EXECUTION COPY
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Warrant to Purchase 1,000,000 Shares
of Common Stock at $20.00 per Share
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
WESTWOOD ONE, INC.
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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 MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE ENCUMBERED
OR DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
WESTWOOD ONE, INC., a Delaware corporation (the "Company"),
certifies that, for value received, Infinity Broadcasting
Corporation, a Delaware corporation ("Infinity"), 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), One Million
(1,000,000) shares of Common Stock, par value $0.01 per share, of the Company,
at a price of $20.00 per share; subject, however, to the provisions and upon the
terms and conditions hereinafter set forth. "Termination Date" shall mean March
31, 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 $30.00 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, to the
Company at its principal office at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Secretary, and by (i) the payment to the Company of
the then applicable Warrant Price of the Common Stock being purchased ("Warrant
Price" shall mean the price specified in the first paragraph of this Warrant and
such other prices as shall result from the adjustments specified in Section 5
hereof); and (ii) delivery to the Company of the form of subscription at the end
hereof (or a reasonable facsimile thereof).
(b) Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the business
day on which this Warrant shall have been surrendered to the Company as provided
in this Section 2, and at such time the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record thereof.
(c) In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered at the Company's expense (including the payment by
the Company of any applicable issuance taxes) to the holder hereof within five
(5) business days after the rights represented by this Warrant shall have been
so exercised, and unless this Warrant has expired, a new Warrant of like tenor
representing the number of shares of Common Stock, if any, with respect to which
this Warrant shall not then have been exercised, shall also be issued to the
holder hereof within such time.
3. Stock Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all liens. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized, and reserved for the purpose of the issue upon exercise
of the purchase rights evidenced by this Warrant, at least the maximum number of
shares of its Common Stock as are issuable upon the exercise of the rights
represented by this Warrant.
4. Fractional Shares. No fractional shares of Common Stock
will be issued in connection with any exercise hereunder but in lieu of such
fractional shares, the Company shall make a cash payment therefor upon the basis
of the Current Market Value (as defined below) of the Common Stock.
5. Number of Shares Receivable Upon Exercise. The number of
shares of Common Stock receivable upon the exercise of this Warrant is subject
to adjustment upon the happening of certain events specified in this Section 5.
For the purposes of this Section 5, the "Warrant Price" referred to herein shall
initially be $20.00 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 $20.00 and (B)
the denominator is the Warrant Price in effect at the time of such exercise. The
price to be paid for each such share of Common Stock by the holder shall be the
Warrant Price as adjusted pursuant to this Section 5, provided that the price
paid by the holder for any shares of Common Stock upon exercise of this Warrant
shall never be less than $0.01 per share. The Warrant Price shall be subject to
adjustment as follows:
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(a) Stock Dividends, Stock Splits, Etc. If the Company
at any time or from time to time after the date hereof shall issue additional
shares of Common Stock as a result of the declaration or payment of a dividend
on the Common Stock payable in Common Stock, or as a distribution to holders of
Common Stock, or as a result of a subdivision of the outstanding shares of
Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock), then, and in each such case, the Warrant Price then in effect shall be
reduced, concurrently with the issuance of such shares, to a price (calculated
to the nearest cent) determined by multiplying such Warrant Price by a fraction
(i) the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance of additional shares of Common
Stock, and (ii) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issuance, provided that, for purposes
of this Section 5(a), (x) additional shares of Common Stock shall be deemed to
have been issued (A) in the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution or (B) in the case of any such subdivision, at the close of
business on the date immediately prior to the day upon which such corporate
action becomes effective, (y) immediately after any additional shares of Common
Stock are deemed to have been issued, such additional shares of Common Stock
shall be deemed to be outstanding, and (z) treasury shares shall be deemed not
to be outstanding.
(b) Extraordinary Dividends and Distributions. If the
Company shall distribute to all holders of its outstanding Common Stock
evidences of indebtedness of the Company, cash (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 subsegment to the
date hereof, as determined in accordance with generally accepted accounting
principles, consistently applied) or assets or securities other than its Common
Stock (including stock of a subsidiary or securities convertible into or
exercisable for such stock but excluding dividends or distributions referred to
in Section 5(a) above) (any such evidences of indebtedness, cash, assets or
securities, the "assets or securities"), then, in each case, the Warrant Price
shall be adjusted by subtracting from the Warrant Price then in effect the value
of the assets or securities that the holder would have been entitled to receive
as a result of such distribution had the Warrant been exercised and the relevant
shares of Common Stock issued in the name of the holder immediately prior to the
record date for such distribution; provided that if, after giving effect to such
adjustment, the Warrant Price would be less than the then par value of the
Common Stock, the Company shall distribute such assets or securities to the
holder as if the holder had exercised the Warrant and the shares of Common Stock
had been issued in the name of the holder immediately prior to the record date
for such distribution. Any adjustment required by this Section 5(b) shall be
made whenever any such distribution is made, and shall become effective on the
date of distribution
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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 (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 pursuant to the terms of (i)
the Warrants dated February 3, 1994, (ii) this Warrant and (iii) the other
Warrant issued pursuant to the Management Agreement, dated as of March 31, 1999,
between the Company and Infinity, 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
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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,
(a) the Warrants dated February 3, 1994, (b) this Warrant and (c) the other
Warrant issued pursuant to the Management Agreement, dated as of March 31 1999,
between the Company and Infinity, (xxiv) the exercise of any conversion or
exchange rights outstanding on or prior to the date hereof issued by the
Company, (xxv) the exercise of any conversion or exchange rights issued by the
Company after the date hereof, so long as the conversion or exchange price is
not less than the Market Price on the date that such issuance is approved by the
Board of Directors or a duly authorized committee thereof or, if later, the date
that such conversion or exchange price is established or (xxvi) the issuance or
sale of Additional Shares pursuant to a firmly underwritten public offering of
such shares.
(e) Accountants' Report as to Adjustments. In each case
of any adjustment or readjustment in the Warrant Price, the Company at its
expense will promptly compute such adjustment or readjustment in accordance with
the terms hereof and, upon the reasonable request of the Holder, cause
independent public accountants of recognized national standing selected by the
Company (which may be the regular auditors of the Company) to verify such
computation and prepare a report setting forth such adjustment or readjustment
and showing in reasonable detail the method of calculation thereof and the facts
upon which such adjustment or readjustment is based, including a statement of
(i) the number of shares of Common Stock outstanding or deemed to be outstanding
and (ii) the Warrant Price in effect immediately prior to such adjustment or
readjustment and as adjusted and readjusted (if required by Section 5) on
account thereto. 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
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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 $30.00, then (A) upon the consummation thereof this Warrant shall become
exercisable with respect to all shares of Common Stock covered hereby (whether
or not it has otherwise become exercisable with respect to such shares pursuant
to Section 1) and shall be deemed to have been exercised by the holder hereof
without any act on the part of such holder and without any obligation on the
part of such holder to pay the exercise price until presentation of this Warrant
pursuant to clause (B) below, and (B) this Warrant shall represent the right of
such holder to receive (upon presentation of this Warrant on or within thirty
(30) days after the date of such consummation together with payment of the
aggregate exercise price payable at the time of such consummation in accordance
with Section 2 for all shares of Common Stock issuable upon such exercise
immediately prior to such consummation), in lieu of the Common Stock issuable
upon exercise of this Warrant prior to such consummation, the cash, securities
and other property to which such holder would have been entitled upon the
consummation of the Transaction if such holder had exercised this Warrant
immediately prior thereto.
(ii) The Company will not effect any Transaction
unless, prior to the consummation thereof, each corporation or entity (other
than the Company) which may be required to deliver any cash, securities or other
property upon the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to the holder of this Warrant, the obligation to
deliver to such holder such cash, securities or other property as, in accordance
with the foregoing provision, such holder may be entitled to receive.
(iii) In case the Company shall be a party to any
Transaction pursuant to which the aggregate value of the cash, securities and
other consideration payable for a share of Common Stock is less than $30.00,
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
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(ii) Transaction, or
(iii) voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to the holder of this Warrant a notice specifying (A) the
date or expected date on which any such record is to be taken for the purpose of
such dividend or distribution or (B) the date or expected date on which any such
Transaction, dissolution, liquidation or winding-up is to take place and the
time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for the
securities or other property deliverable upon such Transaction, dissolution,
liquidation or winding-up. Such notice shall be mailed at least twenty (20) days
prior to the date therein specified, in the case of any date referred to in the
foregoing clause (A), and at least thirty (30) days prior to the date therein
specified, in the case of the date referred to in the foregoing clause (B).
6. Definitions. As used herein, the following terms have
the following respective meanings:
Common Stock: The Company's (a) Common Stock, par value
$0.01 per share, and (b) Class B Stock, par value $0.01 per share.
Current Market Value: The average of the daily Market Price
per share of Common Stock for the period of five (5) days, ending on the day
immediately prior to the date determined pursuant to Section 5(d)(i) or (ii),
during which the national securities exchanges were opened for trading, provided
that if an exercise of this Warrant occurs as a result of or in connection with
the consummation of a Transaction, Current Market Value shall be the aggregate
value of the cash, securities and other consideration payable for a share of
Common Stock in connection with such Transaction.
Market Price: Per share of Common Stock on any date
specified herein shall be (a) the last sale price, regular way, on such date or,
if no such sale takes place on such date, the average of the closing bid and
asked prices on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading, or (b) if such Common Stock is not then listed or admitted
to trading on any national securities exchange, but is designated as a national
market system security by the National 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 as of March 30, 1999, between the Company and the original
holder hereof.
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Transaction: A merger, consolidation, sale of all or
substantially all of the Company's assets, recapitalization of the Common Stock
or other similar transaction, in each case if the previously outstanding Common
Stock is acquired for cash or changed into or exchanged for different securities
of the Company or changed into or exchanged for common stock or other securities
of another corporation or interests in a non-corporate entity or other property
(including cash) or any combination of any of the foregoing.
Warrant Price: The meaning specified in Section 5.
7. Amendments and Waivers. Any term of this Warrant may be
amended or modified or the observance of any term of this Warrant may be waived
(either generally or in a particular instance) only with the written consent of
the Company and the holder of this Warrant.
8. Assignment. The provisions of this Warrant shall be
binding upon and inure to the benefit of the original holder hereof, its
successors and assigns by way of merger, consolidation or operation of law, and
each third party transferee of this Warrant, provided that, this Warrant may
only be transferred in accordance with the terms of the Registration Rights
Agreement and, in the case of any third party transferee, such transferee shall
have delivered to the Company a valid agreement of assumption of the restriction
on transfer specified in this Section 8.
9. Exchange of Warrant. Upon surrender for exchange of this
Warrant, properly endorsed, for registration of Transfer or for exchange at the
principal office of the Company, the Company, at its expense, will issue and
deliver to or upon the order of the holder hereof a new Warrant or Warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face of this Warrant, provided that any such transfer of this Warrant is
made in accordance with the Registration Rights Agreement.
10. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Company may determine (or, in the case of any Warrant
held by the original holder hereof or any affiliate thereof or an institutional
holder or any of their respective nominees, of an affidavit of an authorized
officer of such holder, setting forth the fact of such loss, theft or
destruction, which shall be satisfactory evidence thereof and no further
indemnity shall be required as a condition of the execution and delivery of a
new Warrant), or, in the case of any such mutilation, upon the surrender of such
Warrant for cancellation to the Company at its principal office, the Company at
its expense will execute and deliver, in lieu thereof, a new Warrant, of like
tenor. Any Warrant in lieu of which any such new Warrant has been so executed
and delivered by the Company shall not be deemed to be an outstanding Warrant
for any purpose.
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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, at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000, 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 bear a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS. SUCH SECURITIES 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.
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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 March 30, 1999.
WESTWOOD ONE, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
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FORM OF SUBSCRIPTION
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[To be signed only upon exercise of the Warrant]
TO WESTWOOD ONE, INC.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by
such Warrant for, and to purchase thereunder, __________* shares of Common Stock
of WESTWOOD ONE, INC. and herewith makes payment of $______ therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to, _______________________________, whose address is
________________________________________________________.
Dated: _______________________
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(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
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(Address)
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* 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.
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FORM OF ASSIGNMENT
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[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: _______________________
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(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
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(Address)
Signed in the presence of:
---------------------------------
Name:
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