<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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Annual Report Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993 Commission file number 0-14702
INFINITY BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2766282
(State of incorporation) (I.R.S. Employer
Identification No.)
600 Madison Avenue
New York, New York 10022
(Address of principal executive offices)
(212) 750-6400
Registrant's telephone number, including area code
------------------------
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange
Title of Each Class on which registered
- - ------------------- -------------------
Class A Common Stock, NASDAQ National
par value $.002 per share Market System
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Securities registered pursuant to Section 12 (g) of the Act:
10 3/8% Senior Subordinated Notes Due 2002
(Title of class)
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _x_ No___.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 18, 1994 was approximately $811,482,437. As of
March 18, 1994, 28,477,720 shares of Class A Common Stock, 3,990,621 shares
of Class B Common Stock, and 496,114 shares of Class C Common Stock were
issued and outstanding.
Documents Incorporated By Reference--The registrant's definitive Proxy
Statement (to be filed pursuant to Regulation 14 A) is incorporated by
reference into Part III of the Form 10-K for the fiscal year ended
December 31, 1993.
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- - ------------------------------------------------------------------------------
TABLE OF CONTENTS
VOLUME I
PART I
- - ------------
ITEM 1. BUSINESS.............................................. 1
ITEM 2. PROPERTIES............................................ 11
ITEM 3. LEGAL PROCEEDINGS.................................... 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS... 12
PART II
- - ------------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS...................... 12
ITEM 6. SELECTED FINANCIAL DATA............................... 13
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................... 14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........... 16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE................... 16
PART III
- - ------------ The information required in this Part is incorporated
by reference from the registrant's definitive proxy
statement (to be filed pursuant to Regulation 14A). 17
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT....
ITEM 11. EXECUTIVE COMPENSATION................................
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT............................................
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........
PART IV
- - ------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K........................................... 17
SIGNATURES............................................ 30
VOLUME II
EXHIBITS
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<PAGE>
PART I
ITEM 1. BUSINESS
BACKGROUND
Infinity Broadcasting Corporation (the "Company" or "Infinity") is the
largest company in the United States whose business is exclusively devoted to
radio broadcasting. It is one of only two companies able to offer advertisers
a radio listening audience in each of the nation's top ten radio markets (the
other being CBS, Inc.). Based on information contained in Duncan's Radio
Market Guide (1994 ed.), and adjusting for the pro forma effect of the 1993
Acquisitions (as defined below), Infinity would have ranked first in total
radio revenues in 1993 among all companies owning radio stations in the United
States. The Company serves markets accounting for approximately $2.4 billion
in radio advertising revenues, representing approximately 27% of the total
radio advertising expenditures in the United States in 1993. Upon completion
of the acquisitions of WPGC-AM/FM and WXYT-AM referred to below, Infinity
would own and operate 26 radio stations serving 13 of the nation's largest
radio markets.
Since Infinity acquired its first radio station in May 1973, it has
expanded by acquiring and developing underperforming stations in the nation's
largest media markets, where the greatest proportion of radio advertising
dollars is spent. The Company believes that its presence in large markets
makes it attractive to advertisers and that the overall diversity of its
stations reduces its dependence on any single station, local economy or
advertiser.
In each of its markets, the Company attracts a specific demographic group
by targeting its program format and hiring popular on-air talent. The
Company's stations serve diverse target demographics through a broad range of
programming formats such as rock, oldies, adult contemporary, all-sports and
country. The Company's overall programming strategy in part is to acquire
significant on-air talent and broadcasting rights for sports franchises.
The diversity of station and market characteristics, combined with the
Company's successful acquisition and operating strategies, have enabled the
Company to achieve consistent growth in revenues and operating cash flow (as
used in this Form 10-K, the term "operating cash flow" means operating income
plus depreciation and amortization).
The Company was incorporated in 1972 in Delaware and first issued shares
of its common stock to the public in June 1986. In August 1988, the Company
became privately held as a result of a merger (the "Merger") with a company
whose stockholders were the Company's principal stockholders and executive
officers at the time. The Company was the surviving corporation in the
Merger. On February 5, 1992, the Company and certain holders of warrants
exercisable for shares of the Company's Class A Common Stock sold 13,788,826
shares of Class A Common Stock through an initial public offering (the "Common
Stock IPO"). In addition, on May 13, 1993, the Company and certain holders
of warrants exercisable for shares of the Company's Class A Common Stock sold
8,148,814 shares of Class A Common Stock through another public offering
(the "Second Common Stock Offering").
RECENT DEVELOPMENTS
On February 1, 1993, the Company completed the acquisition of radio
stations WZGC-FM (Atlanta), WZLX-FM (Boston) and WUSN-FM (Chicago) for a
total purchase price of approximately $100 million. On September 1, 1993, the
Company completed the acquisition of WIP-AM, an all-sports radio station
serving Philadelphia, for approximately $17.4 million (together with the
acquisition of radio stations WZGC-FM, WZLX-FM and WUSN-FM described above,
the "1993 Acquisitions"). In February 1994, the Company completed the
acquisition of KRTH-FM, a radio station serving Los Angeles, for
approximately $116 million.
On October 4, 1993, the Company entered into an agreement to purchase
WPGC- AM/FM in Washington, D.C. for approximately $60 million. On March
8, 1994, the Company entered into an agreement to acquire WXYT-AM, a
news/talk radio station serving Detroit for approximately $23 million.
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In addition, on February 3, 1994 the Company, Unistar Communications
Group, Inc. ("UCG") Unistar Radio Networks, Inc. ("Unistar") and Westwood
One, Inc. ("Westwood One") consummated the Stock Purchase Agreement dated
November 4, 1993 for the purchase by Westwood One of Unistar, an affiliate of
the Company, for approximately $101.3 million. In connection with the
Westwood One/Unistar transaction, an affiliate of the Company received 5
million newly issued shares of common stock of Westwood One for $3 per share
(which represents approximately 16.45% of the issued and outstanding capital
stock of Westwood One) and a warrant to purchase an additional 3 million
shares of Westwood One's common stock at a purchase price of $3 per share,
subject to certain vesting requirements. In connection with the
transactions, the Company is managing the combined operations of Westwood One
and Unistar pursuant to a management agreement, and the Company's Chief
Executive Officer, Mel Karmazin, and Chief Financial Officer, Farid Suleman,
serve as the Chief Executive Officer and Chief Financial Officer,
respectively, of Westwood One. The agreement provides for a base management
fee and additional warrants to acquire up to 1.5 million shares of Westwood
One's Common Stock at a purchase price ranging from $3 to $5 per share in the
event that Westwood One's Common Stock trades above certain target price
levels.
The Company continues to seek opportunities for expansion through
the acquisition of additional radio stations, although its ability to
make further acquisitions may be limited by certain regulatory
requirements. See "Business--Federal Regulation of Radio Broadcasting",
appearing elsewhere in this Report.
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<TABLE>
GENERAL
The following table sets forth certain information about the Company's
current radio stations:
<CAPTION> STATIONS
1993 1993 WITH
RADIO RADIO TARGET RANKINGS
MARKET MARKET TARGET DEMOGRAPHICS IN TARGET
STATION MARKET STATION FORMAT RANK(1) REVENUES(2) DEMOGRAPHICS RANK(3) DEMOGRAPHICS
- - ------- ------------ --------------- ------- ----------- ------------- -------- ---------(4)
($ MILLIONS)
<S> <S> <S> <C> <C> <S> <C> <C>
WXRK-FM New York, NY Classic Rock 1 $ 351.5 Men 25-54 1(tie) 44
WZRC-AM New York, NY 1 351.5 --(5) --(5) --(5)
WFAN-AM New York, NY All Sports 1 351.5 Men 25-54 1(tie) 44
KROQ-FM(6) Los Angeles, CA Alternative Rock 2 418.7 Men 18-34 2 43
KRTH-FM Los Angeles, CA Oldies 2 418.7 Persons 25-54 3(tie) 43
WJMK-FM/ Chicago, IL Oldies/MOR 3 266.7 Persons 25-54 9(tie) 35
WJJD-AM
WUSN-FM Chicago, IL Country 3 266.7 Persons 25-54 2 35
KOME-FM(7) San Francisco/ Album-Oriented 4/31(8) 174.0/ Men 18-34 7/5 46/13
San Jose, CA Rock 30.9
WIP-AM Philadelphia, PA All Sports 5 148.9 Men 25-54 3 23
WYSP-FM Philadelphia, PA Classic Rock 5 148.9 Men 25-54 2 23
WOMC-FM Detroit, MI Oldies 6 135.4 Persons 25-54 11 27
KVIL-FM/ Dallas/ Adult Contemporary 7 160.6 Women 25-54 1(tie) 31
AM(9) Ft. Worth, TX
WJFK-FM(10) Washington, DC Personality 8 164.1 Men 25-54 1 28
WBCN-FM Boston, MA Album-Oriented 9 124.3 Men 18-34 1 27
Rock
WZLX-FM Boston, MA Classic Rock 9 124.3 Men 25-54 3 30
KXYZ-AM(11) Houston, TX Spanish Language 10 143.4 Persons 18-49 --(11) --(11)
WZGC-FM Atlanta, GA Classic Rock 12 120.0 Men 25-54 7 19
WLIF-FM Baltimore, MD Adult Contemporary 19 63.5 Women 25-54 5 21
WJFK-AM Baltimore, MD Personality 19 63.5 Men 25-54 11 35
WQYK-FM/ Tampa/ Country 22 64.0 Persons 25-54 1 24
AM(12) St. Petersburg,
FL
<FN>
(1) Markets ranked by 1993 Arbitron metropolitan area population.
(2) Radio advertising revenues according to Duncan's Radio Market Guide (1994
ed.).
(3) Target demographics rank by Fall 1993 Arbitron Radio Market Reports.
(4) Number of stations in each market with rankings in the Company's target
demographics for such market, based on the Fall 1993 Arbitron Radio Market
Reports.
(5) Effective July 7, 1993, the Company entered into a Time Brokerage
and Option Agreement with Radio Korea New York ("RKNY"), pursuant to
which the Company will make substantially all of the programming time
on WZRC-AM available to RKNY for its Korean language programming for
a period of one year. The agreement also provides RKNY with an
option to purchase substantially all of WZRC's assets for $9.5
million. The agreement provides that if RKNY exercises the purchase
option, the Company will continue to make available WZRC's
programming time until consummation of the sale, but not later than
December 15, 1994.
2
(6) KROQ-FM is licensed to the community of Pasadena, California.
(7) KOME-FM is licensed to the community of San Jose, California.
(8) San Francisco and San Jose have radio market ranks of 4 and 31,
respectively, and KOME-FM's rankings within target demographics in
those markets are 7 and 5, respectively.
(9) KVIL-FM is licensed to the community of Highland Park-Dallas, Texas.
KVIL-AM is licensed to the community of Highland Park, Texas.
(10) WJFK-FM is licensed to the community of Manassas, Virginia.
(11) Not included in Arbitron rankings because the Company does not
subscribe to the Arbitron rankings in Houston.
(12) WQYK-FM is licensed to St. Petersburg, Florida, and WQYK-AM is
licensed to the community of Seffner, Florida.
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</TABLE>
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COMPANY STRATEGY
The Company's overall strategy is to own and operate radio
stations in the nation's largest radio revenue markets. The Company
believes that its presence in large markets makes it attractive to
advertisers and that the overall diversity of its stations reduces
its dependence on any single station, local economy, or
advertiser. The Company also believes that by serving major markets,
it is able to attract more highly skilled management, employees and
on-air talent.
In developing its stations, the Company takes a variety of actions to
improve a station's operating cash flow, including instituting strict
financial reporting requirements and cost controls, directing promotional
activities, developing programming to improve the station's appeal to a
targeted audience group and enhancing advertising sales efforts. In
particular, the Company emphasizes increasing local advertising revenues in
order to reduce dependence on national advertising revenues. During the year
ended December 31, 1993, the Company generated approximately 74% of its total
revenues from local and regional advertising.
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In operating its stations, the Company concentrates on the development
of strong decentralized local management, which is responsible for the
day-to-day operations of the station and is compensated based on the
station's financial performance. Local management, in cooperation with
corporate management, is responsible for developing programming. Corporate
management is responsible for long-range planning, establishing policies and
procedures, resource allocation and maintaining overall control of the
stations.
The overall mix of a station's programming is designed to fit each
station's specific format and serve its local community. The Company's overall
programming strategy includes acquiring significant on-air talent and sports
franchises for its radio stations. The Company believes that this strategy, in
addition to developing loyal audiences for its radio stations, enables the
Company to obtain additional revenues from syndicating such programming
franchises to other radio stations. In addition to its regular programming,
all of the Company's stations provide non-entertainment programming, such as
news and public affairs broadcasts.
The Company expects to continue to acquire radio stations with strong
growth potential in the Company's current markets, subject to the
Communications Act of 1934, as amended (the "Communications Act"), and FCC
rules, which impose certain limits on the maximum number of radio stations the
Company can own nationwide and the number of stations the Company can own in
the same geographic market. Because the Company has historically grown in part
through the acquisition of broadcasting properties, limitations imposed by the
FCC on the number of broadcasting properties the Company can acquire could
limit the Company's ability to grow through acquisitions in the future. In
1992, the FCC adopted changes in its ownership rules that, among other
things, increased the number of radio broadcasting properties the Company can
own both nationwide and within a single geographic market. See
"Business--Federal Regulation of Radio Broadcasting--Ownership Matters",
appearing elsewhere in this Report. Other than as described in this Report,
the Company has no present agreements or arrangements to acquire or sell any
radio stations.
The Company's affiliation with Westwood One and Unistar will enable the
Company to expand its presence in the radio program distribution
business while simultaneously enhancing the programming lineups of Westwood
One and Unistar.
ADVERTISING
The Company believes that radio is one of the most efficient,
cost-effective means for advertisers to reach specific demographic groups.
Advertising rates charged by radio stations are based primarily on a
station's ability to attract audiences in the demographic groups targeted
by advertisers (as measured by rating service surveys quantifying the number
of listeners tuned to the station at various times), on the number of
stations in the market competing for the same demographic group and on the
supply of and demand for radio advertising time. Rates are generally
highest during morning and evening drive-time hours.
Radio station revenues are derived substantially from local, regional and
national advertising. Local and regional sales generally are made by a
station's sales staff. National sales are made by "national rep" firms, which
specialize in radio advertising sales on the national level. These firms are
compensated on a commission-only basis. Most advertising contracts are
short-term, generally running for only a few weeks.
COMPETITION
Radio broadcasting is a competitive business. The Company's radio
stations compete for listeners and advertising revenues directly with other
radio stations within their markets. Radio stations compete for listeners
primarily on the basis of program content and by hiring on-air talent
which appeals to a particular
4
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demographic group. By building a strong listenership base comprised of a
specific demographic group in each of its markets, the Company is able to
attract advertisers seeking to reach these listeners.
Other media, including broadcast television, cable television,
newspapers, magazines, direct mail, coupons and billboard advertising also
compete with the Company's stations for advertising revenues.
SEASONALITY
The Company's revenues vary throughout the year. As is the case
throughout the radio broadcast industry, the Company's first quarter generally
reflects the lowest revenues for each year.
EMPLOYEES
As of December 31, 1993, the Company had approximately 675 full-time
employees and approximately 180 part-time employees. Certain employees at
the Company's stations in New York, Chicago, Philadelphia, and Boston,
totalling approximately 125, are represented by unions. The Company believes
that its relations with its employees and their unions are good.
The Company employs several high-profile on-air personalities with large
loyal audiences in their respective markets. The Company generally enters into
employment agreements with its on-air talent and commissioned sales
representatives to protect its interests in those relationships that it
believes to be valuable. The Company has entered into employment agreements
with three of its four executive officers (see "Executive
Compensation--Employment Agreements" appearing in Part III of this Report,
which is incorporated by reference) and with all of its high-profile on-air
personalities.
FEDERAL REGULATION OF RADIO BROADCASTING
The ownership, operation and sale of radio stations, including those
licensed to the Company, are subject to the jurisdiction of the FCC, which
engages in extensive and changing regulation of the radio broadcasting
industry under authority granted by the Communications Act. Among other
things, the FCC assigns frequency bands for broadcasting; determines the
particular frequencies, locations and operating power of stations;
issues, renews, revokes and modifies station licenses; determines whether
to approve changes in ownership or control of station licenses; regulates
equipment used by stations; adopts and implements regulations and policies
that directly or indirectly affect the ownership, operation and
employment practices of stations; regulates program content (including
indecent and obscene program material) and has the power to impose penalties
for violations of its rules or the Communications Act.
The following is a brief summary of certain provisions of the
Communications Act and of specific FCC regulations and policies. Reference
should be made to the Communications Act, FCC rules and the public notices
and rulings of the FCC for further information concerning the nature and
extent of federal regulation of broadcast stations.
License Renewal. Radio broadcasting licenses are granted for maximum
terms of seven years. They are subject to renewal upon application to the FCC.
During certain periods when a renewal application is pending, (1) competing
applicants are permitted to file for the radio frequency being used by the
renewal applicant; (2) interested parties, including members of the public,
are permitted to file petitions to deny license renewal applications;
and (3) the transferability of the applicant's license is restricted. The
FCC is required to hold evidentiary hearings on renewal applications if a
competing application is filed against a renewal application, or if the FCC
is unable to determine that
5
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renewal of a license would serve the public
interest, convenience and necessity, or if a petition to deny raises a
"substantial and material question of fact" as to whether the grant of the
renewal application would be prima facie inconsistent with the public
interest, convenience and necessity.
The following table sets forth the date on which each of the Company's
radio stations was acquired, the frequency on which each station operates,
and the date on which each such station's FCC license expires:
EXPIRATION
DATE OF DATE OF FCC
STATION MARKET(1) ACQUISITION FREQUENCY AUTHORIZATION
- - ------- -------------------------- ----------- ----------- -------------
WXRK-FM New York, NY.............. 11/81 92.3 MHz 06/01/98
WZRC-AM New York, NY.............. 11/81 1480 KHz 06/01/98
WFAN-AM New York, NY.............. 04/92 660 KHz 06/01/98
KROQ-FM Los Angeles, CA........... 09/86 106.7 MHz 12/01/97
KRTH-FM(3) Los Angeles, CA........... 02/94 101.1 MHz 12/01/97
WJMK-FM Chicago, IL............... 07/84 104.3 MHz 12/01/96
WJJD-AM Chicago, IL............... 07/84 1160 KHz 12/01/96
WUSN-FM Chicago, IL............... 02/93 99.5 MHz 12/01/96
KOME-FM San Jose/ 05/73 98.5 MHz 12/01/97
San Francisco, CA...
WYSP-FM(2) Philadelphia, PA.......... 11/81 94.1 MHz 08/01/91
WIP-AM Philadelphia, PA.......... 09/93 610 KHz 08/01/91
WOMC-FM Detroit, MI............... 04/88 104.3 MHz 10/01/96
WJFK-FM Washington, DC............ 12/86 106.7 MHz 10/01/95
KVIL-FM Dallas/Ft. Worth, TX...... 07/87 103.7 MHz 08/01/97
KVIL-AM Dallas/Ft. Worth, TX...... 07/87 1150 KHz 08/01/97
WBCN-FM Boston, MA................ 02/79 104.1 MHz 04/01/98
WZLX-FM Boston, MA................ 02/93 100.7 MHz 04/01/98
KXYZ-AM Houston, TX............... 06/83 1320 KHz 08/01/97
WLIF-FM Baltimore, MD............. 05/89 101.9 MHz 10/01/95
WJFK-AM Baltimore, MD............. 05/89 1300 KHz 10/01/95
WZGC-FM Atlanta, GA............... 02/93 92.9 MHz 04/01/96
WQYK-FM Tampa/St. Petersburg, FL.. 12/86 99.5 MHz 02/01/96
WQYK-AM Tampa/St. Petersburg, FL.. 11/87 1010 KHz 02/01/96
(1) Some stations are licensed to a different community located within the
market which they serve.
(2) An application for renewal of the WYSP-FM license was filed on April 1,
1991. Two Petitions to Deny were filed against such renewal application in
July 1991. See "Business--Federal Regulation of Broadcasting--Programming
and Operation," appearing elsewhere in this Report. One of these petitions
has been dismissed by the FCC, and one remains pending. The station's
operating authority remains effective during the pendency of the remaining
petition.
(3) The FCC granted its consent to assignment of the KRTH license to the
Company on February 1, 1994. A Petition for Reconsideration of the
FCC's grant was filed by Americans for Responsible Television
on March 3, 1994. The station's operating authority and the FCC's
grant of assignment remain effective during the pendency of this
Petition. See "Business--Federal Regulation of Radio
Broadcasting--Programming and Operation".
Ownership Matters. The Communications Act prohibits the assignment of a
license or the transfer of control of a broadcast licensee without the
prior approval of the FCC. In determining whether to grant or renew a
broadcast license, the FCC considers a number of factors pertaining to
the licensee, including compliance with the Communications Act's
limitations on alien ownership, compliance with various rules limiting common
ownership of broadcast, cable and newspaper properties, and the "character" of
the licensee and those persons holding "attributable" interests therein.
Under the Communications Act, broadcast licenses may not be granted to
any corporation having more than one-fifth of its issued and outstanding
capital stock owned or voted by aliens (including non-U.S. corporations),
foreign governments or their representatives (collectively, "Aliens") or
having an Alien as an officer or director. The Communications Act also
prohibits a corporation
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without FCC waiver, from holding a broadcast license
if that corporation is controlled, directly or indirectly, by another
corporation, any officer of which is an Alien, or more than one-fourth of the
directors of which are Aliens, or more than one-fourth of the issued and
outstanding capital stock of which is owned or voted by Aliens. The FCC has
issued interpretations of existing law under which these restrictions in
modified form apply to other forms of business organizations, including
partnerships. As a result of these provisions, in the absence of a waiver
(which the FCC has granted in very limited circumstances), the Company,
which serves as a holding company for its various radio station subsidiaries,
cannot have more than 25% of its stock owned or voted by Aliens, and cannot
have an officer who is an Alien, or more than one-fourth of its Board of
Directors consisting of Aliens.
Certain merchant banking partnerships (the "Lehman Investors")
affiliated with Shearson Lehman Brothers Holdings, Inc. ("SLBH") hold
shares of the Company's capital stock and warrants exercisable for
additional shares. See "Security Ownership of Certain Beneficial Owners
and Management," appearing in Part III of this Report which is incorporated
by reference. Certain of the Lehman Investors and certain limited partners
in the Lehman Investors may be deemed to be Aliens or controlled by
Aliens or their representatives under the Communications Act.
Approximately 1.51% and .72% of the Company's issued and outstanding capital
stock is owned and voted, respectively, by the Lehman Investors. Assuming the
exercise of all warrants held by the Lehman Investors, approximately
20.36% and 9.37% of the Company's issued and outstanding capital stock
would be owned and voted, respectively, by the Lehman Investors. The
warrants held by the Lehman Investors can only be exercised by the Lehman
Investors to the extent such exercise would not cause the Company to
violate the Communications Act's limitations on Alien ownership or control.
Current FCC rules limit the number of radio broadcast stations that can
be commonly owned, operated or controlled. These rules prohibit the Company
from owning, operating or controlling, directly or indirectly, more than 18 AM
and 18 FM radio stations in the United States provided that an entity
may have a noncontrolling interest in up to 3 additional FM and 3
additional AM stations that are controlled by members of minority groups or
by certain small businesses. The 18 station limitation will increase to 20
in September 1994. The Company currently owns 15 FM radio stations and
8 AM radio stations, and has entered into agreements to acquire Washington,
D.C. market radio stations WPGC(AM) and WPGC(FM) and Detroit, Michigan
radio station WXYT(AM).
The Communications Act and FCC rules also generally limit the common
ownership, operation, or control of radio broadcast stations in the same
service (AM or FM) serving the same geographic market, of a radio broadcast
station and a television broadcast station serving the same geographic market
and of a radio broadcast station and a daily newspaper serving the same
geographic market. Under these rules, absent waivers, the Company would not be
permitted to acquire any newspaper or television broadcast station (other than
low-power television) in a geographic market in which it now owns any radio
broadcast properties. The FCC's rules provide for the liberal grant of waivers
of the rule prohibiting ownership of radio and television stations in the same
geographic market in the top 25 television markets if certain other conditions
are satisfied. Similar newly- enacted rules provide for liberal grant of
waivers of the rule prohibiting common ownership of a radio station and a
newspaper in the same market in the nation's 25 largest markets.
Until August 1992, the multiple ownership rules permitted the Company to
own both an AM and FM station in the same geographic market, but did not allow
ownership of two AM or two FM stations in the same market. As a result of the
1992 rule changes, the Company is now permitted to own up to three
stations, no more than two of which are FM stations, in markets with fewer
than 15 commercial stations, so long as the owned stations represent less
than 50% of the stations in the market; the Company may own up to two AM and
two FM stations, so long as the combined audience share of those stations
does not exceed 25%. The FCC is currently considering other possible
changes to some of the FCC rules governing
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the ownership of broadcast properties. See "Federal Regulation of Radio
Broadcasting--Proposed Changes". The Company owns three stations in each of
the New York City and Chicago markets, and two FM stations in the Boston
and Los Angeles markets, all of which ownership combinations are consistent
with the new rules. Completion of the pending Washington, D.C. and
Detroit acquisitions will also be consistent with these new rules.
The FCC generally applies its ownership limits to "attributable"
interests held by an individual, corporation, partnership or other
association. In the case of corporations holding broadcast licenses, the
interests of officers, directors and those who, directly or indirectly, have
the right to vote 5% or more of the corporation's stock (or 10% or more
of such stock in the case of insurance companies, mutual funds, bank
trust departments and certain other passive investors that are holding stock
for investment purposes only) are generally attributable, as are positions
of an officer or director of a corporate parent of a broadcast licensee.
Currently, none of the Company's officers, directors or stockholders has an
attributable interest in any company licensed to operate broadcast stations
other than the Company, except that one of the Company's directors has an
attributable interest in an FM radio station located in the Denver, Colorado
market. Certain stockholders and a director of the Company have a
non-attributable interest in another broadcasting company, which is
licensed to operate radio stations in some of the markets in which the
Company's radio stations are located. Because such interests are
non-attributable and have been disclosed repeatedly in ownership reports
filed by the Company with the FCC, and in applications filed by the Company
with the FCC which were granted, the Company believes that these
cross-interests are consistent with FCC rules and policies.
Local Marketing Agreements. Over the past several years, a number
of radio stations have entered into what have commonly been referred to as
"Local Marketing Agreements", or "LMAs". While these agreements may take
varying forms, under a typical LMA, separately owned and licensed radio
stations agree to enter into cooperative arrangements of varying sorts,
subject to compliance with the requirements of the antitrust laws and
the FCC's rules and policies, including the requirement that the licensee of
each station maintain independent control over the programming and station
operations of its own stations. One typical type of LMA is a programming
agreement among two separately-owned radio stations serving a common
service area, whereby the licensee of one station programs substantial
portions of the broadcast day on the other licensee's station, subject to
ultimate editorial and other controls being exercised by the latter
licensee, and sells advertising time during such program segments. The FCC
has held that such agreements are not contrary to the Communications Act,
provided that the licensee of the station that is being substantially
programmed by another entity maintains complete responsibility for, and
control over, the operations of its broadcast station, and assures
compliance with applicable FCC rules and policies. During the past year, the
Company had such an arrangement with respect to its station WZRC(AM) in New
York City.
The FCC's rules provide that a station brokering more than 15% of the
weekly broadcast time of another station serving of the same market will be
considered to have an attributable ownership interest in the brokered station
for purposes of the FCC's multiple ownership rules. As a result, under these
rules, a broadcast station will not be permitted to enter into an LMA or time
brokerage agreement giving it the right to program more than 15% of the
broadcast time, on a weekly basis, of another local station that it could not
own under the FCC's local ownership rules. The FCC's rules also prohibit a
broadcast licensee from simulcasting more than 25% of its programming on
another station in the same broadcast service (i.e., AM-AM or FM-FM), whether
it owns that other station or has a time brokerage or LMA arrangement, with
it where the brokered and brokering stations serve substantially the same
geographic area.
Programming and Operation. The Communications Act requires broadcasters
to serve the "public interest". Since the late 1970s, the FCC gradually has
relaxed or eliminated many of the more formalized procedures it developed to
promote the broadcast of certain types of programming responsive to the needs
of a station's
8
</PAGE>
<PAGE>
community of license. However, licensees continue to be
required to present programming that is responsive to community problems,
needs and interests and to maintain certain records demonstrating such
responsiveness. Complaints from listeners concerning a station's
programming often will be considered by the FCC when it evaluates renewal
applications of a licensee, although such complaints may be filed at any
time. Stations also must follow various rules promulgated under the
Communications Act that regulate, among other things, political
advertising, the broadcast of obscene or indecent material, sponsorship
identifications, the advertisement of contests and lotteries, and technical
operations, including limits on radio frequency radiation. In addition,
licensees must develop and implement affirmative action plans designed to
promote equal employment opportunities, and must submit reports to the FCC
with respect to these matters on an annual basis and in connection with
renewal applications.
Failure to observe these or other rules and policies can result
in the imposition of various sanctions, including monetary forfeitures,
the grant of "short" (less than the full seven-year) renewal terms or, for
particularly egregious violations, the denial of a license renewal
application or the revocation of a license.
In a letter dated October 25, 1989, the FCC requested the Company to
respond to a complaint that it had received alleging that WXRK-FM, the
Company's New York City FM radio station, had broadcast certain
programming that contained "indecent" material. On December 29, 1989, the
Company submitted a letter to the FCC in which it contended that WXRK-FM
had not broadcast "indecent" programming. On November 29, 1990, the FCC
issued a Notice of Apparent Liability for Monetary Forfeiture advising
WXRK-FM (New York), WYSP-FM (Philadelphia), and WJFK-FM (Washington,
D.C.) of apparent liability for forfeitures in the amount of $2,000 each
for the broadcast, which was part of the Howard Stern Show and had been
originated by WXRK-FM and simulcast over the other two stations. On
February 11, 1991, the Company responded to this Notice, opposing the
imposition of any fine and again contending that "indecent" programming had
not been broadcast. On October 23, 1992, the FCC's Staff issued a Memorandum
Opinion and Order in which it determined that the three stations were liable
for those forfeitures. Thereafter, the Company sought reconsideration of that
Order which the FCC subsequently denied. On December 30, 1993, the Company
advised the FCC that it did not intend to pay the forfeiture and that it
wished to avail itself of de novo U.S. District Court procedures in the
_______
event that the FCC wished to continue to pursue the matter by initiating a
collection suit in such court as is required by statute.
On December 18, 1992, the same date on which the FCC approved the
Company's acquisition of the three Cook Inlet radio stations (see
"Business--Recent Developments"), the FCC issued a Notice of Apparent
Liability (the "1992 NAL") advising the Company that it may be liable for a
$600,000 monetary forfeiture for broadcasts over WXRK-FM, WYSP-FM, and
WJFK-FM, of certain material in the Howard Stern Show that the FCC believes
may be "indecent". The 1992 NAL related to broadcasts aired after the FCC's
October 1989 action. The NAL stated that additional enforcement action would
result if additional violations of the FCC's indecency regulations have
occurred or should occur, and that further action could include additional
monetary forfeitures, renewal of licenses for short terms, or proceedings
focusing upon the Company's qualifications to be an FCC licensee. The
Company was afforded an opportunity to show why the proposed forfeiture
should not be imposed or should be reduced. On February 23, 1993, the
Company filed its response with the FCC, which asserted that the cited
material is not indecent and set forth several other defenses. The FCC has
taken no action on the Company's response and the matter is pending.
On August 12,1993, the same date on which the FCC approved the
Company's acquisition of Station WIP-AM in Philadelphia, the FCC issued
a Notice of Apparent Liability for a Forfeiture (the "1993 NAL") in the
amount of $500,000 which was directed to the Company's subsidiaries
which operate Stations WJFK-AM/FM, WXRK-FM and WYSP-FM, and which
relates to the broadcast of allegedly indecent material on certain dates
in November and December 1992 and January
9
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<PAGE>
1993. The 1993 NAL stated that if additional violations of the FCC's indecency
regulations should occur, further enforcement action could include proceedings
focusing upon the Company's qualifications to be a licensee. The Company
submitted a response to the 1993 NAL on October 15, 1993, which vigorously
asserted its position that the material is not indecent, and advanced other
defenses.The FCC has taken no action on the Company's response and the matter
remains pending.
On August 5, 1993, Americans for Responsible Television filed a Formal
Petition to Deny against the Company's application to purchase Station
KRTH-FM in Los Angeles, which contended that the Company's pending
proceedings at the FCC involving indecency matters should cause the FCC to
conclude that the Company is unqualified to purchase KRTH. In addition, an
individual filed a late-filed Petition to Deny the KRTH assignment
application, which made a similar argument. The Company opposed these
Petitions, and on February 1, 1994, the FCC granted the KRTH application
and the Company closed the KRTH transaction on February 15, 1994. On March 3,
1994, ART filed a Petition for Reconsideration of the FCC's grant. The
Company intends to vigorously oppose ART's Petition, and the current due
date for the Company's Opposition is April 13, 1994.
On February 1, 1994, the same date on which the FCC granted the KRTH
assignment application, the FCC released an NAL in the amount of $400,000
(the"1994 NAL") directed to Stations WXRK-FM, WYSP-FM and WJFK-AM/FM
relating to the broadcast of allegedly indecent material within the Howard
Stern Show on four dates in August, September and October, 1993. The
Company intends to vigorously assert that the material in question is not
indecent and will advance other defenses in a response that is currently
due on April 4, 1994.
On November 15, 1993, the African American Businesses Association (AABA)
filed a Petition to Deny against the application for assignment of the
WPGC(AM/FM) licenses to the Company. The Petition alleges that the Company,
which carries the Howard Stern Show on its Station WJFK-FM in the
Washington, DC market, is unqualified to be a licensee because such show
contains allegedly racist comments; that the broadcast of such show creates a
hostile, racist environment at WJFK-FM in violation of civil rights laws and
the FCC's equal employment opportunity rules; and that the marketing
environment created by the acquisition at WPGC(AM/FM) will be hostile to
African American businesses because purchase of advertising time on
WPGC(AM/FM) will purportedly subsidize the broadcast of the Howard Stern Show
on WJFK-FM. AABA also requests the FCC to order that the renewal application
for WJFK-FM be filed by the Company one year earlier than it would
otherwise be due and that the renewal application be designated for hearing
and denied. On November 22, 1993, a late-filed pleading styled "Petition to
Deny" was filed by an individual which replicates the argument made by the
AABA. The Company filed an Opposition to both Petitions on December 2, 1993,
which vigorously contested the allegations set forth in the Petitions. The
WPGC(AM/FM) assignment application is pending.
The Company is involved in pending proceedings at the FCC (including
complaints as to which the FCC has not taken any action that were filed after
the 1994 NAL) which relate to the broadcast of allegedly indecent
material by certain of the Company's stations. The Company is contesting, on
an informal basis, the FCC's and complainants' contentions in these
proceedings. Changes in FCC policy toward indecent broadcasts or the pending
proceedings against the Company or other FCC licensees for allegedly indecent
broadcasts could, among other things, result in the FCC calling into question
the Company's continuing fitness as a licensee and delaying the grant of, or
refusing to grant, its consent to the assignment of licenses to the Company.
On July 1, 1991, the Philadelphia Lesbian and Gay Task Force, the
National Organization for Women (Pennsylvania Chapter and Philadelphia
Chapter), and Aspira, Philadelphia (collectively, the "Petitioners") filed a
Petition to Deny the license renewal application of WYSP-FM, Philadelphia,
Pennsylvania, and of three other radio stations owned by other companies in
the Philadelphia market. The Petition alleges that WYSP-FM's employment of
women and minorities during
10
</PAGE>
<PAGE>
the previous license term was not in compliance with FCC rules. On August
30, 1991, a subsidiary of the Company, Infinity Broadcasting Corporation
of Pennsylvania, licensee of WYSP-FM, filed an Opposition to the
Petition contesting these allegations. On January 15, 1992, the Petitioners
filed a Reply, which raised no new issues. The Company believes that the
Petition to Deny would be granted by the FCC only if the Petition
established a prima facie case of clearly inadequate equal employment
opportunity efforts by WYSP-FM. The Company believes, and its Opposition
demonstrates, that WYSP's equal employment opportunity efforts were fully
adequate during the previous license term and that the allegations made in the
Petition, even if accepted as true, would not warrant grant of the relief
requested. Accordingly, while the Company cannot predict the outcome of
this matter at this time, the Company believes that the Petition to
Deny will not be granted. A second Petition filed by these entities and
others against several radio stations in the Philadelphia market which
focused upon programming efforts was denied by the FCC in August 1993.
Proposed Changes. The Congress and the FCC have under consideration, and
may in the future consider and adopt, new laws, regulations and policies
regarding a wide variety of matters that could, directly or indirectly, affect
the operation and ownership of the Company's radio broadcast properties.
Such matters include, for example, the license renewal process; proposals
to impose spectrum use or other governmentally imposed fees upon licensees;
the FCC's equal employment opportunity rules and other matters relating
to minority and female involvement in the broadcasting industry;
proposals to change rules relating to political broadcasting; proposals to
increase the thresholds or benchmarks for attributing ownership interests
in broadcast media; proposals to permit lenders to take a security
interest in FCC licenses; technical and frequency allocation matters,
including those relative to the implementation of digital audio
broadcasting on both a satellite and terrestrial basis; proposals to permit
expanded use of FM translator stations; proposals to restrict or prohibit the
advertising of beer, wine and other alcoholic beverages on radio; proposals
to allow telephone companies to deliver audio and video programming to the
home through existing phone lines; and changes to broadcast technical
requirements and frequency allocation matters. The Company cannot predict
whether any such proposed changes will be adopted nor can it judge in
advance what impact, if any, any such proposed changes might have on its
business. In addition, the Company cannot predict what other changes might
be considered in the future, nor can it judge in advance what impact, if
any, such other changes might have on its business.
ITEM 2. PROPERTIES
The Company's corporate headquarters are located in midtown
Manhattan. The types of properties required to support each of the Company's
radio stations include offices, studios, transmitter sites and antenna
sites. A station's studios are generally housed with its offices in
downtown or business districts. The transmitter sites and antenna sites are
generally located so as to provide maximum market coverage.
With the exception of the Company's Houston radio station, the studios
and offices of the Company's stations, as well as its corporate headquarters
in New York City, are located in leased facilities with lease terms that
expire in one to ten years. The Company owns or leases its transmitter and
antenna sites, with lease terms that expire in one to eleven years.
The Company does not anticipate any difficulties in renewing those
leases that expire within the next five years or in leasing other
space, if required.
No one property is material to the Company's overall operations. The
Company believes that its properties are in good condition and suitable for
its operations; however, the Company continually looks for opportunities to
upgrade its properties.
11
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<PAGE>
The Company owns substantially all of the equipment used
in its radio broadcasting business.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to certain litigation in the ordinary course of
business and also is a party to routine filings with the FCC and customary
regulatory proceedings pending in connection with station acquisitions and
license renewals, proceedings concerning the broadcast industry generally,
and other legal and regulatory proceedings that management does not believe
are material to the Company. For a description of certain matters pending
before the FCC, see "Business--Federal Regulation of Radio
Broadcasting--Programming and Operation", appearing elsewhere in this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
As reported in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993, the Company's Board of Directors, pursuant
to a Proxy Statement dated September 2, 1993, solicited the written consent of
its stockholders to amend the Company's Restated Certificate of Incorporation.
The amendment was approved by the stockholders of the Company and filed with
the Secretary of State of the State of Delaware on October 22, 1993. The above
information, together with additional information regarding such amendment,
the number of votes cast for or withheld and the number of abstentions with
respect to such amendment, is contained in the above-referenced Form 10-Q.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Shares of the Company's Class A Common Stock, par value $.002 per share
(the "Class A Shares"), have been quoted on the NASDAQ National Market System
under the symbol INFTA since the consummation of the Common Stock IPO in
February 1992. See "Business--Background" appearing elsewhere in this
Report. The following table sets forth, for the calendar quarters indicated,
the high and low sales prices of the Class A Shares on the NASDAQ National
Market System, as reported in published financial sources.
YEAR HIGH LOW
- - ---- ------ -----
1992:
First Quarter (from February 5, 1992)........... 8.33 7.56
Second Quarter.................................. 9.44 7.00
Third Quarter................................... 9.33 8.44
Fourth Quarter.................................. 11.78 8.89
1993:
First Quarter................................... 13.89 10.22
Second Quarter.................................. 18.67 13.56
Third Quarter................................... 32.17 20.33
Fourth Quarter.................................. 35.67 24.75
1994:
First Quarter (through March 18, 1994).......... 33.75 27.00
The above table gives effect to the stock splits effected by the
Company during 1993. See Note 2 of the Notes to Company's Consolidated
Financial Statements, appearing elsewhere in this Report.
There is no public trading market for the Company's Class B Common
Stock, $.002 per share (the "Class B Shares"), or its Class C Common Stock,
$.002 per share (the "Class C Shares").
12
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<PAGE>
As of March 18, 1994, there were 195 holders of record of the Class A
Shares (which number does not include the number of stockholders whose
shares are held of record by a broker or clearing agency but does include
each such brokerage house or clearing agency as one record holder). As of
March 18, 1994, there were six holders of record of the Class B Shares and
four holders of record of the Class C Shares.
The Company has never paid dividends on its shares of common
stock, and the payment of dividends is restricted by the terms of
the Credit Agreement and the Indenture. See Note 5 of the Notes
to the Company's Consolidated Financial Statements, appearing
elsewhere in this Report. It is not anticipated that any dividends
will be paid on any shares of any class of the Company's common stock
in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The selected consolidated financial information for the Company
presented below under the captions "Statement of Operations Data" and
"Balance Sheet Data" for, and as of the end of, each of the years in the
five-year period ended December 31, 1993, is derived from the Company's
Consolidated Financial Statements. This selected consolidated financial
information should be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
appearing elsewhere in this Report.
<TABLE>
INFINITY BROADCASTING CORPORATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1989 1990 1991 1992 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (1):
Total revenues........................ $ 123,122 $ 128,944 $ 135,278 $ 171,843 $ 234,240
Net revenues.......................... 107,159 112,184 117,959 150,230 204,522
Station operating expenses excluding
depreciation and amortization.... 58,855 59,531 61,207 81,707 109,601
----------- ----------- ----------- ----------- -----------
Station operating income excluding
depreciation and amortization.... 48,304 52,653 56,752 68,523 94,921
Depreciation and amortization........ 29,667 28,682 25,582 28,926 38,853
Corporate general and
administrative expenses........... 3,208 3,542 3,698 4,182 4,836
----------- ----------- ----------- ----------- ----------
Operating income...................... 15,429 20,429 27,472 35,415 51,232
Interest expense...................... 59,416 59,611 51,756 39,390 36,776
Net earnings (loss) before
extraordinary items............... (43,646) (39,682) (24,026) (9,432) 14,335
Net earnings (loss) per share
before extraordinary items........ (5.03) (3.93) (1.63) (.30) .35
Cash dividends declared per
common share...................... -- -- -- -- --
Weighted average number of shares
outstanding(2).................... 8,681 10,107 14,715 31,334 41,370
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
1989 1990 1991 1992 1993
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(1):
Total assets........................ $ 264,044 $ 246,430 $ 212,383 $ 271,952 $ 378,040
Long-term debt
(excluding current portion)....... 463,709 439,730 391,345 367,500 342,750
Stockholders' equity (deficiency).. (230,908) (245,610) (222,030) (138,734) (24,240)
Working capital.................... 1,290 (9,022) (4,709) 4,656 10,610
13
</TABLE>
</page>
<PAGE>
- - ---------------
(1) The historical consolidated financial results for the Company are
not comparable from year to year because of the acquisition of
various broadcasting properties by the Company during the periods
covered. See "Business--Background" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations", appearing
elsewhere in this Report.
(2) See Notes 1(f) and 2 of the Notes to the Company's Consolidated Financial
Statements, appearing elsewhere in this Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1993 COMPARED TO YEAR ENDED DECEMBER 31, 1992
Net revenues for the year ended December 31, 1993 were $204,522,000 as
compared to $150,230,000 for the year ended December 31, 1992, an increase of
approximately 36%. The increase was due principally to higher advertising
revenues at most of the Company's stations and the 1993 Acquisitions and the
acquisition of WFAN-AM effective April 16, 1992. On a pro forma basis,
assuming the above acquisitions had occurred as of the beginning of 1992,
net revenues for the year ended December 31, 1993 would have increased by
approximately 14%.
Station operating expenses (excluding depreciation and
amortization) for the year ended December 31, 1993 were $109,601,000,
as compared to $81,707,000, for the year ended December 31,1992 an
increase of approximately 34%. The increase was due principally to
the above acquisitions, expenses associated with higher revenues and
higher programming expenses. On a pro forma basis, assuming the above
acquisitions had occurred as of the beginning of 1992, station
operating expenses in 1993 would have increased by approximately 12%.
Depreciation and amortization expense for the year ended December
31, 1993 was $38,853,000, as compared to $28,926,000 for the year
ended December 31, 1992, an increase of approximately $9,927,000
or 34%. The increase was due to the depreciation and
amortization expense associated with the above acquisitions,
partially offset by lower depreciation and amortization expense at
the Company's other radio stations.
Operating income for the year ended December 31, 1993 was
$51,232,000, as compared to $35,415,000 for the year ended December
31, 1992, an increase of approximately 45%. The increase was due
principally to improved results at the Company's radio stations.
Net financing expense (defined as interest expense less interest
income) for the year ended December 31, 1993 was $36,291,000 as compared to
$38,238,000 for the year ended December 31, 1992, a decrease of
approximately 5% The decrease was due principally to lower interest rates
during 1993.
Net earnings before extraordinary items for the year ended December
31, 1993 was $14,335,000 ($0.35 per share) as compared to a net loss of
$9,432,000 ($0.30 per share) for the year ended December 31, 1992, an
increase of approximately $23,767,000. As a result of the Common Stock
IPO in February 1992, the Company recorded in 1992 a non-recurring charge
of approximately $6,503,000, resulting from the issuance in 1990 of Common
Stock to management.
In 1992, the Company recorded extraordinary charges of approximately
$12,318,000, including the write-off of deferred financing costs of
approximately $7,416,000, as a result of (a) the redemption of all of the
remaining, approximately $98,000,000 principal amount of the Company's
14.25% Subordinated Discount Debentures (the "14.25% Subordinated
Debentures"), and (b) the refinancing of the Company's then existing bank
credit agreement.
14
</PAGE>
<PAGE>
YEAR ENDED DECEMBER 31, 1992 COMPARED TO YEAR ENDED DECEMBER 31, 1991
Net revenues for the year ended December 31, 1992 were $150,230,000, as
compared to $117,959,000 for the year ended December 31, 1991, an increase
of approximately $32,271,000, or 27%. The increase was due principally to the
acquisition of New York radio station WFAN-AM, effective April 16, 1992,
revenues associated with the various sports broadcasting rights, and higher
local advertising revenues generally at the Company's stations in Los
Angeles, New York, Detroit, Tampa/St. Petersburg, Philadelphia, Chicago, and
Washington, D.C., partially offset by lower revenues at the Company's
stations in Dallas/Fort Worth. On a pro forma basis, assuming the
acquisition of WFAN-AM had occurred as of the beginning of 1991, net revenues
in 1992, as compared to 1991, would have increased by approximately 8%.
Station operating expenses (excluding depreciation and amortization) for
the year ended December 31, 1992 were $81,707,000, as compared to
$61,207,000 for the year ended December 31, 1991, an increase of approximately
$20,500,000, or 33%. The increase was due principally to the acquisition of
WFAN-AM and costs associated with various sports broadcasting rights. On a
pro forma basis, assuming the acquisition of WFAN-AM had occurred as of the
beginning of 1991, station operating expenses in 1992, as compared to
1991, would have increased by approximately 8%.
Depreciation and amortization expense for the year ended December 31,
1992 was $28,926,000, as compared to $25,582,000 for the year ended
December 31, 1991, an increase of approximately $3,344,000, or 13%. The
increase was due to the acquisition of WFAN-AM.
Operating income for the year ended December 31, 1992 was
$35,415,000, as compared to $27,472,000 for the year ended December 31,
1991, an increase of approximately $7,943,000, or 29%. The increase was
due principally to higher net revenues.
Net financing expense (defined as interest expense less interest
income) for the year ended December 31, 1992 was $38,238,000, as compared to
$51,492,000 for the year ended December 31, 1991, a decrease of approximately
26%. The decrease was due principally to lower total borrowings, as well as
lower interest rates during 1992. The Company's net financing expenses
consist principally of interest on borrowings under its bank credit
agreement and of interest on the 10 3/8% Senior Subordinated Notes Due
2002, which were sold to the public in March 1992. The Company redeemed all
of its outstanding 14.25% Subordinated Debentures in 1992.
Net loss before extraordinary items for the year ended December 31,
1992 was $9,432,000, as compared to a net loss of $24,026,000 for the year
ended December 31, 1991, a decrease of approximately 61%. As a result of
the Common Stock IPO in February 1992, the Company recorded a
non-recurring, non-cash charge of approximately $6,503,000 during the
first quarter of 1992, resulting from the issuance in 1990 of
approximately 836,107 shares of the Company's common stock to management.
Excluding the effect of this non-cash charge, net loss before
extraordinary items for the year ended December 31, 1992 would have been
$2,929,000, as compared to $24,026,000 for the year ended December 31,
1991, a decrease of approximately 88%.
For the year ended December 31, 1992, the Company recorded
extraordinary charges of approximately $12,318,000, including the write-off
of non-cash deferred financing costs of approximately $7,416,000, as a
result of (a) the redemption of all of the remaining, approximately
$98,000,000 principal amount of the Company's 14.25% Subordinated Debentures,
at a cost of approximately $102,900,000, and (b) the refinancing of the
Company's bank credit agreement, in September 1992, in connection with the
execution of a new bank credit agreement. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources", appearing elsewhere in this Report. The Company
recorded an extraordinary gain of approximately $18,020,000 during 1991,
as a result of the purchase of approximately $87 million principal amount
of its 14.25% Subordinated Debentures at a discount.
15
</PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary needs for capital are to make acquisitions of
radio stations and to cover debt service payments on its indebtedness.
The Company's radio stations do not typically require substantial
investments in capital expenditures. For the year ended December 31,
1993, net cash flow from operating activities was approximately
$45,211,000, as compared to $18,310,000 for the year ended December 31,
1992, an increase of approximately $26,901,000 or 147%. The increase was
principally due to improved earnings in 1993 partially offset by higher
working capital requirements.
In February 1993, the Company borrowed $103 million under the Credit
Agreement to finance the acquisition and working capital of radio stations
WZGC-FM, WZLX-FM and WUSN-FM. In September 1993, the Company borrowed
approximately $18 million under the Credit Agreement to finance the
acquisition and working capital of WIP-AM.
On May 13, 1993, the Company completed the Second Common Stock Offering
for net proceeds to the Company of approximately $100 million (including
approximately $10.1 million paid to the Company upon exercise of certain
warrants sold in the offering). The net proceeds from the offering were
used to pay down borrowings under the acquisition facility under the
Credit Agreement.
The net cash flow from operating activities of approximately $45.2
million together with total cash from financing activities of approximately
$78.1 million were used to finance acquisitions and capital expenditures of
$123.3 million.
The Credit Agreement contains various covenants and restrictions that
impose certain limitations on the Company and its subsidiaries, including,
among others, limitations on the incurrence of additional indebtedness by
the Company or its subsidiaries, the payment of cash dividends or other
distributions, the redemption or repurchase of the capital stock of the
Company, the issuance of additional capital stock of the Company, the
making of investments and acquisitions, and other similar limitations.
Under the terms of a Security Agreement among the Company, its
subsidiaries, and one of the banks acting as collateral agent, substantially
all of the assets of the Company and its subsidiaries, as well as the
stock of the Company's subsidiaries, are pledged to secure borrowings
under the Credit Agreement.
The Credit Agreement provides for the repayment of borrowings on a
quarterly basis through September 2000. See Note 5 of the Notes to the
Company's Consolidated Financial Statements. The Credit Agreement also
permits voluntary prepayments in whole or in part at any time, and it
requires mandatory prepayments under specified circumstances.
In February 1994, the Company borrowed approximately $116 million
under the Credit Agreement to finance the acquisition of Los Angeles radio
station KRTH-FM.
The Company is currently negotiating with its Agent Bank
under the Credit Agreement to increase its acquisition facility by $150
million. The purchase price of the pending acquisitions of WPGC-AM/FM and
WXYT-AM is expected to be financed by additional bank borrowings.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information called for by this Item is included on Pages F-1 through
F-17 of this Report on Form 10-K and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
The information called for by this Item is not applicable.
16
</PAGE>
<PAGE>
PART III
The information required in this Part is incorporated by reference from
the registrant's definitive proxy statement (to be filed pursuant to
Regulation 14A).
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. Financial Statements.
2. Financial Statement Schedules.
The financial statements and schedules listed in the index to the
Consolidated Financial Statements of the Company that appears on Page 31 of
this Report on Form 10-K are filed as part of this Report.
</PAGE>
<PAGE>
3. Exhibits.
Exhibit
Number Description of Exhibit
_______ ______________________
2(a) Securities Purchase Agreement, dated as of
September 30, 1991, by and among the Company,
Michael A. Wiener, Gerald Carrus, Mel
Karmazin, and Shearson Lehman Hutton Capital
Partners II, L.P., Shearson Lehman Hutton
Merchant Banking Portfolio Partnership L.P.,
Shearson Lehman Hutton Offshore Investment
Partnership L.P., and Shearson Lehman Hutton
Offshore Investment Partnership Japan L.P.
(collectively, the "Lehman Investors").
(This exhibit can be found as Exhibit 2(a) to
the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1991
(File No. 0-14702) and is incorporated herein
by reference.)
2(b) Stock Purchase Agreement, dated as of
December 16, 1991, between Infinity
Broadcasting Corporation of New York and
KPWR, Inc. (This exhibit can be found as
Exhibit 2(c) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
No. 33-44568) and is incorporated herein by
reference.)
2(c) Assignment and Assumption Agreement, dated as
of December 16, 1991, between Infinity
Broadcasting Corporation of New York and the
Company. (This exhibit can be found as
Exhibit 2(d) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
No. 33-44568) and is incorporated herein by
reference.)
2(d) Asset Purchase Agreement, dated as of August
15, 1992, between Cook Inlet Radio Partners,
L.P., Cook Inlet Radio License Partnership,
L.P., Infinity Broadcasting Corporation of
Chicago, Infinity Broadcasting Corporation of
Atlanta, Infinity Broadcasting Corporation of
Boston and the Company. (This exhibit can be
found as Exhibit 2(c) to the Company's
Quarterly Report on Form 10-Q for the quarter
18
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
ended September 30, 1992 (File No. 0-14702)
and is incorporated herein by reference.)
2(e) Asset Purchase Agreement, dated as of
September 25, 1992, between Spectacor
Broadcasting, L.P. and Infinity Broadcasting
Corporation of Philadelphia. (This exhibit
can be found as Exhibit 2(d) to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992 (File No. 0-14702)
and is incorporated herein by reference.)
2(f) Purchase Agreement, dated as of June 16,
1993, among Beasley FM Acquisition Corp.,
Infinity Broadcasting Corporation of
California and the Company. (This exhibit
can be found as Exhibit 2(e) to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993 (File No. 0-14702) and is
incorporated herein by reference.)
2(g) Asset Purchase Agreement, dated as of
October 4, 1993, between Cook Inlet Radio
Partners, L.P. and Cook Inlet Radio License
Partnership, L.P. and Infinity Broadcasting
Corporation of Maryland and the Company.
(This exhibit can be found as Exhibit 2(f) to
the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993
(File No. 0-14702) and is incorporated herein
by reference.)
2(h) Asset Purchase Agreement, dated as of March
8, 1994, by and between Fritz Broadcasting,
Inc., Infinity Broadcasting Corporation of
Detroit and the Company, including a list of
omitted schedules and an undertaking by the
Company to furnish supplementally a copy of
any such omitted schedule to the Securities
and Exchange Commission upon request.
3(a) Restated Certificate of Incorporation of the
Company, as amended October 22, 1993. (This
exhibit can be found as Exhibit 3 to the
Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1993 (File
No. 0-14702) and is incorporated herein by
reference.)
19
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
3(b) Amended and Restated By-Laws of the Company.
(This exhibit can be found as Exhibit 3(b) to
the Company's Registration Statement on Forms
S-1 and S-3 (Registration No. 33-46118) and
is incorporated herein by reference.)
4(a) Indenture, dated as of March 24, 1992,
between the Company and Bank of Montreal
Trust Company, as Trustee. (This exhibit can
be found as Exhibit 4(c) to the Company's
Registration Statement on Form S-3
(Registration No. 33-61348) and is incor-
porated herein by reference.)
4(b) Credit Agreement, dated as of September 22,
1992, by and among the Company, Hemisphere
Broadcasting Corporation, Sagittarius
Broadcasting Corporation, each of the sub-
sidiaries of the Company identified under the
caption "Subsidiary Guarantors" on the sig-
nature page thereof, each of the banks that
is a signatory thereto (collectively, the
"Banks"), The Chase Manhattan Bank (National
Association) as Administrative Agent for the
Banks, Bank of Montreal, The Bank of New
York, and Chemical Bank as co-agents for the
Banks, and Chemical Bank as collateral agent
for the Banks. (This exhibit can be found as
Exhibit 4(j) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1992 (File No. 0-14702) and is
incorporated herein by reference.)
4(c) Amendment No. 1, dated as of December 1,
1992, to the Credit Agreement, dated as of
September 22, 1992, among the Company, its
subsidiaries and the banks that are signa-
tories thereto. (This exhibit can be found
as Exhibit 4(c) to the Company's Report on
Form 8-K filed on February 12, 1993 (File
No. 0-14702) and is incorporated herein by
reference.)
4(d) Amendment No. 2, dated as of May 31, 1993, to
the Credit Agreement, dated as of September
22, 1992, among the Company, its subsidiaries
and the banks that are signatories thereto.
(This exhibit can be found as Exhibit 4(a) to
20
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993 (File
No. 0-14702) and is incorporated herein by
reference.)
4(e) Amendment No. 3, dated as of August 31, 1993,
to the Credit Agreement, dated as of
September 22, 1992, among the Company, its
subsidiaries and the banks that are signa-
tories thereto. (This exhibit can be found
as Exhibit 4 to the Company's Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1993 (file No. 0-14702) and is
incorporated herein by reference.)
4(f) Security Agreement, dated as of September 22,
1992, by and among the Company, each of the
subsidiaries of the Company identified under
the caption "Subsidiaries" on the signature
page thereof, and Chemical Bank, as col-
lateral agent for the lenders or other finan-
cial institutions or entities party, as
lenders, to the Credit Agreement. (This
exhibit can be found as Exhibit 4(k) to the
Company's Quarterly Report on Form l0-Q for
the quarter ended September 30, 1992 (File
No. 0-14702) and is incorporated herein by
reference.)
4(g) Amended and Restated Stockholders' Agreement,
dated as of February 5, 1992, among the Com-
pany, Michael A. Wiener, Gerald Carrus, Mel
Karmazin and the Lehman Investors. (This
exhibit can be found as Exhibit 4(j) to the
Company's Registration Statement on Forms S-1
and S-3 (Registration No. 33-46118) and is
incorporated herein by reference.)
4(h) Warrant Certificate, dated January 28, 1992,
certifying that Shearson Lehman Hutton
Capital Partners II L.P. is the owner of
warrants to purchase 1,051,977 shares of
Class C Common Stock, par value $.002 per
share, of the Company. (This exhibit can be
found as Exhibit 4(l) to the Company's Regis-
tration Statement on Forms S-1 and S-3
(Registration No. 33-46118) and is incor-
porated herein by reference.)
21
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
4(i) Warrant Certificate, dated January 28, 1992,
certifying that Lehman Brothers Merchant
Banking Portfolio Partnership L.P. is the
owner of warrants to purchase 1,547,373
shares of Class C Common Stock, par value
$.002 per share, of the Company. (This
exhibit can be found as Exhibit 4(m) to the
Company's Registration Statement on Forms S-1
and S-3 (Registration No. 33-46118) and is
incorporated herein by reference.)
4(j) Warrant Certificate, dated December 14, 1993,
certifying that Shearson Lehman Hutton
Offshore Investment Partnership L.P. is the
owner of warrants to purchase 769,465 shares
of Class C Common Stock, par value $.002 per
share, of the Company.
4(k) Warrant Certificate, dated December 14, 1993,
certifying that Shearson Lehman Hutton
Offshore Investment Partnership Japan L.P. is
the owner of warrants to purchase 2,317,522
shares of Class C Common Stock, par value
$.002 per share, of the Company.
4(l) Securities Exchange Agreement, dated as of
January 28, 1992, among the Company and the
Lehman Investors. (This exhibit can be found
as Exhibit 4(p) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
No. 33-46118) and is incorporated herein by
reference.)
10(a)* Employment Agreement, dated as of December
30, 1985, between the Company and Michael A.
Wiener. (This exhibit can be found as
Exhibit 10(a) to the Company's Registration
Statement on Form S-1 (Registration No. 33-
5190) and is incorporated herein by refer-
ence.)
____________________
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant
to item 14(c) of Form 10-K.
22
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
10(b)* Employment Agreement, dated as of December
30, 1985, between the Company and Gerald
Carrus. (This exhibit can be found as
Exhibit 10(b) to the Company's Registration
Statement on Form S-1 (Registration No. 33-
5190) and is incorporated herein by refer-
ence.)
10(c)* Employment Agreement, dated as of September
10, 1990, between the Company and Mel
Karmazin. (This exhibit can be found as
Exhibit 28(a) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1990 (File No. 0-14702) and is
incorporated herein by reference.)
10(d)* First Amendment, dated September 30, 1991, to
the Employment Agreement, dated as of
September 10, 1990, between the Company and
Mel Karmazin. (This exhibit can be found as
Exhibit 10(d) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
No. 33-44568) and is incorporated herein by
reference.)
10(e)* Second Amendment, dated February 4, 1992, to
the Employment Agreement, dated as of
September 10, 1990, between the Company and
Mel Karmazin. (This exhibit can be found as
Exhibit 10(e) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
No. 33-46118) and is incorporated herein by
reference.)
10(f)* Third Amendment, effective as of June 14,
1993, to the Employment Agreement, dated as
of September 10, 1990, between the Company
and Mel Karmazin. (This exhibit can be found
as Exhibit 10(a) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1993 (File No. 0-14702) and is in-
corporated herein by reference.)
____________________
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant
to item 14(c) of Form 10-K.
23
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
10(g)* Fourth Amendment, effective as of August 16,
1993, to the Employment Agreement, dated as
of September 10, 1990, between the Company
and Mel Karmazin. (This exhibit can be found
as Exhibit 10(b) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1993 (File No. 0-14702) and is in-
corporated herein by reference.)
10(h)* Fifth Amendment, effective as of November 19,
1993, to the Employment Agreement, dated as
of September 10, 1990, between the Company
and Mel Karmazin. (This exhibit can be found
as Exhibit 10(d) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1993 (File No. 0-14702) and is
incorporated herein by reference.)
10(i)* Sixth Amendment to the Employment Agreement,
dated as of September 10, 1990, between the
Company and Mel Karmazin, effective as of
March 30, 1994 (subject in part to share-
holder approval at the annual meeting of the
shareholders to be held on June 13, 1994).
10(j)* The Company's Stock Option Plan, amended and
restated as of August 16, 1993.
10(k)* Amendment, effective as of November 19, 1993,
to the Company's Stock Option Plan, as
amended and restated as of August 16, 1993.
10(l)* Amendment, adopted March 30, 1994 (subject to
shareholder approval at the annual meeting of
the Company's shareholders to be held June
13, 1994) to the Company's Stock Option Plan.
10(m)* The Company's Deferred Share Plan, amended
and restated as of August 16, 1993.
____________________
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant
to item 14(c) of Form 10-K.
24
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
10(n)* Amendment, effective as of November 19, 1993,
to the Company's Deferred Share Plan, as
amended and restated as of August 16, 1993.
10(o)* The Company's Cash Bonus Compensation Plan,
adopted on March 30, 1994 (subject to share-
holder approval at the annual meeting of the
shareholders to be held on June 13, 1994).
10(p)* Indemnity Agreement, dated as of February 27,
1986, between the Company and Michael A.
Wiener. (This exhibit can be found as
Exhibit 10(f) to the Company's Registration
Statement on Form S-1 (Registration No. 33-
5190) and is incorporated herein by refer-
ence.)
10(q)* Indemnity Agreement, dated as of February 27,
1986, between the Company and Gerald Carrus.
(This exhibit can be found as Exhibit 10(g)
to the Company's Registration Statement on
Form S-1 (Registration No. 33-5190) and is
incorporated herein by reference.)
10(r)* Indemnity Agreement, dated as of February 7,
1986, between the Company and Mel Karmazin.
(This exhibit can be found as Exhibit 10(h)
to the Company's Registration Statement on
Form S-1 (Registration No. 33-5190) and is
incorporated herein by reference.)
10(s) Indemnity Agreement, dated as of June 22,
1987, between the Company and Farid Suleman.
(This exhibit can be found as Exhibit 10(j)
to the Company's Registration Statement on
Form S-1 (Registration No. 33-15285) and is
incorporated herein by reference.)
10(t) Indemnity Agreement, dated as of February 4,
1992, between the Company and Steven A.
Lerman. (This exhibit can be found as
Exhibit 10(l) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
____________________
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant
to item 14(c) of Form 10-K.
25
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
No. 33-46118) and is incorporated herein by
reference.)
10(u) Indemnity Agreement, dated as of November 9,
1992, between the Company and Alan R. Batkin.
(This exhibit can be found as Exhibit 10(m)
to the Company's Report on Form l0-K for the
year ended December 31, 1992 (File
No. 0-14702) and is incorporated herein by
reference.)
10(v)* Indemnity Agreement, dated as of November 9,
1992, between the Company and O.J. Simpson.
(This exhibit can be found as Exhibit 10(n)
to the Company's Report on Form l0-K for the
year ended December 31, 1992 (File
No. 0-14702) and is incorporated herein by
reference.)
10(w)* Stock Option Agreement, dated as of June 27,
1988, between the Company, as successor to
WCK, and Mel Karmazin. (This exhibit can be
found as Exhibit (c)(2) to the Statement on
Schedule 13E-3 filed pursuant to Rule 13e-3
by WCK, the Management Investors (Michael A.
Wiener, Gerald Carrus and Mel Karmazin) and
the Company and is incorporated herein by
reference.)
10(x)* Amendment Agreement, dated as of August 2,
1988, to Stock Option Agreement dated as of
June 27, 1988, between the Company, as suc-
cessor to WCK, and Mel Karmazin. (This
exhibit can be found as Exhibit 9(c)(7) to
Amendment No. 3 to Schedule 14D-1 filed by
the Company as successor to WCK and is incor-
porated herein by reference.)
10(y)* Amendment No. 1 to Stock Option Agreement,
dated as of October 14, 1988, between the
Company and Mel Karmazin. (This exhibit can
be found as Exhibit 4(l) to the Company's
Annual Report on Form 10-K for the year ended
____________________
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant
to item 14(c) of Form 10-K.
26
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
December 25, 1988 (File No. 0-14702) and is
incorporated herein by reference.)
10(z)* Agreement, dated as of July 26, 1993, between
the Company and Mel Karmazin, with respect to
the exercise of certain options granted pur-
suant to the Stock Option Agreement, dated as
of June 27, 1988, as amended, between the
Company, as successor to WCK, and Mel
Karmazin. (This exhibit can be found as
Exhibit 10(d) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1993 (File No. 0-14702) and is in-
corporated herein by reference.)
10(aa) Warrant Certificate, dated September 30,
1991, certifying that Mel Karmazin is the
owner of warrants to purchase shares of Class
A Common Stock, par value $.002 per share, of
the Company. (This exhibit can be found as
Exhibit 10(p) to the Company's Registration
Statement on Forms S-1 and S-3 (Registration
No. 33-46118) and is incorporated herein by
reference.)
10(bb) Management Agreement, dated February 17,
1993, by and among the Company, Unistar Com-
munications Group, Inc., Unistar Radio
Networks, Inc., The Chase Manhattan Bank,
N.A., National Westminster Bank, USA, and
Novastar, Inc. (This exhibit can be found as
Exhibit 10(s) to the Company's Annual Report
on Form 10-K for the year ended December 31,
1992 (File No. 0-14702) and is incorporated
herein by reference.)
10(cc) Amended and Restated Management Agreement,
dated September 29, 1993, among the Company,
Unistar Communications Group, Inc., Unistar
Radio Networks, Inc., The Chase Manhattan
Bank, N.A. and Novastar, Inc. (This exhibit
can be found as Exhibit 10(a) to the Com-
pany's Quarterly Report on Form 10-Q for the
____________________
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit pursuant
to item 14(c) of Form 10-K.
27
</PAGE>
<PAGE>
Exhibit
Number Description of Exhibit
_______ ______________________
quarter ended September 30, 1993 (File No. 0-
14702) and is incorporated herein by refer-
ence.)
10(dd) Amended and Restated Credit Agreement, Pur-
chase and Release Agreement, dated as of
February 3, 1994, among Unistar Radio
Networks, Inc. (formerly known as Unistar
Holdings, Inc.), UCGI, Inc. (formerly known
as Unistar Communications Group, Inc.), TMRG,
Inc. (formerly known as The Market Research
Group, Inc.), The Chase Manhattan Bank
(National Association), as lender and as
agent, the Company and Novastar, Inc.
10(ee) Securities Purchase Agreement, dated as of
November 4, 1993, between Westwood One, Inc.
and Infinity Network Inc. (This exhibit can
be found as Exhibit 10(b) to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993 (File No. 0-14702)
and is incorporated herein by reference.)
10(ff) Stock Purchase Agreement, dated as of
November 4, 1993, among UCGI, Inc. (formerly
known as Unistar Communications Group, Inc.),
Unistar Radio Networks, Inc., the Company and
Westwood One, Inc. and Infinity Network Inc.
(This exhibit can be found as Exhibit 10(a)
to the Company's Report on Form 8-K filed on
November 17, 1993 (File No. 0-14702) and is
incorporated herein by reference.)
10(gg) Management Agreement, dated as of February 3,
1994, between Westwood One, Inc. and the
Company.
21 Subsidiaries of the Company.
23 Consent of KPMG Peat Marwick, Independent
Certified Public Accountants.
28
</PAGE>
<PAGE>
(b) Reports on Form 8-K.
The Company filed a Report on Form 8-K, dated November 4, 1993, with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. on November 17, 1993, reporting in response to Item 5 of the
Form 8-K. The Report on Form 8-K contained the consolidated financial
statements at November 30, 1992 of Westwood One, Inc.
29
</PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the 30th day
of March, 1994.
INFINITY BROADCASTING CORPORATION
BY /S/ MICHAEL A. WIENER
..................................
Michael Wiener
Chairman of the Board
of Directors and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Michael A. Wiener March 30, 1994
........................ ...............
Michael A. Wiener Date
Chairman of the Board of
Directors and Secretary
/s/ Gerald Carrus March 30, 1994
.................. ..............
Gerald Carrus Date
Co-Chairman of the Board
of Directors and Treasurer
/s/ Mel Karmazin March 30, 1994
........................ ...............
Mel A. Karmazin Date
Director, President, and
Chief Executive Officer
/s/ Farid Suleman March 30, 1994
.................. ..............
Farid Suleman Date
Director, Vice President--Finance,
and Chief Financial Officer *
/s/ James A. Stern March 30, 1994
........................ ..............
James A. Stern Date
Director
/s/ James L. Singleton March 30, 1994
....................... ..............
James L. Singleton Date
Director
/s/ Steven A. Lerman March 30, 1994
........................ ..............
Steven A. Lerman Date
Director
/s/ Alan R. Batkin March 30, 1994
........................ ..............
Alan R. Batkin Date
Director
/s/ O.J. Simpson March 30, 1994
........................ ..............
O.J. Simpson Date
Director
- - ---------------
* Mr. Suleman also performs the functions of Chief Accounting Officer
30
</PAGE>
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
COVERED BY INDEPENDENT AUDITORS' REPORT
(ITEM 14(A)1)
Independent Auditors' Report............................................ F-1
Consolidated balance sheets as of December 31, 1992 and 1993............. F-2
Consolidated statements of operations for each of the years in
the three-year period ended December 31, 1993............................ F-4
Consolidated statements of changes in stockholders' equity (deficiency)
for each of the years in the three-year period ended December 31,1993.... F-5
Consolidated statements of cash flows for each of the years in
the three-year period ended December 31, 1993............................ F-6
Notes to consolidated financial statements.............................. F-7
Financial statement schedules for each of the years in the
three-year period ended December 31, 1993
VIII Valuation and qualifying accounts.................................. F-16
X Supplementary income statement information......................... F-17
All other schedules have been omitted because the required information
either is not applicable or is shown in the consolidated financial statements
or notes thereto.
31
</PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Stockholders
Infinity Broadcasting Corporation:
We have audited the consolidated financial statements of Infinity
Broadcasting Corporation and subsidiaries as listed in the accompanying index.
In connection with our audits of the consolidated financial statements, we
also have audited the financial statement schedules as listed in the
accompanying index. These consolidated financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Infinity
Broadcasting Corporation and subsidiaries as of December 31, 1992 and 1993,
and the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 1993, in conformity with
generally accepted accounting principles. Also in our opinion, the
related financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
KPMG PEAT MARWICK
New York, New York
February 1, 1994
F-1
</PAGE>
<TABLE>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Dec. 31, Dec. 31,
1992 1993
--------- ---------
(Dollars In Thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $3,379 $9,913
Receivables (less allowance of $882 in
1992 and $1,027 in 1993) 42,382 57,249
Prepaid expenses and other current assets 2,081 2,978
--------- ---------
Total Current Assets 47,842 70,140
--------- ---------
Property and equipment at cost:
Land and buildings 6,194 6,197
Machinery and equipment 14,376 17,609
Furniture and fixtures 1,873 1,476
Leasehold improvements 1,820 2,002
Construction in progress 1,289 797
--------- ---------
25,552 28,081
Less accumulated depreciation and amortization 7,913 9,332
--------- ---------
Net property and equipment 17,639 18,749
--------- ---------
Intangible assets (net of accumulated amortization
of $96,783 in 1992 and $73,077 in 1993) 193,451 277,047
Other assets 13,020 12,104
--------- ---------
$271,952 $378,040
========= =========
<FN>
See accompanying Notes to Consolidated Financial Statements
F-2
</TABLE>
<TABLE>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONTINUED
<CAPTION>
Dec. 31, Dec. 31,
1992 1993
--------- ---------
(Dollars In Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
<S> <C> <C>
Current Liabilities:
Accounts payable and other accrued expenses $10,222 $12,841
Accrued compensation 2,420 3,236
Accrued interest 6,955 7,776
Income taxes 7,006 7,477
Other current liabilities 3,458 5,888
Current portion of long-term debt 13,125 22,312
--------- ---------
Total Current Liabilities 43,186 59,530
--------- ---------
Long-term debt, less current portion 367,500 342,750
Commitments and contingencies
Stockholders' equity (deficiency):
Preferred stock, $ .01 par value:
1,000,000 shares authorized; none issued - -
Class A Common Stock, $.002 par value:
75,000,000 shares authorized; issued and
outstanding 14,504,880 shares in 1992
and 28,377,585 shares in 1993 29 57
Class B Common Stock, $.002 par value:
17,500,000 shares authorized; issued and
outstanding 4,010,153 shares in 1992
and 3,990,621 shares in 1993 9 8
Class C Common Stock, $.002 par value:
30,000,000 shares authorized; issued and
outstanding 5,254,140 shares in 1992
and 496,114 shares in 1993 11 1
Additional paid-in capital 159,606 259,748
Retained earnings (deficit) (298,389) (284,054)
---------- ----------
Total stockholders' equity (deficiency) (138,734) (24,240)
---------- ----------
$271,952 $378,040
========== ==========
<FN>
See accompanying Notes to Consolidated Financial Statements
F-3
</TABLE>
<TABLE>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1991 1992 1993
------- ------- -------
(Dollars and Shares In Thousands
Except Per Share Amounts)
<S> <C> <C> <C>
Total revenues $135,278 $171,843 $234,240
Less agency commissions 17,319 21,613 29,718
--------- --------- ---------
Net revenues 117,959 150,230 204,522
--------- --------- ---------
Station operating expenses excluding
depreciation and amortization 61,207 81,707 109,601
Depreciation and amortization 25,582 28,926 38,853
Corporate general and
administrative expenses 3,698 4,182 4,836
--------- --------- ---------
90,487 114,815 153,290
--------- --------- ---------
Operating income 27,472 35,415 51,232
--------- --------- ---------
Other income (expense)
Interest expense (51,756) (39,390) (36,776)
Interest income 264 1,152 485
Other expense (6,503)
--------- --------- ---------
Earnings (loss) before income
taxes and extraordinary items (24,020) (9,326) 14,941
Income taxes 6 106 606
--------- --------- ---------
Net earnings (loss) before
extraordinary items (24,026) (9,432) 14,335
Extraordinary items 18,020 (12,318)
--------- --------- ---------
Net earnings (loss) ($6,006) ($21,750) $14,335
========= ========= =========
Earnings (loss) per common share:
Before extraordinary items ($1.63) ($0.30) $0.35
Extraordinary items 1.22 (0.39) 0.00
--------- --------- ---------
Net earnings (loss) per common share ($0.41) ($0.69) $0.35
========= ========= =========
Weighted average shares outstanding 14,715 31,334 41,370
========= ========= =========
<FN>
See accompanying Notes to Consolidated Financial Statements
F-4
</TABLE>
<TABLE>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
(IN THOUSANDS)
<CAPTION>
Class A Class B Class C Add'l Retained
Common Stock Common Stock Common Stock Paid-in Earnings
Shares Amt Shares Amt Shares Amt Capital (Deficit) Total
-------------- ------------- ------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1990 5,254 $11 4,010 $9 0 $0 $25,003 ($270,633) ($245,610)
Net loss (6,006) (6,006)
Issuance of Warrants 29,585 29,585
Exercise of Class A Warrants 515 2 (1) 1
Issuance of Class C Common
Stock in exchange for
Class A Common Stock (5,254) (11) 5,254 11 0
------ ---- ------ ---- ------ ---- --------- --------- ---------
Balance at December 31, 1991 515 2 4,010 9 5,254 11 54,587 (276,639) (222,030)
Net loss (21,750) (21,750)
Vesting of Deferred Shares 6,503 6,503
Exercise of Class A Warrants 108
Issuance of Class A
Common Stock 13,849 27 98,515 98,542
Issuance of Class B
Common Stock 34 1 1
Conversion of Class B
Common Stock to
Class A Common Stock 34 (34)
------ ---- ------ ---- ------ ---- --------- --------- ---------
Balance at December 31, 1992 14,506 29 4,010 9 5,254 11 159,606 (298,389) (138,734)
Net earnings 14,335 14,335
Exercise of Class A Warrants 1,680 3 10,077 10,080
Exercise of Class B Warrants 135 3 3
Issuance of Deferred Shares 596 1 1
Exercise of Class C Warrants 42
Issuance of Class A
Common Stock 6,642 13 90,062 90,075
Conversion of Class B
Common Stock to
Class A Common Stock 750 2 (750) (2)
Conversion of Class C
Common Stock to
Class A Common Stock 4,800 10 (4,800) (10)
------- ----- ------- ----- ------- ----- --------- --------- ---------
Balance at December 31, 1993 28,378 $57 3,991 $8 496 $1 $259,748 ($284,054) ($24,240)
======= ===== ======= ===== ======= ===== ========= ========= =========
<FN>
See accompanying Notes to Consolidated Financial Statements
F-5
</TABLE>
<TABLE>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1991 1992 1993
------- ------- -------
(Dollars In Thousands)
<S> <C> <C> <C>
Net cash flow from operating activities:
Net earnings (loss) ($6,006) ($21,750) $14,335
Extraordinary items (18,020) 12,318
Depreciation and amortization 25,582 28,926 38,853
Amortization of deferred financing costs 1,997 1,898 1,330
Accretion of 14.25% Debentures 14,155
Vesting of deferred shares 6,503
Other 750
-------- -------- --------
18,458 27,895 54,518
Increase in receivables (3,028) (11,468) (14,867)
Decrease (increase) in other
current assets (81) 97 (897)
Increase (decrease) in accounts
payables and accrued expenses (2,349) 5,189 6,336
Increase (decrease) in accrued interest 3,538 (3,399) 821
Other, net 177 (4) (700)
-------- -------- --------
Net cash flow from operating activities 16,715 18,310 45,211
-------- -------- --------
Investing activities:
Capital expenditures 1,425 1,300 1,901
Acquisitions:
Property and equipment 1,000 4,000
Intangibles 1,000 72,500 117,372
Other 976
--------- --------- ---------
Net cash used for investing activities 2,425 75,776 123,273
--------- --------- ---------
Cash provided (required) before
financing activities 14,290 (57,466) (78,062)
========= ========= =========
Financing activities:
Borrowings under debt agreements 36,531 421,000 126,000
Reduction of debt (81,565) (446,513) (141,563)
Proceeds from issuance of stock 28,836 98,543 100,159
Premium paid for bond buyback (4,902)
Deferred financing costs (5,701) (12,550)
--------- --------- ---------
Net cash provided by (used for)
financing activities (21,899) 55,578 84,596
Decrease (increase) in cash
and cash equivalents 7,609 1,888 (6,534)
--------- --------- ---------
Total cash provided by (used for)
financing activities ($14,290) $57,466 $78,062
========= ========= =========
<FN>
See accompanying Notes to Consolidated Financial Statements
F-6
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiaries, which are wholly owned and are all
involved in radio broadcasting. All significant intercompany balances
and transactions have been eliminated in consolidation.
(b) Revenue Recognition
Revenues are recognized when advertisements are aired.
(c) Property and Equipment
Depreciation is provided on a straight line basis for financial statement
purposes over the estimated useful lives of the related assets as follows:
Buildings........................................ 18 years
Machinery and equipment.......................... 3-10 years
Leasehold improvements........................... Life of lease
Furniture and fixtures........................... 10 years
(d) Intangible Assets
Intangible assets arising from acquisitions are amortized on a
straight-line basis over their useful lives ranging generally from 3 to
40 years.
(e) Income Taxes
The Company and its subsidiaries file a consolidated
Federal income tax return.
Effective January 1, 1993, the Company implemented Statement
of Financial Accounting Standards No. 109 (FAS 109), "Accounting for
Income Taxes" which requires the use of the asset and liability method
of financial accounting and reporting for income taxes. Under FAS
109, deferred income taxes reflect the impact of temporary differences
between the amount of assets and liabilities recognized for
financial reporting purposes and the amounts recognized for tax
purposes.
(f) Earnings Per Share
Earnings (loss) per common share are based on the weighted
average number of common shares and common equivalent shares (where
inclusion of such equivalent shares would not be anti-dilutive)
outstanding during the year.
(g) Cash Equivalents
Cash equivalents include certificates of deposit and commercial paper
with maturities of one month or less.
NOTE 2. PUBLIC STOCK OFFERINGS
On February 5, 1992, the Company and certain holders of warrants
exercisable for shares of the Company's Class A Common Stock, through an
initial public offering (the "Common Stock IPO") sold 13,788,826 shares of
Class A Common Stock, resulting in net proceeds to the Company of
approximately $100.1 million before expenses of approximately $1.6
million. As a result of the Company's Common Stock IPO, the Company in
the First Quarter of 1992 recorded a non-recurring non-cash charge of
approximately $6,503,000, resulting from the issuance in 1990 of
approximately 836,107 deferred shares of the Company's Common Stock to
management.
F-7
</PAGE>
<PAGE>
On May 13, 1993, the Company and certain holders of warrants
exercisable for shares of the Company's Class A Common Stock sold
through a public offering 8,148,814 shares of Class A Common Stock
resulting in net proceeds to the Company of approximately $100 million. The
net proceeds from this offering were used to pay down bank borrowings
under the Company's bank credit agreement (the "Credit Agreement").
Effective August 9, 1993, the Company declared a three-for-two stock
split in the form of a stock dividend payable on August 16, 1993 to
shareholders of record at the close of business on August 9, 1993.
Effective November 12, 1993, the company declared another three-for-two stock
split in the form of a stock dividend payable on November 19, 1993 to
shareholders of record at the close of business on November 12, 1993. During
1993, in connection with these stock splits, the Company increased the number
of authorized shares of its Class A Common Stock to 75,000,000, Class B
Common Stock to 17,500,000 and Class C Common Stock to 30,000,000. The
accompanying consolidated financial statements reflect the effect of the stock
dividends.
On December 7, 1993, certain merchant banking partnerships
affiliated with Lehman Brothers Inc. and certain officers of the Company
sold in a secondary offering 5,550,000 shares of Class A Common Stock.
NOTE 3. ACQUISITIONS
On April 16, 1992, the Company acquired WFAN-AM, a radio station
serving New York City, for approximately $70 million.
On February 1, 1993, the Company acquired the assets of WZGC-FM
(Atlanta), WZLX-FM (Boston) and WUSN-FM (Chicago) from Cook Inlet Radio
Partners, L.P. and Cook Inlet Radio License Partnership, L.P. for a total
purchase price of approximately $100 million.
On September 1, 1993, the Company acquired WIP-AM, an all-sports
radio station serving Philadelphia, from Spectacor Broadcasting,
L.P. for approximately $17.4 million.
The above acquisitions have been accounted for by the purchase method of
accounting. The purchase price has been allocated to the assets
acquired, principally intangible assets, including covenants not to
compete, and the liabilities assumed based on their estimated fair values
at the date of acquisition. The excess of purchase price over the
estimated fair values of the net assets acquired has been recorded as
goodwill.
The operating results of these acquisitions are included in the Company's
consolidated results of operations from the date of acquisition. The following
unaudited pro forma summary presents the consolidated results of operations as
if the acquisitions had occurred as of the beginning of 1992 and 1993, after
giving effect to certain adjustments, including amortization of goodwill
and interest expense on the acquisition debt. These pro forma results
have been prepared for comparative purposes only and do not purport to be
indicative of what would have occurred had the acquisitions been made as of
those dates or of results which may occur in the future.
F-8
</PAGE>
<PAGE>
Years Ended December 31,
------------------------
1992 1993
---------- ----------
(Unaudited)
Net revenues.................................... $ 183,935 $ 210,317
Net earnings (loss) before extraordinary items.. (23,287) 13,524
Net earnings (loss)............................. (35,605) 13,524
Earnings (loss) per common share:
Before extraordinary items...................... (.74) .33
Extraordinary items............................. (.39) --
---------- ----------
Net earnings (loss) per common share............ (1.13) .33
========== ==========
On October 4, 1993, the Company entered into an agreement to
acquire Washington, D.C. radio stations WPGC-AM/FM from Cook Inlet Radio
Partners, L.P. and Cook Inlet Radio License Partnership, L.P. for
approximately $60 million.
On March 8, 1994, the Company entered into an agreement to acquire
Detroit radio station WXYT-AM for approximately $23 million from Fritz
Broadcasting Inc.
The purchase price of the acquisitions of WPGC-AM/FM and WXYT-AM is
expected to be financed by bank borrowings.
In February 1994, the Company completed the acquisition of Los Angeles
radio station KRTH-FM from Beasley FM Acquisitions Corp. for approximately
$116 million. The purchase price of the acquisition was funded by borrowings
under the Credit Agreement.
On February 17, 1993, the Company entered into an agreement to manage
the business and operations of Unistar Communications Group, Inc. ("UCG") and
its subsidiaries. UCG is the parent of Unistar Radio Networks, Inc.
("Unistar"), the country's fourth-largest provider of radio network
programming services. Under the terms of this agreement, as amended, the
Company received at no cost approximately 20.23% of UCG's issued and
outstanding capital stock, an option to acquire the remaining capital stock of
UCG for a nominal price under certain conditions, and an annual management
fee of approximately $2 million.
On February 3, 1994, the Company, Unistar and Westwood One, Inc.
("Westwood One") completed the purchase by Westwood One of the radio
network business of Unistar for approximately $101.3 million. Westwood One
is the nation's largest producer and distributor of nationally sponsored
radio programs. In connection with the transaction, an affiliate of the
Company received 5 million newly issued shares of common stock of Westwood
One for $3 per share (which represents approximately 16.45% of the issued
and outstanding capital stock of Westwood One) and an option to purchase an
additional 3 million shares of Westwood One's common stock at a purchase
price of $3 per share, subject to certain vesting requirements. In
connection with the transactions, the Company's Chief Executive Officer and
Chief Financial Officer became the Chief Executive Officer and Chief
Financial Officer, respectively, of Westwood One pursuant to a Management
Agreement between the Company and Westwood One. Under the management
agreement, the Company will receive a base management fee and
additional warrants to acquire up to 1.5 million shares of Westwood One's
Common Stock at a purchase price from $3 to $5 per share in the event that
Westwood One's Common Stock trades above certain target price levels.
F-9
</PAGE>
<PAGE>
NOTE 4. DEPRECIATION AND AMORTIZATION
<TABLE>
A summary of depreciation and amortization expense for the years
ended December 31, 1991, 1992 and 1993 follows:
<CAPTION>
1991 1992 1993
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
Depreciation and amortization of
property and equipment............ $ 4,098 $ 3,934 $ 4,791
Amortization of intangible assets:
Covenants not to compete........ 4,214 6,384 15,875
Franchise interests.............. 2,651 3,192 3,705
Other............................ 14,619 15,416 14,482
------- --------- --------
21,484 24,992 34,062
------- --------- --------
$ 25,582 $ 28,926 $ 38,853
======= ========= ========
</TABLE>
<TABLE>
NOTE 5. LONG-TERM DEBT
<CAPTION>
Long-term debt at December 31, 1992 and 1993 consists of the following:
1992 1993
------ ------
(In Thousands)
<S> <C> <C>
Bank Borrowings(a).................... $ 180,625 $ 165,062
10 3/8% Subordinated Debentures(b).... 200,000 200,000
----------- ----------
$ 380,625 $ 365,062
Less current portion.................. (13,125) (22,312)
----------- ----------
$ 367,500 $ 342,750
=========== ==========
</TABLE>
- - ---------------
(a) At December 31, 1993, the Company's Credit Agreement provided for
aggregate borrowings of up to approximately $295 million, including
an acquisition facility of $115 million and a working capital facility
of $30 million.
The Credit Agreement provides for quarterly principal payments
through September 30, 2000.
Under the Credit Agreement, interest is payable quarterly, based on
the (i) prime rate or (ii) London Interbank Offer Rate.
In the normal course of business, the Company enters into a variety of
interest rate protection agreements, options and swaps, in order to limit
its exposure due to adverse fluctuations in interest rates. These
instruments are executed with creditworthy financial institutions.
As of December 31, 1993, the Company has entered into various
interest rate protection agreements under which the Company's
interest rate on $80 million of borrowings under the Credit Agreement
is fixed at between 4.80% and 5.25% per annum, expiring in the
first quarter of 1996.
(b) On March 24, 1992, the Company sold $200 million principal amount
of its 10 3/8% Senior Subordinated Notes due 2002, through a public
offering for net
F-10
</PAGE>
<PAGE>
proceeds to the Company of approximately $195 million.
At December 31, 1993, the fair value of the Company's 10 3/8% Senior
Subordinated Notes was estimated to be $215,000,000 based on the quoted
market prices for the same issue.
The scheduled maturities of long-term debt for the next five years and
after are as follows:
YEAR ENDING DECEMBER AMOUNT
------------------------------------------- --------------
(In Thousands)
1994....................................... $ 22,312
1995....................................... 15,170
1996....................................... 20,227
1997....................................... 20,227
1998....................................... 25,478
After 1998................................. 261,648
-------------
$ 365,062
=============
The debt agreements contain, among other things, restrictions on
additional borrowings, capital expenditures, leases, sale of assets or
common stock of subsidiaries, and payment of cash dividends. As of
December 31, 1993, no earnings were available for payment of dividends.
Substantially all of the assets of the Company and the common shares of
its subsidiaries are pledged as collateral under the Credit Agreement.
For years ended 1991, 1992 and 1993, the Company paid cash for interest
of $32,066,000, $40,891,000 and $34,625,000, respectively.
NOTE 6. EMPLOYEE AND OTHER POST RETIREMENT BENEFIT PLANS
The Company has a qualified 401(k) profit sharing plan covering
substantially all of its non-union full-time employees. For the years ended
December 31, 1991, 1992 and 1993, no contributions to this plan were made by
the Company.
The Company does not provide any post retirement health care and life
insurance benefits to its employees and accordingly, has no liabilities for
such benefits.
NOTE 7. INCOME TAXES
The provision for income taxes for the years ended December 31, 1991,
1992 and 1993, consisting of current state and local taxes, was $6,000,
$106,000 and $606,000, respectively. No federal income taxes were provided
in 1991, 1992 and 1993 as a result of net losses incurred and available net
loss carryforwards for each period.
At December 31, 1993, the Company had net operating loss
carryforwards for federal income tax purposes which expire from 2004 to
2008 of approximately $73 million.
As discussed in note 1, the Company adopted FAS No. 109 as of January
1, 1993. There was no effect on the consolidated balance sheet as of December
31, 1993 of implementing FAS 109 as the value of the deferred tax asset
resulting from the net operating loss carryforwards was offset by a
valuation allowance of equal amount.
For the years ended December 31, 1991, 1992 and 1993, the Company paid
cash for income taxes of $33,000, $714,000 and $135,000, respectively.
F-11
</PAGE>
<PAGE>
NOTE 8. EMPLOYEE STOCK PLANS
Employee Stock Option Plan. The Company's 1988 Employee Stock Option Plan
as amended provides for a grant of options to purchase 2,664,350 shares of the
Company's Class A Common Stock and 187,500 shares of Class B Common
Stock. The options are exercisable in equal amounts generally over five years
from the date of grant. At December 31, 1992 and 1993, options for 686,700 and
905,981 shares, respectively, of Class A Common Stock were exercisable.
Employee Deferred Share Plan. The Deferred Share Plan permits the grant
of up to 240,641 Class A Deferred Shares and 782,969 Class B Deferred Shares
to executives or other key employees of the Company.
The following is a table summarizing the changes during the years ended
December 31, 1992 and 1993 in options and deferred shares outstanding:
CLASS A COMMON STOCK
---------------------------
DEFERRED EXERCISE
SHARES AND PRICE PER
OPTIONS SHARE
------------ ------------
Outstanding as of December 31, 1991........... 1,203,196 $.001-.1333
Granted/Issued................................ 556,875 7.78
Canceled...................................... (50,076) .04-7.78
Exercised..................................... (58,495) .1333
----------
Total outstanding as of December 31, 1992....... 1,651,500
Granted/Issued.................................. 963,750 8.78-26.00
Canceled........................................ -- --
Exercised................................ ..... (173,900) .1333-8.78
-----------
Total outstanding as of December 31, 1993....... 2,441,350
===========
NOTE 9. STOCKHOLDERS' EQUITY
Each share of Class A Common Stock and each share of Class C Common
Stock is entitled to one vote per share. Each share of Class B Common
Stock is generally entitled to ten votes per share. Shares of Class B Common
Stock and Class C Common Stock, at the option of the holder, may be
converted at any time into an equal number of shares of Class A Common
Stock. Each share of Class B Common Stock and Class C Common Stock
automatically converts into one share of Class A Common Stock upon the sale,
gift, or other transfer of such share to any person other than an
associate of the Company (as defined) and upon certain other events.
During 1988, the Company issued options with an exercise price of
$.027 per share to an officer of the Company to purchase 2,107,998 shares
of the Company's Class B Common Stock. During 1992 and 1993 options to
purchase 33,750 and 134,942 shares were exercised.
The Company has reserved 32,439 shares of Class A Common Stock,
2,051,807 shares of Class B Common Stock and 8,935,526 shares of Class C
Common Stock for issuance upon the exercise of certain warrants and
options outstanding as of December 31, 1993.
NOTE 10. RELATED PARTY TRANSACTIONS
The Company leases office space from an affiliate which is owned 70% by
certain stockholders. The lease expires on December 31, 1998 and provides for
an annual rent of $145,380 subject to certain annual adjustments.
F-12
</PAGE>
<PAGE>
As of December 31, 1992 and 1993, the Company has loans receivable from
certain stockholders amounting to $1,200,000 in the aggregate. Such loans,
payable on June 1, 1994, are non-interest bearing and are included as other
assets in the accompanying consolidated balance sheets.
As of December 31, 1993, the Company had accounts receivable from Unistar
amounting to approximately $204,000.
NOTE 11. EXTRAORDINARY ITEMS
In 1991, the Company purchased approximately $87 million principal
amount of the 14.25% Subordinated Discount Debentures, resulting in an
extraordinary gain of approximately $18 million.
On March 24, 1992, the Company called for the redemption of all
of the remaining approximately $98,000,000 of the 14.25% Subordinated
Discount Debentures, resulting in an extraordinary loss of approximately
$8,277,000.
On September 22, 1992, the Company entered into a new credit agreement
which replaced its prior bank credit agreement and which resulted in an
extraordinary loss of $4,041,000.
NOTE 12. COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries occupy certain office space and
transmitting facilities under lease agreements expiring at various dates
through 2004. Management expects that in the normal course of business,
leases that expire will be renewed or replaced by other leases. Most leases
provide for escalation of rent based on increases in the Consumer Price
Index and/or real estate taxes.
The following is a summary of the future minimum rental
commitments under existing leases:
YEAR ENDING DECEMBER 31, AMOUNT
------------------------------------------ --------------
(In Thousands)
1994...................................... $ 3,766
1995...................................... 3,897
1996...................................... 3,740
1997...................................... 2,664
1998...................................... 2,556
After 1998................................ 7,343
--------------
$ 23,966
==============
Rent expense applicable to such leases amounted to approximately
$2,049,000, $2,354,000 and $3,079,000 for the years ended December 31, 1991,
1992 and 1993, respectively.
F-13
</PAGE>
<PAGE>
At December 31, 1993, the Company is committed to the purchase of
broadcast rights for various sports events and other programming including
on-air talent, aggregating approximately $62.5 million. The aggregate payments
related to these commitments during the next five years are as follows:
AMOUNT
--------------
(In Thousands)
1994.................................... $ 26,475
1995.................................... 26,721
1996.................................... 6,203
1997.................................... 2,894
1998.................................... 179
--------------
$ 62,472
==============
NOTE 13. INTANGIBLE AND OTHER ASSETS
Intangible assets at cost, as of December 31, 1992 and 1993 include:
1992 1993
-------- --------
(In Thousands)
Franchise interests................ $214,458 $259,582
Favorable leasehold interest....... 30,708 30,542
Other, principally covenants.......
not to complete.................. 45,068 60,000
-------- --------
$290,234 $350,124
========= =========
Other assets include principally deferred financing costs and
are amortized over the term of the financing.
F-14
</PAGE>
<TABLE>
NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
-------- -------- -------- -------- --------
(In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
1993
Net revenues $35,165 $53,036 $55,156 $61,165 $204,522
Station operating expenses 22,797 26,029 28,645 32,130 109,601
Operating income 3,026 15,245 15,078 17,883 51,232
Net earnings (loss) (6,430) 5,684 5,994 9,087 14,335
Net earnings (loss) per share (0.20) 0.14 0.13 0.20 0.35
Dividends per share - - - - -
1992
Net revenues $23,372 $40,250 $41,702 $44,906 $150,230
Station operating expenses 15,639 19,524 21,893 24,651 81,707
Operating income 1,693 11,661 10,539 11,522 35,415
Net earnings (loss) (22,826)(a) 1,179 (2,557)(a) 2,454 (21,750)
Net earnings (loss) per share (0.74)(a) (0.03) (0.07)(a) 0.07 (0.69)
Dividends per share - - - - -
1991
Net revenues $22,228 $31,235 $31,894 $32,602 $117,959
Station operating expenses 15,108 15,137 15,713 15,249 61,207
Operating income (loss) (1,118) 8,586 8,867 11,137 27,472
Net earnings (loss) (14,838) (4,611) 13,305 (a) 138 (6,006)
Net earnings (loss) per share (1.60) (0.49) 1.00 (a) 0.01 (0.41)
Dividends per share - - - - -
<FN>
(a) Amount includes extraordinary gain (loss) related to repayment of debt of
$18,020,000 in 1991, ($8,277,000) in the first quarter of 1992 and ($4,041,000)
in the third quarter of 1992.
F-15
</TABLE>
<TABLE>
SCHEDULE VIII
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
<CAPTION>
Column A Column B Column C Column D Column E
- - -------------------------------------------------------------------------------
Balance at Charged to Charged Balance at
Beginning Costs and to Other End of
Description of Period Expenses Accounts Deductions Period
- - -------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
1991
Allowance for
Doubtful Accounts $ 792 $ 557 $ - $ 457 $ 892
======== ======= ======= ======= =======
1992
Allowance for
Doubtful Accounts $ 892 $ 556 $ - $ 566 $ 882
======== ======= ======= ======= =======
1993
Allowance for
Doubtful Accounts $ 882 $ 852 $ - $ 707 $ 1,027
======== ======= ======= ======= =======
F-16
</TABLE>
<TABLE>
SCHEDULE X
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
<CAPTION>
COLUMN A COLUMN B
- - -------------------------------------------------------------------------------
1991 1992 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Depreciation and amortization of
intangible assets (including amortization
of deferred financing costs)............... $ 23,481 $ 26,890 $ 35,392
========= ========= =========
Royalties (Music License Fees)............ $ 2,716 $ 3,234 $ 4,804
========= ======== =========
Advertising and promotions costs........... $ 6,689 $ 5,914 $ 7,955
========= ======== =========
<FN>
All other information is omitted as the amounts do not exceed one
percent of total sales.
F-17
</TABLE>
<PAGE>
EXECUTION COPY
_________________________________________________________
ASSET PURCHASE AGREEMENT
by and between
FRITZ BROADCASTING, INC.
as "Seller"
and
INFINITY BROADCASTING CORPORATION OF DETROIT
as "Buyer"
of
WXYT(AM), DETROIT, MICHIGAN
Dated as of March 8, 1994
_________________________________________________________
<PAGE>
</PAGE>
TABLE OF CONTENTS
PAGE
Index to Exhibits and Schedules . . . . . . . . . . . . i-v
ARTICLE 1 ASSETS TO BE CONVEYED . . . . . . . . . . . . 1
1.1. Closing . . . . . . . . . . . . . . . . . . . 1
1.2. Station Assets . . . . . . . . . . . . . . . 1
1.3. Excluded Assets . . . . . . . . . . . . . . . 3
ARTICLE 2 PURCHASE PRICE . . . . . . . . . . . . . . . 4
2.1. Purchase Price . . . . . . . . . . . . . . . 4
2.2. Procedure for Calculating Purchase Price . . 5
2.3. Allocation . . . . . . . . . . . . . . . . . 6
ARTICLE 3 ASSUMPTION OF OBLIGATIONS . . . . . . . . . . 6
3.1. Assumption of Obligations . . . . . . . . . . 6
3.2. Limitation . . . . . . . . . . . . . . . . . 7
ARTICLE 4 REQUIRED CONSENTS . . . . . . . . . . . . . . 7
4.1. FCC Application . . . . . . . . . . . . . . . 7
4.2. Compliance with HSRA . . . . . . . . . . . . 8
4.3. Other Governmental Consents . . . . . . . . . 8
ARTICLE 5 PRORATIONS; ACCOUNTS RECEIVABLE . . . . . . . 8
5.1. Proration of Income and Expenses . . . . . . 8
5.2. Trade Agreements . . . . . . . . . . . . . . 9
5.3. Payment of Proration Items . . . . . . . . . 9
5.4. Accounts Receivable . . . . . . . . . . . . . 10
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER . . . 11
6.1. Organization and Standing . . . . . . . . . . 11
6.2. Authorization and Binding Obligation . . . . 11
6.3. FCC Qualifications . . . . . . . . . . . . . 12
6.4. Absence of Conflicting Agreements or Required
Consents . . . . . . . . . . . . . . . . . . 12
6.5. Absence of Litigation . . . . . . . . . . . . 12
<PAGE>
</PAGE>
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER . . 12
7.1. Organization and Standing . . . . . . . . . . 12
7.2. Authorization and Binding Obligation . . . . 12
7.3. Absence of Conflicting Agreements or Required
Consents . . . . . . . . . . . . . . . . . . 13
7.4. FCC Authorizations . . . . . . . . . . . . . 13
7.5. Title to and Condition of Real Property . . . 14
7.6. Title to and Condition of Personal Property . 15
7.7. Contracts . . . . . . . . . . . . . . . . . . 16
7.8. Personnel Information . . . . . . . . . . . . 16
7.9. Intellectual Property . . . . . . . . . . . . 18
7.10. Litigation . . . . . . . . . . . . . . . 18
7.11. Compliance With Laws . . . . . . . . . . 19
7.12. Interests in Clients, Suppliers, Etc. . 19
7.13. Financial Statements; Budget . . . . . . 19
7.14. Insurance . . . . . . . . . . . . . . . 20
7.15. Taxes . . . . . . . . . . . . . . . . . 20
7.16. Bankruptcy . . . . . . . . . . . . . . . 20
7.17. Environmental Matters . . . . . . . . . 20
7.18. UCC Financing Statements . . . . . . . . 21
7.19. Disclosure . . . . . . . . . . . . . . . 21
ARTICLE 8 COVENANTS OF BUYER . . . . . . . . . . . . . 21
8.1. Notification . . . . . . . . . . . . . . . . 21
8.2. No Inconsistent Action . . . . . . . . . . . 22
ARTICLE 9 COVENANTS OF SELLER . . . . . . . . . . . . . 22
9.1. Interim Operation . . . . . . . . . . . . . . 22
9.2. Access to Station . . . . . . . . . . . . . . 25
9.3. No Solicitation . . . . . . . . . . . . . . . 25
9.4. Financial Statements . . . . . . . . . . . . 25
9.5. Notification . . . . . . . . . . . . . . . . 26
9.6. Third-Party Consents . . . . . . . . . . . . 26
9.7. Estoppel Certificates; Consent and Waiver . . 26
9.8. Closing Covenant . . . . . . . . . . . . . . 27
9.9. Agreement to Purchase Real Estate . . . . . . 27
9.10. Non-Competition Agreement . . . . . . . 27
9.12. Payment of Indebtedness; Financing
Statements . . . . . . . . . . . . . . . . . 27
9.13. No Inconsistent Action . . . . . . . . . 27
ARTICLE 10 JOINT COVENANTS . . . . . . . . . . . . 28
10.1. Conditions . . . . . . . . . . . . . . . 28
10.2. Best Efforts . . . . . . . . . . . . . . 28
ii
<PAGE>
</PAGE>
10.3. Control of Station . . . . . . . . . . . 28
10.4. Confidentiality . . . . . . . . . . . . 28
10.5. Continued Employment of Station
Employees . . . . . . . . . . . . . . . . . . 28
ARTICLE 11 CONDITIONS PRECEDENT TO BUYER'S
OBLIGATION TO CLOSE . . . . . . . . . . 30
11.1. Representations, Warranties and
Covenants . . . . . . . . . . . . . . . . . . 31
11.2. Governmental Consents . . . . . . . . . 31
11.3. Governmental Authorizations . . . . . . 31
11.4. Third-Party Consents . . . . . . . . . . 31
11.5. Adverse Proceedings . . . . . . . . . . 31
11.6. No Material Adverse Change . . . . . . . 32
11.7. Deliveries . . . . . . . . . . . . . . . 32
ARTICLE 12 CONDITIONS PRECEDENT TO SELLER'S
OBLIGATION TO CLOSE . . . . . . . . . . 32
12.1. Representations, Warranties and
Covenants . . . . . . . . . . . . . . . . . . 32
12.2. Governmental Consents . . . . . . . . . 32
12.3. Adverse Proceedings . . . . . . . . . . 32
12.4. Deliveries . . . . . . . . . . . . . . . 32
ARTICLE 13 DOCUMENTS TO BE DELIVERED AT THE
CLOSING . . . . . . . . . . . . . . . . . . . . . 33
13.1. Documents to be Delivered by Seller . . 33
13.2. Documents to be Delivered by Buyer . . . 34
ARTICLE 14 TRANSFER TAXES; FEES AND EXPENSES . . . 34
14.1. Transfer Taxes and Similar Charges . . . 34
14.2. Governmental Filing or Grant Fees . . . 34
14.3. Expenses . . . . . . . . . . . . . . . . 35
ARTICLE 15 BROKER'S COMMISSION OR FINDER'S FEE . . 35
15.1. Buyer's Representation and Agreement to
Indemnify . . . . . . . . . . . . . . . . . . 35
15.2. Seller's Representation and Agreement to
Indemnify . . . . . . . . . . . . . . . . . . 35
ARTICLE 16 INDEMNIFICATION . . . . . . . . . . . . 36
16.1. Indemnification by Seller . . . . . . . 36
iii
<PAGE>
</PAGE>
16.2. Indemnification by Buyer . . . . . . . . 37
16.3. Procedure for Indemnification . . . . . 37
16.4. Limitations . . . . . . . . . . . . . . 38
ARTICLE 17 TERMINATION RIGHTS . . . . . . . . . . . 39
17.1. Termination . . . . . . . . . . . . . . 39
17.2. Liability . . . . . . . . . . . . . . . 40
ARTICLE 18 SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS . . . . . . . . 40
ARTICLE 19 REMEDIES UPON DEFAULT . . . . . . . . . 41
19.1. Default by Seller . . . . . . . . . . . 41
19.2. Default by Buyer . . . . . . . . . . . . 41
ARTICLE 20 RISK OF LOSS . . . . . . . . . . . . . . 42
ARTICLE 21 OTHER PROVISIONS . . . . . . . . . . . . 42
21.1. Publicity . . . . . . . . . . . . . . . 42
21.2. Benefit and Assignment . . . . . . . . . 43
21.3. Entire Agreement . . . . . . . . . . . . 43
21.4. Headings . . . . . . . . . . . . . . . . 43
21.5. Computation of Time. . . . . . . . . . . 43
21.6. Governing Law . . . . . . . . . . . . . 43
21.7. Notices . . . . . . . . . . . . . . . . 43
21.8. Counterparts . . . . . . . . . . . . . . 44
21.9. Further Assurances . . . . . . . . . . . 44
ARTICLE 22 GUARANTY . . . . . . . . . . . . . . . . 45
ARTICLE 23 DEFINITIONS . . . . . . . . . . . . . . 45
iv
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</PAGE>
EXHIBITS AND SCHEDULES
EXHIBITS
________
A. Agreement to Purchase Real Estate
B. Non-Competition Agreement
C. Opinion of Seller's Counsel
D. Opinion of Buyer's Counsel
E. Reversal Agreement
SCHEDULES
_________
1.2(a) Station Licenses
1.2(b) Real Property
1.2(c) Tangible Personal Property
1.2(d) Contracts
1.2(f) Intellectual Property
1.3(d) Excluded Assets
1.3(f) Excluded Employee Plans and Arrangements
6.3 Buyer's FCC Exceptions
6.4 Buyer's Required Consents
6.5 Buyer's Litigation
7.3 Required Consents
7.7(b) Contracts Exception
7.8 Employee List and Compensation; Past Labor
Disputes
7.10 Pending Claims and Litigation
7.12 Interests in Clients, Suppliers, Etc.
7.13(a) Financial Statements
7.13(b) Allocations
7.13(c) 1994 Budget
7.14 Insurance Policies
7.18 UCC Financing Statements
10.5 Excluded Employees
v
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<PAGE>
</PAGE>
ASSET PURCHASE AGREEMENT
________________________
This ASSET PURCHASE AGREEMENT (this "Agreement"),
_________
made as of the 8th day of March 1994, is by and between
FRITZ BROADCASTING, INC., a Michigan corporation ("Seller"),
______
INFINITY BROADCASTING CORPORATION OF DETROIT, a Delaware
corporation ("Buyer"), and INFINITY BROADCASTING
_____
CORPORATION, a Delaware corporation ("Guarantor").
_________
RECITALS
________
Seller is the licensee of and operates radio
broadcast station WXYT(AM), Detroit, Michigan (the
"Station"), pursuant to licenses issued by the Federal
_______
Communications Commission (the "FCC").
___
Seller and Buyer have agreed that Seller will sell
and Buyer will acquire all of the assets used or necessary
in the operation of the Station on the terms and subject to
the conditions set forth in this Agreement.
Therefore, the parties agree as follows:
ARTICLE 1
ASSETS TO BE CONVEYED
_____________________
1.1. Closing. Subject to Section 17.1 hereof and
except as otherwise mutually agreed upon by Seller and
Buyer, the closing of this transaction (the "Closing") shall
_________
take place on a date designated by Buyer within fifteen (15)
days after the last of the conditions specified in Sections
11.2 and 12.2 hereof has been fulfilled (or waived by the
party entitled to waive such condition). The Closing shall
be held at 10:00 a.m. (Detroit, Michigan time) in the
offices of Butzel Long, 150 West Jefferson, Detroit,
Michigan, or at such place as the parties may otherwise
agree.
1.2. Station Assets. At the Closing, Seller shall
sell, assign, transfer and convey to Buyer, and Buyer shall
purchase from Seller, all of the assets, real, personal and
mixed, tangible and intangible (including the business of
the Station as a going concern), owned or held by Seller and
used or necessary in the conduct of the business and
operation of the Station, including all such property
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<PAGE>
</PAGE>
acquired by Seller between the date hereof and the Closing
Date (but excluding the assets specified in Section 1.3),
including, but not limited to, the following:
(a) all of Seller's rights in and to the
licenses, permits and other authorizations issued
to Seller by any governmental authority and used or
necessary in the conduct of the business and
operation of the Station, including the Station
Licenses listed in Schedule 1.2(a), together with
_______________
any additions thereto (including renewals or
modifications of such licenses, permits and
authorizations and applications therefor) between
the date hereof and the Closing Date, and all its
rights in and to the call letters "WXYT";
(b) all of Seller's right, title and interest
in and to all real property, including leasehold
interests and easements, used or necessary in the
conduct of the business and the operation of the
Station, including the Real Property listed in
Schedule 1.2(b), together with any additions
_______________
thereto between the date hereof and the Closing
Date;
(c) all equipment, office furniture and
fixtures, office materials and supplies, inventory,
spare parts, motor vehicles and other tangible
personal property of every kind and description,
owned, leased or held by Seller and used or
necessary in the conduct of the business and
operation of the Station, including the items
listed in Schedule 1.2(c), together with any
_______________
replacements thereof and additions thereto, made
between the date hereof and the Closing Date;
(d) subject to the provisions of Article 3
hereof, all of Seller's rights under and interest
in all Contracts, including the Contracts listed in
Schedule 1.2(d) hereto, together with all of
_______________
Seller's rights under and interest in all Contracts
entered into or acquired by Seller between the date
hereof and the Closing Date in accordance with this
Agreement;
(e) all programs and programming materials of
whatever form or nature owned by Seller and used or
intended for use on or by the Station;
2
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<PAGE>
</PAGE>
(f) all of Seller's rights in and to the
trademarks, trade names, service marks, franchises,
copyrights, including registrations and
applications for registration of any of them,
jingles, logos, slogans, licenses, permits and
privileges owned or held by Seller and used in the
conduct of the business and operation of the
Station, including those listed in Schedule 1.2(f),
_______________
together with any additions thereto between the
date hereof and the Closing Date;
(g) all files, records, books of account,
computer programs and software and logs relating to
the operation of the Station, including, without
limitation, payable records, receivable records,
invoices, statements, traffic material, programming
information and studies, technical information and
engineering data, news and advertising studies and
consultants' reports, ratings reports, marketing
and demographic data, sales correspondence, lists
of advertisers, promotional materials, credit and
sales reports, budgets, financial reports and
projections, sales, operating and business plans,
filings with the FCC and original executed copies
of all written Contracts to be assigned hereunder;
and
(h) all of Seller's rights under
manufacturers' and vendors' warranties relating to
items included in the Station Assets and all
similar rights against third parties relating to
items included in the Station Assets to the extent
contractually assignable.
The assets to be transferred to Buyer hereunder are
hereinafter collectively referred to as the "Station
_______
Assets." The Station Assets shall be transferred to Buyer
______
free and clear of all debts, liens, security interests,
mortgages, trusts, claims, liabilities and encumbrances
(except for lessors' rights under leases assumed by Buyer
pursuant to Section 3.1).
1.3. Excluded Assets. The Station Assets shall
not include the following:
(a) Seller's books and records as pertain to
the corporate organization, existence or
capitalization of Seller, and duplicate copies of
3
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<PAGE>
</PAGE>
such records as are necessary to enable Seller to
file tax returns and reports;
(b) all cash, cash equivalents or similar
type investments of Seller, such as certificates of
deposit, Treasury bills, and other marketable
securities on hand and/or in banks;
(c) all accounts receivable arising out of
the operation of the Station for services performed
or provided prior to the Effective Time (the
"Accounts Receivable"), but specifically excluding
_____________________
any amounts owing in connection with advertisements
or programs to be broadcast at and after the
Effective Time;
(d) the items identified on Schedule 1.3(d);
(e) all Contracts of insurance, except for
any rights that may be assigned pursuant to Article
20 hereof; and
(f) all pension, profit sharing or cash or
deferred (Section 401(k)) plans and trusts and the
assets thereof and any other employee benefit plan
or arrangement listed in Schedule 1.3(f) hereto and
_______________
the assets thereof, if any.
ARTICLE 2
PURCHASE PRICE
______________
2.1. Purchase Price. The total consideration to
be paid by Buyer for the Station Assets and the Non-
Competition Agreement referenced in Section 9.10 below (the
"Purchase Price") shall be the lesser of:
________________
(a) Twenty-Two Million Seven Hundred Seventy
Four Thousand Dollars ($22,774,000);
(b) if Adjusted Broadcast Cash Flow is less
than $2,735,000, the total of (i) nine (9) times
the remainder of (A) Adjusted Broadcast Cash Flow
less (B) Two Hundred Thirty-Five Thousand Dollars
____
($235,000), less (ii) Three Hundred Two Thousand
____
Dollars ($302,000); and
4
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</PAGE>
(c) if Broadcast Cash Flow for the period of
twelve (12) full Broadcast Months immediately
preceding the Closing Date (the "Trailing Twelve
________________
Months") is less than ninety-five percent (95%) of
_______
Adjusted Broadcast Cash Flow, the total of (i) nine
(9) times the remainder of (A) Broadcast Cash Flow
for the Trailing Twelve Months less (B) Two Hundred
____
Thirty-Five Thousand Dollars ($235,000), less (ii)
____
Three Hundred Two Thousand Dollars ($302,000).
The Purchase Price shall be payable by Buyer at Closing by
wire transfer of immediately available federal funds to an
account at a domestic U.S. bank or other financial
institution pursuant to wire instructions that Seller shall
deliver to Buyer at least two (2) business days prior to
Closing.
2.2. Procedure for Calculating Purchase Price.
(a) At least three (3) business days prior to the
Closing Date, Seller shall deliver to Buyer a certificate
executed by an officer of Seller, dated the day of delivery,
setting forth Adjusted Broadcast Cash Flow for broadcast
year 1993, Broadcast Cash Flow for the Trailing Twelve
Months and Seller's calculation of the Purchase Price (the
"Calculation"). The certificate will state that (i) the
_____________
Calculation is based on Seller's financial statements for
the year ended December 26, 1993 and for the Trailing Twelve
Months provided to Buyer pursuant to Section 9.4 of this
Agreement (or, to the extent such financial statements are
not yet due, to be provided concurrently with delivery of
such certificate) after taking into account normal year-end
adjustments, and (ii) such financial statements have been
prepared in accordance with GAAP and fairly reflect the
results of operation of the Station as of the dates and for
the periods indicated, and (iii) and the Calculation has
been performed in accordance with the terms of this
Agreement. If Buyer has designated a date for Closing
pursuant to Section 1.1 that falls within ten (10) days
after the end of a Broadcast Month, Seller may defer the
date for Closing by no more than five (5) days for the
purpose of giving Seller time to include the previous
Broadcast Month in the determination of Broadcast Cash Flow
for the Trailing Twelve Months. Seller shall notify Buyer
of its election to defer the Closing Date at least ten (10)
days prior to the date for Closing designated by Buyer.
5
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<PAGE>
</PAGE>
(b) If Buyer disputes the accuracy of the
Calculation, Buyer shall promptly inform Seller of the
disputed amount and the basis for Buyer's dispute in
reasonable detail. If Seller does not agree to modify the
Calculation in accordance with Buyer's position, Seller may
elect either (i) to defer the Closing until the matter can
be resolved pursuant to the arbitration procedures set forth
below, or (ii) to proceed to Closing as scheduled, in which
event Buyer shall pay to Seller at Closing the Purchase
Price, calculated after giving effect to the adjustments
proposed by Buyer (the "Buyer's Amount"). In any event,
________________
whether Seller elects to proceed pursuant to clause (i) or
(ii), Buyer and Seller shall within ten days submit such
dispute to the Detroit, Michigan, office of Price Waterhouse
for arbitration. Buyer and Seller shall use all reasonable
efforts to achieve a decision by such arbitrator as soon as
practicable, which decision shall be final, conclusive and
binding on the parties. If Seller has elected to proceed
under clause (i), the Closing shall take place three (3)
business days following the arbitrator's decision, and the
Purchase Price shall be determined in accordance with the
terms of such decision. If Seller has elected to proceed
under clause (ii), and if pursuant to the arbitrator's
decision the Purchase Price exceeds Buyer's Amount (the
amount of such excess referred to as the "Excess Amount"),
_______________
then within three (3) business days after the arbitrator's
decision, Buyer shall pay the Excess Amount to Seller by
wire transfer of immediately available funds. Each party
shall be responsible for its own fees and expenses in
connection with such arbitration. The fees and expenses of
the arbitrator shall be borne equally by Buyer and Seller.
2.3. Allocation. Buyer shall arrange for an
appraisal of the value of the tangible assets included in
the Station Assets. The appraisal shall be completed within
one hundred eighty (180) days after the Closing, and, based
upon such appraisal, Buyer shall prepare an initial draft of
IRS Form 8594. Buyer shall forward such form to Seller for
its approval, which shall not be unreasonably withheld, and
Buyer and Seller shall each file the IRS Form 8594 finally
agreed upon by the parties with their respective federal
income tax return for the tax year in which the Closing
occurs.
ARTICLE 3
ASSUMPTION OF OBLIGATION
________________________
6
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</PAGE>
3.1. Assumption of Obligations. Subject to the
provisions of this Article 3 and Article 5 of this
Agreement, Buyer shall assume and undertake to pay, satisfy
or discharge: (a) the liabilities, obligations and
commitments of Seller arising and accruing after the Closing
Date under the Contracts listed in Schedule 1.2(d) and the
_______________
Time Sales Agreements; (b) the liabilities, obligations and
commitments of Seller arising and accruing after the Closing
Date under other Contracts entered into between the date of
this Agreement and the Closing Date which Buyer expressly
agrees in writing to assume; and (c) the liabilities and
obligations of Seller to the Transferred Employees as
provided in Section 10.5.
3.2. Limitation. Except as set forth in Section
3.1 hereof, Buyer expressly does not, and shall not, assume
or be deemed to assume, under this Agreement or otherwise by
reason of the transactions contemplated hereby, any
liabilities, obligations or commitments of Seller of any
nature whatsoever. Without limiting the generality of the
foregoing, Buyer shall not assume or be liable for any
liability or obligation of Seller (a) arising out of any
litigation, proceeding or claim by any person or entity
relating to the business or operation of the Station prior
to the Closing Date, whether or not such litigation,
proceeding or claim is pending, threatened or asserted
before, on or after the Closing Date, or (b) under any
employment contract, collective bargaining agreement,
insurance, pension, retirement, deferred compensation,
incentive bonus or profit sharing or employee benefit plan
or trust, except to the extent such agreement is
specifically included in the Contracts listed on Schedule
________
1.2(d).
______
ARTICLE 4
REQUIRED CONSENTS
_________________
4.1. FCC Application. The assignment of the
Station Licenses as contemplated by this Agreement is
subject to the prior consent and approval of the FCC. No
later than seven (7) business days after the date of this
Agreement, Buyer and Seller shall file the FCC Application.
Seller and Buyer shall thereafter prosecute the FCC
Application with all reasonable diligence and otherwise use
their best efforts to obtain the grant of the FCC
Application as expeditiously as practicable; provided,
however, that neither Seller nor Buyer shall have any
7
<PAGE>
</PAGE>
obligation to satisfy any complainant or the FCC by taking
any steps which would have a material adverse effect upon
Seller or Buyer or upon any affiliated entity, but neither
the expense nor inconvenience to a party of defending
against a complainant or an inquiry by the FCC shall be
considered a material adverse effect on such party. If the
FCC Consent imposes any condition on any party hereto, such
party shall use its best efforts to comply with such
condition; provided, however, that no party shall be
required to comply with any condition that would have a
material adverse effect upon it or any affiliated entity.
If reconsideration or judicial review is sought with respect
to the FCC Consent, the party affected shall vigorously
oppose such efforts for reconsideration or judicial review;
provided, however, that nothing herein shall be construed to
limit either party's right to terminate this Agreement
pursuant to Article 17 hereof.
4.2. Compliance with HSRA. Each party shall make
or cause to be made in a timely fashion, and in any event
within thirty (30) days following the date of this
Agreement, all filings which are required in connection with
the transactions contemplated hereby under the HSRA, and
shall furnish to the other party all information that the
other reasonably requests in connection with such filings.
The transfer of the Station Assets hereunder is conditioned
upon the expiration of the applicable waiting period under
the HSRA without the institution or threat of any action
with respect to the consummation of the transactions
contemplated hereunder.
4.3. Other Governmental Consents. Promptly
following the execution of this Agreement, the parties shall
prepare and file with the appropriate governmental
authorities any other requests for approval or waiver that
are required from such governmental authorities in
connection with the transactions contemplated hereby and
shall diligently and expeditiously prosecute, and shall
cooperate fully with each other in the prosecution of, such
requests for approval or waiver and all proceedings
necessary to secure such approvals and waivers.
ARTICLE 5
PRORATIONS; ACCOUNTS RECEIVABLE
_______________________________
5.1. Proration of Income and Expenses. All income
and expenses arising from the conduct of the business and
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operation of the Station shall be prorated between Buyer and
Seller as of the Effective Time in accordance with GAAP.
Such prorations shall be based upon the principle that
Seller shall be entitled to all income earned and shall be
responsible for all liabilities and obligations incurred or
accruing in connection with the operation of the Station
until the Effective Time, and Buyer shall be entitled to all
income earned and be responsible for such liabilities and
obligations incurred by Buyer thereafter. Such prorations
shall include, without limitation, all ad valorem, real
estate and other property taxes (but excluding taxes arising
by reason of the transfer of the Station Assets as
contemplated hereby, which shall be paid as set forth in
Article 14 of this Agreement), business and license fees,
music and other license fees (including any retroactive
adjustments thereof), wages and salaries of employees
(including accruals up to the Closing Date for bonuses,
commissions, sick leave, vacation and severance pay and
related payroll taxes), utility expenses, liabilities and
obligations under all Contracts to be assumed by Buyer
(other than Trade Agreements), rents and similar prepaid and
deferred items and all other expenses attributable to the
ownership and operation of the Station. Trade Agreements
shall be prorated only to the extent provided in Section 5.2
of this Agreement. To the extent not known, real estate
taxes shall be apportioned on the basis of taxes assessed
for the preceding year, with a reapportionment as soon as
the new tax rate and valuation can be ascertained.
5.2. Trade Agreements. Liabilities and
obligations under Trade Agreements shall be prorated in
favor of Buyer to the extent that the total liability of the
Station for air time under such agreements as of the
Effective Time exceeds by ten percent (10%) the total of the
vendors' prices (as of the date of each Trade Agreement) for
the property to be received by Buyer under such agreements
after the Effective Time. The liability of the Station for
unperformed time under a Trade Agreement as of the Effective
Time shall be valued according to the Station's prevailing
rate as of the date of such Trade Agreement. Buyer shall
not be obligated to make any proration in favor of Seller
with respect to Trade Agreements, notwithstanding that the
fair market value of property to be received by Buyer
exceeds the liability for unperformed time. Seller
covenants that the total liability of the Station under
Trade Agreements as of the Effective Time shall not exceed
Thirty Thousand Dollars ($30,000).
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5.3. Payment of Proration Items. Within sixty
(60) days following the Closing Date, Seller shall deliver
to Buyer a schedule of its proposed prorations (which shall
set forth in reasonable detail the basis for those
determinations) (the "Proration Schedule"). The Proration
__________________
Schedule shall be conclusive and binding upon Buyer unless
Buyer provides Seller with written notice of objection (the
"Notice of Disagreement") within thirty (30) days after
______________________
Buyer's receipt of the Proration Schedule, which notice
shall state the prorations of expenses proposed by Buyer
(the "Buyer's Proration Amount"). Seller shall have fifteen
________________________
(15) days from receipt of a Notice of Disagreement to accept
or reject Buyer's Proration Amount. If Seller rejects
Buyer's Proration Amount, and the amount in dispute exceeds
five thousand dollars ($5,000), the dispute shall be
submitted within ten (10) days to the Detroit, Michigan,
office of Price Waterhouse (the "Referee") for resolution,
_______
such resolution to be made within thirty (30) days after
submission to the Referee and to be final, conclusive and
binding on Seller and Buyer. Buyer and Seller agree to
share equally the cost and expenses of the Referee, but each
party shall bear its own legal and other expenses, if any.
If the amount in dispute is equal to or less than five
thousand dollars ($5,000), such amount shall be divided
equally between Buyer and Seller. Payment by Buyer or
Seller, as the case may be, of the proration amounts
determined pursuant to this Section 5.3 shall be due fifteen
(15) days after the last to occur of (i) Buyer's acceptance
of the Proration Schedule or failure to give Seller a timely
Notice of Disagreement; (ii) Seller's acceptance of Buyer's
Proration Amount or failure to reject Buyer's Proration
Amount within fifteen (15) days of receipt of a Notice of
Disagreement; (iii) Seller's rejection of Buyer's Proration
Amount in the event the amount in dispute equals or is less
than five thousand dollars ($5,000); and (iv) notice to
Seller and Buyer of the resolution of the disputed amount by
the Referee in the event that the amount in dispute exceeds
five thousand dollars ($5,000). Any payment required by
Seller to Buyer or by Buyer to Seller, as the case may be,
under this Section 5.3 shall be paid by wire transfer of
immediately available federal funds to the account of the
payee with a financial institution in the United States as
designated by Seller in the Proration Schedule or by Buyer
in the Notice of Disagreement (or by separate notice in the
event that Buyer does not send a Notice of Disagreement).
If either Buyer or Seller fails to pay when due any amount
under this Section 5.3, interest on such amount will accrue
from the date payment was due to the date such payment is
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made at a per annum rate equal to the Prime Rate plus two
____
percent (2%), and such interest shall be payable upon
demand.
5.4. Accounts Receivable. On the Closing Date,
Seller will assign the Accounts Receivable to Buyer for
purposes of collection only. Buyer will collect the
Accounts Receivable as Seller's agent in the same manner and
with the same diligence that Buyer uses to collect its own
accounts receivable for a period of one hundred eighty (180)
days following the Closing Date (the "Collection Period");
_________________
provided, that Buyer shall not be obligated to institute
________
litigation, employ any collection agency, legal counsel or
other third party, or take any other extraordinary means of
collection; and provided further, that Buyer shall not
________ _______
compromise, settle or adjust any of the Amounts Receivable
without receiving the written approval of Seller. Within
ten (10) business days after the Closing Date, Seller shall
deliver to Buyer a complete and detailed statement of each
Account Receivable, including a statement showing all
commissions owing with respect to such receivables, if any
(the "Receivable Statement"). Neither Seller nor its agents
____________________
will make any solicitation of such Accounts Receivable for
collection purposes nor will Seller or its agents institute
litigation for the collection of any Accounts Receivable
during the Collection Period, except with respect to
Accounts Receivable returned to Seller for collection as set
forth below. By the fifteenth (15th) day of each month
during the Collection Period, Buyer shall pay to Seller all
amounts collected by Buyer on the Accounts Receivable during
the previous calendar month. Buyer may deduct from such
collections (a) any commissions which may be due with
respect to the Accounts Receivable (as indicated on the
Receivable Statement) and, if so, shall promptly notify
Seller of the deduction and remit such commissions to the
appropriate person and (b) any amount due to Buyer under
Section 5 of this Agreement for which payment has not been
made; except as provided in this Section 5, Buyer shall have
no right of offset against the Accounts Receivable. All
amounts received by Buyer from account debtors included
among the Accounts Receivable shall be applied first to the
Accounts Receivable, unless the account debtor specifically
disputes a receivable or instructs that the payment be
otherwise applied. If during the Collection Period an
account debtor disputes an account included among the
Accounts Receivable, Buyer may return that account to Seller
for collection. At the conclusion of the Collection Period,
any remaining Accounts Receivable shall be reassigned to
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Seller and thereafter Buyer shall have no further obligation
with respect to the Accounts Receivable.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
_______________________________________
Buyer represents and warrants to Seller as follows:
6.1. Organization and Standing. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and, as of
the Closing Date, will be qualified to do business in the
State of Michigan.
6.2. Authorization and Binding Obligation. Buyer
has all necessary power and authority to enter into and
perform under this Agreement and the transactions
contemplated hereby, and Buyer's execution, delivery and
performance of this Agreement has been duly and validly
authorized by all necessary action on its part. This
Agreement has been duly executed and delivered by Buyer and
constitutes its valid and binding obligation, enforceable in
accordance with its terms, except as limited by laws
affecting creditors' rights or equitable principles
generally.
6.3. FCC Qualifications. To Buyer's knowledge,
there are no facts which, under the Communications Act of
1934, as amended, or the existing rules and regulations of
the FCC, would disqualify Buyer as assignee of the Station
Licenses except as disclosed on Schedule 6.3.
____________
6.4. Absence of Conflicting Agreements or Required
Consents. Except as set forth in Article 4 with respect to
FCC and other governmental consents or as disclosed on
Schedule 6.4, the execution, delivery and performance of
____________
this Agreement and the consummation of the transactions
contemplated hereby by Buyer: (a) do and will not require
the consent of any third party; (b) do and will not violate
any provisions of Buyer's articles of incorporation or
bylaws; (c) do and will not violate any applicable law,
judgment, order, injunction, decree, rule, regulation or
ruling of any governmental authority to which any Buyer is a
party; and (d) do and will not, either alone or with the
giving of notice or the passage of time, or both, conflict
with, constitute grounds for termination of or result in a
breach of the terms, conditions or provisions of, or
12
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constitute a default under any agreement, instrument,
license or permit to which any Buyer is now subject.
6.5. Absence of Litigation. Except as set forth
in Schedule 6.5, there is no claim, litigation, proceeding
____________
or investigation pending or, to the best of Buyer's
knowledge, threatened against Buyer which seeks to enjoin or
prohibit, or which otherwise questions the validity of, any
action taken or to be taken in connection with this
Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
________________________________________
Seller represents and warrants to Buyer as follows:
7.1. Organization and Standing. Seller is a
corporation duly formed, validly existing and in good
standing under the laws of the State of Michigan, and has
all necessary corporate power and authority to own, lease
and operate the Station Assets and to carry on the business
of the Station as now being conducted and as proposed to be
conducted by Seller between the date hereof and the Closing
Date.
7.2. Authorization and Binding Obligation. Seller
has all necessary power and authority to enter into and
perform this Agreement and the transactions contemplated
hereby, and Seller's execution, delivery and performance of
this Agreement has been duly and validly authorized by all
necessary action on its part. This Agreement has been duly
executed and delivered by Seller and constitutes its valid
and binding obligation, enforceable in accordance with its
terms, except as limited by laws affecting the enforcement
of creditors' rights or equitable principles generally.
7.3. Absence of Conflicting Agreements or Required
Consents. Except as set forth in Article 4 with respect to
FCC and other governmental consents and except as set forth
on Schedule 7.3, the execution, delivery and performance of
____________
this Agreement and the consummation of the transactions
contemplated hereby by Seller (a) do and will not require
the consent of any third party (except with respect to
Contracts as disclosed in Schedule 1.2(d)); (b) do and will
_______________
not violate any provisions of Seller's articles of
incorporation or bylaws; (c) do and will not violate any
applicable law, judgment, order, injunction, decree, rule,
13
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regulation or ruling of any governmental authority to which
Seller is a party or by which it or the Station Assets are
bound; (d) do and will not, either alone or with the giving
of notice or the passage of time, or both, conflict with,
constitute grounds for termination of or result in a breach
of the terms, conditions or provisions of, or constitute a
default under any Contract, agreement, instrument, license
or permit to which either Seller or the Station Assets are
now subject; and (e) do and will not result in the creation
of any lien, charge or encumbrance on any of the Station
Assets.
7.4. FCC Authorizations.
(a) Schedule 1.2(a) contains a true and complete
_______________
list of the Station Licenses, including their expiration
dates, and there are no other licenses, permits or other
authorizations from governmental or regulatory authorities
required for the lawful conduct of the business and
operation of the Station in the manner and to the full
extent it is now conducted. Seller has delivered to Buyer
true and complete copies of the Station Licenses, including
any and all amendments and other modifications thereto. The
Station Licenses and other licenses, permits and
authorizations listed in Schedule 1.2(a) were validly issued
_______________
and are validly held by Seller, are in full force and effect
and are unimpaired by any act or omission of Seller, its
shareholders, officers, directors, employees or agents, and
except as disclosed in Schedule 1.2(a), none is subject to
_______________
any restriction or condition which would limit in any
respect the full operation of the Station as now operated.
Seller has no reason to believe that the FCC will not renew
the Station Licenses in the ordinary course.
(b) Except as disclosed in Schedule 1.2(a), there
_______________
are no applications, complaints or proceedings pending or,
to the best of Seller's knowledge, threatened before the FCC
relating to the business or operation of the Station or that
may result in the revocation, modification, non-renewal or
suspension of any of the Station Licenses, the denial of any
pending application or the imposition of any fines,
forfeitures, or other administrative actions by the FCC with
respect to the Station or its operation other than
proceedings affecting the broadcasting industry generally.
Except as disclosed in Schedule 1.2(a), Seller is not
_______________
subject to any outstanding judgment or order of the FCC
relating to the Station. The Station is being operated in
all material respects in accordance with the terms and
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conditions of the Station Licenses, the underlying
construction permits, the Communications Act of 1934, as
amended, and all rules, regulations and policies of the FCC.
All ownership reports, employment reports and other reports
and documents required to be filed by Seller with the FCC
have been timely filed; such items as are required to be
placed in the Station's local public files have been placed
in such files; all proofs of performance and measurements
that are required to be made by Seller with respect to the
Station's transmission facilities have been completed and
filed at the Station; and all information contained in the
foregoing documents is true, complete and correct in all
material respects.
(c) To the best knowledge of Seller, there are no
facts which, under the Communications Act of 1934, as
amended, or the existing rules and regulations of the FCC,
would disqualify Seller as the assignor of the Station
Licenses.
7.5. Title to and Condition of Real Property.
(a) Schedule 1.2(b) contains descriptions of all of
_______________
Seller's real property interests, including leasehold
interests and easements, and a description of all leasehold
improvements, necessary to conduct or used in the business
or operation of the Station (the "Real Property"). The Real
_______________
Property listed in Schedule 1.2(b) includes all such
_______________
properties necessary to conduct the business and operation
of the Station as now conducted.
(b) Seller owns a valid and subsisting interest as
lessee under the leased Real Property free and clear of all
Liens except for the lessor's interest in such lease.
(c) Any improvements to the Real Property used by
Seller in the operation of the Station conform in all
material respects to all lease restrictions, restrictive
covenants, building codes, and federal, state and local
laws, regulations and ordinances, and the Real Property is
zoned for the various purposes for which it is currently
being used. Such improvements are in good working condition
and repair, are insurable at standard rates, and comply in
all material respects with the rules and regulations of the
FCC and all other applicable federal, state and local
statutes, ordinances, rules and regulations. Seller has no
knowledge of any pending, threatened or contemplated action
to take by eminent domain or otherwise to condemn any part
15
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of the Real Property. The transmitting towers, ground
radials, guy anchors, transmitter buildings and related
improvements used by Seller in the operation of the Station
are located entirely on the Real Property.
7.6. Title to and Condition of Personal Property.
Schedule 1.2(c) contains a list of the principal items (and
_______________
a summary description of the other items) of tangible
personal property owned, leased or held by Seller and used
in the conduct of the business and operation of the Station
("Personal Property"). Except as described in Schedule
_________________ ________
1.2(c), Seller has good and marketable title to all Personal
______
Property (and to all other tangible personal property and
assets to be transferred to Buyer hereunder) free and clear
of all Liens (except for Liens for current taxes not yet due
and payable). Except as described in Schedule 1.2(c), all
_______________
of the items of tangible personal property and facilities
included in the Station Assets are in good operating
condition and repair (reasonable wear and tear excepted),
are insurable at standard rates, have been properly
maintained in accordance with industry standards, are
performing satisfactorily and in accordance with standards
of good engineering practice and are available for immediate
use in the conduct of the business and operation of the
Station. All such tangible personal property and facilities
are in compliance in all material respects with the rules
and regulations of the FCC and with all other applicable
federal, state and local statutes, ordinances, rules and
regulations. Except for Personal Property included on
Schedule 1.3(d), the Personal Property listed in Schedule
_______________ ________
1.2(c) includes all such properties necessary to conduct the
______
business and operation of the Station as now conducted.
7.7. Contracts.
(a) Schedule 1.2(d) lists all Contracts as of
_______________
the date of this Agreement, including Trade Agreements and
leases for Real Property, other than (i) Time Sales
Agreements (unless such Time Sales Agreement has a stated
value in excess of Eleven Thousand Dollars ($11,000),
prepayment has been received, or the term exceeds three (3)
months in which case such Time Sales Agreement is included
on Schedule 1.2(d)) and (ii) the employment arrangements
_______________
with the Station's employees described in Schedule 1.3(f).
_______________
(b) Except for Time Sales Agreements (other
than Time Sales Agreements required to be listed on Schedule
________
1.2(d)), Seller has delivered to Buyer true and complete
______
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copies of all written Contracts, or true and complete
memoranda describing all oral Contracts, including all
amendments and other modifications thereto, and all
liabilities and obligations under such Contracts can be
ascertained from such copies or memoranda. Except as
disclosed in Schedule 7.7(b), all Contracts are in full
_______________
force and effect and are valid, binding and enforceable by
Seller in accordance with their respective terms, except as
limited by laws affecting creditors' rights or equitable
principles generally. Seller has complied in all material
respects with all Contracts and is not in default under any
of the Contracts. Seller has not granted or been granted
any waiver or forbearance with respect to any of the
Contracts. To the best of Seller's knowledge, no other
contracting party is in default under any of the Contracts.
Except as set forth in Schedule 1.2(d), Seller has full
_______________
legal power and authority to assign its rights under the
Contracts to Buyer in accordance with this Agreement on
terms and conditions no less favorable than those in effect
on the date hereof, and such assignment will not require the
consent of any third party or affect the validity,
enforceability or continuity of any of the Contracts. The
Contracts listed on Schedule 1.2(d) include all those
_______________
necessary to conduct the business and operation of the
Station as now conducted.
7.8. Personnel Information.
(a) Schedule 7.8 contains a true and complete list
____________
of all persons employed at the Station, each such person's
job title or the capacity in which employed, an indication
whether such person works exclusively for the Station or
also works for Station WMXD(FM) (and if so, whether more
than one half or less than one half of such person's time at
work per week is devoted to the Station) and a description
of all compensation including bonus arrangements and
employee benefit plans or arrangements applicable to each
such employee. Seller is not a party to any agreement,
written or oral, with salaried or non-salaried employees
except as described on Schedules 1.2(d) and 1.3(f). Except
___________________________
as described on Schedule 7.8, Seller has no knowledge that
____________
any employee identified on Schedule 7.8 currently plans to
____________
terminate employment, whether by reason of the transactions
contemplated by this Agreement or otherwise.
(b) Seller is not a party to any collective
bargaining agreement covering any of its employees at the
Station. Seller is not a party to any Contract with any
17
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labor organization, nor has Seller agreed to recognize any
union or other collective bargaining unit, nor has any union
or other collective bargaining unit been certified as
representing any of Seller's employees at the Station.
Seller has no knowledge of any organizational effort
currently being made or threatened by or on behalf of any
labor union with respect to the employees of Seller at the
Station. There are no unfair labor practice charges pending
against Seller; there are no pending or, to the best of
Seller's knowledge, threatened strikes or arbitration
proceedings involving labor matters affecting Seller; and,
except as disclosed on Schedule 7.8, Seller has not
____________
experienced any strikes, work stoppage or other significant
labor difficulties of any nature at the Station.
(c) Except as set forth in Schedule 1.3(f), Seller
_______________
is not a party to or bound by any employee benefit plan
within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), whether or not such plan is otherwise exempt from
_______
the provisions of ERISA, and no employee or spouse of an
employee is entitled to any benefits that would be payable
pursuant to any such plan. Except pursuant to a plan or
agreement listed on Schedule 1.3(f), Seller has no fixed or
_______________
contingent liability or obligation to any person now or
formerly employed at the Station, including, without
limitation, pension or thrift plans, individual or
supplemental pension or accrued compensation arrangements,
contributions to hospitalization or other health or life
insurance programs, incentive plans, bonus arrangements and
vacation, sick leave, disability and termination
arrangements or policies, including workers' compensation
policies. Seller has administered any plan listed on
Schedule 1.3(f) in accordance with the provisions of ERISA.
_______________
Buyer shall not assume or hereby become obligated to pay any
debt, obligation or liability arising from Seller's employee
benefit plans, or any other employment arrangement, except
as specifically provided in Section 3.1, and coverage under
such plans and arrangements shall remain the responsibility
of Seller.
(d) Seller has complied with all laws relating to
employment, including, without limitation, laws relating to
safety, health, equal employment opportunity, wages, hours,
collective bargaining, unemployment insurance, workers'
compensation, pension, welfare and benefit plans (including
ERISA) and the payment and withholding of income, social
security, unemployment, disability and similar taxes. To
18
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Seller's knowledge, there is no dispute between Seller and
any of its past or present employees (nor any job applicant)
related to discrimination, compensation, severance pay,
vacation or pension benefits, except as disclosed in
Schedule 7.10.
_____________
7.9. Intellectual Property. Schedule 1.2(f) lists
all copyrights, trademarks, trade names, service marks,
licenses, patents, permits, jingles, privileges, and other
similar intangible property rights and interests (exclusive
of those required to be listed in other Schedules hereto)
applied for, issued to or owned by Seller, or under which
Seller is licensed or franchised, and used or useful in the
conduct of the business and operation of the Station
("Intellectual Property"), all of which rights and interests
_______________________
are issued to or owned by Seller, or if licensed or
franchised to Seller, are valid and uncontested. Seller has
delivered to Buyer copies of all documents, if any,
establishing such rights, licenses or other authority.
There is no pending or, to the best of Seller's knowledge,
threatened proceeding or litigation affecting or with
respect to the Intellectual Property. Seller has received
no notice and has no knowledge of any infringement or
unlawful use of such property. The properties listed in
Schedule 1.2(f) include all such properties necessary to
_______________
conduct the business and operation of the Station as now
conducted.
7.10. Litigation. Seller is not subject to any
judgment, award, order, writ, injunction, arbitration
decision or decree. Except as disclosed on Schedule 7.10,
_____________
there is no claim, litigation, proceeding or investigation
pending or, to the best of Seller's knowledge, threatened
against the Station in any federal, state or local court, or
before any administrative agency, arbitrator or other
tribunal authorized to resolve disputes. Except as
disclosed on Schedule 7.10, there is no claim, litigation,
_____________
proceeding or investigation pending or, to the best of
Seller's knowledge, threatened against Seller, which might
have a material adverse effect upon the business, assets or
condition (financial or otherwise) of the Station or which
seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken in connection
with this Agreement.
7.11. Compliance With Laws. Seller has operated
and is operating in material compliance with all laws,
regulations and governmental orders applicable to the
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conduct of the business and operation of the Station, and
its present use of the Station Assets does not violate any
such laws, regulations or orders in any material respect.
Seller has not received any notice asserting any
noncompliance with any applicable statute, rule or
regulation, in connection with the business or operation of
the Station.
7.12. Interests in Clients, Suppliers, Etc. Except
as disclosed in Schedule 7.12, neither Seller nor any of its
_____________
shareholders, officers, directors, or Affiliates possesses,
directly or indirectly, any financial interest in, or is a
partner, director, officer or employee of, any partnership,
corporation, firm, association or business organization
which is a client, supplier, customer, lessor, lessee or
competitor of the Station or has a banking relationship
involving the Station. Ownership of securities of a company
whose securities are registered under the Securities
Exchange Act of 1934 not in excess of five percent (5%) of
any class of such securities shall not be deemed to be a
financial interest for purposes of this Section 7.12. All
Real Property, Personal Property, Contracts and Intellectual
Property used or necessary in the business or operation of
the Station are owned, leased or held by Seller, and no
Affiliate of Seller owns or leases property or is a party to
any lease or agreement affecting or relating to the
operation of the Station other than the lease agreement
between Charles D. Fritz and Jack W. Fritz, on the one hand,
and Seller, on the other, for the Station's Studio Site,
which agreement Seller shall cause to be terminated as of
the Effective Time.
7.13. Financial Statements; Budget.
(a) Schedule 7.13(a) contains true and complete
________________
copies of the Financial Statements. The Financial
Statements have been prepared in accordance with GAAP. The
Financial Statements accurately reflect and present fairly
the financial position and the results of the operations of
the Station as of the dates and for the periods indicated.
Since December 26, 1993, there has been no material adverse
change in the business, property, assets, liabilities,
condition (financial or otherwise) or prospects of the
Station, and to Seller's knowledge no such change is
imminent. Except for the transactions contemplated herein,
Seller has operated the Station in the ordinary and normal
course of business since December 26, 1993. Except for (a)
liabilities as and to the extent reflected or reserved
20
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against in the Financial Statements, and (b) liabilities
incurred since December 26, 1993 in the ordinary and normal
course of business, Seller has no liabilities or obligations
of any nature, whether accrued, absolute, contingent or
otherwise, relating to the Station.
(b) Seller's allocations of expense and revenues
between the Station and Seller's other broadcast station,
WMXD(FM), as set forth on Schedule 7.13(b), are consistent
________________
with past practices in all material respects, are reasonable
under the circumstances, and have not been made with a view
to increase the Broadcast Cash Flow of the Station.
(c) Schedule 7.13(c) contains Seller's month-by-
________________
month budget for the Station for fiscal year 1994 (the "1994
_____
Budget").
_______
(d) Seller does not reasonably anticipate
incurring capital expenditures in fiscal year 1994 in excess
of $10,000.
7.14. Insurance. Schedule 7.14 lists all insurance
policies held by Seller relating to its business, properties
and employees, together with the policy limit, the type of
coverage, the location of the property covered, annual
premium, premium payment dates and expiration date of each
of the policies. Copies of all such insurance policies have
been furnished to Buyer. All such insurance policies are in
full force and effect.
7.15. Taxes. Seller has duly, timely and in the
required manner filed all federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and
other tax returns and forms required to be filed, and has
paid in full or discharged all taxes, assessments, excises,
interest, penalties, deficiencies and losses required to be
paid. No event has occurred which could impose on Buyer any
liability for any taxes, penalties or interest due or to
become due from Seller from any taxing authority.
7.16. Bankruptcy. No insolvency proceedings of any
character, including without limitation, bankruptcy,
receivership, reorganization, composition or arrangement
with creditors, voluntary or involuntary, affecting Seller
or any of the Station Assets, are pending or threatened, and
Seller has not made any assignment for the benefit of
creditors or taken any action in contemplation of or which
21
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would constitute the basis for the institution of such
insolvency proceedings.
7.17. Environmental Matters. To the best of
Seller's knowledge, (a) no Hazardous Substance (i) is or has
been used, treated, stored, disposed of, released, spilled,
generated, manufactured, transported or otherwise handled on
the Real Property, (ii) has been spilled, released or
disposed of on property adjacent to the Real Property, or
(iii) has otherwise come to be located on or under the Real
Property, (b) the Real Property and all operations on the
Real Property are in compliance with all Environmental Laws,
and (c) Seller has obtained all environmental, health and
safety permits necessary for the operation of the Station,
and all such permits are in full force and effect, and
Seller is in compliance with the terms and conditions of all
such permits. No outstanding liens have been placed on the
Real Property under any Environmental Laws. Seller has not
received any notice, and is not aware, of any administrative
or judicial investigations, proceedings or actions with
respect to violations, alleged or proven, of Environmental
Laws by Seller or any tenants of Seller, or otherwise
involving the Real Property or the operations conducted on
the Real Property. The Real Property and all operations
conducted on the Real Property are in compliance with all
federal and state statutes and regulations relating to
Asbestos, and to the best of Seller's knowledge, no
Asbestos-Containing Material is present in any of the
improvements on the Real Property or is otherwise located on
the Real Property. To the best of Seller's knowledge, there
are no underground storage tanks, whether in use or closed,
on or under the Real Property, and no PCB is present on the
Real Property. No PCB is used in the Personal Property.
7.18. UCC Financing Statements. All of the Station
Assets are and have been located in the State of Michigan
since the Station Assets were acquired by Seller. All
financing statements filed by any party with respect to the
Station Assets are listed in Schedule 7.18.
_____________
7.19. Disclosure. None of this Agreement or any
certificate or other document delivered in connection with
the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits any statement
of material fact necessary to make any statement contained
herein or therein, in light of the circumstances in which it
was made, not misleading.
22
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ARTICLE 8
COVENANTS OF BUYER
__________________
8.1. Notification. Buyer shall notify Seller of
any material litigation, arbitration or administrative
proceeding pending or, to its knowledge, threatened against
Buyer which challenges the transactions contemplated hereby,
including any challenges to the FCC Application, and shall
use reasonable efforts to remove any such impediment to the
transactions contemplated by this Agreement.
8.2. No Inconsistent Action. Buyer shall not take
any action materially inconsistent with its obligations
under this Agreement or that would hinder or delay the
consummation of the transactions contemplated by this
Agreement.
ARTICLE 9
COVENANTS OF SELLER
___________________
9.1. Interim Operation. Between the date of this
Agreement and the Closing Date, except as expressly
permitted by this Agreement or with the prior written
consent of Buyer:
(a) Seller shall conduct the business and
operation of the Station solely in the ordinary and
normal course of business consistent with past
practice, with the intent of preserving the ongoing
operations and assets of the Station;
(b) Seller shall not sell, assign, lease or
otherwise transfer or dispose of any of the Station
Assets, except for assets consumed or disposed of
in the ordinary course of business, where no longer
used or useful in the business or operation of the
Station, in which event the same shall be replaced
with assets of equal or greater value and utility
(except that, with Buyer's consent, which shall not
be unreasonably withheld, Seller shall have no
obligation to replace obsolete assets where a
replacement is no longer necessary or useful for
the continued operation of the Station consistent
with past practice), and the Station's inventories
of spare parts and expendable supplies shall be
maintained at levels consistent with past
practices;
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(c) Seller shall not create, assume or permit
to exist any claim, liability, mortgage, lien,
pledge, condition, charge, or encumbrance of any
nature whatsoever upon the Station Assets, except
for those in existence on the date of this
Agreement, all of which will be removed on or prior
to the Closing Date unless they are to be assumed
by Buyer in accordance with Section 3.1 of this
Agreement;
(d) Seller shall operate the Station in
accordance with the FCC's rules and regulations and
the Station Licenses and with all other applicable
laws, regulations, rules and orders, and shall not
cause or permit by any act, or failure to act, any
of the Station Licenses to expire, be surrendered,
adversely modified, or otherwise terminated, or
fail to prosecute with due diligence any pending
application to the FCC;
(e) Seller shall not waive any material right
under any Contract or relating to the Station or
the Station Assets;
(f) Seller shall not, without Buyer's
consent, which shall not be unreasonably withheld
(and which may be requested and given by facsimile
notwithstanding the notice requirements of Section
21.7), enter into or renew (i) any Contract that
involves payment by or to Seller of Ten Thousand
Dollars ($10,000) or more, other than a Time Sales
Agreement, (ii) any Contract for a term extending
beyond the Closing Date and having a duration of
three (3) months or more, other than a Time Sales
Agreement, or (iii) any Time Sales Agreement for
advertising time to be aired on the Station after
the Closing Date which specifies volume discounts
or special rates inconsistent with past practices;
(g) Seller shall timely make all payments
required to be paid under any Contract to be
assumed by Buyer when due and otherwise pay all
liabilities and satisfy all obligations when such
liabilities and obligations become due;
(h) Seller shall not increase or agree to
increase the compensation, bonuses or other
benefits for employees of the Station, except as
24
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may be required under Contracts disclosed in
Schedules 1.2(d) and 1.3(f) or consistent with past
___________________________
employee compensation and promotion practices, and
shall pay all commissions due with respect to
accounts receivable in accordance with past
practices;
(i) Seller shall, in accordance with its
personnel practices and policies, use its best
efforts to maintain the employment at the Station
and to renew the existing employment contracts of
the employees listed on Schedule 7.8, and neither
____________
Seller nor any Affiliate of Seller shall solicit,
directly or indirectly, through any agent or
otherwise, the employment of, or hire, any of the
employees listed on Schedule 7.8;
____________
(j) Seller shall use its best efforts to
preserve the operations, organization and
reputation of the Station intact, to preserve the
goodwill and business of the Station's advertisers,
suppliers, and others having business relations
with the Station, and to continue to conduct
financial operations of the Station, including
their credit and collection policies, with no less
effort, as in the prior conduct of the business of
the Station;
(k) Seller shall remove, cure, correct and
repair prior to the Closing any material
deficiencies in the assets being sold under this
Agreement and any violations under applicable
statutes, rules, regulations, engineering standards
or building, fire or zoning laws or regulations,
which are inconsistent with Seller's
representations, warranties and covenants contained
in this Agreement;
(l) Seller shall maintain monthly cash
advertising and promotional expenditures for the
Station at levels that are consistent with past
practices and at least equal to the budgeted
monthly expenditures set forth in the 1994 Budget;
(m) Seller shall make capital improvements
reasonably required to continue the operations of
the Station consistent with past practices;
25
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(n) Seller shall maintain insurance policies
on the Station and the Station Assets comparable to
those policies listed on Schedule 7.14; and
_____________
(o) Seller shall maintain its books and
records in accordance with GAAP.
9.2. Access to Station. Between the date of this
Agreement and the Closing Date, Seller shall give Buyer and
Buyer's counsel, accountants, engineers and other
representatives, reasonable access during normal business
hours to all of Seller's properties, records and employees
relating to the Station, including the data underlying the
Financial Statements necessary for Buyer's accountants to
prepare audited statements for the Station, and shall
furnish Buyer with all information related to the Station
that Buyer reasonably requests. The rights of Buyer under
this Section shall not be exercised in such a manner as to
interfere unreasonably with the business of the Station.
9.3. No Solicitation. Between the date of this
Agreement and the Closing, neither Seller nor any Affiliate
of Seller shall directly or indirectly (a) solicit, initiate
or encourage submission of any proposal or offer from any
person relating to any acquisition or purchase of all or any
substantial amount of the Station Assets, or any equity
interest in the Station or Seller, or (b) participate in any
discussions or negotiations regarding, or furnish to any
person any information with respect to, or otherwise
cooperate in any way, or assist or participate in,
facilitate or encourage, any effort or attempt by any person
to do or seek any of the foregoing. Seller shall promptly
notify Buyer in writing if any such offer or proposal is
made to it after the date of this Agreement and shall advise
Buyer of the identity of the person making such offer or
proposal and of the content of such offer or proposal.
Notwithstanding the foregoing, Seller may negotiate with and
purchase its own shares from its shareholders; provided,
however, that any such purchase shall not reduce the number
of shares held by the Approving Shareholders to less than a
majority of the outstanding voting shares of Seller.
9.4. Financial Statements.
(a) Within fifteen (15) days of the end of each
Broadcast Month until the Closing Date, Seller shall deliver
to Buyer Seller's unaudited statements of revenue and
expenses for the Station for the Broadcast Month then ended,
26
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along with a balance sheet as at the end of such Broadcast
Month.
(b) Within sixty (60) days after the date of this
Agreement, Seller shall deliver to Buyer Seller's audited
statements of income and cash flow for the broadcast year
ended December 26, 1993 and a related balance sheet as at
the end of such year certified by Plante and Moran,
independent certified public accountants of Seller (the
"1993 Audit"). The 1993 Audit shall contain a separate
____________
statement of such accountants pointing out any adjustments
to revenues or expenses contained in the 1993 Audit that
affect the Station. Should the 1993 Audit of Seller result
in Plante & Moran proposing adjustments to net income or
cash flow, then, upon reasonable request, Seller shall cause
Plante & Moran to make their work papers associated with any
such adjustment available to Buyer. All financial
statements furnished pursuant to this Section shall be
prepared in accordance with GAAP, subject to normal year-end
adjustments, shall be true and complete to the best of
Seller's knowledge and shall fairly represent the results of
operation of the Station for the period covered by such
statements.
(c) Seller shall furnish to Buyer any and all
other information customarily prepared by Seller concerning
the financial condition of the Station that Buyer may
request.
9.5. Notification. (a) Seller shall notify Buyer
of any litigation, arbitration or administrative proceeding
pending or, to its knowledge, threatened against Seller
which challenges the transactions contemplated hereby,
including any challenges to the FCC Application, and shall
use its best efforts to take such steps as may be necessary
to remove any such impediment to the transactions
contemplated by this Agreement.
(b) Between the date of this Agreement and the
Closing Date, Seller shall notify Buyer if the regular
broadcast transmission of the Station from its main
broadcasting antenna at full authorized effective radiated
power is interrupted or impaired for a period of more than
three (3) consecutive hours or for an aggregate of six (6)
hours in any continuous two (2) day period or twelve (12)
hours in any single thirty (30) day period.
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(c) Between the date of this Agreement and the
Closing, Seller shall keep Buyer reasonably informed of all
material operational matters and business developments with
respect to the Station.
9.6. Third-Party Consents. Seller shall use
commercially reasonable efforts to obtain at its own expense
the consent of any third parties necessary for the
assignment to Buyer of any Contract to be assigned
hereunder.
9.7. Estoppel Certificates; Consent and Waiver.
Seller shall use commercially reasonably efforts to obtain
estoppel certificates and consent and waivers from any
landlord with respect to the Real Property or other lessor
of any Station Asset that Buyer requests at least twenty
(20) days before the Closing Date. Each estoppel
certificate shall identify with specificity the lease, and
any amendments or modifications thereto, and the amount of
the monthly payments due thereunder, and shall contain the
landlord's or lessor's certification for the benefit of
Buyer that the lease is in full force and effect, that there
are no uncured defaults with respect to such lease and that
Seller has been and is in full compliance with all of
Seller's obligations thereunder. Each consent and waiver
shall be in form and substance satisfactory to Buyer's
lenders.
9.8. Closing Covenant. On the Closing Date,
Seller shall transfer, convey, assign and deliver to Buyer
the Station Assets as provided in Article 1 of this
Agreement.
9.9. Agreement to Purchase Real Estate. Seller
shall cause Charles D. Fritz, Barbara J. Fritz, Jack W.
Fritz and Marilyn Fritz to sell the Studio Site to Buyer
pursuant to a sales agreement in the form of Exhibit A
_________
hereto (the "Agreement to Purchase Real Estate").
___________________________________
9.10. Non-Competition Agreement. At the Closing,
Seller shall execute and deliver, and shall cause Jock T.
Fritz to execute and deliver, the Non-Competition Agreement.
9.11. Reversal Agreement. In the event that the
Closing occurs prior to the FCC Consent becoming a Final
Order, at the Closing, Seller shall execute and deliver, and
shall cause the Approving Shareholders to execute and
deliver, the Reversal Agreement.
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9.12. Payment of Indebtedness; Financing
Statements. Seller shall secure the release of all liens or
encumbrances on the Station Assets that secure the payment
of any indebtedness and shall deliver to Buyer at the
Closing releases or terminations under the Uniform
Commercial Code and any other applicable federal, state or
local statutes or regulations of any financing or similar
statements filed against any Station Assets in (a) the
jurisdictions in which the Station Assets are and have been
located since such Station Assets were acquired by Seller,
and (b) any other location specified or required by
applicable federal, state or local statutes or regulations.
9.13. No Inconsistent Action. Seller shall not
take any action which is materially inconsistent with its
obligations under this Agreement or that would hinder or
delay the consummation of the transactions contemplated by
this Agreement.
ARTICLE 10
JOINT COVENANTS
_______________
10.1. Conditions. If any event should occur
between the date hereof and the Closing, either within or
without the control of any party hereto, which would prevent
fulfillment of the conditions upon the obligations of any
party to consummate the transactions contemplated by this
Agreement, the parties shall use their reasonable efforts to
cure the event as expeditiously as possible.
10.2. Best Efforts. Between the date of this
Agreement and the Closing, each party shall use its best
efforts to cause the fulfillment at the earliest practicable
date of all of the conditions to the obligations of the
other party to consummate the sale and purchase under this
Agreement.
10.3. Control of Station. Between the date of this
Agreement and the Closing, Buyer shall not, directly or
indirectly, control, supervise or direct the operations of
the Station. Such operations shall be the sole
responsibility of Seller and, subject to the provisions of
Article 9, shall be in its complete discretion.
10.4. Confidentiality. Buyer and Seller shall each
keep confidential all information obtained by it with
respect to the other in connection with this Agreement, and
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if the transactions contemplated hereby are not consummated
for any reason, each shall return to the other, without
retaining a copy thereof, any schedules, documents or other
written information, including all financial information,
obtained from the other in connection with this Agreement
and the transactions contemplated hereby, except where such
information is known or available through other lawful
sources or where such party is advised by counsel that its
disclosure is required in accordance with applicable law.
10.5. Continued Employment of Station Employees.
(a) On the Closing Date, all active employees of Seller
identified on Schedule 7.8, other than the employees
____________
identified on Schedule 10.5 (the "Excluded Employees"),
_____________ ____________________
shall become employees of the Buyer ("Transferred
____________
Employees"). The terms and conditions of Buyer's employment
__________
of the Transferred Employees shall be at-will employment in
at least the same positions, for at least the same direct
cash compensation, with medical insurance coverage effective
immediately as of the Closing and such other benefits as
Buyer deems appropriate; provided, however, that Buyer shall
________ _______
have no obligation (except as required by law) to provide
immediate medical insurance coverage for pre-existing
conditions and shall be entitled to terminate any
Transferred Employee after the Closing; and provided,
________
further, that Buyer shall comply with the terms of any
_______
Contract relating to any Transferred Employee listed on
Schedule 1.2(d) and assumed by Buyer pursuant to Section
_______________
3.1.
(b) Except to the extent required by law, Buyer
shall not be required to employ any employee who, on the
Closing Date, shall be suffering from any temporary or
permanent disability of a nature which prevents such
employee even with reasonable accommodation from fully
performing the essential functions of his or her employment
duties, and such employee shall not be deemed to be a
Transferred Employee hereunder. On the Closing Date, Seller
shall provide Buyer with a list of any employees identified
on Schedule 7.8 known by Seller to be so disabled at such
____________
time.
(c) Except as otherwise expressly set forth herein,
Seller shall be solely responsible for all salaries and
other compensation which will or may become payable to any
Transferred Employee in respect of any period of employment
by Seller prior to the Closing Date, and Buyer shall be
solely responsible for any salaries and other compensation
30
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which will or may become payable to any Transferred Employee
in respect of any period on and after the Closing Date.
(d) Buyer and Seller agree that, pursuant to the
"Alternative Procedure" provided in Section 5 of the Revenue
Procedure 87-77, 1984-2 C.B. 753, (i) Seller and Buyer shall
report on a predecessor/successor basis as set forth
therein, (ii) Seller shall be relieved from filing a Form W-
2 with respect to any employee of Seller who becomes
employed by Buyer, and (iii) Buyer shall undertake to file a
W-2 for each such employee for the year that includes the
Closing Date (including the portion of such year that such
employee was employed by the Seller). Seller agrees to
provide Buyer with all payroll and employment related
information with respect to each employee of Seller who
becomes employed by Buyer pursuant to this Agreement.
(e) Buyer agrees to prepare for Seller and, where
permitted, to file on Seller's behalf, any federal, state or
local employment-related tax reports or information reports
(including Internal Revenue Service Form W-2, W-3, 940, 941,
1042, 1042S, 1096 and 1099) that Seller may be required to
file following the Closing Date (but that were not due to be
filed on or prior to the Closing Date) for each employee of
Seller who becomes employed by Buyer pursuant to this
Agreement with respect to any employment period on or before
the Closing Date.
(f) For purposes of determining the amount of any
entitlement of any Transferred Employee under Buyer's
vacation policy, Buyer will take into account and credit
such Transferred Employee's length of service with Seller as
well as with Buyer, and Buyer will also assume
responsibility for the accrued but unused vacation of all
Transferred Employees. As part of the proration process
described in Section 5.1, Seller shall make a payment to
Buyer equal to the value of the accrued, but unused vacation
entitlements of all Transferred Employees. Buyer shall not
assume any obligations under Seller's existing sick leave or
severance policies, except for such obligations set forth in
written Contracts being assumed by Buyer.
(g) No provisions of this Agreement shall create
any third party beneficiary rights of any employee or former
employee (including any beneficiary or dependent thereof) of
Seller in respect of continued employment (or resumed
employment) with Seller or with Buyer.
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(h) Seller shall cooperate with Buyer in all
reasonable respects in connection with Buyer's employment of
the Transferred Employees. Without limiting the generality
of the foregoing, for a period commencing on the date of
this Agreement and ending two (2) years following the
Closing Date, neither Seller nor any of its Affiliates shall
take any action to induce any Transferred Employee to enter
into or to continue in the employment of Seller or its
affiliates in a position other than as an employee of the
Station.
ARTICLE 11
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
___________________________________________________
The obligations of Buyer hereunder are, at its
option, subject to satisfaction, at or prior to the Closing
Date, of each of the following conditions:
11.1. Representations, Warranties and Covenants.
(a) All representations and warranties of Seller
made in this Agreement shall be true and complete in all
material respects on and as of the Closing Date as if made
on and as of that date.
(b) All of the terms, covenants and conditions to
be complied with and performed by Seller on or prior to
Closing Date shall have been complied with or performed.
11.2. Governmental Consents. The conditions
specified in Article 4 of this Agreement shall have been
satisfied, and the FCC Consent shall have become a Final
Order; provided, that the requirement that the FCC Consent
________
shall have become a Final Order shall not apply if no issues
have been raised before or by the FCC, by petition to deny,
informal objection, or otherwise, about the qualifications
of Seller to be an FCC licensee.
11.3. Governmental Authorizations. Seller shall be
the lawful holder of the Station Licenses and all other
material licenses, permits and other authorizations listed
in Schedule 1.2(a), and there shall not have been any
_______________
modification of any of such licenses, permits and other
authorizations which might have an adverse effect on the
Station or the conduct of its business and operation. No
proceeding shall be pending which seeks or the effect of
which reasonably could be to revoke, cancel, fail to renew,
suspend or modify adversely any of the Station Licenses or
32
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any other licenses, permits or other authorizations relating
to the Station.
11.4. Third-Party Consents. Seller shall have
obtained and shall have delivered to Buyer all third-party
consents that may be required for assignment of the
Contracts, without any condition adverse to Buyer.
11.5. Adverse Proceedings. No suit, action, claim
or governmental proceeding shall be pending against, and no
order, decree or judgment of any court, agency or other
governmental authority shall have been rendered against, any
party hereto that Buyer in good faith, based upon a written
opinion of counsel, believes would render it unlawful, as of
the Closing Date, to effect the transactions contemplated by
this Agreement in accordance with its terms.
11.6. No Material Adverse Change. There shall have
been no material adverse change in the property, assets,
condition (financial or otherwise), business or prospects of
the Station.
11.7. Deliveries. Seller shall have made or stand
willing to make all the deliveries required under Section
13.1.
ARTICLE 12
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
____________________________________________________
The obligations of Seller hereunder are, at its
option, subject to satisfaction, at or prior to the Closing
Date, of each of the following conditions:
12.1. Representations, Warranties and Covenants.
(a) All representations and warranties made by
Buyer in this Agreement shall be true and complete in all
material respects on and as of the Closing Date as if made
on and as of that date.
(b) All the terms, covenants and conditions to be
complied with and performed by Buyer under this Agreement on
or prior to the Closing Date shall have been complied with
or performed in all material respects.
12.2. Governmental Consents. The conditions
specified in Article 4 of this Agreement shall have been
satisfied.
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12.3. Adverse Proceedings. No suit, action, claim
or governmental proceeding shall be pending against, and no
order, decree or judgment of any court, agency or other
governmental authority shall have been rendered against any
party hereto that Seller in good faith, based upon a written
opinion of counsel, believes would render it unlawful, as of
the Closing Date, to effect the transactions contemplated by
this Agreement in accordance with its terms.
12.4. Deliveries. Buyer shall have made or stand
willing to make all the deliveries required under Section
13.2.
ARTICLE 13
DOCUMENTS TO BE DELIVERED AT THE CLOSING
________________________________________
13.1. Documents to be Delivered by Seller. At the
Closing, Seller shall deliver to Buyer the following:
(a) a certificate of an officer of Seller,
dated the Closing Date, in form and substance
reasonably satisfactory to Buyer, certifying to the
fulfillment of the conditions set forth in Sections
11.1 through 11.6 hereof;
(b) opinions of Seller's counsel, dated the
Closing Date, substantially in the form of Exhibit
_______
C;
_
(c) instruments of conveyance and transfer,
in form and substance reasonably satisfactory to
counsel to Buyer, effecting the sale, transfer,
assignment and conveyance of the Station Assets to
Buyer, including, but not limited to, the
following:
(i) assignments of the Station
Licenses;
(ii) bills of sale for all Personal
Property;
(iii) assignments of the Contracts; and
(iv) assignments of all intangible
personal property including all
34
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books, records, logs and similar
assets;
(d) the Non-Competition Agreement duly
executed by Seller and Jock T. Fritz;
(e) instruments of conveyance and transfer,
in form and substance reasonably satisfactory to
counsel to Buyer, effecting the sale, transfer,
assignment and conveyance of the Studio Site to
Buyer pursuant to the Agreement to Purchase Real
Estate;
(f) the Reversal Agreement duly executed by
Seller and each of the Approving Shareholders
unless at the time of Closing the FCC Consent shall
have become a Final Order;
(g) resolutions of the boards of directors
and shareholders of Seller, authorizing the
execution, delivery and performance of this
Agreement, certified by the secretary of the
Seller; and
(h) such other documents as may reasonably
be requested by Buyer's counsel.
13.2. Documents to be Delivered by Buyer. At the
Closing, Buyer shall deliver to Seller the following:
(a) a certificate of an officer of Buyer, dated the
Closing Date, in form and substance reasonably satisfactory
to Seller, certifying to the fulfillment of the conditions
specified in Sections 12.1 through 12.3 hereof;
(b) opinions of Buyer's counsel, dated the Closing
Date, substantially in the form of Exhibit D;
_________
(c) immediately available wire-transferred federal
funds as provided in Section 2.1;
(d) instruments, in form and substance reasonably
satisfactory to Seller and its counsel, pursuant to which
Buyer assumes obligations, liabilities and commitments as
provided in Article 3; and
(e) such other documents as may reasonably be
requested by Seller's counsel.
35
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ARTICLE 14
TRANSFER TAXES; FEES AND EXPENSES
_________________________________
14.1. Transfer Taxes and Similar Charges. Except
as set forth in Sections 14.2 and 14.3 hereof, all costs of
transferring the Station Assets in accordance with this
Agreement, including recordation, transfer and documentary
taxes and fees, and any excise, sales or use taxes, shall be
borne by Seller.
14.2. Governmental Filing or Grant Fees. Any
filing or grant fees imposed by any governmental authority,
the consent of which is required for the transactions
contemplated hereby, including all filing fees incurred
pursuant to Article 4, shall be borne equally by Buyer and
Seller.
14.3. Expenses. Each party hereto shall be solely
responsible for and shall pay all costs and expenses
incurred by it in connection with the negotiation,
preparation and performance of and compliance with the terms
of this Agreement.
ARTICLE 15
BROKER'S COMMISSION OR FINDER'S FEE
___________________________________
15.1. Buyer's Representation and Agreement to
Indemnify. Buyer represents and warrants to Seller that
neither it nor any person or entity acting on its behalf has
agreed to pay a commission, finder's fee or similar payment
in connection with this Agreement or any matter related
hereto to any person or entity, nor have they or any person
or entity acting on their behalf taken any action on which a
claim for any such payment could be based. Buyer further
agrees to indemnify and hold Seller harmless from and
against any and all claims, losses, liabilities and expenses
(including reasonable attorneys' fees) arising out of a
claim by any person or entity based on any such arrangement
or agreement made or alleged to have been made by Buyer.
15.2. Seller's Representation and Agreement to
Indemnify. Seller represents and warrants to Buyer that,
except for Seller's agreement with Gary Stevens & Co.,
neither it nor any person or entity acting on its behalf has
agreed to pay a commission, finder's fee or similar payment
in connection with this Agreement or any matter related
36
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hereto to any person or entity, nor have they or any person
or entity acting on their behalf taken any action on which a
claim for any such payment could be based. Seller agrees
that it shall be solely responsible for the payment of any
fee due to Gary Stevens & Co. Seller further agrees to
indemnify and hold Buyer harmless from and against any and
all claims, losses, liabilities and expenses (including
reasonable attorneys' fees) arising out of a claim by any
person or entity based on any such arrangement or agreement
made or alleged to have been made by Seller.
ARTICLE 16
INDEMNIFICATION
_______________
16.1. Indemnification by Seller. Notwithstanding
the Closing, Seller hereby agrees to indemnify, defend and
hold Buyer harmless against and with respect to, and shall
reimburse Buyer for:
(a) Any and all losses, direct or indirect,
liabilities, or damages resulting from any untrue
representation, breach of warranty, or nonfulfillment of any
covenant or obligation by Seller contained herein or in any
certificate, document or instrument delivered to Buyer
hereunder, including the certificate containing the
Calculations;
(b) Any and all obligations of Seller not assumed
by Buyer pursuant to the terms of this Agreement;
(c) Any and all losses, liabilities or damages
resulting from the operation or ownership of the Station
prior to the Effective Time, including but not limited to
any and all liabilities arising under the Station Licenses
or the Contracts which relate to events occurring prior to
the Effective Time;
(d) Any and all losses, liabilities or damages
resulting from any failure to comply with any "bulk sales"
laws applicable to the transactions contemplated by this
Agreement;
(e) Any and all losses, liabilities or damages
resulting from the litigation listed on Schedule 7.10;
_____________
(f) Any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses,
37
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including reasonable legal fees and expenses, incident to
any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity, subject to the
notice and opportunity to remedy requirements of Section
16.3 hereof; and
(g) Interest at the Prime Rate on any reimbursable
expense or loss incurred by Seller from the date of payment,
in the case of a reimbursable expense, and from the date of
incurrence, in the case of any other losses, until the date
of reimbursement by Buyer.
16.2. Indemnification by Buyer. Notwithstanding
the Closing, Buyer hereby agrees to indemnify and hold the
Seller harmless against and with respect to, and shall
reimburse the Seller for:
(a) Any and all losses, direct or indirect,
liabilities, or damages resulting from any untrue
representation, breach of warranty, or nonfulfillment of any
covenant or obligation by Buyer contained herein or in any
certificate, document or instrument delivered to Seller
hereunder;
(b) Any and all losses, liabilities or damages
resulting from the operation or ownership of the Station by
Buyers on and after the Effective Time, including but not
limited to any and all liabilities arising under the Station
Licenses or the Contracts assigned to Buyer which relate to
events occurring after the Effective Time;
(c) Any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses,
including reasonable legal fees and expenses, incident to
any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity, subject to the
notice and opportunity to remedy requirements of Section
16.3 hereof; and
(d) Interest at the Prime Rate on any reimbursable
expense or loss incurred by Seller from the date of payment,
in the case of a reimbursable expense, and from the date of
incurrence, in the case of any other losses, until the date
of reimbursement by Buyer.
38
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16.3. Procedure for Indemnification. The procedure
for indemnification shall be as follows:
(a) The party seeking indemnification under this
Article 16 (the "Claimant") shall give notice to the party
__________
from whom indemnification is sought (the "Indemnitor") of
____________
any claim, whether solely between the parties or brought by
a third party, specifying (i) the factual basis for the
claim, and (ii) the amount of the claim. If the claim
relates to an action, suit or proceeding filed by a third
party against Claimant, notice shall be given by Claimant
within fifteen (15) business days after written notice of
the action, suit or proceeding was given to Claimant. In
all other circumstances, notice shall be given by Claimant
within thirty (30) business days after Claimant becomes, or
should have become, aware of the facts giving rise to the
claim. Notwithstanding the foregoing, Claimant's failure to
give Indemnitor timely notice shall not preclude Claimant
from seeking indemnification from Indemnitor except to the
extent that Claimant's failure has materially prejudiced
Indemnitor's ability to defend the claim or litigation.
(b) With respect to claims between the parties,
following receipt of notice from the Claimant of a claim,
the Indemnitor shall have thirty (30) business days to make
any investigation of the claim that the Indemnitor deems
necessary or desirable. For the purposes of this
investigation, the Claimant agrees to make available to the
Indemnitor and/or its authorized representatives the
information relied upon by the Claimant to substantiate the
claim. If the Claimant and the Indemnitor cannot agree as
to the validity and amount of the claim within the 30-day
period (or any mutually agreed upon extension thereof), the
Claimant may seek appropriate legal remedy.
(c) With respect to any claim by a third party as
to which the Claimant is entitled to indemnification
hereunder, the Indemnitor shall have the right at its own
expense to participate in or assume control of the defense
of the claim, and the Claimant shall cooperate fully with
the Indemnitor, subject to reimbursement for actual
out-of-pocket expenses incurred by the Claimant as the
result of a request by the Indemnitor. If the Indemnitor
elects to assume control of the defense of any third-party
claim, the Claimant shall have the right to participate in
the defense of the claim as its own expense. If the
Indemnitor does not elect to assume control or otherwise
participate in the defense of any third party claim,
39
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Claimant may, but shall have no obligation to, defend or
settle such claim or litigation in such manner as it deems
appropriate, and in any event Indemnitor shall be bound by
the results obtained by the Claimant with respect to the
claim (by default or otherwise) and shall promptly reimburse
Claimant for the amount of all expenses (including the
amount of any judgment rendered), legal or otherwise,
incurred in connection with such claim or litigation. The
Indemnitor shall be subrogated to all rights of the Claimant
against any third party with respect to any claim for which
indemnity was paid.
16.4. Limitations. Neither Seller nor Buyer shall
have any obligation to the other party for any matter
described in Section 16.1 or Section 16.2, as the case may
be, except upon compliance by the other party with the
provisions of this Article 16, particularly Section 16.3.
Neither party shall be required to indemnify the other party
under this Article 16 for any breach of any representation
or warranty contained in this Agreement unless (a) written
notice of a claim under this Article 16 was received by the
party within the pertinent survival period specified in
Article 18 of this Agreement, and (b) unless the aggregate
amount of all claims against the party for breaches of its
representations and warranties exceeds Fifty Thousand
Dollars ($50,000), in which case such party's responsibility
to indemnify shall extend to all claims, including the
$50,000 "basket" amount. The foregoing $50,000 "basket"
amount shall not be applicable to any claims made by third
parties against which Buyer or Seller is indemnified
pursuant to Section 16.1 hereof.
ARTICLE 17
TERMINATION RIGHTS
__________________
17.1. Termination.
(a) This Agreement may be terminated by either
Buyer or Seller, if the party seeking to terminate is not in
material default or breach of this Agreement, upon written
notice to the other upon the occurrence of any of the
following:
(i) if, on or prior to the Closing Date, the
other party defaults in any material respect in the
observance or in the due and timely performance of
40
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any of its covenants or agreements contained
herein;
(ii) if the FCC denies the FCC Application or
any part thereof or designates any part of it for a
trial-type hearing;
(iii) if there shall be in effect any
judgment, final decree or order that would prevent
or make unlawful the Closing; or
(iv) if the Closing has not occurred by
November 31, 1994, unless the delay in the Closing
results from an election under Section 2.2 to defer
the Closing.
(b) This Agreement may be terminated by Buyer,
upon written notice to Seller,
(i) if Buyer elects to terminate pursuant to
Article 20 hereof; or
(ii) if the broadcast transmission of the
Station from its main broadcasting antenna at full
authorized power is interrupted or impaired for a
period of more than twenty-four (24) consecutive
hours or for an aggregate of thirty-six (36) hours
in any seven (7) day period.
17.2. Liability. The termination of this Agreement
under Section 17.1 hereof shall not relieve any party of any
liability for breach of this Agreement prior to the date of
termination.
ARTICLE 18
SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
________________________
The representations, warranties, covenants,
indemnities and agreements contained in this Agreement or in
any certificate, document or instrument delivered pursuant
to this Agreement are and will be deemed and construed to be
continuing representations, warranties, covenants,
indemnities and agreements and shall survive the Closing for
a period of eighteen (18) months after the Closing Date,
except for (a) agreements under Section 10.4 of this
Agreement, which shall survive the Closing indefinitely, and
41
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(b) indemnification obligations resulting from or for third
party claims, which shall survive the Closing for a period
of one (1) month after the last day of the longest
applicable statutory limitation period. No claim may be
brought under this Agreement or any other certificate,
document or instrument delivered pursuant to this Agreement
unless written notice describing in reasonable detail the
nature and basis of such claim is given on or prior to the
last day of the applicable survival period. In the event
such a notice is given, the right to indemnification with
respect thereto shall survive the applicable survival period
until such claim is finally resolved and any obligations
thereto are fully satisfied. Any investigation by or on
behalf of any party hereto shall not constitute a waiver as
to enforcement of any representation, warranty, covenant or
agreement contained herein.
ARTICLE 19
REMEDIES UPON DEFAULT
_____________________
19.1. Default by Seller. Seller recognizes that,
in the event Seller defaults in the performance of its
obligations under this Agreement, monetary damages alone
will not be adequate. Buyer shall therefore be entitled in
such event, in addition to bringing suit at law or equity
for money or other damages (including costs and expenses
incurred by Buyer in the preparation and negotiation of this
Agreement and in contemplation of the Closing hereunder) or
for indemnification under Article 16 hereof, to obtain
specific performance of the terms of this Agreement. In any
action to enforce the provisions of this Agreement, Seller
shall waive the defense that there is an adequate remedy at
law or equity and agree that Buyer shall have the right to
obtain specific performance of the terms of this Agreement
without being required to prove actual damages, post bond or
furnish other security. In addition, Buyer shall be
entitled to obtain from Seller court costs and reasonable
attorneys' fees incurred by it in enforcing its rights
hereunder, plus interest at the Prime Rate on the amount of
any judgment obtained against Seller from the date of
default until the date of payment of the judgment. As a
condition to seeking specific performance, Buyer shall not
be required to have tendered the Purchase Price specified in
Section 2.1 of this Agreement, but shall be ready, willing
and able to do so.
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19.2. Default by Buyer. If the transactions
contemplated by this Agreement are not consummated as a
result of Buyer's wrongful failure to close hereunder, and
Seller is not also in material breach hereunder, Seller
shall be entitled to payment of One Million Dollars
($1,000,000) as liquidated damages in full settlement of any
damages of any nature or kind that Seller may suffer or
allege to suffer as the result thereof. It is understood
and agreed that the amount of liquidated damages represents
Buyer's and Seller's reasonable estimate of actual damages
and does not constitute a penalty. Recovery of liquidated
damages under this Section 19.2 shall be the sole and
exclusive remedy of Seller against Buyer for breach of or
failure to consummate this Agreement and shall be applicable
regardless of the actual amount of damages sustained. In
addition, Seller shall be entitled to obtain from Buyer
court costs and reasonable attorneys' fees incurred by it in
enforcing its rights hereunder, plus interest at the Prime
Rate on the amount of any judgment obtained against Buyer
from the date of default until the date of payment of the
judgment. As a condition to obtaining liquidated damages,
Seller shall not be required to have tendered the Station
Assets but shall be required to demonstrate that it is
willing and able to do so and to perform its other closing
obligations in all material respects.
ARTICLE 20
RISK OF LOSS
____________
The risk of loss or damage to the Station Assets
prior to the Effective Time shall be upon Seller. Seller
shall repair, replace and restore any damaged or lost
Station Asset to its prior condition as soon as possible and
in no event later than the Effective Time; provided,
________
however, that Seller shall have no obligation to repair,
_______
replace or restore a damaged or lost Station Asset that is
obsolete if no replacement asset is necessary or useful for
the continued operation of the Station consistent with past
practice. If Seller is unable or fails to restore or
replace a lost or damaged Station Asset prior to the Closing
and the cost of such restoration or replacement would exceed
$10,000, Buyer may elect (a) to terminate this Agreement
pursuant to Article 17 hereof, (b) to consummate the
transactions contemplated by this Agreement on the Closing
Date, in which event Seller shall assign to Buyer at Closing
Seller's rights under any insurance policy or pay over to
Buyer all proceeds of insurance covering such Station
43
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Asset's damage, destruction or loss, or (c) delay the
Closing Date until a date within fifteen (15) days after
Seller gives written notice to Buyer of completion of the
restoration or replacement of such Station Asset. If Seller
is unable or fails to restore or replace any lost or damaged
Station Asset prior to the Closing Date and the cost of such
restoration or replacement would be $10,000 or less, Seller
shall reimburse Buyer for the cost of restoration or
replacement of such asset. If the delay in the Closing Date
under this Article 20 would cause the Closing to fall at any
time after the period permitted by the FCC Consent, Seller
and Buyer shall file an appropriate request with the FCC for
an extension of time within which to complete the Closing.
ARTICLE 21
OTHER PROVISIONS
________________
21.1. Publicity. Except as required by applicable
law or with the other party's express written consent, no
party to this Agreement nor any affiliate of any party shall
issue any press release or make any public statement (oral
or written) regarding the transactions contemplated by this
Agreement.
21.2. Benefit and Assignment. This Agreement shall
be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
Neither Buyer nor Seller may assign this Agreement without
the prior written consent of the other parties hereto except
that Buyer may assign its rights (but not its obligations)
under this Agreement to an Affiliate of Buyer.
21.3. Entire Agreement. This Agreement and the
exhibits and schedules hereto embody the entire agreement
and understanding of the parties hereto and supersede any
and all prior agreements, arrangements and understandings
relating to the matters provided for herein. No amendment,
waiver of compliance with any provision or condition hereof,
or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the
party against whom enforcement of any waiver, amendment,
change, extension or discharge is sought.
21.4. Headings. The headings set forth in this
Agreement are for convenience only and will not control or
affect the meaning or construction of the provisions of this
Agreement.
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21.5. Computation of Time. If after making
computations of time provided for in this Agreement, a time
for action or notice falls on Saturday, Sunday or a Federal
holiday, then such time shall be extended to the next
business day.
21.6. Governing Law. The construction and
performance of this Agreement shall be governed by the laws
of the State of Michigan without regard to its principles of
conflict of law.
21.7. Notices. Any notice, demand or request
required or permitted to be given under the provisions of
this Agreement shall be in writing, addressed to the
following addresses, or to such other address as any party
may request in writing.
If to Seller:
Fritz Broadcasting, Inc.
15600 W. Twelve Mile Road
Southfield, Michigan 48037
Attention: Mr. Jock Fritz
With a copy to:
Butzel Long
Suite 900
150 West Jefferson
Detroit, Michigan 48226
Attention: William M. Saxton, Esq.
Thomas E. Sizemore, Esq.
If to Buyer or Guarantor:
Infinity Broadcasting Corporation
Infinity Broadcasting Corporation of Detroit
600 Madison Avenue
New York, New York 10022
Attention: Mr. Mel Karmazin
With a copy to:
Leventhal, Senter & Lerman
2000 K Street, N.W.
Suite 600
Washington, D.C. 20006-1809
Attention: Steven A. Lerman, Esq.
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Any such notice, demand or request shall be deemed to have
been duly delivered and received (i) on the date of personal
delivery, or (ii) on the date of receipt, if mailed by
registered or certified mail, postage prepaid and return
receipt requested, or (iii) on the date of a signed receipt,
if sent by an overnight delivery service, but only if sent
in the same manner to all persons entitled to receive notice
or a copy.
21.8. Counterparts. This Agreement may be executed
in one or more counterparts, each of which will be deemed an
original and all of which together will constitute one and
the same instrument.
21.9. Further Assurances. Seller shall at any time
and from time to time after the Closing execute and deliver
to Buyer such further conveyances, assignments and other
written assurances as Buyer may reasonably request in order
to vest and confirm in Buyer (or their assignees) the title
and rights to and in all of the Station Assets to be and
intended to be transferred, assigned and conveyed hereunder.
ARTICLE 22
GUARANTY
________
Guarantor hereby unconditionally guarantees to
Seller payment and performance of all of the obligations of
Buyer under this Agreement.
ARTICLE 23
DEFINITIONS
___________
Unless otherwise stated in this Agreement, the
following terms when used herein shall have the meanings
assigned to them below (such meanings to be equally
applicable to both the singular and plural forms of the
terms defined).
"Accounts Receivable" shall have the meaning set
_____________________
forth in Section 1.3(c).
"Adjusted Broadcast Cash Flow" shall mean Broadcast
______________________________
Cash Flow for the year ended December 26, 1993, after taking
into account any adjustments to revenue or expenses
contained in the 1993 Audit that affect the Station.
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"Affiliate" shall mean any person or entity that is
___________
controlling, controlled by or under common control with the
named person or entity.
"Affiliate Transactions" shall mean the any
________________________
transaction between the Station and an Affiliate of Seller.
"Agreement" shall mean this Asset Purchase
___________
Agreement, including the exhibits and schedules hereto.
"Agreement to Purchase Real Estate" shall have the
___________________________________
meaning set forth at Section 9.9.
"Approving Shareholders" shall mean the
________________________
shareholders of Seller who are signatory to this Agreement.
"Asbestos" shall mean any and all varieties of
__________
materials included in the definition of "asbestos" under any
federal or state law or regulation relating to the
protection of human health or the environment.
"Asbestos-Containing Material" shall mean any
______________________________
material containing more than one (1) percent Asbestos by
weight.
"Broadcast Cash Flow" shall mean the Station's net
_____________________
income before income taxes taking into account the
allocations set forth on Schedule 7.13(b) (excluding any net
________________
income attributable to Trade Agreements or Affiliate
Transactions) determined in accordance with GAAP, plus
____
interest expense (net of interest income), depreciation and
amortization and bonuses paid to Charles D. Fritz and Jock
T. Fritz deducted in determining net income of the Station
for the period, minus gains on the sale of equipment
_____
included in net income and any other extraordinary income,
and plus any extraordinary losses.
____
"Broadcast Month" shall mean a period that begins
_________________
on the first Monday following the last Sunday of a calendar
month and ends on the last Sunday of the next calendar
month. For example, the February 1994 Broadcast Month
begins January 31, 1994, and ends February 27, 1994.
"Buyer" shall have the meaning set forth in the
_______
preamble to this Agreement.
"Buyer's Amount" shall have the meaning set forth
________________
in Section 2.1(b).
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"Buyer's Proration Amount" shall have the meaning
__________________________
set forth in Section 5.3.
"Business Day," whether or not capitalized, shall
_______________
mean every day of the week excluding Saturdays, Sundays and
Federal holidays.
"Calculation" shall have the meaning set forth in
_____________
Section 2.2(a).
"Claimant" shall have the meaning set forth in
__________
Section 16.3(a).
"Closing" shall have the meaning set forth in
_________
Section 1.1 hereof.
"Closing Date" shall mean the date on which the
______________
Closing is completed.
"Collection Period" shall have the meaning set
___________________
forth in Section 5.4 hereof.
"Contracts" shall mean any and all of the
___________
contracts, agreements, including Time Sales Agreements,
Trade Agreements, employment agreements, leases, commitments
and understandings, options, rights and interests, written
or oral, of Seller or to which Seller is a party, relating
to the conduct of the business and operations of the
Station.
"Effective Time" shall mean 12:01 a.m., Detroit
________________
time, on the Closing Date.
"Environmental Laws" shall mean all applicable
____________________
local, state and federal statutes and regulations relating
to the protection of human health or the environment
including the FCC's regulations concerning radio frequency
radiation.
"ERISA" shall have the meaning set forth in Section
_______
7.8(c).
"Excess Amount" shall have the meaning set forth in
_______________
Section 2.2(b).
"Excluded Employees" shall have the meaning set
____________________
forth in Section 10.5.
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"FCC" shall mean the Federal Communications
_____
Commission.
"FCC Application" shall mean the application or
_________________
applications that Seller and Buyer must file with the FCC
requesting its consent to the assignment of the Station
Licenses.
"FCC Consent" shall mean the action by the FCC
_____________
granting the FCC Application.
"Final Order" shall mean action by the FCC (i)
_____________
which has not been vacated, reversed, stayed, set aside,
annulled or suspended, (ii) with respect to which no timely
appeal, request for stay or petition for rehearing,
reconsideration or review by any party or by the FCC on its
own motion, is pending, and (iii) as to which the time for
filing any such appeal, request, petition, or similar
document or for the reconsideration or review by the FCC on
its own motion under the Communications Act of 1934, as
amended, and the rules and regulations of the Commission,
has expired.
"Financial Statements" shall mean (i) the unaudited
______________________
balance sheets for the Seller as of December 29, 1991,
December 27, 1992, and December 26, 1993, and the related
statements of operations and changes in financial position
for the fiscal year then ended (including the notes to such
financial statements), and (ii) the unaudited monthly
balance sheets and related statements in income and expenses
of the Station for the Broadcast Month January 1994.
"GAAP" shall mean generally accepted accounting
______
principles, consistently applied.
"Guarantor" shall have the meaning set forth in the
___________
preamble to this Agreement.
"Hazardous Substance" shall mean all hazardous or
_____________________
toxic waste or material which, because of its quantity,
concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled. "Hazardous Substance"
shall include, but is not limited to, any and all hazardous
or toxic substances, materials or wastes as defined or
listed under the Resource Conservation and Recovery Act, the
49
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Toxic Substances Control Act, the Comprehensive
Environmental Response, Compensation and Liability Act or
any comparable state statute or any regulation promulgated
under any of such federal or state statutes. "Hazardous
Substance" shall not include ordinary quantities of consumer
or commercial products used in the normal course of
broadcast station operations, including grounds and building
operation and maintenance; provided, that such products have
________
been properly stored, handled and disposed of.
"HSRA" shall mean the Hart-Scott-Rodino Antitrust
______
Improvements Act of 1976, as amended, and the regulations
adopted thereunder.
"Indemnitor" shall have the meaning set forth in
____________
Section 16.3(a).
"Intellectual Property" shall have the meaning set
_______________________
forth in Section 7.9.
"Liens" shall mean mortgages, deeds of trust,
_______
liens, pledges, collateral assignments, security interests,
leases, subleases, conditional sales agreements, easements,
covenants, encroachments, encumbrances or other defects of
title.
"1994 Budget" shall have the meaning set forth in
_____________
Section 7.13(b).
"1993 Audit" shall have the meaning set forth in
____________
Section 9.4.
"Non-Competition Agreement" shall mean the Non-
___________________________
Competition Agreement among Buyer, Seller and Jock T. Fritz
substantially in the form of Exhibit B to this Agreement.
_________
"Notice of Disagreement" shall have the meaning set
________________________
forth in Section 5.3.
"PCB" shall mean polychlorinated biphenyl.
_____
"Personal Property" shall have the meaning set
___________________
forth in Section 7.6.
"Prime Rate" shall mean a per annum rate equal to
____________
the "prime rate" as published in the Money Rates column of
the Eastern Edition of The Wall Street Journal (or the
_______________________
average of such rates if more than one rate is indicated).
50
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"Proration Schedule" shall have the meaning set
____________________
forth in Section 5.3.
"Purchase Price" shall have the meaning set forth
________________
in Section 2.1.
"Real Property" shall have the meaning set forth in
_______________
Section 7.5(a).
"Receivable Statement" shall have the meaning set
______________________
forth in Section 5.4.
"Referee" shall have the meaning set forth in
_________
Section 5.3.
"Reversal Agreement" shall mean the Reversal
____________________
Agreement among Seller, the Approving Shareholders and Buyer
substantially in the form of Exhibit E to this Agreement.
_________
"Seller" shall have the meaning set forth in the
________
preamble to this Agreement.
"Seller's Shareholders" shall mean Charles D.
_______________________
Fritz, Jock T. Fritz, Jack W. Fritz, William M. Saxton,
Michael S. Packer, Daniel S. Follis, Priscilla W. Riggs
T/U/A dated December 16, 1991, Charles Scharfe, Frank Magid,
Robert David, and Charles C. Fritz.
"Station" shall mean radio broadcast station
_________
WXYT(AM), Detroit, Michigan.
"Station Assets" shall have the meaning set forth
________________
in Section 1.2.
"Station Licenses" shall mean the licenses, permits
__________________
and other authorizations, including any temporary waiver or
special temporary authorization, issued by the FCC to Seller
in connection with the conduct of the business and operation
of the Station.
"Studio Site" shall mean the land and building in
_____________
which the Station's studio facilities are currently located,
as more particularly described in Schedule 1.2(b).
_______________
"Time Sales Agreements" shall mean contracts
_______________________
entered into in the ordinary course of business of the
Station for the sale or sponsorship of broadcast time on the
Station for cash.
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"Trade Agreements" shall mean Contracts for the
__________________
sale of advertising time for consideration other than cash.
"Trailing Twelve Months" shall have the meaning set
________________________
forth in Section 2.1(c).
"Transferred Employees" shall have the meaning set
_______________________
forth in Section 10.5.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first
written above.
SELLER:
FRITZ BROADCASTING, INC.
By: /s/ Jock T. Fritz
_____________________________________
Name: Jock T. Fritz
Title: President
BUYER:
INFINITY BROADCASTING CORPORATION OF DETROIT
By: /s/ Mel Karmazin
____________________________________________
Name: Mel Karmazin
Title: President and Chief
Executive Officer
GUARANTOR:
INFINITY BROADCASTING CORPORATION
By: /s/ Mel Karmazin
____________________________________________
Name: Mel Karmazin
Title: President and Chief
Executive Officer
52
<PAGE>
</PAGE>
The undersigned shareholders (the "Approving Shareholders") of
Seller each represents, warrants and covenants that: (i) as a group
they control a majority of the outstanding shares of Seller; (ii)
each will vote all of such shares in favor of the transactions
contemplated by this Agreement at a meeting of shareholders called
to consider such transaction or by consent in writing according to
applicable law; and (iii) such meeting or written consent, as the
case may be, shall be effectuated as soon as practicable after
execution of this Agreement.
/s/ Charles D. Fritz
_____________________________________
Charles D. Fritz
/s/ Jock T. Fritz
_____________________________________
Jock T. Fritz
/s/ Jack W. Fritz
_____________________________________
Jack W. Fritz
53
<PAGE>
</PAGE>
EXHIBIT A
FORM OF AGREEMENT TO PURCHASE REAL ESTATE
_________________________________________
EXHIBIT A
FORM OF NON-COMPETITION AGREEMENT
_________________________________
NON-COMPETITION AGREEMENT
_________________________
This Non-Competition Agreement, made as of the day
____
of , 199 , is by and between Fritz Broadcasting,
______________ _
Inc., a Michigan corporation ("Seller"), Jock T. Fritz ("Seller's
______ ________
Shareholder") (Seller and Seller's Shareholder together, the
___________
"Noncompete Parties), and Infinity Broadcasting Corporation of
__________________
Detroit, a Delaware corporation ("Buyer").
_____
W I T N E S E T H:
_ _ _ _ _ _ _ _ _
WHEREAS, Buyer has this date purchased from Seller
substantially all of the assets owned or held by Seller and used or
useful in the conduct of the business and operation of radio
station WXYT(AM), Detroit, Michigan (the "Station"), pursuant to an
_______
Asset Purchase Agreement dated March , 1994 (the "Purchase
___
Agreement");
WHEREAS, Seller's Shareholder is an officer, director and
significant shareholder of Seller with access to confidential
information concerning the Station; and
WHEREAS, to induce Buyer to enter into the Purchase
Agreement, the Noncompete Parties have agreed not to compete with
the Station in the area and for the period specified below.
NOW, THEREFORE, in consideration of the premises and
mutual promises and covenants herein contained, the parties,
intending to be legally bound, agree as follows:
1. Term. This Agreement shall commence on the date
____
hereof and shall terminate two (2) years thereafter.
2. Non-Competition. Neither the Noncompete Parties nor
_______________
any Affiliate (as defined below) shall directly or indirectly
engage in (whether as owner, partner, consultant, advisor,
employee, independent contractor or otherwise), assist any person
or entity in engaging in, or hold any legal or beneficial interest
in any person or entity that is engaged in, the management or
operation of any Competitive Business (as defined below) during the
term of this Agreement. "Competitive Business" shall mean a radio
____________________
broadcast station in the Detroit Metro Area (as defined by
Arbitron) (the "Covenant Area") that broadcasts a talk format.
_____________
"Affiliate" shall mean any firm or entity in which a Noncompete
_________
Party may be interested as a partner, trustee, employee, consultant
or shareholder.
<PAGE>
</PAGE>
3. Non-Solicitation. During the term hereof, neither
________________
the Noncompete Parties nor any Affiliate shall, directly or
indirectly, employ or solicit the employment of any current
employee of the Station.
4. Consideration. The Noncompete Parties acknowledge
_____________
that (a) Buyer is not obligated, and would not otherwise agree, to
close its purchase under the Purchase Agreement without the
Noncompete Parties' execution and delivery of this Agreement, and
(b) each of the Noncompete Parties is directly or indirectly
benefitted by the payment by Buyer to Seller of the Purchase Price
(as defined in the Purchase Agreement).
5. Representations and Warranties of Individuals.
_____________________________________________
Seller's Shareholder represents and warrants that this Agreement
has been duly executed and delivered by him and constitutes his
legal and valid obligation enforceable against him in accordance
with its terms.
6. Representations and Warranties of Entities. Seller
__________________________________________
represents and warrants that:
(a) Organization and Good Standing. It is duly
______________________________
organized, validly existing and in good standing under the
laws of the jurisdiction in which it is formed;
(b) Authorization and Binding Effect of Documents. It
_____________________________________________
has the power and authority to execute, deliver and perform
its obligations under this Agreement; all necessary action has
been taken to authorize its execution, delivery and
performance of this Agreement; and this Agreement constitutes
its legal, valid and binding obligation enforceable against it
in accordance with its terms;
(c) Absence of Conflicts. The execution and delivery
____________________
of, and the performance of its obligations under, this
Agreement do not:
(i) conflict with or violate any provision of its
certificate of incorporation, by-laws, partnership
agreement, or other organization document;
(ii) violate any law, order, judgment, injunction,
decree or ruling applicable to it; or
(iii) conflict with, violate or result in a breach
of or constitute a default under any agreement or
2
<PAGE>
</PAGE>
instrument to which it is a party or by which it or its
properties or assets are bound; and
(d) Governmental Consents and Consent of Third Parties.
__________________________________________________
The execution and delivery of, and the performance of its
obligations under, this Agreement do not require the consent,
waiver, approval, permit, license, clearance or authorization
of, or any declaration or filing with, any court or public
agency or other authority, or the consent of any person under
any agreement, arrangement or commitment of any nature to
which it is bound.
7. Specific Performance. The Noncompete Parties
____________________
acknowledge that Buyer will be irreparably harmed in the event of a
breach or threatened breach by the Noncompete Parties of the
provisions of Paragraphs 2 and 3 of this Agreement, and that in
such event, Buyer shall be entitled to an injunction restraining
the Noncompete Parties from engaging in any of the activities
prohibited by Paragraphs 2 and 3 whether such activities actually
have been engaged in or are threatened. Nothing herein shall be
construed as prohibiting Buyer from pursuing any other remedies
available to it at law or in equity for such breach or threatened
breach, including the recovery of damages from the Noncompete
Parties. The existence of any claim or cause of action of any of
the Noncompete Parties against Buyer, whether predicated upon the
Purchase Agreement or otherwise, shall not constitute a defense to
the enforcement by Buyer of the covenants of the Noncompete Parties
hereunder.
8. Severability. If any term, covenant, condition or
____________
provision of this Agreement, or the application thereof to any
party or circumstance shall to any extent be held invalid or
unenforceable by a judicial order, the remainder of this Agreement
or the application of such term or provision to parties or
circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby and each term,
covenant, condition or provision of this Agreement shall be valid
and be enforced to the fullest extent permitted by law, provided
that such invalid or unenforceable provision shall be curtailed,
limited or eliminated only to the extent necessary to remove such
invalidity or unenforceability with respect to the applicable law
as it shall then be applied. If the period of time for which any
covenant is in effect and the area encompassed within the Covenant
Area shall be unenforceable as a matter of law, such covenant shall
be in effect for such time period or such area as is enforceable.
9. Waiver. Failure of any party to complain of any act
______
or omission on the part of any other party in breach or default of
3
<PAGE>
</PAGE>
this Agreement, no matter how long the same may continue, shall not
be deemed to be a waiver by the party of its rights hereunder. No
waiver by any party at any time, express or implied, of any breach
of any other provision of this Agreement shall be deemed a waiver
of a breach of any other provision of this Agreement or a consent
to any subsequent breach of the same or other provisions.
10. Notices. Any notice, demand or request required or
_______
permitted to be given under the provisions of this Agreement shall
be in writing, addressed to the following addresses, or to such
other address as any party may request,
To any of the Noncompete Parties:
[to be provided]
Attention:
Copy to:
Butzel Long
Suite 900
150 West Jefferson
Detroit, Michigan 48226
Attention: William M. Saxton, Esq.
Thomas E. Sizemore, Esq.
To Buyer:
Infinity Broadcasting Corporation of Detroit
600 Madison Avenue
New York, New York 10022
Attention: Mr. Mel Karmazin
4
<PAGE>
</PAGE>
Copy to:
Leventhal, Senter & Lerman
2000 K Street, N.W.
Suite 600
Washington, D.C. 20006-1809
Attention: Steven A. Lerman, Esq.
and shall be deemed to have been duly delivered and received (a) on
the date of personal delivery, or (b) on the date of receipt, if
mailed by registered or certified mail, postage prepaid and return
receipt requested, or (c) on the date of a signed receipt, if sent
by an overnight delivery service, but only if sent in the same
manner to all persons entitled to receive notice or a copy.
11. Benefit. This Agreement shall be binding upon and
_______
inure to the benefit of the parties hereto, and their respective
administrators, executors, personal representatives, beneficiaries,
heirs, successors and assigns.
12. Entire Agreement. This Agreement embodies the
________________
entire agreement and understanding of the parties hereto, and
supersedes any and all prior agreements, arrangements and
understandings, relating to the matters provided for herein. No
amendment, waiver of compliance with any provision or condition
hereof, or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party
against whom enforcement of any waiver, amendment, change,
extension or discharge is sought.
13. Headings. The headings set forth in this Agreement
________
are for convenience only and shall not control or affect the
meaning or construction of the provisions of this Agreement.
14. Choice of Law. The construction and performance of
_____________
this Agreement shall be governed by the laws of the State of
Michigan without regard to its principles of conflict of law.
15. Counterparts. This Agreement may be executed in one
____________
or more counterparts, each of which will be deemed an original and
all of which together will constitute one and the same instrument.
5
<PAGE>
</PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
NONCOMPETE PARTIES:
FRITZ BROADCASTING, INC.
By:
_________________________________________
Name:
____________________________________
Title:
___________________________________
JOCK T. FRITZ
_____________________________________________
BUYER:
INFINITY BROADCASTING CORPORATION
OF DETROIT
By:
_________________________________________
Name:
___________________________________
Title:
__________________________________
6
<PAGE>
</PAGE>
EXHIBIT C
FORM OF OPINIONS OF SELLER'S COUNSEL
____________________________________
<PAGE>
</PAGE>
FORM OF OPINION OF SELLER'S COUNSEL ON FCC MATTERS
__________________________________________________
[Closing Date]
Infinity Broadcasting Corporation of Detroit
600 Madison Avenue
New York, New York 10022
Attention: Mr. Mel Karmazin
Ladies and Gentlemen:
We have acted as counsel to Fritz Broadcasting, Inc., a
Michigan corporation ("Seller"), in connection with the
negotiation, preparation, execution and delivery of that certain
Asset Purchase Agreement by and between you and Seller dated as of
March , 1994 (the "Agreement"). We are furnishing this opinion
___
to you pursuant to Section 13.1(b) of the Agreement. Capitalized
terms used herein without specific definition shall have same
meaning as in the Agreement.
In rendering our opinion, we have assumed (i) the
authenticity of all documents submitted to us as originals; (ii)
the conformity of any documents submitted to us as copies to their
respective originals; (iii) the authenticity of all signatures; and
(iv) the accuracy of all reports and certificates received from
public officials and the FCC. In rendering our opinion, we have
relied, to the extent we deem necessary and proper, as to factual
matters only, on the warranties and representations contained in
the Agreement and on an examination of the public records of the
FCC; and based on the information provided to us in the course of
our representation of the Seller, we have no actual knowledge of
any material inaccuracies in any of the facts contained therein.
This opinion is limited to matters arising under the
Communications Act of 1934, as amended, and the rules, regulations
and policies of the FCC, and we express no opinion as to any other
laws except as specifically stated herein.
Based on the foregoing, we are of the opinion that:
1. Seller validly holds the Station Licenses listed at
Schedule 1.2(a) to the Agreement pursuant to Final Orders of the
FCC. Such Station Licenses are in full force and effect and are
for the full license term customarily issued to broadcast radio
<PAGE>
</PAGE>
Infinity Broadcasting Corporation of Detroit
[Closing Date]
Page - 2 -
Station licensed within the State of Michigan. The Station
Licenses are not subject to any condition except for conditions
applicable to broadcast radio licenses generally. None of the
Station Licenses is the subject of a pending license renewal
application. Seller has all necessary authority from the FCC to
use the call signs WXYT. To our knowledge, the Station Licenses
constitute all FCC licenses, permits and authorizations necessary
for Seller's operation of the Station in the manner in which we
have been advised it is currently being operated.
2. The FCC Consent has been granted [and has become a
Final Order].
3. To the best of our knowledge, based on inquiry of and
representations made by officers of Seller and a review of the
public records of the FCC available as of [date]:
(a) there is no unsatisfied adverse FCC order, decree
or ruling outstanding against Seller, the Station or any of
the Station Licenses;
(b) there is no proceeding (including any rulemaking
proceeding), complaint or investigation against Seller or in
respect of the Station or any of the Station Licenses
pending or, to our knowledge, threatened before the FCC
(including any pending judicial review of such an action by
the FCC) except for proceedings affecting the radio
broadcast industry generally to which Seller is not a
specific party;
(c) Seller is not a party to any complaint, action or
other proceeding at the FCC, including both complaints
against other licensees or applicants and rulemakings of
general applicability; and
(d) Schedule 1.2(a) to the Agreement includes all
applications of Seller or on behalf of the Station now
pending before the FCC.
This opinion is delivered solely to you and is solely
for your benefit in connection with the above transaction. This
opinion may not be quoted or relied upon for any purpose by any
person other than the addressee hereof.
Very truly yours,
COVINGTON & BURLING
2
<PAGE>
</PAGE>
Infinity Broadcasting Corporation of Detroit
[Closing Date]
Page - 3 -
By:
__________________________
3
<PAGE>
</PAGE>
FORM OF OPINION OF SELLER'S COUNSEL
ON NON-FCC MATTERS
__________________
[Closing Date]
Infinity Broadcasting Corporation of Detroit
600 Madison Avenue
New York, New York 10022
Attention: Mr. Mel Karmazin
Ladies and Gentlemen:
We have acted as counsel to Fritz Broadcasting, Inc., a
Michigan corporation ("Seller"), in connection with the
negotiation, preparation, execution and delivery of that certain
Asset Purchase Agreement by and between you and Seller dated as
of March , 1994 (the "Agreement"). We are furnishing this
___
opinion to you pursuant to Section 13.1(b) of the Agreement.
Capitalized terms used herein without specific definition shall
have same meaning as in the Agreement.
In furnishing this opinion, we have made such
investigations and have examined such documents and records as we
have deemed relevant and necessary for purposes of furnishing
this opinion. In such examinations, we have assumed the
genuineness of all signatures, the authenticity of all original
documents and the conformity to authentic original documents of
all documents that are certified, conformed, or photocopies. We
have also assumed the due authorization, execution, and delivery
of the Agreement by you, and that the Agreement is enforceable
against you in accordance with its terms, and that you are not in
material breach of any of your obligations under the Agreement.
In addition, we have relied on certificates and statements of
responsible officers of the Seller, and certificates of certain
public officials with respect to the factual matters therein
contained, and we have made no independent verification of the
factual matters set forth in such certificates, statements,
representations and warranties.
We are admitted to practice law in the State of
Michigan. We express no opinion as to matters governed by any
laws other than those of the jurisdiction in which we are
admitted to practice and the federal laws of the United States of
America (other than the Communications Act of 1934, as amended,
and the rules and regulations promulgated thereunder).
<PAGE>
</PAGE>
Infinity Broadcasting Corporation of Detroit
[Closing Date]
Page -2-
Based upon and subject to the foregoing, we are of the
opinion that:
1. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Michigan, and has all requisite corporate power and authority to
own, lease, and operate its properties, and to carry on its
business as now being conducted and as proposed to be conducted,
and to enter into and perform the Agreement and all related
agreements.
2. The Agreement has been duly authorized by all
necessary corporate action on the part of Seller (including all
necessary approvals by shareholders of Seller) and has been
executed and delivered by duly authorized officer of Seller.
3. The Agreement constitutes a legal, valid, and
binding obligations of Seller, enforceable against Seller in
accordance with its terms.
4. The execution and delivery by Seller of the
Agreement and performance by Seller of its obligations
thereunder, and Seller's consummation of the transactions
contemplated thereby, do not (a) violate, conflict with, or
result in the breach of any provision of the Articles of
Incorporation or By-Laws of Seller; (b) to our knowledge, violate
any order, writ, judgment, injunction, award, decree, rule
regulation, or ruling of an governmental authority against or
binding upon Seller; (c) to our knowledge, violate or result in
the breach of any of the terms of, or constitute (or with notice
or lapse of time or both, constitute) a default under any
Agreement, instrument, license, or permit to which Seller is now
subject.
5. To our knowledge, (a) there are no insolvency
proceedings of any character pending or threatened against
Seller, including without limitation bankruptcy, receivership,
reorganization, composition or arrangement with creditors,
voluntary or involuntary, and (b) Seller has not made any
assignment for the benefit of creditors, or taken any action in
contemplation of, or which would constitute the basis for, the
institution of any insolvency proceedings.
6. To our knowledge, there is no claim, litigation,
proceeding or governmental investigation pending or threatened,
or any order, injunction or decree outstanding, against the
Seller or any of its affiliates that would prevent the
2
<PAGE>
</PAGE>
Infinity Broadcasting Corporation of Detroit
[Closing Date]
Page -3-
consummation of, or impair Seller's ability to consummate, the
transactions contemplated the by Agreement.
With respect to the opinions expressed herein, we
advise you that with respect to the enforceability of the
Agreement, (A) such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, and other similar laws of
general application relating to or affecting the rights and
remedies of creditors generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defense and the discretion of any
court before which any proceeding therefor may be brought.
We do not render any opinion with respect to any matter
except as specifically set forth herein. This opinion is being
delivered solely to you and may not be delivered to or relied
upon by any other party. This opinion is rendered as of the date
hereof, and we have not undertaken to supplement our opinion with
respect to factual matters or changes in the laws that may
hereafter occur.
Very truly yours,
BUTZEL LONG
3
<PAGE>
</PAGE>
EXHIBIT D
FORM OF OPINIONS OF BUYER'S COUNSEL
___________________________________
<PAGE>
</PAGE>
EXHIBIT D
FORM OF OPINIONS OF BUYER'S COUNSEL
___________________________________
FORM OF OPINION OF BUYER'S AND GUARANTOR'S
COUNSEL ON NON-FCC MATTERS
___________________________________________________
[Closing Date]
Fritz Broadcasting, Inc.
15600 W. Twelve Mile Road
Southfield, MI 48037
Ladies and Gentlemen:
We have reviewed the Asset Purchase Agreement, dated as
of March , 1994 (the "Agreement"), by and between Fritz
____
Broadcasting, Inc., a Michigan corporation ("Seller"), Infinity
Broadcasting Corporation of Detroit, a Delaware corporation
("Buyer"), and Infinity Broadcasting Corporation, a Delaware
corporation ("Guarantor"). Capitalized terms used in this
opinion without definition have the respective meanings ascribed
to them in the Agreement.
We have also examined and relied upon the
representations and warranties as to factual matters contained in
or made pursuant to the Agreement and in certificates of officers
of Buyer and Guarantor and upon the originals, or copies
certified or otherwise identified to our satisfaction, of such
records, documents, certificates and other instruments, and have
made such other investigations, as in our judgment are necessary
or appropriate to enable us to render the opinion expressed
below.
Based upon the foregoing, we are of the following
opinion:
1. Each of Buyer and Guarantor is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate
power and authority to own and operate its properties, to carry
on its business as now conducted and to enter into and carry out
the terms of the Agreement.
2. The Agreement has been duly authorized by all
necessary corporate action on the part of Buyer and Guarantor.
The Agreement has been duly executed and delivered by Buyer and
Guarantor.
<PAGE>
</PAGE>
Fritz Broadcasting, Inc.
[Closing Date]
Page -2-
3. The Agreement constitutes the legal, valid and
binding obligation of Buyer and Guarantors enforceable against
each of them in accordance with its terms, except that such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of
general application relating to or affecting the rights and
remedies of creditors and the application of general principles
of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4. The execution and delivery by Buyer and Guarantor
of the Agreement and the performance by Buyer and Guarantor of
their respective obligations thereunder will not (a) violate,
conflict with, or result in the breach of any provision of the
certificate of incorporation or by-laws of Buyer or Guarantor;
(b) to our knowledge, violate any order, writ, judgment,
injunction, award, decree, rule, regulation or ruling of any
governmental authority against or binding upon Buyer or
Guarantor; (c) to our knowledge, violate or result in the breach
of any of the terms of, or constitute (or with notice or lapse of
time or both, would constitute) a default under any material
agreement, instrument, license or permit to which Buyer or
Guarantor is now a party, except for any such violation,
conflict, breach or default that would not reasonably be expected
to have a material adverse effect on Buyer's and Guarantor's
ability to consummate the transactions contemplated by the
Agreement.
5. To our knowledge, (a) there are no insolvency
proceedings of any character pending against Buyer or Guarantor,
including, without limitation, proceedings relating to
bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, and (b)
neither Buyer or Guarantor has made any assignment for the
benefit of creditors, or taken any formal corporate action in
contemplation of the institution of any insolvency proceedings.
6. To our knowledge, there is no claim, litigation,
proceeding or governmental investigation pending or threatened,
or any order, injunction or decree outstanding, against Buyer or
Guarantor or any of their affiliates that would prevent the
consummation of, or materially impair Buyer's or Guarantor's
ability to consummate, the transactions contemplated by the
Agreement, except that we express no opinion as to any
proceedings that may be pending or threatened by or before the
Federal Communications Commission.
2
<PAGE>
</PAGE>
Fritz Broadcasting, Inc.
[Closing Date]
Page -3-
For the purposes of giving the opinion expressed in
paragraph 3, we have assumed with your permission that the laws
of the State of Michigan are identical in all respects to the
applicable laws of the State of New York. For the purposes of
giving the opinions expressed in paragraphs 5 and 6, we have
relied exclusively on certificates of officers of Buyer and
Guarantor.
We express no opinion in this letter as to the law of
any jurisdiction other than the federal law of the United States
(excluding the Communications Act of 1934, as amended, the rules
and regulations promulgated thereunder, and actions and decisions
of the Federal Communications Commission taken in accordance
therewith), the law of the State of New York and the General
Corporation Law of the State of Delaware.
We are delivering this opinion to you pursuant to
Section 13.2(b) of the Agreement, and no persons other than you
are entitled to rely on this opinion.
Very truly yours,
3
<PAGE>
</PAGE>
FORM OF OPINION OF BUYER'S AND GUARANTOR'S
COUNSEL ON FCC MATTERS
_________________________________________________________
[Closing Date]
Fritz Broadcasting, Inc.
15600 W. Twelve Mile Road
Southfield, MI 48037
Ladies and Gentlemen:
We have acted as counsel to Infinity Broadcasting
Corporation of Detroit ("Buyer") and Infinity Broadcasting
Corporation ("Guarantor"), both Delaware corporations, in
connection with the negotiation, preparation, execution and
delivery of that certain Asset Purchase Agreement by and among
you, Buyer and Guarantor, dated as of March , 1994 (the
___
"Agreement"). We are furnishing this opinion to your pursuant to
Section 13.2(b) of the Agreement. Except as otherwise specified
herein, capitalized terms used herein which are defined in the
Agreement shall have the same meanings herein as therein.
In connection with this opinion, we have assumed the
genuineness of signatures on documents, the conformity to the
originals of all copies examined by or submitted to us as
photocopies or conformed copies, and the authenticity of the
originals of such latter documents. As to questions of fact in
connection with this opinion, we have relied upon an examination
of our own files and records and examination of the public
records of the FCC available as of , 199 . We
___________ ___ __
have also relied upon representations made by Buyers to the FCC
and upon certificates of fact of officers of Buyers as we have
deemed necessary. As used herein, the term "to our knowledge"
shall mean to our actual knowledge without further investigation
other than described in this paragraph. You should be aware that
records of the FCC that are public as a matter of law may not be
publicly available as a matter of fact. Furthermore, there may
be records of matters pending at the FCC that are not available
for inspection by the public as a matter of law.
This opinion is limited to matters arising under the
Federal Communications Act of 1934, as amended (the "Act"), and
the rules, regulations and published policies of the FCC, and we
express no opinion as to any other laws except as specifically
stated herein.
<PAGE>
</PAGE>
Fritz Broadcasting, Inc.
[Closing Date]
Page -2-
Based upon and subject to the foregoing and to the
further limitations set forth hereinafter, we are of the opinion
that the FCC Consent has been granted [and has become a Final
Order].
The opinion set forth above is as of the date hereof.
We assume no obligation to advise you of changes which may
thereafter be brought to our attention. Our opinion is based on
statutory laws, agency rules, regulations and policies, and
judicial decisions that are effective on the date hereof, and we
do not opine with respect to any law, regulation, rule or
governmental policy which may be enacted or adopted after the
date hereof, nor do we assume any responsibility to advise you of
future changes in our opinion.
This opinion is delivered solely to you and is solely
for your benefit in connection with the above transaction. This
opinion may not be quoted or relied upon for any purpose by any
person other than the addressee hereof.
Very truly yours,
LEVENTHAL, SENTER & LERMAN
By
__________________________
A Partner
2
<PAGE>
</PAGE>
EXHIBIT E
FORM OF REVERSAL AGREEMENT
__________________________
REVERSAL AGREEMENT
__________________
This Reversal Agreement ("Agreement"), dated as of
_________ _
__, 1994, is by and among Fritz Broadcasting,
___________
Inc., a Michigan corporation ("Seller"), Charles D. Fritz,
______
Jock T. Fritz and Jack W. Fritz (such individuals
collectively the "Approving Shareholders"), and Infinity
________________________
Broadcasting Corporation of Detroit, a Delaware corporation
("Buyer"), and is made with reference to that certain Asset
_____
Purchase Agreement dated as of March , 1994 (the
____
"Purchase Agreement") by and between Buyer, Seller, and
__________________
Infinity Broadcasting Corporation, a Delaware corporation, as
Guarantor.
The Purchase Agreement provides for the sale of AM
radio broadcast station WXYT, Detroit, Michigan (the
"Station"). On , 1994, the Federal
_______ ____________ ____
Communications Commission ("FCC") granted its consent (the
___
"FCC Order") to the assignment of the Station Licenses (as
_________
defined in the Purchase Agreement) from Seller to Buyer
pursuant to the Purchase Agreement. As of the date of this
Agreement, the FCC Order has not yet become a Final Order (as
defined in the Purchase Agreement). Nevertheless, as
provided in the Purchase Agreement, the parties are
proceeding with the Closing (as defined in the Purchase
Agreement) in accordance with the terms and conditions of the
Purchase Agreement. This Agreement sets forth the agreement
of the parties as to the procedures that they will follow in
the event that either (1) the FCC Order is reversed,
rescinded, vacated, set aside or annulled and Buyer is
ordered by Final Order to return the Station Licenses to
Seller on issues unrelated to Seller's qualifications to be
an FCC licensee (a "Buyer's FCC Reversal") or (2) the FCC
____________________
Order is reversed, rescinded, vacated, set aside or annulled
by Final Order on issues related to Seller's qualifications
to be an FCC licensee (a "Seller's FCC Reversal") (a Buyer's
_______________________
FCC Reversal and a Seller's FCC Reversal are hereunder
collectively called an "FCC Reversal"). (A Final Order
______________
requiring Buyer to divest the Station Assets to a party other
than Seller or an affiliate of Seller shall not be considered
an FCC Reversal for the purposes of this Agreement.)
Accordingly, in consideration of the foregoing and
the mutual promises and covenants set forth below, the
parties agree as follows:
1. Definitions.
<PAGE>
</PAGE>
All capitalized terms used but not defined in
this Agreement shall have the meanings assigned to them in
the Purchase Agreement.
2. Procedures in the Event of an FCC Reversal.
(a) Reconveyance. Seller and the Approving
Shareholders agree that in the event of an FCC Reversal,
Seller (or an affiliate of Seller) will accept the
reconveyance by Buyer of the Station Assets (as defined
below) and will assume (or cause such affiliate to assume)
any and all liabilities, obligations or commitments related
to the Station of the type assumed by Buyer pursuant to the
Purchase Agreement arising and accruing after the closing of
the reconveyance of the Station Assets (the "FCC Reversal
_____________
Closing"). "Station Assets" shall mean the assets then owned
________ ______________
or held by Buyer and used or held for use in the conduct of
the business and operations of the Station of the type
constituting the Station Assets (as defined in the Purchase
Agreement) assigned by Seller to Buyer at the Closing
pursuant to the Purchase Agreement; provided that Buyer shall
________
have no obligation to assign the Station Licenses to Seller
if the FCC has revoked or rescinded or otherwise ruled that
Seller is unqualified to hold such licenses. In the event
that Seller or the Approving Shareholders direct the
reconveyance to an affiliate of Seller, all references herein
to Seller shall refer to such affiliate, as appropriate.
(b) Purchase Price in the Event of a Buyer's
FCC Reversal. In the event of a reconveyance of the Station
Assets to Seller pursuant to Section 2(a) following a Buyer's
FCC Reversal, Seller shall have no obligation to refund the
Purchase Price (as defined in the Purchase Agreement).
Rather, Seller agrees to pay Buyer an amount (the "Buyer's
_______
Reversal Purchase Price") to be computed and payable as
_______________________
follows:
(i) The Buyer's Reversal Purchase Price
will be due and payable at the earlier of (A)
Seller's due and timely election to retain the
Station Assets (as provided in clause (ii)
below) and (B) the sale of the Station Assets
by Seller to an unaffiliated third party (as
provided in clause (iii) below); provided,
________
however, that if after a Buyer's FCC Reversal
_______
the FCC Application remains pending (even if
designated for an evidentiary hearing), the
Buyer's Reversal Purchase Price shall not be
2
<PAGE>
</PAGE>
due and all time periods for Seller to elect
to retain the Station or to sell it to an
unaffiliated third party (as provided in
clauses (ii) and (iii) below) shall be tolled
until either (x) the FCC Application has been
_
granted and such grant has become a Final
Order, in which event Seller shall reconvey
the Station Assets to Buyer and this Agreement
shall be terminated (as provided in Section 6
below), or (y) the FCC Application has been
_
denied and such denial has become a Final
Order, in which event the parties shall
proceed as provided in clauses (ii) and (iii)
of this Section 2(b).
(ii) If Seller desires to retain the
Station Assets, the Buyer's Reversal Purchase
Price shall be the fair market value of the
Station Assets (assuming a sale of assets as
of the FCC Reversal Closing on terms and
conditions similar to those in the Purchase
Agreement, including the Noncompetition
Agreement) as determined by the agreement of
two nationally recognized appraisers with
experience in the broadcast industry, one to
be selected by Seller and one by Buyer. Buyer
and Seller shall each pay the costs of their
respective appraisers. The appraisal process
shall be initiated by notice (the "Appraisal
_________
Notice") from Seller to Buyer within thirty
______
(30) days of the FCC Reversal Closing, which
notice shall contain Seller's selection of its
appraiser. Within thirty (30) days of Buyer's
receipt of the Appraisal Notice, Buyer shall
give Seller notice of the appraiser selected
by Buyer. Seller's election to retain the
Station Assets shall be made by written notice
to Buyer within thirty (30) days after
completion of the appraisal and shall be
accompanied by a contemporaneous wire transfer
of the Buyer's Reversal Purchase Price.
Seller shall not be entitled to retain the
Station Assets unless the appraisers have
reached an agreement on the fair market value
of the Station Assets within ninety (90) days
of the Appraisal Notice.
3
<PAGE>
</PAGE>
(iii) If Seller does not elect to
retain the Station Assets, then it shall
proceed to use its reasonable best efforts to
cause the Station Assets to be sold, subject,
during the period of eighteen (18) months
following the FCC Reversal Closing, to Buyer's
approval of the terms and conditions of any
sale. Should Buyer fail to approve any
proposed sale of the Station Assets during the
period of eighteen (18) months following the
FCC Reversal Closing, Seller shall thereafter
be free to sell the Station Assets to an
unaffiliated third party at its discretion.
In either case, Seller shall accept any offer
to purchase the Station Assets brought to the
Seller by Buyer unless Seller has previously
timely and duly elected to retain the Station
Assets. In the event of a sale of the Station
Assets to an unaffiliated third party, the
Buyer's Reversal Purchase Price shall be the
total consideration received by Seller or any
affiliate from the unaffiliated third party
for the Station Assets (including any
consideration for a covenant not to compete,
consulting agreement or other arrangement
entered into in connection with such sale)
less the expenses reasonably incurred by
Seller in connection with such sale. Failure
to sell the Station Assets under this clause
(iii) shall not be deemed an election to
retain the Station Assets under clause (ii).
(iv) Between the FCC Reversal Closing and
payment of the Buyer's Reversal Purchase
Price, Seller agrees to pay Buyer ninety-five
percent (95%) of the amount of the Available
Cash Flow (as defined below), and Buyer agrees
that Seller may retain five percent (5%) of
the Available Cash Flow for its own account.
Available Cash Flow shall be determined on an
annual basis (with adjustments as necessary
for under/over payments), but to the extent
practicable, Seller shall make estimated
payments to Buyer on a monthly basis.
"Available Cash Flow" shall mean for any
_____________________
period the net income of the Station computed
on a stand-alone basis, after payment of any
applicable taxes (other than any income tax on
4
<PAGE>
</PAGE>
the five percent (5%) of Available Cash Flow
retained by Seller, which Seller shall be
responsible for paying), determined in
accordance with GAAP, plus the aggregate
____
amount of all non-cash items (including
depreciation and amortization) deducted in
computing such net income, minus the aggregate
_____
amount of all non-cash items included in
computing such net income, and minus the
_____
aggregate amount of capital expenditures made
during such period.
(v) Seller's obligations under this
Agreement in the event of a Buyer's FCC
Reversal shall be secured by the grant to
Buyer of a first priority security interest in
the Station Assets (and, to the extent
permitted by law, the Station Licenses), and
Seller agrees not to grant or permit, directly
or indirectly, any other security interests or
liens against the Station Assets or the
Station Licenses. Buyer shall have no
recourse against Seller for default under this
Agreement beyond its actual damages, plus all
costs and expenses reasonably incurred by
Buyer in enforcing its rights under this
Agreement, not to exceed in the aggregate the
fair market value of the Station Assets as of
the FCC Reversal Closing.
(c) Purchase Price in the Event of a Seller's
FCC Reversal. In the event of a Seller's FCC Reversal,
Seller and/or the Approving Shareholders agree to refund the
Purchase Price (as defined in the Purchase Agreement) by wire
transfer of immediately available funds, regardless of
whether Buyer is permitted as a matter of law to assign the
Station Licenses to Seller.
(d) No Prorations in the Event of a Buyer's
FCC Reversal. In lieu of prorating income and expenses as of
the FCC Reversal Closing following a Buyer's FCC Reversal,
Seller shall collect all accounts receivable and pay all
accounts payable arising out of the operation of the Station
prior to the FCC Reversal Closing to the extent that adequate
funds are available from operation of the Station (or are
made available by Buyer) and shall treat such cash received
or paid with respect to income and expense accruing prior to
the FCC Reversal Closing as income or expense of the Station
5
<PAGE>
</PAGE>
for purposes of calculating Available Cash Flow; provided,
________
however, that to the extent that the total of all accounts
_______
payable exceeds the total of all accounts receivable as of
the FCC Reversal Closing, Buyer shall provide Seller with
funds at the FCC Reversal Closing to pay such excess amount.
Furthermore, notwithstanding the first sentence of Section
2(a), Seller agrees to assume all Trade Agreements in
existence as of the FCC Reversal Closing.
(e) Operation in the Ordinary Course. During
the period between the FCC Reversal Closing following a
Buyer's FCC Reversal and payment of the Buyer's Reversal
Purchase Price in full, Seller agrees to operate the business
of the Station in accordance with the affirmative and
negative covenants set forth on Annex A hereto.
Notwithstanding anything herein to the contrary, during such
period, Buyer shall not directly or indirectly control,
supervise, or direct, or attempt to control, supervise or
direct the operation of the Station; such operations shall be
the sole responsibility of Seller.
(f) Indemnification. In the event of a
Buyer's FCC Reversal, Buyer shall indemnify, defend and hold
Seller and the Approving Shareholders harmless from and
against and with respect to, and shall reimburse Seller and
the Approving Shareholders for, any deficits incurred in
operating the Station in accordance with the terms of this
Agreement during the period between the FCC Reversal Closing
and payment of the Buyer's Reversal Purchase Price except for
losses resulting from Seller's willful misconduct or gross
negligence. Buyer shall fund any such deficits on a monthly
basis, and Seller shall have no obligation to borrow or
utilize its own funds (other than funds generated from the
operation of the Station) under this Agreement. Buyer shall
be obligated to indemnify Seller under this Section 2(e) only
to the extent that such losses cannot be funded from revenues
arising from operation of the Station.
(g) Documentation. In the event of an FCC
Reversal, the parties shall negotiate in good faith, execute
and deliver such documents and instruments and perform such
other acts as may be necessary for the complete
implementation of this Agreement.
(h) Noncompetition Agreement; Consulting
Agreement. In the event of an FCC Reversal, the
Noncompetition Agreement shall terminate, but as provided in
Section 2(b) neither Seller nor any other party to such
6
<PAGE>
</PAGE>
agreement shall be obligated to refund any portion of the
Buyer's Reversal Purchase Price.
3. Operation of Station by Buyer.
Nothing herein shall be construed to limit in
any way the full powers of Buyer on and after the Closing
Date to operate the Station as Buyer sees fit until an FCC
Reversal Closing. Buyer shall be entitled to retain all
revenues and profits earned during the period between the
Closing and an FCC Reversal Closing.
4. FCC Matters.
(a) Seller and Buyer shall, each at its own
cost and expense, vigorously, expeditiously and diligently
oppose any petition for reconsideration or any request for
stay or appeal filed with respect to the FCC Order to the
extent that any such petition or request applies to Seller or
Buyer, as the case may be, and shall take all actions
necessary or appropriate to obtain denial of any such
petition for reconsideration, stay, review and/or appeal.
The parties will also continue to prosecute the FCC
Application in the event that it is designated for
evidentiary hearing by the FCC following the Closing, and
shall thereafter exhaust all available administrative and
judicial appellate remedies in the event that the FCC
Application is denied following such evidentiary hearing. It
is the intent of the parties that each will use its best
efforts to persuade the FCC, first, to permit Buyer to retain
_____
the Station Licenses but if such efforts are unsuccessful,
then next, to permit Buyer to sell the Station Licenses to a
____
third party, and finally, if such efforts are unsuccessful,
to reconvey the Station Licenses to Seller. The procedures
set forth in Section 2 for reconveyance of the Station Assets
shall apply only if Seller is unable to retain the Station
Assets (including the Station Licenses) or convey such
Station Assets to a third party.
(b) The parties agree to prepare and execute
any and all required applications, documents and instruments
for filing with the FCC in order to enable the parties to
comply with either the FCC Reversal or the terms of this
Agreement, and any other applications, agreements or
instruments necessary to implement the provisions of this
Agreement, including, without limitation, such applications
as may be required under the HSRA.
7
<PAGE>
</PAGE>
5. Expenses.
Except as otherwise provided herein, all
expenses involved in the implementation of this Agreement in
the event of a Buyer's FCC Reversal shall be borne by Buyer,
treated as an ordinary operating expense of the Station for
purposes of calculating Available Cash Flow, or treated as an
expense of sale of the Station Assets, as appropriate, except
that if Seller elects to retain the Station Assets, Seller
shall be responsible for all expenses incurred by it in
connection with such transaction. Except as otherwise
provided herein, all expenses involved in the implementation
of this Agreement in the event of a Seller's FCC Reversal
shall be borne by Seller.
6. Termination.
This Agreement shall terminate on the date
that the FCC Order becomes a Final Order.
8. Severability. If any term, covenant,
condition or provision of this Agreement, or the application
thereof to any party or circumstance shall to any extent be
held invalid or unenforceable by an administrative order, the
remainder of this Agreement or the application of such term
or provision to parties or circumstances other than those as
to which it is held invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or
provision of this Agreement shall be valid and be enforced to
the fullest extent permitted by law, provided that such
invalid or unenforceable provision shall be curtailed,
limited or eliminated only to the extent necessary to remove
such invalidity or unenforceability with respect to the
applicable law as it shall then be applied.
7. Notices.
All notices, requests, demands or other
communications relating to this Agreement shall be in writing
and shall be given in accordance with Section 21.7 of the
Purchase Agreement.
8. Choice of Law.
This Agreement shall be governed by the laws
of the State of Michigan, without regard to its principles of
conflicts of law.
8
<PAGE>
</PAGE>
9. Counterparts.
This Agreement may be signed in multiple
counterparts, which together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed on the day and year first
above written.
FRITZ BROADCASTING, INC.
By:
__________________________________
Title:
_______________________________
9
<PAGE>
</PAGE>
APPROVING SHAREHOLDERS:
______________________________________
Charles D. Fritz
______________________________________
Jock T. Fritz
______________________________________
Jack W. Fritz
INFINITY BROADCASTING CORPORATION
OF DETROIT
By:
_________________________________
Title:
______________________________
10
<PAGE>
</PAGE>
ANNEX A TO
REVERSAL AGREEMENT
__________________
COVENANTS OF SELLER
___________________
1. Interim Operation. Between the date of this
Agreement and the payment of the Buyer's Reversal Purchase
Price in full, except as expressly permitted by this
Agreement or with the prior written consent of Buyer:
(a) Seller shall conduct the business and operation
of the Station solely in the ordinary and normal course
of business consistent with past operations by Buyer,
with the intent of preserving the ongoing operations and
assets of the Station;
(b) Seller shall not sell, assign, lease or
otherwise transfer or dispose of any of the Station
Assets, except for assets consumed or disposed of in the
ordinary course of business, where no longer used or
useful in the business or operation of the Station, in
which event the same shall be replaced with assets of
equal or greater value and utility, and the Station's
inventories of spare parts and expendable supplies shall
be maintained at levels consistent with past practices;
(c) Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature
whatsoever upon the Station Assets, except for those in
existence on the date of this Agreement;
(d) Seller shall operate the Station in accordance
with the FCC's rules and regulations and the Station
Licenses and with all other applicable laws,
regulations, rules and orders, and shall not cause or
permit by any act, or failure to act, any of the Station
Licenses to expire, be surrendered, adversely modified,
or otherwise terminated, or fail to prosecute with due
diligence any pending application to the FCC;
(e) Seller shall not waive any material right under
any Contract or relating to the Station or the Station
Assets;
(f) Seller shall not enter into or renew (i) any
Contract that involves payment by or to Seller of Five
Thousand Dollars ($5,000) or more, other than an
agreement for the sale of advertising time, (ii) any
contract having a duration of three (3) months or more,
or (iii) any agreement for the sale of advertising time
<PAGE>
</PAGE>
to be aired on the Station after the Closing Date which
specifies volume discounts or special rates inconsistent
with past practices;
(g) Seller shall timely make all payments required
to be paid under any Contract when due and otherwise pay
all liabilities and satisfy all obligations when such
liabilities and obligations become due;
(h) Seller shall not increase or agree to increase
the compensation, bonuses or other benefits for
employees of the Station, except as may be required
under Contracts assumed by Seller pursuant to Section
2(a) of the Agreement or consistent with Buyer's past
employee compensation and promotion practices;
(i) Seller shall, in accordance with Buyer's past
personnel practices and policies, use its best efforts
to maintain the employment at the Station and to renew
the existing employment contracts of the employees
identified by Buyer on a schedule to be provided at the
FCC Reversal Closing;
(j) Seller shall use its best efforts to preserve
the operations, organization and reputation of the
Station intact, to preserve the goodwill and business of
the Station's advertisers, suppliers, and others having
business relations with the Station, and to continue to
conduct financial operations of the Station, including
their credit and collection policies, with no less
effort, as in the prior conduct of the business of the
Station;
(k) Seller shall maintain monthly cash advertising
and promotional expenditures for the Station at levels
that are consistent with Buyer's past practices;
(l) Seller shall make capital improvements for the
Station consistent with Buyer's past practices;
(m) Seller shall maintain insurance policies on the
Station and the Station Assets comparable to the
insurance maintained by Buyer prior to the FCC Reversal
Closing; and
(n) Seller shall maintain its books and records in
accordance with GAAP.
2
<PAGE>
</PAGE>
2. Access to Station. Between the date of this
Agreement and payment of the Buyer's Reversal Purchase Price
in full, Seller shall give Buyer and Buyer's counsel,
accountants, engineers and other representatives, reasonable
access during normal business hours to all of Seller's
properties, records and employees relating to the Station,
including the financial data necessary for Buyer's
accountants to prepare audited statements for the Station,
and shall furnish Buyer with all information related to the
Station that Buyer reasonably requests. The rights of Buyer
under this Section shall not be exercised in such a manner as
to interfere unreasonably with the business of the Station.
3. Financial Statements. Within fifteen (15) days of
the end of each Broadcast Month until payment of the Buyer's
Reversal Purchase Price in full, Seller shall deliver to
Buyer unaudited statements of revenue and expenses for the
Station for the Broadcast Month then ended, along with a
balance sheet as of the end of such Broadcast Month. Seller
shall furnish to Buyer any and all other information
customarily prepared by Seller concerning the financial
condition of the Station that Buyer may request.
4. Notification.
(a) Seller shall notify Buyer of any litigation,
arbitration or administrative proceeding pending or, to its
knowledge, threatened against the Station or Seller with
respect to the Station.
(b) Between the date of this Agreement and payment
of the Buyer's Reversal Purchase Price in full, Seller shall
notify Buyer if the regular broadcast transmission of the
Station from its main broadcasting antenna at full authorized
effective radiated power is interrupted or impaired for a
period of more than three (3) consecutive hours or for an
aggregate of six (6) hours in any continuous two (2) day
period or twelve (12) hours in any single thirty (30) day
period.
(c) Between the date of this Agreement and payment
of the Buyer's Reversal Purchase Price in full, Seller shall
keep Buyer reasonably informed of all material operational
matters and business developments with respect to the
Station.
5. No Inconsistent Action. Seller shall not take any action
which is materially inconsistent with its obligations under this
3
<PAGE>
</PAGE>
Agreement or that would hinder or delay the consummation of the
transactions contemplated by this Agreement.
4
<PAGE>
</PAGE>
Omitted Schedules to the
Asset Purchase Agreement,
Dated as of March 8, 1994, by and
between Fritz Broadcasting, Inc.,
Infinity Broadcasting Corporation of Detroit
and Infinity Broadcasting Corporation
___________________________________________
1.2(a) Station Licenses
1.2(b) Real Property
1.2(c) Tangible Personal Property
1.2(d) Contracts
1.2(f) Intellectual Property
1.3(d) Excluded Assets
1.3(f) Excluded Employee Plans and Arrangements
6.3 Buyer's FCC Exceptions
6.4 Buyer's Required Consents
6.5 Buyer's Litigation
7.3 Required Consents
7.7(b) Defaults Under Contracts
7.8 Employee List and Compensation
7.10 Pending Claims and Litigation
7.12 Interests in Clients, Suppliers, etc.
7.13(a) Financial Statements
7.13(b) Broadcast Cash Flow
7.13(c) Seller's 1994 Month-By-Month Budget
7.14 Insurance Policies
7.18 UCC Financing Statements
10.5 Excluded Employees
In lieu of filing these schedules to the Asset Purchase
Agreement, Infinity Broadcasting Corporation agrees to furnish
supplementally a copy of any such omitted schedule to the
Securities and Exchange Commission upon request.
</PAGE>
<PAGE>
INFINITY BROADCASTING CORPORATION (THE "COMPANY") IS A
CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF
DELAWARE AND THE WARRANTS REPRESENTED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR
ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND IS
OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER, THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND THAT CERTAIN AMENDED AND RESTATED STOCK-
HOLDERS' AGREEMENT AMONG THE COMPANY AND CERTAIN STOCK-
HOLDERS OF THE COMPANY, DATED AS OF FEBRUARY 5, 1992. A
COPY OF SUCH STOCKHOLDERS' AGREEMENT IS ON FILE AND AVAIL-
ABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE COMPANY.
EXERCISABLE AT ANY TIME SUBJECT TO THE PROVISIONS HEREOF
NO. 6 INFINITY BROADCASTING CORPORATION
WARRANT CERTIFICATE
Warrant Certificate for 769,465 Warrants
to Purchase 769,465 shares of Class C Common Stock of
Infinity Broadcasting Corporation (the "Company")
This Warrant Certificate certifies that, for value
received, Shearson Lehman Hutton Offshore Investment
Partnership L.P. (the "Holder"), is the owner of a warrant,
which entitles the Holder to purchase at any time from and
after the date hereof and without expiration up to an
aggregate of 769,465 shares of the Company's Class C Common
Stock, par value $.002 per share (the "Class C Common
Stock") at the purchase price stated in Section 2.3 hereof
(the "Exercise Price"). The number of shares purchasable
upon exercise of the Warrants and the Exercise Price shall
be subject to adjustment from time to time as herein
provided. In this Warrant Certificate, the securities
issuable upon exercise of the Warrants are referred to as
the "Warrant Shares".
The Warrants are subject to the following terms,
conditions and provisions:
SECTION 1. Registration; Transferability;
Exchange of Warrant Certificate.
1.1 Registration. The Company shall number and
register the Warrants in a register (the "Warrant Register")
maintained at the office of the Company (the "Office"). The
</PAGE>
<PAGE>
Company shall be entitled to treat the Holder of the
Warrants as the owner in fact thereof for all purposes and
shall not be bound to recognize any equitable or other claim
to or interest in such Warrants on the part of any other
person. If at any time there are more than 50 holders of
warrants issued pursuant to the Securities Exchange
Agreement, dated as of January 28, 1992, among the Company
and the Lehman Investors, as defined therein (the Securities
Exchange Agreement"), the Company shall appoint a warrant
agent to maintain, in New York City, New York, the Warrant
Register (including the recordation of transfers and
exercises of Warrants). Such a warrant agent shall be a
bank or trust company in good standing, incorporated under
the laws of the United States of America or any State
thereof or the District of Columbia and having at the time
of its appointment as warrant agent a combined capital and
surplus of at least $10,000,000. Upon such appointment, the
warrant agent and the Company may enter into a warrant
agency agreement upon customary terms; provided that, other
________
than with respect to the identity of the entity maintaining
the Warrant Register (including the recordation of transfers
and exercises of Warrants), such warrant agency agreement
shall in no way amend or modify or conflict with the
provisions of this Warrant Certificate.
1.2 Transfer. Subject to compliance with the
restrictions on transfer set forth in this Warrant Cer-
tificate, the Warrants shall be transferable only on the
Warrant Register upon delivery thereof by the Holder or by
his duly authorized attorney or representative or accom-
panied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an
attorney, the original power of attorney, duly approved, or
a copy thereof, duly certified shall be deposited and shall
remain with the Company. In case of transfers by executors,
administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and to remain
with the Company in its discretion. No transfer of the
Warrants or any interest therein other than in compliance
with this Section 1.2 shall be made or recorded in the
Warrant Register, and any such purported transfer shall be
void and of no effect.
2
</PAGE>
<PAGE>
SECTION 2. Term of Warrant. Exercise of War-
rants.
2.1 Term of Warrant. Subject to the terms of
this Warrant Certificate, the Holder shall have the right,
which may be exercised at any time from the date hereof
without expiration to purchase from the Company and to cause
the Company to issue and sell to the Holder of the Warrants
up to an aggregate of 769,465 fully paid and nonassessable
Warrant Shares or such other number of Warrant Shares which
the Holder may at the time be entitled to purchase in
accordance with this Warrant Certificate.
2.2 Exercise of Warrants. Subject to the terms
of this Warrant Certificate, the Warrants evidenced by this
Warrant Certificate may be exercised in whole or in part,
upon surrender to the Company, at its Office, of this
Warrant Certificate, with a Purchase Form substantially in
the form attached hereto duly completed and signed, and upon
payment to the Company of the Exercise Price. Payment of
the aggregate Exercise Price shall be in cash or by check
payable to the order of the Company.
Upon the surrender of this Warrant Certificate,
with the Purchase Form duly executed, and payment of the
Exercise Price as aforesaid, the Company shall issue and
deliver to or upon the written order of the Holder and in
such name or names as the Holder may designate a certificate
or certificates for such number of Warrant Shares so
purchased. Such certificate or certificates shall be dated
and deemed to have been issued as of the date of the
surrender of this Warrant Certificate and payment of the
Exercise Price, as aforesaid. The right of purchase
represented by this Warrant Certificate shall be exer-
cisable, at the election of the Holder, in full at any time
or in part from time to time. In the event the Holder shall
exercise fewer than all the Warrants evidenced hereby, a new
Warrant Certificate shall be issued evidencing the remaining
unexercised Warrants.
2.3 Exercise Price. The price per share at which
each Warrant Share shall be purchased upon exercise of each
Warrant shall be $0.00267, subject to adjustment pursuant to
Section 6. The aggregate Exercise Price for all Warrant
Shares subject to this Warrant Certificate shall be rounded
to the next higher $0.01.
3
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<PAGE>
2.4 Restriction on Exercise. (a) Notwithstand-
ing anything contained herein to the contrary, the Warrants
may not be exercised in full or in part as long as the
Company directly or indirectly holds any right, title or
interest in any FCC License, provided, however, that this
________ _______
Warrant may be exercised in full or in part when the Company
is holding a FCC License if such exercise either
(i) complies with the Communications Act of 1934, as
_
amended, including, without limitation, the alien ownership
and control provisions contained therein and the rules,
regulations and policies of the Federal Communications
Commission (the "Communications Act and Rules") or (ii) is
__
exercised in connection with a sale to a person or entity or
persons or entities whose ownership of Warrant Shares would
not violate the Communications Act and Rules. For purposes
of this Warrant Certificate, the term "FCC License" shall
mean any license, permit or other authorization issued by
the FCC to the Company or any of its subsidiaries necessary
to conduct its business or operations. If requested by the
Company, the Holder will consider in good faith exercising
the Warrants if such exercise would facilitate a transaction
contemplated by the Company and would comply with this Sec-
tion 2.4; provided that for so long as the Lehman Investors
________
(as defined in the Securities Exchange Agreement) continue
to hold warrants issued pursuant to the Securities Exchange
Agreement, the Lehman Investors shall only be required to
consider in good faith exercising such warrants if all (but
not less than all) of the Lehman Investors are permitted to
exercise their warrants issued pursuant to the Securities
Exchange Agreement in compliance with this Section 2.4.
(b) Notwithstanding anything contained herein to
the contrary, the Warrants may not be exercised in full or
in part unless the Holder has made any and all filings which
are required in connection with such exercise under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder, and all
applicable waiting periods under such Act with respect to
such filing shall have expired or been terminated.
SECTION 3. Payment of Taxes. The Company
covenants and agrees that it will pay when due and payable
all documentary, stamp and other similar taxes, if any,
which may be payable in respect of the issuance or delivery
of the Warrants or of the Warrant Shares purchasable and
issuable upon the exercise of the Warrants.
4
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<PAGE>
SECTION 4. Mutilated or Missing Warrants. In the
event this Warrant Certificate shall be mutilated, lost,
stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and in
substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and
representing an equivalent right or interest, but only upon,
in the event of a lost, stolen or destroyed certificate,
receipt of evidence satisfactory to the Company of such
loss, theft or destruction. In making application for such
a substitute Warrant Certificate, the Holder shall also
comply with such other reasonable regulations and pay such
other reasonable charges as the Company may prescribe.
SECTION 5. Reservation and Availability of
Warrant Shares; Purchase and Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The
Company shall at all times reserve and keep available free
from preemptive rights, out of the aggregate of its autho-
rized but unissued shares of Common Stock, for the purpose
of enabling it to satisfy any obligations to issue the
Warrant Shares upon exercise of the Warrants, the full
number of Warrant Shares deliverable upon the exercise of
all the Warrants evidenced by this Warrant Certificate. The
Company or, if appointed, the transfer agent for the Common
Stock and every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of
any of the rights of purchase aforesaid (each, a "Transfer
Agent") will be irrevocably authorized and directed at all
times to reserve such number of authorized shares of Class C
Common Stock, as shall be required for such purpose. The
Company will keep a copy of this Warrant Certificate on file
with each Transfer Agent. The Company will furnish such
Transfer Agent a copy of all notices of adjustments and
certificates related thereto which are transmitted to the
Holder pursuant to Section 6 hereof.
(b) The Company covenants that all Warrant Shares
issuable upon exercise of the Warrants will, upon issuance,
be fully paid, nonassessable and free from preemptive rights
and free from all taxes, liens, charges and security
interests with respect to the issuance thereof (other than
any liens, charges and security interests to which the
Warrants are themselves subject).
5
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<PAGE>
(c) Before taking any action which would cause an
adjustment pursuant to Section 6 reducing the Exercise
Price, the Company will take any and all corporate action
which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
5.2 Warrant Shares Record Date. Each person in
whose name any stock certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the
holder of record of the Warrant Shares represented thereby
on, and such stock certificate shall be dated the date upon
which this Warrant Certificate was duly surrendered and
payment of the Exercise Price (and any applicable transfer
taxes) was made.
5.3 Cancellation of Warrant. Upon surrender of
the Warrant Certificate for exchange, substitution, transfer
or exercise, it shall be cancelled by the Company and
retired.
SECTION 6. Adjustment of Number of Warrant Shares
and Exercise Price. The number of securities purchasable
upon the exercise of the Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter described.
6.1 Mandatory Adjustments. The number of
securities purchasable upon the exercise of the Warrant and
the Exercise Price shall be subject to adjustment as
follows:
(a) In case the Company shall (i) declare or pay
_
a dividend on any class of its outstanding common stock
in shares of common stock or make a distribution to
holders of its outstanding common stock in shares of
common stock, (ii) subdivide any class of its
__
outstanding common stock into a greater number of
shares of common stock, (iii) combine any class of its
___
outstanding common stock into a smaller number of
shares of common stock or (iv) issue by reclassifica-
__
tion of any class of its shares of common stock other
securities of the Company (including any such reclas-
sification in connection with a consolidation, merger
or other business combination in which the Company is
the surviving corporation), the number and kind of
Warrant Shares purchasable and issuable upon exercise
6
</PAGE>
<PAGE>
of the Warrants shall be adjusted so that the Holder,
upon exercise thereof, shall be entitled to receive the
number and kind of Warrant Shares and other securities
of the Company that the Holder would have owned or have
been entitled to receive after the happening of any of
the events described above had the Warrants been
exercised and the relevant Warrant Shares issued in the
name of the Holder immediately prior to the happening
of such event or, if applicable, any record date with
respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective on the date of the
dividend payment, subdivision, combination or issuance
retroactive to the record date with respect thereto, if
any, for such event. Such adjustment shall be made
successively whenever such an issuance is made.
(b) In case the Company shall distribute to all
holders of its outstanding common stock evidences of
indebtedness of the Company, cash (including cash
dividends payable out of consolidated earnings or
earned surplus) 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 6.1(a) above or Section 6.1(c) below)
(any such evidences of indebtedness, assets or
securities, the "assets or securities"), then, in each
case, the Exercise Price shall be adjusted by
subtracting from the Exercise Price then in effect the
value (as determined in accordance with Section 6.2(b))
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 Warrant Shares 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 Exercise 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 Warrants and
the Warrant Shares had been issued in the name of the
Holder immediately prior to the record date for such
distribution. Any adjustment required by this Sec-
tion 6.1(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.
7
</PAGE>
<PAGE>
(c) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such
adjustment would require an increase or decrease of at
least one tenth of one percent (.10%) in the number of
Warrant Shares purchasable upon the exercise of each
Warrant; provided, however, that any adjustments which
________ _______
by reason of this Section 6.1(d) are not required to be
made shall be carried forward and taken into account in
any subsequent adjustment. All calculations shall be
made to the nearest one-thousandth of a share. No
adjustment need be made for a change in the par value
of the Warrant Shares.
(d) Whenever the number of Warrant Shares is
adjusted, as herein provided, the Exercise Price
payable upon exercise of each Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to
such adjustment by a fraction of which the numerator
shall be the number of Warrant Shares purchasable upon
the exercise of each Warrant immediately prior to such
adjustment and of which the denominator shall be the
number of Warrant Shares purchasable immediately
thereafter.
6.2 Notice of Adjustment. (a) No action which
results in any adjustment of the number of Warrant Shares
purchasable upon the exercise of the Warrants or the
Exercise Price of such Warrants, as herein provided, shall
be undertaken by the Company unless the Company shall give
to the Holder the greater of 10 business days notice and the
number of days notice required to be given to stockholders
with respect to such action or such adjustment prior to
effecting such action and a certificate of the Chief
Financial Officer of the Company, setting forth in
reasonable detail (i) the number of Warrant Shares pur-
_
chasable upon the exercise of the Warrants and the Exercise
Price of the Warrants after such adjustment, (ii) a brief
__
statement of the facts requiring such adjustment and
(iii) the computation by which such adjustment was made.
___
(b) If any adjustment is required to be made
pursuant to Section 6.1(b) (unless the proviso to the first
_______
sentence of that Section is applicable to the action), the
Company and the Holder shall negotiate in good faith toward
agreeing upon the necessary adjustment. If no agreement can
be reached within 14 days from the date of receipt by the
Holder of such notice, the Company and the holders of a
majority of the warrants issued pursuant to the Stock
8
</PAGE>
<PAGE>
Purchase Agreement and the Securities Purchase Agreement
shall appoint within 21 days from the date of such receipt a
mutually acceptable independent investment banking firm to
determine the necessary adjustment. Such firm shall make
the necessary determination which shall be binding absent
actual fraud or manifest error. One-half of the fees of
such firm for making such determination and any related
reimbursable expenses shall be paid by each of such holders
and the Company.
6.3 Preservation of Purchase Rights Upon Merger,
Consolidation, etc. (a) In the event of any merger,
consolidation or other acquisition or business combination
in which the Company is not the surviving corporation or in
which all of the outstanding common stock of the Company is
converted into, acquired or exchanged for securities, cash
or property or in the event of the sale or other disposition
of all or substantially all the assets of the Company, the
successor, parent or purchasing person, as the case may be,
shall deliver to the Holder an undertaking that the Holder
shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase
upon exercise of each Warrant the kind and amount of
securities, cash and property which the Holder would have
owned or have been entitled to receive upon the happening of
such merger, consolidation, acquisition, business
combination or sale had each Warrant been exercised and the
relevant Warrant Shares issued in the name of the Holder
immediately prior to the relevant record date, if any, or
the occurrence of such merger, consolidation, acquisition,
business combination or sale. Such undertaking shall
provide for adjustments, which shall be as nearly equivalent
as may be practicable to the adjustments provided for in
this Section 6. The Company will not effect any transaction
of the type referred to in this Section 6.4 unless the suc-
cessor or purchasing person delivers such undertaking. The
provisions of this Section 6.4 shall similarly apply to
successive mergers, consolidations, business combinations
and sales or transfers.
(b) Upon any liquidation, dissolution or winding
up of the Company, the Holder shall receive such cash or
property (less the Exercise Price) which the Holder would
have been entitled to receive upon the happening of such
liquidation, dissolution or winding up had the Warrants been
exercised and the Warrant Shares issued immediately prior to
the occurrence of such liquidation, dissolution or winding
up.
9
</PAGE>
<PAGE>
6.4 Statement on the Warrant. Irrespective of
any adjustments in the number or kind of securities pur-
chasable upon the exercise of the Warrant or the Exercise
Price, any Warrant Certificate theretofore or thereafter
issued may continue to express the same price and number and
any kind of shares as are stated in this Warrant
Certificate.
SECTION 7. Fractional Interests. The Company
shall not be required to issue fractional securities on the
exercise of Warrants. If any fraction of a security would
be issuable on the exercise of Warrants, the Company shall
pay to the Holder of such Warrants an amount in cash equal
to the fair market value of such fraction.
SECTION 8. Registration. The Holder shall, from
time to time, have the rights, if any, with respect to
registration of Warrant Shares as are set forth in the
Stockholders' Agreement among the Company and certain
stockholders of the Company, dated as of September 10, 1990.
SECTION 9. No Rights as a Stockholder; Notices to
Holder. Nothing contained in this Warrant Certificate shall
be construed as conferring upon the Holder the right to vote
or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders of the Company for
the election of the directors of the Company or any other
matter, or any rights whatsoever as a stockholder of the
Company. If, however, at any time prior to the expiration
of the Warrant and prior to its exercise, any of the
following events shall occur:
(a) the Company shall declare any dividend
payable in cash or in any securities upon its shares of
common stock or make any distribution to the holders of
its shares of common stock;
(b) the Company shall offer to all holders of its
shares of common stock any additional shares of common
stock or securities convertible into or exchangeable
for shares of common stock or any right to subscribe
for or purchase any thereof;
(c) a dissolution, liquidation or winding up of
the Company (other than in connection with a con-
solidation, merger, sale, transfer or lease of all or
substantially all of its property, assets and business
as an entirety) shall be proposed; or
10
</PAGE>
<PAGE>
(d) any consolidation or merger to which the
Company is a party and for which approval of the
holders of common stock is required, or of the con-
veyance or transfer of all or substantially all assets
of the Company as, or substantially as, an entirety, or
of any reclassification or change of outstanding shares
of Common Stock issuable upon exercise of the Warrant
(other than a change in par value to no par value, or
from no par value to par value) or as a result of a
subdivision or combination,
then in any one or more of said events, the Company shall
give to the Holder the greater of 10 business days' written
notice and the number of days written notice required to be
given to stockholders with respect to such action prior to
the applicable record date hereinafter specified, stating
(i) the date as of which the holders of record of shares of
_
common stock to be entitled to receive any such dividends,
rights or warrants are to be determined or (ii) the date on
__
which any such dissolution, liquidation, winding up,
consolidation, merger, conveyance or transfer is expected to
become effective and the date as of which it is expected
that holders of record of shares of common stock shall be
entitled to exchange their shares of common stock for
securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation, or winding up. Failure
to mail or receive such notice or any defect therein or in
the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution
or subscription rights, or such proposed dissolution,
liquidation, winding up, consolidation, merger, conveyance,
transfer or reclassification.
SECTION 10. Identity of Transfer Agent. Forth-
with upon the appointment of any Transfer Agent for the
common stock, or any other shares of the Company's capital
stock issuable upon the exercise of the Warrant, the Company
shall promptly notify the Holder of the name and address of
such Transfer Agent.
SECTION 11. Notices. Any notice, except as
provided in Section 9 of this Warrant Certificate, or demand
authorized by this Warrant Certificate to be given by the
Holder to the Company, shall be in writing and shall be
delivered in person or by facsimile transmission, or mailed
by overnight courier, or otherwise delivered, to the
Company, at 600 Madison Avenue, New York, New York 10022,
11
</PAGE>
<PAGE>
attention of Chief Executive Officer, with a copy to Richard
D. Bohm, Esq., Debevoise & Plimpton, 875 Third Avenue, New
York, New York 10022. The Company may change the address to
which notices to it are to be delivered or mailed hereunder
by notice to the Holder.
Any notice pursuant to this Warrant Certificate by
the Company to the Holder shall be in writing and shall be
mailed by overnight courier or otherwise delivered, to the
Holder at c/o Shearson Lehman Hutton Holdings Inc., World
Financial Center, American Express Tower, 200 Vesey Street,
New York, New York 10285, attention of James L. Singleton,
with a copy to David B. Chapnick, Esq., Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017.
Notices delivered personally shall be effective at
the time delivered by hand, notices sent by mail shall be
effective when received, notices sent by facsimile
transmission shall be effective when confirmed and notices
sent by courier guaranteeing next day delivery shall be
effective on the next business day after timely delivery to
the courier.
SECTION 12. Supplements and Amendments. The
Warrant Certificate may not be supplemented, amended or
otherwise modified without the prior written consent of the
Holder.
SECTION 13. Successors. All the covenants and
provisions of this Warrant Certificate by or for the benefit
of the Company shall bind and inure to the benefit of its
respective successors and assigns hereunder.
SECTION 14. Applicable Law. This Warrant
Certificate and the Warrants evidenced hereby shall be
governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of
conflict of laws. The Company and the Holder agree to
submit to the non-exclusive jurisdiction of the courts of
the State of New York in any action or proceeding arising
out of or relating to this Warrant Certificate and the
Warrants evidenced hereby.
SECTION 15. Benefits of this Warrant Certificate.
Nothing in this Warrant Certificate shall be construed to
give to any person or entity other than the Company and the
Holder any legal or equitable right, remedy or claim under
this Warrant Certificate; and this Warrant Certificate shall
12
</PAGE>
<PAGE>
be for the sole and exclusive benefit of this Company and
the Holder.
SECTION 16. Captions. The captions of the
Sections and paragraphs of this Warrant Certificate have
been inserted for convenience only and shall have no
substantive effect.
IN WITNESS WHEREOF, the Company has caused this
Warrant Certificate to be duly executed this 14th day of
December, 1993.
INFINITY BROADCASTING CORPORATION
By: /s/ Mel Karmazin
_____________________________
Mel Karmazin
President and Chief Executive
Officer
Attest:
By: /s/ Farid Suleman
___________________
Farid Suleman
Assistant Secretary
13
</PAGE>
<PAGE>
PURCHASE FORM
(To be executed upon exercise of Warrants)
The undersigned hereby irrevocably elects to
exercise the right, represented by the attached Warrant
Certificate (the "Certificate"), to purchase ____________
shares of Class C Common Stock as provided for in the
Certificate and herewith tenders in payment for such shares
of Class C Common Stock payment of the purchase price in
full in the form of cash or a check payable to the order of
Infinity Broadcasting Corporation in the amount of $_______,
all in accordance with the terms of the Certificate. The
undersigned requests that a certificate for such shares of
Common Stock be registered in the name of _______________
whose address is _______________ and that such certificate
shall be delivered to _______________ at the following
address: ______________. If said number of shares of Class
C Common Stock is less than all of the shares of Class C
Common Stock purchasable under the Certificate, the
undersigned requests that a new Warrant Certificate
representing the right to purchase the remaining balance of
the shares of Class C Common Stock be registered in the name
of _______________ whose address is ____________________ and
that such certificate shall be delivered to _______________
whose address is ____________________.
Dated:
[HOLDER]
By:__________________________
Name:
Title:
</PAGE>
<PAGE>
ASSIGNMENT
(To be executed only upon assignment
of the Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________ (Name and Address
of Assignee Must Be Printed or Typewritten) the within
Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________, Attorney, to transfer said Warrant
Certificate on the books of the within-named Company, with
full power of substitution in the premises.
Dated:
______________________________
Signature of Registered Holder
</PAGE>
<PAGE>
INFINITY BROADCASTING CORPORATION (THE "COMPANY") IS A
CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF
DELAWARE AND THE WARRANTS REPRESENTED BY THIS CERTIFICATE
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR
ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND IS
OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE SECURITIES
ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER, THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND THAT CERTAIN AMENDED AND RESTATED STOCK-
HOLDERS' AGREEMENT AMONG THE COMPANY AND CERTAIN STOCK-
HOLDERS OF THE COMPANY, DATED AS OF FEBRUARY 5, 1992. A
COPY OF SUCH STOCKHOLDERS' AGREEMENT IS ON FILE AND AVAIL-
ABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE COMPANY.
EXERCISABLE AT ANY TIME SUBJECT TO THE PROVISIONS HEREOF
NO. 7 INFINITY BROADCASTING CORPORATION
WARRANT CERTIFICATE
Warrant Certificate for 2,317,522 Warrants
to Purchase 2,317,522 shares of Class C Common Stock of
Infinity Broadcasting Corporation (the "Company")
This Warrant Certificate certifies that, for value
received, Shearson Lehman Hutton Offshore Investment
Partnership Japan L.P. (the "Holder"), is the owner of a
warrant, which entitles the Holder to purchase at any time
from and after the date hereof and without expiration up to
an aggregate of 2,317,522 shares of the Company's Class C
Common Stock, par value $.002 per share (the "Class C Common
Stock") at the purchase price stated in Section 2.3 hereof
(the "Exercise Price"). The number of shares purchasable
upon exercise of the Warrants and the Exercise Price shall
be subject to adjustment from time to time as herein
provided. In this Warrant Certificate, the securities
issuable upon exercise of the Warrants are referred to as
the "Warrant Shares".
The Warrants are subject to the following terms,
conditions and provisions:
SECTION 1. Registration; Transferability;
Exchange of Warrant Certificate.
1.1 Registration. The Company shall number and
register the Warrants in a register (the "Warrant Register")
maintained at the office of the Company (the "Office"). The
</PAGE>
<PAGE>
Company shall be entitled to treat the Holder of the
Warrants as the owner in fact thereof for all purposes and
shall not be bound to recognize any equitable or other claim
to or interest in such Warrants on the part of any other
person. If at any time there are more than 50 holders of
warrants issued pursuant to the Securities Exchange
Agreement, dated as of January 28, 1992, among the Company
and the Lehman Investors, as defined therein (the Securities
Exchange Agreement"), the Company shall appoint a warrant
agent to maintain, in New York City, New York, the Warrant
Register (including the recordation of transfers and
exercises of Warrants). Such a warrant agent shall be a
bank or trust company in good standing, incorporated under
the laws of the United States of America or any State
thereof or the District of Columbia and having at the time
of its appointment as warrant agent a combined capital and
surplus of at least $10,000,000. Upon such appointment, the
warrant agent and the Company may enter into a warrant
agency agreement upon customary terms; provided that, other
________
than with respect to the identity of the entity maintaining
the Warrant Register (including the recordation of transfers
and exercises of Warrants), such warrant agency agreement
shall in no way amend or modify or conflict with the
provisions of this Warrant Certificate.
1.2 Transfer. Subject to compliance with the
restrictions on transfer set forth in this Warrant Cer-
tificate, the Warrants shall be transferable only on the
Warrant Register upon delivery thereof by the Holder or by
his duly authorized attorney or representative or accom-
panied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an
attorney, the original power of attorney, duly approved, or
a copy thereof, duly certified shall be deposited and shall
remain with the Company. In case of transfers by executors,
administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and to remain
with the Company in its discretion. No transfer of the
Warrants or any interest therein other than in compliance
with this Section 1.2 shall be made or recorded in the
Warrant Register, and any such purported transfer shall be
void and of no effect.
2
</PAGE>
<PAGE>
SECTION 2. Term of Warrant. Exercise of War-
rants.
2.1 Term of Warrant. Subject to the terms of
this Warrant Certificate, the Holder shall have the right,
which may be exercised at any time from the date hereof
without expiration to purchase from the Company and to cause
the Company to issue and sell to the Holder of the Warrants
up to an aggregate of 2,317,522 fully paid and nonassessable
Warrant Shares or such other number of Warrant Shares which
the Holder may at the time be entitled to purchase in
accordance with this Warrant Certificate.
2.2 Exercise of Warrants. Subject to the terms
of this Warrant Certificate, the Warrants evidenced by this
Warrant Certificate may be exercised in whole or in part,
upon surrender to the Company, at its Office, of this
Warrant Certificate, with a Purchase Form substantially in
the form attached hereto duly completed and signed, and upon
payment to the Company of the Exercise Price. Payment of
the aggregate Exercise Price shall be in cash or by check
payable to the order of the Company.
Upon the surrender of this Warrant Certificate,
with the Purchase Form duly executed, and payment of the
Exercise Price as aforesaid, the Company shall issue and
deliver to or upon the written order of the Holder and in
such name or names as the Holder may designate a certificate
or certificates for such number of Warrant Shares so
purchased. Such certificate or certificates shall be dated
and deemed to have been issued as of the date of the
surrender of this Warrant Certificate and payment of the
Exercise Price, as aforesaid. The right of purchase
represented by this Warrant Certificate shall be exer-
cisable, at the election of the Holder, in full at any time
or in part from time to time. In the event the Holder shall
exercise fewer than all the Warrants evidenced hereby, a new
Warrant Certificate shall be issued evidencing the remaining
unexercised Warrants.
2.3 Exercise Price. The price per share at which
each Warrant Share shall be purchased upon exercise of each
Warrant shall be $0.00267, subject to adjustment pursuant to
Section 6. The aggregate Exercise Price for all Warrant
Shares subject to this Warrant Certificate shall be rounded
to the next higher $0.01.
3
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<PAGE>
2.4 Restriction on Exercise. (a) Notwithstand-
ing anything contained herein to the contrary, the Warrants
may not be exercised in full or in part as long as the
Company directly or indirectly holds any right, title or
interest in any FCC License, provided, however, that this
________ _______
Warrant may be exercised in full or in part when the Company
is holding a FCC License if such exercise either
(i) complies with the Communications Act of 1934, as
_
amended, including, without limitation, the alien ownership
and control provisions contained therein and the rules,
regulations and policies of the Federal Communications
Commission (the "Communications Act and Rules") or (ii) is
__
exercised in connection with a sale to a person or entity or
persons or entities whose ownership of Warrant Shares would
not violate the Communications Act and Rules. For purposes
of this Warrant Certificate, the term "FCC License" shall
mean any license, permit or other authorization issued by
the FCC to the Company or any of its subsidiaries necessary
to conduct its business or operations. If requested by the
Company, the Holder will consider in good faith exercising
the Warrants if such exercise would facilitate a transaction
contemplated by the Company and would comply with this Sec-
tion 2.4; provided that for so long as the Lehman Investors
________
(as defined in the Securities Exchange Agreement) continue
to hold warrants issued pursuant to the Securities Exchange
Agreement, the Lehman Investors shall only be required to
consider in good faith exercising such warrants if all (but
not less than all) of the Lehman Investors are permitted to
exercise their warrants issued pursuant to the Securities
Exchange Agreement in compliance with this Section 2.4.
(b) Notwithstanding anything contained herein to
the contrary, the Warrants may not be exercised in full or
in part unless the Holder has made any and all filings which
are required in connection with such exercise under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder, and all
applicable waiting periods under such Act with respect to
such filing shall have expired or been terminated.
SECTION 3. Payment of Taxes. The Company
covenants and agrees that it will pay when due and payable
all documentary, stamp and other similar taxes, if any,
which may be payable in respect of the issuance or delivery
of the Warrants or of the Warrant Shares purchasable and
issuable upon the exercise of the Warrants.
4
</PAGE>
<PAGE>
SECTION 4. Mutilated or Missing Warrants. In the
event this Warrant Certificate shall be mutilated, lost,
stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and in
substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and
representing an equivalent right or interest, but only upon,
in the event of a lost, stolen or destroyed certificate,
receipt of evidence satisfactory to the Company of such
loss, theft or destruction. In making application for such
a substitute Warrant Certificate, the Holder shall also
comply with such other reasonable regulations and pay such
other reasonable charges as the Company may prescribe.
SECTION 5. Reservation and Availability of
Warrant Shares; Purchase and Cancellation of Warrants.
5.1 Reservation of Warrant Shares. (a) The
Company shall at all times reserve and keep available free
from preemptive rights, out of the aggregate of its autho-
rized but unissued shares of Common Stock, for the purpose
of enabling it to satisfy any obligations to issue the
Warrant Shares upon exercise of the Warrants, the full
number of Warrant Shares deliverable upon the exercise of
all the Warrants evidenced by this Warrant Certificate. The
Company or, if appointed, the transfer agent for the Common
Stock and every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of
any of the rights of purchase aforesaid (each, a "Transfer
Agent") will be irrevocably authorized and directed at all
times to reserve such number of authorized shares of Class C
Common Stock, as shall be required for such purpose. The
Company will keep a copy of this Warrant Certificate on file
with each Transfer Agent. The Company will furnish such
Transfer Agent a copy of all notices of adjustments and
certificates related thereto which are transmitted to the
Holder pursuant to Section 6 hereof.
(b) The Company covenants that all Warrant Shares
issuable upon exercise of the Warrants will, upon issuance,
be fully paid, nonassessable and free from preemptive rights
and free from all taxes, liens, charges and security
interests with respect to the issuance thereof (other than
any liens, charges and security interests to which the
Warrants are themselves subject).
5
</PAGE>
<PAGE>
(c) Before taking any action which would cause an
adjustment pursuant to Section 6 reducing the Exercise
Price, the Company will take any and all corporate action
which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
5.2 Warrant Shares Record Date. Each person in
whose name any stock certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the
holder of record of the Warrant Shares represented thereby
on, and such stock certificate shall be dated the date upon
which this Warrant Certificate was duly surrendered and
payment of the Exercise Price (and any applicable transfer
taxes) was made.
5.3 Cancellation of Warrant. Upon surrender of
the Warrant Certificate for exchange, substitution, transfer
or exercise, it shall be cancelled by the Company and
retired.
SECTION 6. Adjustment of Number of Warrant Shares
and Exercise Price. The number of securities purchasable
upon the exercise of the Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter described.
6.1 Mandatory Adjustments. The number of
securities purchasable upon the exercise of the Warrant and
the Exercise Price shall be subject to adjustment as
follows:
(a) In case the Company shall (i) declare or pay
_
a dividend on any class of its outstanding common stock
in shares of common stock or make a distribution to
holders of its outstanding common stock in shares of
common stock, (ii) subdivide any class of its
__
outstanding common stock into a greater number of
shares of common stock, (iii) combine any class of its
___
outstanding common stock into a smaller number of
shares of common stock or (iv) issue by reclassifica-
__
tion of any class of its shares of common stock other
securities of the Company (including any such reclas-
sification in connection with a consolidation, merger
or other business combination in which the Company is
the surviving corporation), the number and kind of
Warrant Shares purchasable and issuable upon exercise
6
</PAGE>
<PAGE>
of the Warrants shall be adjusted so that the Holder,
upon exercise thereof, shall be entitled to receive the
number and kind of Warrant Shares and other securities
of the Company that the Holder would have owned or have
been entitled to receive after the happening of any of
the events described above had the Warrants been
exercised and the relevant Warrant Shares issued in the
name of the Holder immediately prior to the happening
of such event or, if applicable, any record date with
respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective on the date of the
dividend payment, subdivision, combination or issuance
retroactive to the record date with respect thereto, if
any, for such event. Such adjustment shall be made
successively whenever such an issuance is made.
(b) In case the Company shall distribute to all
holders of its outstanding common stock evidences of
indebtedness of the Company, cash (including cash
dividends payable out of consolidated earnings or
earned surplus) 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 6.1(a) above or Section 6.1(c) below)
(any such evidences of indebtedness, assets or
securities, the "assets or securities"), then, in each
case, the Exercise Price shall be adjusted by
subtracting from the Exercise Price then in effect the
value (as determined in accordance with Section 6.2(b))
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 Warrant Shares 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 Exercise 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 Warrants and
the Warrant Shares had been issued in the name of the
Holder immediately prior to the record date for such
distribution. Any adjustment required by this Sec-
tion 6.1(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.
7
</PAGE>
<PAGE>
(c) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such
adjustment would require an increase or decrease of at
least one tenth of one percent (.10%) in the number of
Warrant Shares purchasable upon the exercise of each
Warrant; provided, however, that any adjustments which
________ _______
by reason of this Section 6.1(d) are not required to be
made shall be carried forward and taken into account in
any subsequent adjustment. All calculations shall be
made to the nearest one-thousandth of a share. No
adjustment need be made for a change in the par value
of the Warrant Shares.
(d) Whenever the number of Warrant Shares is
adjusted, as herein provided, the Exercise Price
payable upon exercise of each Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to
such adjustment by a fraction of which the numerator
shall be the number of Warrant Shares purchasable upon
the exercise of each Warrant immediately prior to such
adjustment and of which the denominator shall be the
number of Warrant Shares purchasable immediately
thereafter.
6.2 Notice of Adjustment. (a) No action which
results in any adjustment of the number of Warrant Shares
purchasable upon the exercise of the Warrants or the
Exercise Price of such Warrants, as herein provided, shall
be undertaken by the Company unless the Company shall give
to the Holder the greater of 10 business days notice and the
number of days notice required to be given to stockholders
with respect to such action or such adjustment prior to
effecting such action and a certificate of the Chief
Financial Officer of the Company, setting forth in
reasonable detail (i) the number of Warrant Shares pur-
_
chasable upon the exercise of the Warrants and the Exercise
Price of the Warrants after such adjustment, (ii) a brief
__
statement of the facts requiring such adjustment and
(iii) the computation by which such adjustment was made.
___
(b) If any adjustment is required to be made
pursuant to Section 6.1(b) (unless the proviso to the first
_______
sentence of that Section is applicable to the action), the
Company and the Holder shall negotiate in good faith toward
agreeing upon the necessary adjustment. If no agreement can
be reached within 14 days from the date of receipt by the
Holder of such notice, the Company and the holders of a
majority of the warrants issued pursuant to the Stock
8
</PAGE>
<PAGE>
Purchase Agreement and the Securities Purchase Agreement
shall appoint within 21 days from the date of such receipt a
mutually acceptable independent investment banking firm to
determine the necessary adjustment. Such firm shall make
the necessary determination which shall be binding absent
actual fraud or manifest error. One-half of the fees of
such firm for making such determination and any related
reimbursable expenses shall be paid by each of such holders
and the Company.
6.3 Preservation of Purchase Rights Upon Merger,
Consolidation, etc. (a) In the event of any merger,
consolidation or other acquisition or business combination
in which the Company is not the surviving corporation or in
which all of the outstanding common stock of the Company is
converted into, acquired or exchanged for securities, cash
or property or in the event of the sale or other disposition
of all or substantially all the assets of the Company, the
successor, parent or purchasing person, as the case may be,
shall deliver to the Holder an undertaking that the Holder
shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase
upon exercise of each Warrant the kind and amount of
securities, cash and property which the Holder would have
owned or have been entitled to receive upon the happening of
such merger, consolidation, acquisition, business
combination or sale had each Warrant been exercised and the
relevant Warrant Shares issued in the name of the Holder
immediately prior to the relevant record date, if any, or
the occurrence of such merger, consolidation, acquisition,
business combination or sale. Such undertaking shall
provide for adjustments, which shall be as nearly equivalent
as may be practicable to the adjustments provided for in
this Section 6. The Company will not effect any transaction
of the type referred to in this Section 6.4 unless the suc-
cessor or purchasing person delivers such undertaking. The
provisions of this Section 6.4 shall similarly apply to
successive mergers, consolidations, business combinations
and sales or transfers.
(b) Upon any liquidation, dissolution or winding
up of the Company, the Holder shall receive such cash or
property (less the Exercise Price) which the Holder would
have been entitled to receive upon the happening of such
liquidation, dissolution or winding up had the Warrants been
exercised and the Warrant Shares issued immediately prior to
the occurrence of such liquidation, dissolution or winding
up.
9
</PAGE>
<PAGE>
6.4 Statement on the Warrant. Irrespective of
any adjustments in the number or kind of securities pur-
chasable upon the exercise of the Warrant or the Exercise
Price, any Warrant Certificate theretofore or thereafter
issued may continue to express the same price and number and
any kind of shares as are stated in this Warrant
Certificate.
SECTION 7. Fractional Interests. The Company
shall not be required to issue fractional securities on the
exercise of Warrants. If any fraction of a security would
be issuable on the exercise of Warrants, the Company shall
pay to the Holder of such Warrants an amount in cash equal
to the fair market value of such fraction.
SECTION 8. Registration. The Holder shall, from
time to time, have the rights, if any, with respect to
registration of Warrant Shares as are set forth in the
Stockholders' Agreement among the Company and certain
stockholders of the Company, dated as of September 10, 1990.
SECTION 9. No Rights as a Stockholder; Notices to
Holder. Nothing contained in this Warrant Certificate shall
be construed as conferring upon the Holder the right to vote
or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders of the Company for
the election of the directors of the Company or any other
matter, or any rights whatsoever as a stockholder of the
Company. If, however, at any time prior to the expiration
of the Warrant and prior to its exercise, any of the
following events shall occur:
(a) the Company shall declare any dividend
payable in cash or in any securities upon its shares of
common stock or make any distribution to the holders of
its shares of common stock;
(b) the Company shall offer to all holders of its
shares of common stock any additional shares of common
stock or securities convertible into or exchangeable
for shares of common stock or any right to subscribe
for or purchase any thereof;
(c) a dissolution, liquidation or winding up of
the Company (other than in connection with a con-
solidation, merger, sale, transfer or lease of all or
substantially all of its property, assets and business
as an entirety) shall be proposed; or
10
</PAGE>
<PAGE>
(d) any consolidation or merger to which the
Company is a party and for which approval of the
holders of common stock is required, or of the con-
veyance or transfer of all or substantially all assets
of the Company as, or substantially as, an entirety, or
of any reclassification or change of outstanding shares
of Common Stock issuable upon exercise of the Warrant
(other than a change in par value to no par value, or
from no par value to par value) or as a result of a
subdivision or combination,
then in any one or more of said events, the Company shall
give to the Holder the greater of 10 business days' written
notice and the number of days written notice required to be
given to stockholders with respect to such action prior to
the applicable record date hereinafter specified, stating
(i) the date as of which the holders of record of shares of
_
common stock to be entitled to receive any such dividends,
rights or warrants are to be determined or (ii) the date on
__
which any such dissolution, liquidation, winding up,
consolidation, merger, conveyance or transfer is expected to
become effective and the date as of which it is expected
that holders of record of shares of common stock shall be
entitled to exchange their shares of common stock for
securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation, or winding up. Failure
to mail or receive such notice or any defect therein or in
the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution
or subscription rights, or such proposed dissolution,
liquidation, winding up, consolidation, merger, conveyance,
transfer or reclassification.
SECTION 10. Identity of Transfer Agent. Forth-
with upon the appointment of any Transfer Agent for the
common stock, or any other shares of the Company's capital
stock issuable upon the exercise of the Warrant, the Company
shall promptly notify the Holder of the name and address of
such Transfer Agent.
SECTION 11. Notices. Any notice, except as
provided in Section 9 of this Warrant Certificate, or demand
authorized by this Warrant Certificate to be given by the
Holder to the Company, shall be in writing and shall be
delivered in person or by facsimile transmission, or mailed
by overnight courier, or otherwise delivered, to the
Company, at 600 Madison Avenue, New York, New York 10022,
11
</PAGE>
<PAGE>
attention of Chief Executive Officer, with a copy to Richard
D. Bohm, Esq., Debevoise & Plimpton, 875 Third Avenue, New
York, New York 10022. The Company may change the address to
which notices to it are to be delivered or mailed hereunder
by notice to the Holder.
Any notice pursuant to this Warrant Certificate by
the Company to the Holder shall be in writing and shall be
mailed by overnight courier or otherwise delivered, to the
Holder at c/o Shearson Lehman Hutton Holdings Inc., World
Financial Center, American Express Tower, 200 Vesey Street,
New York, New York 10285, attention of James L. Singleton,
with a copy to David B. Chapnick, Esq., Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017.
Notices delivered personally shall be effective at
the time delivered by hand, notices sent by mail shall be
effective when received, notices sent by facsimile
transmission shall be effective when confirmed and notices
sent by courier guaranteeing next day delivery shall be
effective on the next business day after timely delivery to
the courier.
SECTION 12. Supplements and Amendments. The
Warrant Certificate may not be supplemented, amended or
otherwise modified without the prior written consent of the
Holder.
SECTION 13. Successors. All the covenants and
provisions of this Warrant Certificate by or for the benefit
of the Company shall bind and inure to the benefit of its
respective successors and assigns hereunder.
SECTION 14. Applicable Law. This Warrant
Certificate and the Warrants evidenced hereby shall be
governed by and construed in accordance with the laws of the
State of New York, without giving effect to principles of
conflict of laws. The Company and the Holder agree to
submit to the non-exclusive jurisdiction of the courts of
the State of New York in any action or proceeding arising
out of or relating to this Warrant Certificate and the
Warrants evidenced hereby.
SECTION 15. Benefits of this Warrant Certificate.
Nothing in this Warrant Certificate shall be construed to
give to any person or entity other than the Company and the
Holder any legal or equitable right, remedy or claim under
this Warrant Certificate; and this Warrant Certificate shall
12
</PAGE>
<PAGE>
be for the sole and exclusive benefit of this Company and
the Holder.
SECTION 16. Captions. The captions of the
Sections and paragraphs of this Warrant Certificate have
been inserted for convenience only and shall have no
substantive effect.
IN WITNESS WHEREOF, the Company has caused this
Warrant Certificate to be duly executed this 14th day of
December, 1993.
INFINITY BROADCASTING CORPORATION
By: /s/ Mel Karmazin
_____________________________
Mel Karmazin
President and Chief Executive
Officer
Attest:
By: /s/ Farid Suleman
___________________
Farid Suleman
Assistant Secretary
13
</PAGE>
<PAGE>
PURCHASE FORM
(To be executed upon exercise of Warrants)
The undersigned hereby irrevocably elects to
exercise the right, represented by the attached Warrant
Certificate (the "Certificate"), to purchase ____________
shares of Class C Common Stock as provided for in the
Certificate and herewith tenders in payment for such shares
of Class C Common Stock payment of the purchase price in
full in the form of cash or a check payable to the order of
Infinity Broadcasting Corporation in the amount of $_______,
all in accordance with the terms of the Certificate. The
undersigned requests that a certificate for such shares of
Common Stock be registered in the name of _______________
whose address is _______________ and that such certificate
shall be delivered to _______________ at the following
address: ______________. If said number of shares of Class
C Common Stock is less than all of the shares of Class C
Common Stock purchasable under the Certificate, the
undersigned requests that a new Warrant Certificate
representing the right to purchase the remaining balance of
the shares of Class C Common Stock be registered in the name
of _______________ whose address is ____________________ and
that such certificate shall be delivered to _______________
whose address is ____________________.
Dated:
[HOLDER]
By:__________________________
Name:
Title:
</PAGE>
<PAGE>
ASSIGNMENT
(To be executed only upon assignment
of the Warrant Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________ (Name and Address
of Assignee Must Be Printed or Typewritten) the within
Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________, Attorney, to transfer said Warrant
Certificate on the books of the within-named Company, with
full power of substitution in the premises.
Dated:
______________________________
Signature of Registered Holder
</PAGE>
<PAGE>
SIXTH AMENDMENT TO
EMPLOYMENT AGREEMENT
____________________
The Employment Agreement between Infinity Broad-
casting Corporation, a Delaware corporation, and Mel
Karmazin, made as of September 10, 1990 and amended as of
September 30, 1991, February 4, 1992, June 30, 1993, August
16, 1993 and November 19, 1993 (the "Employment Agreement"),
is hereby further amended as follows effective, unless
otherwise indicated, as of the date on which the material
terms (as defined in Section 162(m) of the Internal Revenue
Code of 1986, as amended, and regulations promulgated there-
under ("Section 162(m)")) of the incentive compensation
provisions herein set forth are approved by the Company's
stockholders in accordance with Section 162(m):
1. Section 7.3 of the Employment Agreement is
amended to read as set forth below:
"7.3 Failure to Make Award. If the Employ-
_____________________
er's stock option plan and deferred share plan are, at
the time an award of equity-based incentive compensa-
tion is payable under Exhibit B, administered by a
committee of "disinterested" directors (within the
meaning of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended) with respect to awards to the
Executive, the Employer shall recommend that such com-
mittee grant such award to the Executive. If the com-
mittee fails to grant the award on or before the thir-
tieth day following the filing by the Employer of its
Form 10-K with the Securities and Exchange Commission
for the applicable year, the Employer shall pay to the
Executive in cash an amount equal to the sum of (a) 25%
_
of the fair market value of the number of shares of
Class B common stock as to which Exhibit B requires the
award of options and (b) 125% of the fair market value
_
of the number of shares of Class B common stock as to
</page>
<PAGE>
which Exhibit B requires the award of deferred shares
for the applicable fiscal year of the Employer.
"For purposes of this agreement, the fair
market value of a share of the Company's Class A or
Class B common stock shall be the closing price (as
reported on the NASDAQ National Market System) of a
share of the Company's Class A Common Stock on the date
as of which the relevant determination is made or, if
no price is so reported, the value of a share of the
Company's Class A common stock on such date as deter-
mined in good faith by the Compensation Committee of
the Board."
2. The Employment Agreement is amended, effective
March 30, 1994, by the addition thereto of a new Section
7.4, reading in its entirety as follows:
"7.4 Stockholder Approval. If stockholder
____________________
approval required by Section 162(m) of the Internal
Revenue Code of 1986, as amended, and the regulations
promulgated thereunder (`Section 162(m)') to qualify
any portion of the compensation provided for by Section
7.3 or Exhibit A or Exhibit B hereto for a fiscal year
of the Employer beginning on or after January 1, 1994
as `performance-related' within the meaning of Section
162(m) is not obtained, the Executive shall have no
right hereunder to receive such portion of such compen-
sation. In such event the parties shall use their best
efforts to formulate, and shall seek stockholder ap-
proval of, appropriate incentive compensation arrange-
ments that are `performance-related' within the meaning
of Section 162(m)."
3. Section 13.1.3 of the Employment Agreement is
amended so that the term "EBITAD" appearing therein reads
"EBITDA."
4. Exhibits A and B to the Employment Agreement
are amended to read in their entirety as set forth in Sched-
ule I hereto.
2
</page>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Sixth Amendment to be duly executed as of the 30th day
of March, 1994.
INFINITY BROADCASTING CORPORATION
By /s/ Farid Suleman
_________________________________
Title: Vice President - Finance
and Chief Financial Officer
/s/ Mel Karmazin
_________________________________
MEL KARMAZIN
3
</page>
<PAGE>
SCHEDULE I
to Sixth
Amendment
__________
EXHIBIT A
_________
Cash Incentive Compensation
___________________________
For each fiscal year of the Employer, commencing
with the fiscal year ending December 31, 1994, for which the
Employer meets its EBITDA Target as established by the
Compensation Committee of the Board (the "Compensation
Committee"), the Executive shall be entitled to receive cash
incentive compensation (a "Bonus") of $500,000.
If the Termination Date is other than the last day
of a fiscal year, the Executive will be entitled to a pro-
rated Bonus for the portion of the year preceding the Ter-
mination Date if the EBITDA Target is met through the end of
the month ending on or next preceding the Termination Date.
EBITDA means earnings before interest, taxes,
depreciation and amortization as reported in the Employer's
Form 10-K for the fiscal year, or, if for a portion of the
year, as approved by the Board based on the Employer's books
and records.
The Bonus for any year shall be paid not later
than the thirtieth day following the filing by the Employer
of its Form 10-K with the Securities and Exchange Commission
("SEC") for such year, or if the Bonus is for a part of the
year, not later than the sixtieth day following the end of
the last month taken into account in determining whether the
EBITDA Target is met.
</page>
<PAGE>
EXHIBIT B
_________
Stock Options and Deferred Shares
_________________________________
Stock Options
_____________
For each year that the EBITDA target is met, com-
mencing with the fiscal year ending December 31, 1994, the
Executive shall be granted, no later than the thirtieth day
following the filing by the Employer of its Form 10-K with
the SEC for such year, an option to acquire 112,500 shares
of the Class B common stock of the Employer. Notwithstand-
ing the foregoing sentence, such option may permit the ac-
quisition of shares of Class A Common Stock of the Employer
to the extent options for the purchase of Class B shares are
not available for issuance under the Employer's Stock Option
Plan (or a successor plan thereto) at the time the option is
awarded. The per share exercise price of the option shall
be 85% of the fair market value of a share of Common Stock
(determined in accordance with Section 7.3 of this Agree-
ment) as of the last day of the period for which the award
is made. The option shall be immediately exercisable and
shall expire ten years after the date of grant.
If the Termination Date is other than the last day
of a fiscal year, the Executive shall be granted an option
to acquire a prorated number of shares for such year if the
EBITDA target for the portion of the year through the end of
the month ending on or immediately prior to the Termination
Date is met.
Deferred Shares
_______________
If the EBITDA Target for a fiscal year is exceed-
ed, the Executive shall receive a number of Class B Deferred
Shares, as defined in and pursuant to the Deferred Share
Plan of the Employer, determined by (a) multiplying each
Increment, as defined below, by the applicable Applied Per-
centage, and (b) dividing the sum of the resulting products
by an amount equal to 85% of the fair market value of a
share of common stock (assuming that the value of each
Class A and Class B share is the same) determined by the
Board as of the last day of the period for which the award
is made.
</page>
<PAGE>
Amount by Which Actual Maximum Maximum
EBITDA Exceeds the Applied Increment Aggregate
EBITDA Target ("Increment") Percentage Cash Value Cash Value
___________________________ __________ __________ __________
0 - $1,000,000 3% $30,000 $ 30,000
$1,000,001 - 2,000,000 4% 40,000 70,000
2,000,001 - 3,000,000 5% 50,000 120,000
3,000,001 - 4,000,000 5% 50,000 170,000
4,000,001 - 5,000,000 5% 50,000 220,000
5,000,001 - or more 5%
Deferred Shares for a fiscal year of the
Employer shall be awarded no later than the thirtieth day
following the filing by the Employer of its Form 10-K with
the SEC for such year. All Deferred Shares awarded to the
Executive pursuant hereto shall be fully vested at the
date of grant, and shares of Class B Common Stock shall be
deliverable to Executive as provided in the Deferred Share
Plan, provided that Class A Deferred Shares may be awarded
________
and delivered to the Executive in accordance with the
Deferred Share Plan (or a successor plan thereto) to the
extent Class B Deferred Shares are not available for award
under such plan at the time the Deferred Share award is
made.
2
</page>
<PAGE>
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
(formerly the Infinity Broadcasting Corporation
Key Employee Stock Option Plan)
_______________________________________________
1. Purpose.
_______
This plan, which was formerly known as the
Infinity Broadcasting Corporation Key Employee Stock Option
Plan and shall be known as the Infinity Broadcasting Cor-
poration Stock Option Plan (the "Plan"), is intended to
promote the interests of Infinity Broadcasting Corporation
(the "Company") and its stockholders by encouraging long-
term growth of the Company's earnings by offering to those
key employees and non-employee directors of the Company and
its subsidiaries who have been or will be largely respon-
sible for such growth the opportunity to acquire equity
interests or increase their equity interests in the Company,
thereby aligning their interests more closely with the
interests of stockholders, and by encouraging key employees
and non-employee directors to remain in the service of the
Company and its subsidiaries and providing a basis for
attracting able employees and non-employee directors in the
future.
2. Shares Subject to the Plan.
__________________________
(a) Shares. Subject to adjustment as provided in
______
Section 9, the aggregate number of shares of the Class A
Common Stock of the Company ("Class A Shares") to be
delivered upon exercise of all options granted under the
Plan shall be 1,776,233, and the aggregate number of shares
of the Class B Common Stock of the Company ("Class B Shares"
and, together with Class A Shares, "Shares") to be delivered
upon exercise of all options granted under the Plan shall be
125,000. Such Shares may be authorized but unissued Shares
or treasury Shares. In the event the number of Shares to be
delivered upon the exercise in full of any option granted
under the Plan is reduced for any reason whatsoever, or in
the event any option granted under the Plan can no longer
under any circumstances be exercised, the number of Shares
</PAGE>
<PAGE>
no longer subject to such option shall thereupon be released
from such option and shall thereafter be available to be re-
optioned under the Plan. All Shares issued pursuant to the
exercise of options granted under the Plan shall be fully
paid and non-assessable.
(b) Right of First Refusal. All Shares issued
______________________
pursuant to the exercise of options granted under the Plan
shall be subject to a right of first refusal by the Company
at a value determined in good faith by the Board of Direc-
tors of the Company (the "Board") in its sole discretion,
which value shall in no case be less than the par value of
such Shares, unless at such time the Company shall be sub-
ject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports and other information
with the Securities and Exchange Commission. A holder of
Shares who receives a bona fide offer shall, within 30 days
thereof, notify the Company of such offer and the proposed
date of sale. The Company shall exercise its right of first
refusal by (i) notifying the holder of such Shares, within
_
30 days of its receipt of such notice, of its intention to
purchase all, but not less than all, of the Shares subject
to the bona fide offer and (ii) tendering full payment for
__
such Shares. Once the Company has tendered payment with re-
spect to any such Shares, the Optionee's sole right with
respect to such Shares shall be the right to the payment so
tendered. The Board's determination of the amount to be
paid to the Optionee shall be binding.
(c) Right to Repurchase Shares. All Shares
__________________________
issued pursuant to this Plan shall be subject to the right
of the Company to repurchase such Shares at a value deter-
mined in good faith by the Board in its sole discretion,
upon the termination of employment (including the termina-
tion of all service as a director of the Company, its par-
ents and subsidiaries, in the case of an Optionee who is a
director of any such entity but is not an employee of any
such entity) of the Optionee with respect to whom such
Shares were issued unless, at the time of such termination
of employment, the Company shall be subject to the informa-
tional requirements of the Act, and in accordance therewith
files reports and other information with the Securities and
Exchange Commission. The Company shall exercise such right
by (i) notifying the Optionee within thirty days of the date
_
of his termination of its intention to repurchase all, but
not less than all, of its Shares issued to such Optionee
pursuant to the Plan and (ii) tendering full payment for the
__
2
</PAGE>
<PAGE>
Shares. Once the Company has tendered payment with respect
to any such Shares, an Optionee's sole right with respect to
such Shares shall be the right to the payment so tendered.
The Board's determination of the amount to be paid to the
Optionee shall be binding. The Company is not, however,
obligated to purchase any Shares under the Plan.
3. Effective Date, Amendments.
__________________________
(a) The Plan was adopted on October 27, 1988 and
became effective ("Effective Date") on October 27, 1988,
upon approval by the holders of a majority of all the out-
standing Shares of voting stock of the Company entitled to
vote thereon.
(b) Amendment Date. The Plan was amended on
______________
September 10, 1990, effective as of the same date (the
"Amendment Date"), upon approval of the holders of a
majority of all of the outstanding Shares of voting stock of
the Company entitled to vote thereon. The Plan was amended
and restated effective February 4, 1992, upon the approval
of the holders of a majority of all outstanding shares of
voting stock of the Company entitled to vote thereon, and
was further amended effective as of August 18, 1992, upon
the approval of the Company's stockholders in accordance
with Rule 16b-3 under the Exchange Act.
(c) The Plan was amended, restated and renamed,
effective as of July 26, 1993, the date on which the Com-
pany's stockholders approved the amendments to Sections 1, 5
and 7 reflected herein in accordance with Rule 16b-3 under
the Exchange Act, except that the amendments reflected here-
in to Section 4 of the Plan became effective as of February
4, 1992.
(d) The Plan was further amended, effective as of
August 16, 1993, to reflect the Company's three-for-two
stock split in the form of a 50% stock dividend.
4. Administration.
______________
(a) The Administrator. The term "Administrator"
_________________
as used herein shall mean a committee appointed by the Board
and consisting of two or more members of the Board, each of
whom is a "disinterested person" within the meaning of
Rule 16b-3 under the Exchange Act.
3
</PAGE>
<PAGE>
(b) Authority. Subject to the provisions of the
_________
Plan, the Administrator shall interpret the Plan and the op-
tions granted under the Plan, shall make all other deter-
minations necessary or advisable for the administration of
the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any option,
in the manner and to the extent the Administrator deems
desirable to carry the Plan or option into effect. The
Administrator may, with the consent of the person or persons
entitled to exercise any outstanding option, amend such op-
tion consistent with the provisions of the Plan. In grant-
ing options pursuant to Section 5 hereof to persons other
than the Chief Executive Officer of the Company (the "CEO"),
the Administrator may consider recommendations by the CEO in
addition to the other factors set forth in Section 5.
(c) Procedure. All determinations of the Admin-
_________
istrator shall be made by not less than a majority of its
members at a meeting at which a quorum is present. A major-
ity of the entire Administrator shall constitute a quorum
for the transaction of business. Any action required or
permitted to be taken at a meeting of the Administrator may
be taken without a meeting, if a unanimous written consent
which sets forth the action is signed by each member of the
Administrator and filed with the minutes of proceedings of
the Administrator. No member of the Administrator shall be
liable, in the absence of bad faith, for any act or omission
with respect to his services. Without limiting the general-
ity of the foregoing, no member of the Administrator shall
be liable for any action or determination made in good faith
with respect to the Plan or to any option granted there-
under.
5. Granting of Options.
___________________
(a) Eligibility, Grant of Options and Selection
___________________________________________
of Optionees. The Administrator shall have authority within
____________
ten years of the Effective Date of the Plan, to grant to
such key employees (including officers and directors who are
employees) and non-employee directors of the Company and its
present and future subsidiaries as may be selected by it
("Optionees"), options to purchase Shares. The Adminis-
trator shall have the further authority within ten years
after the Amendment Date to grant to Optionees options to
purchase Shares. All options granted hereunder shall be
granted on the terms and conditions hereinafter set forth.
In selecting Optionees, and in determining the number of
Shares to be covered by each option, the Administrator may
4
</PAGE>
<PAGE>
consider the office or position held by the Optionee, the
Optionee's degree of responsibility for and contributions to
the growth and success of the Company, the Optionee's poten-
tial or any other performance factors which it may consider
relevant. Appropriate officers of the Company are hereby
authorized to execute and deliver option agreements in the
name of the Company, in the form and as directed from time
to time by the Administrator.
(b) Time of Granting Option. Nothing contained
_______________________
in the Plan or any resolutions adopted or to be adopted by
the Board or the stockholders of the Company shall consti-
tute the granting of any option hereunder. Options shall be
granted only by action of or pursuant to the authority of
the Administrator; provided, however, that no participant
shall have any rights with respect to such grant unless and
until he or she shall have executed and delivered an option
agreement in form and substance satisfactory to the Adminis-
trator.
6. Option Price.
____________
Minimum Option Price. The option price per Share
____________________
of the Common Stock underlying each option shall be fixed by
the Administrator.
7. Terms and Conditions of Options.
_______________________________
Options granted under the Plan shall be in such
form as the Administrator may from time to time approve,
subject to the following terms and conditions, and may con-
tain such additional terms and conditions (which terms and
conditions need not be the same in each case), including
restrictions against competition by the Optionee, not incon-
sistent with the Plan, as the Administrator shall deem de-
sirable:
(a) Option Period and Conditions and Limitations
____________________________________________
on Exercise. The options shall be exercisable in full or in
___________
installments at such time or times as the Administrator, in
its sole discretion, may determine. The right to purchase
shall be cumulative so that if the full number of the Shares
purchasable in any period shall not be purchased, the
balance may be purchased at any time from time to time
thereafter prior to the expiration of the option term as
established by the Administrator. No stock option shall be
exercisable with respect to any of the Shares subject to the
option later than ten years from the date of grant. The
5
</PAGE>
<PAGE>
date on which an option ultimately becomes unexercisable is
hereinafter referred to as the Option Expiration Date. To
the extent not prohibited by other provisions of the Plan,
each option shall be exercisable at such time or times and
subject to such conditions as are set forth in the option.
(b) Termination of Employment, Disability and
_________________________________________
Death. For purposes of the Plan and each option granted
_____
under the Plan, an Optionee's employment shall be deemed to
have terminated at the close of business on the day preced-
ing the first date on which he is no longer for any reason
whatsoever employed by the Company or any parent or sub-
sidiary of the Company (or, in the case of a non-employee
director, at the close of business on the day preceding the
first date on which he no longer serves as a director of the
Company or of any of its parents or subsidiaries). Unless
otherwise provided in an applicable option agreement, if an
Optionee's employment is terminated for any reason whatsoev-
er the right to exercise said option shall terminate:
(1) At the expiration of thirty days after the
Optionee's employment is terminated;
(2) At the expiration of three months after the
Optionee ceases to receive wages through the Company's
or a subsidiary's payroll because of disability, within
the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the "Code"). The determina-
tion of the Administrator on any question involving
disability shall be conclusive and binding; or
(3) At the expiration of three months after the
Optionee's death if the Optionee's employment is ter-
minated by reason of death or if the Optionee had a
right to exercise an option on the date of death pur-
suant to Section 7(b)(1) or (2); and prior to such date
such option may be exercised by the estate or by the
person or persons who acquire the right to exercise
such option by bequest or inheritance with respect to
any or all of the Shares remaining subject to such
option at the time of the Optionee's death.
An option exercised after cessation of employment
by an Optionee for any reason may, subject to adjustment as
provided in Section 9, be exercised only with respect to the
number of Shares which the Optionee could have acquired by
an exercise of the option immediately prior to the cessation
of such employment. In no event may an option be exercised
6
</PAGE>
<PAGE>
after its Option Expiration Date. The Administrator may
adopt, amend or rescind from time to time such provisions as
it deems appropriate with respect to the effect of leaves of
absence approved by any duly authorized officer of the Com-
pany or any subsidiary with respect to any Optionee.
(c) Options Not Transferable. An option shall
________________________
not be transferable otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended
(or the rules thereunder), and during the lifetime of the
Optionee shall be exercisable only by the Optionee. Any
attempt to transfer, assign, pledge, hypothecate or other-
wise dispose of, or to subject to execution, attachment or
similar process, any option other than as permitted in the
preceding sentence, shall give no right to the purported
transferee.
(d) Legal Limitations. Notwithstanding any pro-
_________________
vision of the Plan or the terms of any option issued pur-
suant to the Plan, the Company shall not be required to
issue any Shares hereunder if such issuance would, in the
judgment of the Administrator, constitute a violation of any
state or federal law, or of the rules or regulations of any
governmental regulatory body, or any securities exchange.
8. Exercise and Payment.
____________________
(a) Exercise. In order to exercise an option
________
under the Plan, the person or persons entitled to exercise
it shall deliver to the Company written notice of the number
of full Shares with respect to which such option is to be
exercised accompanied by payment in full for the Shares
being purchased plus, in the case of a nonqualified option,
any required withholding tax. No fractional Shares will be
issued. The payment of the option exercise price shall be
in cash. The withholding tax shall be paid in cash or
through a payroll deduction no later than the next payroll
cycle.
(b) Award of Cash or Shares in Lieu of Exercise.
___________________________________________
An Option Agreement may provide that, in lieu of accepting
payment of the option price and delivering any or all Shares
as to which an option has been exercised, the Administrator,
in its sole discretion, may elect to pay the holder of such
option an amount in cash or Shares, or a combination of cash
and Shares, equal to the amount by which the fair market
7
</PAGE>
<PAGE>
value on the date of exercise of the Shares as to which such
option has been exercised exceeds the purchase price that
would otherwise be payable by the holder of such option to
acquire such Shares.
(c) Rights as a Stockholder. The person or per-
_______________________
sons entitled to exercise, or who have exercised, an option
shall not be entitled to any rights as a stockholder of the
Company with respect to any Shares subject to the option
until such person or persons shall have become the holder of
record of such Shares.
9. Adjustment of Shares.
____________________
(a) In the event that any time after the Effec-
tive Date of the Plan the outstanding Shares are changed
into or exchanged for a different number or kind of Shares
of the Company or other securities of the Company by reason
of merger, consolidation, recapitalization, reclassifica-
tion, stock split, stock dividend or combination of Shares,
the Administrator shall make an appropriate and equitable
adjustment in the number and kind of Shares subject to out-
standing options, or portions thereof then unexercised, and
the number of Shares subject to the Plan, to the end that
after such event the Shares subject to the Plan and the
Optionee's right to a proportionate interest in the Company
shall be maintained as before the occurrence of such event.
Such adjustment in an outstanding option shall be made with-
out change in the total price applicable to the option or
the unexercised portion of the option (except for any change
in the total price resulting from rounding-off Share quanti-
ties or prices) and with any necessary corresponding adjust-
ment in option price per Share. Any such adjustment made by
the Administrator shall be final and binding upon all Op-
tionees, the Company and all other interested persons. Any
adjustment of an incentive stock option under this paragraph
shall be made in such manner so as not to constitute a "mod-
ification" within the meaning of Section 424(h)(3) of the
Code. The Administrator, in its sole discretion, may at any
time make or provide for such adjustments to the Plan or any
option granted thereunder as it shall deem appropriate to
prevent the reduction or enlargement of rights, including
adjustments in the event of changes in the outstanding Class
A Common Stock or Class B Common Stock by reason of mergers,
consolidations, combinations or exchanges of shares, separa-
tions, reorganizations, liquidations and the like in which
the Company is not the sole surviving successor to the
assets or business of the Company immediately prior thereto.
8
</PAGE>
<PAGE>
In the event of any offer to holders of Class A Common Stock
or Class B Common Stock generally relating to the acquisi-
tion of their shares, the Administrator may make such ad-
justments as it deems equitable in respect of outstanding
options. Any such determination of the Administrator pur-
suant to this Section shall be conclusive.
(b) In the event of a merger or consolidation of
the Company or the acquisition of all or substantially all
of the outstanding common stock of the Company resulting in
the exchange or payment of other consideration for Shares,
each option authorized or awarded under this Plan shall be
deemed to represent the right to receive, upon fulfillment
of the terms and conditions of this Plan and an applicable
award agreement, the consideration the holder or recipient
of such option would have received had the option been an
outstanding Share immediately prior to the consummation of
such transaction.
10. Limitations.
___________
(a) Authority Limited to Administrator. No per-
__________________________________
son shall at any time have any right to receive an option
hereunder and no person shall have authority to enter into
an agreement for the granting of an option or to make any
representation or warranty with respect thereto, except as
granted by the Administrator, as provided in the Plan.
Optionees shall have no rights in respect to their options
except as set forth in the Plan.
(b) No Right to Employment. Neither the action
______________________
of the Company in establishing the Plan, nor the action
taken by it or by the Administrator under the Plan, nor any
provision of the Plan, shall be construed as giving to any
person the right to be retained in the employ of the Company
or any subsidiary or as giving to any person the right to be
retained as a director of the Company or any subsidiary. No
provision of the Plan will supersede any terms of any em-
ployment agreements that an Optionee may have with the Com-
pany.
11. Amendments and Termination.
__________________________
The Board may terminate, alter, suspend, modify or
amend the Plan in such respects as it shall deem advisable.
Except as otherwise provided in Section 9, no action of the
Board may, without the approval of security holders in the
manner required by subsection (b) of Rule 16b-3, (i) in-
_
9
</PAGE>
<PAGE>
crease materially the aggregate number of Shares as to which
options may be granted or which may be issued under the
Plan, (ii) reduce the minimum option price, (iii) extend the
__ ___
period within which options may be exercised, (iv) extend
__
the period during which options may be granted, (v) increase
_
materially the benefits accruing to participants under the
Plan, or (vi) modify materially the requirements as to
__
eligibility for participation in the Plan. No termination,
alteration, suspension, modification or amendment of the
Plan may, without the consent of the Optionee to whom any
option shall theretofore have been granted, adversely affect
the rights of such Optionee under any such option then out-
standing.
12. Use of Certain Terms.
____________________
The terms "parent" and "subsidiary" shall have the
meanings ascribed to them in Section 424 of the Code and
unless the context otherwise requires, the other terms used
in the Plan which correspond to like terms defined in Sec-
tions 421 through 424, inclusive, of the Code and regula-
tions and revenue rulings applicable thereto, shall have the
meanings attributed to them therein.
IN WITNESS WHEREOF, the Company has caused its
duly authorized officer to execute this restated plan
document as of the 16th day of August, 1993.
INFINITY BROADCASTING CORPORATION
By: /s/ Farid Suleman
______________________________
10
</PAGE>
<PAGE>
AMENDMENT TO THE
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
_________________________________
The Infinity Broadcasting Corporation Stock Option
Plan (the "Plan"), as amended and restated as of August 16,
1993, is hereby further amended as follows to reflect the
Company's three-for-two stock split in the form of a stock
dividend, effective as of November 19, 1993:
Section 2(a) of the Plan ("Shares") is amended so
that the first sentence thereof reads in its entirety as
follows:
"Subject to adjustment as provided in Section 9,
the aggregate number of shares of the Class A
Common Stock of the Company ("Class A Shares") to
be delivered upon exercise of all options granted
under the Plan shall be 2,664,350 and the
aggregate number of shares of the Class B Common
Stock of the Company ("Class B Shares" and,
together with Class A Shares, "Shares") to be
delivered upon exercise of all options granted
under the Plan shall be 187,500."
IN WITNESS WHEREOF, the Company has caused its
duly authorized officer to execute this amendment instrument
as of the 19th day of November, 1993.
INFINITY BROADCASTING CORPORATION
By /s/ Farid Suleman
_______________________________
Title Vice President-Finance and
Chief Financial Officer
</PAGE>
<PAGE>
AMENDMENT TO THE
INFINITY BROADCASTING CORPORATION
STOCK OPTION PLAN
_________________________________
The Infinity Broadcasting Corporation Stock Option
Plan (the "Plan"), as amended and restated as of August 16,
1993, and amended as of November 19, 1993, is further amend-
ed as follows, effective as of the date on which the follow-
ing amendment to Section 2 of the Plan, and the material
terms of the following amendment to Section 5 of the Plan,
are approved by the Company's stockholders in accordance
with the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and Section 162(m) of the
Internal Revenue Code of 1986, as amended, respectively:
1. Subsection 2(a) of the Plan ("Shares") is
amended so that the first clause of the first sentence
thereof reads as follows:
"Subject to adjustment as provided in Section 9
and to the last sentence of this subsection,";
and is further amended by adding a new final sentence
thereto, reading as follows:
"Subject to adjustment as provided in Section 9,
the aggregate number of Class A shares set forth
in the first sentence of this subsection is hereby
increased by 2,000,000, and the aggregate number
of Class B Shares set forth in such sentence is
hereby increased by 600,000."
</page>
<PAGE>
2. Section 3 of the Plan ("Effective Date;
Amendments") is awarded to read in its entirety as follows:
"The Plan was adopted in October 27, 1988 and
became effective on that date upon approval by the
holders of a majority of all outstanding Shares of
voting stock of the Company entitled to vote
thereon. The Plan was thereafter amended effec-
tive as of September 10, 1990, February 4, 1992,
August 18, 1992, July 26, 1993, August 15, 1993
and November 19, 1993. The Plan is hereby
amended, effective as of [June 13, 1994]."
3. Section 4 of the Plan ("Administration") is
amended, for purposes of clarity, so that the final sentence
of subsection "(c)" thereof reads as follows:
"Without limiting the generality of the foregoing
or the scope of any applicable provision of the
Company's Charter or By-Laws or any indemnifica-
tion agreement, no member of the Administrator
shall be liable for any action or determination
made in good faith with respect to the Plan or any
option granted thereunder."
4. Section 5 of the Plan ("Granting of Options")
is amended to read in its entirety as follows:
"(a) Eligibility, Grant of Options and Selec-
________________________________________
tion of Optionees. The Administrator shall have
_________________
authority, within ten years after September 10,
1990, to grant to such key employees (including
officers and directors who are employees) and non-
employee directors of the Company and its present
and future subsidiaries as may be selected by it
("Optionees"), options to purchase Shares. All
options granted hereunder shall be granted on the
terms and conditions hereinafter set forth. In
selecting Optionees, and in determining the number
of Shares to be covered by each option, the Admin-
istrator may consider the office or position held
by the Optionee, the Optionee's degree of respon-
sibility for and contributions to the growth and
success of the Company, the Optionee's potential
or any other performance factors which it may
consider relevant. Appropriate officers of the
Company are hereby authorized to execute and de-
2
</page>
<PAGE>
liver option agreements in the name of the Compa-
ny, in the form and as directed from time to time
by the Administrator.
"(b) Annual Maximum Number of Shares Subject
_______________________________________
to Award. The following provisions shall apply to
________
option awards made in fiscal years of the Company
beginning on or after January 1, 1994 (each, a
"Plan Year"). In the first Plan Year in which an
award is made to an Optionee, the Administrator
may grant such Optionee Options for the purchase
of up to 200,000 Shares. The maximum number of
Shares as to which Options may be awarded to such
Optionee in each succeeding Plan Year shall be (x)
_
200,000 plus (y) the excess, if any, of (1) the
maximum award that could have been made to such
Optionee in the most recent Plan Year in which
such Optionee received an award hereunder over (2)
_
the total number of Shares as to which options
were awarded to such Optionee in such most recent
Plan Year (including awards, if any, made under
subsection 5(c)) (such excess being referred to as
the "Additional Amount"). In no event shall any
Optionee's Additional Amount exceed 300,000 Shares
for any Plan Year.
"(c) Certain Awards. The Administrator shall
______________
have the authority, prior to the beginning of each
Plan Year (or at such later time as may be per-
mitted under Section 162(m)), to establish in
writing an EBITDA target (the "EBITDA Target") for
such Plan Year and to make an award of options for
the purchase of up to 112,500 Shares to any
Eligible Optionee upon the Company's attainment of
such EBITDA Target (or the attainment of a
prorated portion of such target, as determined by
the Administrator in the case of an award in
respect of a period shorter than a Plan Year).
The maximum number of Shares as to which options
may be awarded pursuant to this subsection 5(c)
shall be prorated in the event of an award in
respect of a period shorter than a Plan Year. The
per Share exercise price of any option awarded
pursuant to this subsection 5(c) shall be 85% of
the Fair Market Value of a Share as of the last
day of the period for which the award is made.
Any option granted pursuant to this Section 5(c)
shall be immediately exercisable and shall expire
3
</page>
<PAGE>
ten years after the date of grant. For the
purposes of the Plan: the term "EBITDA" means
earnings of the Company and its consolidated
subsidiaries before interest, taxes, depreciation
and amortization, as reported in the Company's
report on Form 10-K for the Plan Year or, if for a
portion of a Plan Year, as approved by the Board
based on the Company's books and records; the term
"Eligible Optionee" means the Company's Chief
Executive Officer and any other senior executive
officer of the Company designated as an Eligible
Optionee by the Board prior to the commencement of
the applicable Plan Year (or, if later, prior to
the commencement of such individual's service as a
senior executive officer or such other time as may
be specified under Section 162(m) of the Code (as
defined below)); and the term "Fair Market Value"
means, with respect to any Share, the closing
price of a Class A Share (as reported on the
NASDAQ National Market System) on the date as of
which the determination is made, in the event no
price is so reported, the fair market value of a
Class A Share on such date, as determined in good
faith by the Administrator.
"(d) Time of Granting Option. Nothing con-
_______________________
tained in the Plan or any resolutions adopted or
to be adopted by the Board or the stockholders of
the Company shall constitute the granting of any
option hereunder. Options shall be granted only
by action of or pursuant to the authority of the
Administrator; provided, however, that no partici-
pant shall have any rights with respect to such
grant unless and until he or she shall have
executed and delivered an option agreement in form
and substance satisfactory to the Administrator."
5. Subsection 10(b) of the Plan ("No Right to
Employment") is amended by the addition of the following
clause at the end of the final sentence thereof:
"; provided that awards made pursuant to subsec-
________
tion 5(c) hereof shall be deemed for purposes of
an applicable employment agreement to have been
made pursuant thereto to the extent such agreement
provides for such awards."
4
</page>
<PAGE>
6. The Plan is amended, for purposes of clarity,
by the addition of a new section 13 thereto, reading in its
entirety as follows:
"13. Governing Law.
_____________
The Plan shall be governed by and construed and
enforced in accordance with the laws of the State
of New York, without regard to principles of con-
flicts of law."
IN WITNESS WHEREOF, the Company has caused its
duly authorized officer to execute this amendment instrument
as of the 30th day of March, 1994.
INFINITY BROADCASTING CORPORATION
By /s/ Farid Suleman
________________________________
Title: Vice President-Finance and
Chief Financial Officer
5
</page>
<PAGE>
INFINITY BROADCASTING CORPORATION
DEFERRED SHARE PLAN
(Amended and Restated as of August 16, 1993)
___________________________________________
The Infinity Broadcasting Deferred Share Plan,
which was originally adopted and approved by the Company's
shareholders as of September 10, 1990, is hereby amended and
restated as of August 16, 1993.
Section 1. Purpose.
_______
The purpose of the Plan is to enable the Company
to attract and retain executives and other key employees who
are expected to contribute to the Company's success and to
provide such persons with incentives based on the success of
the Company.
Section 2. Definitions.
___________
2.1. "Administrator." To the extent required by
Rule 16b-3, the term "Administrator" as used herein shall,
in the case of grants to Section 16(b) Persons, mean a
committee appointed by the Board and consisting of two or
more members of the Board, each of whom is a "disinterested
person" within the meaning of Rule 16b-3. In all other
cases, the term "Administrator" shall mean the Board (or a
person or committee appointed by the Board to administer the
</PAGE>
<PAGE>
Plan). All determinations of the Board or a committee
serving as Administrator shall be made by not less than a
majority of its members at a meeting at which a quorum is
present. A majority of the entire Administrator shall
constitute a quorum for the transaction of business. Any
action required or permitted to be taken at a meeting of the
Administrator may be taken without a meeting, if a unanimous
written consent which sets forth the action is signed by
each member of the Administrator and filed with the minutes
of proceedings of the Administrator.
2.2. "Agreement" means the award agreement, if
any, required by the Administrator or the CEO to be entered
into as a condition of an award of Deferred Shares and any
amendment to such an agreement.
2.3. "Board" means the Board of Directors of the
Company.
2.4. "CEO" means the Chief Executive Officer of
the Company.
2.5. "Class A Deferred Share" shall mean a share
of the Class A Common Stock of the Company, $.002 par value,
awarded pursuant to this Plan and issuable to a Participant
upon the occurrence of a Trigger Event.
2.6. "Class B Deferred Share" shall mean a share
of the Class B Common Stock of the Company, $.002 par value,
2
</PAGE>
<PAGE>
awarded pursuant to this Plan and issuable to a Participant
upon the occurrence of a Trigger Event.
2.7. "Committee" shall mean the committee of
disinterested directors described in Section 2.1 or, if no
such committee is at the time required by Rule 16b-3 to
administer grants to any Plan participant, the Board.
2.8. "Common Stock" means the Class A common
stock, $.002 par value, of the Company, the Class B common
stock, $.002 par value, of the Company, the Class C Common
Stock, $.002 par value, of the Company, and such other
common stock of the Company or of a successor to the Company
by merger, consolidation, acquisition of substantially all
of the Company's common stock or its assets or otherwise, as
may be issued in lieu of or in respect of Class A Common
Stock, Class B Common Stock, or Class C Common Stock.
2.9. "Company" means Infinity Broadcasting
Corporation, a Delaware corporation, or any successor
thereto.
2.10. "Date of Grant" means, as to any Partici-
pant, the date or dates on which Class A Deferred Shares or
Class B Deferred Shares are granted to such Participant
pursuant to the Plan.
3
</PAGE>
<PAGE>
2.11. "Deferred Shares" shall mean Class A
Deferred Shares or Class B Deferred Shares, as the context
shall require.
2.12. "Effective Date" means September 10, 1990.
2.13. "Exchange Act" means the Securities Ex-
change Act of 1934, as amended.
2.14. "Participant" means Mel Karmazin and such
other key employees of the Company as may from time to time
be designated by the Administrator or by the CEO as Plan
participants.
2.15. "Plan" means the Infinity Broadcasting
Corporation Deferred Share Plan, as in effect and as it may
be amended from time to time.
2.16. "Public Offering" shall mean the effec-
tiveness of a registration statement under the Securities
Act of 1933 (other than a registration on form S-4 or S-8 or
any successor or other forms promulgated for similar pur-
poses) of an offering covering any of the Common Stock, and
the completion of a sale of such Common Stock thereunder.
2.17. "Registration Rights" means such rights as
described in the Stockholders' Agreement.
2.18. "Rule 16b-3" means Rule 16b-3 under the
Exchange Act and any successor rule.
4
</PAGE>
<PAGE>
2.19. "Section 16(b) Person" shall mean a person
who is required under Section 16 of the Exchange Act to file
reports of beneficial ownership of Company securities.
2.20. "Stockholders' Agreement" means the Stock-
holders' Agreement, dated as of September 10, 1990, as
amended, among the Company, Mel Karmazin, Michael A. Weiner,
Gerald Carrus, and Shearson Lehman Hutton Capital Partners
II. L.P., Shearson Lehman Hutton Merchant Banking Portfolio
Partnership L.P., and Shearson Lehman Hutton Offshore
Investment Partnership L.P.
2.21. "Trigger Event" means, with respect to a
vested Class A Deferred Share or a vested Class B Deferred
Share, the first to occur of any of the following events:
(a) Registration Rights arise as to all or a
portion of a Participant's Deferred Shares,
and (a) in the case of the CEO or any
_
Participant who is a Section 16(b) Person,
the Administrator approves such Participant's
exercise of Registration Rights, or (b) in
_
the case of a Participant other than the CEO
who is not a Section 16(b) Person, the CEO
approves such Participant's exercise of
Registration Rights, except that (c) if, in
_
the case of a Participant who owns other
5
</PAGE>
<PAGE>
shares of Common Stock, the Participant exer-
cises Registration Rights with respect to all
of such other shares, no such approval shall
be required;
(b) The first day of the twenty-fifth calendar
month following the earliest date on which
shares of Common Stock of the Company sold
pursuant to a Public Offering, when aggre-
gated with all other shares of Common Stock
of the Company sold pursuant to Public
Offerings, equal at least 20% of the then
aggregate outstanding shares of Common Stock
on a fully diluted basis;
(c) The merger or consolidation of the Company
with or into, or the acquisition of the
Company by, a company at least 20% of whose
stock (or the stock of a controlling corpo-
ration of which) is publicly traded, other
than any entity which is a subsidiary of the
Company immediately before or after such
merger or consolidation, provided that such a
________
transaction shall not be a Trigger Event
within the meaning of this subsection (iii)
if, immediately following such transaction,
6
</PAGE>
<PAGE>
the persons who were the shareholders of the
Company immediately prior to the transaction
own 50% or more of the outstanding stock of
the surviving (or such controlling) entity;
(d) The liquidation of the Company;
(e) Subject to the Committee's designation of
such transaction as a Trigger Event, the sale
or exchange for cash, securities or any other
consideration of all or substantially all of
the outstanding common stock of the Company,
other than a sale to or exchange with an
entity which is a subsidiary of the Company
immediately before or after such sale or
exchange; and
(f) Such other event as may be designated a
Trigger Event at any time by the Committee.
Section 3. Number of Deferred Shares Available.
___________________________________
Subject to Section 4.4, the maximum number of
Class A Deferred Shares which may be granted pursuant to the
terms of the Plan shall be 160,427 and the maximum number of
Class B Deferred Shares which may be granted pursuant to the
terms of the Plan shall be 521,979. Deferred Shares which
are forfeited shall again be available for grant hereunder
at the discretion of the CEO to persons (other than the CEO
7
</PAGE>
<PAGE>
and Section 16(b) Persons) who are eligible to participate
in the Plan or, at the discretion of the Administrator, to
the CEO or any Section 16(b) Person.
Section 4. Grant of Deferred Shares.
________________________
4.1. Eligibility and Grant. The CEO shall, in
_____________________
his discretion, grant such number of Class A Deferred Shares
as he shall determine to each executive or other key
employee of the Company (other than a Section 16(b) Person)
that he designates as a Participant in the Plan. The
Administrator shall, in its discretion, grant such number of
Class A Deferred Shares as it shall determine to each
executive or other key employee of the Company who is a
Section 16(b) Person that the Administrator designates as a
Participant in the Plan. Class B Deferred Shares may be
granted to the CEO by the Administrator in its discretion.
Each grant of Deferred Shares shall be subject to the terms
and conditions set forth in the Plan and to such other terms
and conditions, not inconsistent with the Plan, as shall be
contained in an Agreement, if an Agreement is required by
the Administrator or (in the case of a Participant other
than the CEO or a Section 16(b) Person) by the CEO in
connection with such grant.
4.2. Vesting. Class A Deferred Shares awarded by
_______
the CEO shall vest in accordance with a schedule prescribed
8
</PAGE>
<PAGE>
by the CEO, which schedule need not be the same for each
Participant, and such shares awarded by the Administrator
shall vest in accordance with a schedule prescribed by the
Administrator, which schedule need not be the same for each
Participant, set forth in either case in an applicable
Agreement. An Agreement may provide for the acceleration of
vesting upon the termination of employment or at the dis-
cretion of the Administrator or the CEO (as the case may be)
upon the occurrence of such other events as may be specified
in such Agreement. All Deferred Shares awarded to Mel
Karmazin shall be fully vested as of the Date of Grant.
4.3. Termination of Employment. If a Partici-
_________________________
pant's employment with the Company terminates for any reason
at a time at which any Deferred Shares held by such Par-
ticipant are not then vested in accordance with the provi-
sions of Section 4.2 or an applicable Agreement, such non-
vested Deferred Shares shall be forfeited on the date of
such termination unless such Deferred Shares vest upon such
event pursuant to the terms of Section 4.2 or an applicable
Agreement.
4.4. Adjustments. (a) The Administrator may
___________
adjust the number of Deferred Shares issuable under the Plan
or deliverable to a Participant in the event of any con-
solidation, merger which is not a Trigger Event, contribu-
9
</PAGE>
<PAGE>
tion of capital or assets or other corporate transaction
involving the Company or any increase or decrease in the
number of shares of Class A Common Stock or Class B Common
Stock resulting from a stock split, stock dividend, recapi-
talization or other capital adjustment or contribution of
capital or other assets to the Company to the extent it
determines such adjustment to be appropriate to prevent any
diminution or enlargement of a Participant's rights here-
under.
(b) In the event of a merger or consolidation of
the Company or the acquisition of all or substantially all
of the outstanding stock of the Company resulting in the
exchange of or payment of other consideration for Common
Stock, each Deferred Share authorized or awarded under this
Plan shall be deemed to represent the right to receive, upon
fulfillment of the applicable terms and conditions of this
Plan and of an Agreement, the consideration the holder or
recipient of such Deferred Share would have received had the
Deferred Share been an outstanding share of Common Stock
immediately prior to the consummation of such transaction.
Section 5. Delivery of Deferred Shares.
___________________________
Subject to Section 11.4, a Participant's vested
Deferred Shares shall be delivered as soon as is practicable
following the payment for each Deferred Share of the par
10
</PAGE>
<PAGE>
value of a share of Common Stock and the occurrence of a
Trigger Event with respect to such Deferred Shares.
Section 6. Transferability.
_______________
Neither a Participant nor such Participant's
beneficiary shall have the right or power to sell, exchange,
pledge, transfer, assign or otherwise encumber or dispose of
such Participant's or beneficiary's interest in the Plan or
in any non-delivered Deferred Share, other than in accor-
dance with Section 11.6. During the Participant's lifetime,
any Deferred Share awarded to such Participant shall be
deliverable solely to the Participant or his legal guardian
or representative. The Participant's or a beneficiary's
interest in the Plan or in any Deferred Share shall not be
transferable other than by will or by the laws of descent
and distribution or pursuant to a qualified domestic rela-
tions order as defined by the Internal Revenue Code of 1986,
as amended, or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder,
and shall not otherwise be subject to seizure for the
payment of any debt, judgment, alimony or separate main-
tenance or be transferable by the operation of law in the
event of the Participant's or any beneficiary's bankruptcy
or insolvency.
11
</PAGE>
<PAGE>
Section 7. Dividends and Other Distributions.
_________________________________
A Participant who receives an award of Deferred
Shares shall be entitled to receive with respect to each of
the Participant's Deferred Shares at the time such Deferred
Share is delivered to such Participant an amount equal to
all dividends and other distributions paid on a share of
Common Stock during the period from the Date of Grant to the
date of delivery of such Deferred Share.
Section 8. Funding.
_______
The Plan shall be unfunded. The Company may at
its discretion establish a grantor trust and contribute
thereto shares of Common Stock intended to be awarded or
delivered under the Plan, provided that the assets of such
trust shall be subject to the claims of the Company's gen-
eral creditors in the event the Company becomes insolvent,
and further provided that Participants shall have only the
unsecured promise of the Company to pay benefits and shall
have no greater rights than any other unsecured creditor of
the Company.
12
</PAGE>
<PAGE>
Section 9. Administration.
______________
9.1. Administration. Except to the extent the
______________
Plan requires action by the Board or the Committee, or
permits action by the CEO, the Plan shall be administered by
the Administrator. The Administrator shall have the
authority, subject to the terms of the Plan, to determine
the terms and provisions of the Deferred Shares granted
under the Plan; to interpret the Plan and the provisions of
any Agreement; to adopt, amend and rescind rules and regula-
tions for the administration of the Plan; and to make all
determinations necessary or advisable for the administration
of the Plan. Any action taken or decision made by the
Administrator in connection with the Plan, including,
without limitation, the interpretation by the Administrator
of any provision of the Plan or any Agreement, shall be
final and binding on the Company and any Participant and any
persons claiming thereunder.
9.2. Indemnity. Neither the Board, the CEO, the
_________
Administrator, nor any member of the Board or of a committee
appointed by the Board to serve as Administrator, shall be
liable for any act, omission, interpretation, construction
or determination made in connection with the Plan in good
faith, and the members of the Board, the CEO, the
Administrator, and the members of any committee appointed by
13
</PAGE>
<PAGE>
the Board to serve as Administrator shall be entitled to
indemnification and reimbursement by the Company to the full
extent permitted by law with respect to any claim, loss,
damage or expense (including counsel fees) arising there-
from. Such indemnification shall be in addition to any
rights of indemnification the members of the Board, the CEO,
the Administrator, or the members of a committee appointed
to serve as Administrator, as the case may be, may have as
directors or officers, pursuant to an employment or other
contract with the Company or under the by-laws or the Cer-
tificate of Incorporation of the Company.
Section 10. Amendment and Termination.
_________________________
Subject to the following provisions of this
Section 10, the Board may from time to time and at any time
alter, amend, suspend, discontinue or terminate this Plan.
No action of the Board with respect to the Plan shall reduce
any rights of any Participant with respect to Deferred
Shares previously granted under the Plan without the consent
of such Participant, and no action of the Board with respect
to the Plan shall reduce the number of Class A Deferred
Shares that may be awarded hereunder by the CEO or reduce
any rights of the CEO hereunder without, in either case, the
consent of the CEO then in office, except as may otherwise
be required by law. The approval of the Company's share-
14
</PAGE>
<PAGE>
holders (in the manner required by Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended) shall
be required for any amendment that would (a) materially
_
increase the benefits accruing to Participants under the
Plan, (b) materially increase the number of Deferred Shares
_
which may be awarded under the Plan, or (c) materially
_
modify the requirements as to eligibility for participating
in the Plan.
Section 11. Miscellaneous.
_____________
11.1. Expenses. All expenses of administration
________
of the Plan shall be paid by the Company.
11.2. Legend on Deferred Shares. Each stock
_________________________
certificate representing shares of Common Stock which is
delivered pursuant to the Plan to any Participant shall bear
the following legend on the face thereof:
"INFINITY BROADCASTING CORPORATION (THE "COMPANY")
IS A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE
OF DELAWARE AND THE STOCK REPRESENTED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE
WITH THE PROVISIONS OF, AND IS OTHERWISE RESTRICTED BY
THE PROVISIONS OF, THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS THEREUNDER AND
THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION."
11.3. [Reserved]
11.4. Withholding. Any delivery under the Plan
___________
of Deferred Shares shall be subject to all applicable fee
15
</PAGE>
<PAGE>
payment and withholding requirements of federal, state and
local tax and other laws and regulations which may be in
effect as of the date of such payment. Subject to the terms
of any applicable credit agreement and to the approval of
the Administrator, amounts required to be paid or withheld
in respect of Class B Deferred Shares shall be withheld in
the form of Deferred Shares (any Deferred Shares so withheld
shall revert to the Company) or, at the option of the
Participant, from any amount required to be paid to the
Participant pursuant to Section 7, and amounts required to
be paid or withheld in respect of Class A Deferred Shares
may be so withheld upon the approval of the Administrator.
11.5. No Right to Continued Employment. Nothing
________________________________
in the Plan or any agreement entered into under the Plan
shall be construed as providing any Participant with the
right to continue in the employ of the Company or any of its
subsidiaries.
11.6. Beneficiary Designation. A Participant may
_______________________
appoint a beneficiary, on a form supplied by the
Administrator, to receive vested Deferred Shares granted to
such Participant in the event of such Participant's death
prior to a Trigger Event and may change such beneficiary
designation at any time prior to the Participant's death.
If no such beneficiary designation is in effect at the date
16
</PAGE>
<PAGE>
of the Participant's death, the Participant's vested
Deferred Shares shall be deliverable in accordance with
Section 5 to the legal representative of his estate or the
person who inherits such vested Deferred Shares by will or
the laws of descent and distribution.
11.7. No Rights to Corporate Assets. The Plan is
_____________________________
an unfunded plan of deferred compensation and nothing in the
Plan shall give a Participant, the Participant's benefici-
aries or any other person any interest of any kind in the
assets of the Company or its affiliates or create a trust or
fiduciary relationship of any kind between the Company or
its affiliates and any such person.
11.8. No Limit on Corporate Actions. Except as
_____________________________
otherwise provided in Section 10, nothing contained in the
Plan shall prevent the Company from taking any action which
is deemed by the Company to be appropriate or in its best
interest, whether or not such action would have any adverse
effect on the Plan or any Deferred Share issued under the
Plan. No Participant, beneficiary or other person shall
have any claim against the Company as a result of any such
action.
11.9. No Rights as Stockholders. Prior to the
_________________________
delivery of Deferred Shares to the Participant and except as
otherwise specifically provided herein, a Participant shall
17
</PAGE>
<PAGE>
have no rights as a shareholder of the Company by reason of
the grant of Deferred Shares hereunder.
11.10. Compliance With Applicable Laws. The
_______________________________
Company shall not be required to take any action, including
the issuance of any Deferred Share or the making of any
payment with respect thereto, if such action would violate
any applicable federal or state law. The Company shall use
its best efforts to effect compliance with such laws,
including taking all reasonable actions necessary to obtain
any required consents.
18
</PAGE>
<PAGE>
11.11. Governing Law. All rights and obligations
_____________
under the Plan shall be governed by, and the Plan shall be
construed in accordance with, the internal laws of the State
of Delaware. Titles and headings to sections are for the
purpose of reference only, and in no way limit or otherwise
affect the meaning or interpretation of any provision of the
Plan.
IN WITNESS WHEREOF, the Company has caused its
duly authorized officer to execute this restated plan
document as of the 16th day of August, 1993.
INFINITY BROADCASTING CORPORATION
By: /s/ Farid Suleman
______________________________
19
</PAGE>
<PAGE>
AMENDMENT TO THE
INFINITY BROADCASTING CORPORATION
DEFERRED SHARE PLAN
_________________________________
The Infinity Broadcasting Corporation Deferred
Share Plan (the "Plan"), as amended and restated as of
August 16, 1993, is hereby further amended as follows to
reflect the Company's three-for-two stock split in the form
of a stock dividend, effective as of November 19, 1993:
Section 3 of the Plan ("Number of Shares
Available") is amended so that the first sentence thereof
reads in its entirety as follows:
"Subject to Section 4.4, the maximum number of
Class A Deferred Shares which may be granted
pursuant to the terms of the Plan shall be 240,641
and the maximum number of Class B Deferred Shares
which may be granted pursuant to the terms of the
Plan shall be 782,969."
IN WITNESS WHEREOF, the Company has caused its
duly authorized officer to execute this amendment instrument
as of the 19th day of November, 1993.
INFINITY BROADCASTING CORPORATION
By /s/ Farid Suleman
_______________________________
Title Vice President-Finance and
Chief Financial Officer
</PAGE>
<PAGE>
CASH BONUS COMPENSATION
PLAN OF
INFINITY BROADCASTING CORPORATION
_________________________________
1. Purpose.
_______
This plan, which shall be known as the Infinity
Broadcasting Corporation Cash Bonus Compensation Plan (the
"Plan") is intended to promote the interests of Infinity
Broadcasting Corporation (the "Company") and its stockhold-
ers by providing incentives for senior executive officers of
the Company to promote the growth of the Company's earnings.
Such incentives are intended to further align the interests
of such senior executive officers with the interests of the
Company's shareholders. The Company intends that bonus
compensation payable pursuant to this Plan shall constitute
"performance-based compensation" within the meaning of Sec-
tion 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations from time to time promul-
gated thereunder ("Section 162(m)").
2. Eligible Employees.
__________________
The Company's Chief Executive Officer (the "CEO"),
the Company's Chief Financial Officer (the "CFO"), and such
other senior executive officers of the Company or its
affiliates as may from time to time be designated as Plan
participants by the Company's Board of Directors (the
"Board") shall be eligible to receive cash bonus awards
under this Plan. The CEO, the CFO, and each other senior
executive officer designated prior to the commencement of a
Plan Year (or, if later, prior to the commencement of such
individual's service as a senior executive officer or such
other time as shall be specified under Section 162(m)) as a
Plan participant for such Plan Year shall be an "Eligible
Participant" for such Plan Year.
3. Plan Year.
_________
The Plan Year shall be the fiscal year of the
Company, currently the calendar year. The 1994 calendar
year shall be the first Plan Year.
4. Effective Date.
______________
The Plan was adopted on March 30, 1994 and shall
become effective upon approval of the material terms hereof
</page>
<PAGE>
by the Company's stockholders in accordance with the re-
quirements of Section 162(m).
5. Administration.
______________
(a) The Administrator. The term "Administrator"
_________________
as used herein shall mean a committee appointed by the Board
and consisting of two or more members of the Board.
(b) Authority. Subject to the provisions of the
_________
Plan, the Administrator shall interpret the Plan and the
awards granted under the Plan, shall make all other deter-
minations necessary or advisable for the administration of
the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any award,
in the manner and to the extent the Administrator deems
desirable to carry the Plan or award into effect.
(c) Procedure. All determinations of the Admin-
_________
istrator shall be made by not less than a majority of its
members at a meeting at which a quorum is present. A major-
ity of the entire Administrator shall constitute a quorum
for the transaction of business. Any action required or
permitted to be taken at a meeting of the Administrator may
be taken without a meeting, if a unanimous written consent
which sets forth the action is signed by each member of the
Administrator and filed with the minutes of the proceedings
of the Administrator. No member of the Administrator shall
be liable, in the absence of bad faith, for any act or omis-
sion with respect to his services. Without limiting the
generality of the foregoing or the scope of any applicable
provision of the Company's Charter or By-Laws or any indem-
nification agreement, no member of the Administrator shall
be liable for any action or determination made in good faith
with respect to the Plan or any award granted thereunder.
6. Awards.
______
(a) Establishment of EBITDA Target
______________________________
(i) General Rule. Prior to the beginning of each
____________
Plan Year (or at such other time as may be permitted under
Section 162(m)), the Administrator shall establish in writ-
ing an EBITDA target (the "EBITDA Target") for such Plan
Year.
2
</page>
<PAGE>
(ii) 1994 Plan Year. On or before March 31,
______________
1994, the Administrator shall establish the EBITDA Target
for the Plan Year commencing January 1, 1994.
(b) Definition of EBITDA. As used in the Plan,
____________________
the term EBITDA means earnings of the Company and its con-
solidated subsidiaries before interest, taxes, depreciation
and amortization, as reported in the Company's report on
Form 10-K for the fiscal year or, if for a portion of a Plan
Year, as approved by the Company's Board of Directors based
on the Company's books and records.
(c) Awards. (i) If the EBITDA Target for the
______
Plan Year has been attained as of the last day of the appli-
cable Plan Year, the Administrator shall certify the attain-
ment of such target and, following such certification, may
award any Eligible Participant who was employed by the Com-
pany on the last day of the Plan Year a cash bonus. The
maximum cash bonus that may be awarded to any such Eligible
Participant with respect to the first Plan Year in which
such participant is eligible to receive an award hereunder
shall be $1,500,000. The maximum cash bonus that can be
awarded to an Eligible Participant for each succeeding Plan
Year shall be the sum of (x) $1,500,000 and (y) the excess,
_ _
if any, of (A) the maximum cash bonus that could have been
_
awarded to such Eligible Participant for the most recent
Plan Year with respect to which such Eligible Participant
could have received an award hereunder over (B) the cash
_
bonus amount actually awarded to such Eligible Participant
with respect to such most recent Plan Year (such excess
being referred to herein as the Eligible Participant's "Ad-
ditional Amount"). In no event shall any Eligible Partici-
pant's Additional Amount exceed $1,500,000 for any Plan
Year.
(ii) In the event an Eligible Participant's em-
ployment terminates prior to the last day of a Plan Year,
the Administrator shall determine whether the EBITDA Target,
prorated through the end of the month in which such termina-
tion takes place, has been met. If such prorated target has
been met, the Administrator may, in its sole discretion,
award the Eligible Participant a cash bonus with respect to
such prorated portion of the Plan Year, provided that the
amount of such bonus shall in no event exceed a portion,
prorated through the end of the month in which such termina-
tion takes place, of the maximum bonus amount applicable to
the participant for the Plan Year, determined in accordance
with this subsection 6(c).
3
</page>
<PAGE>
(iii) Notwithstanding the Company's attainment of
the EBITDA Target for a Plan Year, the Administrator may, in
its sole discretion, award an Eligible Participant less than
the maximum cash bonus and may decline to award a bonus to
an Eligible Participant. In determining whether to award
less than the maximum permissible bonus to an Eligible Par-
ticipant, the Administrator may take into account factors
such as the individual's office or position, levels of com-
pensation paid by the Company's industry peers and competi-
tors, the individual's degree of responsibility for and
contributions to the growth and success of the Company, the
individual's potential, the individual's conduct, or any
other performance factors it may consider relevant.
(d) Time of Granting Award. Nothing contained in
______________________
the Plan or any resolutions adopted or to be adopted by the
Board or the stockholders of the Company shall constitute
the granting of any award hereunder. Awards shall be grant-
ed only by action of or pursuant to the authority of the
Administrator.
(e) Payment of Awards. If an award is to be
_________________
granted hereunder, such award shall be declared and paid not
later than the thirtieth day following the filing by the
Company of its Form 10-K with the Securities and Exchange
Commission for the applicable Plan Year or, if the award is
for part of the year, not later than the sixtieth day fol-
lowing the end of the last month taken into account in de-
termining whether the EBITDA Target has been met. In the
event the Administrator does not declare an award permitted
hereunder for an Eligible Participant within such period,
the Administrator shall be deemed to have declined to make
an award to such Eligible Participant with respect to such
Plan Year.
7. Limitations.
___________
(a) Authority Limited to Administrator. No per-
__________________________________
son shall at any time have any right to receive an award
hereunder and no person shall have authority to enter into
an agreement for the granting of an award or to make any
representation or warranty with respect thereto, except as
granted by the Administrator, as provided in the Plan.
Eligible Participants shall have no rights in respect of
their awards except as set forth in the Plan.
(b) No Right to Employment. Neither the action
______________________
of the Company in establishing the Plan, nor the actions
4
</page>
<PAGE>
taken by it or by the Administrator under the Plan, nor any
provision of the Plan, shall be construed as giving to any
person the right to be retained in the employ of the Company
or any affiliate or as giving to any person the right to be
retained as a director of the Company or any affiliate. No
provision of the Plan will supersede any terms of any em-
ployment agreement that an Eligible Participant may have
with the Company; provided that bonuses payable pursuant
________
hereto shall be deemed for purposes of an applicable employ-
ment agreement to have been paid pursuant thereto, to the
extent such agreement provides for the payment of cash bonus
compensation.
(c) Awards Not Transferable. An award shall not
_______________________
be transferable otherwise than by will or by the laws of
descent and distribution. Any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of, or to subject
to execution, attachment or similar process any award, other
than as permitted in the preceding sentence, shall give no
right to the purported transferee.
8. Amendments and Termination.
__________________________
The Board may terminate, alter, suspend, modify or
amend the Plan in such respects as it shall deem advisable.
No termination, alteration, suspension, modification or
amendment of the Plan may, without the consent of the Eligi-
ble Participant to whom any award shall theretofore have
been granted, adversely affect the rights of such Eligible
Participant under any such award then outstanding.
9. Governing Law.
_____________
The Plan shall be governed by and construed and
enforced in accordance with the laws of the State of New
York, without regard to principles of conflicts of law.
IN WITNESS WHEREOF, the Company has caused its
duly authorized officer to execute this plan document as of
the 30th day of March, 1994.
INFINITY BROADCASTING CORPORATION
By: /s/ Farid Suleman
______________________________
Title: Vice President-Finance
and Chief Financial Officer
5
</page>
<PAGE>
EXECUTION COUNTERPART
AMENDED AND RESTATED CREDIT AGREEMENT,
PURCHASE AND RELEASE AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, PURCHASE
AND RELEASE AGREEMENT dated as of February 3, 1994 among
UNISTAR RADIO NETWORKS, INC. (formerly known as Unistar
Holdings, Inc.), a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Com-
____
pany"); UNISTAR COMMUNICATIONS GROUP, INC., a corporation
____
duly organized and validly existing under the laws of the
State of Delaware (the "Parent"); THE MARKET RESEARCH GROUP,
______
INC., a corporation duly organized and validly existing
under the laws of the State of Delaware (the "Subsidiary");
__________
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) ("Chase"),
_____
as lender (in such capacity, the "Lender"); Chase, as agent
______
for the Lenders under the Existing Credit Agreement referred
to below (in such capacity, the "Agent"); INFINITY BROAD-
_____
CASTING CORPORATION, a Delaware corporation ("Infinity");
________
and NOVASTAR, INC., a Delaware corporation ("Novastar").
________
The Company, the Parent, the Subsidiary, the Lend-
ers (as defined in the Existing Credit Agreement referred to
below) and the Agent (together with a subsidiary of the
Company that has since merged with and into the Company) are
parties to a Credit Agreement dated as of August 17, 1989
(as heretofore amended, modified and supplemented and in
effect on the date hereof, the "Existing Credit Agreement")
_________________________
which provides, among other things, for the payment of the
principal of and interest on the Class A Loans and the Class
B Loans and for the payment of the principal of the Deferred
Interest (as each such term is defined in the Existing
Credit Agreement). As of the date hereof, Chase is the only
Lender under the Existing Credit Agreement.
Infinity, the Parent, the Company, Chase and
Novastar are parties to an Amended and Restated Management
Agreement dated September 29, 1993 (the "Existing Management
___________________
Agreement") which provides for, among other things, the
_________
management by Infinity of the Parent and its direct and
indirect subsidiaries.
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
</PAGE>
<PAGE>
The Parent, the Company, Infinity and Westwood
One, Inc. ("Westwood") are parties to a Stock Purchase Agre-
________
ement dated as of November 4, 1993 (the "Stock Purchase
______________
Agreement") which provides for, among other things, the sale
_________
by the Parent of all of the stock of the Company to Westwood
(such sale is referred to herein as the "Sale"). In connec-
____
tion with the Sale, (A) the principal of, interest on, and
all other amounts owed to the Lender and the Agent with
respect to, the Class A Loans shall be paid in full, (B)
Infinity shall agree to purchase all of the shares of stock
of the Parent owned by Novastar, (C) the Parent shall (x)
assume the obligations of the Company to pay the principal
of, and all other amounts owed to the Lender and the Agent
with respect to, the Deferred Interest and (y) agree to
restructure terms of the Deferred Interest and (D) the
Lender shall forgive the Class B Loans.
The parties hereto wish to (x) amend and restate
the Existing Credit Agreement and (y) terminate the Existing
Management Agreement and, accordingly, the parties hereto
agree as follows:
Section 1. Defined Terms. As used herein, the
_____________
following terms shall have the following meanings:
"Closing Date" shall mean the date on which each
____________
of the conditions set forth in Section 9 hereof have been
satisfied.
"DIN" and "DIN Loan" shall each have the meaning
___ ________
assigned thereto in Section 2.02 hereof.
"Existing Documents" shall mean, collectively, the
__________________
Existing Credit Agreement, the Existing Notes and the Exist-
ing Security Agreement.
"Existing Notes" shall mean the Deferred Interest
______________
Note and the Class B Note delivered by the Company to the
Lender pursuant to the Existing Credit Agreement.
"Existing Security Agreement" shall mean the Secu-
___________________________
rity Agreement dated as of August 17, 1989 between the Com-
pany, the Parent, the Subsidiary and the Agent (together
with a subsidiary of the Company that has since merged with
and into the Company), as the same has been modified and
supplemented and is in effect prior to the Closing Date.
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
2
</PAGE>
<PAGE>
"Loan Agreement" shall mean the Revolving Credit
______________
and Term Loan Agreement dated as of January 31, 1994 among
Research Acquisition Corp., the Subsidiary and the Parent as
the same shall be amended, modified and supplemented from
time to time.
"Obligors" shall mean, collectively, the Parent
________
and the Subsidiary.
"Security Documents" shall mean, collectively,
__________________
(x) the Amended and Restated Security Agreement dated as of
August 17, 1989 and amended and restated as of February 3,
1994 between the Company, the Parent, the Subsidiary, the
Lender and the Agent, as modified and supplemented from time
to time and (y) all Uniform Commercial Code statements
delivered in connection therewith.
Section 2. Amendment and Restatement of the
________________________________
Existing Credit Agreement. Subject to the satisfaction of
_________________________
the conditions precedent set forth in Section 9 hereof, but
effective as of the date hereof, the Company, the Parent,
the Subsidiary, the Lender, the Agent and Infinity hereby
agree to amend and restate the Existing Credit Agreement in
its entirety to read as set forth in this Section 2.
2.01 Assumption by the Parent. The Parent hereby
________________________
assumes (A) the obligations of the Company to the Lender and
the Agent with respect to (i) the payment of the principal
of the Deferred Interest and (ii) the payment of all other
amounts owed under the Existing Documents with respect to
the Deferred Interest and (B) all other obligations of the
Company to the Agent and the Lender under the Existing Docu-
ments in connection with the Deferred Interest.
2.02 Restructuring of Deferred Interest. The
__________________________________
Parent hereby agrees that the obligations of the Company to
the Lender and the Agent assumed by the Parent pursuant to
Section 2.01 hereof shall be superseded and replaced by the
terms and conditions of this Agreement, the note attached
hereto as Exhibit A (the "DIN") and the Security Documents.
___
As restructured pursuant to this Section 2.02, the Deferred
Interest shall be referred to herein as the "DIN Loan".
________
2.03 Release of Agent. The Company, the Parent,
________________
the Subsidiary and the Lender hereby agree to release the
Agent of its duties and obligations under the Existing
Credit Agreement. The provisions of Section 11 of the
Existing Credit Agreement shall be deemed to continue in
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
3
</PAGE>
<PAGE>
effect for the benefit of the Agent in respect of any
actions taken or omitted to be taken by it while it was
acting as the Agent under the Existing Documents.
2.04 Restructuring of Class B Loans. The princi-
______________________________
pal of and interest on the Class B Loans shall be deemed
forgiven and shall no longer be due and owing by the Company
to the Lender hereunder, under the Existing Credit Agreement
or otherwise, and the Class B Note shall be canceled.
2.05 Covenants. Each Obligor agrees that, until
_________
payment in full of all amounts owed with respect to the DIN
Loan hereunder and under the DIN:
A. Information. The Parent shall deliver to the
___________
Lender:
(a) as soon as available and in any event within
45 days after the end of each quarterly fiscal period
of each fiscal year of the Parent, consolidated and
consolidating statements of income, retained earnings
and changes in financial position (or of cash flow, as
the case may be) of the Parent and its subsidiaries for
such period and for the period from the beginning of
the respective fiscal year to the end of such period,
and the related consolidated and consolidating balance
sheets as at the end of such period; and
(b) from time to time (i) notice of all legal
proceedings affecting the Parent and its subsidiaries
and (ii) such other information regarding the business,
affairs or financial condition of any Obligor or its
subsidiaries as the Lender may reasonably request.
B. Corporate Existence, Etc. Each Obligor will,
_________________________
and will cause each of its subsidiaries to: maintain its
corporate existence and all of its material rights, privi-
leges and franchises (except as permitted under Section
2.05.C hereof); comply with the requirements of all applica-
ble laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements would materially and adversely affect the Par-
ent and its subsidiaries; pay and discharge all taxes,
assessments and governmental charges or levies imposed on it
or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for
any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper pro-
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
4
</PAGE>
<PAGE>
ceedings and against which reserves are being maintained in
accordance with generally accepted accounting principles;
maintain all of its properties used or useful in its busi-
ness in good working order and condition, ordinary wear and
tear excepted; and permit representatives of the Lender,
during normal business hours on reasonable advance notice,
to examine, copy and make extracts from its books and
records, to inspect its properties, and to discuss its busi-
ness and affairs with its officers, all to the extent rea-
sonably requested by the Lender.
C. Prohibition of Fundamental Changes. No
__________________________________
Obligor will, and no Obligor will permit any subsidiary of
such Obligor to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution);
acquire any business or assets from, or capital stock of, or
be a party to any acquisition of, any person; convey, sell,
lease, transfer or otherwise dispose of, in one transaction
or a series of transactions all or any part of its proper-
ties; provided that the Subsidiary may be merged or consoli-
________
dated with the Parent if the Parent shall be the continuing
or surviving corporation.
D. Limitation on Liens. No Obligor will, and no
___________________
Obligor will permit any subsidiary of such Obligor to, cre-
ate, incur, assume or suffer to exist any lien, pledge,
charge, security interest or encumbrance (the foregoing
shall be collectively referred to herein as "Liens") of any
_____
kind upon any of its property except: (a) Liens created
pursuant to the Security Documents; and (b) Liens imposed by
any governmental authority for taxes, assessments or charges
not yet due or which are being contested in good faith and
by appropriate proceedings if adequate reserves with respect
thereto are maintained.
E. Indebtedness. No Obligor will, and no Obligor
____________
will permit any subsidiary of such Obligor to, create, incur
or suffer to exist any indebtedness except indebtedness to
the Lender hereunder and under the DIN.
F. Dividend Payments. No Obligor will, and no
_________________
Obligor will permit any subsidiary of such Obligor to, de-
clare or make any dividend payment at any time; provided
________
that any subsidiary of the Parent may declare and pay any
dividend payment to the Parent.
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
5
</PAGE>
<PAGE>
G. Mandatory Prepayment. The Parent and the
____________________
Subsidiary hereby agree that, until the principal of the DIN
Loan shall have been paid in full, upon receipt by the Par-
ent and/or the Subsidiary of any payment of principal of,
interest on or any other amount owed by Research Acquisition
Corp. with respect to the Loans (as defined in the Loan
Agreement), the Parent and/or the Subsidiary shall pay each
such payment it receives to the Lender to be applied to the
payment in full of the principal of the DIN Loan; provided
________
that, notwithstanding the foregoing, prior to the Revolver
Maturity Date (as defined in the Loan Agreement), the Parent
shall not be required to prepay to the Lender pursuant to
this clause G payments of principal that the Parent receives
with respect to the Revolving Credit Loans (as defined in
the Loan Agreement) except in the case of acceleration of
the Revolving Credit Loans under the Loan Agreement or any
reduction in the Revolving Credit Commitment (as defined in
the Loan Agreement) thereunder which, pursuant to the terms
of the Loan Agreement, results in a prepayment of the Re-
volving Credit Loans.
Section 3. Existing Management Agreement. Sub-
_____________________________
ject to the satisfaction of the conditions set forth in
Section 9 of this Agreement, but effective as of the date
hereof, Infinity, the Parent, the Company, Chase and
Novastar hereby agree that the Existing Management Agreement
shall be terminated and of no further force or effect.
Section 4. Purchase of Class A Stock and Class B
_____________________________________
Stock.
_____
(a) Infinity hereby agrees that, on the date
which is 35 days after the Closing Date (the "Purchase
________
Date"), Infinity or a direct or indirect wholly-owned sub-
____
sidiary of Infinity (an "Infinity Wholly-Owned Subsidiary")
________________________________
shall be deemed to have purchased all, but not less than
all, of the outstanding Class A Stock, par value $.01 per
share, of the Parent (the "Class A Stock") and Class B
_____________
Stock, par value $.01 per share, of the Parent (the "Class B
_______
Stock", and together with the Class A Stock, the "Stock")
_____ _____
held by Novastar for an aggregate purchase price of $1 (the
"Purchase Price").
______________
(b) It is understood and agreed that Infinity or
an Infinity Wholly-Owned Subsidiary may purchase the Stock
in the manner provided in clause (a) of this Section 4 on
any date prior to the Purchase Date so long as Infinity
gives Novastar 3 days notice of the date on which Infinity
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
6
</PAGE>
<PAGE>
(or such Subsidiary) will purchase the Stock (such date
being referred to herein as the "Early Purchase Date").
___________________
(c) On the Purchase Date or the Early Purchase
Date, as the case may be, (i) Novastar hereby agrees to
deliver to Infinity (or the Infinity Wholly-Owned Subsid-
iary) the certificates representing the Class A Stock and
the Class B Stock, each accompanied by a stock power in
favor of Infinity (or such Subsidiary) and all necessary
stock transfer stamps and (ii) Infinity agrees to pay the
Purchase Price to Novastar. Infinity hereby assumes, effec-
tive as of the date on which Infinity (or such Subsidiary)
purchases the Stock, the obligations of Chase and Novastar
under Section 5.01 of the Stock Purchase Agreement dated
February 17, 1993 (the "Principal Stock Purchase Agreement")
__________________________________
among the Parent, the Company, Chase, National Westminster
Bank USA, Novastar and the Principal Stockholders referred
to therein.
Section 5. Representations and Warranties.
______________________________
(a) Each of the parties hereto represents and
warrants to the others that, as of the date hereof: (i) it
is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is formed and
has all requisite authority to own its property and assets
and to conduct its business as presently conducted or pro-
posed to be conducted under this Agreement; (ii) it has the
power and authority to execute, deliver and perform its
obligations under this Agreement and, in the case of the
Parent, the DIN; (iii) all necessary action has been taken
to authorize its execution, delivery and performance of this
Agreement and, in the case of the Parent, the DIN and this
Agreement and, in the case of the Parent, the DIN consti-
tutes its legal, valid and binding obligation enforceable
against it in accordance with its respective terms, except
as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium and other similar laws affecting the
rights of creditors generally and by general principles of
equity; (iv) neither its execution and delivery of this
Agreement, and in the case of the Parent, the DIN, nor the
performance of its obligations hereunder and, in the case of
the Parent, under the DIN will: (A) conflict with or violate
any provision of its certificate of incorporation or by-
laws; (B) conflict with, violate or result in a breach of
any constitution, law, judgment, regulation or order of any
governmental authority applicable to it; or (C) conflict
with, violate or result in a breach of or constitute a
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
7
</PAGE>
<PAGE>
default under or result in the imposition or creation of any
mortgage, pledge, lien, security interest or other encum-
brance under any term or condition of any mortgage, inden-
ture, loan agreement or other agreement to which it is a
party or by which its properties or assets are bound; (v) no
approval, authorization, order or consent of, or declara-
tion, registration or filing with any governmental authority
is required for its valid execution, delivery and perfor-
mance of this Agreement or, in the case of the Parent, the
DIN, except such as have been duly obtained or made; and
(vi) there is no action, suit or proceeding, at law or in
equity, by or before any court, tribunal or governmental
authority pending, or, to its knowledge, threatened, which,
if adversely determined, would materially and adversely
affect its ability to perform its obligations hereunder or
the validity or enforceability of this Agreement or, in the
case of the Parent, the DIN.
(b) Infinity hereby represents and warrants to
the Lender that, as of the Closing Date after giving effect
to the Sale and the transactions contemplated hereby, the
current assets of the Parent shall be greater than the sum
of (i) the current liabilities of the Parent plus (ii) the
____
principal of the DIN Loan and all amounts owed by the Parent
to the Lender in connection therewith.
Section 6. Consent under Stock Purchase Agree-
___________________________________
ment. Subject to the satisfaction of the conditions prece-
____
dent set forth in Section 9 hereof, but effective as of the
date of this Agreement, the Lender under the Existing Credit
Agreement hereby consents to the Sale.
Section 7. Release. Subject to the satisfaction
_______
of the conditions precedent set forth in Section 9 hereof,
but effective as of the date of this Agreement the Lender
and the Agent hereby release and discharge (i) all of the
liens, security interests and all encumbrances of any kind
on the capital stock and all assets of the Company (includ-
ing, without limitation, those created pursuant to the
Existing Security Agreement) and (ii) each of the Parent and
the Subsidiary from its obligations under Section 6 of the
Existing Credit Agreement in respect of its guarantee of the
Guaranteed Obligations under the Existing Credit Agreement.
The Lender hereby directs the Agent to execute and deliver
to the Parent, upon the satisfaction of the conditions pre-
cedent set forth in Section 9 hereof, a Release
substantially in the form of Exhibit B hereto and the Uni-
form Commercial Code Termination Statements as shall be
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
8
</PAGE>
<PAGE>
appropriate to evidence of record the release in clause (i)
above.
Section 8. Collateral Security for the DIN Loan.
____________________________________
It is the intention of the parties hereto that the DIN Loan
shall be entitled to the benefits of the collateral security
provided for in the Existing Security Agreement as if the
DIN Loan and the DIN had been provided for when the Existing
Security Agreement was originally executed. The Parent, the
Subsidiary, the Agent and the Lender hereby agree to execute
and deliver to the Lender an Amended and Restated Security
Agreement substantially in the form of Exhibit C to the
Existing Credit Agreement (with appropriate modifications to
reflect the proper parties thereto and the collateral secu-
rity covered thereby which shall include the additional
collateral pledged to the Agent for the benefit of the Lend-
ers pursuant to the Consent, Release and Agreement dated as
of January 31, 1994 between the Company, the Obligors, the
Lender, the Agent, Chase, Infinity and Novastar).
Section 9. Conditions Precedent. The amendment
____________________
and restatement of the Existing Credit Agreement set forth
in Section 2 hereof, the termination of the Management Agre-
ement set forth in Section 3 hereof, the consent set forth
in Section 6 hereof, and the release set forth in Section 7
hereof, shall become effective as of the date hereof on the
date upon which the following conditions precedent are sat-
isfied:
(a) Execution. This Amended and Restated Credit
_________
Agreement, Purchase and Release Agreement shall have been
executed and delivered by each of the parties hereto.
(b) DIN. The Parent shall have delivered to (i)
___
the Lender, in exchange for such Lender's Deferred Interest
Note heretofore delivered to such Lender pursuant to the
Existing Credit Agreement, the DIN; and (ii) the Lender
shall have delivered to the Parent the Class A Note and the
Class B Note marked "canceled".
(c) Corporate Documents. The Agent shall have
___________________
received resolutions of the Company, the Parent and the
Subsidiary with respect to this Agreement and the transac-
tions contemplated hereby.
(d) Stock Purchase Agreement. All of the condi-
________________________
tions to the closing set forth in Article V and Article VI
of the Stock Purchase Agreement shall have been satisfied.
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
9
</PAGE>
<PAGE>
Payment to the Lender of all amounts owed with respect to
the Class A Loans pursuant to clause 9(e) hereof shall con-
stitute a representation by the Parent that such conditions
to closing have been satisfied.
(e) Payment in full of Class A Loans. The prin-
________________________________
cipal of, interest on and all other amounts owed to the
Agent and the Lender with respect to the Class A Loans shall
have been paid in full.
(f) Resignation of Directors. Each member of the
________________________
board of directors of the Company shall have resigned.
(g) Amended and Restated Security Agreement. The
_______________________________________
Company, the Parent, the Subsidiary, the Agent (as defined
thereunder) and the Lender shall execute and deliver the
Amended and Restated Security Agreement referred to in Sec-
tion 8 hereof, in form and substance satisfactory to the
Lender. The Lender, the Agent, the Parent and the Subsid-
iary shall execute and deliver the appropriate Uniform Com-
mercial Code financing statements (or amendment statements),
if any, in connection with such Amended and Restated
Security Agreement.
(h) Other Documents. The Agent shall have re-
_______________
ceived such other documents as the Agent, any Lender or
special New York counsel to the Lenders may reasonably re-
quest.
Section 10. Miscellaneous.
_____________
10.01 Waiver. Any term or condition of this
______
Agreement or the DIN may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument
duly executed by or on behalf of the party waiving such term
or condition. No waiver by any party of any term or condi-
tion of this Agreement or the DIN, in any one or more
instances, shall be deemed to be or construed as a waiver of
the same or any other term or condition of this Agreement or
the DIN on any future occasion. All remedies, either under
this Agreement, the DIN or by law or otherwise afforded,
will be cumulative and not alternative.
10.02 Notices. All notices, requests and other
_______
communications hereunder, under the DIN and under the Secu-
rity Documents must be in writing and will be deemed to have
been duly given only if delivered personally or by facsimile
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
10
</PAGE>
<PAGE>
transmission or mailed (first class postage prepaid) to the
parties at the "Address for Notices" specified below its
name on the signature pages hereof; or, as to any party, at
such other address as shall be designated by such party in a
notice to each other party.
10.03 Expenses. Infinity agrees to pay all rea-
________
sonable costs and expenses of the Lender and the Agent
(including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy, special New
York counsel to the Lender) in connection with the execu-
tion, delivery, performance and enforcement of this Agree-
ment, the DIN and the Security Documents and all of the
other transactions contemplated hereby. The provisions of
Section 12.03 of the Existing Credit Agreement shall be
incorporated herein by reference and remain in full force
and effect after the Closing Date of this Agreement to the
extent that such Section relates to obligations of the Par-
ent and the Subsidiary prior to the Closing Date.
10.04 Entire Agreement. This Agreement super-
________________
sedes all prior discussions and agreements between the par-
ties with respect to the subject matter hereof and contains
the sole and entire agreement between the parties hereto
with respect to the subject matter hereof.
10.05 Amendment. This Agreement may be amended,
_________
supplemented or modified only by a written instrument duly
executed by or on behalf of the Parent, the Subsidiary, the
Lender and Infinity.
10.06 Assignments and Participations. The consent
______________________________
of the Lender shall be required in connection with any
assignment of this Agreement, the DIN or the Security Docu-
ments.
10.07 Headings. The headings used in this Agree-
________
ment have been inserted for convenience of reference only
and do not define or limit the provisions hereof.
10.08 Governing Law; Submission to Jurisdiction;
__________________________________________
Waiver of Jury Trial. THIS AGREEMENT, THE SECURITY DOCU-
____________________ __________________________________
MENTS AND THE DIN SHALL BE GOVERNED BY, AND CONSTRUED IN
________________________________________________________
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH
________________________________________________________
OBLIGOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
__________________________________________________________
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
__________________________________________________________
OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
__________________________________________________________
YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
___________________________________________________________
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
11
</PAGE>
<PAGE>
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
________________________________________________________
CONTEMPLATED HEREBY. EACH OBLIGOR IRREVOCABLY WAIVES, TO
_________________________________________________________
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT
___________________________________________________________
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
___________________________________________________________
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
__________________________________________________________
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
____________________________________________________________
IN AN INCONVENIENT FORUM. EACH OF THE OBLIGORS, THE LENDER
___________________________________________________________
AND INFINITY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
______________________________________________________
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
___________________________________________________________
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
__________________________________________________________
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
__________________________________________________
10.09 Counterparts. This Agreement may be exe-
____________
cuted in any number of counterparts, each of which will be
deemed an original, but all of which together will consti-
tute one and the same instrument.
10.10 Survival. The obligations of Infinity
________
under Section 10.03 hereof shall survive the repayment of
the DIN Loan.
10.11 Closing Documents. Promptly after the
_________________
Closing Date, the Parent agrees to deliver to the Lender a
copy of all documents delivered in connection with the clos-
ing of the Stock Purchase Agreement and the transactions
contemplated thereby.
Section 11. Release of Company Directors. The
____________________________
Parent, the Company, the Subsidiary and Infinity for itself
and on behalf of its subsidiaries, affiliates, directors,
officers, agents, successors and assigns (collectively, the
"Releasors") release and discharge Thomas V. Reifenheiser
_________
and Glenn R. Meyer (each, a "Named Releasee") and each such
______________
Named Releasee's respective affiliates, agents, successors
and assigns (collectively, the "Releasees", and
_________
individually, a "Releasee") from all actions, suits, debts,
________
covenants, contracts, agreements, claims and demands whatso-
ever, in law or equity (collectively, "Claims") which
______
against any Releasee, the Releasors ever had, now have or
may hereafter have, whether direct or indirect, individual,
joint, several, class, cooperative, derivative or in any
other capacity, for any reason whatsoever, known or unknown,
based upon or arising out of any Releasee's acts, omissions
or in any Releasee's capacity as a director, officer,
employee, affiliate or controlling person of the Company.
The Releasors hereby waive any rights conferred under any
law, statute, rule or regulation that, in the absence of an
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
12
</PAGE>
<PAGE>
effective waiver by Releasors of such rights, would limit or
reduce the effectiveness of this Section 11.
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
13
</PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Amended and Restated Credit Agreement, Purchase and
Release Agreement to be duly executed as of the day and year
first above written.
UNISTAR RADIO NETWORKS, INC.
(formerly known as Unistar
Holdings, Inc.)
By /s/ Charles N. Persing
_____________________________
Title: Chief Financial Officer
UNISTAR COMMUNICATIONS GROUP, INC.
By /s/ Charles N. Persing
_____________________________
Title: Chief Financial Officer
THE MARKET RESEARCH GROUP, INC.
By /s/ Charles N. Persing
_____________________________
Title: Chief Financial Officer
Address for Notices for the
Company, the Parent and the
Subsidiary:
Unistar Communications Group, Inc.
1675 Broadway
17th Floor
New York, New York 10019
Attention: Charles N. Persing
Chief Financial Officer
Facsimile No.: (212) 247-0394
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By /s/ Pamela M. Stumpp
____________________________
Title: Managing Director
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
14
</PAGE>
<PAGE>
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as Agent
By /s/ Pamela M. Stumpp
____________________________
Title: Managing Director
NOVASTAR, INC.
By /s/ Pamela M. Stumpp
____________________________
Title: Vice President
Address for Notices for the Lender,
the Agent and Novastar:
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
15th Floor
New York, New York 10081
Attention: Pamela M. Stumpp,
Managing Director, or
any other Chase Officer
in the Restructuring
and Recoveries Group
Facsimile No.: (212) 422-6249
and
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
4th Floor
New York, New York 10081
Attention: Stephen J. Vaccaro,
Managing Director, or
any other Chase Officer
in the Media Group
Facsimile No.: (212) 552-5334
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
15
</PAGE>
<PAGE>
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
55th Floor
New York, New York 10005
Attention: G. Malcolm Holderness,
Esq.
Facsimile No.: (212) 530-5219
INFINITY BROADCASTING CORPORATION
By /s/ Farid Suleman
____________________________
Title: Vice President-Finance and
Chief Financial Officer
Address for Notices:
Infinity Broadcasting Corporation
600 Madison Avenue
4th Floor
New York, New York 10022
Attention: Farid Suleman
Chief Financial Officer
Facsimile No.: (212) 888-2959
Amended and Restated Credit Agreement,
______________________________________
Purchase and Release Agreement
______________________________
16
</PAGE>
<PAGE>
EXHIBIT A
[Form of DIN]
Note
$3,380,753.50 ______________, 199_
New York, New York
FOR VALUE RECEIVED, UNISTAR COMMUNICATIONS GROUP,
INC., a Delaware corporation (the "Parent"), hereby promises
______
to pay to THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
(the "Lender") at the principal office of The Chase
______
Manhattan Bank (National Association) at 1 Chase Manhattan
Plaza, New York, New York 10081, the principal sum of THREE
MILLION THREE HUNDRED EIGHTY THOUSAND SEVEN HUNDRED FIFTY-
THREE DOLLARS AND 50/100 (or such lesser amount as shall
equal the aggregate unpaid principal amount of the DIN Loan
owed to the Lender by the Parent hereunder) in accordance
with the terms hereof, in lawful money of the United States
of America and in immediately available funds, on the dates
and in the principal amounts provided herein, at such of-
fice, in like money and funds, on the dates provided herein.
This Note is the DIN referred to in the Amended
and Restated Credit Agreement, Purchase and Release Agree-
ment (as modified and supplemented and in effect from time
to time, the "Credit Agreement") dated as of August 17, 1989
________________
and amended and restated as of February 3, 1994 among the
Unistar Radio Networks, Inc., the Parent, the Subsidiary,
Infinity, Novastar and The Chase Manhattan Bank (National
Association), as Lender and as Agent, and evidences the DIN
Loan owed to the Lender thereunder.
Section 1. Definitions. Unless otherwise defined
___________
herein, terms defined in the Credit Agreement shall be used
herein as defined therein.
Section 2. Payment of Principal. The Parent
____________________
hereby promises to pay the outstanding principal amount of
this Note on June 30, 1995.
Section 3. Voluntary Prepayments. The Parent
_____________________
shall have the right to prepay the principal of this Note in
whole or in part at any time without premium or penalty.
Section 4. Excess Cash Flow Prepayment. Not later
___________________________
than 45 days after the last day of each fiscal quarter of
the Parent, the Parent shall prepay this Note in an aggre-
gate principal amount equal to the Excess Cash Flow for such
fiscal quarter. For purposes hereof, "Excess Cash Flow"
________________
shall mean for any fiscal quarter, an amount equal to the
excess (if any) of (1) (a) the sum of (i) the amount (in
excess of zero) of cash of the Parent on hand at the begin-
ning of such fiscal quarter plus (ii) cash operating reve-
____
nues of the Parent for such quarter minus (b) cash operating
_____
DIN
___
1
</PAGE>
<PAGE>
expenses (including taxes paid or payable and principal
payments on this Note other than principal payments under
this Section 4) for such quarter over (2) $1,000,000.
____
Section 5. Payments.
________
(a) Except to the extent otherwise provided
herein, all payments of principal of this Note shall be made
in Dollars, in immediately available funds, without deduc-
tion, set-off or counterclaim, to the Lender at account
number NYAO-D1-900-9-000002 maintained by the Lender at 1
Chase Manhattan Plaza, New York, New York, 10081 (or to such
other address as the Lender shall notify the Parent), not
later than 12:00 noon New York time on the date on which
such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on
the next succeeding business day).
(b) The Lender may (but shall not be obligated
to) debit the amount of any such payment which is not made
by such time to any ordinary deposit account of the Parent
with the Lender (with notice to the Parent).
(c) If the due date of any payment under this
Note or the Credit Agreement would otherwise fall on a day
which is not a business day such date shall be extended to
the next succeeding business day.
Section 6. Events of Default. If one or more of
_________________
the following events (herein called "Events of Default")
_________________
shall occur and be continuing:
(a) the Parent shall default in the payment when
due of any principal of this Note or the payment of any
other amount owed to the Lender under the Credit Agree-
ment; or
(b) the Parent shall admit in writing its inabil-
ity to, or be generally unable to, pay its debts as
such debts become due; or
(c) the Parent shall (i) apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (ii) make
a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Bankruptcy
Code (as now or hereafter in effect), (iv) file a peti-
tion seeking to take advantage of any other law relat-
ing to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts,
(v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
DIN
___
2
</PAGE>
<PAGE>
against it in an involuntary case under the Bankruptcy
Code, or (vi) take any corporate action for the purpose
of effecting any of the foregoing; or
(d) a proceeding or case shall be commenced,
without the application or consent of the Parent in any
court of competent jurisdiction, seeking (i) its liqui-
dation, reorganization, dissolution or winding-up, or
the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquida-
tor or the like of the Parent or of all or any substan-
tial part of its assets, or (iii) similar relief in
respect of the Parent under any law relating to bank-
ruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding
or case shall continue undismissed, or an order, judg-
ment or decree approving or ordering any of the forego-
ing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order
for relief against the Parent shall be entered in an
involuntary case under the Bankruptcy Code; or
(e) any Obligor shall default in the performance
of any of its obligations under Section 2.05 of the
Credit Agreement, or in the performance of any of its
obligations under the Security Documents and such de-
fault shall continue unremedied for a period of twenty
days after notice thereof to the Parent by the Lender;
THEREUPON: (i) in the case of an Event of Default other
than one referred to in clause (c) or (d) of this Section 6,
the Lender shall by notice to the Parent, declare the prin-
cipal amount then outstanding of the DIN Loan and all other
amounts payable by the Parent hereunder and under the Credit
Agreement to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without pre-
sentment, demand, protest or other formalities of any kind,
all of which is hereby expressly waived by the Parent; and
(ii) in the case of the occurrence of an Event of Default
referred to in clause (c) or (d) of this Section 6, the
principal amount then outstanding of the DIN Loan and all
other amounts payable by the Parent hereunder and under the
Credit Agreement shall automatically become immediately due
and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly
waived by the Parent.
Section 7. Miscellaneous. All notices with re-
_____________
spect hereto shall be given in accordance with the terms of
the Credit Agreement. All expenses with respect hereto
shall be paid in accordance with the terms of the Credit
Agreement. Any provision of this Note may be amended or
modified only by an instrument in writing signed by the
DIN
___
3
</PAGE>
<PAGE>
Parent and the Lender. This Note shall be binding upon and
inure to the benefit of the parties hereto and their respec-
tive successors and permitted assigns (pursuant to Section
10.06 of the Credit Agreement).
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
________________________________________________
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
__________________________________________________
UNISTAR COMMUNICATIONS GROUP, INC.
By________________________________
Title:
DIN
___
4
</PAGE>
<PAGE>
EXHIBIT B
RELEASE
RELEASE dated as of ___________, 1994 by THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), as agent (in such
capacity, the "Agent") for the Lenders party to the Credit
_____
Agreement dated as of August 17, 1989 (as the same has been
amended, modified and supplemented and is in effect prior to
the closing of the transactions described below, the "Credit
______
Agreement") between Unistar Radio Networks, Inc. (the "Com-
_________ ____
pany"), Unistar Communications Group, Inc. (the "Parent"),
____ ______
The Market Research Group, Inc. (the "Subsidiary"), said
__________
Lenders and the Agent, for the benefit of the Company, the
Parent, Infinity Broadcasting Corporation ("Infinity") and
________
Westwood One, Inc. (the "Purchaser").
_________
WHEREAS, pursuant to the Credit Agreement, the
Lenders have extended credit to the Company which is secured
by liens granted by the Company, the Parent and the Subsid-
iary in favor of the Agent for the benefit of the Lenders
pursuant to a Security Agreement dated as of August 17, 1989
(as heretofore modified, supplemented and amended, the
"Security Agreement") between the Company, the Parent, the
__________________
Subsidiary and the Agent;
WHEREAS, the Company, the Parent, Infinity and the
Purchaser are parties to a Stock Purchase Agreement dated as
of November 4, 1993 (the "Stock Purchase Agreement"), which
________________________
provides for the sale by the Parent to the Purchaser of all
of the stock of the Company (the "Sale");
____
WHEREAS, in connection with the Sale, the princi-
pal of, interest on, and all other amounts owed to the Lend-
ers and the Agent with respect to, the Class A Loans under
the Credit Agreement shall be paid in full (payment of such
principal, interest and other amounts being referred to
herein as the "Payment") and each of the Credit Agreement
_______
and Security Agreement shall be amended and restated in
their entirety;
WHEREAS, the Agent has been authorized and
directed, upon receipt of the Payment and the satisfaction
of certain other conditions, to release the lien in favor of
the Agent for the benefit of the Lenders under the Security
Agreement on (x) the stock of the Company sold to the Pur-
chaser pursuant to the Stock Purchase Agreement (the
"Stock") and (y) all of the assets of the Company (the "As-
_____ ___
sets");
____
Release
_______
</PAGE>
<PAGE>
NOW THEREFORE, the Agent hereby releases and dis-
charges the liens, security interests and all encumbrances
of any kind on the Stock and the Assets in favor of the
Agent (including, without limitation, those created pursuant
to the Security Agreement) and agrees to execute and deliver
to the Parent such Uniform Commercial Code Termination Stat-
ements, and any further instruments, as shall be appropriate
to evidence of record the foregoing release and discharge.
IN WITNESS WHEREOF, the Agent has caused this
Release to be duly executed as of the day and year first
above written.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By________________________
Title:
Release
_______
2
</PAGE>
<PAGE>
<PAGE>
MANAGEMENT AGREEMENT
____________________
This MANAGEMENT AGREEMENT (this "Agreement"),
dated as of February 3, 1994, is entered into by and between
Westwood One, Inc., a Delaware corporation ("Westwood One")
and Infinity Broadcasting Corporation, a Delaware corpora-
tion ("Manager").
R E C I T A L S:
A. Pursuant to a Stock Purchase Agreement (the
"Stock Purchase Agreement") dated as of November 4, 1993
among Westwood One, Unistar Communications Group, Inc., a
Delaware corporation (the "Parent"), and Manager, Westwood
One has, concurrent with the execution of this Agreement,
purchased all of the capital stock (the "Acquisition") of
Unistar Radio Networks, Inc., a Delaware corporation ("Uni-
star").
B. Pursuant to a Securities Purchase Agreement
(the "Securities Purchase Agreement") dated as of Novem-
ber 4, 1993 by and between Westwood One and a wholly-owned
subsidiary of Manager, such subsidiary has purchased from
Westwood One 5,000,000 shares of the Common Stock of
Westwood One and has received a warrant to purchase up to
3,000,000 additional shares of Common Stock of Westwood One.
C. Manager is engaged in the business of owning
and operating radio stations and producing programming
therefor, and it is a condition to the closing of each of
the Stock Purchase Agreement and Securities Purchase Agree-
ment that Manager provide management services to Westwood
One and its direct and indirect subsidiaries (collectively,
the "Company"), upon the terms herein provided.
D. Accordingly, Westwood One desires that Manager
provide such management services to the Company, and the
Manager is willing to perform such services.
A G R E E M E N T :
NOW THEREFORE, in consideration of the premises
and the agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as fol-
lows:
</PAGE>
<PAGE>
ARTICLE I
MANAGEMENT SERVICES
Section 1.1 Management Services. Manager shall,
___________________
during the term of this Agreement, manage the business and
operations of the Company by providing the following ser-
vices:
(a) Manager's Chief Executive Officer shall also
serve as Chief Executive Officer of the Company, pro-
vided that, so long as Mel Karmazin serves as the chief
executive officer of Manager or is otherwise affiliated
with manager in an executive officer or other senior
managerial capacity (each a "Managerial Position"),
Mr. Karmazin shall also serve as Chief Executive
Officer pursuant to the terms of this Agreement. In
that capacity, the Chief Executive Officer will have
the authority and responsibility normally attendant to
such office and will, among other things, be
responsible and subject to the authority of the Board
of Directors of Westwood One (the "Board of
Directors"), for all operations and functions of the
Company, recommendations for strategic direction and
the general implementation of the Company's business or
operating plan;
(b) Manager's Chief Financial Officer, at any
given time, shall also serve as Chief Financial Officer
of the Company. In that capacity, such Chief Financial
Officer will have the authority and responsibility
normally attendant to such office and will, among other
things, be responsible and subject to the authority of
the Chief Executive Officer of Westwood One and the
Board of Directors;
(c) Mr. Karmazin and Mr. Farid Suleman, as Man-
ager's Chief Executive and Chief Financial Officers,
respectively, have been duly elected by the Board of
Directors to hold such respective offices of Westwood
One; and
(d) Manager shall provide support and administra-
tive personnel required by the above-described offi-
cers.
Such management shall be performed by Manager (i) with such
care as a prudent manager would use in the conduct of his
company's affairs and (ii) with a view to maximizing the
2
</PAGE>
<PAGE>
long-term value of the Company. The management to be per-
formed by Manager pursuant to this Section 1.1 is herein
sometimes referred to as the "Management Services". The
Management Services shall not include the exercise by the
Company of its rights and obligations under this Agreement,
which rights and obligations shall be exercised and per-
formed by, or as directed by, the Board of Directors.
Section 1.2 Manager Employees. Manager will, in
_________________
performing the Management Services, make available and use
the services of the officers and employees described in Sec-
tion 1.1 and such other officers and other employees of
Manager as may be necessary, together with officers and
other employees of the Company, to perform the Management
Services. It is understood and agreed that the personnel
described in Section 1.1 and any such other officers and
other employees of Manager so made available and used will
continue to be employees of Manager and not of the Company
and that Manger, and not the Company, will be responsible
for their salary, employee benefits and related costs. The
Company acknowledges and agrees that such officers and other
employees of Manager shall continue to perform services for
Manager and that they will devote only so much of their time
to the business of the Company as is necessary for Manager
to perform the Management Services hereunder.
Section 1.3 Supervisory Role of Board of Direc-
___________________________________
tors. The providing of Management Services by Manager here-
____
under shall always be subject to the direction and supervi-
sion of the Board of Directors.
Section 1.4 Information. (a) During the term of
___________
this Agreement, Manager and the Company shall each, at the
reasonable request of the other, supply the other with the
information requested in connection with the performance of
the Management Services.
(b) Manager shall notify the Board of Directors
as promptly as practicable after the occurrence of any of
the following:
(i) receipt by Manager of any written notice from
any governmental agency of any claim or legal process
or notification that, in the reasonable opinion of
Manager, is or is likely to become material to the
Company; or
3
</PAGE>
<PAGE>
(ii) any other development that, in the reasonable
opinion of Manager, materially affects or is likely
materially to affect the Company or the ability of
Manager to fulfill its obligations under this Agree-
ment.
Section 1.5 Compliance with Applicable Law.
______________________________
Manager will perform the Management Services in compliance
in all material respects with applicable law.
Section 1.6 Reimbursement for Expenses. The
__________________________
compensation to be paid to Manager as provided in Article II
does not include, and the Company agrees to promptly reim-
burse Manager for, all out-of-pocket expenses incurred by
Manager in performing the Management Services, but not in-
cluding (a) the salaries, employee benefits and related
costs of officers and other employees of Manager made avail-
able and used as provided in Article I or (b) office and
other overhead expenses of Manager.
Section 1.7 Arm's Length Transactions Between the
_____________________________________
Company and Manager. Notwithstanding any other provision of
___________________
this agreement, (a) all transactions between the Company and
Manager or any of its affiliates, including without limita-
tion any regarding use of programming, sales commissions,
compensation to radio stations or the employment or compen-
sation of talent, shall be on a basis that is at least as
favorable to the Company as if the Company were to obtain
the products or services to which such transactions relate
from an independent third party and (b) all agreements be-
tween Manager or any affiliate of Manager and the Company
must be approved by the Board of Directors.
Section 1.8 Indemnification. (a) The Company
_______________
agrees to indemnify and hold manager and its directors,
officers, employees and agents (collectively, the "Indemni-
fied parties") harmless from and against any and all ac-
tions, claims, damages, and liabilities (and all actions in
respect thereof and any legal or other expenses in giving
testimony or furnishing documents in response to a subpoena
or otherwise and weather or not a party thereto), whether or
not arising out of third party claims, including reasonable
legal fees and expenses in connection with, and other costs
of, investigating, preparing or defending any such action or
claim or enforcing its rights under this Agreement, whether
or not in connection with litigation in which and Indemni-
fied Party is a party, and as and when incurred, caused by,
relating to, based upon or arising out of (directly or indi-
4
</PAGE>
<PAGE>
rectly) such Indemnified Party's acceptance of or the per-
formance of its obligations under this Agreement or other-
wise relating to the Company or the Company's business,
assets or properties; provided, however, that such indemnity
________ _______
shall not apply to any such action, claim, damage, liability
or cost to the extent such action, claim, damage, liability
or cost has been finally adjudicated by a court of competent
jurisdiction to have resulted from the gross negligence or
willful misconduct of the Indemnified Parties (including any
consultants, independent contractors or other third parties
engaged by them if, but only if, the Indemnified Parties
were grossly negligent in selecting such third parties) or a
material breach of this Agreement by Manager; provided,
________
further, however, neither (i) the taking of any action by
_______ _______
Manager directed by the Board of Directors to be taken by
Manager nor (ii) the failure of Manager to take action spe-
cifically recommended to the Board of Directors by Manager
that the Board of Directors directed Manager not to take,
shall, for purposes of the preceding provision or Sec-
tion 1.9, constitute gross negligence, willful misconduct or
a material breach of this Agreement by Manager.
(b) If any action, proceeding or Investigation is
commenced for which an Indemnified Party proposes to demand
such indemnification, it will notify Westwood One with rea-
sonable promptness; provided, however, that any failure by
________ _______
an Indemnified Party to notify Westwood One will not relieve
the Company from its obligations hereunder, except to the
extent that such failure shall have prejudiced the defense
of such action. The Company shall promptly pay expenses
reasonably and actually incurred by an Indemnified Party
(including the reasonable fees and expenses of counsel) in
investigating, defending or settling any action, proceeding
or investigation in which an Indemnified Party is a party or
is threatened to be made a party or otherwise involved
therewith by reason of its relationship with the Company
hereunder or otherwise, in advance of the final disposition
of such action, proceeding, or investigation upon submission
of invoices therefor. Manager, on behalf of each Indemni-
fied Party, hereby undertakes, and the Company hereby
accepts its undertaking, to repay any and all such amounts
so advanced if it shall ultimately be determined that such
Indemnified Party is not entitled to be indemnified there-
for. If any such action, proceeding, or investigation in
which an Indemnified Party is a party is also against the
Company, the Indemnified Party may provide the Company with
legal representation by the same counsel who represents the
Indemnified Party; provided, however, that if such counsel
________ _______
5
</PAGE>
<PAGE>
or counsel to such Indemnified Party shall determine that
due to the existence of actual or potential conflicts of
interest between such Indemnified Party and any one or more
of Westwood One or its subsidiaries, such counsel is unable
to represent both the Indemnified Party and one or more of
Westwood One or its subsidiaries, then the Company shall be
entitled to use separate counsel of its own choice, and
shall bear full responsibility for all reasonable expenses
of such separate counsel. Nothing herein shall prevent the
Company from using separate counsel of its own choice at its
own expense. The Company shall only be liable for settle-
ments of claims against any Indemnified Party made with the
Company's written consent, which consent shall not be unrea-
sonably withheld. The Indemnifying Party shall not, in
defense of any such claim involving an Indemnified Party,
except with the prior written consent of such Indemnified
Party, consent to the 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 in
question to such Indemnified Party and any affiliates of
such Indemnified Party named in such claim of an unqualified
release of all liabilities in respect of such claims.
Section 1.9 Limitation on Manager's Liability.
_________________________________
Notwithstanding any provision to the contrary in this Agree-
ment, Manager shall have no liability to the Company here-
under for its failure to perform its obligations under this
Agreement except to the extent that any such failure has
been finally adjudicated by a court of competent jurisdic-
tion to have resulted from the gross negligence or wilful
misconduct of, or a material breach of its obligations under
this Agreement by, Manager, subject to the last proviso of
Section 1.8(a).
Section 1.10 Directors and Officers Insurance;
_________________________________
Indemnification of Individual Officers. The Company shall
______________________________________
provide the individuals serving in the capacities specified
in Section 1.1(a) and Section 1.1(b) with (a) the coverage
available to the senior officers of the Company under the
Company's policies of directors and officers insurance, if
any, (b) indemnification agreements, if any, that are or
have been provided by the Company to its current or subse-
quent senior executive officers and (c) the indemnification
provided by the Company's by-laws and Certificate of Incor-
poration available to the senior officers of the Company.
6
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<PAGE>
ARTICLE II
COMPENSATION TO MANAGER
Section 2.1 Base Management Fee. (a) Westwood
___________________
One shall pay to the Manager a base management fee at the
rate of $2,000,000 annually (subject to increase as provided
in paragraph (b) below), which shall be payable in advance
in monthly installments on the first business day of each
month (prorated for any partial month).
(b) The dollar amount of the base management fee
(and the installment payments thereof) set forth in para-
graph (a) above shall be increased, effective as of the
first day of each fiscal year of the Company commencing with
the fiscal year beginning December 1, 1994, by a percentage
amount equal to the percentage increase in the Consumer
Price Index All Urban Consumers (Los Angeles-Anaheim-River-
side area; base 1982-1984=100) as published by the United
States Department of Labor, Bureau of Labor Statistics as of
such first day of each fiscal year compared to such index as
in effect on the date hereof. The base management fee, as
adjusted from time to time, shall hereinafter be referred to
as the "Base Fee.
Section 2.2 Cash Incentive Bonus. (a) Westwood
____________________
One shall additionally pay to the Manager, as a cash incen-
tive bonus (the "Cash Bonus"), 10% of the amount, if any, by
which Westwood One's Operating Cash Flow (as hereinafter
defined) exceeds the following target amounts (the "Target
Amounts," which are subject to modification as provided in
paragraph (b) below) for each fiscal year of Westwood One
ending in the applicable fiscal year indicated below:
Fiscal Year Ending Target Amount for Bonus
__________________ _______________________
1994 $27,000,000
1995 $29,700,000
1996 $32,670,000
1997 $35,937,000
1998 $39,531,000
In the case of the first fiscal year ending in 1994, the
Cash Bonus shall not be prorated to reflect the portion of
such fiscal year during which this Agreement has been in
effect, but rather shall be paid in full, and all cost sav-
ings realized in such fiscal year will be calculated on a
pro forma basis to give effect to such cost reductions for
the entire fiscal year if, but only if, Operating Cash Flow
7
</PAGE>
<PAGE>
for the last six months of such fiscal year is at least
$13,500,000 (on an actual basis, without applying such pro
forma adjustment).
(b) "Operating Cash Flow" shall mean the consoli-
dated net income of Westwood One before taxes and extraordi-
nary gains or losses, determined in accordance with general-
ly accepted accounting principles consistently applied, plus
(i) depreciation, amortization, interest expense, compensa-
tion paid or payable to the Manager pursuant to this Article
II (including any compensation expense recognized by reason
of the provisions of Section 2.3 hereof) and any expenses
(except depreciation, amortization and interest expense)
incurred in connection with any business of Westwood One
other than its network radio business, less (ii) any reve-
nues from businesses other than Westwood One's consolidated
network radio business (including but not limited to any
revenues from its Radio & Records business).
(c) If, after the date hereof, the Company either
acquires or disposes of any network radio business, the
Target Amounts set forth in paragraph (a) of this Sec-
tion 2.2 shall be adjusted, upward (in the case of an acqui-
sition) or downward (in the case of a disposition), by mutu-
al agreement, to fairly reflect the increase or decrease in
Operating Cash Flow anticipated to result from such acquisi-
tion or disposition. Westwood One and the Manager agree to
negotiate in good faith such adjustment. Additionally, if
Westwood One retains its Radio & Records business or ac-
quires any other non-radio network business, then Manager
shall operate such retained business and, in such event,
Manager and the Board of Directors of Westwood One shall
determine what adjustments, if any, should be made to the
Target Amounts set forth in Section 2.2(a) to take into
account any Operating Cash Flow generated by such non-radio
network businesses and modify the definition of Operating
Cash Flow set forth in Section 2.2(b), If necessary. In the
event the parties are unable to agree upon an adjustment,
the adjustments shall be determined by the Company's inde-
pendent auditors. Each party agrees to cooperate fully with
such auditors in an attempt to resolve the adjustment. The
decision reached by such auditors shall be legally binding
on the parties and admissible in any legal proceedings.
(d) Each Cash Bonus shall be payable as promptly
as practicable after Westwood One's consolidated income
statements, as approved by the Board of Directors and certi-
8
</PAGE>
<PAGE>
fied by Westwood One's independent public accountants, have
been prepared with respect to each applicable fiscal year.
Section 2.3 Stock Incentive Option. As addition-
______________________
al compensation to the Manager hereunder, Westwood One has,
concurrent with the execution of this Agreement, executed
and delivered to Infinity Network Inc., a wholly-owned sub-
sidiary of Manager ("Manager Sub"), a Stock Incentive Op-
tion, in the form of Exhibit A hereto (the "Stock Incentive
Option"), granting the Manager or Manager Sub the right to
purchase an aggregate of up to 1,500,000 shares of Westwood
One's common stock, upon and subject to the terms and condi-
tions thereof.
ARTICLE III
TERM OF AGREEMENT; EARLY TERMINATION
Section 3.1 Term of Agreement. The term of this
_________________
Agreement commences on the date of this Agreement and will
end on the fifth anniversary of the date of this Agreement,
unless terminated earlier pursuant to Section 3.2 or extend-
ed pursuant to Section 3.3.
Section 3.2 Early Termination. (a) Westwood One
_________________
may terminate the term of this Agreement without cause at
any time, by specifying a termination date in a written
notice of termination to Manager given by the Board of Di-
rectors on behalf of Westwood One not later than 30 days
prior to such date of termination. Upon any termination of
this Agreement by Westwood One under this Section 3.2(a),
Manager shall be entitled to the payment of the Base Fee,
payable in the manner set forth in Section 2.1, for the
remaining term of this Agreement. Additionally, upon such
termination Manager's rights to the Cash Bonus with respect
to the fiscal year in which such termination occurs shall
immediately be vested (but Manager shall not be entitled to
any cash bonus in any subsequent fiscal year) and Manager's
rights to purchase 3,000,000 shares of Westwood One's common
stock under the Purchase Warrant (as defined in the Securi-
ties Purchase Agreement) shall immediately vest.
(b) Westwood One may terminate the term of this
Agreement (i) by a two-thirds vote of the Board of Directors
of Westwood One, if Manager shall have willfully committed a
material act of fraud or gross misconduct in performing its
obligations hereunder, and such act first occurs during the
term of this Agreement and has a material adverse effect
9
</PAGE>
<PAGE>
upon the business of the Company, or (ii) if Manager shall
have failed to provide the services of Mel Karmazin as Chief
Executive Officer of the Company hereunder during any period
in which Mr. Karmazin held a Managerial Position, which date
of termination shall be specified in a written notice of
termination to Manager given by the Board of Directors not
later than ninety (90) days prior to such date of termina-
tion, which notice specifies in reasonable detail the basis,
pursuant to this Section 3.2(b), for such termination.
(c) The term of this Agreement shall terminate
forthwith upon notice from Westwood One to Manager if
(i) Manager shall (A) apply for or consent to the
appointment of, or the taking of possession by, a re-
ceiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (B) make
a general assignment for the benefit of its creditors,
(C) commence a voluntary case under the Bankruptcy Code
(as now or hereafter in effect), (D) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, (E) fail to con-
trovert in a timely and appropriate manner, or acqui-
esce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (F) take
any corporate action for the purpose of effecting any
of the foregoing; or
(ii) a proceeding or case shall be commenced,
without the application or consent of Manager, in any
court of competent jurisdiction, seeking (A) its liqui-
dation, reorganization, dissolution or winding-up, or
the composition or readjustment of its debts, (B) the
appointment of a trustee, receiver, custodian, liquida-
tor or the like of Manager or of all or any substantial
part of its assets, or (C) similar relief in-respect of
Manager under any law relating to bankruptcy, insolven-
cy, reorganization, winding-up, or composition or ad-
justment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a
period of 60 or more days; or an order for relief
against Manager shall be entered in an involuntary case
under the Bankruptcy Code.
10
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<PAGE>
Section 3.3 Extension. The term of this Agree-
_________
ment may be extended for a period of one year from the fifth
anniversary of the date of this Agreement with the approval
of such extension by the Board of Directors and the written
agreement, prior to such fifth anniversary, of both parties
hereto, and may be similarly extended, with such approval
and agreement, for additional one-year periods following
such initial one-year extension. The parties shall, in
connection with any such extension, mutually agree upon new
Target Amounts and rights to purchase additional shares of
Westwood One's Common Stock applicable to such extension
period for purposes of Sections 2.2 and 2.3.
Section 3.4 Survival and Termination. The provi-
________________________
sions of Sections 1.6, 1.8, 1.9, 1.10, 3.2(a) and 4.1 (to
the extent provided therein) shall survive the termination
of this Agreement pursuant to this Article III. Upon any
termination of this Agreement pursuant to Section 3.2(b) or
(c), Westwood One shall have no further obligations to com-
pensate Manager pursuant to the terms of this Agreement.
ARTICLE IV
NONCOMPETITION; RIGHT OF FIRST REFUSAL
Section 4.1 Noncompetition, Etc. (a) Except
___________________
pursuant to this Agreement or as otherwise approved by the
Board of Directors, Manager will, and will cause its direct
and indirect majority-owned subsidiaries ("Manager Subsid-
iaries") and its and their officers to, refrain from, either
alone or in conjunction with any other person, or directly
or indirectly through its or their present or future affili-
ates:
(i) during the term of this Agreement, managing,
purchasing, establishing, participating in, or having a
substantial ownership interest in (other than through
the ownership of five percent (5%) or less of any class
of securities registered under the Securities Exchange
Act of 1934, as amended), or otherwise lending assis-
tance (financial or otherwise) to, a radio network
company (which, for purposes of this Agreement, shall
mean Capital Cities/ABC, Inc. and CBS Radio Networks or
their successors or any other compensation-based radio
network that is RADAR-rated) (a "Radio Network Compa-
ny"), or entering into, or obtaining rights under, any
agreement providing for an option to do any of the
foregoing, provided, however, that if this Agreement is
________ _______
11
</PAGE>
<PAGE>
terminated by Westwood One pursuant to Section 3.2(b),
this clause (i) shall be applicable for a period of two
(2) years after such termination of this Agreement so
long as Westwood One continues to pay Manager the Base
Fee for such period after termination;
(ii) during the term of this Agreement and for a
period of two years thereafter, disclosing (unless
compelled by judicial or administrative process) or
using any confidential or secret information relating
to the Company or any of its clients, customers or
suppliers, except, during the term of this Agreement,
as Manager reasonably determines to be necessary in
connection with the performance of Manager's obliga-
tions under this Agreement and in the best interest of
the Company; or
(iii) during the term of this Agreement, causing or
attempting to cause (A) any client, customer or sup-
plier of the Company to terminate or materially reduce
its business with the Company or (B) any officer, em-
ployee or consultant of the Company or any Subsidiary
to resign or sever a relationship with the Company;
provided, however, that if this Agreement is terminated
________ _______
by Westwood One pursuant to Section 3.2(b), this clause
(iii) shall be applicable for a period of two (2) years
after such termination so long as Westwood One contin-
ues to pay Manager the Base Fee for such period after
termination.
(b) The parties hereto recognize that the laws
and public policies of the various states of the United
States may differ as to the validity and enforceability of
covenants similar to those set forth in this Section 4.1.
It is the intention of the parties that the provisions of
this Section 4.1 be enforced to the fullest extent permis-
sible under the laws and policies of each jurisdiction in
which enforcement may be sought, and that the unenforcea-
bility (or the modification to conform to such laws or poli-
cies) of any provisions of this Section 4.1 shall not render
unenforceable, or impair, the remainder of the provisions of
this Section 4.1. Accordingly, if any provision of this
Section 4.1 shall be determined to be invalid or unenforce-
able, such invalidity or unenforceability shall be deemed to
apply only with respect to the operation of such provision
in the particular jurisdiction in which such determination
is made and not with respect to any other provision or
jurisdiction.
12
</PAGE>
<PAGE>
(c) The parties hereto acknowledge and agree that
any remedy at law for any breach of the provisions of this
Section 4.1 may be inadequate, and Manager hereby consents
to the granting by any court of an injunction or other equi-
table relief, without the necessity of actual monetary loss
being proved, in order that the breach or threatened breach
of such provisions may be effectively restrained.
Section 4.2 Right of Refusal as to Certain
______________________________
Programming. Manager agrees that, unless Manager is con-
___________
tractually prohibited from doing so, before it or any of its
subsidiary entities (each a "Manager Subsidiary") offers,
sells or otherwise makes available, in each case, for bar-
ter, to any Radar-rated radio network any radio programming
for sale to any national advertiser in exchange for air time
(collectively, "Programs for Barter"), Manager shall, sub-
ject to Section 4.3, first offer (by written notice to the
Board of Directors, which notice shall describe the nature
of such Programs for Barter and the terms and conditions on
which Manager or such Manager Subsidiary intends so to of-
fer, sell or otherwise make available such Programs for
Barter, in reasonable detail) such Programs for Barter to
the Company on the same terms and conditions (adjusted to
reflect the fact that the Company would become the prospec-
tive buyer of such Programs for Barter) as Manager or such
Manager Subsidiary intends so to offer, sell or otherwise
make available such Programs for Barter, provided, however,
________ _______
this sentence shall not apply to the offering, selling or
otherwise making available by Manager or an Manager Subsid-
iary of the services of either Howard Stern or the "Grease-
man" and related programming and products to a third party.
If the Board of Directors, acting on behalf of the Company,
fails to accept such offer by written notice to Manager
within ten (10) business days after notice is given by Man-
ager, Manager or such Manager Subsidiary, as the case may
be, may, for a period of one hundred eighty (180) days
thereafter, offer, sell or otherwise make available such
Programs for Barter to one or more third parties on terms
and conditions no more favorable to the third party than
those specified in such notice to the Board of Directors,
but not otherwise, provided, however, the rights of the
________ _______
Company and the obligations of Manager under this Sec-
tion 4.2 shall terminate upon the end of the term of this
Agreement as to any offer made to the Company pursuant to
this section 4.2 that is not so accepted by the Board of
Directors, acting on behalf of the Company, prior to the end
of the term of this Agreement. If the Board of Directors,
acting on behalf of the Company, accepts such offer during
13
</PAGE>
<PAGE>
the term of this Agreement, Manager, acting on its own be-
half and, pursuant to Article I hereof, on behalf of the
Company will cause the transaction to be consummated, sub-
ject to the approval of any agreements in respect thereof by
the Board of Directors.
Section 4.3 Existing Contracts Excluded. Notwith-
___________________________
standing the provisions of Section 4.1 or 4.2, Manager and
each Manager Subsidiary may honor any contracts that any of
them has entered into prior to the date hereof regarding
programming or other services with other companies in the
radio broadcast industry and any renewals or extensions
thereof on commercially reasonable terms.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of
_________________________________
Each Party. Each of the parties hereto represents and war-
__________
rants to the other that, as of the date hereof:
(a) it is duly organized, validly existing and in
good standing under the laws of the jurisdiction in
which it is formed and has all requisite corporate
authority to own its property and assets and to conduct
its business as presently conducted or proposed to be
conducted under this Agreement;
(b) it has the corporate power and authority to
execute, deliver and perform its obligations under this
Agreement;
(c) all necessary action has been taken to autho-
rize its execution, delivery and performance of this
Agreement and this Agreement constitutes its legal,
valid and binding obligation enforceable against it in
accordance with its respective terms, except as such
enforcement may be limited by applicable bankruptcy,
insolvency, moratorium and other similar laws affecting
the rights of creditors generally and by general prin-
ciples of equity;
(d) neither its execution and delivery of this
Agreement nor the performance of its obligations here-
under will:
14
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<PAGE>
(i) conflict with or violate any provision of its
certificate of incorporation or by-laws;
(ii) conflict with, violate or result in a breach
of any constitution, law, judgment, regulation or order
of any governmental authority applicable to it; or
(iii) conflict with, violate or result in a breach
of or constitute a default under or result in the impo-
sition or creation of any mortgage, pledge, lien, secu-
rity interest or other encumbrance under any term or
condition of any mortgage, indenture, loan agreement or
other agreement to which it is a party or by which its
properties or assets are bound;
(e) no approval, authorization, order or consent
of, or declaration, registration or filing with any govern-
mental authority or third party is required for its valid
execution, delivery and performance of this Agreement, ex-
cept such as have been duly obtained or made; and
(f) there is no action, suit or proceeding, at
law or in equity, by or before any court, tribunal or gov-
ernmental authority or third party pending, or, to its
knowledge, threatened, which, if adversely determined, would
materially and adversely affect its ability to perform its
obligations hereunder or the validity or enforceability of
this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. All notices, requests and
_______
other communications hereunder must be in writing and will
be deemed to have been duly given only if delivered person-
ally or by facsimile transmission or mailed (first class
postage prepaid) to the parties at the following addresses
or facsimile numbers:
If to Westwood Westwood One, Inc.
One, to: 9540 Washington Boulevard
Culver City, California 90232
Attention: Mr. Norman J. Pattiz
Fax No.: (310) 840-0834
15
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<PAGE>
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
If to Manager, Infinity Broadcasting Corporation
to: 600 Madison Avenue, 4th Floor
New York, New York 10022
Attention: Mr. Farid Suleman
Fax No.: (212) 888-2959
With a copy to: Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Richard D. Bohm, Esq.
Fax No.: (212) 909-6836
All such notices, requests and other communications will
(i) if delivered personally to the address as provided in
this Section, be deemed given upon delivery, (ii) if deliv-
ered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon confirmation
of transmission, and (iii) if delivered by mail in the man-
ner described above to the address as provided in this Sec-
tion, be deemed given upon receipt (in each case regardless
of whether such notice, request or other communication is
received by any other person to whom a copy of such notice,
request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its
address, facsimile number or other information for the pur-
pose of notices to that party by giving notice specifying
such change to the other parties hereto.
Section 6.2 Entire Agreement. This Agreement,
________________
the Stock Purchase Agreement, the Securities Purchase Agree-
ment, the Purchase Warrant (as defined in the Securities
Purchase Agreement), the Registration Rights Agreement (as
defined in the Securities Purchase Agreement), the Stock
Incentive Option, and the Voting Agreement (as defined in
the Securities Purchase Agreement) supersede all prior dis-
cussions and agreements between the parties with respect to
the subject matter hereof and contain the sole and entire
agreement between the parties hereto with respect to the
subject matter hereof.
Section 6.3 Waiver. Any term or condition of
______
this Agreement may be waived at any time by the party that
16
</PAGE>
<PAGE>
is entitled to the benefit thereof, but no such waiver shall
be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or
condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future
occasion. All remedies, either under this Agreement or by
law or otherwise afforded, will be cumulative and not alter-
native.
Section 6.4 Amendment. This Agreement may be
_________
amended, supplemented or modified only by a written instru-
ment duly executed by or on behalf of each party hereto.
Section 6.5 No Third Party Beneficiary. The
__________________________
terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention
of the parties to confer third-party beneficiary-rights upon
any other person.
Section 6.6 No Assignment: Binding Effect.
_____________________________
Neither this Agreement nor any right, interest or obligation
hereunder may be assigned by either party hereto without the
prior written consent of the other party hereto and any
attempt to do so will be void, except for assignments and
transfers by operation of law. Subject to the preceding
sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by, the parties and their
respective successors and assigns.
Section 6.7 Headings. The headings used in this
________
Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.
Section 6.8 Invalid Provisions. If any provision
__________________
of this Agreement, other than Section 4.1(a), which shall be
subject to the provisions of Sections 4.1(b) and (c), is
held to be illegal, invalid or unenforceable under any pres-
ent or future law, and if the rights or obligations of any
party hereto under this Agreement will not be materially and
adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced
as if such illegal, invalid or unenforceable provision had
never comprised a part hereof, (c) the remaining provisions
of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforce-
17
</PAGE>
<PAGE>
able provision or by its severance herefrom and (d) in lieu
of such illegal, invalid or unenforceable provision, there
will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may
be possible.
Section 6.9 Governing Law. This Agreement shall
_____________
be governed by and construed in accordance with the laws of
the State of Delaware.
Section 6.10 Counterparts. This Agreement may be
____________
executed in any number of counterparts, each of which will
be deemed an original, but all of which together will con-
stitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be executed on its behalf by its
duly authorized officer on the date of this Agreement.
WESTWOOD ONE, INC.
By: /s/ Eric R. Weiss
______________________________
Name: Eric R. Weiss
Title: Senior Vice President
INFINITY BROADCASTING CORPORATION
By: /s/ Farid Suleman
______________________________
Name: Farid Suleman
Title: Vice President-Finance
and Chief Financial
Officer
18
</PAGE>
<PAGE>
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 California, Attention: Secretary, and by (i) the
payment to the Company of the then applicable Warrant Price
</PAGE>
<PAGE>
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
2
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<PAGE>
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 Sec-
tion 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 Sec-
tion 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
3
</PAGE>
<PAGE>
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 (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
4
</PAGE>
<PAGE>
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 (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
5
</PAGE>
<PAGE>
(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 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
6
</PAGE>
<PAGE>
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 Sec-
tion 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
7
</PAGE>
<PAGE>
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 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
8
</PAGE>
<PAGE>
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 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).
9
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<PAGE>
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 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
10
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<PAGE>
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 Sec-
_____________
tion 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.
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
11
</PAGE>
<PAGE>
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.
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.
12
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<PAGE>
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
13
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<PAGE>
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,
_________1 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)
____________________
1. 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.
14
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<PAGE>
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:
_______________________________
15
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<PAGE>
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 California, Attention: Secretary, and by (i) the
</PAGE>
<PAGE>
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
2
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<PAGE>
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 $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 Sec-
tion 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 Sec-
tion 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
3
</PAGE>
<PAGE>
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 (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
4
</PAGE>
<PAGE>
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 (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
5
</PAGE>
<PAGE>
(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) Sec-
tion 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 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.
6
</PAGE>
<PAGE>
(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 Sec-
tion 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
7
</PAGE>
<PAGE>
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 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
8
</PAGE>
<PAGE>
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 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).
9
</PAGE>
<PAGE>
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 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
10
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<PAGE>
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 Sec-
_____________
tion 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.
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
11
</PAGE>
<PAGE>
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.
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.
12
</PAGE>
<PAGE>
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
13
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<PAGE>
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,
_________2 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.
14
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<PAGE>
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:
___________________________________
15
</PAGE>
<PAGE>
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
</PAGE>
<PAGE>
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.
4. Fractional Shares. No fractional shares of
_________________
Common Stock will be issued in connection with any exercise
2
</PAGE>
<PAGE>
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 $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 Sec-
tion 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 Sec-
tion 5(a), (x) additional shares of Common Stock shall
be deemed to have been issued (A) in the case of any
3
</PAGE>
<PAGE>
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 (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
4
</PAGE>
<PAGE>
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 (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
5
</PAGE>
<PAGE>
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) Sec-
tion 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 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
6
</PAGE>
<PAGE>
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 Sec-
tion 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
7
</PAGE>
<PAGE>
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 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
8
</PAGE>
<PAGE>
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 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).
9
</PAGE>
<PAGE>
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 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
10
</PAGE>
<PAGE>
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 Sec-
_____________
tion 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.
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
11
</PAGE>
<PAGE>
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.
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.
12
</PAGE>
<PAGE>
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
13
</PAGE>
<PAGE>
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,
_________3 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)
____________________
3. 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.
14
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<PAGE>
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)
______________________________
Signed in the presence of:
______________________________
15
</PAGE>
<PAGE>
SUBSIDIARIES OF
INFINITY BROADCASTING CORPORATION
Percentage of Ownership
by Infinity Broadcasting
Jurisdiction of Corporation ("Infinity")
Name of Subsidiary Incorporation or its Subsidiaries
- - ------------------- --------------- ------------------------
The Audio House, Inc. California 100% by Infinity
Hemisphere Broadcasting Delaware 100% by Infinity
Corporation
Infinity Broadcasting Pennsylvania 100% by Infinity
Corporation of
Pennsylvania
Sagittarius Broadcasting New York 100% by Infinity
Corporation
Hit Radio, Inc. New York 80% by Sagittarius
Broadcasting
Corporation: 20% by
Infinity
C & W Land Corporation New Jersey 100% by Infinity
13 Radio Corporation Delaware 100% by Infinity
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Illinois
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Los Angeles
<PAGE>
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Maryland
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Michigan
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Florida
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Washington,
D.C.
Infinity Ventures, Inc. Delaware 100% by Infinity
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Tampa
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Glendale
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Texas
Infinity Broadcasting New York 100% by Infinity
Corporation of Baltimore Broadcasting
Corporation of
Maryland
Infinity WLIF, Inc. Maryland 100% by Infinity
Broadcasting
Corporation of
Baltimore
Infinity WLIF-AM, Inc. Maryland 100% by Infinity
Broadcasting
Corporation of
Baltimore
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Atlanta
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Boston
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Chicago
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Philadelphia
Infinity Broadcasting Delaware 100% by Infinity
Corporation of California
Infinity Network Inc. Delaware 100% by Infinity
Unistar Communication Delaware 100% by Infinity
Group, Inc.
Infinity Broadcasting Delaware 100% by Infinity
Corporation of Detroit
</PAGE>
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
The Board of Directors
Infinity Broadcasting Corporation:
We consent to incorporation by reference in the registration
statements No. 33-45977 and No. 33-56938 on Form S-8 of Infinity
Broadcasting Corporation of our report dated February 1, 1994,
relating to the consolidated balance sheets of Infinity
Broadcasting Corporation and subsidiaries as of December 31, 1992
and 1993, and the related consolidated statements of operations,
changes in stockholders' equity (deficiency), and cash flows and
related schedules for each of the years in the three-year period
ended December 31, 1993, which report appears in the December 31,
1993 annual report on Form 10-K of Infinity Broadcasting
Corporation.
New York, New York
March 31, 1994
</page>
