EXHIBIT 10.16
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS
COMMON STOCK PURCHASE WARRANT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO DISTRIBUTION, AND THIS COMMON STOCK PURCHASE
WARRANT MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AND
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL THAT THE PROPOSED TRANSACTION DOES NOT VIOLATE
THE SECURITIES ACT OF 1933, AND APPLICABLE STATE SECURITIES LAWS.
CUMULUS MEDIA INC.
COMMON STOCK PURCHASE WARRANT
Date of Issuance: March 28, 2002 Certificate No. 14
THIS IS TO CERTIFY that BANCAMERICA CAPITAL INVESTORS SBIC I, L.P., a
Delaware limited partnership, and its transferees, successors and assigns (the
"HOLDER"), for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, is entitled to purchase from CUMULUS MEDIA INC.,
an Illinois corporation (the "COMPANY"), at the price of $ 12.00 per share,
706,424 shares (the "AGGREGATE NUMBER") of the fully paid and nonassessable
Class A Common Stock, par value $0.01 per share of the Company ("CLASS A COMMON
STOCK"), or Class B Common Stock, par value $0.01 per share of the Company
("CLASS B COMMON STOCK"), at the option of the Holder at the time of exercise
(as such number may be adjusted as provided herein).
"COMMON STOCK" means either (a) Class A Common Stock or any other
capital stock into which the foregoing is reclassified or reconstituted or (b)
Class B Common Stock or any other capital stock into which the foregoing is
reclassified or reconstituted.
SECTION 1. THE WARRANT; TRANSFER AND EXCHANGE.
(a) THE WARRANT. This Common Stock Purchase Warrant (the
"WARRANT") and the rights and privileges of the Holder and the
Company hereunder may be exercised by the Holder in whole or
in part as provided herein; and, as more fully set forth in
Sections 1(b) and 8 hereof, may be transferred by the Holder
to any other persons or entities at any time or from time to
time, in whole or in part.
(b) TRANSFER AND EXCHANGES. The Company shall initially record
this Warrant on a register to be maintained by the Company
with its other stock books and subject to Section 8 hereof,
from time to time thereafter shall reflect the transfer of
this Warrant on such register when surrendered for transfer in
accordance with the terms hereof and properly endorsed,
accompanied by appropriate instructions. Upon any such
transfer, a new warrant or warrants shall be issued to the
transferee and the Holder (in the event the Warrant is only
partially transferred) and the surrendered warrant shall be
canceled. This Warrant may be exchanged at the option of the
Holder, when surrendered at the principal executive offices of
the Company ("PRINCIPAL OFFICE"), for another warrant or other
warrants of like tenor and representing in the aggregate the
right to purchase a like number of shares of Common Stock.
SECTION 2. EXERCISE.
(a) RIGHT TO EXERCISE. At any time after the Date of Issuance and
on or before the first anniversary of the Date of Issuance
(the "Expiration Date"), the Holder, in accordance with the
terms hereof, may exercise this Warrant, in whole at any time
or in part from time to time, by delivering this Warrant to
the Company during normal business hours on any Business Day
(defined below) at the Principal Office, together with the
election to purchase, in the form attached hereto as EXHIBIT A
and made a part hereof (the "ELECTION TO PURCHASE"), duly
executed, and payment of the Exercise Price for the number of
shares to be purchased (the "EXERCISE AMOUNT"), as specified
in the Election to Purchase. As used herein "BUSINESS DAY"
means any day other than a Saturday, Sunday or a day on which
commercial banking institutions in Atlanta, Georgia are
authorized or required by law or executive order to be closed.
If the Expiration Date is not a Business Day, then this
Warrant may be exercised on the next succeeding Business Day.
(b) PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall
be made to the Company in cash or other immediately available
funds.
(c) ISSUANCE OF SHARES OF COMMON STOCK. Upon receipt by the
Company of this Warrant at its Principal Office in proper form
for exercise, and accompanied by payment of the Exercise Price
as aforesaid, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such
exercise, notwithstanding that certificates representing such
shares of Common Stock may not then be actually delivered.
Upon such surrender of this Warrant and payment of the
Exercise Price as aforesaid, the Company shall issue and cause
to be delivered with all reasonable dispatch to, or upon the
written order of, the Holder (and in such name or names as the
Holder may designate) a certificate or certificates for the
Exercise Amount.
(d) FRACTIONAL SHARES. The Company shall not be required to
deliver fractions of shares of Common Stock upon exercise of
this Warrant. If any fraction of a share of Common Stock would
be deliverable upon an exercise of this Warrant, the Company
may, in lieu of delivering such fraction of a share of Common
Stock, make a cash payment to the Holder in an amount equal to
2
the same fraction of the Fair Market Value Per Share (defined
below) determined as of the Business Day immediately preceding
the date of exercise of this Warrant. As used herein, "FAIR
MARKET VALUE PER SHARE" means as of a particular date the
average (weighted by daily trading volume) of the closing
prices of the Class A Common Stock on all securities exchanges
on which such security may be listed at the time, or, if there
has been no sales on any such exchange on any day, or, if on
any day such security is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ
System as of 4:00 P.M., New York City time, or, if on any day
such security is not quoted in the NASDAQ System, the average
of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated or any similar successor
organization, in each such case averaged over a period of 20
days consisting of the day as of which the "Fair Market Value
Per Share" is being determined and the 19 consecutive trading
days prior to such day.
(e) PARTIAL EXERCISE. In the event of a partial exercise of this
Warrant, the Company shall issue to the Holder a Warrant in
like form for the unexercised portion thereof.
SECTION 3. PAYMENT OF TAXES. The Company shall pay all stamp taxes attributable
to the initial issuance of shares or other securities issuable upon the
exercise of this Warrant or issuable pursuant to Section 6 hereof,
excluding any tax or taxes which may be payable because of the transfer
involved in the issuance or delivery of any certificates for shares or
other securities in a name other than that of the Holder in respect of
which such shares or securities are issued.
SECTION 4. REPLACEMENT WARRANT. In case this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in
lieu of and in substitution for the Warrant lost, stolen or destroyed,
a new Warrant of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction of such Warrant and upon
receipt of indemnity reasonably satisfactory to the Company provided
that if the Holder is a financial institution or other institutional
investor its own agreement shall be satisfactory.
SECTION 5. RESERVATION OF COMMON STOCK AND OTHER COVENANTS.
(a) RESERVATION OF AUTHORIZED COMMON STOCK. The Company shall at
all times reserve and keep available out of the aggregate of
its authorized but unissued shares, free of preemptive rights,
such number of its duly authorized shares of Class A Common
Stock and Class B Common Stock, or other stock or securities
deliverable pursuant to Section 6 hereof, as shall be
sufficient to enable the Company at any time to fulfill all of
its obligations under this Warrant.
(b) AFFIRMATIVE ACTIONS TO PERMIT EXERCISE AND REALIZATION OF
BENEFITS. If any shares of Common Stock reserved or to be
reserved for the purpose of the exercise of this Warrant, or
any shares or other securities reserved or to be reserved for
3
the purpose of issuance pursuant to Section 6 hereof, require
registration with or approval of any governmental authority
under any federal or state law (other than securities laws)
before such shares or other securities may be validly
delivered upon exercise of this Warrant, then the Company
covenants that it will, at its sole expense, use its
reasonable best efforts to secure upon and after exercise of
this Warrant such registration or approval, as the case may be
(including but not limited to approvals or expirations of
waiting periods required under the Hart Scott Rodino Antitrust
Improvements Act).
(c) REGULATORY REQUIREMENTS AND RESTRICTIONS. In the event of any
reasonable determination by the Holder that, by reason of any
existing or future federal or state law, statute, rule,
regulation, guideline, order, court or administrative ruling,
request or directive (whether or not having the force of law
and whether or not failure to comply therewith would be
unlawful) (collectively, a "REGULATORY REQUIREMENT"), the
Holder is effectively restricted or prohibited from holding
this Warrant or any shares of Common Stock issuable upon
exercise of this Warrant, any shares of Class A Common Stock
into which shares of Class B Common Stock are convertible or
any shares or other securities issuable pursuant to Section 6
hereof (such shares or other securities collectively, the
"Warrant Shares"), or otherwise realizing upon or receiving
the benefits intended under this Warrant, the Company shall
use its reasonable best efforts to take such action as the
Holder and the Company shall jointly agree in good faith to be
reasonably necessary to permit the Holder to comply with such
Regulatory Requirement, with the costs of same for the account
of the Company.
(d) VALIDLY ISSUED SHARES. The Company covenants that all shares
of Common Stock that may be delivered upon exercise of this
Warrant (including any shares or other securities issued
pursuant to Section 6 hereof), assuming full payment of the
Exercise Price, shall upon delivery by the Company be duly
authorized and validly issued, fully paid and nonassessable,
free from all stamp taxes, liens and charges with respect to
the issue or delivery thereof and otherwise free of all other
security interests, encumbrances and claims of any nature
whatsoever.
(e) LISTING. If the Warrant Shares require listing on any
securities exchange, before such shares or securities may be
issued upon exercise, the Company will, at its expense and as
expeditiously as possible, use its best efforts to cause such
shares or securities to be duly listed on such securities
exchange.
SECTION 6. ADJUSTMENTS TO AGGREGATE NUMBER.
Under certain conditions, the Exercise Price and Aggregate Number shall
be adjusted as set forth in this Section 6. Upon each adjustment of the
Aggregate Number, the Exercise Price shall be adjusted by multiplying the
Exercise Price then in effect by a fraction, the numerator of which shall be the
Aggregate Number immediately prior to such adjustment, and the denominator of
which shall be the Aggregate Number immediately following such adjustment.
4
(a) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In case at any
time or from time to time the Company shall: (i) issue to the
holders of any of its Common Stock, a dividend payable in, or
other distribution of, Common Stock (a "Stock Dividend"),
subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, including without limitation
by means of a stock split (a "Stock Subdivision"), or combine
its outstanding shares of Common Stock into a smaller number
of shares of Common Stock (a "Stock Combination"), then the
Aggregate Number in effect immediately prior thereto shall be
(1) proportionately increased in the case of a Stock Dividend
or a Stock Subdivision and (2) proportionately decreased in
the case of a Stock Combination. In the event the Company
shall declare or pay, without consideration, any dividend on
the Common Stock payable in any right to acquire Common Stock
for no consideration, then the Company shall be deemed to have
made a Stock Dividend in an amount of shares equal to the
maximum number of shares issuable upon exercise of such rights
to acquire Common Stock. An adjustment made pursuant to this
Section 6 shall become effective retroactively (x) in the case
of any Stock Dividend to a date immediately following the
close of business on the record date for the determination of
holders of shares of Common Stock entitled to receive such
Stock Dividend, or (y) in the case of any such Stock
Subdivision to the close of business on the date upon which
such corporate action becomes effective.
(b) CHANGES IN COMMON STOCK. In case at any time the Company shall
initiate any transaction or be a party to any transaction
(including, without limitation, a merger, consolidation, share
exchange, sale, lease or other disposition of all or
substantially all of the Company's assets, liquidation,
recapitalization or reclassification of the Company's
securities) in connection with which the then outstanding
shares of Common Stock shall be changed into or exchanged for
different securities of the Company or capital stock or other
securities of another corporation or interests in a
non-corporate entity or other property (including cash) or any
combination of the foregoing (each such transaction being
herein called a "TRANSACTION"), then, as a condition of the
consummation of the Transaction, lawful, enforceable and
adequate provision shall be made so that the Holder shall be
entitled to elect by written notice to the Company to receive
(i) a new warrant in form and substance similar to, and in
exchange for, this Warrant to purchase all or a portion of
5
such securities or other property or (ii) upon exercise of
this Warrant at any time on or after the consummation of the
Transaction, in lieu of shares of Common Stock issuable upon
such exercise prior to such consummation, the securities or
other property (including cash) to which such Holder would
have been entitled upon consummation of the Transaction if
such Holder had exercised this Warrant immediately prior
thereto (subject to adjustments from and after the
consummation date as nearly equivalent as possible to the
adjustments provided for in this Section 6). The Company will
not effect any Transaction unless prior to the consummation
thereof each corporation or other entity (other than the
Company) which may be required to deliver any new warrant,
securities or other property as provided herein shall assume,
by written instrument delivered to the Holder, the obligation
to deliver to such Holder such new warrant, securities or
other property as in accordance with the foregoing provisions
such Holder may be entitled to receive and such corporation or
entity shall have similarly delivered to the Holder an opinion
of counsel for such corporation or entity, satisfactory to the
Holder, which opinion shall state that all of the terms of the
new warrant or this Warrant shall be enforceable against the
Company and such corporation or entity in accordance with the
terms hereof and thereof, together with such other matters as
the Holder may reasonably request. The foregoing provisions of
this Section 6(b) shall similarly apply to successive
Transactions.
(c) ADJUSTMENT NOTICE. Whenever the Aggregate Number is to be
adjusted pursuant to this Section 6, unless otherwise agreed
by the Holder, the Company shall promptly (and in any event
within 10 Business Days after the event requiring the
adjustment) prepare a certificate signed by the chief
financial officer of the Company, setting forth, in reasonable
detail, the event requiring the adjustment and the method by
which such adjustment is to be calculated. The Company shall
promptly cause a copy of such certificate to be delivered to
the Holder. The Company shall keep at its Principal Office
copies of all such certificates and cause the same to be
available for inspection at said office during normal business
hours by the Holder or any prospective purchaser of the
Warrant (in whole or in part). The Company shall also notify
the Holders of (i) any capital reorganization or
reclassification of the capital stock of the Company or share
exchange or merger with, or sale, disposition or other
conveyance of all or substantially all of its assets to, any
Person and (ii) the Company (or any other party) shall
institute any proceeding seeking an order for relief under
Federal Bankruptcy laws or seeking to adjudicate the Company
as bankrupt or insolvent, or seeking dissolution, liquidation
or winding up of the Company or seeking reorganization under
any law relating to bankruptcy or insolvency.
SECTION 7. NO DILUTION OR IMPAIRMENT.
(a) The Company will not, by amendment of its Articles of
Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, share exchange,
dissolution or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of
this Warrant, including without limitation the adjustments
required under Section 6 hereof, and will at all times in good
faith assist in the carrying out of all such terms and in
taking of all such action as may be necessary or appropriate
to protect the rights of the Holder against dilution or other
impairment. Without limiting the generality of the foregoing
and notwithstanding any other provision of this Warrant to the
contrary (including by way of implication), the Company (a)
will not increase the par value of any shares of Common Stock
receivable on the exercise of this Warrant above the amount
payable therefor on such exercise or (b) will take all such
action as may be necessary or appropriate so that the Company
may validly and legally issue fully paid and nonassessable
shares of Common Stock on the exercise of this Warrant.
6
(b) CERTAIN EVENTS. If any event occurs as to which the provisions
of this Warrant are not strictly applicable or, if strictly
applicable, would not fairly protect the rights of the Holder
in accordance with the essential intent and principles of such
provisions, then the Company and the Holder shall make an
adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to
protect the Holder's rights as aforesaid.
SECTION 8. TRANSFERS OF THE WARRANT.
(a) GENERALLY. Subject to the restrictions set forth in this
Section 8, the Holder may at any time and from time to time
freely transfer this Warrant and the Warrant Shares in whole
or in part.
(b) COMPLIANCE WITH SECURITIES LAWS. The Holder agrees that the
Warrant may not be sold or otherwise disposed of except
pursuant to an effective registration statement under the
Securities Act and applicable state securities laws or
pursuant to an applicable exemption from the registration
requirements of the Securities Act and such state securities
laws. In the event that the Holder transfers this Warrant
pursuant to an applicable exemption from registration, the
Company may request, at its expense, an opinion of counsel
that the proposed transfer does not violate the Securities Act
and applicable state securities laws.
SECTION 9. SURVIVAL OF PROVISIONS. Notwithstanding the full exercise by the
Holder of its rights to purchase Common Stock hereunder, the provisions
of Sections 3, 5(c), 5(d), 5(e) and 9 through 18 of this Warrant shall
survive such exercise and the Expiration Date.
SECTION 10. DELAYS, OMISSIONS AND INDULGENCES. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to the Holder
upon any breach or default of the Company under this Warrant shall
impair any such right, power or remedy, nor shall it be construed to be
a waiver of any such breach or default, or any acquiescence therein, or
of or in any similar breach or default thereafter occurring; nor shall
any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind
or character on the Holder's part of any breach or default under this
Warrant, or any waiver on the Holder's part of any provisions or
conditions of this Warrant must be in writing and that all remedies,
either under this Warrant, or by law or otherwise afforded to the
Holder, shall be cumulative and not alternative.
SECTION 11. RIGHTS OF TRANSFEREES. Subject to the provisions of Section 8, the
rights granted to the Holder hereunder of this Warrant shall pass to
and inure to the benefit of all subsequent transferees of all or any
portion of the Warrant (provided that the Holder and any transferee
shall hold such rights in proportion to their respective ownership of
the Warrant and Warrant Shares) until extinguished pursuant to the
terms hereof.
SECTION 12. CAPTIONS. The titles and captions of the Sections and other
provisions of this Warrant are for convenience of reference only and
are not to be considered in construing this Warrant.
7
SECTION 13. NOTICES.
All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified
first-class mail, return receipt requested, telecopy, overnight courier service
or personal delivery:
(a) IF TO THE COMPANY:
Cumulus Media Inc.
3535 Piedmont Road
Bldg. 14, Suite 1400
Atlanta, GA 30305
Attention: Chief Executive Officer
Telecopy No.: (404) 949-0740
with a copy to:
Jones, Day, Reavis & Pogue
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, GA 30308
Attention: John E. Zamer, Esq.
Telecopy No.: (404) 581-8330
(b) IF TO THE HOLDER:
BancAmerica Capital Investors SBIC I, L.P.
Bank of America Corporate Center
25th Floor
100 North Tyron Street
Charlotte, NC 28255-0001
Attn.: Robert H. Sheridan, III
Telecopy No: (704) 386-6432
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
SECTION 14. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns, provided that the Company shall have no right
to assign its rights, or to delegate its obligations, hereunder without
the prior written consent of the Holder.
SECTION 15. SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every
8
other respect and of the remaining provisions hereof shall not be in
any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
SECTION 16. GOVERNING LAW. This Warrant is to be construed and enforced in
accordance with and governed by the laws of the State of Illinois and
without regard to the principles of conflicts of law of such state.
SECTION 17. ENTIRE AGREEMENT. This Warrant is intended by the parties as a
final expression of their agreement and is intended to be a complete
and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and
therein.
SECTION 18. RULES OF CONSTRUCTION. Unless the context otherwise requires "or"
is not exclusive, and references to sections or subsections refer to
sections or subsections of this Warrant. All pronouns and any
variations thereof refer to the masculine, feminine or neuter, singular
or plural, as the context may require.
[Remainder of Page Intentionally Omitted.]
9
IN WITNESS WHEREOF, the Company has caused this Warrant to be issued
and executed in its corporate name by its duly authorized officers and its
corporate seal to be affixed hereto as of the date below written.
CUMULUS MEDIA INC.
By: /s/ MARTIN R. GAUSVIK
------------------------------------
Name: Martin R. Gausvik
Title: Executive Vice President and
Chief Financial Officer
10
EXHIBIT A
NOTICE OF EXERCISE
To: Cumulus Media Inc.
3535 Piedmont Road
Building 14, 14th Floor
Atlanta, GA 30305
Attn: Chief Executive Officer
1. The undersigned, pursuant to the provisions of the attached Warrant, hereby
elects to exercise the attached Warrant with respect to ________ shares of Class
[A][B] Common Stock (the "Exercise Amount"). Capitalized terms used but not
otherwise defined herein have the meanings ascribed thereto in the attached
Warrant.
2. The undersigned herewith tenders the Exercise Price for such shares.
3. Please issue a certificate or certificates representing the shares
issuable in respect hereof under the terms of the attached Warrant, as follows:
--------------------------------------------
(Name of Record Holder/Transferee)
and deliver such certificate or certificates to the following address:
--------------------------------------------
(Address of Record Holder/Transferee)
4. The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
5. If the Exercise Amount is less than all of the shares of Class
[A][B] Common Stock purchasable under the attached Warrant, please issue a new
Warrant representing the remaining balance of such shares, as follows:
--------------------------------------------
(Name of Record Holder/Transferee)
and deliver such warrant to the following address:
--------------------------------------------
(Address of Record Holder/Transferee)
--------------------------------------------
(Signature)
- --------------------
(Date)
11