REGISTRATION RIGHTS AGREEMENT
Exhibit 10.7
Execution Version
This Registration Rights Agreement (this “Agreement”) is made and entered into as of March 3,
2008, among Westwood One, Inc., a Delaware corporation (the “Company”), and Gores Radio
Holdings, LLC (together with its designees that are affiliates of The Gores Group, LLC, the
“Purchasers").
WHEREAS, the parties have agreed to enter into this Agreement in connection with, and as a
condition to the Closing under the Purchase Agreement, dated as of February 25, 2008, among the
Company and the Purchasers (the “Purchase Agreement”); and
WHEREAS, pursuant to the Purchase Agreement and concurrently with the execution of this
Agreement, the Purchasers are acquiring from the Company shares of the Company’s 7.50% Series A
Convertible Preferred Stock, par value $0.01 per share, and warrants to purchase shares of the
Company’s common stock, par value $0.01 per share.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this
Agreement, the Company and the Purchasers agree as follows:
1. Definitions. In addition to the terms defined elsewhere in this Agreement, (a)
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Purchase Agreement, and (b) the following terms have the meanings indicated:
“Automatic Shelf Registration Statement” means an “automatic shelf registration
statement” as defined in Rule 405 promulgated under the Securities Act.
“CBS” means CBS Radio Inc.
“CBS Registrable Securities” means the “Registrable Securities” as defined in the CBS
Registration Rights Agreement.
“CBS Registration Rights Agreement” means the Registration Rights Agreement by and
between the Company and CBS substantially in the form set forth as Exhibit D to the Master
Agreement between the Company and CBS contained in the Company’s Definitive Proxy Statement,
dated December 21, 2007.
“Holder” means any holder, from time to time, of Registrable Securities.
“Purchaser Request” means a written request from Holders that in the aggregate hold a
majority of the Registrable Securities outstanding as of the date of such request.
“Prospectus” means the prospectus included in a Registration Statement (including a
prospectus that includes any information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.
“Registrable Securities” means any Common Stock (including Underlying Shares) issued or
issuable to the Purchasers pursuant to the Transaction Documents, together with any
securities issued or issuable upon any stock split, stock dividend or other distribution or
in connection with a combination of shares, recapitalization, merger, consolidation or
similar event with respect to the foregoing; provided, however, that Registrable Securities
shall not include any securities a Holder is permitted to sell pursuant to Rule 144 without
volume limitations or any other restrictions.
“Registration Statement” means any registration statement to be filed under the
Exchange Act, that covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus included therein, all amendments and supplements to
such Registration Statement, including pre- and post-effective amendments, all exhibits and
all material incorporated by reference in such Registration Statement.
“Rule 144,” “Rule 415,” “Rule 424” and “Rule 461” means Rule 144, Rule 415, Rule 424
and Rule 461, respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rules may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.
“Well-Known Seasoned Issuer” means a “well-known seasoned issuer” as defined in Rule
405 of the General Rules and Regulations promulgated under the Securities Act and that (a)
is a “well-known seasoned issuer” under paragraph (1)(i)(A) of such definition or (b) is a
“well-known seasoned issuer” under paragraph (1)(i)(B) of such definition and is also
eligible to register a primary offering of its securities relying on General Instruction
I.B.1 of Form S-3 or Form F-3 under the Securities Act (or any successor instruction or
successor form).
2. Shelf Registration.
(a) If at any time the Company shall receive a Purchaser Request under this Section 2 that the
Company file a shelf registration statement under the Securities Act, then the Company shall,
within 10 days of the receipt thereof, give written notice of such request to all Holders and,
subject to Section 4 below, shall prepare and file (as expeditiously as practicable, and in
any event within 60 days of the receipt of the Purchaser Request) with the Commission a “Shelf”
Registration Statement covering the resale of all Registrable Securities for an offering to be made
on a continuous basis pursuant to Rule 415; provided, however, that the Company
shall have no obligation to file a Registration Statement pursuant to this Section 2 for
less than the total amount of Registrable Securities then held by the Holders if (based on the
current market prices) the remaining Registrable Securities owned by all Holders would not yield
gross proceeds of at least $15,000,000. Such Registration Statement shall be on Form S-3 (except
if the Company is not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in accordance herewith as the
2
Holders may consent) and shall contain (except if otherwise directed by the Holders) the “Plan
of Distribution” attached hereto as Annex A. The Company shall use its reasonable best efforts to
cause such Registration Statement to be declared effective under the Securities Act as promptly as
reasonably practicable after the filing thereof, and in any event within 90 days of the filing
thereof (or 120 days if the Commission has determined to review the applicable Registration
Statement) or if the Company is a Well-Known Seasoned Issuer at time of receipt of a Purchaser
Request, Company shall cause the Registration Statement to be filed pursuant to an Automatic Shelf
Registration Statement and, subject to Section 4 below, shall use its reasonable best efforts to
keep such Registration Statement continuously effective under the Securities Act until the earliest
of (i) the fifth anniversary of the effective date of the Registration Statement, (ii) when all
Registrable Securities covered by such Registration Statement have been sold and (iii) the date as
of which each Holder is permitted to sell its Registrable Securities pursuant to Rule 144 without
volume limitations or any other restrictions (the “Effectiveness Period”).
(b) Subject to Section 4, the Company shall be deemed not to have used its reasonable
best efforts to keep the Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that results in Holders of Registrable Securities covered thereby not
being able to offer and sell such Registrable Securities during the Effectiveness Period, unless
(i) such action is required by law or the applicable interpretations thereof by the Commission’s
staff or (ii) such action is taken by the Company in good faith and for valid business reasons
(which shall not include avoidance of its obligations hereunder), provided, that the
Company on or prior to 45 days thereafter complies with the requirements of Section 6(j) to
the extent permitted by law or interpretation by the Commission’s staff.
3. Demand Underwritten Registration.
(a) If at any time the Company shall receive a Purchaser Request that the Company file a
registration statement under the Securities Act or prepare a prospectus supplement to an effective
Shelf Registration Statement filed pursuant to Section 2 above in order to effect an
underwritten offering, then the Company shall, within 10 days of the receipt thereof, give written
notice of such request to all Holders and, subject to Section 4 below, shall prepare and
file (as expeditiously as reasonably practicable, and in any event within 60 days after the date
the Company receives the Purchaser Request) a Registration Statement with respect to all
Registrable Securities that the Holders request to be registered (which shall be on Form S-3 or
other available form designated by the underwriters) and use its reasonable best efforts to (x)
cause such Registration Statement to become effective and (y) keep such Registration Statement
continuously effective under the Securities Act for a period of not less than 120 days or such
shorter period as is necessary to complete the distribution of the Registrable Securities covered
by such Registration Statement.
(b) If the Holders intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of their request made pursuant
to this Section 3 and the Company shall include such information in the written notice
referred to in Section 3(a). In such event, the right of any Holder to include such
Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided below. A majority in interest of the Holders of Registrable
3
Securities participating in the underwriting shall select the managing underwriter or
underwriters in such underwriting subject to the reasonable approval of the Company. All Holders
proposing to distribute their securities through such underwriting shall, together with the Company
as provided in Section 6(n), enter into an underwriting agreement in customary form with
the underwriter or underwriters so selected for such underwriting by a majority in interest of such
Holders; provided, however, that the Holders (or any of their assignees) shall not be
required by the Company to make any representations, warranties or indemnities except as they
relate to such Holder’s ownership of shares and authority to enter into the underwriting agreement
and to such Holder’s intended method of distribution, and the liability of such Holder shall be
limited to an amount equal to the net proceeds from the offering received by such Holder.
Notwithstanding any other provision of this Section 3, if the underwriter advises a Holder
that marketing factors require a limitation of the number of shares to be underwritten, then the
Holder shall so advise the Company and the Company shall so advise all Holders of Registrable
Securities that would otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be allocated as follows: (i)
first, among Holders of Registrable Securities that have elected to participate in such
underwritten offering and CBS to the extent, but only to the extent, CBS elects to participate in
such underwritten offering pursuant to the CBS Registration Rights Agreement, in proportion (as
nearly as practicable) to the aggregate amount of Registrable Securities held by all such Holders
and the amount of CBS Registrable Securities held by CBS, until such Holders have included in the
underwriting all shares requested by such holders to be included, and (ii) thereafter, among all
other holders of Common Stock, if any, that have the right and have elected to participate in such
underwritten offering, in proportion (as nearly as practicable) to the amount of shares of Common
Stock owned by such holders. Without the consent of a majority in interest of the Holders of
Registrable Securities participating in a registration referred to in Section 3(a), no
securities other than Registrable Securities and the CBS Registrable Securities shall be covered by
such registration if the inclusion of such other securities would result in a reduction of the
number of Registrable Securities covered by such registration or included in any underwriting or
if, in the opinion of the managing underwriter, the inclusion of such other securities would
adversely impact the marketing of such offering.
(c) The Company shall be obligated to effect only four registrations (and only if such
registration would include Registrable Securities with an aggregate value of at least $15,000,000,
calculated using the stated offering price disclosed on the cover of the final prospectus covering
such Registrable Securities) pursuant to a Purchaser Request under this Section 3 (except
as provided in the next sentence, an offering that is not consummated and an offering pursuant to
Section 2 above shall not be counted for this purpose); provided, that no more than
two Purchaser Requests shall be made in any 12-month period. The registration of Registrable
Securities under this Section 3 shall not be deemed to have been requested unless such
registration becomes effective (provided that if, within 120 days after it has become effective,
the offering of Registrable Securities pursuant to such registration is interfered with by any stop
order, injunction or other order or requirement of the SEC or other governmental agency or court,
such registration will be deemed not to have become effective unless 80% of such Registrable
Securities have been sold pursuant to such registration), and if the registration has remained
effective for 120 days without such interference such registration shall be deemed to have been
requested regardless of whether any of the Registrable Securities are ultimately sold pursuant to
such registration. In addition to the foregoing, if CBS participates in a registration of
4
Registrable Securities under this Section 3, such registration shall not be deemed to
have been requested unless 80% of the Registrable Securities originally requested by the Holders to
be included in such registration have been sold pursuant to such registration. The Company may
grant piggyback registration rights with respect to any registration statement demanded pursuant to
this Section 3, provided that any such rights shall be subject to the priority of Holders’
rights under this Section 3.
4. Postponement; Suspension. If at the time a request for registration is made
pursuant to Section 2 or Section 3, or at any time during the Effectiveness Period,
the Company is in the process of or desires to register securities under the Securities Act for
sale by it or has pending or in process a material transaction, the disclosure of which would, in
the good faith judgment of the Board of Directors of the Company, materially and adversely affect
the Company, the Company may defer the filing (but not the preparation) of the requested
Registration Statement, or suspend the use of the Shelf Registration Statement, as the case may be
(a) in the case of another registration statement in process, until the filing or abandonment of
such registration statement but in no event longer than 105 days, and (b) in the case of a material
transaction, for up to 105 days (but the Company shall use its reasonable best efforts to resolve
the transaction and file the Registration Statement as soon as practicable); provided,
however, that the Company may not utilize this right more than once in any 12-month period.
5. Piggy-Back Registrations.
(a) If (but without any obligation to do so) the Company proposes to register (including for
this purpose a registration effected by the Company for stockholders other than the Holders) any of
its stock or other securities under the Securities Act in connection with the public offering of
such securities solely for cash (other than a registration on Form S-8 (or similar or successor
form) relating solely to the sale of securities to participants in a Company stock plan or to other
compensatory arrangements to the extent includable on Form S-8 (or similar or successor form), or a
registration on Form S-4 (or similar or successor form)), the Company shall, at such time, promptly
give each Holder written notice of such registration. Upon the written request of each Holder
given within 30 days after mailing of such notice by the Company in accordance with Section
10(g) below, the Company shall use its reasonable best efforts to cause to be registered under
the Securities Act all of the Registrable Securities that each such Holder has requested to be
registered. The Company shall have no obligation under this Section 5 to make any offering of its
securities, or to complete an offering of its securities that it proposes to make. If the
registration of which the Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the written notice given
pursuant to this Section 5(a). All Holders requesting to distribute their securities
through such underwriting shall, together with the Company as provided in Section 6(n),
enter into an underwriting agreement in customary form with the underwriter or underwriters for
such underwriting; provided, however, that the Holders (or any of their assignees) shall
not be required by the Company to make any representations, warranties or indemnities except as
they relate to such Holder’s ownership of shares and authority to enter into the underwriting
agreement and to such Holder’s intended method of distribution, and the liability of such Holder
shall be limited to an amount equal to the net proceeds from the offering received by such Holder.
5
(b) If the registration under this Section 5 is an underwritten registration on behalf
of holders of securities of the Company other than the Holders, and if the underwriter advises the
Company that marketing factors require a limitation of the number of shares to be underwritten, the
underwriter may limit the number of Registrable Securities to be included in the registration and
underwriting. The Company shall so advise all Holders of Registrable Securities that would
otherwise be underwritten pursuant hereto. The number of shares, including Registrable Securities,
that may be included in the registration and underwriting shall be allocated as follows: (i)
first, among holders of securities requesting such registration in proportion (as nearly as
practicable) to the amount of registrable securities held by such holders, (ii) second, among all
of the Holders of Registrable Securities that have elected to participate in such underwritten
offering and CBS, if CBS is not the holder requesting such registration, to the extent, but only to
the extent, CBS elects to participate in such underwritten offering pursuant to the CBS
Registration Rights Agreement, in proportion (as nearly as practicable) to the amount of
Registrable Securities held by such Holders and the amount of CBS Registrable Securities held by
CBS and (iii) thereafter, among all other holders of Common Stock, if any, that have the right and
have elected to participate in such underwritten offering, in proportion (as nearly as practicable)
to the amount of shares of Common Stock owned by such holders.
(c) If the registration under this Section 5 is an underwritten registration on behalf
of the Company and if the underwriter advises a Holder that marketing factors require a limitation
of the number of shares to be underwritten, the underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting. The Holder shall so advise the
Company and the Company shall so advise all Holders of Registrable Securities that would otherwise
be underwritten pursuant hereto. The number of shares, including Registrable Securities, that may
be included in the registration and underwriting shall be allocated as follows: (i) first, the
securities that the Company proposes to sell, (ii) second, among Holders of Registrable Securities
that have elected to participate in such underwritten offering and CBS to the extent, but only to
the extent, CBS elects to participate in such underwritten offering pursuant to the CBS
Registration Rights Agreement, in proportion (as nearly as practicable) to the aggregate amount of
Registrable Securities held by all such holders and the amount of CBS Registrable Securities held
by CBS, until such holders have included in the underwriting all shares requested by such holders
to be included, and (iii) thereafter, among all other holders of Common Stock, if any, that have
the right and have elected to participate in such underwritten offering, in proportion (as nearly
as practicable) to the amount of shares of Common Stock owned by such holders.
(d) Each Holder agrees that if a managing underwriter reasonably determines it is necessary in
order to effect such underwritten public offering, at such managing underwriter’s request, such
Holder will agree not to publicly sell any shares of Registrable Securities that are not included
in an underwritten public offering described in this Section 5 for a period, not to exceed
the lesser of (a) 120 days and (b) the number of days that the Company, any director or officer or
any other selling stockholder is similarly restricted; provided that if any such Person is released
from its obligations to not publicly sell, then all Holders shall be released from their
obligations under this Section 5(d) to the same extent.
6. Registration Procedures. In connection with the Company’s registration obligations
hereunder, the Company shall:
6
(a) Not less than three Trading Days before the filing of each Registration Statement or any
related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to
the Holders and Purchaser Counsel copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by reference) will be subject
to the review of such Holders and Purchaser Counsel, and (ii) cause its officers and directors,
counsel and independent certified public accountants to respond to such inquiries as shall be
necessary to conduct a reasonable investigation within the meaning of the Securities Act. The
Company shall not file such a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable Securities shall
reasonably object.
(b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the Securities Act all of
the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably practicable, and in any event within 15 Trading Days (or 20
Trading Days in the case of initial comments), to any comments received from the Commission with
respect to any Registration Statement or any amendment thereto and as promptly as reasonably
practicable provide the Holders and Purchaser Counsel true and complete copies of all
correspondence from and to the Commission relating to a Registration Statement; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange Act with respect
to the disposition of all Registrable Securities covered by a Registration Statement during the
applicable period in accordance with the intended methods of disposition by the Holders thereof set
forth in the applicable Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders of Registrable Securities to be sold and Purchaser Counsel as promptly
as reasonably possible, and (if requested by any such Person) confirm such notice in writing no
later than one Trading Day thereafter, of any of the following events: (i) the Commission notifies
the Company whether there will be a “review” of any Registration Statement; (ii) the Commission
comments in writing on any Registration Statement (in which case the Company shall deliver to each
Holder a copy of such comments and of all written responses thereto); (iii) any Registration
Statement or any post-effective amendment is declared effective; (iv) the Commission or any other
Federal or state governmental authority requests any amendment or supplement to a Registration
Statement or Prospectus or requests additional information related thereto; (v) the Commission
issues any stop order suspending the effectiveness of any Registration Statement or initiates any
Proceedings for that purpose; (vi) the Company receives notice of any suspension of the
qualification or exemption from qualification of any Registrable Securities for sale in any
jurisdiction, or the initiation or threat of any Proceeding for such purpose; or (vii) the
financial statements included in any Registration Statement become ineligible for inclusion therein
or any statement made in any Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference is untrue in any material respect or any revision to
a Registration Statement, Prospectus or other document is required so that it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.
7
(d) Use its reasonable best efforts to avoid the issuance of or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of any Registration Statement or (ii) any
suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as expeditiously as reasonably practicable.
(e) Furnish to each Holder and Purchaser Counsel, without charge, at least one conformed copy
of each Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission.
(f) Promptly deliver to each Holder and Purchaser Counsel, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement
thereto as such Persons may reasonably request. Subject to Section 10(f), the Company
hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Registrable Securities covered
by such Prospectus and any amendment or supplement thereto.
(g) In the time and manner required by each Trading Market, if at all, prepare and file with
such Trading Market an additional shares listing application covering all of the Registrable
Securities; (ii) take all steps necessary to cause such Registrable Securities to be approved for
listing on each Trading Market as soon as reasonably practicable thereafter; (iii) to the extent
available to the Company, provide to the Holders evidence of such listing; and (iv) maintain the
listing of such Registrable Securities on each such Trading Market.
(h) Before any public offering of Registrable Securities, use its reasonable best efforts to
register or qualify or cooperate with the selling Holders and Purchaser Counsel in connection with
the registration or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky Laws of such
jurisdictions within the United States as any Holder requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement.
(i) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.
8
(j) Upon the occurrence of any event described in Section 6(c)(iv) through
(vii), as promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to such a Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, neither such Registration Statement
nor its related Prospectus will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(k) Cooperate with any due diligence investigation undertaken by the Holders in connection
with the sale of Registrable Securities, including by making available any documents and
information; provided, that the Company will not deliver or make available to any Holder
material, nonpublic information unless such Holder specifically requests in advance to receive
material, nonpublic information and such Holder executes a nondisclosure agreement reasonably
acceptable to the Company.
(l) If Holders of a majority of the Registrable Securities being offered pursuant to a
Registration Statement select underwriters for the offering, the Company shall enter into and
perform its obligations under an underwriting agreement, in usual and customary form, including by
providing customary legal opinions, comfort letters and indemnification and contribution
obligations.
(m) Comply in all material respects with all applicable rules and regulations of the
Commission and make generally available to its stockholders a consolidated earnings statement
(which need not be audited) for the 12 months beginning after the effective date of a Registration
Statement that satisfies the requirements of an earnings statement under Section 11(a) of the
Securities Act as soon as reasonably practicable after the end of such period.
(n) Enter into such customary agreements (including, if requested, an underwriting agreement
in customary form) and take all such other customary actions, if any, as Holders holding a majority
of the Registrable Securities being sold or the managing underwriters (if any) shall reasonably
request in order to facilitate any disposition of Registrable Securities pursuant to such
Registration Statement. If requested by Holders holding a majority of the Registrable Securities
being sold, their counsel or the managing underwriters (if any) in connection with such
Registration Statement, use its reasonable best efforts to cause (i) its counsel to deliver an
opinion relating to the Shelf Registration Statement and Registrable Securities, as applicable, in
customary form, (ii) its officers to execute and deliver all customary documents and certificates
requested by Holders holding a majority of the Registrable Securities being sold, their counsel of
the managing underwriters (if any) and (iii) its independent public accountants to provide a
comfort letter or letters in customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72 or any successor
accounting standard.
(o) Make reasonably available for inspection during normal business hours at the offices where
normally kept by a representative of, and counsel acting for, Holders holding a majority of the
Registrable Securities being sold and any underwriter participating in any disposition of
Registrable Securities pursuant to such Registration Statement, all relevant financial and other records and pertinent corporate documents and properties of the Company
and use its reasonable best efforts to have its officers, directors, employees, accountants and
counsel supply all relevant information reasonably requested by such representative, such counsel
or any such underwriter in connection with such Registration Statement, in either case to the
extent reasonably requested by such representative, such counsel or underwriter for the purpose of
conducting customary due diligence with respect to the Company.
9
(p) If any broker-dealer registered under the Exchange Act shall underwrite any transfer of
Registrable Securities or participate as a member of an underwriting syndicate or selling group or
“assist in the distribution” (within the meaning of the Rules of Conduct (the “Rules of Conduct”)
of the Financial Industry Regulatory Authority (“FINRA”)), whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker-dealer in complying with the requirements of such Rules
of Conduct by (if such Rules of Conduct shall so require) engaging a “qualified independent
underwriter” (as defined in such Rules of Conduct) to participate in the preparation of the
registration statement relating to such Registrable Securities.
(q) Use its reasonable best efforts to make available executive officers of the Company to
participate with the Holders and any underwriters in any “road shows” or other selling efforts that
may be reasonably requested by the Holders in connection with the methods of distribution for the
Registrable Securities.
7. Registration Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company. The fees and expenses
referred to in the foregoing sentence shall include (a) all registration and filing fees (including
fees and expenses (i) with respect to filings required to be made with any Trading Market, (ii) in
compliance with applicable state securities or Blue Sky Laws (including fees and disbursements of
counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable
Securities and determination of the eligibility of the Registrable Securities for investment under
the Laws of such jurisdictions as requested by the Holders) and (iii) FINRA fees and expenses), (b)
all expenses relating to the preparation, printing, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included therein or prepared
for distribution pursuant hereto, each amendment or supplement to the foregoing, the certificates
representing the Registrable Securities and all other documents relating thereto, (c) messenger,
telephone and delivery expenses, (d) fees and disbursements of counsel and independent registered
public accounting firm for the Company (including the expenses of any opinions or “cold comfort”
letters required by or incident to such performance and compliance), (e) the reasonable fees and
disbursement of one counsel for the Holders; (f) reasonable fees, disbursements and expenses of any
“qualified independent underwriter” engaged pursuant to Section 6(p); and (g) fees and
expenses of all other Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. The Company shall not be required to pay stock
transfer taxes or underwriters’ discounts or commissions related to Registrable Securities. The
obligation of the Company to bear the fees and expenses described in clauses (b), (d) and (e) (in
the case of (d) and (e), with respect to counsel only) of this Section 7 shall apply
whether or not any Registrable Securities are sold pursuant to a Registration Statement;
provided, however, that the fees and expenses described in this Section 7 for any
supplements or amendments to a Registration Statement or Prospectus solely resulting from a misstatement furnished in writing to the Company for
inclusion therein by or on behalf of a Holder shall be borne by such Holder.
10
Notwithstanding the foregoing, the provisions of this Section 7 shall be deemed
amended to the extent necessary to cause these provisions to comply with “blue sky” laws of each
state or the securities laws of any jurisdiction in the United States and its territories in which
the offering is made.
8. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors,
partners, members, agents, brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin call of Common Stock),
investment advisors and employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable Law, from and against any and all Losses, as incurred,
arising out of or relating to any untrue or alleged untrue statement of a material fact contained
in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that (i) such untrue statements or omissions are based upon information
regarding such Holder furnished in writing to the Company by or on behalf of such Holder expressly
for use therein, or to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was reviewed and approved in writing
by such Holder expressly for use in a Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an
event of the type specified in Section 6(c)(v)-(vii), the use by such Holder of an outdated
or defective Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated or defective and before the receipt by such Holder of the Advice contemplated in
Section 10(f). The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable Law, from and against all Losses (as determined by a
court of competent jurisdiction in a final judgment not subject to appeal or review), arising
solely out of any untrue statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely
out of any omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the
11
extent, that such untrue statement or omission is contained in any information so furnished in
writing by or on behalf of such Holder to the Company specifically for inclusion in such
Registration Statement or such Prospectus. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder
upon the sale of the Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
engagement of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations
or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have materially adversely prejudiced the Indemnifying
Party.
An Indemnified Party shall have the right to engage separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding; (iii) the Indemnifying Party shall have failed promptly to
engage counsel reasonably satisfactory to such Indemnified Party in any such Proceeding (in each
case, only with respect to such Indemnified Party); or (iv) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party or any of its Affiliates, and such Indemnified Party shall have been advised by
counsel that a conflict of interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party or such Affiliates (in which case, under any of
clauses (i) through (iv), such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any Proceeding effected without its
written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within 10
Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to indemnification hereunder;
provided that the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder.
12
(d) Contribution. If a claim for indemnification under Section 8(a) or
8(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 8(c), any reasonable attorneys’ or other reasonable
fees or expenses incurred by such party in connection with any Proceeding to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 8(d) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(d),
no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount
such Holder would otherwise have been required to pay under Section 8(b) had
indemnification been available. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section are in addition to any
liability which any party may have to any other party.
9. Current Public Information. At all times the Company will file all reports
required to be filed by it under the Securities Act and the Exchange Act, and will take such
further action as any Holder of Registrable Securities may reasonably request, all to the extent
required to enable such Holders to sell Registrable Securities pursuant to Rule 144.
10. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by Law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at Law would be adequate.
13
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of a majority of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders and that does not
directly or indirectly affect the rights of other Holders may be given by the Holders of at least a
majority of the Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.
(c) No Other Registration Rights Agreements. Except for the CBS Registration Rights
Agreement and any registration rights on Form S-8 in favor of Xxxxxx F.X. Xxxxxx related to the
options granted by the Company to Xx. Xxxxxx under the Stand-Alone Stock Option Agreement, dated as
of January 8, 2008, between the Company and Xx. Xxxxxx, neither the Company nor any Subsidiary has
previously entered into any contract granting any registration rights with respect to any of its
securities to any Person that have not been satisfied in full.
(d) No Piggyback on Registrations. Except as and to the extent specified in Schedule
3.1(g) to the Purchase Agreement, neither the Company nor any of its security holders (other than
the Holders in such capacity pursuant hereto) may include securities of the Company in a
Registration Statement other than the Registrable Securities, and the Company shall not after the
date hereof enter into any contract providing any such right to any of its security holders.
(e) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.
(f) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Sections 6(c)(iv) through 6(c)(vii), such Holder
will forthwith discontinue disposition of such Registrable Securities under a Registration
Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 6(j), or until it is advised in writing (the
"Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement. The Company may
provide appropriate stop orders to enforce the provisions of this paragraph.
(g) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section before 5:30 p.m. (New York City time)
on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in this Section later
than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the Trading Day following the date of sending, if sent by nationally
recognized overnight courier service, specifying next business day delivery or (iv) upon actual
receipt by the party to whom such notice is required to be given if delivered by hand. The address
and facsimile numbers for such notices and communications shall be as set forth in the Purchase
Agreement.
14
(h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of the majority of the Holders. Each Holder may assign its rights and
obligations hereunder in the manner and to the extent permitted under the Purchase Agreement;
provided that the assignee of such Holders acquires at least 2,000,000 shares of the Common
Stock constituting Registrable Securities held by the transferring Holder, and, provided
further, that the Company is given written notice by the transferor of such transfer,
stating the name and address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned. References to a Person are also to
its permitted successors and assigns.
(i) Construction. The headings herein are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof. Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation.” The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement. The
definitions contained in this Agreement are applicable to the singular as well as the plural forms
of such terms and to the masculine as well as to the feminine and neuter genders of such term. The
language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. Any
contract, statute or rule defined or referred to herein means such contract, statute or rule as
from time to time amended, modified or supplemented, including (in the case of contracts) by waiver
or consent and (in the case of statutes or rules) by succession of comparable successor statutes or
rules and references to all attachments thereto and instruments incorporated therein. References
to a Person are also to its permitted successors and assigns.
(j) Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. If any signature is delivered by
facsimile transmission, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature page were an original thereof.
15
(k) Governing Law; Venue; Waiver Of Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this agreement shall be
governed by and construed and enforced in accordance with the internal laws of the State of New
York. Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions (whether brought against a party hereto or its respective affiliates, directors, officers, stockholders, employees or
agents) shall be commenced exclusively in the state and U.S. federal courts sitting in the City of
New York, Borough of Manhattan. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and U.S. federal courts sitting in the City of New York, Borough of
Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of this agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this agreement
and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this agreement or any of the transaction documents or the transactions. If
either party shall commence a proceeding to enforce any provisions of this agreement or any
transaction document, then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys fees and other reasonable costs and expenses incurred
with the investigation, preparation and prosecution of such proceeding.
(l) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by Law.
(m) Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision that is a reasonable substitute
therefor and effects the original intent of the parties as closely as possible, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
(n) No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person, except that each Related Person is
an intended third party beneficiary of Section 7 and (in each case) may enforce the
provisions of Section 7 directly against the parties with obligations thereunder.
(o) No Limitation on Convertible Securities. Nothing in this Agreement shall operate
to limit the right of any Holder to request the registration of Registrable Securities issuable
upon conversion, exchange or exercise of securities held by such Holder notwithstanding the fact
that at the time of such request, such Holder does not hold the Registrable Securities underlying
such securities.
16
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW]
SIGNATURE PAGES TO FOLLOW]
17
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.
| WESTWOOD ONE, INC. |
||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | CAO | |||
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASERS TO FOLLOW]
SIGNATURE PAGES OF PURCHASERS TO FOLLOW]
[Signature Page to Registration Rights Agreement]
| GORES RADIO HOLDINGS, LLC |
||||
| By: | THE GORES GROUP, LLC, its Manager | |||
| By: | /s/ Xxx X. Xxxxxxxxxx | |||
| Name: | Xxx X. Xxxxxxxxxx | |||
| Title: | Managing Director | |||
[Signature Page to Registration Rights Agreement]
Annex A
Plan of Distribution
The selling stockholders, including their pledgees, donees, transferees, beneficiaries or
other successors in interest, may from time to time offer some or all of the shares of common stock
covered by this prospectus. To the extent required, this prospectus may be amended and
supplemented from time to time to describe a specific plan of distribution.
The selling stockholders will not pay any of the costs, expenses and fees in connection with
the registration and sale of the shares covered by this prospectus, but they will pay all
discounts, commissions or brokers’ fees or fees of similar securities industry professionals and
transfer taxes, if any, attributable to sales of the shares. We will not receive any proceeds from
the sale of the shares of our common stock covered hereby.
The selling stockholders may sell the shares of common stock covered by this prospectus from
time to time, and may also decide not to sell all or any of the shares that they are allowed to
sell under this prospectus. The selling stockholders will act independently of us in making
decisions regarding the timing, manner and size of each sale. The selling stockholders may sell
shares at fixed prices, at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at varying prices determined at the time of sale, or at privately
negotiated prices. Sales may be made by the selling stockholders in one or more types of
transactions, which may include:
| • | purchases by underwriters, dealers and agents who may receive compensation in the form of underwriting discounts, concessions or commissions from the selling stockholders and/or the purchasers of the shares for whom they may act as agent; | ||
| • | one or more block transactions, including transactions in which the broker or dealer so engaged will attempt to sell the shares of common stock as agent but may position and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as an agent on both sides of the trade; | ||
| • | ordinary brokerage transactions or transactions in which a broker solicits purchases; | ||
| • | purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account; | ||
| • | the pledge of shares as security for any loan or obligation, including pledges to brokers or dealers who may from time to time effect distributions of the shares or other interests in the shares; | ||
| • | short sales or transactions to cover short sales relating to the shares; | ||
| • | one or more exchanges or over the counter market transactions; |
A-1
| • | through distribution by a selling stockholder or its successor in interest to its members, partners or shareholders; | ||
| • | privately negotiated transactions; | ||
| • | the writing of options, whether the options are listed on an options exchange or otherwise; | ||
| • | distributions to creditors and equity holders of the selling stockholders; and | ||
| • | any combination of the foregoing, or any other available means allowable under applicable law. |
A selling stockholder may also resell all or a portion of its securities in open market
transactions in reliance upon Rule 144 under the Securities Act of 1933, as amended (the
“Securities Act”) provided it meets the criteria and conforms to the requirements of Rule 144.
The selling stockholders may enter into sale, forward sale and derivative transactions with
third parties, or may sell shares not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in connection with
those sale, forward sale or derivative transactions, the third parties may sell shares covered by
this prospectus and the applicable prospectus supplement, including in short sale transactions and
by issuing securities that are not covered by this prospectus but are exchangeable for or represent
beneficial interests in the common stock. The third parties also may use shares received under
those sale, forward sale or derivative arrangements or shares pledged by the selling stockholder or
borrowed from the selling stockholders or others to settle such third-party sales or to close out
any related open borrowings of common stock. The third parties may deliver this prospectus in
connection with any such transactions. Any third party in such sale transactions will be an
underwriter and will be identified in the applicable prospectus supplement (or a post-effective
amendment to the registration statement of which this prospectus is a part).
In addition, the selling stockholders may engage in hedging transactions with broker-dealers
in connection with distributions of shares or otherwise. In those transactions, broker-dealers may
engage in short sales of shares in the course of hedging the positions they assume with selling
stockholders. The selling stockholders may also sell shares short and redeliver shares to close
out such short positions. The selling stockholders may also enter into option or other
transactions with broker-dealers which require the delivery of shares to the broker-dealer. The
broker-dealer may then resell or otherwise transfer such shares pursuant to this prospectus. The
selling stockholders also may loan or pledge shares, and the borrower or pledgee may sell or
otherwise transfer the shares so loaned or pledged pursuant to this prospectus. Such borrower or
pledgee also may transfer those shares to investors in our securities or the selling stockholders’
securities or in connection with the offering of other securities not covered by this prospectus.
A-2
To the extent necessary, we may amend or supplement this prospectus from time to time to
describe a specific plan of distribution. We will file a supplement to this prospectus, if
required, upon being notified by the selling stockholders that any material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade, offering or a purchase by a broker or dealer. The applicable prospectus supplement will set forth the specific
terms of the offering of securities, including:
| • | the number of shares of common stock offered; | ||
| • | the price of such shares of common stock; | ||
| • | the proceeds to the selling stockholders from the sale of such shares; | ||
| • | the names of the underwriters or agents, if any; | ||
| • | any underwriting discounts, agency fees or other compensation to underwriters or agents; and | ||
| • | any discounts or concessions allowed or paid to dealers. |
The selling stockholders may, or may authorize underwriters, dealers and agents to, solicit
offers from specified institutions to purchase shares of common stock from the selling stockholders
at the public offering price listed in the applicable prospectus supplement. These sales may be
made under “delayed delivery contracts” or other purchase contracts that provide for payment and
delivery on a specified future date. Any contracts like this will be described in and be subject
to the conditions listed in the applicable prospectus supplement.
Broker-dealers or agents may receive compensation in the form of commissions, discounts or
concessions from the selling stockholders. Broker-dealers or agents may also receive compensation
from the purchasers of shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of customary commissions
and will be in amounts to be negotiated in connection with transactions involving shares. In
effecting sales, broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.
In connection with sales of our common stock covered hereby, the selling stockholders and any
underwriter, broker-dealer or agent and any other participating broker-dealer that executes sales
for the selling stockholders may be deemed to be an “underwriter” within the meaning of the
Securities Act. Accordingly, any profits realized by the selling stockholders and any compensation
earned by such underwriter, broker-dealer or agent may be deemed to be underwriting discounts and
commissions. Because the selling stockholders may be deemed to be “underwriters” under the
Securities Act, the selling stockholders must deliver this prospectus and any prospectus supplement
in the manner required by the Securities Act. This prospectus delivery requirement may be
satisfied through the facilities of the New York Stock Exchange in accordance with Rule 153 under
the Securities Act.
We and the selling stockholders have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act. In addition, we or the selling
stockholders may agree to indemnify any underwriters, broker-dealers and agents against or
contribute to any payments the underwriters, broker-dealers or agents may be required to make with
respect to, civil liabilities, including liabilities under the Securities Act. Underwriters,
broker-dealers and agents and their affiliates are permitted to be customers of, engage in transactions with, or perform services for us and our affiliates or the selling stockholders or
their affiliates in the ordinary course of business.
A-3
The selling stockholders will be subject to applicable provisions of Regulation M of the
Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the shares of our common stock by
the selling stockholders. Regulation M may also restrict the ability of any person engaged in the
distribution of the shares of common stock to engage in market-making activities with respect to
the shares of common stock. These restrictions may affect the marketability of such shares.
In order to comply with applicable securities laws of some states, the shares may be sold in
those jurisdictions only through registered or licensed brokers or dealers. In addition, in
certain states the shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification requirements is
available. In addition, any shares of a selling stockholder covered by this prospectus that
qualify for sale pursuant to Rule 144 under the Securities Act may be sold in open market
transactions under Rule 144 rather than pursuant to this prospectus.
In connection with an offering of common stock under this prospectus, the underwriters may
purchase and sell securities in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short sales. Short sales
involve the sale by the underwriters of a greater number of securities than they are required to
purchase in an offering. Stabilizing transactions consist of certain bids or purchases made for
the purpose of preventing or retarding a decline in the market price of the securities while an
offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a particular underwriter
repays to the underwriters a portion of the underwriting discount received by it because the
underwriters have repurchased securities sold by or for the account of that underwriter in
stabilizing or short-covering transactions.
These activities by the underwriters may stabilize, maintain or otherwise affect the market
price of the common stock offered under this prospectus. As a result, the price of the common
stock may be higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any time. These
transactions may be effected on the New York Stock Exchange or another securities exchange or
automated quotation system, or in the over-the-counter market or otherwise.
A-4
