liable for any indemnification under this
Section 8.3(b)
for any information provided by another Purchaser. Notwithstanding
the foregoing, each Purchasers liability under this
Section 8.3(b)
shall be
limited to the net proceeds realized by such Purchaser in the sale of Registrable
Securities of the Purchaser to which such Damages relate.
(c)
Contribution
. If the indemnification provided for in this
Section 8.3
is
unavailable to the indemnified parties in respect of any Damages, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Damages in such
proportion as is appropriate to reflect the relative fault of the indemnifying party and
the indemnified parties in connection with the actions which resulted in such Damages, as
well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified 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
indemnifying party or indemnified parties, and the parties relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this
Section 8.3(c)
were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of
the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject
to the limitations set forth above, 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 of this
Section 8.3(c)
, no Purchaser shall be required to
contribute any amount in excess of the net proceeds realized by such Purchaser in the sale of
Registrable Securities of the Purchaser to which such Damages relate. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
-18-
8.4 Rule 144 Reporting
With a view to making available to each Purchaser the benefits of Rule 144 under the
Securities Act (or its successor rule) and any other rule or regulation of the Commission that may
at any time permit such Purchaser to sell Warrant Shares to the public without registration, the
Company covenants and agrees to: (i) use its commercially reasonable efforts to make and keep
public information available, as those terms are understood and defined in Rule 144, until the
earlier of (A) the one year anniversary of the Closing or (B) such date as all of the Purchasers
Warrant Shares shall have been resold; and (ii) file with the Commission in a timely manner all
reports and other documents required of the Company under the Exchange Act; and (iii) furnish to
each Purchaser upon request, as long as such Purchaser owns any Warrant Shares, (A) a written
statement by the Company that it has complied with the reporting requirements of the Exchange Act,
(B) a copy of the Companys most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q
and (C) such other information as may be reasonably requested in order to avail such Purchaser of
any rule or regulation of the Commission that permits the selling of any such Warrant Shares
without registration.
9. INTERPRETATION OF THIS AGREEMENT.
9.1 Certain Defined Terms.
For the purpose of this Agreement, the following terms shall have the meanings set forth below
or set forth in the Section hereof following such term:
Additional Common Stock
means Common Stock, including treasury shares, issued after the
date hereof, except Class A Common Stock issued upon the exercise of any one or more Warrants.
Affiliate
means, with respect to any Person, (a) a director, officer or stockholder of such
Person, (b) a spouse, parent, sibling or descendant of such Person (or spouse, parent, sibling or
descendant of any director or executive officer of such Person) and (c) any other Person that,
directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is
under common Control with, such Person, at such time;
provided, however
, that neither the Purchaser
nor any Purchaser Affiliate shall be deemed to be an
Affiliate
of the Company and no Person
holding any one or more of the Warrants shall be deemed to be an
Affiliate
of the Company solely
by virtue of the ownership of such Securities.
Agreement, this
and references thereto means this Warrant Agreement as it may from time to
time be amended, restated, supplemented or modified.
Base Dickey Share Amount
as defined in
Section 6.2(a)
.
Beneficially Owned
has the meaning ascribed to in Rule 13d-3 promulgated under the Exchange
Act (or any successor rule).
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Board of Directors
means, at any time, the board of directors of the Company or any
committee thereof which, in the instance, shall have the lawful power to exercise the power and
authority of such board of directors.
Class A Common Stock
as defined in
Section 6.1(a)
.
Class B Common Stock
as defined in
Section 6.1(a)
.
Class C Common Stock
as defined in
Section 6.1(a)
.
Closing
as defined in
Section 1
.
Commission
as defined in
Section 4.7
.
Common Stock
means shares now or hereafter authorized of any class of common stock of the
Company and any other capital stock of the Company however designated that has the right (subject
to any prior rights of any class or series of preferred stock) to participate in any distribution
of the assets upon voluntary or involuntary liquidation, dissolution or winding up of the Company
or in the earnings of the Company without limit as to per share amount, and includes without
limitation, the presently authorized 200,000,000 shares of Class A Common Stock, 20,000,000 shares
of Class B Common Stock and 30,000,000 shares of Class C Common Stock.
Company
as defined in the introductory paragraph hereof.
Consenting Lenders
as defined in the recitals to this Agreement.
Control
means, with respect to any Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting Securities, by contract or otherwise.
Credit Agreement
as defined in the recitals to this Agreement.
Damages
as defined in
Section 8.3(a)
.
Denomination
means, in the case of any Warrant Certificate, the number of shares of Class A
Common Stock issuable upon exercise of such Warrant Certificate represented thereby.
Dickey Family
as defined in the introductory paragraph hereof.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Exercise Price
means, prior to any adjustment pursuant to
Section 5
, the Initial
Exercise Price per share of Class A Common Stock; and thereafter such Initial Exercise Price as
successively adjusted and readjusted from time to time in accordance with the provisions of
Section 5
.
Expiration
Date
means June 29, 2019.
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Fair Market Value
with respect to the Company, with respect to shares of Common Stock or
with respect to any other property shall be determined by the Board of Directors in good faith,
provided
, that such determination is approved by the Required Warrantholders. The Fair Market
Value of the shares of Common Stock shall not include a discount for a minority ownership interest.
If the Board of Directors and the Required Warrantholders are unable to agree on the Fair Market
Value within ten (10) days, then the Board of Directors shall select and approve an appraiser
experienced in the business of evaluating or appraising the market value of securities (which
appraiser shall be subject to approval by the Required Warrantholders, which approval shall not be
unreasonably withheld). The Fair Market Value established by such appraiser shall be conclusive
and binding on the parties and the fees and expenses for such appraiser shall be paid for by the
Company.
Fully Diluted Basis
means, with respect to any calculation of the number of shares of
Common Stock at any time, the sum of:
(a) the number of shares of Common Stock outstanding at such time (other than shares
held by the Company so long as such shares remain treasury shares); plus
(b) the aggregate number of shares of Common Stock issuable upon the exercise,
conversion or exchange, as the case may be, of all Rights outstanding at such time,
regardless of whether such Rights are then exercisable, convertible or exchangeable and
regardless of whether the consideration given up by the holder of any such Right in
connection with the exercise, conversion or exchange thereof would exceed the value of the
Common Stock received upon such exercise, conversion or exchange.
For the sake of clarity, if any series of Common Stock, now or hereafter authorized, is convertible
into more than one share of Class A Common Stock then each share of such series of Common Stock
shall be treated as the number of shares of Class A Common Stock into which such share is
convertible for all purposes in this Agreement.
Governmental Entity
means any federal, state, local or foreign government, any political
subdivision thereof, or any court, administrative or regulatory agency, department,
instrumentality, body or commission or other governmental authority or agency, domestic or foreign.
Initial Exercise Price
means $1.17.
Law
means all statutes, rules, codes, regulations, restrictions, ordinances, orders,
decrees, approvals, directives, judgments, injunctions, writs, awards and decrees of, or issued by,
any Governmental Entity.
Lenders
as defined in the recitals to this Agreement.
Lien
means any mortgage, pledge, hypothecation, assignment, charge, deposit arrangement,
encumbrance, lien (statutory or other), adverse claim or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever, including any conditional
sale or other title retention agreement, any financing lease involving
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substantially the same economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any jurisdiction.
Market Price
means, per share of Class A Common Stock, as of any date of determination, the
arithmetic mean of the daily closing prices for the fifteen (15) consecutive trading days before
such date of determination; provided that if the Class A Common Stock is then neither listed nor
admitted to trading on any national securities exchange, then
Market Price
means the Fair Market
Value of such share.
Offer
as defined in
Section 7
.
Offer Notice
as defined in
Section 7
.
Person
means any natural person, corporation, partnership, limited liability company, firm,
association, government, governmental agency or any other entity, whether acting in an individual,
fiduciary or other capacity.
Prospective Purchaser
as defined in
Section 7
.
Purchaser
as defined in the introductory paragraph hereof.
Purchaser Affiliate
means (a) a partner of a Purchaser, (b) any Person that, directly or
indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common
Control with, a Purchaser and (c) any managed account or investment fund which is managed by a
Purchaser or another Purchaser Affiliate described in clause (b) of this definition.
Registrable Securities
as defined in
Section 8.1
.
Required Warrantholders
means, at any time, the holders of Warrants representing at least a
majority of the Class A Common Stock issuable upon exercise of the Warrants then outstanding
(exclusive of any Warrants directly or indirectly held by the Company, any Subsidiary or any
Affiliate of the Company).
Right
means and includes:
(a) any warrant (including, without limitation, any Warrant) or any option (including,
without limitation, employee stock options) to acquire any Common Stock;
(b) any right issued to holders of the Common Stock, or any class thereof, permitting
the holders thereof to subscribe for Additional Common Stock (pursuant to a rights offering
or otherwise);
(c) any right to acquire Common Stock pursuant to the provisions of any Security
convertible or exchangeable into Common Stock (including, without limitation, an option or
any convertible preferred stock); and
(d) any similar right permitting the holder thereof to subscribe for or purchase Common
Stock.
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Securities Act
means the Securities Act of 1933, as amended.
Security
as defined in Section 2(1) of the Securities Act.
Subsidiary
of any corporation means any other corporation, partnership or limited liability
company of which greater than 50% of the outstanding shares of capital stock or other ownership
interests having ordinary voting power for the election of directors (or others serving equivalent
functions) is owned directly or indirectly by such corporation. Except as otherwise indicated
herein, references to Subsidiaries shall refer to Subsidiaries of the Company.
Third Amendment
as defined in the recitals to this Agreement.
Transferee
means any registered transferee of all or any part of any one or more Warrant
Certificates initially acquired by the Purchaser under this Agreement;
provided
, that such
transfer is in accordance with this Agreement.
Warrant
as defined in
Section 1
.
Warrant Certificate
means a certificate evidencing the Warrants in the forms set forth in
Attachment A.
Warrant Securities
means, collectively, the Warrants and the Warrant Shares.
Warrant Shares
means the securities that a holder of a Warrant Certificate may acquire upon
exercise or conversion of a Warrant, together with any other securities that such holder may
acquire on account of any such Warrant Shares whether upon the making or paying of any dividend or
other distribution on Common Stock, upon any split-up of such Common Stock, upon a
recapitalization, merger, consolidation, share exchange, reorganization or other transaction or
series of related transactions in which shares of Common Stock are changed into or exchanged for
securities of another corporation, upon exercise of any preemptive right (or the exercise or
conversion of any security which such holder may acquire in connection with the exercise of any
preemptive right) with respect to any such Common Stock or otherwise.
9.2 Section Heading and Table of Contents and Construction.
(a)
Section Headings and Table of Contents, etc.
The titles of the Sections of this
Agreement and the Table of Contents of this Agreement appear as a matter of convenience
only, do not constitute a part hereof and shall not affect the construction hereof. The
words herein, hereof, hereunder and hereto refer to this Agreement as a whole and
not to any particular Section or other subdivision. References to Sections are, unless
otherwise specified, references to Sections of this Agreement. References to Annexes and
Attachments are, unless otherwise specified, references to Annexes and Attachments attached
to this Agreement.
(b)
Independent Construction
. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each other covenant
contained herein, and compliance with any one covenant shall not
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(absent such an express contrary provision) be deemed to excuse compliance with one or
more other covenants.
9.3 Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action is taken directly or
indirectly by such Person, including actions taken by or on behalf of any partnership in which such
Person is a general partner.
9.4 Governing Law.
THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
DELAWARE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO THE EXTENT THAT ANY SUCH
RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
10. MISCELLANEOUS.
10.1 Expenses.
Except as expressly provided in this Agreement to the contrary, the Company agrees to pay, and
save each Purchaser and any Transferees harmless against liability for the payment of, all
reasonable out-of-pocket expenses (including, without limitation, the reasonable fees and
disbursements of special counsel for the Purchasers and any Transferee) arising in connection with
the transactions herein contemplated (other than the transfer taxes not payable by the Company
pursuant to
Section 4.3
), including, without limitation:
(a) compliance with
Section 4.7
hereof;
(b) the reasonable out-of-pocket costs and expenses (including reasonable attorneys fees;
provided, however, that the Company shall not be required to pay the fees of more than one counsel
for all holders of Warrants) incurred by the holders of Warrants in connection with the
consideration, negotiation, preparation or execution of any amendments, waivers, consents,
standstill agreements and other similar agreements with respect to this Agreement, the Warrant
Certificates or the Warrants (whether or not any such amendments, waivers, consents, standstill
agreements or other similar agreements are executed); and
(c) any enforcement of (or determination of whether or how to enforce) any rights under this
Agreement, the Warrant Certificates or the Warrants or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this Agreement or the
transactions contemplated hereby or by reason of any Purchaser or any Transferee having acquired
any Warrant Certificate, including, without limitation, the reasonable fees and expenses of counsel
engaged by the holders of the Warrants (provided, however, that the Company shall not be required
to pay the fees of more than one counsel for all holders of
-24-
Warrants) and the costs and expenses incurred in any bankruptcy case involving the Company or
any Subsidiary.
10.2 Amendment and Waiver.
This Agreement may be amended, and the observance of any term of this Agreement may be waived,
with and only with the written consent of the Company and the Required Warrantholders;
provided,
however,
that no amendment or waiver of the provisions of this
Section 10.2
,
Section
5.4
or of any term defined in
Section 9.1
to the extent used herein or therein, may be
made without the prior written consent of all holders of Warrants then outstanding (excluding any
Warrants directly or indirectly held by the Company, any Subsidiary or any Affiliate of the
Company); and, provided, further, that
(a) no such amendment or waiver of any of the provisions of this Agreement pertaining
to the Exercise Price or the number of shares or kind of Common Stock that may be purchased
upon exercise of each Warrant; and
(b) no change accelerating the occurrence of the Expiration Date
shall be effective as to the holder of any Warrants unless consented to in writing by such holder.
10.3 Entire Agreement.
This Agreement embodies the entire agreement and understanding between the Purchasers and the
Company and supersedes all prior agreements and understandings relating to the subject matter
hereof.
10.4 Successors and Assigns.
All covenants and other agreements in this Agreement contained by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respective successors and assigns of the
parties hereto to the extent they become holders of Warrants (including, without limitation, any
Transferee) whether so expressed or not. Notwithstanding the foregoing sentence, except as
provided in
Section 5.4
, the Company may not assign any of its rights, duties or
obligations hereunder or under the Warrant Certificates without the prior written consent of all
holders of Warrants then outstanding.
10.5 Notices.
All communications hereunder or under the Warrants shall be in writing and shall be delivered
either by national overnight courier or by facsimile transmission (confirmed by delivery by
national overnight courier sent on the day of the sending of such facsimile transmission), and
shall be addressed to the following addresses:
(a) if to a Purchaser, at its address set forth on such Purchasers respective joinder
to this Agreement or at such other address as such Purchaser shall have specified to the
Company in writing; and
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(b) if to the Company, at the address set forth below, or at such other address as the
Company shall have specified to each holder of Warrants in writing.
To:
Cumulus Media, Inc.
3280 Peachtree Road, N.W., Suite 2300
Atlanta, GA 30305
Any communication addressed and delivered as herein provided shall be deemed to be received when
actually delivered to the address of the addressee (whether or not delivery is accepted) or
received by the telecopy machine of the recipient. Any communication not so addressed and
delivered shall be ineffective unless actually received by the intended addressee. Notwithstanding
the foregoing provisions of this Section, service of process in any suit, action or proceeding
arising out of or relating to this Agreement or any document, agreement or transaction contemplated
hereby shall be delivered in the manner provided in
Section 10.8(c)
.
10.6 Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.
10.7 Execution in Counterpart.
This Agreement may be executed in one or more counterparts and shall be effective when at
least one counterpart shall have been executed by each party hereto, and each set of counterparts
that, collectively, show execution by each party hereto shall constitute one duplicate original.
10.8 Waiver of Jury Trial; Consent to Jurisdiction, Etc.
(a)
Waiver of Jury Trial
. THE PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE WARRANTS OR ANY OF THE DOCUMENTS,
AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY.
(b)
Consent to Jurisdiction
. ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE WARRANTS, OR ANY OF THE DOCUMENTS, AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE
ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS AGREEMENT, THE WARRANTS OR ANY
DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT BY SUCH
-26-
PARTY TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW IN ANY FEDERAL DISTRICT COURT
LOCATED IN THE DISTRICT OF DELAWARE (OR, IF SUCH FEDERAL DISTRICT COURTS ARE UNAVAILABLE,
IN ANY STATE COURT LOCATED IN WILMINGTON, DELAWARE) AS SUCH PARTY MAY IN ITS SOLE
DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE
IN PERSONAM
JURISDICTION OF
EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT
IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY
CLAIM THAT IT IS NOT SUBJECT TO THE
IN PERSONAM
JURISDICTION OF ANY SUCH COURT. IN
ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c)
Other Forums
. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF
ANY PURCHASER OR ANY OTHER HOLDER OF A WARRANT TO SERVE ANY WRITS, PROCESSES OR SUMMONSES
IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE COMPANY IN
SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.
[Remainder of page intentionally left blank; next page is signature page]
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IN WITNESS WHEREOF,
each of the parties hereto has caused this Agreement to be duly executed
and delivered on its behalf by one of its duly authorized officers or representatives.
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COMPANY:
CUMULUS MEDIA INC.
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By:
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/s/ Martin R. Gausvik
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Name:
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Martin R. Gausvik
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Title:
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Executive Vice President
Treasurer & Chief Financial Officer
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DICKEY FAMILY
:
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/s/ Lewis W. Dickey, Sr.
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Lewis W. Dickey, Sr.
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/s/ Lewis W. Dickey, Jr.
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Lewis W. Dickey, Jr.
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/s/ John W. Dickey
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John W. Dickey
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/s/ Michael W. Dickey
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Michael W. Dickey
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/s/ David W. Dickey
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David W. Dickey
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Lewis W. Dickey, Sr. Revocable Trust
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By:
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/s/ Lewis W. Dickey, Jr.
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Name:
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Lewis W. Dickey, Jr.
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Title:
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DBBC, LLC
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By:
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/s/ John W. Dickey
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Name:
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John W. Dickey
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Title:
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Vice President
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[SIGNATURE PAGE TO WARRANT AGREEMENT]