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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
--
Westwood One, Inc.
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Common Stock, par value $.01 per share
----------------------------------------------------------------------
Title of Class of Securities
961815107
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(CUSIP Number)
Eric R. Weiss
9540 Washington Blvd.
Culver City, CA 90232 (310) 204-5000
----------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 3, 1994
----------------------------------------------------------------------
(Date of Event Which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with the statement
[ ]. (A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
(Continued on following page(s))
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13D
CUSIP No. 961815107
1 NAME OF REPORTING PERSON
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Norman J. Pattiz
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) x
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable.
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 SOLE VOTING POWER
NUMBER OF None
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 7,514,480
EACH
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 2,514,480
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,514,480
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.2%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Item 1 - Security and Issuer
This statement relates to the Common Stock, par value
$.01 per share (the "Common Stock"), of Westwood One, Inc. (the "Issuer") and
the Issuer's Class B Stock which is convertible into Common Stock at anytime on
a share-for-share basis (the "Class B Stock").
The principal executive offices of the Issuer are located
at 9540 Washington Boulevard, Culver City, California 90232.
Item 2 - Identity and Background
(a) Norman J. Pattiz.
(b) 9540 Washington Boulevard, Culver City,
California 90230.
(c) Chairman of the Board of the Issuer.
(d) Mr. Pattiz has never been convicted in a
criminal proceeding.
(e) Mr. Pattiz has never been a party to a
civil proceeding of a judicial or
administrative body of competent jurisdiction
where the result of such proceeding was the
imposition of a judgment, decree or final
order enjoining future violations of, or
prohibiting or mandating activities subject
to, federal or state securities laws or
finding any violation with respect to such
laws.
(f) Mr. Pattiz is a citizen of the United States
of America.
Item 3 - Source and Amount of Funds and Other Consideration
Not applicable.
Item 4 - Purpose of Transaction
This statement relates to the acquisition by Infinity
Network Inc., a Delaware corporation ("INI"), of 5,000,000 shares of Common
Stock plus warrants to acquire additional shares of Common Stock and the Voting
Agreement dated as of February 3, 1994 among Mr. Pattiz, INI and the Issuer
(the "Voting Agreement") which provides for the voting of shares of the
Issuer's capital stock held by Mr. Pattiz and INI, as described in Items 5 and
6 below.
Mr. Pattiz does not have any present intention to acquire
additional securities of the Issuer or dispose of any such securities, although
he may, depending on his evaluation of the Issuer's business and prospects and
upon future developments (including, but not limited to, general economic and
stock market conditions) determine to increase or decrease his position in the
Issuer in the future. Except in connection with the exercise of the warrants
and the Letter Agreement referred to in Items 5 and 6 below, Mr. Pattiz is not
aware of any plans or proposals by INI or its affiliates to acquire additional
securities of the Issuer or dispose of any such securities.
Except as described in Items 5 and 6 below, Mr. Pattiz
does not have any present plan or proposals which relate to or would result in
(i) an extraordinary corporate transaction involving the Issuer or any of its
SM01: 79503.1 Page 3 of 8
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subsidiaries, (ii) a sale or transfer of a material amount of the assets of the
Issuer or any of its subsidiaries, (iii) any change in the present board of
directors or management of the Issuer, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
board, (iv) any material change in the present capitalization or dividend
policy of the Issuer, (v) any other material change in the Issuers business or
corporate structure, (vi) changes in the Issuer's charter, bylaws or
instruments corresponding thereto or other actions which might impede the
acquisition of control of the Issuer by any person, (vii) causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (viii) a class of equity securities
of the Issuer becoming eligible for termination of registration, and (ix) any
action similar to any of those enumerated above.
Item 5 - Interest in Securities of the Issuer
(a) - Aggregate Number and Percentage Owned.
See Items 11 and 13 of the cover pages attached hereto
for the aggregate number and percentage of Common Stock beneficially owned by
Mr. Pattiz.
Mr. Pattiz is the direct beneficial owner of 2,514,480
shares of Common Stock, which includes (i) stock options to purchase 525,000
shares of Common Stock granted pursuant to Mr Pattiz' previous written
employment agreement with the Issuer and stock options to purchase 18,750
shares of Common Stock under the Issuer's 1989 Stock Incentive Plan, and (ii)
351,690 shares of Class B Stock held by Mr. Pattiz.
On February 3, 1994, INI purchased 5,000,000 shares of
Common Stock and a ten-year warrant to purchase up to an additional 3,000,000
shares of Common Stock at an exercise price of $3.00 per share (the "Purchase
Warrant"), for a total purchase price of $15,000,000 pursuant to a Securities
Purchase Agreement dated as of November 4, 1993 between the Issuer and INI (the
"Securities Purchase Agreement"). The Purchase Warrant will become exercisable
in three equal annual installments of 1,000,000 shares commencing on February 3
of each of 1995, 1996 and 1997, subject to the adjustment in certain events as
set forth therein. The Purchase Warrant will become immediately exercisable
with respect to all shares of underlying Common Stock if the Management
Agreement (the "Management Agreement") dated February 3, 1994 between the
Issuer and Infinity Broadcasting Corporation, the sole shareholder of INI
("Infinity"), is terminated for any reason other than for cause.
On February 3, 1994, as incentive compensation under the
Management Agreement, the Issuer issued to INI warrants (collectively, the
"Incentive Warrants") to purchase up to an aggregate of 1,500,000 shares of
Common Stock exercisable as follows: (i) 500,000 shares at $3.00 per share
(subject to adjustment) if the Common Stock reaches a price of $10.00 per share
on at least 20 out of 30 consecutive trading days during which the national
securities exchanges are open for trading ("Trading Days"); (ii) 500,000 shares
at $4.00 per share (subject to adjustment) if the Common Stock reaches a price
of $15.00 per share on at
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least 20 out of 30 Trading Days; and (iii) 500,000 shares at $5.00 per share
(subject to adjustment) if the Common Stock reaches a price of $20.00 per share
on at least 20 out of 30 Trading Days. On February 10, 1994, the last sale
price of the Common Stock as reported on the NASDAQ/National Market System was
$7-3/4. Each Incentive Warrant terminates on the later of February 3, 2004 or
the third anniversary of the date upon which such Incentive Warrant becomes
exercisable, except that each Incentive Warrant will terminate no later than
February 3, 2009.
As described in more detail in Item 6 below, the Issuer,
Mr. Pattiz and INI have entered into the Voting Agreement pursuant to which
INI and Mr. Pattiz have agreed to vote all shares of capital stock of the
Issuer held by them to elect their respective designees to the Board of
Directors of the Issuer. As a result of the Voting Agreement, Mr. Pattiz
beneficially owns with INI 7,514,480 shares of Common Stock or approximately
29.2% of the outstanding Common Stock, having sole dispositive power of
2,514,480 shares and shared voting power with INI over 7,514,480 shares. For
purposes of calculating the percentage of Common Stock owned by Mr. Pattiz,
the 543,750 shares underlying Mr. Pattiz' options and the 351,690 shares of
Mr. Pattiz' Class B stock were included as Common Stock beneficially owned by
Mr. Pattiz and outstanding.
The description of the Securities Purchase Agreement, the
Purchase Warrants and the Incentive Warrants set forth above does not purport
to be complete and is qualified in its entirety by reference to the Securities
Purchase Agreement, the Purchase Warrant and the Incentive Warrants attached
hereto as Exhibits 1, 2, 3, 4 and 5.
(b) Voting and Investment Power.
See Items 7-10 of the cover pages attached hereto and
Item 5(a) above for the number of shares of Common Stock as to which Mr. Pattiz
has the sole or shared power to vote or direct the vote and the sole or shared
power to dispose or direct the disposition.
As described in Item 6 below, Mr. Pattiz shares, in
certain limited circumstances, the power to vote or direct the vote of Common
Stock beneficially owned by Mr. Pattiz with INI. INI is a Delaware corporation
and a wholly owned subsidiary of Infinity, also a Delaware corporation. The
present principal business of INI and Infinity is radio broadcasting and
related businesses. The current address of each of INI's and Infinity's
principal business and office is 600 Madison Avenue, New York, New York 10022.
During the last five years, neither INI nor Infinity has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the last five years neither INI nor Infinity has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction where
the result of such proceeding was the imposition of a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
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(c) Description of Transactions.
See Item 5(a) for a description of the transaction
pursuant to which INI acquired Common Stock.
Mr. Pattiz has not effected transactions involving the
Common Stock in the last 60 days.
(d) Dividends, Proceeds, etc.
To Mr. Pattiz' knowledge, no person other than the direct
beneficial owner of the shares of Common Stock described above has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, any such shares.
(e) Not applicable.
ITEM 6 - Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
AGREEMENTS TO WHICH MR. PATTIZ IS A PARTY.
Pursuant to the Voting Agreement, Mr. Pattiz and INI have
the right to designate persons for election to the Board of Directors of the
Issuer and to provide for the voting of the Class B Stock held by Mr Pattiz.
The Voting Agreement provides that the Issuer will use all reasonable efforts
to appoint and maintain as members of its Board (i) three directors selected by
Mr. Pattiz (the "Pattiz Designees"), (ii) three directors selected by INI (the
"INI Designees") and (iii) three Independent Directors who are not officers or
employees of either the Issuer or INI and who will be designated by a
nominating committee composed of one Pattiz Designee and one INI Designee. The
Issuer, Mr. Pattiz and INI have also agreed that they will not take any action
to alter the authorized number of Board members without the consent of the
other except as provided in the Voting Agreement. Mr. Pattiz and INI have each
agreed to vote all of their shares of capital stock in favor of the election as
directors of the Issuer as described above and as determined pursuant to the
terms of the Voting Agreement.
Mr. Pattiz has agreed that he will vote all of his shares
of Class B Stock in accordance with the recommendation of the majority of the
full incumbent Board on any matters presented to the shareholders of the
Issuer.
INI has agreed that so long as Mr. Pattiz has not been
subject to Removal for Cause (as defined in Mr. Pattiz' employment agreement
with the Issuer), is a director of the Issuer and holds at least one-sixth of
the shares of the Issuer held by him as of February 3, 1994, it will direct the
INI Designees, to the extent consistent with their fiduciary duties to the
Issuer, to vote for the appointment and nomination of Mr. Pattiz as Chairman of
the Board of the Issuer.
Under the terms of the Voting Agreement, at such time as
either Mr. Pattiz or INI no longer holds (or in the case of INI has rights to
acquire) shares of the Issuer representing at least two-thirds of the shares
held by him or held (or acquirable) by INI as of February 3, 1994,
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such party's designation rights with respect to the Board of Directors will be
reduced so that such party will only have the right to designate two members of
the Board and the total number of directors will be reduced by one. Mr.
Pattiz' or INI's designation rights will be further reduced to one designee
with a corresponding reduction in the total Board by one member at such time as
Mr. Pattiz or INI, as the case may be, no longer holds (or in the case of INI
has rights to acquire) shares representing at least one-third of the shares
held by him or held (or acquirable) by INI as of February 3, 1994. The
designation rights of either Mr. Pattiz or INI will be terminated and the total
number of directors of the Issuer further reduced by one when Mr. Pattiz or
INI, as the case may be, no longer holds (or in the case of INI has rights to
acquire) any of the shares of the Issuer which he or INI held (or in the case
of INI had rights to acquire) as of February 3, 1994.
The description of the Voting Agreement set forth above
does not purport to be complete and is qualified in its entirety by reference
to the Voting Agreement attached hereto as Exhibit 6.
AGREEMENTS TO WHICH INI IS A PARTY.
See Item 5(a) for a description of the Securities
Purchase Agreement between the Issuer and INI and the Purchase Warrant and the
Incentive Warrants issued to INI by the Issuer.
INI and the Issuer have also entered into a Registration
Rights Agreement dated as of February 3, 1994, attached hereto as Exhibit 7,
granting certain demand and incidental registration rights with respect to the
shares of Common Stock currently held by INI or acquired upon exercise of the
Purchase Warrant or the Incentive Warrants and providing for certain
restrictions on the transfer of such shares.
The description of the Registration Rights Agreement set
forth above does not purport to be complete and is qualified in its entirety by
reference to the Registration Rights Agreement attached hereto as Exhibit 7.
The Issuer and INI have also entered into a letter
agreement dated February 3, 1994 (the "Letter Agreement") pursuant to which INI
has agreed to purchase all of the Issuer's 9% Convertible Senior Subordinated
Debentures due 2002 (the "Debentures") that are tendered for redemption at a
time when they are eligible for conversion into Common Stock and promptly
convert such Debentures into Common Stock. If all of the outstanding Debentures
have not been converted into Common Stock or purchased by INI on the day
preceding the date fixed for redemption, INI has agreed to purchase from the
Issuer the number of shares of Common Stock into which the outstanding
Debentures then required to be redeemed could have been converted (on the last
day that such Debentures were eligible for conversion), for an aggregate
purchase price equal to the aggregate redemption price of such Debentures.
The description of the Letter Agreement set forth above
does not purport to be complete and is qualified in its entirety by reference
to the Letter Agreement attached hereto as Exhibit 8.
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ITEM 7 - Material to Be Filed as Exhibits
Exhibits
Exhibit 1 Securities Purchase Agreement dated as of November 4, 1993
between the Issuer and INI
Exhibit 2 Purchase Warrant dated as of February 3, 1994 issued by the Issuer
to INI
Exhibit 3 Incentive Warrant dated as of February 3, 1994 issued by the Issuer
to Infinity or its designated affiliate to purchase 500,000 shares
of Common Stock at an exercise price of $3.00 per share
Exhibit 4 Incentive Warrant dated as of February 3, 1994 issued by the
Issuer to Infinity or its designated affiliate to purchase
500,000 shares of Common Stock at an exercise price of
$4.00 per share
Exhibit 5 Incentive Warrant dated as of February 3, 1994 issued by the Issuer
to Infinity or its designated affiliate to purchase 500,000 shares
of Common Stock at an exercise price of $5.00 per share
Exhibit 6 Voting Agreement dated as of February 3, 1994 among the Issuer,
Norman J. Pattiz and INI
Exhibit 7 Registration Rights Agreement dated as of February 3, 1994 between
the Issuer and INI
Exhibit 8 Letter Agreement dated February 3, 1994 between the Issuer and INI
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
February 16, 1994
- -----------------------------------------------
Date
/S/ Norman J. Pattiz
- -----------------------------------------------
Signature
Norman J. Pattiz, Chairman-Westwood One, Inc.
- -----------------------------------------------
Name/Title
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Exhibit 1
SECURITIES PURCHASE AGREEMENT
dated as of
November 4, 1993
by and among
Westwood One, Inc.
and
Infinity Network Inc.
_________________________________________
5,000,000 Shares of
Common Stock
and
Common Stock Purchase Warrants
to purchase up to an aggregate of
3,000,000 shares of
Common Stock
_________________________________________
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TABLE OF CONTENTS
<TABLE>
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 Purchase and Sale of the Securities . . . . . . . . . . . . . . . . . 2
1.1 Purchase and Sale of the Securities . . . . . . . . . . . . . . . . . 2
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2 Representations and Warranties of the Company . . . . . . . . . . . . 2
2.1 Organization; Articles and Bylaws . . . . . . . . . . . . . . . . . . 2
2.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Authorization and Enforceability . . . . . . . . . . . . . . . . . . 3
2.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Financial Statements and SEC Reports. . . . . . . . . . . . . . . . . 4
2.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . 5
2.9 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . 6
2.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.11 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Employment, Severance and Termination Agreements . . . . . . . . . . 8
2.14 Environmental Laws and Regulations . . . . . . . . . . . . . . . . . 8
2.15 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . 9
2.16 Westinghouse Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.17 Bank Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.18 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.19 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3 Representations and Warranties of Purchaser . . . . . . . . . . . . . 10
3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Authorization and Enforceability . . . . . . . . . . . . . . . . . . 10
3.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.5 Unregistered Securities . . . . . . . . . . . . . . . . . . . . . . . 11
3.6 Status and Knowledge . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4 Conduct of Business Pending Closing . . . . . . . . . . . . . . . . . 11
4.1 Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 No Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 No Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Mortgages, Liens and Other Encumbrances . . . . . . . . . . . . . . . 12
</TABLE>
i
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TABLE OF CONTENTS
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<S> <C> <C> <C>
4.6 Waiver of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . 12
4.9 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.10 Access by Infinity and the Purchaser . . . . . . . . . . . . . . . . 12
4.11 Copies of Filings, Etc. . . . . . . . . . . . . . . . . . . . . . . . 13
4.12 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5 Conditions Precedent to Purchaser's Obligations . . . . . . . . . . . 13
5.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . 14
5.2 Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . 14
5.3 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Closing of Acquisition . . . . . . . . . . . . . . . . . . . . . . . 14
5.5 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.7 Certain Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.8 Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . 14
Section 6 Conditions Precedent to the Company's Obligations . . . . . . . . . . 15
6.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . 15
6.2 Reciprocal Conditions . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Proceedings and Documents . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Closing of Acquisition . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7 Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 No Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Legend Requirement . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8 Survival; Indemnification . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Survival of Representations and Warranties . . . . . . . . . . . . . 16
8.2 General Indemnification . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.3 Waiver and Amendment . . . . . . . . . . . . . . . . . . . . . . . . 19
9.4 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -i-
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ii
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is
entered into as of November 4, 1993, by and between Westwood One, Inc., a
Delaware corporation (the "Company"), and Infinity Network Inc., a Delaware
corporation ("Purchaser").
R E C I T A L S
A. Pursuant to the terms of that certain Stock Purchase
Agreement (the "Purchase Agreement") dated of even date herewith among Unistar
Communications Group, Inc., a Delaware corporation ("UCG"), Unistar Radio
Networks, Inc., a Delaware corporation and a wholly-owned subsidiary of UCG
("Unistar"), Infinity Broadcasting Corporation, a Delaware corporation and
owner of all of the issued and outstanding stock of the Purchaser ("Infinity"),
and the Company, the Company agreed to acquire the stock of Unistar (the
"Acquisition"). The consummation of the transactions contemplated by this
Agreement is a condition to the obligations of the Company, UCG and Infinity
under the Purchase Agreement.
B. In connection with the Acquisition, the Company and
Infinity will enter into a Management Agreement (the "Management Agreement")
pursuant to which Infinity will manage the business and operations of the
Company (including the business and operations acquired pursuant to the
Acquisition), subject to the terms and conditions thereof.
C. Accordingly, in order to facilitate the consummation
of the Acquisition, the Company wishes to sell to Purchaser, and Purchaser
desires to purchase from the Company, upon the terms and conditions set forth
herein, 5,000,000 shares (the "Shares") of the Company's Common Stock, par
value $0.01 per share (the "Common Stock"), and a common stock purchase warrant
to purchase up to an aggregate of 3,000,000 shares of Common Stock at a per
share exercise price of $3.00, substantially in the form of Exhibit A attached
hereto (the "Warrant"). The Shares and the Warrant are sometimes referred to
herein as the "Securities."
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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Section 1
Purchase and Sale of the Securities
1.1 Purchase and Sale of the Securities. Upon the terms
and subject to the conditions contained herein and in reliance on the
representations and warranties contained herein, Purchaser agrees to purchase
the Securities from the Company and the Company agrees to sell the Securities
to Purchaser.
1.2 Purchase Price. The aggregate purchase price for the
Shares and the Warrant shall be $15,000,000.
1.3 Closing. The closing of the sale of the Securities
(the "Closing") shall occur concurrent with the closing of the Acquisition at
the location of such Acquisition closing. The date of the Closing is sometimes
herein referred to as the "Closing Date." At the Closing, (a) the Company
shall deliver to Purchaser a stock certificate registered in Purchaser's name
evidencing the Shares and an executed Warrant (for delivery by the Purchaser to
Infinity or its designated affiliate), and (b) Purchaser shall deliver the
purchase price specified in Section 1.2 to the Company by a wire transfer of
same day funds.
Section 2
Representations and Warranties of the Company
The Company represents and warrants to Purchaser as follows:
2.1 Organization; Articles and Bylaws. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite power and authority to
carry on its business as currently conducted, to own and hold its properties,
to enter into this Agreement and the Purchase Agreement, the Management
Agreement, the Registration Rights Agreement attached as Exhibit E to the
Purchase Agreement, the Voting Agreement attached as Exhibit D to the Purchase
Agreement and the Warrant (collectively, the "Other Agreements"), to offer,
sell and issue the Securities and to carry out and otherwise perform its
obligations hereunder and thereunder. The Company is duly qualified or
licensed to do business as a foreign corporation in good standing in all other
jurisdictions in which the ownership of its property or the conduct of its
business requires such qualification, except for such jurisdictions wherein the
failure to be so qualified would not materially and adversely affect the
Company.
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2.2 Capitalization.
(a) The total authorized capital stock of the
Company consists of 117,000,000 shares of Common Stock, 3,000,000 shares of
Class B Stock, par value $.01 per share (the "Class B Stock"), and 10,000,000
shares of Preferred Stock, par value $.01 per share. At the date of this
Agreement, the only outstanding stock of the Company is 14,748,624 shares of
Common Stock and 351,733 shares of Class B Stock. Immediately following the
Closing, all of the issued and outstanding shares of Common Stock, including,
without limitation, the Shares, and of Class B Stock will be duly authorized
and validly issued, fully paid and nonassessable and free of any preemptive or
other similar rights to subscribe for or to purchase any shares of capital
stock of the Company. Immediately following the Closing, the Purchaser will
receive the Shares free and clear of any claims, liens, rights, restrictions,
security interests or encumbrances of any kind, other than liens or
encumbrances imposed as a result of actions of Purchaser. Except as
contemplated by the Acquisition and the transactions contemplated thereby, or
by this Agreement and the Warrant, and except as described in the Company's
Annual Report to the Securities and Exchange Commission (the "Commission") on
Form 10-K for the year ended November 30, 1992 (the "1992 10-K"), or as shown
on Schedule 2.2, there are (i) no outstanding securities or obligations of the
Company convertible or exchangeable into any equity securities of the Company,
(ii) no outstanding subscriptions, warrants, rights, options, contracts, calls,
commitments, agreements or arrangements of any kind whatsoever to subscribe for
or purchase, or obligations to issue, any such equity securities or any such
convertible or exchangeable securities or obligations and (iii) no voting
trusts or other agreements or undertakings to which the Company or Norman J.
Pattiz is a party with respect to the voting of the capital stock of the
Company other than the Voting Agreement. No person has any preemptive or
similar rights with respect to any issuance of equity securities by the
Company. Except as set forth on Schedule 2.2, the Company is not a party to
any agreement that grants any person demand or piggyback registration rights
with respect to any securities of the Company.
(b) When the Warrant is exercised in whole or in
part, the shares of Common Stock issued on exercise of the Warrant pursuant to
the terms thereof will be duly authorized and validly issued, fully paid and
non-assessable, and Purchaser will receive those shares of Common Stock free
and clear of any liens or encumbrances, other than liens or encumbrances
imposed as a result of actions of Purchaser.
2.3 Authorization and Enforceability. The execution and
delivery of this Agreement and the Other Agreements by the Company, and the
consummation by the Company of the transactions contemplated hereby and
thereby, have been duly authorized by the
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Board of Directors of the Company, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement and the Other
Agreements or the transactions contemplated hereby or thereby, other than the
approval thereof by the stockholders of the Company as provided in Section 5.8
of the Purchase Agreement (which approval is a condition to the obligations of
the Company hereunder and under the Purchase Agreement). This Agreement and
the Stock Purchase Agreement constitute, and the other Other Agreements shall
upon execution and delivery by the Company at the Closing constitute, the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms.
2.4 Litigation. There are no actions, suits or other
legal proceedings pending or, to the best knowledge of the Company, threatened,
against the Company that might have a material adverse effect on the Company,
or which might seek to restrain, enjoin, prevent or hinder the Company from
performing its obligations under this Agreement or any of the Other Agreements,
or the consummation of the transactions contemplated hereby or thereby.
2.5 Consents. All consents, qualifications, orders,
approvals or authorizations of, or filings with, any governmental authority
required in connection with the Company's execution, delivery and performance
of this Agreement and the Other Agreements, the offer, sale and issuance of the
Securities by the Company and the consummation of any other transaction
contemplated on the part of the Company hereby and by the Other Agreements,
have been duly obtained and are currently effective.
2.6 No Conflicts. Neither the execution of this Agreement
or any of the Other Agreements, nor the offer, sale and issuance of the
Securities or the performance by the Company of the transactions contemplated
hereby or thereby, will conflict with the terms of, or accelerate the vesting
or payment of any obligation under, (a) the Company's Certificate of
Incorporation or Bylaws or (b) any mortgage, indenture, contract, agreement,
instrument, judgment, decree, order, statute, rule or regulation to which the
Company is subject.
2.7 Financial Statements and SEC Reports. The Company has
filed with the Commission all reports and documents required to be so filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in
respect of all periods subsequent to November 30, 1992, all of which have
complied in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder. The Company has delivered to Purchaser true and correct copies of
(a) the Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1991 and the fiscal year ended November 30, 1992 (the "1992 10-K"), (b) the
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Company's quarterly reports on Form 10-Q for the periods ended February 28,
1993, May 31, 1993 and August 31, 1993, (c) the Company's proxy statements
relating to all meetings of its stockholders held during 1991, 1992 and 1993,
and (d) all other reports and other documents filed by the Company with the
Commission pursuant to the Exchange Act since November 30, 1992 (collectively,
the "SEC Filings"). As of their respective dates of filing, the SEC Filings
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, (i) the financial statements
contained in the 1992 10-K (including the notes thereto) were prepared in
accordance with generally accepted accounting principles consistently applied
(except as otherwise stated in the report of Price Waterhouse, independent
accountants to the Company, dated February 15, 1993) and fairly present the
consolidated financial condition of the Company and its subsidiaries, and the
consolidated results of operations of the Company and its subsidiaries, at the
dates, and for the periods, to which they relate, and (ii) the financial
information contained in the Company's quarterly reports on Form 10-Q for the
periods ended February 28, 1993, May 31, 1993 and August 31, 1993 has been
derived from consolidated financial statements of the Company and its
subsidiaries which were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with the manner in which
they were applied in preparing the financial statements included in the 1992
10-K, and fairly present the consolidated financial condition, and consolidated
results of operations, of the Company and its subsidiaries at the dates, and
for the periods, to which they relate, subject to condensation, the absence of
notes thereto and normal year-end adjustments.
2.8 Absence of Certain Changes. Since August 31, 1993,
there has not occurred: (a) any material adverse change in the Company or its
financial condition, results of operations, properties or assets; (b) any sale
or other disposition of any assets of the Company, other than sales or
dispositions made in the ordinary course of business and consistent with prior
practice and other than sales or dispositions of assets being held for sale as
of August 31, 1993 (including the Company's WOSGI Subsidiaries (as defined in
Section 2.16) and the Company's AQLD facility); (c) any creation of a mortgage,
pledge, security interest, encumbrance, lien or charge of any kind upon any
properties or assets of the Company except in the ordinary course of business
and consistent with prior practice and except with regard to any liens or
encumbrances created pursuant to the Restated Westinghouse Debt (as defined
below); (d) any material write-offs or write-downs of accounts receivable or
other assets of the Company; (e) any material borrowings relating to the
Company; (f) any damage, destruction or loss, which is not
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adequately covered by insurance, which could materially and adversely affect
the Company; (g) any adoption or material modification of any Employee Benefit
Plan (as defined in Section 2.11) made to, for or with any employees of the
Company; (h) except with respect to the Employment Agreement of Norman J.
Pattiz dated October 18, 1993 (the "Pattiz Agreement"), any material increase
in compensation payable or to become payable by the Company to any of its
employees or in benefits under any Employee Benefit Plan, in each case other
than increases made in the ordinary course of business, and no severance
payment has been made or promised to any such employees by the Company; (i) any
material change in the method of allocation of expenses, liabilities or income
of the Company or any other material change in the method of accounting or
accounting practices of the Company; (j) any material amendment, termination,
waiver or cancellation of any substantial right relating to the Company other
than in the ordinary course of business; (k) any material capital expenditures
or commitments relating to the Business for any addition to property, plant or
equipment; (l) declaration, payment or set aside of any sum or property for any
dividend or other distribution to its stockholders, purchase or redemption of
any shares of its capital stock or any option, warrant or right to purchase any
such capital stock or reclassified its capital stock; (m) any issuance of
equity securities or securities convertible into or exchangeable for any equity
securities of the Company, except with regard to the issuance of options to Mr.
Pattiz in accordance with the terms of the Pattiz Agreement and options issued
to employees of the Company in the ordinary course of business; (n) any
transaction with an affiliate of the Company other than in the ordinary course
of business and on terms no less favorable than could be obtained on an
arm's-length basis; and (o) any agreement to take any action described in this
Section 2.8, other than borrowing agreements to obtain financing for the
Acquisition. Since August 31, 1993, the Company has conducted its business in
the ordinary course consistent with past practice.
2.9 No Undisclosed Liabilities. To the Company's best
knowledge, as of August 31, 1993, there was no liability or obligation of the
Company of any nature, whether absolute, accrued, contingent or otherwise,
which, individually or in the aggregate, is material to the Company, other than
liabilities and obligations reflected or reserved against on the balance sheet
included in the quarterly report on Form 10-Q for the period ended August 31,
1993, liabilities and obligations not required by generally accepted accounting
principles to be disclosed or reserved against on such balance sheet and
liabilities and obligations relating to contracts not yet required to be
performed as of August 31, 1993. Since August 31, 1993, the Company has not
assumed or incurred any material liabilities or obligations, except liabilities
or obligations assumed or
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incurred in the ordinary course of business consistent with past practice.
2.10 Taxes. To the Company's best knowledge, the Company
has filed when due all federal, state, local and foreign tax returns required
by applicable law to be filed with respect to the Company's operations and
assets and paid all amounts set forth thereon; there is no action, suit,
proceeding, investigation, audit or claim now pending against or with respect
to the Company in respect of any tax or assessment, nor is any claim for
additional tax or assessment asserted or, to the Company's best knowledge,
threatened by any such authority; and all material tax liabilities with respect
to the Company (including, without limitation, federal, state, local, foreign,
and other income, franchise, capital stock, employee's income withholding,
foreign pension withholding, social security, unemployment, disability,
payroll, real property, personal property, sales, use, transfer, or other tax,
plus any interest, penalties or other charges in respect of the foregoing) have
been or will be paid for all periods up to and including August 31, 1993 or
have been accrued, reserved against or reflected in the balance sheet included
in the financial statements set forth in the Company's quarterly report on form
10-Q for the quarter ended August 31, 1993 (the "August Balance Sheet").
2.11 Compliance with Law. The Company is not in violation
of any federal, state or local laws, ordinances, regulations or orders
applicable thereto, including without limitation, any applicable building,
zoning, health, sanitation, safety, labor relations or similar laws,
ordinances, regulations or orders relating to the Company, except for
violations which in the aggregate would not have a material adverse effect on
the Company. To the best knowledge of the Company, the Company has not
received any complaint from any governmental authority, and none is threatened,
alleging that the Company has violated any such law, ordinance, regulation or
order in such a manner as would have a material adverse effect on the Company.
The Company owns and possesses all licenses, permits and other authorizations
required by law in connection with the operation of its business, except for
such licenses, permits and other authorizations the failure of which to own or
possess, individually and in the aggregate, would not have a material adverse
effect on the Company.
2.12 Employee Benefit Plans. Schedule 2.12 contains a
complete list of all Employee Benefit Plans. To the best knowledge of the
Company, the Company has timely made all contributions which it was required to
make for each Employee Benefit Plan under the terms of such plan and applicable
law and the provisions of such plan, and all benefit payments due and payable
to plan participants under each Employee Benefit Plan have been made or are
being appropriately processed. To the best
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knowledge of the Company, the Company is in all material respects in compliance
with, and each Employee Benefit Plan complies in all material respects with,
ERISA, and as of August 31, 1993, the Company had no material liability under
any such Employee Benefit Plan which was not reflected OR RESERVED AGAINST on
the August Balance Sheet or in the notes thereto. For the purposes hereof, the
term "Employee Benefit Plans" includes all plans, funds, programs, policies,
fringe benefits, perquisites, arrangements, practices, customs and
understandings providing benefits of economic value to any employee, former
employee, consultant, former consultant or present or former beneficiary,
dependent or assignee of any such party, other than regular salary, wages,
commissions or other compensation paid substantially concurrently with the
performance of the services for which paid. Without limitation, the term
"Employee Benefit Plans" includes all employee welfare benefit plans within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and all employee pension benefit plans within the meaning
of Section 3(2) of ERISA.
2.13 Employment, Severance and Termination Agreements.
Except as set forth in Schedule 2.13, the Company is not a party to any
executory employment, termination or severance pay agreement, contract or
understanding with any employee or former employee. The transactions
contemplated by this Agreement and the Other Agreements will not result in the
acceleration, vesting or extension of, nor will it otherwise affect, the rights
of any employee or former employee under any such agreement, contract or
understanding, any award pursuant to any employee benefit or equity-based
compensation plan, or any other compensatory arrangement. The Company has
provided to the Purchaser true and complete copies or descriptions of all
agreements, contracts and understandings listed in Schedule 2.13.
2.14 Environmental Laws and Regulations. To its best
knowledge, the Company is in material compliance with, and has no material
liability under, all applicable federal, state and local laws and regulations
relating to product registration, pollution control and environmental
contamination including, but not limited to, all laws and regulations governing
the generation, use, collection, discharge, or disposal of Hazardous Materials
(as defined below) and all laws and regulations with regard to record keeping,
notification and reporting requirements respecting Hazardous Materials. To the
best knowledge of the Company, (A) the Company has not been alleged to be in
violation of, or has been subject to any administrative or judicial proceeding
pursuant to, such laws or regulations either now or any time during the past
three years, and (B) there are no Claims (as defined below) against the Company
relating to environmental matters including, but not limited to, any Claim
arising from past or present environmental practices asserted under any
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Environmental Laws (as defined below), which may have a material adverse effect
on the Company.
For purposes of this Section 2.14, the following terms shall
have the following meanings:
(a) "Hazardous Materials" shall mean asbestos,
petroleum products, underground tanks of any type and all other materials
defined as "hazardous substances," "hazardous wastes," "toxic substances" or
"solid wastes," or otherwise listed or regulated pursuant to (collectively, the
"Environmental Laws"): the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., and any amendments
thereto; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., and any amendments thereto; the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801 et seq.; and any other similar federal, state or local
statute, regulation, ordinance, order, decree, or any other law, common law
theory or reported decision of any state or federal court, as currently in
effect, relating to, or imposing liability or standards of conduct concerning,
any hazardous, toxic or dangerous waste, substance or material.
(b) "Claim" shall mean any and all claims,
demands, causes of actions, suits, proceedings, administrative proceedings,
losses, judgments, decrees, debts, damages, liabilities, court costs,
attorneys' fees and any other expense incurred, assessed or sustained by or
against the Company or any of its subsidiaries.
2.15 Transactions with Affiliates. Except as set forth on
Schedule 2.15, no stockholder, director, officer or employee of the Company, or
any member of his or her immediate family or any other of its, his or her
affiliates, owns or has a five percent (5%) or more ownership interest in any
corporation or other entity that is or was during the last one year a party to,
or in any property which is or was the subject of, any material contract,
agreement or understanding, business arrangement or relationship with the
Company.
2.16 Westinghouse Debt. The obligations of the parties to
that certain Amended and Restated Credit Agreement dated as of October 17, 1993
(the "Restated Westinghouse Debt") among Westwood One Stations Group, Inc.,
Radio & Records, Inc., Westwood One Stations-LA, Inc. (collectively, the "WOSGI
Subsidiaries") and Westinghouse Electric Corporation is nonrecourse to the
Company and all of its subsidiaries other than the WOSGI Subsidiaries, and no
default or event of default under such indebtedness (other than with respect to
the bankruptcy or insolvency of a WOSGI Subsidiary), or acceleration of such
indebtedness following any such default or event of default, shall cause a
default or event of default under any other
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indebtedness of the Company or any subsidiary of the Company other then the
WOSGI Subsidiaries. The indebtedness under the Restated Westinghouse Debt is
not secured by any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind on any of the properties or assets of the Company, other
than assets of the WOSGI Subsidiaries and on the stock thereof.
2.17 Bank Debt. The Company's indebtedness for borrowed
money, including any capital lease obligations incurred after the date of this
Agreement (but specifically excluding capital lease obligations incurred prior
to the date of this Agreement), guarantees and letters of credit and similar
instruments, but not including the Company's 9% Convertible Senior Subordinated
Debentures maturing 2002 and the Company's 6-3/4% Convertible Subordinated
Debentures maturing 2011, does not exceed $15,000,000.
2.18 Brokers. The Company has paid or shall duly pay any
brokerage commissions, investment banker fees or similar compensation in
connection with the transactions contemplated by this Agreement which it has
agreed to pay.
2.19 Disclosure. This Agreement does not contain any
untrue statement of a material fact and does not omit to state a material fact
necessary in order to make the statements contained herein not misleading in
light of the circumstances under which they are made.
Section 3
Representations and Warranties of Purchaser
Purchaser represents and warrants to the Company as follows:
3.1 Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to enter into
this Agreement and to carry out and otherwise perform its obligations
hereunder.
3.2 Authorization and Enforceability. This Agreement has
been duly executed and delivered by Purchaser and constitutes a legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general
equitable principles.
3.3 No Conflicts. The execution of this Agreement and the
performance by Purchaser of the transactions contemplated
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hereby do not conflict with the terms of (a) Purchaser's Certificate of
Incorporation or Bylaws or (b) any mortgage, indenture, contract, agreement,
instrument, judgment, decree, order, statute, rule or regulation to which
Purchaser is subject.
3.4 Investment Intent. Purchaser is acquiring the
Securities for investment purposes only, and not with a present view for the
resale thereof in connection with any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
3.5 Unregistered Securities. Purchaser understands that
the Securities have not been registered under the Securities Act and that,
accordingly, the Securities will not be transferable except pursuant to an
exemption from the registration and prospectus delivery requirement of the
Securities Act or upon satisfaction of such requirement. Purchaser further
acknowledges that the Securities will be subject to the transfer restrictions
set forth in Section 6 below and further acknowledges and agrees that the
instruments and certificates evidencing the Securities and each instrument or
certificate issued in exchange therefor will bear a legend indicating such
restriction on transfer.
3.6 Status and Knowledge. Purchaser represents to the
Company that it is an "accredited investor" (as such term is defined in Rule
501 of Regulation D under the Securities Act). Purchaser acknowledges that it
has been given the opportunity to ask questions and receive answers from the
Company's officers and directors concerning the terms and conditions of the
transactions contemplated hereby, the operations, financial condition and
prospects of the Company and the accuracy of the information contained in any
document provided to Purchaser by the Company.
Section 4
Conduct of Business Pending Closing
From the date of this Agreement until the Closing, the Company
covenants that, except as otherwise consented to in writing by the Purchaser
(which consent shall not be unreasonably withheld), it shall either satisfy or
cause to be satisfied the following:
4.1 Ordinary Course. The Company shall carry on its
business in the ordinary course in substantially the same manner as heretofore
conducted and shall promptly advise the Purchaser of any material, adverse
change in the Company's financial condition or results of operations. The
Company shall not take, or permit to be taken, any action described in Section
2.8 of this Agreement.
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4.2 No Acquisitions. The Company shall not acquire or
agree to acquire a substantial portion of the assets of any business or any
corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets which are
material in the aggregate to the Company.
4.3 No Dispositions. The Company shall not sell, lease
or otherwise dispose of any assets except in the ordinary course of business
consistent with past practice.
4.4 Employees. The Company shall not grant any material
increase in the compensation payable to any of its employees or any material
benefit increase in any Employee Benefit Plan, except for increases made in the
ordinary course of business consistent with past practice.
4.5 Mortgages, Liens and Other Encumbrances. The Company
shall not create, assume or incur any mortgage, lien, pledge or other
encumbrance of any kind in respect of any property other than mortgages, liens,
pledges or other encumbrances incurred in the ordinary course of business and
other than liens and encumbrances created in connection with the Restated
Westinghouse Debt.
4.6 Waiver of Rights. The Company shall not amend,
terminate or waive any right of substantial value other than in the ordinary
course of business consistent with past practice.
4.7 Material Agreements. The Company shall not enter
into any lease for property or equipment or any agreement material to the
Company, except in the ordinary course of business consistent with past
practice.
4.8 Capital Expenditures. The Company shall not make or
commit to any capital expenditures or commitments exceeding $100,000 in the
aggregate.
4.9 Agreements. The Company shall not commit or agree,
whether in writing or otherwise, to take any action prohibited by this Section
4.
4.10 Access by Infinity and the Purchaser. The Company
agrees that each of Infinity and the Purchaser, and their designated
representatives, attorneys, auditors and agents, shall have reasonable access
following reasonable notice to the books of account, financial and corporate
records, contracts, leases, tax returns, properties and other assets of the
Company and to make copies of such corporate records, reports and other
documents as they may request at any reasonable time during regular business
hours prior to the Closing, and the Company agrees to use all reasonable
efforts to cooperate with such
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persons in conducting such examination, except that none of Infinity, the
Purchaser nor any of their designated representatives, attorneys, auditors and
agents shall have access to information regarding advertisers, talent
agreements or affiliation agreements. The Company's officers, employees and
accountants will take such reasonable steps as may be necessary to furnish such
additional financial and operating data and other information (subject to the
exception in the previous sentence) as Infinity or the Purchaser may from time
to time reasonably request. Each of Infinity and the Purchaser and their
designated representatives, attorneys, auditors and agents shall keep all such
information provided pursuant to this Section 4.10 or otherwise confidential
pursuant to that certain letter agreement dated August 20, 1993, between the
Company and Infinity regarding the confidentiality of information supplied by
the Company to Infinity.
4.11 Copies of Filings, Etc. From the date of this
Agreement until the Closing, the Company will deliver to the Purchaser,
promptly upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available generally by the
Company to the holders of its publicly-traded securities, of all regular and
periodic reports and all registration statements and prospectuses filed by the
Company with the Securities and Exchange Commission and of all press releases
and other statements made available generally by the Company to the public
concerning material developments in the business of the Company or its
subsidiaries.
4.12 No Solicitation. Except as contemplated by the terms
of this Agreement, neither the Company nor any of its officers, directors,
employees, affiliates, representatives or agents shall, directly or indirectly,
solicit or authorize the solicitation of, or initiate discussions or
negotiations with, or, except to the extent required by their fiduciary duties,
participate in discussions or negotiations or otherwise cooperate in any way
with or provide any information to any person concerning (a) the purchase,
lease or other acquisition of all or a substantial portion of the assets of the
Company, (b) the purchase of any of the shares of capital stock of the Company
or (c) the merger, consolidation or other combination of the Company with
another person.
Section 5
Conditions Precedent to Purchaser's Obligations
The obligation of Purchaser to purchase the Securities on the
Closing Date, or at any time thereafter, is subject to the timely fulfillment
on or prior to the Closing Date of the following conditions, any of which may
be waived in whole or in part by Purchaser and which if not waived shall
relieve Purchaser
13
<PAGE> 17
of its obligation to purchase the Securities and permit Purchaser at its option
to terminate this Agreement without any liability or obligation on the part of
Purchaser:
5.1 Accuracy of Representations and Warranties. The
representations and warranties made or given by the Company in this Agreement
or in any written instrument delivered to Purchaser pursuant to this Agreement
shall be true, correct and complete in all material respects on the date hereof
and on and as the Closing Date as though such representations and warranties
were made and given on and as of the Closing Date; the Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by it on or prior to the Closing Date; and at the Closing,
there shall be delivered to the Purchaser a certificate signed by authorized
officers of the Company to such effect.
5.2 Compliance with Securities Laws. The offering,
issuance and sale of the Securities under this Agreement shall comply with all
applicable requirements of federal and state securities laws.
5.3 Legal Opinion. Purchaser shall have received the
opinion of counsel to the Company in form and substance reasonably satisfactory
to the Purchaser dated as of the Closing and covering such matters as may
reasonably be requested thereby.
5.4 Closing of Acquisition. The Closing of the
Acquisition shall have concurrently occurred and all conditions to the Seller's
obligations thereunder shall have been satisfied or waived by the Seller.
5.5 Stockholder Approval. The conditions set forth in
Section 5.8 of the Purchase Agreement shall have been satisfied.
5.6 HSR Act. All provisions under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, shall have been complied with,
and the waiting period thereunder shall have expired or terminated.
5.7 Certain Proceedings. The Purchaser shall be
reasonably satisfied that the Company will incur no material liability directly
or indirectly arising out of, relating to or in connection with the matters
described in Item 3 of the 1992 10-K.
5.8 Proceedings and Documents. All corporate and other
proceedings and actions taken in connection with the transactions contemplated
hereby and all certificates, agreements, instruments and documents mentioned
herein or
14
<PAGE> 18
incident to any such transactions shall be reasonably satisfactory in form and
substance to Purchaser.
Section 6
Conditions Precedent to the Company's Obligations
The obligation of the Company to sell the Securities on the
Closing Date, or at any time thereafter, is subject to the timely fulfillment
on or prior to the Closing Date of the following conditions, any of which may
be waived in whole or in part by the Company, and which if not waived shall
relieve the Company of its obligation to sell the Securities, and permit the
Company at its option to terminate this Agreement without any liability or
obligation on its part:
6.1 Accuracy of Representations and Warranties. The
representations and warranties made or given by Purchaser in this Agreement or
in any written instrument delivered to the Company pursuant to this Agreement
shall be true, correct and complete in all material respects on and as of the
Closing Date as though such representations and warranties were made and given
on and as of the Closing Date; and Purchaser shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by Purchaser on or prior to the Closing Date.
6.2 Reciprocal Conditions. The conditions set forth in
Sections 5.2, 5.5 and 5.6 hereof shall have been satisfied or waived by the
Company.
6.3 Proceedings and Documents. All corporate and other
proceedings and actions taken in connection with the transactions contemplated
hereby and all certificates, agreements, instruments and documents mentioned
herein or incident to any such transactions shall be reasonably satisfactory in
form and substance to the Company.
6.4 Closing of Acquisition. The Closing of the
Acquisition shall have concurrently occurred and all conditions to the
Company's obligations thereunder shall have been satisfied or waived by the
Company.
Section 7
Transfer Restrictions
The Shares, the Warrant and the shares of Common Stock
issuable upon exercise of the Warrant (the "Warrant Shares") shall be subject
to the following restrictions on transfer:
15
<PAGE> 19
7.1 No Transfer. None of the Shares, the Warrant nor the
Warrant Shares may be sold, transferred, pledged, hypothecated, assigned or
otherwise encumbered or disposed of (collectively, a "Transfer") unless (a) the
prior written consent of the Company has been obtained, (b) the Transfer is
made pursuant to an effective registration statement under the Securities Act
or pursuant to Rule 144 or Rule 144A under the Securities Act or (c) the
Purchaser shall have delivered to the Company a written opinion of legal
counsel reasonably satisfactory to the Company and to the Company's legal
counsel that an exemption from the registration requirements of the Securities
Act is available and that the proposed Transfer would comply with all
applicable federal and state securities laws. Any attempted Transfer that
fails to comply with this Section 6.1 shall be null and void, ab initio.
7.2 Legend Requirement. Each of the Shares, the Warrant
and the Warrant Shares shall bear a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.
SUCH SECURITIES ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
SECURITIES PURCHASE AGREEMENT BETWEEN THE HOLDER HEREOF AND
THE ISSUER, A COPY OF WHICH IS AVAILABLE AT THE ISSUER'S
PRINCIPAL OFFICES, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, ASSIGNED OR OTHERWISE ENCUMBERED OR DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
So long as Section 8 of the Voting Agreement remains in effect, each of the
Shares and the Warrant Shares shall also contain a legend setting forth the
restrictions called for thereby.
Section 8
Survival; Indemnification
8.1 Survival of Representations and Warranties. The
representations and warranties contained in Sections 2 and 3 of this Agreement
shall survive the Closing hereunder and shall continue in effect,
notwithstanding any investigation by or on behalf of any of the parties hereto,
until the earlier to occur of (a) eighteen (18) months following the Closing
and (b) ninety (90) days after the receipt by the Purchaser of the Company's
audited financial statements for the fiscal year ended November 30, 1994 (the
"Cutoff Date"), except that any representation or warranty which would
otherwise terminate after the Cutoff Date
16
<PAGE> 20
shall survive until the final adjudication or settlement of any such matter if
notice of any inaccuracy or breach thereof, including a reasonably detailed
description of such alleged inaccuracy or breach, shall have been given in
writing to the Company or the Purchaser, as the case may be, on or prior to the
Cutoff Date.
8.2 General Indemnification.
(a) Subject to the provisions of Section 8.1
above, the Company shall indemnify and hold harmless the Purchaser from and
against, and shall reimburse the Purchaser on demand for, any claim, loss,
liability, damage or expense, including reasonable attorneys' fees and costs of
appeals (collectively, "Damages"), resulting from any material breach of any
representation or warranty or agreement or covenant on the part of the Company
under or pursuant to this Agreement. Notwithstanding the foregoing, the
Company shall be responsible for any Damages claimed for any breach of any
representation or warranty herein, or indemnification with respect thereto,
only to the extent that the aggregate amount of such Damages claimed for all of
such breaches exceeds $150,000. For purposes of the foregoing, the Purchaser's
Damages in respect of any loss, liability, damage or expense suffered by the
Company shall be (i) to the extent of the Set-Off Amount (as defined in the
next sentence), the greater of (x) Purchaser's actual Damages and (y) 25% of
the dollar amount of such Damages suffered by the Company, and (ii) to the
extent of amounts in excess of the Set-Off Amount, Purchaser's actual Damages.
"Set-Off Amount" shall mean the sum of all amounts paid or payable to the
Company by Infinity or UCG as indemnity pursuant to Section 7.2(a) of the
Purchase Agreement.
(b) The Purchaser shall indemnify and hold
harmless the Company from and against, and shall reimburse such parties on
demand for, any Damages resulting from any breach of any representation,
warranty, agreement or covenant on the part of the Purchaser under or pursuant
to this Agreement. Notwithstanding the foregoing, the Purchaser shall be
responsible for any Damages claimed for any breach of any representation or
warranty herein, or indemnification with respect thereto, only to the extent
that the aggregate amount of such Damages claimed for all of such breaches
exceeds $150,000, provided that the Purchaser's aggregate obligations under
this Section 8.2(b) shall not exceed $15,000,000.
(c) If a third party asserts a claim against any
indemnified party for which indemnification would be available under this
Section 8.2 hereof (a "Claim"), the indemnified party shall promptly give
notice of such Claim, describing such Claim with reasonable specificity, to the
indemnifying party; provided, however, that the failure to give such notice
shall not affect
17
<PAGE> 21
the right of the indemnified party to indemnification hereunder except to the
extent that such failure prejudices the ability of the indemnifying party to
defend any Claim or take any other remedial action. The indemnifying party
shall be entitled to assume the defense of such Claim, including the employment
of counsel reasonably satisfactory to the indemnified party; provided, however,
that in the event that the indemnified party reasonably determines in good
faith that its interests with respect to such Claim cannot appropriately be
represented by the indemnifying party, such indemnified party shall have the
right to retain separate counsel and to have its expenses reimbursed promptly
with respect to such Claim. In addition, in the event that such indemnifying
party, within a reasonable time after notice of any such Claim, fails to defend
any indemnified party, such indemnified party will (upon further notice to such
indemnifying party) have the right to undertake its defense of such Claim for
the account of such indemnifying party and to have its expenses reimbursed
promptly with respect to such Claim. Regardless of which party is controlling
the defense of any Claim, (i) both the indemnifying party and the indemnified
party shall act in good faith and (ii) no settlement of such Claim may be
agreed to without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld. The controlling party shall deliver, or
cause to be delivered, to the other party copies of all correspondence,
pleadings, motions, briefs, appeals or other written statements relating to or
submitted in connection with the defense of any such Claim, and timely notices
of any hearing or other court proceeding relating to such Claim.
(d) The exclusive remedy available to a party
hereto in respect of the matters covered by subparagraphs (a) and (b) of this
Section 8.2 shall be to proceed in the manner and subject to the limitations
contained in this Section 8.2.
Section 9
Miscellaneous
9.1 Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall be
hand-delivered, transmitted via facsimile, deposited prepaid for next day
delivery by Federal Express or other similar overnight courier, or mailed first
class postage prepaid, registered or certified mail addressed as follows:
(a) If to the Company, to: Westwood One, Inc.
9540 Washington Boulevard
Culver City, California 90232
Attention: Mr. Norman J. Pattiz
Fax No.: (310) 840-0834
18
<PAGE> 22
(b) With a copy to: Riordan & McKinzie
5743 Corsa Avenue, Suite 116
Westlake Village, California 91362
Attention: Lawrence C. Weeks, Esq.
Fax No.: (818) 706-2956
(c) If to Purchaser, to: c/o Infinity Broadcasting Corporation
600 Madison Avenue, 4th Floor
New York, New York 10022
Attention: Mr. Farid Suleman
Fax No.: (212) 898-2959
(d) With a copy to: Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Richard D. Bohm, Esq.
Fax No.: (212) 909-6836
Such notices, requests, consents and other communications shall for all
purposes of this Agreement be treated as being effective or having been given,
if delivered personally, upon delivery, if transmitted via facsimile, upon
receipt of confirmation of transmission, if delivered by overnight courier,
upon twenty-four (24) hours after deposit, or, if sent by mail, upon the
earlier of actual receipt or the third day after the same has been deposited in
a regularly maintained receptacle for the deposit of United States mail, and
postage prepaid and addressed as set forth above.
9.2 Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition of invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
9.3 Waiver and Amendment. No amendment, modification,
termination or waiver of any provision of this Agreement shall be effective
unless the same shall be in writing and signed by the Company and the
Purchaser.
9.4 Parties in Interest. All of the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto.
Neither party may assign its rights and obligations under this Agreement
without the consent of the other party, except the Purchaser may assign such
rights and obligations to any of its affiliates without any such consent.
19
<PAGE> 23
9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
9.6 Entire Agreement. This Agreement, together with the
Other Agreements, constitutes the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein
and supersede all prior negotiations, agreements and understandings among the
parties with respect to such subject matter. There are no restrictions,
promises, representations, warranties, covenants, or undertakings, other than
those expressly set forth or referred to herein and therein.
9.7 Counterparts. This Agreement may be executed in two
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts so executed shall be deemed to be an original,
shall be construed together and shall constitute one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
COMPANY: WESTWOOD ONE, INC.,
a Delaware corporation
By: /s/ Norman J. Pattiz
Name: Norman J. Pattiz
Title: Chairman of the Board and
Chief Executive Officer
PURCHASER: INFINITY NETWORK INC.,
a Delaware corporation
By: /s/ Mel Karmazin
Name: Mel Karmazin
Title: President
20
<PAGE> 1
Warrant to Purchase 3,000,000
Shares of Common Stock
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
WESTWOOD ONE, INC.
Void after February 3, 2004
THE SECURITIES EVIDENCED BY THIS WARRANT OR ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE HOLDER
HEREOF AND THE ISSUER, A COPY OF WHICH IS AVAILABLE AT THE ISSUER'S
PRINCIPAL OFFICES, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, ASSIGNED OR OTHERWISE ENCUMBERED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
WESTWOOD ONE, INC., a Delaware corporation (the "Company"),
certifies that, for value received, Infinity Broadcasting Corporation, a
Delaware corporation, or a designated affiliated entity (collectively, the
"Manager"), is entitled to purchase, until the close of business on
February 3, 2004, Three Million (3,000,000) shares of Common Stock, par value
$0.01 per share, of the Company, at a price of $3.00 per share; subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth.
1. Exercisability of Warrant. This Warrant shall become
exercisable in three equal annual installments of One Million (1,000,000)
shares of Common Stock, par value $0.01 per share, of the Company
(appropriately adjusted for stock splits, stock dividends or similar capital
modifications as provided in Section 5 below) on February 3 in each of 1995,
1996 and 1997, provided that this Warrant shall become immediately exercisable
with respect to all shares of Common Stock covered hereby if the Management
Agreement dated February 3, 1994 between the Company and the Manager (the
"Management Agreement") is terminated for any reason other than pursuant to
Section 3.2(b) or (c) of the Management Agreement. Installments shall be
cumulative such that this Warrant may be exercised as to any or all of the
Common Stock covered by an installment at any time or
Exhibit 2
<PAGE> 2
times after that installment becomes exercisable and until this Warrant
expires.
2. Method of Exercise; Payment; Issuance of New Warrant.
(a) This Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, properly
endorsed, at the principal office of the Company in California, Attention:
Secretary, and by (i) the payment to the Company of the then applicable Warrant
Price of the Common Stock being purchased ("Warrant Price" shall mean the price
specified in the first paragraph of this Warrant and such other prices as shall
result from the adjustments specified in Section 5 hereof); and (ii) delivery
to the Company of the form of subscription at the end hereof (or a reasonable
facsimile thereof).
(b) Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to the Company
as provided in this Section 2, and at such time the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such exercise shall be deemed to have become the holder or
holders of record thereof.
(c) In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered at the Company's expense (including the payment by
the Company of any applicable issuance taxes) to the holder hereof within five
(5) business days after the rights represented by this Warrant shall have been
so exercised, and unless this Warrant has expired, a new Warrant of like tenor
representing the number of shares of Common Stock, if any, with respect to
which this Warrant shall not then have been exercised, shall also be issued to
the holder hereof within such time.
3. Stock Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all liens. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of the issue upon exercise
of the purchase rights evidenced by this Warrant, at least the maximum number
of shares of its Common Stock as are issuable upon the exercise of the rights
represented by this Warrant.
A-2.
<PAGE> 3
4. Fractional Shares. No fractional shares of Common
Stock will be issued in connection with any exercise hereunder but in lieu of
such fractional shares, the Company shall make a cash payment therefor upon the
basis of the Current Market Value (as defined below) of the Common Stock.
5. Number of Shares Receivable Upon Exercise. The
number of shares of Common Stock receivable upon the exercise of this Warrant
is subject to adjustment upon the happening of certain events specified in this
Section 5. For the purposes of this Section 5, the "Warrant Price" referred to
herein shall initially be $3.00 and shall be adjusted and readjusted from time
to time as provided in this Section 5. The holder of this Warrant shall, upon
exercise hereof as provided in Section 2, be entitled to receive the number of
shares of Common Stock determined by multiplying the number of shares of Common
Stock which would otherwise (but for the provisions of this Section 5) be
issuable upon such exercise by a fraction of which (A) the numerator is $3.00
and (B) the denominator is the Warrant Price in effect at the time of such
exercise. The price to be paid for each such share of Common Stock by the
holder shall be the Warrant Price as adjusted pursuant to this Section 5,
provided that the price paid by the holder for any shares of Common Stock upon
exercise of this Warrant shall never be less than $0.01 per share. The Warrant
Price shall be subject to adjustment as follows:
(a) Stock Dividends, Stock Splits, Etc. If the
Company at any time or from time to time after the date hereof shall issue
additional shares of Common Stock as a result of the declaration or payment of
a dividend on the Common Stock payable in Common Stock, or as a distribution to
holders of Common Stock, or as a result of a subdivision of the outstanding
shares of Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock), then, and in each such case, the Warrant Price then in effect shall be
reduced, concurrently with the issuance of such shares, to a price (calculated
to the nearest cent) determined by multiplying such Warrant Price by a fraction
(i) the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance of additional shares of Common
Stock, and (ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issuance, provided that, for
purposes of this Section 5(a), (x) additional shares of Common Stock shall be
deemed to have been issued (A) in the case of any such dividend or
distribution, immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive
such dividend or distribution or (B) in the case of any such subdivision, at
the close of business on the date immediately prior to the day upon which such
A-3.
<PAGE> 4
corporate action becomes effective, (y) immediately after any additional shares
of Common Stock are deemed to have been issued, such additional shares of
Common Stock shall be deemed to be outstanding, and (z) treasury shares shall
be deemed not to be outstanding.
(b) Extraordinary Dividends and Distributions.
If the Company shall distribute to all holders of its outstanding Common Stock
evidences of indebtedness of the Company, cash (other than a cash distribution
made as a dividend payable or to be payable at regularly scheduled intervals
and payable out of earnings or earned surplus legally available for the payment
of dividends under the laws of the State of Delaware, but only to the extent
that the aggregate of all such dividends paid or declared after the date hereof
does not exceed the consolidated net income of the Company earned subsequent to
the date hereof, as determined in accordance with generally accepted accounting
principles, consistently applied) or assets or securities other than its Common
Stock (including stock of a subsidiary or securities convertible into or
exercisable for such stock but excluding dividends or distributions referred to
in Section 5(a) above) (any such evidences of indebtedness, cash, assets or
securities, the "assets or securities"), then, in each case, the Warrant Price
shall be adjusted by subtracting from the Warrant Price then in effect the
value of the assets or securities that the holder would have been entitled to
receive as a result of such distribution had the Warrant been exercised and the
relevant shares of Common Stock issued in the name of the holder immediately
prior to the record date for such distribution; provided that if, after giving
effect to such adjustment, the Warrant Price would be less than the then par
value of the Common Stock, the Company shall distribute such assets or
securities to the holder as if the holder had exercised the Warrant and the
shares of Common Stock had been issued in the name of the holder immediately
prior to the record date for such distribution. Any adjustment required by
this Section 5(b) shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the record
date for the determination of stockholders entitled to receive such
distribution.
(c) Combinations, Etc. If the Company at any
time or from time to time after the date hereof shall combine or consolidate
the outstanding shares of Common Stock, by reclassification or otherwise, into
a lesser number of shares of Common Stock, then, and in each such case, the
Warrant Price then in effect shall be increased, concurrently with the
effectiveness of such combination or consolidation, to a price (calculated to
the nearest one cent) determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to
A-4.
<PAGE> 5
the effectiveness of such combination or consolidation and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such effectiveness.
(d) Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to time after the date
hereof shall issue or sell additional shares of Common Stock ("Additional
Shares") for a consideration per share less than the Current Market Value in
effect on the earlier of (i) the date on which the Company enters into a firm
contract for the issuance and sale of such Additional Shares (unless such
contract specifies that the price will be determined at a later date, then such
later date shall apply to this clause (i)) or (ii) the date of actual issuance
or sale of such Additional Shares, then, in each such case, the Warrant Price
in effect immediately prior to such date shall be reduced, concurrently with
such issuance or sale, to a price (calculated to the nearest one cent)
determined by multiplying such Warrant Price by a fraction (x) the numerator of
which shall be the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issue or sale, plus (B) the number of shares of
Common Stock which the aggregate consideration received by the Company for the
total number of such Additional Shares so issued or sold would purchase at such
Current Market Value, and (xi) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such issue or sale,
provided that (a) treasury shares shall not be deemed to be outstanding for
purposes of this Section 5(d) and (b) the shares of Common Stock then issuable
(i) pursuant to the terms of this Warrant and the Incentive Stock Option (as
defined in the Management Agreement) and (ii) on conversion of the Company's 9%
Convertible Senior Subordinated Debentures due 2002 issued pursuant to that
certain Indenture dated as of December 15, 1990 (the "9% Convertible Debt")
shall be deemed to be outstanding immediately prior to and after such issue or
sale. Notwithstanding anything contained herein to the contrary, no adjustment
to the Warrant Price shall be made pursuant to this Section 5(d) following the
issuance of Additional Shares pursuant to (xx) Section 5(a) hereof, (xxi) the
exercise of any options or issuance of any shares under any options or purchase
or other rights that are outstanding on or prior to the date hereof and that
were issued pursuant to any of the Company's employee stock option,
appreciation or purchase right plans, (xxii) the exercise of any options or
purchase or other rights or the issuance of any shares under any options or
rights that are granted after the date hereof, whether in accordance with the
terms of any of the Company's employee stock option, appreciation or purchase
right plans or otherwise, so long as the exercise price of any such option,
warrant, subscription or purchase right is not less than the Market Price on
the date that such grant is approved by the Company's Board of Directors or a
duly authorized committee thereof or, if later,
A-5.
<PAGE> 6
the date that such exercise price is established, (xxiii) the exercise of any
other options, warrants or other subscription or purchase rights outstanding on
or prior to the date hereof, including without limitation, this Warrant and the
Stock Incentive Option, (xxiv) the exercise of any conversion or exchange
rights outstanding on or prior to the date hereof issued by the Company,
including without limitation, any such conversion rights relating to the 9%
Convertible Debt, (xxv) the exercise of any conversion or exchange rights
issued by the Company after the date hereof, so long as the conversion or
exchange price is not less than the Market Price on the date that such issuance
is approved by the Board of Directors or a duly authorized committee thereof
or, if later, the date that such conversion or exchange price is established or
(xxvi) the issuance or sale of Additional Shares pursuant to a firmly
underwritten public offering of such shares.
(e) Accountants' Report as to Adjustments. In
each case of any adjustment or readjustment in the Warrant Price, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms hereof and, upon the reasonable request of the
Manager, cause independent public accountants of recognized national standing
selected by the Company (which may be the regular auditors of the Company) to
verify such computation and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof
and the facts upon which such adjustment or readjustment is based, including a
statement of (i) the number of shares of Common Stock outstanding or deemed to
be outstanding and (ii) the Warrant Price in effect immediately prior to such
adjustment or readjustment and as adjusted and readjusted (if required by
Section 5) on account thereof. The Company will forthwith mail a copy of each
such report to the holder of this Warrant. The Company will also keep copies
of all such reports at its principal office, and will cause the same to be
available for inspection at such office during normal business hours by any
holder of this Warrant or any prospective purchaser of a Warrant designated in
writing by the holder thereof.
(f) No Dilution or Impairment. The Company will
not, by amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms hereof, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against dilution as provided herein.
Without limiting the generality of the foregoing, the Company (i) will not
permit the par value of any shares of Common Stock receivable upon the exercise
of any
A-6.
<PAGE> 7
Warrant to be increased to an amount that exceeds the amount payable therefor
upon such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares upon the exercise of this Warrant from time to time
and (iii) will not take any action which results in any adjustment of the
Warrant Price if the total number of shares of Common Stock issuable after such
action upon the exercise of this Warrant would exceed the total number of
shares of Common Stock then authorized by the Company's certificate of
incorporation and available for the purpose of issue upon such exercise.
(g) Exercise of Warrant in the Event of a
Consolidation, Merger, Sale of Assets, Reorganization, Etc.
(i) In case at any time the Company
shall be a party to any Transaction, then (A) upon the
consummation thereof this Warrant shall become exercisable with
respect to all shares of Common Stock covered hereby (whether
or not it has otherwise become exercisable with respect to such
shares pursuant to Section 1) and shall be deemed to have been
exercised by the holder hereof without any act on the part of
such holder and without any obligation on the part of such
holder to pay the exercise price until presentation of this
Warrant pursuant to clause (B) below, and (B) this Warrant
shall represent the right of such holder to receive (upon
presentation of this Warrant on or within thirty (30) days
after the date of such consummation together with payment of
the aggregate exercise price payable at the time of such
consummation in accordance with Section 2 for all shares of
Common Stock issuable upon such exercise immediately prior to
such consummation), in lieu of the Common Stock issuable upon
exercise of this Warrant prior to such consummation, the cash,
securities and other property to which such holder would have
been entitled upon the consummation of the Transaction if such
older had exercised this Warrant immediately prior thereto.
(ii) The Company will not effect any
Transaction unless, prior to the consummation thereof, each
corporation or entity (other than the Company) which may be
required to deliver any cash, securities or other property upon
the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to the holder of this Warrant, the
obligation to deliver to such holder such cash, securities or
other property as, in accordance with the foregoing provision,
such holder may be entitled to receive.
(h) Notices of Corporate Action. In the event of
any anticipated
A-7.
<PAGE> 8
(i) taking by the Company of a record of
the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive
any dividend or other distribution on such securities, or
(ii) Transaction, or
(iii) voluntary or involuntary
dissolution, liquidation or winding-up of the Company,
the Company will mail to the holder of this Warrant a notice specifying (A) the
date or expected date on which any such record is to be taken for the purpose
of such dividend or distribution or (B) the date or expected date on which any
such Transaction, dissolution, liquidation or winding-up is to take place and
the time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such Transaction, dissolution,
liquidation or winding-up. Such notice shall be mailed at least twenty (20)
days prior to the date therein specified, in the case of any date referred to
in the foregoing clause (A), and at least thirty (30) days prior to the date
therein specified, in the case of the date referred to in the foregoing clause
(B).
6. Definitions. As used herein, the following terms
have the following respective meanings:
Common Stock: The Company's (a) Common Stock, par value $0.01
per share, and (b) Class B Stock, par value $0.01 per share.
Current Market Value: The average of the daily Market Price
per share of Common Stock for the period of five (5) days, ending on the day
immediately prior to the date determined pursuant to Section 5(d)(i) or (ii),
during which the national securities exchanges were opened for trading,
provided that if an exercise of this Warrant occurs as a result of or in
connection with the consummation of a Transaction, Current Market Value shall
be the aggregate value of the cash, securities and other consideration payable
for a share of Common Stock in connection with such Transaction.
Market Price: Per share of Common Stock on any date specified
herein shall be (a) the last sale price, regular way, on such date or, if no
such sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading, or (b) if such Common Stock is not then listed or
A-8.
<PAGE> 9
admitted to trading on any national securities exchange, but is designated as a
national market system security by the National Association of Securities
Dealers, the last trading price of the Common Stock on such date, or (c) if
there shall have been no trading on such date or if the Common Stock is not so
designated, the average of the reported closing bid and asked prices on such
date as shown by the National Association of Securities Dealers Automated
Quotation System.
Registration Rights Agreement: The Registration Rights
Agreement, dated the date hereof, between the Company and the original holder
hereof.
Transaction: A merger, consolidation, sale of all or
substantially all of the Company's assets, recapitalization of the Common Stock
or other similar transaction, in each case if the previously outstanding Common
Stock is acquired for cash or changed into or exchanged for different
securities of the Company or changed into or exchanged for common stock or
other securities of another corporation or interests in a non-corporate entity
or other property (including cash) or any combination of any of the foregoing.
Warrant Price: The meaning specified in Section 5.
7. Amendments and Waivers. Any term of this Warrant may
be amended or modified or the observance of any term of this Warrant may be
waived (either generally or in a particular instance) only with the written
consent of the Company and the holder of this Warrant.
8. Assignment. The provisions of this Warrant shall be
binding upon and inure to the benefit of the original holder hereof, its
successors and assigns by way of merger, consolidation or operation of law, and
each third party transferee of this Warrant, provided that, this Warrant may
only be transferred in accordance with the terms of the Registration Rights
Agreement and, in the case of any third party transferee, such transferee shall
have delivered to the Company a valid agreement of assumption of the
restriction on transfer specified in this Section 8.
9. Exchange of Warrant. Upon surrender for exchange of
this Warrant, properly endorsed, for registration of Transfer or for exchange
at the principal office of the Company, the Company at its expense will issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of such holder or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of this
A-9.
<PAGE> 10
Warrant, provided that any such transfer of this Warrant is made in accordance
with the Registration Rights Agreement.
10. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Company may determine (or, in the case of any Warrant
held by the original holder hereof or any affiliate thereof or an institutional
holder or any of their respective nominees, of an affidavit of an authorized
officer of such holder, setting forth the fact of such loss, theft or
destruction, which shall be satisfactory evidence thereof and no further
indemnity shall be required as a condition of the execution and delivery of a
new Warrant), or, in the case of any such mutilation, upon the surrender of
such Warrant for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new
Warrant, of like tenor. Any Warrant in lieu of which any such new Warrant has
been so executed and delivered by the Company shall not be deemed to be an
outstanding Warrant for any purpose.
11. Remedies. The Company stipulates that the remedies
at law of the holder of this Warrant in the event of any default by the Company
in the performance of or in compliance with any of the terms of this Warrant
are not and will not be adequate, and that such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise without the requirement of the posting of a bond.
12. No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company (except to the extent that
shares of Common Stock are issued to such holder pursuant to this Warrant) or
as imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors or stockholders of the Company or otherwise.
13. Notices. All notices and other communications under
this Warrant shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, or by facsimile transmission, addressed (a) if
to the holder, at the registered address or the facsimile number of such holder
as set forth in the register kept at the principal office of the Company, and
(b) if to the Company, to the attention of the Secretary at its principal
office, or to its facsimile number,
A-10.
<PAGE> 11
Attention: Secretary, provided that the exercise of any Warrant shall be
effected in the manner provided in Section 2.
14. Legends. The shares of Common Stock issuable
pursuant to the terms of this Warrant shall contain the legends set forth in
Section 7.2 of the Securities Purchase Agreement dated as of November 4, 1993
by and between the Company and Manager.
15. Miscellaneous. THIS WARRANT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
DATED as of February 3, 1994.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
Name: Eric R. Weiss
Title: Senior Vice President
A-11.
<PAGE> 12
FORM OF SUBSCRIPTION
[To be signed only upon exercise of the Warrant]
TO WESTWOOD ONE, INC.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _________* shares of Common Stock of WESTWOOD
ONE, INC. and herewith makes payment of $______ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
________________________________, whose address is ____________________________
________________________________________________________________.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
____________________
* Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to
which the Warrant is being exercised), in either case without making
any adjustment for additional shares of the Common Stock or any other
stock or other securities or property or cash which, pursuant to the
adjustment provisions referred to in the Warrant, may be deliverable
upon exercise. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised
portion of such Warrant, all as provided in the Warrant.
A-12.
<PAGE> 13
FORM OF ASSIGNMENT
[To be signed only upon transfer of the Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _____________________________________ the rights represented by
the within Warrant to purchase _______ shares of Common Stock of WESTWOOD ONE,
INC. to which the within Warrant relates, and appoints _______________________
__________________________________ Attorney to transfer such rights on the
books of WESTWOOD ONE, INC. with full power of substitution in the premises.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
Signed in the presence of:
___________________________________
A-13.
<PAGE> 1
Warrant to Purchase 500,000 Shares
of Common Stock at $3.00 per share
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
WESTWOOD ONE, INC.
THE SECURITIES EVIDENCED BY THIS WARRANT OR ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE HOLDER
HEREOF AND THE ISSUER, A COPY OF WHICH IS AVAILABLE AT THE ISSUER'S
PRINCIPAL OFFICES, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, ASSIGNED OR OTHERWISE ENCUMBERED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
WESTWOOD ONE, INC., a Delaware corporation (the "Company"),
certifies that, for value received, Infinity Network Inc., a Delaware
corporation, or a designated affiliated entity (collectively, the "Holder"), is
entitled to purchase, until the close of business on the Termination Date (as
defined in the next sentence), Five Hundred Thousand (500,000) shares of Common
Stock, par value $0.01 per share, of the Company, at a price of $3.00 per
share; subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. "Termination Date" shall mean the later of
February 3, 2004 or the third anniversary of the date upon which this
Warrant has become exercisable; provided, however, that the Termination Date
shall in no event be later than February 3, 2009.
1. Exercisability of Warrant. This Warrant shall become
exercisable only if the Market Price (as defined below) per share of Common
Stock, par value $0.01 per share, of the Company is at least $10.00 on at least
twenty (20) out of thirty (30) consecutive days during which the national
securities exchanges are open for trading.
2. Method of Exercise; Payment; Issuance of New Warrant.
(a) This Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, properly
endorsed, at the principal office of the Company in
Exhibit 3
<PAGE> 2
California, Attention: Secretary, and by (i) the payment to the Company of the
then applicable Warrant Price of the Common Stock being purchased ("Warrant
Price" shall mean the price specified in the first paragraph of this Warrant
and such other prices as shall result from the adjustments specified in Section
5 hereof); and (ii) delivery to the Company of the form of subscription at the
end hereof (or a reasonable facsimile thereof).
(b) Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to the Company
as provided in this Section 2, and at such time the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such exercise shall be deemed to have become the holder or
holders of record thereof.
(c) In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered at the Company's expense (including the payment by
the Company of any applicable issuance taxes) to the holder hereof within five
(5) business days after the rights represented by this Warrant shall have been
so exercised, and unless this Warrant has expired, a new Warrant of like tenor
representing the number of shares of Common Stock, if any, with respect to
which this Warrant shall not then have been exercised, shall also be issued to
the holder hereof within such time.
3. Stock Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all liens. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of the issue upon exercise
of the purchase rights evidenced by this Warrant, at least the maximum number
of shares of its Common Stock as are issuable upon the exercise of the rights
represented by this Warrant.
4. Fractional Shares. No fractional shares of Common
Stock will be issued in connection with any exercise hereunder but in lieu of
such fractional shares, the Company shall make a cash payment therefor upon the
basis of the Current Market Value (as defined below) of the Common Stock.
5. Number of Shares Receivable Upon Exercise. The
number of shares of Common Stock receivable upon the exercise of this Warrant
is subject to adjustment upon the happening of
2.
<PAGE> 3
certain events specified in this Section 5. For the purposes of this Section
5, the "Warrant Price" referred to herein shall initially be $3.00 and shall be
adjusted and readjusted from time to time as provided in this Section 5. The
holder of this Warrant shall, upon exercise hereof as provided in Section 2, be
entitled to receive the number of shares of Common Stock determined by
multiplying the number of shares of Common Stock which would otherwise (but for
the provisions of this Section 5) be issuable upon such exercise by a fraction
of which (A) the numerator is $3.00 and (B) the denominator is the Warrant
Price in effect at the time of such exercise. The price to be paid for each
such share of Common Stock by the holder shall be the Warrant Price as adjusted
pursuant to this Section 5, provided that the price paid by the holder for any
shares of Common Stock upon exercise of this Warrant shall never be less than
$0.01 per share. The Warrant Price shall be subject to adjustment as follows:
(a) Stock Dividends, Stock Splits, Etc. If the
Company at any time or from time to time after the date hereof shall issue
additional shares of Common Stock as a result of the declaration or payment of
a dividend on the Common Stock payable in Common Stock, or as a distribution to
holders of Common Stock, or as a result of a subdivision of the outstanding
shares of Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock), then, and in each such case, the Warrant Price then in effect shall be
reduced, concurrently with the issuance of such shares, to a price (calculated
to the nearest cent) determined by multiplying such Warrant Price by a fraction
(i) the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance of additional shares of Common
Stock, and (ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issuance, provided that, for
purposes of this Section 5(a), (x) additional shares of Common Stock shall be
deemed to have been issued (A) in the case of any such dividend or
distribution, immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive
such dividend or distribution or (B) in the case of any such subdivision, at
the close of business on the date immediately prior to the day upon which such
corporate action becomes effective, (y) immediately after any additional shares
of Common Stock are deemed to have been issued, such additional shares of
Common Stock shall be deemed to be outstanding, and (z) treasury shares shall
be deemed not to be outstanding.
(b) Extraordinary Dividends and Distributions.
If the Company shall distribute to all holders of its outstanding Common Stock
evidences of indebtedness of the Company, cash
3.
<PAGE> 4
(other than a cash distribution made as a dividend payable or to be payable at
regularly scheduled intervals and payable out of earnings or earned surplus
legally available for the payment of dividends under the laws of the State of
Delaware, but only to the extent that the aggregate of all such dividends paid
or declared after the date hereof does not exceed the consolidated net income
of the Company earned subsequent to the date hereof, as determined in
accordance with generally accepted accounting principles, consistently applied)
or assets or securities other than its Common Stock (including stock of a
subsidiary or securities convertible into or exercisable for such stock but
excluding dividends or distributions referred to in Section 5(a) above) (any
such evidences of indebtedness, cash, assets or securities, the "assets or
securities"), then, in each case, the Warrant Price shall be adjusted by
subtracting from the Warrant Price then in effect the value of the assets or
securities that the holder would have been entitled to receive as a result of
such distribution had the Warrant been exercised and the relevant shares of
Common Stock issued in the name of the holder immediately prior to the record
date for such distribution; provided that if, after giving effect to such
adjustment, the Warrant Price would be less than the then par value of the
Common Stock, the Company shall distribute such assets or securities to the
holder as if the holder had exercised the Warrant and the shares of Common
Stock had been issued in the name of the holder immediately prior to the record
date for such distribution. Any adjustment required by this Section 5(b) shall
be made whenever any such distribution is made, and shall become effective on
the date of distribution retroactive to the record date for the determination
of stockholders entitled to receive such distribution.
(c) Combinations, Etc. If the Company at any
time or from time to time after the date hereof shall combine or consolidate
the outstanding shares of Common Stock, by reclassification or otherwise, into
a lesser number of shares of Common Stock, then, and in each such case, the
Warrant Price then in effect shall be increased, concurrently with the
effectiveness of such combination or consolidation, to a price (calculated to
the nearest one cent) determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to the effectiveness of such combination or
consolidation and (ii) the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such effectiveness.
(d) Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to time after the date
hereof shall issue or sell additional shares of Common Stock ("Additional
Shares") for a consideration per share less than the Current Market Value in
effect on the earlier of
4.
<PAGE> 5
(i) the date on which the Company enters into a firm contract for the issuance
and sale of such Additional Shares (unless such contract specifies that the
price will be determined at a later date, then such later date shall apply to
this clause (i)) or (ii) the date of actual issuance or sale of such Additional
Shares, then, in each such case, the Warrant Price in effect immediately prior
to such date shall be reduced, concurrently with such issuance or sale, to a
price (calculated to the nearest one cent) determined by multiplying such
Warrant Price by a fraction (x) the numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such
issue or sale, plus (B) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number of such
Additional Shares so issued or sold would purchase at such Current Market
Value, and (xi) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale, provided that
(a) treasury shares shall not be deemed to be outstanding for purposes of this
Section 5(d) and (b) the shares of Common Stock then issuable (i) pursuant to
the terms of this Warrant and the Incentive Stock Option (as defined in the
Management Agreement) and (ii) on conversion of the Company's 9% Convertible
Senior Subordinated Debentures due 2002 issued pursuant to that certain
Indenture dated as of December 15, 1990 (the "9% Convertible Debt") shall be
deemed to be outstanding immediately prior to and after such issue or sale.
Notwithstanding anything contained herein to the contrary, no adjustment to the
Warrant Price shall be made pursuant to this Section 5(d) following the
issuance of Additional Shares pursuant to (xx) Section 5(a) hereof, (xxi) the
exercise of any options or issuance of any shares under any options or purchase
or other rights that are outstanding on or prior to the date hereof and that
were issued pursuant to any of the Company's employee stock option,
appreciation or purchase right plans, (xxii) the exercise of any options or
purchase or other rights or the issuance of any shares under any options or
rights that are granted after the date hereof, whether in accordance with the
terms of any of the Company's employee stock option, appreciation or purchase
right plans or otherwise, so long as the exercise price of any such option,
warrant, subscription or purchase right is not less than the Market Price on
the date that such grant is approved by the Company's Board of Directors or a
duly authorized committee thereof or, if later, the date that such exercise
price is established, (xxiii) the exercise of any other options, warrants or
other subscription or purchase rights outstanding on or prior to the date
hereof, including without limitation, this Warrant and the Stock Incentive
Option, (xxiv) the exercise of any conversion or exchange rights outstanding on
or prior to the date hereof issued by the Company, including without
limitation, any such conversion rights relating to the 9% Convertible Debt,
(xxv) the exercise of any conversion or exchange rights issued by the Company
after the
5.
<PAGE> 6
date hereof, so long as the conversion or exchange price is not less than the
Market Price on the date that such issuance is approved by the Board of
Directors or a duly authorized committee thereof or, if later, the date that
such conversion or exchange price is established or (xxvi) the issuance or sale
of Additional Shares pursuant to a firmly underwritten public offering of such
shares.
(e) Accountants' Report as to Adjustments. In
each case of any adjustment or readjustment in the Warrant Price, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms hereof and, upon the reasonable request of the
Holder, cause independent public accountants of recognized national standing
selected by the Company (which may be the regular auditors of the Company) to
verify such computation and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof
and the facts upon which such adjustment or readjustment is based, including a
statement of (i) the number of shares of Common Stock outstanding or deemed to
be outstanding and (ii) the Warrant Price in effect immediately prior to such
adjustment or readjustment and as adjusted and readjusted (if required by
Section 5) on account thereof. The Company will forthwith mail a copy of each
such report to the holder of this Warrant. The Company will also keep copies
of all such reports at its principal office, and will cause the same to be
available for inspection at such office during normal business hours by any
holder of this Warrant or any prospective purchaser of a Warrant designated in
writing by the holder thereof.
(f) No Dilution or Impairment. The Company will
not, by amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms hereof, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against dilution as provided herein.
Without limiting the generality of the foregoing, the Company (i) will not
permit the par value of any shares of Common Stock receivable upon the exercise
of any Warrant to be increased to an amount that exceeds the amount payable
therefor upon such exercise, (ii) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares upon the exercise of this Warrant from time to
time and (iii) will not take any action which results in any adjustment of the
Warrant Price if the total number of shares of Common Stock issuable after such
action upon the exercise of this Warrant would exceed the total number of
shares of Common Stock
6.
<PAGE> 7
then authorized by the Company's certificate of incorporation and available for
the purpose of issue upon such exercise.
(g) Exercise of Warrant in the Event of a
Consolidation, Merger, Sale of Assets, Reorganization, Etc.
(i) In case at any time the Company
shall be a party to any Transaction pursuant to which the
aggregate value of the cash, securities and other consideration
payable for a share of Common Stock is at least $10.00, then
(A) upon the consummation thereof this Warrant shall become
exercisable with respect to all shares of Common Stock covered
hereby (whether or not it has otherwise become exercisable with
respect to such shares pursuant to Section 1) and shall be
deemed to have been exercised by the holder hereof without any
act on the part of such holder and without any obligation on
the part of such holder to pay the exercise price until
presentation of this Warrant pursuant to clause (B) below, and
(B) this Warrant shall represent the right of such holder to
receive (upon presentation of this Warrant on or within thirty
(30) days after the date of such consummation together with
payment of the aggregate exercise price payable at the time of
such consummation in accordance with Section 2 for all shares
of Common Stock issuable upon such exercise immediately prior
to such consummation), in lieu of the Common Stock issuable
upon exercise of this Warrant prior to such consummation, the
cash, securities and other property to which such holder
would have been entitled upon the consummation of the
Transaction if such holder had exercised this Warrant
immediately prior thereto.
(ii) The Company will not effect any
Transaction unless, prior to the consummation thereof, each
corporation or entity (other than the Company) which may be
required to deliver any cash, securities or other property upon
the exercise of this Warrant as provided herein shall assume,
by written instrument delivered to the holder of this Warrant,
the obligation to deliver to such holder such cash, securities or
other property as, in accordance with the foregoing provision,
such holder may be entitled to receive.
(iii) In case the Company shall be a party
to any Transaction pursuant to which the aggregate value of the
cash, securities and other consideration payable for a share of
Common Stock is less than $10.00, this Warrant shall terminate
upon the consummation thereof.
(h) Notices of Corporate Action. In the event
of any anticipated
(i) taking by the Company of a record of the
holders of any class of securities for the purpose of
7.
<PAGE> 8
determining the holders thereof who are entitled to receive
any dividend or other distribution on such securities, or
(ii) Transaction, or
(iii) voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to the holder of this Warrant a notice specifying (A) the
date or expected date on which any such record is to be taken for the purpose
of such dividend or distribution or (B) the date or expected date on which any
such Transaction, dissolution, liquidation or winding-up is to take place and
the time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such Transaction, dissolution,
liquidation or winding-up. Such notice shall be mailed at least twenty (20)
days prior to the date therein specified, in the case of any date referred to
in the foregoing clause (A), and at least thirty (30) days prior to the date
therein specified, in the case of the date referred to in the foregoing clause
(B).
6. Definitions. As used herein, the following terms
have the following respective meanings:
Common Stock: The Company's (a) Common Stock, par value $0.01
per share, and (b) Class B Stock, par value $0.01 per share.
Current Market Value: The average of the daily Market Price
per share of Common Stock for the period of five (5) days, ending on the day
immediately prior to the date determined pursuant to Section 5(d)(i) or (ii),
during which the national securities exchanges were opened for trading,
provided that if an exercise of this Warrant occurs as a result of or in
connection with the consummation of a Transaction, Current Market Value shall
be the aggregate value of the cash, securities and other consideration payable
for a share of Common Stock in connection with such Transaction.
Market Price: Per share of Common Stock on any date specified
herein shall be (a) the last sale price, regular way, on such date or, if no
such sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading, or (b) if such Common Stock is not then listed or admitted
to trading on any national securities exchange, but is designated as a national
market system security by the National
8.
<PAGE> 9
Association of Securities Dealers, the last trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the reported closing bid and
asked prices on such date as shown by the National Association of Securities
Dealers Automated Quotation System.
Registration Rights Agreement: The Registration Rights
Agreement, dated the date hereof, between the Company and the original holder
hereof.
Transaction: A merger, consolidation, sale of all or
substantially all of the Company's assets, recapitalization of the Common Stock
or other similar transaction, in each case if the previously outstanding Common
Stock is acquired for cash or changed into or exchanged for different
securities of the Company or changed into or exchanged for common stock or
other securities of another corporation or interests in a non-corporate entity
or other property (including cash) or any combination of any of the foregoing.
Warrant Price: The meaning specified in Section 5.
7. Amendments and Waivers. Any term of this Warrant may
be amended or modified or the observance of any term of this Warrant may be
waived (either generally or in a particular instance) only with the written
consent of the Company and the holder of this Warrant.
8. Assignment. The provisions of this Warrant shall be
binding upon and inure to the benefit of the original holder hereof, its
successors and assigns by way of merger, consolidation or operation of law, and
each third party transferee of this Warrant, provided that, this Warrant may
only be transferred in accordance with the terms of the Registration Rights
Agreement and, in the case of any third party transferee, such transferee shall
have delivered to the Company a valid agreement of assumption of the
restriction on transfer specified in this Section 8.
9. Exchange of Warrant. Upon surrender for exchange of
this Warrant, properly endorsed, for registration of Transfer or for exchange
at the principal office of the Company, the Company at its expense will issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of such holder or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of this Warrant, provided that any such transfer of this
Warrant is made in accordance with the Registration Rights Agreement.
9.
<PAGE> 10
10. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Company may determine (or, in the case of any Warrant
held by the original holder hereof or any affiliate thereof or an institutional
holder or any of their respective nominees, of an affidavit of an authorized
officer of such holder, setting forth the fact of such loss, theft or
destruction, which shall be satisfactory evidence thereof and no further
indemnity shall be required as a condition of the execution and delivery of a
new Warrant), or, in the case of any such mutilation, upon the surrender of
such Warrant for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new
Warrant, of like tenor. Any Warrant in lieu of which any such new Warrant has
been so executed and delivered by the Company shall not be deemed to be an
outstanding Warrant for any purpose.
11. Remedies. The Company stipulates that the remedies
at law of the holder of this Warrant in the event of any default by the Company
in the performance of or in compliance with any of the terms of this Warrant
are not and will not be adequate, and that such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise without the requirement of the posting of a bond.
12. No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company (except to the extent that
shares of Common Stock are issued to such holder pursuant to this Warrant) or
as imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors or stockholders of the Company or otherwise.
13. Notices. All notices and other communications under
this Warrant shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, or by facsimile transmission, addressed (a) if
to the holder, at the registered address or the facsimile number of such holder
as set forth in the register kept at the principal office of the Company, and
(b) if to the Company, to the attention of the Secretary at its principal
office, or to its facsimile number, Attention: Secretary, provided that the
exercise of any Warrant shall be effected in the manner provided in Section 2.
10.
<PAGE> 11
14. Legends. The shares of Common Stock issuable
pursuant to the terms of this Warrant shall contain the legends set forth in
Section 7.2 of that certain Securities Purchase Agreement dated as of November
4, 1993 by and between the Company and Holder.
15. Miscellaneous. THIS WARRANT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
DATED as of February 3, 1994.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
Name: Eric R. Weiss
Title: Senior Vice President
11.
<PAGE> 12
FORM OF SUBSCRIPTION
[To be signed only upon exercise of the Warrant]
TO WESTWOOD ONE, INC.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _________* shares of Common Stock of WESTWOOD
ONE, INC. and herewith makes payment of $______ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
________________________________, whose address is ___________________________
________________________________________________________________.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
____________________
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment
for additional shares of the Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment provisions
referred to in the Warrant, may be deliverable upon exercise. In the case
of a partial exercise, a new Warrant or Warrants will be issued and
delivered, representing the unexercised portion of such Warrant, all as
provided in the Warrant.
12.
<PAGE> 13
FORM OF ASSIGNMENT
[To be signed only upon transfer of the Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _____________________________________ the rights represented by
the within Warrant to purchase _______ shares of Common Stock of WESTWOOD ONE,
INC. to which the within Warrant relates, and appoints _______________________
__________________________________ Attorney to transfer such rights on the
books of WESTWOOD ONE, INC. with full power of substitution in the premises.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
Signed in the presence of:
___________________________________
13.
<PAGE> 1
Warrant to Purchase 500,000 Shares
of Common Stock at $4.00 per share
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
WESTWOOD ONE, INC.
------------------
THE SECURITIES EVIDENCED BY THIS WARRANT OR ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE HOLDER
HEREOF AND THE ISSUER, A COPY OF WHICH IS AVAILABLE AT THE ISSUER'S
PRINCIPAL OFFICES, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, ASSIGNED OR OTHERWISE ENCUMBERED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
WESTWOOD ONE, INC., a Delaware corporation (the "Company"),
certifies that, for value received, Infinity Network Inc., a Delaware
corporation, or a designated affiliated entity (collectively, the "Holder"), is
entitled to purchase, until the close of business on the Termination Date (as
defined in the next sentence), Five Hundred Thousand (500,000) shares of Common
Stock, par value $0.01 per share, of the Company, at a price of $4.00 per
share; subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. "Termination Date" shall mean the later of
February 3, 2004 or the third anniversary of the date upon which this
Warrant has become exercisable; provided, however, that the Termination Date
shall in no event be later than February 3, 2009.
1. Exercisability of Warrant. This Warrant shall become
exercisable only if the Market Price (as defined below) per share of Common
Stock, par value $0.01 per share, of the Company is at least $15.00 on at least
twenty (20) out of thirty (30) consecutive days during which the national
securities exchanges are open for trading.
2. Method of Exercise; Payment; Issuance of New Warrant.
(a) This Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, properly
endorsed, at the principal office of the Company in
Exhibit 4
<PAGE> 2
California, Attention: Secretary, and by (i) the payment to the Company
of the then applicable Warrant Price of the Common Stock being purchased
("Warrant Price" shall mean the price specified in the first paragraph of this
Warrant and such other prices as shall result from the adjustments specified in
Section 5 hereof); and (ii) delivery to the Company of the form of subscription
at the end hereof (or a reasonable facsimile thereof).
(b) Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to the Company
as provided in this Section 2, and at such time the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such exercise shall be deemed to have become the holder or
holders of record thereof.
(c) In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered at the Company's expense (including the payment by
the Company of any applicable issuance taxes) to the holder hereof within five
(5) business days after the rights represented by this Warrant shall have been
so exercised, and unless this Warrant has expired, a new Warrant of like tenor
representing the number of shares of Common Stock, if any, with respect to
which this Warrant shall not then have been exercised, shall also be issued to
the holder hereof within such time.
3. Stock Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all liens. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of the issue upon exercise
of the purchase rights evidenced by this Warrant, at least the maximum number
of shares of its Common Stock as are issuable upon the exercise of the rights
represented by this Warrant.
4. Fractional Shares. No fractional shares of Common
Stock will be issued in connection with any exercise hereunder but in lieu of
such fractional shares, the Company shall make a cash payment therefor upon the
basis of the Current Market Value (as defined below) of the Common Stock.
5. Number of Shares Receivable Upon Exercise. The
number of shares of Common Stock receivable upon the exercise of this Warrant
is subject to adjustment upon the happening of
2.
<PAGE> 3
certain events specified in this Section 5. For the purposes of this Section
5, the "Warrant Price" referred to herein shall initially be $4.00 and shall be
adjusted and readjusted from time to time as provided in this Section 5. The
holder of this Warrant shall, upon exercise hereof as provided in Section 2, be
entitled to receive the number of shares of Common Stock determined by
multiplying the number of shares of Common Stock which would otherwise (but for
the provisions of this Section 5) be issuable upon such exercise by a fraction
of which (A) the numerator is $4.00 and (B) the denominator is the Warrant
Price in effect at the time of such exercise. The price to be paid for each
such share of Common Stock by the holder shall be the Warrant Price as adjusted
pursuant to this Section 5, provided that the price paid by the holder for any
shares of Common Stock upon exercise of this Warrant shall never be less than
$0.01 per share. The Warrant Price shall be subject to adjustment as follows:
(a) Stock Dividends, Stock Splits, Etc. If the
Company at any time or from time to time after the date hereof shall issue
additional shares of Common Stock as a result of the declaration or payment of
a dividend on the Common Stock payable in Common Stock, or as a distribution to
holders of Common Stock, or as a result of a subdivision of the outstanding
shares of Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock), then, and in each such case, the Warrant Price then in effect shall be
reduced, concurrently with the issuance of such shares, to a price (calculated
to the nearest cent) determined by multiplying such Warrant Price by a fraction
(i) the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance of additional shares of Common
Stock, and (ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issuance, provided that, for
purposes of this Section 5(a), (x) additional shares of Common Stock shall be
deemed to have been issued (A) in the case of any such dividend or
distribution, immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive
such dividend or distribution or (B) in the case of any such subdivision, at
the close of business on the date immediately prior to the day upon which such
corporate action becomes effective, (y) immediately after any additional shares
of Common Stock are deemed to have been issued, such additional shares of
Common Stock shall be deemed to be outstanding, and (z) treasury shares shall
be deemed not to be outstanding.
(b) Extraordinary Dividends and Distributions.
If the Company shall distribute to all holders of its outstanding Common Stock
evidences of indebtedness of the Company, cash
3.
<PAGE> 4
(other than a cash distribution made as a dividend payable or to be payable at
regularly scheduled intervals and payable out of earnings or earned surplus
legally available for the payment of dividends under the laws of the State of
Delaware, but only to the extent that the aggregate of all such dividends paid
or declared after the date hereof does not exceed the consolidated net income
of the Company earned subsequent to the date hereof, as determined in
accordance with generally accepted accounting principles, consistently applied)
or assets or securities other than its Common Stock (including stock of a
subsidiary or securities convertible into or exercisable for such stock but
excluding dividends or distributions referred to in Section 5(a) above) (any
such evidences of indebtedness, cash, assets or securities, the "assets or
securities"), then, in each case, the Warrant Price shall be adjusted by
subtracting from the Warrant Price then in effect the value of the assets or
securities that the holder would have been entitled to receive as a result of
such distribution had the Warrant been exercised and the relevant shares of
Common Stock issued in the name of the holder immediately prior to the record
date for such distribution; provided that if, after giving effect to such
adjustment, the Warrant Price would be less than the then par value of the
Common Stock, the Company shall distribute such assets or securities to the
holder as if the holder had exercised the Warrant and the shares of Common
Stock had been issued in the name of the holder immediately prior to the record
date for such distribution. Any adjustment required by this Section 5(b) shall
be made whenever any such distribution is made, and shall become effective on
the date of distribution retroactive to the record date for the determination
of stockholders entitled to receive such distribution.
(c) Combinations, Etc. If the Company at any
time or from time to time after the date hereof shall combine or consolidate
the outstanding shares of Common Stock, by reclassification or otherwise, into
a lesser number of shares of Common Stock, then, and in each such case, the
Warrant Price then in effect shall be increased, concurrently with the
effectiveness of such combination or consolidation, to a price (calculated to
the nearest one cent) determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to the effectiveness of such combination or
consolidation and (ii) the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such effectiveness.
(d) Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to time after the date
hereof shall issue or sell additional shares of Common Stock ("Additional
Shares") for a consideration per share less than the Current Market Value in
effect on the earlier of
4.
<PAGE> 5
(i) the date on which the Company enters into a firm contract for the issuance
and sale of such Additional Shares (unless such contract specifies that the
price will be determined at a later date, then such later date shall apply to
this clause (i)) or (ii) the date of actual issuance or sale of such Additional
Shares, then, in each such case, the Warrant Price in effect immediately prior
to such date shall be reduced, concurrently with such issuance or sale, to a
price (calculated to the nearest one cent) determined by multiplying such
Warrant Price by a fraction (x) the numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such
issue or sale, plus (B) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number of such
Additional Shares so issued or sold would purchase at such Current Market
Value, and (xi) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale, provided that
(a) treasury shares shall not be deemed to be outstanding for purposes of this
Section 5(d) and (b) the shares of Common Stock then issuable (i) pursuant to
the terms of this Warrant and the Incentive Stock Option (as defined in the
Management Agreement) and (ii) on conversion of the Company's 9% Convertible
Senior Subordinated Debentures due 2002 issued pursuant to that certain
Indenture dated as of December 15, 1990 (the "9% Convertible Debt") shall be
deemed to be outstanding immediately prior to and after such issue or sale.
Notwithstanding anything contained herein to the contrary, no adjustment to the
Warrant Price shall be made pursuant to this Section 5(d) following the
issuance of Additional Shares pursuant to (xx) Section 5(a) hereof, (xxi) the
exercise of any options or issuance of any shares under any options or purchase
or other rights that are outstanding on or prior to the date hereof and that
were issued pursuant to any of the Company's employee stock option,
appreciation or purchase right plans, (xxii) the exercise of any options or
purchase or other rights or the issuance of any shares under any options or
rights that are granted after the date hereof, whether in accordance with the
terms of any of the Company's employee stock option, appreciation or purchase
right plans or otherwise, so long as the exercise price of any such option,
warrant, subscription or purchase right is not less than the Market Price on
the date that such grant is approved by the Company's Board of Directors or a
duly authorized committee thereof or, if later, the date that such exercise
price is established, (xxiii) the exercise of any other options, warrants or
other subscription or purchase rights outstanding on or prior to the date
hereof, including without limitation, this Warrant and the Stock Incentive
Option, (xxiv) the exercise of any conversion or exchange rights outstanding on
or prior to the date hereof issued by the Company, including without
limitation, any such conversion rights relating to the 9% Convertible Debt,
(xxv) the exercise of any conversion or exchange rights issued by the Company
after the
5.
<PAGE> 6
date hereof, so long as the conversion or exchange price is not less than the
Market Price on the date that such issuance is approved by the Board of
Directors or a duly authorized committee thereof or, if later, the date that
such conversion or exchange price is established or (xxvi) the issuance or sale
of Additional Shares pursuant to a firmly underwritten public offering of such
shares.
(e) Accountants' Report as to Adjustments. In
each case of any adjustment or readjustment in the Warrant Price, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms hereof and, upon the reasonable request of the
Holder, cause independent public accountants of recognized national standing
selected by the Company (which may be the regular auditors of the Company) to
verify such computation and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof
and the facts upon which such adjustment or readjustment is based, including a
statement of (i) the number of shares of Common Stock outstanding or deemed to
be outstanding and (ii) the Warrant Price in effect immediately prior to such
adjustment or readjustment and as adjusted and readjusted (if required by
Section 5) on account thereof. The Company will forthwith mail a copy of each
such report to the holder of this Warrant. The Company will also keep copies
of all such reports at its principal office, and will cause the same to be
available for inspection at such office during normal business hours by any
holder of this Warrant or any prospective purchaser of a Warrant designated in
writing by the holder thereof.
(f) No Dilution or Impairment. The Company will
not, by amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms hereof, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against dilution as provided herein.
Without limiting the generality of the foregoing, the Company (i) will not
permit the par value of any shares of Common Stock receivable upon the exercise
of any Warrant to be increased to an amount that exceeds the amount payable
therefor upon such exercise, (ii) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares upon the exercise of this Warrant from time to
time and (iii) will not take any action which results in any adjustment of the
Warrant Price if the total number of shares of Common Stock issuable after such
action upon the exercise of this Warrant would exceed the total number of
shares of Common Stock
6.
<PAGE> 7
then authorized by the Company's certificate of incorporation and available for
the purpose of issue upon such exercise.
(g) Exercise of Warrant in the Event of a
Consolidation, Merger, Sale of Assets, Reorganization, Etc.
(i) In case at any time the Company
shall be a party to any Transaction pursuant to which the
aggregate value of the cash, securities and other consideration
payable for a share of Common Stock is at least $15.00, then
(A) upon the consummation thereof this Warrant shall become
exercisable with respect to all shares of Common Stock covered
hereby (whether or not it has otherwise become exercisable with
respect to such shares pursuant to Section 1) and shall be
deemed to have been exercised by the holder hereof without any
act on the part of such holder and without any obligation on
the part of such holder to pay the exercise price until
presentation of this Warrant pursuant to clause (B) below, and
(B) this Warrant shall represent the right of such holder to
receive (upon presentation of this Warrant on or within thirty
(30) days after the date of such consummation together with
payment of the aggregate exercise price payable at the time of
such consummation in accordance with Section 2 for all shares
of Common Stock issuable upon such exercise immediately prior
to such consummation), in lieu of the Common Stock issuable
upon exercise of this Warrant prior to such consummation, the
cash, securities and other property to which such holder
would have been entitled upon the consummation of the
Transaction if such holder had exercised this Warrant
immediately prior thereto.
(ii) The Company will not effect any
Transaction unless, prior to the consummation thereof, each
corporation or entity (other than the Company) which may be
required to deliver any cash, securities or other property upon
the exercise of this Warrant as provided herein shall assume,
by written instrument delivered to the holder of this Warrant,
the obligation to deliver to such holder such cash, securities or
other property as, in accordance with the foregoing provision,
such holder may be entitled to receive.
(iii) In case the Company shall be a party
to any Transaction pursuant to which the aggregate value of the
cash, securities and other consideration payable for a share of
Common Stock is less than $15.00, this Warrant shall terminate
upon the consummation thereof.
(h) Notices of Corporate Action. In the event of
any anticipated
(i) taking by the Company of a record of
the holders of any class of securities for the purpose of
7.
<PAGE> 8
determining the holders thereof who are entitled to receive
any dividend or other distribution on such securities, or
(ii) Transaction, or
(iii) voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to the holder of this Warrant a notice specifying (A) the
date or expected date on which any such record is to be taken for the purpose
of such dividend or distribution or (B) the date or expected date on which any
such Transaction, dissolution, liquidation or winding-up is to take place and
the time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such Transaction, dissolution,
liquidation or winding-up. Such notice shall be mailed at least twenty (20)
days prior to the date therein specified, in the case of any date referred to
in the foregoing clause (A), and at least thirty (30) days prior to the date
therein specified, in the case of the date referred to in the foregoing clause
(B).
6. Definitions. As used herein, the following terms
have the following respective meanings:
Common Stock: The Company's (a) Common Stock, par value $0.01
per share, and (b) Class B Stock, par value $0.01 per share.
Current Market Value: The average of the daily Market Price
per share of Common Stock for the period of five (5) days, ending on the day
immediately prior to the date determined pursuant to Section 5(d)(i) or (ii),
during which the national securities exchanges were opened for trading,
provided that if an exercise of this Warrant occurs as a result of or in
connection with the consummation of a Transaction, Current Market Value shall
be the aggregate value of the cash, securities and other consideration payable
for a share of Common Stock in connection with such Transaction.
Market Price: Per share of Common Stock on any date specified
herein shall be (a) the last sale price, regular way, on such date or, if no
such sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading, or (b) if such Common Stock is not then listed or admitted
to trading on any national securities exchange, but is designated as a national
market system security by the National
8.
<PAGE> 9
Association of Securities Dealers, the last trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the reported closing bid and
asked prices on such date as shown by the National Association of Securities
Dealers Automated Quotation System.
Registration Rights Agreement: The Registration Rights
Agreement, dated the date hereof, between the Company and the original holder
hereof.
Transaction: A merger, consolidation, sale of all or
substantially all of the Company's assets, recapitalization of the Common Stock
or other similar transaction, in each case if the previously outstanding Common
Stock is acquired for cash or changed into or exchanged for different
securities of the Company or changed into or exchanged for common stock or
other securities of another corporation or interests in a non-corporate entity
or other property (including cash) or any combination of any of the foregoing.
Warrant Price: The meaning specified in Section 5.
7. Amendments and Waivers. Any term of this Warrant may
be amended or modified or the observance of any term of this Warrant may be
waived (either generally or in a particular instance) only with the written
consent of the Company and the holder of this Warrant.
8. Assignment. The provisions of this Warrant shall be
binding upon and inure to the benefit of the original holder hereof, its
successors and assigns by way of merger, consolidation or operation of law, and
each third party transferee of this Warrant, provided that, this Warrant may
only be transferred in accordance with the terms of the Registration Rights
Agreement and, in the case of any third party transferee, such transferee shall
have delivered to the Company a valid agreement of assumption of the
restriction on transfer specified in this Section 8.
9. Exchange of Warrant. Upon surrender for exchange of
this Warrant, properly endorsed, for registration of Transfer or for exchange
at the principal office of the Company, the Company at its expense will issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of such holder or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of this Warrant, provided that any such transfer of this
Warrant is made in accordance with the Registration Rights Agreement.
9.
<PAGE> 10
10. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Company may determine (or, in the case of any Warrant
held by the original holder hereof or any affiliate thereof or an institutional
holder or any of their respective nominees, of an affidavit of an authorized
officer of such holder, setting forth the fact of such loss, theft or
destruction, which shall be satisfactory evidence thereof and no further
indemnity shall be required as a condition of the execution and delivery of a
new Warrant), or, in the case of any such mutilation, upon the surrender of
such Warrant for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new
Warrant, of like tenor. Any Warrant in lieu of which any such new Warrant has
been so executed and delivered by the Company shall not be deemed to be an
outstanding Warrant for any purpose.
11. Remedies. The Company stipulates that the remedies
at law of the holder of this Warrant in the event of any default by the Company
in the performance of or in compliance with any of the terms of this Warrant
are not and will not be adequate, and that such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise without the requirement of the posting of a bond.
12. No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company (except to the extent that
shares of Common Stock are issued to such holder pursuant to this Warrant) or
as imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors or stockholders of the Company or otherwise.
13. Notices. All notices and other communications under
this Warrant shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, or by facsimile transmission, addressed (a) if
to the holder, at the registered address or the facsimile number of such holder
as set forth in the register kept at the principal office of the Company, and
(b) if to the Company, to the attention of the Secretary at its principal
office, or to its facsimile number, Attention: Secretary, provided that the
exercise of any Warrant shall be effected in the manner provided in Section 2.
10.
<PAGE> 11
14. Legends. The shares of Common Stock issuable
pursuant to the terms of this Warrant shall contain the legends set forth in
Section 7.2 of that certain Securities Purchase Agreement dated as of November
4, 1993 by and between the Company and Holder.
15. Miscellaneous. THIS WARRANT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
DATED as of February 3, 1994.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
Name: Eric R. Weiss
Title: Senior Vice President
11.
<PAGE> 12
FORM OF SUBSCRIPTION
[To be signed only upon exercise of the Warrant]
TO WESTWOOD ONE, INC.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _________* shares of Common Stock of WESTWOOD
ONE, INC. and herewith makes payment of $______ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
________________________________, whose address is ____________________________
________________________________________________________________.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
____________________
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment for
additional shares of the Common Stock or any other stock or other securities
or property or cash which, pursuant to the adjustment provisions referred to
in the Warrant, may be deliverable upon exercise. In the case of a partial
exercise, a new Warrant or Warrants will be issued and delivered,
representing the unexercised portion of such Warrant, all as provided in the
Warrant.
12.
<PAGE> 13
FORM OF ASSIGNMENT
[To be signed only upon transfer of the Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _____________________________________ the rights represented by
the within Warrant to purchase _______ shares of Common Stock of WESTWOOD ONE,
INC. to which the within Warrant relates, and appoints _______________________
__________________________________ Attorney to transfer such rights on the
books of WESTWOOD ONE, INC. with full power of substitution in the premises.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
Signed in the presence of:
___________________________________
13.
<PAGE> 1
Warrant to Purchase 500,000 Shares
of Common Stock at $5.00 per share
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
WESTWOOD ONE, INC.
------------------
THE SECURITIES EVIDENCED BY THIS WARRANT OR ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE HOLDER
HEREOF AND THE ISSUER, A COPY OF WHICH IS AVAILABLE AT THE ISSUER'S
PRINCIPAL OFFICES, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, ASSIGNED OR OTHERWISE ENCUMBERED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
WESTWOOD ONE, INC., a Delaware corporation (the "Company"),
certifies that, for value received, Infinity Network Inc., a Delaware
corporation, or a designated affiliated entity (collectively, the "Holder"), is
entitled to purchase, until the close of business on the Termination Date (as
defined in the next sentence), Five Hundred Thousand (500,000) shares of Common
Stock, par value $0.01 per share, of the Company, at a price of $5.00 per
share; subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. "Termination Date" shall mean the later of
February 3, 2004 or the third anniversary of the date upon which this
Warrant has become exercisable; provided, however, that the Termination Date
shall in no event be later than February 3, 2009.
1. Exercisability of Warrant. This Warrant shall become
exercisable only if the Market Price (as defined below) per share of Common
Stock, par value $0.01 per share, of the Company is at least $20.00 on at least
twenty (20) out of thirty (30) consecutive days during which the national
securities exchanges are open for trading.
2. Method of Exercise; Payment; Issuance of New Warrant.
(a) This Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, properly
endorsed, at the principal office of the Company in
Exhibit 5
<PAGE> 2
California, Attention: Secretary, and by (i) the payment to the Company of the
then applicable Warrant Price of the Common Stock being purchased ("Warrant
Price" shall mean the price specified in the first paragraph of this Warrant
and such other prices as shall result from the adjustments specified in Section
5 hereof); and (ii) delivery to the Company of the form of subscription at the
end hereof (or a reasonable facsimile thereof).
(b) Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to the Company
as provided in this Section 2, and at such time the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such exercise shall be deemed to have become the holder or
holders of record thereof.
(c) In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered at the Company's expense (including the payment by
the Company of any applicable issuance taxes) to the holder hereof within five
(5) business days after the rights represented by this Warrant shall have been
so exercised, and unless this Warrant has expired, a new Warrant of like tenor
representing the number of shares of Common Stock, if any, with respect to
which this Warrant shall not then have been exercised, shall also be issued to
the holder hereof within such time.
3. Stock Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all liens. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of the issue upon exercise
of the purchase rights evidenced by this Warrant, at least the maximum number
of shares of its Common Stock as are issuable upon the exercise of the rights
represented by this Warrant.
4. Fractional Shares. No fractional shares of Common
Stock will be issued in connection with any exercise hereunder but in lieu of
such fractional shares, the Company shall make a cash payment therefor upon the
basis of the Current Market Value (as defined below) of the Common Stock.
5. Number of Shares Receivable Upon Exercise. The
number of shares of Common Stock receivable upon the exercise of this Warrant
is subject to adjustment upon the happening of
2.
<PAGE> 3
certain events specified in this Section 5. For the purposes of this Section
5, the "Warrant Price" referred to herein shall initially be $5.00 and shall be
adjusted and readjusted from time to time as provided in this Section 5. The
holder of this Warrant shall, upon exercise hereof as provided in Section 2, be
entitled to receive the number of shares of Common Stock determined by
multiplying the number of shares of Common Stock which would otherwise (but for
the provisions of this Section 5) be issuable upon such exercise by a fraction
of which (A) the numerator is $5.00 and (B) the denominator is the Warrant
Price in effect at the time of such exercise. The price to be paid for each
such share of Common Stock by the holder shall be the Warrant Price as adjusted
pursuant to this Section 5, provided that the price paid by the holder for any
shares of Common Stock upon exercise of this Warrant shall never be less than
$0.01 per share. The Warrant Price shall be subject to adjustment as follows:
(a) Stock Dividends, Stock Splits, Etc. If the
Company at any time or from time to time after the date hereof shall issue
additional shares of Common Stock as a result of the declaration or payment of
a dividend on the Common Stock payable in Common Stock, or as a distribution to
holders of Common Stock, or as a result of a subdivision of the outstanding
shares of Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock), then, and in each such case, the Warrant Price then in effect shall be
reduced, concurrently with the issuance of such shares, to a price (calculated
to the nearest cent) determined by multiplying such Warrant Price by a fraction
(i) the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance of additional shares of Common
Stock, and (ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issuance, provided that, for
purposes of this Section 5(a), (x) additional shares of Common Stock shall be
deemed to have been issued (A) in the case of any such dividend or
distribution, immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive
such dividend or distribution or (B) in the case of any such subdivision, at
the close of business on the date immediately prior to the day upon which such
corporate action becomes effective, (y) immediately after any additional shares
of Common Stock are deemed to have been issued, such additional shares of
Common Stock shall be deemed to be outstanding, and (z) treasury shares shall
be deemed not to be outstanding.
(b) Extraordinary Dividends and Distributions.
If the Company shall distribute to all holders of its outstanding Common Stock
evidences of indebtedness of the Company, cash
3.
<PAGE> 4
(other than a cash distribution made as a dividend payable or to be payable at
regularly scheduled intervals and payable out of earnings or earned surplus
legally available for the payment of dividends under the laws of the State of
Delaware, but only to the extent that the aggregate of all such dividends paid
or declared after the date hereof does not exceed the consolidated net income
of the Company earned subsequent to the date hereof, as determined in
accordance with generally accepted accounting principles, consistently applied)
or assets or securities other than its Common Stock (including stock of a
subsidiary or securities convertible into or exercisable for such stock but
excluding dividends or distributions referred to in Section 5(a) above) (any
such evidences of indebtedness, cash, assets or securities, the "assets or
securities"), then, in each case, the Warrant Price shall be adjusted by
subtracting from the Warrant Price then in effect the value of the assets or
securities that the holder would have been entitled to receive as a result of
such distribution had the Warrant been exercised and the relevant shares of
Common Stock issued in the name of the holder immediately prior to the record
date for such distribution; provided that if, after giving effect to such
adjustment, the Warrant Price would be less than the then par value of the
Common Stock, the Company shall distribute such assets or securities to the
holder as if the holder had exercised the Warrant and the shares of Common
Stock had been issued in the name of the holder immediately prior to the record
date for such distribution. Any adjustment required by this Section 5(b) shall
be made whenever any such distribution is made, and shall become effective on
the date of distribution retroactive to the record date for the determination
of stockholders entitled to receive such distribution.
(c) Combinations, Etc. If the Company at any
time or from time to time after the date hereof shall combine or consolidate
the outstanding shares of Common Stock, by reclassification or otherwise, into
a lesser number of shares of Common Stock, then, and in each such case, the
Warrant Price then in effect shall be increased, concurrently with the
effectiveness of such combination or consolidation, to a price (calculated to
the nearest one cent) determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to the effectiveness of such combination or
consolidation and (ii) the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such effectiveness.
(d) Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to time after the date
hereof shall issue or sell additional shares of Common Stock ("Additional
Shares") for a consideration per share less than the Current Market Value in
effect on the earlier of
4.
<PAGE> 5
(i) the date on which the Company enters into a firm contract for the issuance
and sale of such Additional Shares (unless such contract specifies that the
price will be determined at a later date, then such later date shall apply to
this clause (i)) or (ii) the date of actual issuance or sale of such Additional
Shares, then, in each such case, the Warrant Price in effect immediately prior
to such date shall be reduced, concurrently with such issuance or sale, to a
price (calculated to the nearest one cent) determined by multiplying such
Warrant Price by a fraction (x) the numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such
issue or sale, plus (B) the number of shares of Common Stock which the
aggregate consideration received by the Company for the total number of such
Additional Shares so issued or sold would purchase at such Current Market
Value, and (xi) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale, provided that
(a) treasury shares shall not be deemed to be outstanding for purposes of this
Section 5(d) and (b) the shares of Common Stock then issuable (i) pursuant to
the terms of this Warrant and the Incentive Stock Option (as defined in the
Management Agreement) and (ii) on conversion of the Company's 9% Convertible
Senior Subordinated Debentures due 2002 issued pursuant to that certain
Indenture dated as of December 15, 1990 (the "9% Convertible Debt") shall be
deemed to be outstanding immediately prior to and after such issue or sale.
Notwithstanding anything contained herein to the contrary, no adjustment to the
Warrant Price shall be made pursuant to this Section 5(d) following the
issuance of Additional Shares pursuant to (xx) Section 5(a) hereof, (xxi) the
exercise of any options or issuance of any shares under any options or purchase
or other rights that are outstanding on or prior to the date hereof and that
were issued pursuant to any of the Company's employee stock option,
appreciation or purchase right plans, (xxii) the exercise of any options or
purchase or other rights or the issuance of any shares under any options or
rights that are granted after the date hereof, whether in accordance with the
terms of any of the Company's employee stock option, appreciation or purchase
right plans or otherwise, so long as the exercise price of any such option,
warrant, subscription or purchase right is not less than the Market Price on
the date that such grant is approved by the Company's Board of Directors or a
duly authorized committee thereof or, if later, the date that such exercise
price is established, (xxiii) the exercise of any other options, warrants or
other subscription or purchase rights outstanding on or prior to the date
hereof, including without limitation, this Warrant and the Stock Incentive
Option, (xxiv) the exercise of any conversion or exchange rights outstanding on
or prior to the date hereof issued by the Company, including without
limitation, any such conversion rights relating to the 9% Convertible Debt,
(xxv) the exercise of any conversion or exchange rights issued by the Company
after the
5.
<PAGE> 6
date hereof, so long as the conversion or exchange price is not less than the
Market Price on the date that such issuance is approved by the Board of
Directors or a duly authorized committee thereof or, if later, the date that
such conversion or exchange price is established or (xxvi) the issuance or sale
of Additional Shares pursuant to a firmly underwritten public offering of such
shares.
(e) Accountants' Report as to Adjustments. In
each case of any adjustment or readjustment in the Warrant Price, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms hereof and, upon the reasonable request of the
Holder, cause independent public accountants of recognized national standing
selected by the Company (which may be the regular auditors of the Company) to
verify such computation and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof
and the facts upon which such adjustment or readjustment is based, including a
statement of (i) the number of shares of Common Stock outstanding or deemed to
be outstanding and (ii) the Warrant Price in effect immediately prior to such
adjustment or readjustment and as adjusted and readjusted (if required by
Section 5) on account thereof. The Company will forthwith mail a copy of each
such report to the holder of this Warrant. The Company will also keep copies
of all such reports at its principal office, and will cause the same to be
available for inspection at such office during normal business hours by any
holder of this Warrant or any prospective purchaser of a Warrant designated in
writing by the holder thereof.
(f) No Dilution or Impairment. The Company will
not, by amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms hereof, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against dilution as provided herein.
Without limiting the generality of the foregoing, the Company (i) will not
permit the par value of any shares of Common Stock receivable upon the exercise
of any Warrant to be increased to an amount that exceeds the amount payable
therefor upon such exercise, (ii) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares upon the exercise of this Warrant from time to
time and (iii) will not take any action which results in any adjustment of the
Warrant Price if the total number of shares of Common Stock issuable after such
action upon the exercise of this Warrant would exceed the total number of
shares of Common Stock
6.
<PAGE> 7
then authorized by the Company's certificate of incorporation and available for
the purpose of issue upon such exercise.
(g) Exercise of Warrant in the Event of a
Consolidation, Merger, Sale of Assets, Reorganization, Etc.
(i) In case at any time the Company
shall be a party to any Transaction pursuant to which the
aggregate value of the cash, securities and other consideration
payable for a share of Common Stock is at least $20.00, then
(A) upon the consummation thereof this Warrant shall become
exercisable with respect to all shares of Common Stock covered
hereby (whether or not it has otherwise become exercisable with
respect to such shares pursuant to Section 1) and shall be
deemed to have been exercised by the holder hereof without any
act on the part of such holder and without any obligation on
the part of such holder to pay the exercise part until
presentation of this Warrant pursuant to clause (B) below, and
(B) this Warrant shall represent the right of such holder to
receive (upon presentation of this Warrant on or within thirty
(30) days after the date of such consummation together with
payment of the aggregate exercise price payable at the time of
such consummation in accordance with Section 2 for all shares
of Common Stock issuable upon such exercise immediately prior
to such consummation), in lieu of the Common Stock issuable
upon exercise of this Warrant prior to such consummation, the
cash, securities and other property to which such holder would
have been entitled upon the consummation of the Transaction if
such holder had exercised this Warrant immediately prior thereto.
(ii) The Company will not effect any
Transaction unless, prior to the consummation thereof, each
corporation or entity (other than the Company) which may be
required to deliver any cash, securities or other property upon
the exercise of this Warrant as provide herein shall assume, by
written instrument delivered to the holder of this Warrant, the
obligation to deliver to such holder such cash, securities or
other property as, in accordance with the foregoing provision,
such holder may be entitled to receive.
(iii) In case the Company shall be a
party to any Transaction pursuant to which the aggregate value
of the cash, securities and other consideration payable for a
share of Common Stock is less than $20.00, this Warrant shall
terminate upon the consummation thereof.
(h) Notices of Corporate Action. In the event of
any anticipated
(i) taking by the Company of a record of
the holders of any class of securities for the purpose of
7.
<PAGE> 8
determining the holders thereof who are entitled to receive
any dividend or other distribution on such securities, or
(ii) Transaction, or
(iii) voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to the holder of this Warrant a notice specifying (A) the
date or expected date on which any such record is to be taken for the purpose
of such dividend or distribution or (B) the date or expected date on which any
such Transaction, dissolution, liquidation or winding-up is to take place and
the time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such Transaction, dissolution,
liquidation or winding-up. Such notice shall be mailed at least twenty (20)
days prior to the date therein specified, in the case of any date referred to
in the foregoing clause (A), and at least thirty (30) days prior to the date
therein specified, in the case of the date referred to in the foregoing clause
(B).
6. Definitions. As used herein, the following terms
have the following respective meanings:
Common Stock: The Company's (a) Common Stock, par value $0.01
per share, and (b) Class B Stock, par value $0.01 per share.
Current Market Value: The average of the daily Market Price
per share of Common Stock for the period of five (5) days, ending on the day
immediately prior to the date determined pursuant to Section 5(d)(i) or (ii),
during which the national securities exchanges were opened for trading,
provided that if an exercise of this Warrant occurs as a result of or in
connection with the consummation of a Transaction, Current Market Value shall
be the aggregate value of the cash, securities and other consideration payable
for a share of Common Stock in connection with such Transaction.
Market Price: Per share of Common Stock on any date specified
herein shall be (a) the last sale price, regular way, on such date or, if no
such sale takes place on such date, the average of the closing bid and asked
prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading, or (b) if such Common Stock is not then listed or admitted
to trading on any national securities exchange, but is designated as a national
market system security by the National
8.
<PAGE> 9
Association of Securities Dealers, the last trading price of the Common Stock
on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the reported closing bid and
asked prices on such date as shown by the National Association of Securities
Dealers Automated Quotation System.
Registration Rights Agreement: The Registration Rights
Agreement, dated the date hereof, between the Company and the original holder
hereof.
Transaction: A merger, consolidation, sale of all or
substantially all of the Company's assets, recapitalization of the Common Stock
or other similar transaction, in each case if the previously outstanding Common
Stock is acquired for cash or changed into or exchanged for different
securities of the Company or changed into or exchanged for common stock or
other securities of another corporation or interests in a non-corporate entity
or other property (including cash) or any combination of any of the foregoing.
Warrant Price: The meaning specified in Section 5.
7. Amendments and Waivers. Any term of this Warrant may
be amended or modified or the observance of any term of this Warrant may be
waived (either generally or in a particular instance) only with the written
consent of the Company and the holder of this Warrant.
8. Assignment. The provisions of this Warrant shall be
binding upon and inure to the benefit of the original holder hereof, its
successors and assigns by way of merger, consolidation or operation of law, and
each third party transferee of this Warrant, provided that, this Warrant may
only be transferred in accordance with the terms of the Registration Rights
Agreement and, in the case of any third party transferee, such transferee shall
have delivered to the Company a valid agreement of assumption of the
restriction on transfer specified in this Section 8.
9. Exchange of Warrant. Upon surrender for exchange of
this Warrant, properly endorsed, for registration of Transfer or for exchange
at the principal office of the Company, the Company at its expense will issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of such holder or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face of this Warrant, provided that any such transfer of this
Warrant is made in accordance with the Registration Rights Agreement.
9.
<PAGE> 10
10. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Company may determine (or, in the case of any Warrant
held by the original holder hereof or any affiliate thereof or an institutional
holder or any of their respective nominees, of an affidavit of an authorized
officer of such holder, setting forth the fact of such loss, theft or
destruction, which shall be satisfactory evidence thereof and no further
indemnity shall be required as a condition of the execution and delivery of a
new Warrant), or, in the case of any such mutilation, upon the surrender of
such Warrant for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new
Warrant, of like tenor. Any Warrant in lieu of which any such new Warrant has
been so executed and delivered by the Company shall not be deemed to be an
outstanding Warrant for any purpose.
11. Remedies. The Company stipulates that the remedies
at law of the holder of this Warrant in the event of any default by the Company
in the performance of or in compliance with any of the terms of this Warrant
are not and will not be adequate, and that such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise without the requirement of the posting of a bond.
12. No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company (except to the extent that
shares of Common Stock are issued to such holder pursuant to this Warrant) or
as imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors or stockholders of the Company or otherwise.
13. Notices. All notices and other communications under
this Warrant shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, or by facsimile transmission, addressed (a) if
to the holder, at the registered address or the facsimile number of such holder
as set forth in the register kept at the principal office of the Company, and
(b) if to the Company, to the attention of the Secretary at its principal
office, or to its facsimile number, Attention: Secretary, provided that the
exercise of any Warrant shall be effected in the manner provided in Section 2.
10.
<PAGE> 11
14. Legends. The shares of Common Stock issuable
pursuant to the terms of this Warrant shall contain the legends set forth in
Section 7.2 of that certain Securities Purchase Agreement dated as of November
4, 1993 by and between the Company and Holder.
15. Miscellaneous. THIS WARRANT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
DATED as of February 3, 1994.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
Name: Eric R. Weiss
Title: Senior Vice President
11.
<PAGE> 12
FORM OF SUBSCRIPTION
[To be signed only upon exercise of the Warrant]
TO WESTWOOD ONE, INC.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, _________* shares of Common Stock of WESTWOOD
ONE, INC. and herewith makes payment of $______ therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
________________________________, whose address is ____________________________
________________________________________________________________.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
____________________
* Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to
which the Warrant is being exercised), in either case without making
any adjustment for additional shares of the Common Stock or any other
stock or other securities or property or cash which, pursuant to the
adjustment provisions referred to in the Warrant, may be deliverable
upon exercise. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised
portion of such Warrant, all as provided in the Warrant.
12.
<PAGE> 13
FORM OF ASSIGNMENT
[To be signed only upon transfer of the Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _____________________________________ the rights represented by
the within Warrant to purchase _______ shares of Common Stock of WESTWOOD ONE,
INC. to which the within Warrant relates, and appoints _______________________
__________________________________ Attorney to transfer such rights on the
books of WESTWOOD ONE, INC. with full power of substitution in the premises.
Dated: _________________
___________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
___________________________________
(Address)
Signed in the presence of:
___________________________________
13.
<PAGE> 1
VOTING AGREEMENT
This Voting Agreement (this "Agreement") is entered into as of
February 3, 1994 by and among Westwood One, Inc., a Delaware corporation
(the "Company"), Norman J. Pattiz ("Shareholder"), and Infinity Network Inc., a
Delaware corporation ("Manager Sub") which is a wholly-owned subsidiary of
Infinity Broadcasting Corporation, a Delaware corporation ("Manager").
R E C I T A L S :
A. Concurrent with the execution of this Agreement, (1)
the Company has acquired all of the outstanding shares of capital stock (the
"Acquisition") of Unistar Radio Networks, Inc., a Delaware corporation, (2) the
Manager Sub has purchased from the Company 5,000,000 shares of Common Stock and
options to acquire an additional 3,000,000 shares of Common Stock pursuant to a
Securities Purchase Agreement dated of even date herewith between the Company
and Manager Sub (the "Securities Purchase Agreement"), and (3) the Company has
engaged the Manager to provide management services to the Company pursuant to a
Management Agreement dated of even date herewith between the Company and the
Manager (the "Management Agreement").
B. Concurrent with or prior to the execution of this
Agreement, the Bylaws of the Company have been amended to provide that the
authorized number of directors constituting the Board of Directors of the
Company (the "Board") shall be nine (9), certain directors of the Company have
resigned, and the remaining directors have appointed new directors to fill the
vacancies created by such resignations and such increase in the Board size such
that the Board, as presently constituted, complies with the provisions hereof
regarding the rights of the parties hereto to designate persons for election to
the Board.
C. The Manager has required, in connection with the
Management Agreement and the Securities Purchase Agreement and as a condition
to both such agreements, and as further consideration for the Acquisition, that
this Agreement be entered into in order to (1) provide Manager with the right
to designate persons for election to the Board as herein set forth, and (2)
provide for the voting of the Class B Stock of the Company (the "Class B
Stock") by the Shareholder as provided herein. Accordingly, the parties desire
to enter into this Agreement and to provide for such rights and such voting.
Exhibit 6
<PAGE> 2
A G R E E M E N T :
NOW, THEREFORE, in consideration of the agreements contained
herein and in the Securities Purchase Agreement and the Management Agreement,
and as additional consideration for the Acquisition, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Designation of Board Members. The Company agrees to
use all reasonable efforts to appoint and maintain as members of the Board:
(a) three (3) independent directors, who are not
officers or employees of either the Company or Manager,
designated by a nominating committee of the Board (the
"Nominating Committee") consisting of one director designated
to serve on such committee by the Shareholder and one director
designated to serve on such committee by the Manager Sub (the
"Independent Directors");
(b) three (3) members designated by the
Shareholder pursuant to this Agreement (the "Shareholder
Designees"); and
(c) three (3) members designated by the Manager
Sub pursuant to this Agreement (the "Manager Designees").
The number of Manager Designees and Shareholder Designees are
subject to elimination, as provided in Sections 8 and 9 below.
Except as provided in Sections 9 and 10, the Company,
Shareholder and Manager Sub (Shareholder and Manager Sub being herein
collectively referred to as the "Voting Parties") agree that they will not take
any action to reduce or increase the authorized number of Board members (which
is presently nine (9)) without the written consent of the Voting Parties,
excluding however any party whose rights hereunder have been terminated in
accordance herewith. Pursuant to Sections 9 and 10, the Voting Parties shall
take all necessary action to reduce the size of the Board of Directors to the
size thereof called for by Section 9 or 10, as the case may be.
2. Agreement to Vote Shares. Each of the Voting Parties
hereby agrees to vote any and all shares of the Company held by him or it on
the record date for establishing stockholders entitled to so vote in favor of
the election as directors
B-2.
<PAGE> 3
of the Company of the Independent Directors, the Shareholder Designees and the
Manager Designees, as determined in accordance with the provisions hereof.
3. Notice of Designated Members.
(a) In connection with any proposed meeting of
the stockholders of the Company at which the term of office of any of the
Shareholder Designees or Manager Designees (collectively, the "Designated
Members") will expire, the party who originally designated such member
hereunder (the "Designating Party") may, by written notice to the Company,
notify the Company of the name of a person it designates as a replacement for
such Designated Member whose term of office is then expiring, which notice must
be received by the Company not less than thirty (30) calendar days in advance
of the date the Company's proxy statement was released to stockholders in
connection with the previous year's annual meeting of stockholders; provided,
however, that the notice shall be considered effective, notwithstanding the
foregoing, if it is received by the Company at a time when the Company can
thereafter fulfil its obligations hereunder in a timely manner and without
incurring any material expense in connection with or any delay of such meeting
of stockholders. Substantially concurrent with any such notification, the
Designating Party shall provide the Company with all information which the
Company may require with respect to such replacement person in order to comply
with the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Securities and Exchange Commission in connection with such
meeting. The Company shall, at least ten (10) days prior to such meeting,
notify the Voting Parties of any replacement person so designated by such
Designating Party, and the Voting Parties shall accordingly comply with Section
2 above in voting their shares of the Company at such meeting. For purposes of
the preceding sentence, any proxy statement of the Company which discloses that
the management nominees to the Board have been designated in accordance with
this Agreement shall be deemed to constitute notice to the Voting Parties of
their obligation to vote for such management nominees in accordance with this
Agreement. If any Designating Party fails to notify the Company that it
desires to replace its existing Designated Member in accordance with the
foregoing procedure, such Designating Party shall be deemed to have designated
for re-election such existing Designated Member, and the Voting Parties shall,
in all cases when not otherwise notified in accordance with this paragraph,
vote for the re-election of such Designated Member at such meeting.
(b) Notwithstanding the foregoing, each
Designated Member must be reasonably acceptable to the Company.
B-3.
<PAGE> 4
Any Designated Member shall be deemed reasonably acceptable unless such person
is affirmatively determined to be unacceptable to the Company by a majority of
all Board members who were not designated by the Designating Party that
designated the person in question. In reaching such determination, such Board
members may consider, among other things, the Designated Member's
qualifications, experience, personal background and conflicts of interest that
might result from other business affiliations. The Company shall cause a
meeting of the Board to be convened, for the purpose of making such
determination, upon the request of any of the Voting Parties. If a person is
determined to be unacceptable in accordance with this paragraph, the
Designating Party shall be given an opportunity to designate another person
instead. The Voting Parties agree that the original designees set forth in
Section 6 are acceptable.
4. Notice of Independent Directors. In connection with
any proposed meeting of the stockholders of the Company at which the term of
office of any of the Independent Directors will expire, the Company shall, at
least ten (10) days prior to the mailing of the proxy statement in respect of
such meeting, notify the Voting Parties of any replacement person designated by
the Nominating Committee in respect of such Independent Director whose term of
office will expire, in which case the Voting Parties shall, in accordance with
Section 2 hereof, vote their shares for the election of such replacement
Independent Director. For purposes of the preceding sentence, any proxy
statement of the Company which discloses that the management nominees to the
Board have been designated in accordance with this Agreement shall be deemed to
constitute notice to the Voting Parties of their obligation to vote for such
management nominees in accordance with this Agreement. In the absence of any
such notice to the Voting Parties, the Voting Parties shall vote for the
re-election of the incumbent Independent Director whose term of office will so
expire.
5. Interim Board Vacancies. If any Designated Member
dies or becomes disabled, resigns from the Board or is removed from the Board
prior to the expiration of such Designated Member's term on the Board, the
Designating Party that designated such Designated Member shall designate a
replacement Designated Member and notify each of the Voting Parties of such
designation. If any Independent Director dies or becomes disabled, resigns
from the Board or is removed from the Board prior to the expiration of such
Independent Director's term on the Board, the Nominating Committee shall
designate a replacement Independent Director and notify each of the Voting
Parties of such designation. The Voting Parties agree that, in either such
event, they shall request their respective Designated Members to vote, as
members of the Board and to the extent consistent with
B-4.
<PAGE> 5
the discharge of their fiduciary duties to the Company, for the appointment of
such replacement Designated Member or Independent Director, as the case may be,
to the Board, and the Company agrees to promptly convene a meeting of the Board
for the purpose of considering such appointment.
6. Original Designees. The parties acknowledge and
agree that, at the date of this Agreement, the Independent Directors and
Designated Members are as follows:
Independent Directors
(to be determined within 90
days after the date hereof)
Shareholder Designees
Norman J. Pattiz
Paul G. Krasnow
Arthur E. Levine
Manager Sub Designees
Mel Karmazin
Farid Suleman
William Hogan
7. Additional Voting Obligation of Shareholder. The
Shareholder agrees that until the earlier to occur of (a) the expiration or
termination of the Management Agreement and (b) the Shareholder ceasing to be
the Chairman of the Company other than as a result of a Removal for Cause, if
any matter is presented to the stockholders of the Company for a vote, he will
vote all of his shares of Class B Stock only in accordance with the
recommendation of a majority of the full incumbent Board. Such recommendation
may be set forth in the Company's proxy statement, or may be set forth in a
notice to the Shareholder signed by Board members constituting such majority,
and in either case the Shareholder agrees to so vote in accordance with such
recommendation, provided, however, that the Company shall indemnify Shareholder
and hold him harmless from any and all loss or liability resulting from any
claims made against Shareholder based upon, arising out of or relating to his
agreement to vote his shares of Class B Stock in the manner recommended by the
Board. For purposes of this Section 7, "Removal for Cause" shall mean the
termination of the Shareholder as Chairman of the Company for cause pursuant to
the terms of Section 6.1(a) of that
B-5.
<PAGE> 6
certain Employment Agreement dated October 18, 1993 between the Company and the
Chairman.
8. Nomination and Election of Shareholder as Chairman.
Manager Sub agrees that, so long as the Shareholder (a) has not been subject to
a Removal for Cause, (b) is a Director and (c) the Shareholder holds at least
one-sixth (1/6) of the shares of the Company held as of the date of this
Agreement, Manager Sub shall direct its respective Designated Members to vote,
as members of the Board and to the extent consistent with the discharge of
their fiduciary duties to the Company, for the appointment and nomination of
the Shareholder as Chairman.
9. Termination of Shareholder's Designation Rights. At
such time as the Shareholder fails to hold shares of the Company representing
at least two-thirds (2/3) of the shares of the Company held by the Shareholder
at the date of this Agreement, the designation rights of the Shareholder under
Section 1 shall be reduced so that the Shareholder shall only have the right to
designate two Shareholder Designees, and the total number of directors of the
Company shall be reduced by one. At such time as the Shareholder fails to hold
shares of the Company representing at least one-third (1/3) of the shares of
the Company held by the Shareholder at the date of this Agreement, the
designation rights of the Shareholder under Section 1 shall be further reduced
so that the Shareholder shall only have the right to designate one Shareholder
Designee, and the total number of directors of the Company shall be further
reduced by one. At such time as the Shareholder fails to hold any of the
shares of the Company held by the Shareholder at the date of this Agreement,
the designation rights of the Shareholder under Section 1 shall be terminated
and the total number of directors of the Company shall be further reduced by
one.
10. Termination of Manager Sub's Designation Rights. At
such time as the Manager Sub fails to hold or have rights to acquire shares of
the Company representing at least two-thirds (2/3) of the Manager Sub Shares,
the designation rights of the Manager Sub under Section 1 shall be reduced so
that the Manager Sub shall only have the right to designate two Manager Sub
Designees, and the total number of directors of the Company shall be reduced by
one. At such time as the Manager Sub fails to hold or have rights to acquire
shares of the Company representing at least one-third (1/3) of the Manager Sub
Shares, the designation rights of the Manger Sub under Section 1 shall be
further reduced so that the Manager Sub shall only have the right to designate
one Manager Sub Designee, and the total number of directors of the Company
shall be reduced by one. At such time as the Manager Sub fails to hold or have
rights to acquire any Manager Sub
B-6.
<PAGE> 7
Shares, the designation rights of the Manager Sub under Section 1 shall be
terminated and the total number of directors of the Company shall be further
reduced by one. For purposes of this Section 9, "Manager Sub Shares" means (a)
all 5,000,000 shares of Common Stock acquired by Manager Sub under the
Securities Purchase Agreement, (b) to the extent vested, up to the 3,000,000
shares of Common Stock that may be acquired by Manager Sub under the Purchase
Warrant (as defined in the Securities Purchase Agreement) and (c) to the extent
vested, up to the 1,500,000 shares of Common Stock that may be acquired by
Manager Sub under the Stock Incentive Option (as defined in the Management
Agreement).
11. Full Termination of Agreement. This Agreement shall
terminate in full at such time as the Management Agreement is terminated
pursuant to the terms thereof. This Agreement shall in any event fully
terminate ten (10) years after the date hereof.
12. Assignment; Transferees of Stock. The rights of the
Voting Parties to designate Designated Members hereunder may not be transferred
or assigned except only that if, by reason of disability, the Shareholder is
incapable of exercising his designation rights hereunder, such rights may be
exercised by a conservator of his estate, and upon his death such rights may be
exercised by his executor or administrator and thereafter by any party
receiving from him, by testate or intestate succession, shares representing at
least 50% of the voting power in the Company held by the Shareholder at the
date of this Agreement. The parties agree that any shares of the Company may
be sold, gifted or otherwise disposed of by the Voting Parties from time to
time during the term of this Agreement and that (a) if such shares are sold in
"brokers transactions" (as that term is defined under the Exchange Act) or in
transactions with a market maker, such shares shall be released from the
provisions of this Agreement concurrent with such sale, and (b) such shares
shall otherwise remain subject to the voting provisions of this Agreement, and
the transferee thereof shall be required to vote such shares in accordance with
Section 2 hereof but, except as otherwise provided in the first sentence of
this paragraph, shall have no right to designate Designated Members pursuant
hereto. Each of the Shareholder and Manager Sub consents to the Company
inserting appropriate legends referencing the restrictions and obligations
contained in this Agreement on the certificates representing the shares of the
Company held by the Shareholder and Manager Sub, as the case may be, on or
after the date of this Agreement. The Company undertakes to add such legends
to such certificates as soon as practicable after the date hereof.
B-7.
<PAGE> 8
13. Miscellaneous.
(a) Attorneys' Fees. If any party to this
Agreement shall commence an action to enforce any provision of this Agreement,
the unsuccessful party in such action shall pay to the prevailing party the
latter's reasonable fees, costs and expenses of enforcement, including without
limitation, such fees, costs and expenses of litigation and appeals.
(b) Severability. Should any one or more of the
provisions of this Agreement be determined to be illegal or unenforceable, each
other provision of this Agreement shall be given effect separately from the
provision or provisions determined to be illegal or unenforceable and shall not
be affected thereby.
(c) No Waiver. No failure or delay on the part
of any party in exercising any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy hereunder.
(d) Entire Agreement. This Agreement, the
Securities Purchase Agreement, the Management Agreement, the Registration
Rights Agreement (as defined in the Securities Purchase Agreement), the
Purchase Warrant, the Stock Incentive Option and the Purchase Agreement (as
defined in the Securities Purchase Agreement), together with the Exhibit
hereto, constitute the entire agreement among the parties pertaining to the
subject matter hereof and supersede all prior agreements and understandings of
the parties in connection herewith.
(e) Amendment and Modification. This Agreement
may be amended, modified and supplemented only by written agreement of the
parties hereto.
(f) Remedies. The parties to this Agreement
acknowledge and agree that the breach of any of the terms of this Agreement
will cause irreparable injury for which an adequate remedy at law is not
available. Accordingly, it is agreed that each party hereto shall be entitled
to an injunction, restraining order or other equitable relief to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of competent jurisdiction in the United States or any state
thereof, without the requirement of the posting of any bond. Such remedies
shall be cumulative and non-exclusive and shall be in addition to any other
rights and remedies the parties may have under this Agreement.
B-8.
<PAGE> 9
(g) Notices. Any notices hereunder shall be
deemed sufficiently given by one party to another only if in writing and if and
when delivered or tendered by personal delivery, by facsimile, on receipt of
confirmation of transmission, twenty-four (24) hours after the prepaid deposit
for overnight delivery with Federal Express or other similar overnight courier,
or as of three (3) business days after deposit in the United States mail in a
sealed envelope, registered or certified, with postage prepaid, addressed as
follows:
If to the Company: Westwood One, Inc.
9540 Washington Boulevard
Culver City, California 90232
Attn: Mr. Norman J. Pattiz
Fax#: (310) 840-0834
with a copy to: Riordan & McKinzie
5743 Corsa Avenue, Suite 116
Westlake Village, California 91362
Attn: Lawrence C. Weeks, Esq.
Fax#: (818) 706-2956
If to Shareholder: Mr. Norman J. Pattiz
c/o Westwood One, Inc.
9540 Washington Boulevard
Culver City, California 90232
Fax#: (310) 840-0834
with a copy to: Gibson, Dunn & Crutcher
2029 Century Park East, Suite 4100
Los Angeles, California 90067
Attn: Don Parris, Esq.
Fax#: (310) 277-5827
If to Manager Sub: Infinity Network Inc.
c/o Infinity Broadcasting Corporation
600 Madison Avenue, 4th Floor
New York, New York 10022
Attn: Mr. Farid Suleman
Fax#: (212) 898-2959
with a copy to: Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attn: Richard D. Bohm, Esq.
Fax#: (212) 909-6836
B-9.
<PAGE> 10
(h) Governing Law. This Agreement shall be
instituted and enforced in accordance with, and governed by, the laws of the
State of Delaware.
(i) Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
Name: Eric R. Weiss
Title: Senior Vice President
INFINITY NETWORK INC.
By: /s/ Farid Suleman
Name: Farid Suleman
Title: Vice President - Finance
/s/ Norman J. Pattiz
NORMAN J. PATTIZ, individually
B-10.
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement")
is entered into as of February 3, 1994 by and between Westwood One, Inc., a
Delaware corporation (the "Company"), and Infinity Network Inc., a Delaware
corporation (the "Purchaser").
R E C I T A L S :
A. Pursuant to a Securities Purchase Agreement entered
into concurrently herewith between the Company and the Purchaser (the
"Securities Purchase Agreement"), the Purchaser has purchased from the Company
5,000,000 shares of common stock of the Company ("Common Stock") and a warrant
to purchase an additional 3,000,000 shares of Common Stock (the "Purchase
Warrant").
B. Pursuant to a Management Agreement (the "Management
Agreement") entered into concurrently herewith between the Company and Infinity
Broadcasting Corporation ("Infinity"), which owns all of the outstanding
capital stock of the Purchaser, the Company has issued to the Purchaser a
warrant to purchase an additional 1,500,000 shares of Common Stock (the
"Management Warrant"), upon and subject to the terms and conditions set forth
therein.
C. The Company and the Purchaser desire in this
Agreement to provide, with respect to the above-described securities of the
Company, for (i) the granting to the Purchaser of the registration rights set
forth herein, and (ii) certain contractual restrictions on any sale or
disposition thereof.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
REGISTRATION RIGHTS
1.1 Definitions. As used in this Section 1:
(a) The terms "register," "registered," and
"registration" refer to a registration effected by filing with
Exhibit 7
<PAGE> 2
the Securities and Exchange Commission (the "SEC") a registration statement
("Registration Statement") in compliance with the Securities Act of 1933, as
amended (the "1933 Act") and the declaration or ordering by the SEC of the
effectiveness of such Registration Statement.
(b) The term "Registrable Securities" means (i)
the 5,000,000 shares of Common Stock issued to the Purchaser concurrently
herewith pursuant to the Securities Purchase Agreement, (ii) any and all shares
of Common Stock hereafter issued upon exercise of the Purchase Warrant, and
(iii) any and all shares of Common Stock hereafter issued upon exercise of the
Management Warrant. The term "Registrable Securities" shall also include any
Common Stock issued as (or issuable upon the conversion or exercise of any
warrant, right, or other security that is issued as) a dividend, stock split or
other distribution with respect to, or in exchange for, upon reclassification
or in replacement of, Registrable Securities. In the event of any
recapitalization by the Company, whether by stock split, reverse stock split,
stock dividend or otherwise, the number of shares of Registrable Securities
used throughout this Agreement for various purposes shall be proportionately
increased or decreased.
1.2 Demand Registration. If the Company shall receive
from the Purchaser a written request to register shares of Registrable
Securities (a "Demand"), the Company shall prepare and file a Registration
Statement under the 1933 Act covering the shares so requested to be registered,
and shall use its best efforts to cause as expeditiously as possible such
Registration Statement to become effective; provided, however, that if at the
time the request for registration is made, the Company is in the process of
registering securities under the 1933 Act for sale by it or has pending or in
process a material transaction, the disclosure of which would, in the good
faith judgment of the Board of Directors of the Company, materially and
adversely affect the Company, the Company may defer the filing (but not the
preparation) of the requested Registration Statement (a) in the case of another
registration statement in process, until the filing or abandonment of such
registration statement but in no event longer than sixty (60) days, and (b) in
the case of a material transaction, for up to sixty (60) days (but the Company
shall use its best efforts to resolve the transaction and file the Registration
Statement as soon as practicable). The Company shall be required to register
the Registrable Securities pursuant to this Section 1.2 in response to any
Demand by Purchaser, provided (i) no Demand may be made by Purchaser until on
and after one year from the date hereof, (ii) only one Demand may be made by
Purchaser (together with all permitted assignees thereof pursuant to Section
1.9) in any calendar year and (iii) the Company shall not be required to
register the Registrable
C-2.
<PAGE> 3
Securities more than three (3) times on registration forms other than Form S-3
(or any substantially equivalent successive form). The registration of
Registrable Securities under this Section 1.2 shall not be deemed to have been
requested unless such registration becomes effective (provided that if, within
one hundred twenty (120) days after it has become effective, the offering of
Registrable Securities pursuant to such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court, such registration will be deemed not to have
become effective unless 80% of such Registrable Securities have been sold
pursuant to such registration), and if the registration has remained effective
for one hundred twenty (120) days without such interference such registration
shall be deemed to have been requested regardless of whether any of the
Registrable Securities are ultimately sold pursuant to such registration. The
Company may grant piggyback registration rights with respect to any
registration statement demanded pursuant to this Section 1.2, provided that any
such rights shall be subject to the priority of Purchaser's rights under this
Section 1.2.
1.3 Incidental Registrations.
(a) If at any time or from time to time the
Company shall determine to register any of its securities, either for its own
account or the account of security holders, other than a registration relating
solely to employee benefit plans or a registration on Form S-4 relating solely
to an SEC Rule 145 transaction, the Company will:
(i) promptly give to Purchaser written
notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or
other state securities laws); and
(ii) include in such registration (and any
related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all
the Registrable Securities specified in a written request,
made by Purchaser within thirty (30) days after receipt of
such written notice from the Company, except as set forth in
Section 1.3(b) below.
(b) If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise Purchaser as a part of the written notice given
pursuant to Section 1.3(a)(i). In such event the right of Purchaser to
registration pursuant to this Section 1.3 shall be conditioned upon Purchaser's
participation in such underwriting and the inclusion of Purchaser's Registrable
C-3.
<PAGE> 4
Securities in the underwriting to the extent provided herein. Purchaser,
together with the Company and the other parties distributing their securities
through such underwriting, shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section 1.3, if the underwriter determines that marketing factors require a
limitation of the number of shares or type of securities to be underwritten,
the underwriter may limit the number of Registrable Securities to be included
in the registration and underwriting, or may exclude Registrable Securities
entirely from such registration and underwriting subject to the terms of this
Section. The Company shall so advise all holders of the Company's securities
that would otherwise have a right to be so registered and underwritten and the
number of shares of such securities, including Registrable Securities, that may
be included in the registration and underwriting shall be allocated among
Purchaser and all such other holders in proportion, as nearly as practicable,
to the respective amounts of securities of the Company proposed to be included
in such underwritten offering by all shareholders other than the Company;
provided, however, that the rights of Purchaser to include all or any allocable
portion of such Registrable Securities shall be subject to the priority (prior
to any allocation to Purchaser or others) of the holders of existing "demand"
registration rights similar to that provided in Section 1.2 hereof existing on
the date hereof (all such existing rights are included in agreements listed on
Schedule 2.2 to the Securities Purchase Agreement) and of other holders of
demand registration rights permitted pursuant to the proviso to Section 1.9
hereof. No securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
Purchaser disapproves of the terms of the underwriting, it may elect to
withdraw therefrom by written notice to the Company and the underwriter. The
Registrable Securities so withdrawn shall also be withdrawn from registration.
(c) The Purchaser agrees that any shares of
Registrable Securities which are not included in an underwritten public
offering described in Section 1.3(b) shall not be publicly sold by the
Purchaser for a period, not to exceed one hundred twenty (120) days, which the
managing underwriter reasonably determines is necessary in order to effect such
underwritten public offering.
1.4 Expenses of Registration. All expenses incurred in
connection with the registrations effected pursuant to Section 1.2 and all
registrations effected pursuant to Section 1.3, including without limitation
all registration, filing, listing and qualification fees (including SEC,
securities exchange,
C-4.
<PAGE> 5
National Association of Securities Dealers Inc. and blue sky fees and
expenses), printing expenses, escrow fees, fees and disbursements of counsel
for each of the Company and Purchaser (if Purchaser is participating in such
registration), and expenses of any special audits and/or "cold comfort" letters
incidental to or required by such registration, fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, and the
reasonable fees and expenses of any special experts retained by the Company in
connection with the requested registration shall be borne by the Company;
provided, however, that the Company shall not be required to pay stock transfer
taxes or underwriters' discounts or commissions relating to Registrable
Securities.
1.5 Obligations of the Company. Whenever required under
this Section 1 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC (but in any event
within ninety (90) days after the date of the Demand pursuant to Section 1.2) a
Registration Statement with respect to such Registrable Securities (which, in
the case of a Demand registration pursuant to Section 1.2, shall be on a form
designated by the underwriters or Purchaser) and use its diligent best efforts
to cause such Registration Statement to become effective, and, upon the request
of Purchaser, keep such Registration Statement effective for up to one hundred
twenty (120) days or such longer period as the Company may agree upon, or until
Purchaser has completed the distribution relating thereto, whichever occurs
first;
(b) prepare and file with the SEC such amendments
and supplements to such Registration Statement and the prospectus used in
connection with such Registration Statement as may be necessary to keep such
registration statement effective as provided in Section 1.5(a) and to comply
with the provisions of the 1933 Act with respect to the disposition of all
securities covered by such Registration Statement provided that, before filing
a Registration Statement or prospectus, or any amendments or supplements
thereto, the Company will furnish to Purchaser copies of all documents proposed
to be filed, which documents will be subject to the comments of Purchaser and
its counsel;
(c) furnish to Purchaser such numbers of copies of
the registration statement, the prospectus, including a preliminary prospectus,
and of each amendment and supplement (in each case, including all exhibits), in
conformity with the requirements of the 1933 Act, and such other documents as
C-5.
<PAGE> 6
Purchaser may reasonably request in order to facilitate the disposition of
Registrable Securities owned by Purchaser;
(d) use its best efforts to register and qualify
the securities covered by such Registration Statement under such other
securities or Blue Sky laws of such jurisdictions in such states as shall
be reasonably necessary to facilitate an orderly distribution of the
Registrable Securities, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business in
any such jurisdiction that, but for the requirements of this Section 1.5(d),
it would not be obligated to be so qualified or to file a general consent to
service of process in any such states or jurisdictions;
(e) use its best efforts to cause such securities
covered by such Registration Statement to be registered with or approved by
such other governmental agencies or authorities of the United States of America
or any state thereof as may be necessary to enable Purchaser to consummate the
disposition of such securities;
(f) in the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, usual and customary in form, with the managing underwriter of such
offering; Purchaser shall also enter into and perform its obligations under
such agreement; and the Company shall take such other actions as the
underwriters reasonably request in order to expedite or facilitate a
disposition of such securities;
(g) use its best efforts to cause all such
securities covered by such Registration Statement to be listed on any
securities exchange on which the Common Stock is then listed, and if the Common
Stock is not already so listed at such time, to use its best efforts promptly
to cause all such securities to be listed on either the New York Stock Exchange
or the American Stock Exchange or to be included in the National Association of
Securities Dealers Automotive Quotation System on the National Market List; and
to provide a transfer agent and registrar for such securities covered by such
Registration Statement no later than the effective date of such Registration
Statement;
(h) use its best efforts to obtain a "cold
comfort" letter or letters from the Company's independent public accountants in
customary form and covering matters of the type customarily covered by "cold
comfort" letters as Purchaser shall reasonably request;
C-6.
<PAGE> 7
(i) notify Purchaser at any time when a
prospectus relating thereto is required to be delivered under the 1933 Act of
the happening of any event as a result of which, or of the Company becoming
otherwise aware that, the prospectus included in such Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the request of Purchaser, prepare and furnish to Purchaser a
reasonable number of copies of an amended or supplemental prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such securities
under such Registration Statement, such prospectus shall not include an untrue
statement of a material fact or a misstatement of a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(j) make reasonably available for inspection by
representatives of Purchaser, by any underwriter participating in any
disposition to be effected pursuant to such Registration Statement and by any
attorney, accountant or other agent retained by Purchaser or any such
underwriter, all pertinent financial and other records, pertinent corporate
documents and properties of the Company reasonably requested by such persons in
connection with such Registration Statement.
Purchaser agrees that, upon receipt of any notice from the
Company of the happening of any event described in Section 1.5(i), Purchaser
will forthwith discontinue disposition of such securities pursuant to such
Registration Statement until Purchaser's receipt of the copies of the
supplemental or amended prospectus contemplated by Section 1.5(i), and, as so
directed by the Company, Purchaser will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in
Purchaser's possession, of the prospectus covering such securities covered by
such Registration Statement current at the time of receipt of such notice. In
the event the Company shall give any such notice, the period mentioned in
Section 1.5(a) shall be extended by the number of days during the period from
the date of the giving of such notice pursuant to Section 1.5(i) and through
the date when each seller of such securities covered by such Registration
Statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 1.5(i).
1.6 Selection of Underwriter. In any registration which
is being effected as a result of a Demand by Purchaser pursuant to Section 1.2,
Purchaser shall have the exclusive right to designate the managing underwriter
or underwriters with
C-7.
<PAGE> 8
respect to the related offer, which underwriter or underwriters must be
reasonably acceptable to the Company. In all other registrations, the Company
shall select, in its sole discretion, the managing underwriter or underwriters
with respect to the related offering of the Common Stock.
1.7 Indemnification.
(a) The Company will, and does hereby undertake to,
indemnify and hold harmless Purchaser, each of Purchaser's officers, directors
and affiliates, and each person controlling Purchaser, with respect to any
registration, qualification, listing, or compliance effected pursuant to this
Section 1, and each underwriter, if any (including any broker or dealer which
may be deemed an underwriter), and each person who controls any underwriter
(including any such broker or dealer), of the Registrable Securities held by or
issuable to Purchaser, against all claims, losses, damages, liabilities and
expenses, joint or several (or actions in respect thereto whether or not a
party thereto), to which they may become subject under the 1933 Act, the
Securities Exchange Act of 1934, as amended, (the "1934 Act"), or other
federal, state or common law, or otherwise, arising out of or based on (i) any
untrue statement (or alleged untrue statement) of a material fact contained in
any preliminary, final or summary prospectus, offering circular, or other
similar document or any amendment or supplement thereto (including any related
Registration Statement, notification, or the like) incident to any such
registration, qualification, listing, or compliance, or arising out of or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any violation or alleged violation by the Company of any
federal, state or common law, rule or regulation applicable to the Company in
connection with any such registration, qualification, or compliance, and will
reimburse, as incurred, Purchaser, each such underwriter, and each such
director, officer, affiliate and controlling person, for any legal and any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability, or action (whether or not
the indemnified party is a party to any proceeding); provided that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by an
instrument duly executed by Purchaser or by such underwriter and stated to be
specifically for use therein. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of Purchaser or any
other indemnified party and shall survive the transfer of such securities by
Purchaser.
C-8.
<PAGE> 9
(b) Purchaser will indemnify the Company, each of
its directors, and each officer who signs a Registration Statement in
connection therewith, and each person controlling the Company, each
underwriter, if any, and each person who controls any underwriter, of the
Company's securities covered by such a Registration Statement, against all
claims, losses, damages, liabilities and expenses, joint or several (or actions
in respect thereto whether or not a party thereto) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any such Registration Statement, preliminary, final or summary prospectus,
offering circular, or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse, as incurred,
the Company, each such underwriter and each such director, officer, partner,
and controlling person, for any legal or any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability or action (whether or not the indemnified party is a party to any
proceeding), in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) was made in such Registration Statement, preliminary, final or
summary prospectus, offering circular or other document, in reliance upon and
in conformity with written information furnished to the Company by an
instrument duly executed by Purchaser and stated to be specifically for use
therein; provided, however, that the liability of Purchaser hereunder shall be
limited to the net proceeds received by Purchaser from the sale of securities
under such Registration Statement.
(c) Each party entitled to indemnification under
this Section 1.6 (the "Indemnified Party") shall give notice to the party
required to provide such indemnification (the "Indemnifying Party") of any
claim as to which indemnification may be sought promptly after such Indemnified
Party has actual knowledge thereof, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom;
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be subject to approval by the Indemnified
Party (whose approval shall not be unreasonably withheld) and the Indemnified
Party may participate in such defense at the Indemnifying Party's expense if
representation of such Indemnified Party would be inappropriate due to actual
or potential differing interests between such Indemnified Party and any other
party represented by such counsel in such proceeding; and provided further that
the failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section 1,
except to the extent that such
C-9.
<PAGE> 10
failure to give notice shall materially adversely affect the Indemnifying Party
in the defense of any such claim or any such litigation. No Indemnifying
Party, in the defense of any such claim or litigation, shall except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff therein, to such Indemnified Party, of a
full and final release from all liability in respect to such claim or
litigation.
(d) Indemnification similar to that specified in
this Section 1.7 (with appropriate modifications) shall be given by the Company
and Purchaser with respect to any required registration or other qualification
of securities under any federal or state law or regulation or governmental
authority other than the 1933 Act.
(e) If recovery is not available under the
foregoing indemnification provisions of this Section 1.7 for any reason other
than as expressly specified therein, the parties entitled to indemnification by
the terms thereof shall be entitled to contribution to liabilities and
expenses. In determining the amount of contribution which the respective
parties are entitled, there shall be considered the relative fault of each
party in connection with the statements or omissions which resulted in such
claims, losses, damages or actions, as well as other equitable considerations
appropriate under the circumstances. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding anything in this section 1.7(e),
Purchaser will not be obligated to make contributions which in the aggregate
exceeds the amount for which it would have been liable pursuant to Section
1.7(b) had indemnification been available thereunder.
(f) The obligations of the parties under this
Section 1.7 shall be in addition to any liabilities which any party may
otherwise have to any other party.
1.8 Information by Purchaser. Purchaser shall furnish to
the Company such information regarding Purchaser and the distribution proposed
by Purchaser as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification, or compliance
referred to in this Section 1.
1.9 Transfer of Registration Rights. The rights,
contained in Sections 1.2 and 1.3 hereof, to cause the Company to register the
Registrable Securities, may be assigned or otherwise
C-10.
<PAGE> 11
conveyed to a transferee or assignee of Registrable Securities, provided that
such transferee or assignee (or, if such transferee or assignee is Infinity or
a wholly-owned subsidiary of Infinity, together with Infinity and other
wholly-owned subsidiaries of Infinity) acquires at least 500,000 shares of the
Common Stock constituting Registrable Securities held by the transferring
holder, and, provided further, that the Company is given written notice by the
transferor at the time of or within a reasonable time after said transfer,
stating the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being assigned.
1.10 Limitations on Subsequent Registration Rights. From
and after the date of this Agreement, the Company shall not, without the prior
written consent of Purchaser, enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder to (a) require the Company to effect a
registration under terms and conditions inconsistent with Purchaser's
registration rights under Sections 1.2 or 1.3 hereof, or (b) include any
securities in any registration filed under Section 1.3 hereof, unless, under
the terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent of such holder's
allocable portion consistent with Section 1.3(b); provided, however, that the
Company may grant rights to demand registrations under which such holders shall
have priority (prior to allocation among Purchaser and other holders possessing
"piggyback" registration rights, but not prior to Purchaser's Demand rights
under Section 1.2 hereof).
1.11 Rule 144 Reporting. With a view to making available
to Purchaser the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:
(a) at all times make and keep public information
available, as those terms are understood and defined in SEC Rule 144 or any
similar or analogous rule promulgated under the 1933 Act;
(b) file with the SEC, in a timely manner, all
reports and other documents required of the Company under the 1933 Act and 1934
Act; and
(c) so long as Purchaser owns any Registrable
Securities, furnish to Purchaser forthwith upon request: a written statement
by the Company as to its compliance with the reporting requirements of said
Rule 144 of the 1933 Act, and of
C-11.
<PAGE> 12
the 1993 Act and the 1934 Act; a copy of the most recent annual or quarterly
report of the Company; and such other reports and documents as Purchaser may
reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
SECTION 2
RESTRICTIONS ON TRANSFER
2.1 Definition of "Transfer". For purposes of this
Section 2, the term "Transfer" includes any sale, transfer, pledge,
hypothecation, assignment, encumbrance or other disposition to any person.
2.2 Restrictions on Transfer of Purchase Warrant and
Management Warrant. The Purchaser and the Company agree that, subject to
compliance with all applicable securities laws, Purchaser may Transfer the
Purchase Warrant or Management Warrant, or any portion thereof, (a) to any
wholly-owned subsidiary of Purchaser or to Infinity or any wholly-owned
subsidiary of Infinity and (b) to any other person or entity to the extent that
the right to acquire shares of Common Stock has vested pursuant to the terms of
the Purchase Warrant or Management Warrant, respectively, provided that such
transferee agrees in writing to be bound by the provisions of Section 2.3 with
respect to the shares of Common Stock issued upon exercise of either such
Warrant as if such transferee were the "Purchaser" referred to therein.
2.3 Restrictions on Transfer of Registrable Securities.
The Purchaser agrees to the following contractual restrictions (which shall be
in addition to any restrictions on transfer imposed by applicable securities
laws) on any Transfer of the Registrable Securities:
(a) The Purchaser shall not Transfer any of the
Registrable Securities under any circumstances for a period of one (1) year
following the date hereof;
(b) If the Company terminates the Management
Agreement other than pursuant to Section 3.2(b) or (c) thereof, there shall be
no restrictions on Transfer of the Registrable Securities except the one-year
restriction set forth in (a) above;
(c) If the Manager terminates the Management
Agreement, or if the Company terminates the Management Agreement pursuant to
Section 3.2(b) or (c) thereof, the Purchaser may
C-12.
<PAGE> 13
Transfer without contractual restriction such of the Registrable Securities as
Purchaser could, pursuant to Section 2.3(d), permissibly Transfer immediately
prior to such termination, and may additionally Transfer all of the other
Registrable Securities without contractual restriction upon the earlier of (i)
one year following such termination and (ii) five years after the date hereof;
and
(d) If the Management Agreement is not
terminated, upon and after two years following the date hereof, the Purchaser
may sell in the aggregate twenty-five percent (25%) of the sum of (i) the
Registrable Securities then held by the Purchaser plus (ii) any Registrable
Securities which, at the time of calculating such percentage amount, could then
be acquired by the Purchaser upon exercise of the Purchase Warrant and the
Management Warrant; and such percentage amount shall be increased by
twenty-five percent (25%) on each subsequent anniversary date thereafter (i.e.,
fifty percent (50%) on the third anniversary of the date hereof, seventy-five
percent (75%) on the fourth anniversary of the date hereof, and one hundred
percent (100%) on the fifth anniversary of the date hereof).
SECTION 3
MISCELLANEOUS
3.1 Entire Agreement. This Agreement, the Securities
Purchase Agreement, the Purchase Warrant, the Management Agreement, the
Management Warrant, the Stock Purchase Agreement (as defined in the Management
Agreement) and the Voting Agreement (as defined in the Securities Purchase
Agreement) constitute the entire agreement of the parties and supersede all
prior written or oral agreements, contemporaneous oral agreements,
understandings and negotiations between the parties with respect to the subject
matter hereof.
3.2 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware.
3.3 Amendments and Waivers. This Agreement may not be
modified, amended or waived except by written document specifically identifying
this Agreement and signed by the parties, except that waivers may be effected
by such written document if only signed by the party against which such waiver
is sought to be enforced.
C-13.
<PAGE> 14
3.4 Headings. The headings included in this Agreement
are for convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.
3.5 Attorneys' Fees. In the event of litigation or other
proceeding in connection with or related to this Agreement, the prevailing
party in such litigation or proceeding shall be entitled to reimbursement from
the opposing party of all reasonable expenses, including without limitation
reasonable attorney fees and expenses of investigation in connection with such
litigation or proceeding.
3.6 Notices. All notices hereunder shall be in writing
and shall be given to the respective parties by U. S. mail, personal delivery,
or facsimile transmission to their respective addresses as follows:
If to the Company: Westwood One, Inc.
9540 Washington Boulevard
Culver City, California 90232
Attention: Mr. Norman J. Pattiz
Facsimile: (310) 840-0834
with a copy to: Riordan & McKinzie
5743 Corsa Avenue, Suite 116
Westlake Village, California 91362
Attention: Lawrence C. Weeks, Esq.
Facsimile: (818) 706-2956
If to Purchaser: Infinity Network Inc.
c/o Infinity Broadcasting Corporation
600 Madison Avenue, 4th Floor
New York, New York 10022
Attention: Mr. Farid Suleman
Facsimile: (212) 898-2959
with a copy to: Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Richard D. Bohm, Esq.
Facsimile: (212) 909-6836
All such notices shall be deemed effective upon receipt.
3.7 Successors and Assigns. Subject to Section 1.9 and
Section 2 hereof, this Agreement shall be binding upon the parties hereto and
their respective successors and permitted assigns. The Company may not assign
its rights under this Agreement without the prior written consent of Purchaser.
C-14.
<PAGE> 15
3.8 Remedies, Waivers. No failure or delay on the part
of any party in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. The parties to this Agreement acknowledge and agree that the breach of
any of the terms of this Agreement will cause irreparable injury for which an
adequate remedy at law is not available. Accordingly, it is agreed that either
party shall be entitled to an injunction, restraining order or other equitable
relief to prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof in any court of competent jurisdiction in the
United States or any state thereof, without the requirement of posting any
bond. All rights and remedies existing under this Agreement are cumulative to
and not exclusive of, any rights or remedies available under this Agreement or
otherwise.
3.9 Severability. In the event that any provision of
this Agreement or the application of any provision hereof is declared to be
illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of this Agreement shall not be affected except to the extent
necessary to reform or delete such illegal, invalid or unenforceable provision.
3.10 Termination. The provisions of this Agreement shall
terminate and be of no further effect upon the earlier to occur of (a) the
mutual consent of the Company and Purchaser and (b) Purchaser ceasing to own or
have rights to acquire Registrable Securities.
3.11 Further Assurances. Each party shall cooperate and
take such action as may be reasonably requested by the other party in order to
carry out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
3.12 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
C-15.
<PAGE> 16
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers, duly authorized for such
purpose, as of the date first written above.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
Name: Eric R. Weiss
Title: Senior Vice President
INFINITY NETWORK INC.
By: /s/ Farid Suleman
Name: Farid Suleman
Title: Vice President - Finance
C-16.
<PAGE> 1
Exhibit 8
INFINITY NETWORK INC.
600 MADISON AVENUE
NEW YORK, NEW YORK 10022
February 3, 1994
CONFIDENTIAL
Westwood One, Inc.
9540 Washington Boulevard
Culver City, CA 90232
9% Convertible Senior
Subordinated Debentures due 2002
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of
February 1, 1994 (the "Credit Agreement"), among Westwood One, Inc. (the
"Company"), the Subsidiary Guarantors named therein, The Chase Manhattan Bank
(National Association), as Administrative Agent, and the Banks and Co-Agents
named therein. Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
Pursuant to Section 8.07(b) of the Credit Agreement, the
Company has agreed that it will not permit the aggregate outstanding face
amount of the 9% Debentures to exceed $0 from and after the 90th day following
the Closing Date.
In order to insure compliance by the Company with the
foregoing covenant and to satisfy the Company's obligations under Section
6.01(i) of the Credit Agreement, the parties hereto agree for the benefit of
the Banks referred to above as follows:
(i) Promptly after the Closing Date, the Company will
cause the trustee (the "Trustee") under the 9% Debenture Indenture to
issue a notice of redemption pursuant to Section 12.2 of the Debenture
Indenture to redeem the 9% Debentures not later than 90 days after the
Closing Date;
<PAGE> 2
(ii) Infinity Network Inc. ("INI") will offer to purchase
any 9% Debentures that are tendered for redemption at a time when they
are eligible for conversion under the 9% Debenture Indenture into
Common Stock (as therein defined) of the Company and promptly convert
such Debentures as therein provided;
(iii) If, for whatever reason, all of the outstanding 9%
Debentures have not been converted into Common Stock or purchased by
INI on the day preceding the date fixed for redemption, INI will
purchase from the Company, and the Company will issue and sell to INI,
shares of Common Stock in an amount equal to the number of such shares
into which the outstanding 9% Debentures then required to be redeemed
could have been converted on the last day such Debentures were
eligible for conversion under Section 14.1 of the 9% Debenture
Indenture for an aggregate purchase price equal to the aggregate
redemption price of such Debentures. INI will pay to the Company the
purchase price for such shares in cash and the Company will deposit
the proceeds of such sale with the Trustee in satisfaction of its
obligation to redeem all of the then outstanding 9% Debentures.
If you are in agreement with the foregoing, please sign the
enclosed copy of this letter and return it to the undersigned, whereupon it
will become a binding agreement between us.
<TABLE>
<S> <C>
INFINITY NETWORK INC.
By: /s/ Farid Suleman
--------------------
Name: Farid Suleman
Title: Vice President-
Finance
The foregoing is agreed to
as of the day first
above written:
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
------------------------
Name: Eric R. Weiss
Title: Senior Vice President
</TABLE>
2
