PURCHASE AGREEMENT dated as of August 17, 2010 by and among WESTWOOD ONE, INC. and GORES RADIO HOLDINGS, LLC
Exhibit 10.2
Execution Copy
dated as of August 17, 2010
by and among
WESTWOOD ONE, INC.
and
GORES RADIO HOLDINGS, LLC
This Purchase Agreement is entered into and dated as of August 17, 2010 (this “Agreement”),
among Westwood One, Inc., a Delaware corporation (the “Company”), and Gores Radio Holdings, LLC
(the “Purchaser”).
WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires
to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, certain
securities of the Company pursuant to the terms set forth herein.
NOW, THEREFORE, the Company and the Purchaser hereby agree as follows:
ARTICLE I.
DEFINITIONS
DEFINITIONS
1.1 Definitions. The following terms shall have the meanings set forth in this
Section 1.1:
“$” means U.S. Dollars.
“Affiliate” of a Person means any other Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control with the first Person.
Without limiting the foregoing with respect to the Purchaser, any investment fund, managed account
or investment Person that is managed by the same investment manager (or an Affiliate of such
investment manager) as the Purchaser will be deemed to be an Affiliate of the Purchaser.
“Aggregate Purchase Price Consideration” means the sum of (a) the Aggregate Tranche 1 Purchase
Price plus (b) the Aggregate Tranche 2 Purchase Price.
“Aggregate Tranche 1 Purchase Price” has the meaning set forth in Section 2.1(a).
“Aggregate Tranche 2 Purchase Price” means (a) $10,000,000 less (b) the aggregate Net Cash
Proceeds received by the Company and its Subsidiaries in connection with the sale of Qualified
Equity Interests of the Company, after the date hereof and on or prior to the Second Closing Date.
“assets” or “property” means all assets and property of any nature whatsoever, real, personal,
mixed, tangible, intangible or otherwise.
“Board” means the Board of Directors of the Company.
“Business Day” means any day except Saturday, Sunday and any day on which banking institutions
in New York City are authorized or required by Law or the action of any Governmental Authority to
close.
“Closing” means the First Closing or the Second Closing, as the context so requires.
“Closing Date” means the First Closing Date or the Second Closing Date as applicable.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Shares” means the shares of Common Stock purchased by the Purchaser hereunder.
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“Common Shares Aggregate Purchase Price” has the meaning set forth in Section 2.1(a).
“Common Stock” means the common stock of the Company, par value $0.01 per share, and any
securities into which such stock may hereafter be reclassified.
“Company” has the meaning set forth in the recitals hereto.
“Consent” means any approval, consent, ratification, license, permission, registration,
Permit, waiver or other authorization.
“contract” or “agreement” means any agreement, contract, lease, mortgage, power of attorney,
evidence of indebtedness, letter of credit, undertaking, covenant not to compete, license,
instrument, obligation, commitment, understanding, policy, purchase or sales order, quotation or
other commitment, whether oral or written, express or implied.
“control” including the terms “controlled by” and “under common control with” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, as trustee or
executor, by contract or credit arrangement or otherwise.
“Debt Restructuring Agreements” means the Financing Documents and the New Loan Agreement
Documents as such terms are defined in the Securities Purchase Agreement.
“Encumbrance” means any charge, claim, community property interest, condition, easement,
covenant, warrant, demand, encumbrance, equitable interest, lien, mortgage, option, purchase right,
pledge, security interest, right of first refusal or other right of third parties or restriction of
any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any
other attribute of ownership.
“Fair Market Value” means the “Fair Market Value” per share of the Common Stock of the Company
on a given date determined as follows: (x) if the Common Stock of the Company is publicly traded in
the over-the-counter market, then the average of the per share volume-weighted average price for
the Company’s Primary Exchange as displayed under the heading “VWAP” on the Bloomberg Financial
Markets Information Service (or, if Bloomberg ceases to publish such price, any successor service
reasonably chosen by the Company) page “WWON<Equity> VWAP” (or the equivalent successor if
such page is not available), in respect of the period from the open of trading on the relevant
trading day until the close of trading on such trading day for the 30 consecutive Trading Days
ended on the Trading Day immediately preceding such date, or (y) if no such quotations are
available, the fair value of such shares as of such date as determined by mutual agreement of the
Board and the Purchaser, or, if they shall fail to agree within 10 Business Days (or a further
period on written agreement of all such parties), by an independent internationally-recognized
investment banking firm selected by the Board with the consent of the Purchaser (the fees and
expenses of which shall be paid by the Company). Notwithstanding the foregoing, if the Fair Market
Value of the shares of Common Stock determined in accordance with clause (x) or (y) of the
preceding sentence, as applicable, is less than $4.00 per share, the Fair Market Value of each
share of Common Stock shall be deemed to be $4.00 per share, and if the Fair Market Value of the
shares of Common Stock determined in accordance with clause (x) or (y) of the preceding sentence,
as applicable, is greater than $9.00 per share, the Fair Market Value of each share of Common Stock
shall be deemed to be $9.00 per share.
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“First Closing” means the closing of the purchase and sale of the Tranche 1 Common Shares
pursuant to Section 2.1(a).
“First Closing Date” means the date on which the First Closing occurs.
“GAAP” means United States generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants or the Financial Accounting Standards Board,
consistently applied and maintained on a consistent basis for the Company and its Subsidiaries
throughout the period indicated.
“Governmental Authority” means any United States federal, state, provincial, supranational,
county or local or any foreign government, governmental, regulatory or administrative authority,
agency, self-regulatory body, instrumentality or commission, and any court, tribunal, or judicial
or arbitral body (including private bodies) and any political or other subdivision, department or
branch of any of the foregoing.
“Gores” means The Gores Group, LLC and any successor or assignee thereof.
“Gores Matters” has the meaning set forth in Section 6.16.
“Gores Subordination Agreement” has the meaning ascribed to it in the Securities Purchase
Agreement.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
regulations and rules issued pursuant to that act.
“Indemnified Party” has the meaning set forth in Section 4.5(a).
“Investor Rights Agreement” means the Investor Rights Agreement, dated as of April 23, 2009,
among the Company, Gores Radio Holdings, LLC and the other investors party thereto.
“Laws” means any foreign, federal, state or local statute, law (including common law), rule,
ordinance, code or regulation, any Order, and any regulation, rule, interpretation, guidance,
directive, policy statement or opinion of any Governmental Authority.
“liability” means any liability or obligation of any kind whatsoever (whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, due or to become due, and whether or not reflected or required by GAAP to be
reflected on a balance sheet of the Company).
“Losses” means any and all damages, fines, penalties, deficiencies, liabilities, claims,
losses (including diminution in or loss of value), judgments, awards, settlements, Taxes, actions,
obligations and costs and expenses in connection therewith (including interest, court costs and
reasonable fees and expenses of attorneys, accountants and other experts, and any other expenses of
litigation or other Proceedings (including costs of investigation, preparation and travel) or of
any default or assessment).
“Material Adverse Effect” means any material adverse effect on (a) the condition (financial or
otherwise), results of operations, assets, liabilities or business of the Company and its
Subsidiaries taken as a whole, (b) the ability of the Company or any Subsidiary to perform its
obligations
under this Agreement or any of the other Transaction Documents without substantial delay, or
(c) the legality, validity or enforceability of any Transaction Document.
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“Material Provisions” has the meaning set forth ins Section 6.6.
“Net Cash Proceeds” has the meaning ascribed to it in the Securities Purchase Agreement.
“Noteholders” has the meaning ascribed to it in the Securities Purchase Agreement.
“Order” means any award, writ, stipulation, determination, decision, injunction, judgment,
order, decree, ruling, subpoena or verdict entered, issued, made or rendered by, or any contract
with, any Governmental Authority.
“ordinary course of business” means the ordinary course of business of the Company and the
Subsidiaries consistent with past practice.
“Permits” means all Orders, Consents, franchises, grants, easements, variances, exceptions and
certificates of any Governmental Authority.
“Person” means an individual or corporation, partnership, limited partnership, limited
liability company, trust, incorporated or unincorporated association, joint venture, joint stock
company, Governmental Authority or other entity of any kind.
“PR” has the meaning set forth in Section 6.16.
“Primary Exchange” means the “Primary Exchange” identified on page 2 on the Bloomberg
Financial Markets Information Service (or, if Bloomberg ceases to publish such price, any successor
service reasonably chosen by the Company) page “WWON<Equity> DES” (or the equivalent
successor if such page is not available).
“Proceeding” means an action, charge, claim, demand, suit, arbitration, inquiry, notice of
violation, investigation, litigation, audit or other proceeding (including a partial proceeding,
such as a deposition), whether civil, criminal, administrative, investigative or informal.
“Purchaser” has the meaning set forth in the recitals hereto.
“Qualified Equity Interests” has the meaning ascribed to it in the Securities Purchase
Agreement.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of March 3,
2008, between the Company and Gores Radio Holdings, LLC, as the same may be amended, modified or
supplemented from time to time.
“Related Person” means (x) any Affiliate of the Purchaser and any officer, director, partner
or member of the Purchaser or any of its Affiliates and (y) any investment fund, investment
partnership, investment account or other investment Person whose investment manager, investment
advisor, managing member or general partner, is (i) the Purchaser or an Affiliate of the Purchaser
or (ii) any officer, director, partner or member of the Purchaser or any of its Affiliates.
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“Required Holders” has the meaning ascribed to it in the Securities Purchase Agreement.
“Second Closing” means the closing of the purchase and sale of the Tranche 2 Common Shares
pursuant to Section 2.1(b).
“Second Closing Date” means the date on which the Second Closing occurs.
“Second Amendment” means an amendment to the Registration Rights Agreement in the form
attached hereto as Exhibit A.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of April 23,
2009, between the Company and parties set forth on Schedule A thereto, as may be amended,
restated or otherwise modified through the date hereof.
“Subsidiary” means (a) a corporation more than 50% of the combined voting power of the
outstanding voting stock of which is owned, directly or indirectly, by the Company, or by one or
more Subsidiaries, or by the Company and one or more Subsidiaries, (b) a partnership of which the
Company, or one or more other Subsidiaries, or the Company and one or more Subsidiaries, directly
or indirectly, is the general partner and has the power to direct the policies management and
affairs or (c) any other Person (other than a corporation) in which the Company, or one or more
Subsidiaries, or the Company and one or more Subsidiaries, directly or indirectly, has at least a
majority ownership interest and power to direct the policies, management and affairs thereof.
“Taxes” means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of
any kind (together with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Authority or other taxing authority,
including: taxes or other charges on or with respect to income, franchise, windfall or other
profits, gross receipts, property, sales, use, payroll, employment, social security, workers’
compensation, unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; license, registration
and documentation fees; and customers’ duties, tariffs and similar charges.
“Trading Day” means (a) any day on which the Common Stock is listed and is permitted to be
traded on the Trading Market, or (b) if the Common Stock is not then listed on a Trading Market,
then any Business Day.
“Trading Market” means the NASDAQ stock market or, at any time the Common Stock is not listed
for trading on the NASDAQ stock market, any other national exchange, if the Common Stock is then
listed on such exchange.
“Tranche 1 Common Shares” has the meaning set forth in Section 2.1(a).
“Tranche 2 Common Shares” has the meaning set forth in Section 2.1(b).
“Tranche 2 Notice” means a written notice delivered by the Company to the Purchaser following
the good faith determination by a majority of the independent directors of the Board that the
Company needs the proceeds from the sale of the Tranche 2 Common Shares for liquidity purposes.
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“Tranche 2 Per Share Purchase Price” has the meaning set forth in Section 2.1(b).
“Transaction Documents” means this Agreement, Debt Restructuring Agreements, the Second
Amendment and any other document, instrument or agreement entered into in connection with the
purchase and sale of the Common Shares hereunder.
“Transactions” means the transactions contemplated by the Transaction Documents.
“U.S.” means the United States of America.
“WON Matters” has the meaning set forth in Section 6.16.
ARTICLE II.
PURCHASE AND SALE
PURCHASE AND SALE
2.1 Closing.
(a) On the terms and subject to the conditions set forth in this Agreement applicable to the
First Closing, at the First Closing, the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company, 769,231 Common Shares (the “Tranche 1 Common Shares”)
for an aggregate purchase price of $5,000,001.50 (the “Aggregate Tranche 1 Purchase Price”).
(b) On the terms and subject to the conditions set forth in this Agreement applicable to the
Second Closing, at the Second Closing, the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company, an additional number of Common Shares (the “Tranche 2
Common Shares”), the exact number of Common Shares to be determined by dividing the Aggregate
Tranche 2 Purchase Price by the Fair Market Value (as of the date that is 10 Trading Days prior to
the Second Closing Date) (the “Tranche 2 Per Share Purchase Price”), and rounding up to the nearest
whole number, for an aggregate purchase price equal to the number of Tranche 2 Common Shares
multiplied by the Tranche 2 Per Share Purchase Price. Neither the Company nor the Purchaser shall
have any obligation to consummate the Second Closing in the event that on or prior to the Second
Closing the Company and its Subsidiaries shall have received Net Cash Proceeds of at least
$10,000,000 in the aggregate from the issuance and sale of Qualified Equity Interests of the
Company to any Person (other than any Subsidiary), other than in connection with (i) the
transaction hereunder, or (ii) any stock or option grant to an employee of the Company or any
Subsidiary under a stock option plan or other similar incentive or compensation plan of the Company
or its Subsidiaries or upon the exercise thereof.
(c) Each Closing shall take place at the Los Angeles offices of Proskauer Rose LLP at 10:00
A.M. local time as follows, provided, that the satisfaction or waiver of all of the
conditions set forth in Article V applicable to such Closing (other than any condition that
by its nature must be satisfied on the applicable Closing Date) have been satisfied or waived, as
applicable, or at such other location or time as the parties may agree:
(i) with respect to the First Closing, on September 7, 2010; and
(ii) with respect to the Second Closing, on the earlier of (x) February 28, 2011 or (y)
10 Trading Days following delivery of a valid Tranche 2 Notice.
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2.2 Closing Deliveries.
(a) At the First Closing, the Company shall deliver or cause to be delivered to the Purchaser
the Second Amendment, duly executed by the Company.
(b) At each Closing, the Company shall deliver or cause to be delivered to the Purchaser the
following:
(i) a certificate representing the number of Common Shares to be purchased by the Purchaser at
such Closing, registered in the name of the Purchaser (or its nominee);
(ii) the legal opinion of the General Counsel of the Company, in the form of Exhibit
B, executed by such counsel; and
(iii) a certificate dated as of the applicable Closing Date and signed by the Chief Executive
Officer or Chief Financial Officer of the Company certifying as to the fulfillment of each of the
conditions set forth in Section 5.1 applicable to such Closing.
(c) At each Closing, the Purchaser shall deliver or cause to be delivered to the Company the
Aggregate Tranche 1 Purchase Price or the Aggregate Tranche 2 Purchase Price, as the case may be,
in U.S. Dollars and in immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby represents and
warrants to the Purchaser that, as of the date hereof and, except for representations and
warranties that speak as of a specific date other than the respective Closing Dates, on each
Closing Date:
(a) Organization and Qualification. Each of the Company and the Subsidiaries is an
entity duly incorporated, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation, with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation
in each jurisdiction in which the nature of the business conducted or property owned by it makes
such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.
(b) Authorization; Enforcement. The Company has the requisite power and authority to
enter into and to consummate the Transactions and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of each of the Transaction Documents by the Company and
the consummation of the Transactions have been duly authorized by all necessary action on the part
of the Company and no further action, approval consent, ratification, license, permission,
registration, waiver or other authorization is required by the Company, the Board or the Company’s
stockholders. Each Transaction Document has been (or upon delivery will have been) duly executed
by the Company and, when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in accordance with its terms.
Each of the Board and a duly authorized committee of the Board (by the affirmative votes of a
majority of the disinterested directors of such committee) by resolutions duly adopted, and not
subsequently rescinded or modified in any way,
has, in good faith, duly authorized this Agreement and the Transactions, and has determined
that this Agreement and the Transactions are fair as to the Company as of the time of such
authorization.
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(c) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation of the Transactions do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, by-laws or other organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any contract to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) result in a violation of any Law, except, in the cases of clauses (ii) and (iii), for any
such conflict, default, right, violation or other occurrence which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(d) Filings, Consents and Approvals. Neither the Company nor any Subsidiary is
required to obtain any Consent of, give any notice to, or make any filing or registration with, any
Governmental Authority or other Person in connection with the execution and delivery of the
Transaction Documents or the consummation of the Transactions, other than (i) those that the
Company or any of its Subsidiaries has obtained, given or made as of the date hereof, or (ii) those
required to be obtained, given or made after the date hereof, which shall be obtained, given or
made when so required.
(e) Issuance of the Common Shares. The Common Shares are duly authorized, and when
issued and paid for in accordance with the Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Encumbrances and shall not be subject to
preemptive rights or similar rights, other than those that have (i) been waived, or (ii) not been
exercised and the period for exercise has expired.
3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is an entity duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its organization with the
requisite corporate, limited liability company or partnership power and authority to enter into and
to consummate the Transactions and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by the Purchaser of the Transaction Documents to which it
is a party have been duly authorized by all necessary limited liability company action on the part
of the Purchaser. Each of the Transaction Documents to which the Purchaser is a party has been
duly executed by the Purchaser and, when delivered by the Purchaser in accordance with terms
hereof, will constitute the valid and binding obligation of the Purchaser, enforceable against it
in accordance with its terms.
(b) Investment Intent. The Purchaser is acquiring the Common Shares for investment
purposes and not with a view to distributing or reselling such Common Shares or any part thereof in
violation of applicable securities Laws, without prejudice, however, to the Purchaser’s right at
all times to sell or otherwise dispose of all or any part of such Common Shares in compliance with
applicable federal or state securities laws. Nothing contained herein shall be deemed a
representation or warranty by the Purchaser to hold the Common Shares for any period of time. The
Purchaser understands that the Common Shares have not been registered under the Securities Act, and
therefore the Common Shares may not be sold, assigned or transferred in the U.S. other than
pursuant to (i) a registration statement under the Securities Act and applicable state securities
laws, or (ii) an exemption from such registration requirements.
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(c) Purchaser Status. The Purchaser is an “accredited investor” within the meaning
of Rule 501(a) of Regulation D under the Securities Act.
(d) General Solicitation. The Purchaser is not purchasing the Common Shares as a
result of any advertisement, article, notice or other communication regarding the Common Shares
published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general advertisement.
(e) Reliance on Exemptions. The Purchaser understands that the Common Shares are
being offered and sold to it in reliance on specific exemptions from the registration requirements
of U.S. federal and state securities Laws and that the Company is relying in part upon the truth
and accuracy of, and the Purchaser’s representations and warranties set forth herein in order to
determine the availability of such exemptions and the eligibility of the Purchaser to acquire the
Common Shares.
(f) Ability to Protect Its Own Investment and Bear Economic Risks. By reason of the
business and financial experience of the Purchaser, the Purchaser has the capacity to protect its
own interests in connection with the Transactions and is able to bear the economic risk of an
investment in the Common Shares.
(g) Ability to Consummate Transactions. The Purchaser has available to it sufficient
funds to pay the Aggregate Purchase Price Consideration and to make other necessary payments by the
Purchaser in connection with the Transactions and will have available to it on each Closing Date
sufficient funds to pay such amounts.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) Common Shares may only be disposed of pursuant to an effective registration statement
under the Securities Act or pursuant to an available exemption from the registration requirements
of the Securities Act, and in compliance with any applicable state securities Laws.
(b) The Purchaser agrees to the imprinting on any certificate evidencing the Common Shares in
substantially the form set forth in the Investor Rights Agreement.
4.2 Integration. The Company shall not, and shall use its reasonable best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Common Shares in a manner that would require the
registration under the Securities Act of the sale of the Common Shares to the Purchaser, or that
would be integrated with the offer or sale of the Common Shares for purposes of the rules and
regulations of the Trading Market.
4.3 Reservation of Common Shares.
The Company shall maintain a reserve from its duly authorized Common Stock for issuance
pursuant to the Transaction Documents in such amount as may be required to fulfill its obligations
in full under the Transaction Documents.
4.4 Investigation. No investigation made by Gores and its employees, advisors and
other representatives shall affect the representations, warranties and agreements made by the
Company
pursuant to this Agreement, and each such representation, warranty and agreement shall survive
any such investigation in accordance with the terms of this Agreement.
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4.5 Indemnification.
(a) The Company shall indemnify, to the fullest extent lawful, and hold harmless the
Purchaser and Related Person, and their respective directors, officers, employees, agents and
representatives (collectively, “Indemnified Parties”) from and against any and all Losses, as
incurred, directly or indirectly arising out of, based upon or relating to (a) any breach by the
Company of any of its representations, warranties or covenants in this Agreement or any other
Transaction Document or (b) any Proceeding by or against any Person, directly or indirectly, in
connection with or as a result of any of any of the Transactions except to the extent any such
Proceeding arose out of, is based upon or relates to any act or failure to act by the Purchaser
that is in breach in any material respect of this Agreement or in violation of any Law. The
payment obligations of the Company to the Indemnified Parties under this Section 4.5(a)
shall be subordinated and junior in right of payment to all payment obligations of the Company to
the Noteholders under the Debt Restructuring Agreements to the same extent as the “Subordinated
Debt” (as defined in the Gores Subordination Agreement) is subordinated to the “Senior Debt” (as
defined in the Gores Subordination Agreement) under the Gores Subordination Agreement.
(b) If any Proceeding shall be brought or asserted against any Indemnified Party, such
Indemnified Party shall promptly notify the Company in writing, and the Company 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 Company 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 Company.
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 Company has agreed in writing to
pay such fees and expenses; (ii) the Company shall have failed promptly to assume the defense of
such Proceeding; (iii) the Company 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 Company 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 Company or such Affiliates (in
which case, under any of clauses (i) through (iv), such counsel shall be at the expense of the
Company). The Company shall not be liable for any settlement of any Proceeding effected without
its written consent, which consent shall not be unreasonably withheld. The Company shall not,
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.
(c) The indemnification and expense reimbursement obligations of the Company under this
Section 4.5 shall be in addition to any liability that the Company may otherwise have and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Indemnified Parties. If the Company breaches its obligations under any
Transaction Document, then, in addition to any other liabilities the Company may have under any
Transaction Document or applicable Law, the Company shall pay or reimburse the Indemnified Parties
on demand for all costs of collection
and enforcement (including reasonable attorneys’ fees and expenses), provided that the
Indemnified Parties prevail in such matters. Without limiting the generality of the foregoing, the
Company specifically agrees to reimburse the Indemnified Parties on demand for all costs of
enforcing the indemnification obligations in this paragraph, subject to the Indemnified Parties
entering into an undertaking to reimburse all such amounts, in the event the Indemnified Parties do
not prevail on such matters and subject to the last sentence of Section 4.5(a) above.
For purposes of clarity, the provisions contained in this Section 4.5 shall not constitute
the exclusive remedies of any Indemnified Party hereunder.
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4.6 Approvals; Taking of Actions. Subject to the terms and conditions of this
Agreement, the Company shall use its commercially reasonable best efforts to (i) take or cause to
be taken all actions, and to do or cause to be done all other things, necessary, proper or
advisable to consummate the Transactions as promptly as practicable, and (ii) obtain in a timely
manner all necessary Consents and effect all necessary registrations and filings. The Company
shall be responsible for all filing fees required to be paid in connection any filings or approvals
required under the HSR Act. The Purchaser and the Company shall cooperate with each other in
connection with the making of all such filings, including providing copies of all such documents to
the non-filing party and its advisors before filing. The Purchaser and the Company shall use their
respective commercially reasonable efforts to furnish to each other all information required for
any application or other filing to be made pursuant to the rules and regulations of any applicable
Law in connection with the Transactions. The Company shall give any notices to third parties, and
use their commercially reasonable efforts to obtain any third party Consents related to or required
in connection with or to consummate the Transactions. Notwithstanding the foregoing or any other
covenant contained herein, in connection with the receipt of any necessary Consents, including
under the HSR Act or under any applicable foreign anti-trust laws, nothing shall require the
Company to (i) divest or hold separate any material part of its businesses or operations or (ii)
agree not to compete in any geographic area or line of business or agree to take, or not to take,
any other action or comply with any other term or condition, in such a manner as would reasonably
be expected to result in a Material Adverse Effect.
ARTICLE V.
CONDITIONS
CONDITIONS
5.1 Conditions Precedent to the Obligations of the Purchaser. The obligation of the
Purchaser to acquire the Common Shares is subject to the satisfaction or, to the extent permitted
by Law, waiver by the Purchaser, at or before the First Closing or the Second Closing, as
applicable, of each of the following conditions (which, unless expressly stated otherwise, apply to
both Closings):
(a) Representations and Warranties. All representations and warranties of the
Company contained in this Agreement shall have been true and correct as of the date hereof and,
except for representations and warranties that speak as of a specific date other than the
respective Closing Dates, which need only be true and correct as of such specific date, shall have
been true and correct in all material respects as of each Closing Date.
(b) Performance. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or before the applicable Closing,
including delivering or causing the delivery of those items required to be delivered pursuant to
Section 2.2 as applicable to each Closing.
11
(c) Required Approvals. The Company shall have obtained in a timely fashion any and
all Consents, Permits and waivers necessary or appropriate for consummation of the purchase and
sale of the Common Shares, and all of which shall be and remain so long as necessary in full force
and effect.
(d) Amendment. The Registration Rights Agreement shall have been amended by the
Second Amendment.
(e) Debt Restructuring. The transactions contemplated by the Debt Restructuring
Agreements, shall have been consummated.
5.2 Conditions Precedent to the Obligations of the Company. The obligation of the
Company to sell the Common Shares is subject to the satisfaction or, to the extent permitted by
law, waiver by the Company, at or before the First Closing or the Second Closing, as applicable, of
each of the following conditions (which, unless expressly stated otherwise, apply to both
Closings):
(a) Representations and Warranties. The representations and warranties of the
Purchaser contained herein shall be true and correct in all material respects as of the date when
made and as of each Closing Date as though made on and as of such date.
(b) Performance. The Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Purchaser at or before the applicable
Closing, including delivering or causing the delivery of those items required to be delivered
pursuant to Section 2.2 as applicable to each Closing.
(c) No Injunction. No Law or Order shall have been enacted, entered, promulgated or
endorsed by any Governmental Authority of competent jurisdiction that prohibits the consummation of
any of the Transactions.
ARTICLE VI.
MISCELLANEOUS
MISCELLANEOUS
6.1 Survival. Except for the representations and warranties set forth in (a)
Sections 3.1(a), 3.1(b) and 3.1(e) each of which shall survive
indefinitely, the representations and warranties of a party contained in this Agreement (and the
portion of any certificate certifying such representations and warranties) shall survive the
closing of the transactions contemplated in this Agreement until the 24-month anniversary of the
Second Closing Date (or if there is no Second Closing, the First Closing Date), unless a bona fide
notice of a claim shall have been made in writing before such date, in which case the
representation and warranty to which such notice applies shall survive in respect of that claim
until the final determination or settlement of the claim, and, notwithstanding such closing nor any
investigation made by or on behalf of the party entitled to rely on such representation and
warranty, shall continue in full force and effect for the benefit of such party during such period.
6.2 Fees and Expenses.
(a) The Company shall pay the actual and reasonable legal, accounting, consulting, travel and
all other out-of-pocket expenses incurred by or on behalf of the Purchaser in connection with due
diligence and the preparation and negotiation of the Transaction Documents and otherwise in
connection with the Transactions, in each case, promptly following Gores’ request.
12
(b) Except as expressly set forth in this Section 6.2 or the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all
transfer agent fees, stamp Taxes and other Taxes and duties levied in connection with the issuance
of the Common Shares.
6.3 Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both oral or written.
6.4 Further Assurances. At or after the Closing, and without further consideration,
each of the parties will execute and deliver to the other parties such further documents and take
such further action as may be reasonably requested in order to give practical effect to the
intention of the parties under the Transaction Documents.
6.5 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 or by other means of electronic communication at the facsimile number or e-mail address
specified in this Section 6.5 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 or by other means of electronic communication at the facsimile number or e-mail address
specified in this Section 6.5 specified in this Agreement 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 mailed by registered or certified mail, return receipt
requested, postage prepaid or otherwise delivered by hand. The address for such notices and
communications shall be as follows:
| If to the Company: | Westwood One, Inc. |
|||
| 1166 Avenue of the Xxxxxxxx |
||||
| 00xx Xxxxx |
||||
| Xxx Xxxx, Xxx Xxxx 00000 |
||||
| Attn: General Counsel |
||||
| Phone: (000) 000-0000 |
||||
| Fax: (000) 000-0000 |
||||
| Email: xxxxxxxx@xxxxxxxxxxx.xxx | ||||
| With a copy to (which shall not constitute notice): | With a copy to: | |||
| Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP |
||||
| 000 Xxxxx Xxxxx Xxxxxx |
||||
| Xxxxx 0000 |
||||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 |
||||
| Attn: Xxxxx X. XxXxxxxx |
||||
| Phone: (000) 000-0000 |
||||
| Fax: (000) 000-0000 |
||||
| Email: xxxxx.xxxxxxxx@xxxxxxx.xxx | ||||
| If to the Purchaser: | To the addresses set forth under the Purchaser’s name on the signature page attached hereto. |
13
or such other address as may be designated in writing hereafter, in the same manner, by such
Person by two Trading Days prior notice to the other party in accordance with this Section
6.5.
6.6 Amendments; 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 (a) the Company, (b) the Purchaser, and (c) to the extent affecting Section 2.1
hereof (or any of the defined terms as used therein), or otherwise materially adversely affecting
the Noteholders, as such, the Required Holders. The provisions referred to in the preceding
clause (c) are referred to as the “Material Provisions.” No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right.
6.7 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.
6.8 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Purchaser. The Purchaser may assign its rights under this Agreement after the Closing to any
Person to whom the Purchaser assigns or transfers any Common Shares, provided (a) such transferee
agrees in writing to be bound, with respect to the transferred Common Shares, by the provisions
hereof and of the Transaction Documents that apply to the “Purchaser” and (b) the Purchaser shall
not be relieved of its obligations hereunder in connection with any such assignment.
Notwithstanding anything to the contrary herein, Common Shares may be pledged to a bank or
financial lending institution in connection with a bona fide loan or financing arrangement,
provided, that prior to any foreclosure thereunder such pledgee shall enter into an
agreement, in form and substance reasonably satisfactory to the Company, making the restrictions
set forth in the Transaction Documents applicable to such pledgee.
6.9 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 (a) the Noteholders, as
such, are intended third party beneficiaries of the Material Provisions of this Agreement, and (b)
each Indemnified Party is an intended third party beneficiary of Section 4.5 and (in each
case) may enforce the provisions of Section 4.5 directly against the parties with
obligations thereunder.
14
6.10 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 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.
6.11 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.
6.12 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.
6.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction Documents, whenever
the Purchaser exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then
the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice
to the Company, any relevant notice, demand or election in whole or in part without prejudice to
its future actions and rights.
6.14 Replacement of Common Shares. If any certificate or instrument evidencing any
Common Shares is mutilated, lost, stolen or destroyed, upon receipt of evidence to the Company’s
reasonable satisfaction of such mutilation, loss, theft or destruction, the Company shall issue or
cause to
be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument. Applicants for such substitute
certificates shall also comply with such other reasonable regulations and pay such other reasonable
charges incidental thereto as the Company may reasonably prescribe.
15
6.15 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by Law, including recovery of damages, the Purchaser and the Company will be entitled to
specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations described
in the foregoing sentence and hereby agrees to waive in any Proceeding for specific performance of
any such obligation the defense that a remedy at Law would be adequate.
6.16 Conflict of Interest. Each party hereto hereby acknowledges and agrees that (a)
the Purchaser and certain of its Related Persons are clients of Proskauer Rose LLP (“PR”) on
matters related to the Purchaser’s investment in the Company (including with respect to the
Transactions) and other unrelated matters (the “Gores Matters”), (b) the Company is a client of PR
on certain unrelated matters (the “WON Matters”), (c) PR’s concurrent representation of the Company
on the WON Matters and the Purchaser and certain of its Related Persons on the Gores Matters
presents a potential conflict of interest for PR, and (d) such party (i) understands the possible
adverse effects of PR’s simultaneous representation of WON on the WON Matters and the Purchaser and
certain of its Related Persons on the Gores Matters, and (ii) has consented to PR’s representation
of WON on the WON Matters and the Purchaser and certain of its Related Persons on the Gores
Matters, as described above.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
SIGNATURE PAGES FOLLOW]
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.
| WESTWOOD ONE, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxxxxx, III | |||
| Name: | Xxxxxxxx X. Xxxxxxxx, III | |||
| Title: | President and CFO | |||
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASER(S) FOLLOW.]
SIGNATURE PAGES OF PURCHASER(S) FOLLOW.]
| GORES RADIO HOLDINGS, LLC | ||||||
| By: | The Gores Group, LLC, its Managing Member | |||||
| By: | /s/ Xxxxxx X. Xxxxxx
|
|||||
| Title: Vice President | ||||||
| Address for Notice: | ||||||
| GORES RADIO HOLDINGS, LLC | ||||||
| 00000 Xxxxxxxx Xxxxxxxxx | ||||||
| 00xx Xxxxx | ||||||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||||||
| Attn: General Counsel | ||||||
| Phone: (000) 000-0000 | ||||||
| Fax: (000) 000 0000 | ||||||
| With a copy to (which shall not constitute notice): | With a copy to (which shall not constitute notice): | |||||
| GORES RADIO HOLDINGS, LLC | XXXXXXXXX XXXX XXX | |||||
| 00000 Xxxxxxxx Xxxxxxxxx | 2049 Century Park East | |||||
| 00xx Xxxxx | 00xx Xxxxx | |||||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | Xxx Xxxxxxx, Xxxxxxxxxx 00000 | |||||
| Attn: Xxx Xxxxxxxxxx | Attn: Xxxxxxx X. Xxxxxxxx, Esq. | |||||
| Phone: (000) 000-0000 | Phone: (000) 000-0000 | |||||
| Fax: (000) 000 0000 | Fax: (000) 000-0000 | |||||
