WARRANT NO. 1 15.24 WARRANTS
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THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY
APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii)
UPON FIRST FURNISHING TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH TRANSFER IS NOT IN VIOLATION OF THE
REGISTRATION REQUIREMENTS OF THE ACT OR ANY APPLICABLE STATE SECURITIES
LAW.
"This instrument/agreement is subject to a Standstill Agreement dated
as of the Closing Date among RADIO ONE, INC., the Subsidiaries of Radio
One, Inc. from time to time, the Investors (as defined therein), the
Senior Lenders (as defined therein) and NationsBank of Texas, N.A., as
Agent to the Senior Lenders (as defined therein) and individually as a
Lender, and United States Trust Company of New York, as Trustee for the
Senior Subordinated Noteholders (as defined therein). By its acceptance
of this instrument/agreement, the holder hereof agrees to be bound by
the provisions of such Standstill Agreement to the same extent that
each Investor is bound. In the event of any inconsistency between the
terms of this instrument/agreement and the terms of such Standstill
Agreement, the terms of the Standstill Agreement shall govern and be
controlling."
RADIO ONE, INC.
This warrant certificate (the "Warrant Certificate") certifies that,
for value received, CAPITAL DIMENSIONS VENTURE FUND, INC. or registered assigns
under Section 8 hereof (the "Holder") is the owner of FIFTEEN AND 24/100 (15.24)
WARRANTS specified above (the "Warrants") each of which entitles the Holder
thereof to purchase one (1) fully paid and nonassessable share of Common Stock,
par value $.01 per share, of Radio One, Inc., a corporation organized under the
laws of the State of Delaware (the "Company"), or such other number of shares as
may be determined pursuant to an adjustment in accordance with Section 4 hereof,
at the price per share set forth in Section 4 hereof, subject to adjustment from
time to time pursuant to Section 4 hereof (the "Warrant Price") and subject to
the provisions and upon the terms and conditions set forth herein.
1. Term of Warrant.
Each Warrant is exercisable (i) at any time after the date hereof by
Investors holding a majority of the outstanding shares of Preferred Stock (or,
if the Preferred Stock has been redeemed in full prior to such date, by
Investors holding a majority of the outstanding shares of Preferred Stock
immediately prior to such redemption) (the "Requisite Holders"), or (ii) at any
time after the Preferred Stock has been paid in full at the option of the Holder
hereof; provided, however, that if the Holder is a "Specialized Small Business
Investment Company" (as defined in the 26 U.S.C. Section 1044(c)(3)), this
Warrant may not in any event be exercised after the sixth (6th) anniversary of
the redemption in full of all Preferred Stock held by the Holder. Upon the
consummation by the Company of a Qualified Public Offering, this Warrant shall
be subject to automatic exercise, on a net basis, as provided in Section 2(a)
hereof.
2. Method of Exercise and Payment; Issuance of New Warrant
Certificate; Contingent Exercise.
(a) In connection with any exercise pursuant to Section 1
hereof, this Warrant Certificate shall be surrendered (with the notice of
exercise form attached hereto as Exhibit 1 duly executed) at the principal
office of the Company together with the payment to the Company of (i) cash or a
certified check or a wire transfer in an amount equal to the then applicable
Warrant Price multiplied by the number of shares of Common Stock then being
purchased or (ii) that number of shares of Common Stock of the Company having a
fair market value (as defined below) equal to the then applicable Warrant Price
multiplied by the number of shares of Common Stock then being purchased. In the
alternative, the Holder hereof may exercise its right to purchase some or all of
the shares of Common Stock pursuant to this Warrant Certificate on a net basis,
such that, without the exchange of any funds, the Holder hereof receives that
number of shares of Common Stock subscribed to pursuant to this Warrant
Certificate less that number of shares of Common Stock having an aggregate fair
market value (as defined below) at the time of exercise equal to the aggregate
Warrant Price that would otherwise have been paid by the Holder for the number
of shares of Common Stock subscribed to under this Warrant Certificate. Fair
market value, on a per-share basis, shall be deemed to be (i) the initial
offering price of the Common Stock to the public in a Qualified Public Offering;
and (ii) if the Common Stock is not publicly held or traded, "fair market value"
shall mean the Per Share Net Equity Value of the Company as determined pursuant
to Section 5.03 of the Warrantholders' Agreement.
(b) The Company agrees that the shares of Common Stock so
purchased shall be deemed to be issued to the Holder hereof as the record owner
of such shares as of the close of business on the date on which this Warrant
Certificate shall have been surrendered and payment made for such shares as
aforesaid. In the event of any exercise of the rights represented by this
Warrant Certificate, certificates for the shares of Common Stock so purchased
shall be delivered to the Holder hereof within 15 days thereafter and, unless
all of the Warrants represented by this Warrant Certificate have been fully
exercised or have expired
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pursuant to Section 1 hereof, a new Warrant Certificate representing the shares
of Common Stock, if any, with respect to which the Warrants represented by this
Warrant Certificate shall not then have been exercised, shall also be issued to
the Holder hereof within such 15 day period.
3. Common Stock Fully Paid; Reservation of Shares.
All Common Stock which may be issued upon the exercise of the Warrants
will, upon issuance, be fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issue thereof. During the period within
which the rights represented by this Warrant Certificate may be exercised, the
Company will at all times have authorized, and reserved for the purpose of the
issuance upon exercise of the purchase rights evidenced by this Warrant
Certificate, a sufficient number of shares of its Common Stock to provide for
the exercise of the Warrants.
4. Warrant Price; Adjustment of Warrant Price and Number of Shares.
The Warrant Price shall be $100.00 per share of Common Stock, and the
Warrant Price and the number of shares of Common Stock purchasable upon exercise
of the Warrants shall be subject to adjustment from time to time, as follows:
(a) Reclassification, Consolidation or Merger. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of the Warrants, or in case of any consolidation or merger of the
Company with or into another corporation or entity, other than a consolidation
or merger with another corporation or entity in which the Company is the
continuing corporation and which does not result in any reclassification,
conversion or change of outstanding securities issuable upon exercise of the
Warrants, or in case of any sale of all or substantially all of the assets of
the Company, the Company, or such successor or purchasing corporation, as the
case may be, shall execute a new warrant certificate (the "New Warrant
Certificate"), providing that the Holder of this Warrant Certificate shall have
the right to exercise such new warrants and procure upon such exercise, in lieu
of each share of Common Stock theretofore issuable upon exercise of the
Warrants, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, conversion, change,
consolidation, or merger by a holder of one share of Common Stock. Such New
Warrant Certificate shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
4. The provisions of this Section 4(a) shall similarly apply to successive
reclassifications, changes, consolidations, mergers and transfers.
(b) Subdivisions, Combinations and Stock Dividends. If the
Company at any time while this Warrant Certificate is outstanding and unexpired
shall subdivide or combine its Common Stock, or shall pay a dividend with
respect to Common Stock payable in, or make any other distribution with respect
to its Common Stock consisting of, shares of
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Common Stock, then the Warrant Price shall be adjusted, from and after the date
of determination of shareholders entitled to receive such dividend or
distribution, to that price determined by multiplying the Warrant Price in
effect immediately prior to such date of determination by a fraction (i) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution and (ii) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.
Upon each adjustment in the Warrant Price pursuant to this
Section 4(b), the number of shares of Common Stock purchasable hereunder shall
be adjusted to the product obtained by multiplying the number of shares
purchasable immediately prior to such adjustment in the Warrant Price by a
fraction (i) the numerator of which shall be the Warrant Price immediately prior
to such adjustment and (ii) the denominator of which shall be the Warrant Price
immediately thereafter.
(c) [Intentionally Omitted.]
5. Notice of Adjustments.
Whenever any adjustment shall be made pursuant to Section 4 hereof, the
Company shall prepare a certificate signed by its chief financial officer
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
the Warrant Price after giving effect to such adjustment and the number of
shares of Common Stock then purchasable upon exercise of the Warrants, and shall
cause copies of such certificate to be mailed to the Holder hereof at the
address specified in Section 9(d) hereof, or at such other address as may be
provided to the Company in writing by the Holder hereof.
6. Other Agreements; Definitions; Put and Call Rights.
For purposes of this Warrant Certificate, all capitalized terms that
are used herein without definition shall have the respective meanings ascribed
thereto in either the Preferred Stockholders' Agreement (the "Preferred
Stockholders' Agreement"), dated as of May 14, 1997, by and among the Holder,
the Company and certain other parties named therein, the Warrantholders'
Agreement, dated as of June 6, 1995, as amended by the First Amendment to the
Warrantholders' Agreement, dated as of May 19, 1997, by and among the Holder,
the Company and certain other parties named therein (the "Warrantholders'
Agreement") or, in the event that a capitalized term used herein without
definition is not defined in the Preferred Stockholders' Agreement or the
Warrantholders' Agreement, but is defined in the Securities Purchase Agreement,
dated as of June 6, 1995, by and among the Holder, the Company and certain other
parties named therein (the "Securities Purchase Agreement"), the Securities
Purchase Agreement. The Holder of this Warrant Certificate shall be entitled to
the rights and subject to the terms and conditions of the Preferred
Stockholders' Agreement and
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Warrantholders' Agreement, and in the event of any inconsistency between the
terms hereof and the terms of the Preferred Stockholders' Agreement or the
Warrantholders' Agreement, as the case may be, the terms of the Preferred
Stockholders' Agreement or the Warrantholders' Agreement shall control. Without
limiting the generality of the foregoing, this Warrant Certificate and the
Warrants represented hereby are subject to the "put" and "call" provisions of
Article V of the Warrantholders' Agreement which are incorporated herein by
reference.
7. Compliance with Securities Act.
The Holder of this Warrant Certificate, by acceptance hereof, agrees
that the Warrants and the shares of Common Stock to be issued upon exercise
thereof are being acquired for investment and that it will not offer, sell or
otherwise dispose of the Warrants or any shares of Common Stock to be issued
upon exercise thereof except under circumstances which will not result in a
violation of the Act. Upon exercise of the Warrants, the Holder hereof shall, if
requested by the Company, confirm in writing that the shares of Common Stock so
purchased are being acquired for investment and not with a view toward
distribution or resale. This Warrant Certificate and all shares of Common Stock
issued upon exercise of the Warrants (unless registered under the Act) shall be
stamped or imprinted with a legend substantially in the following form:
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED EXCEPT (i)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii)
IN A TRANSACTION WHICH IS NOT IN VIOLATION OF THE REGISTRATION
REQUIREMENTS OF THE ACT OR ANY APPLICABLE STATE SECURITIES LAW.
8. Transfer.
Subject to compliance with the terms of Section 7 above, the Warrants
and all rights under this Warrant Certificate are transferable, in whole or in
part, at the principal office of the Company by the Holder hereof, in person or
by its duly authorized attorney, upon surrender of this Warrant Certificate
properly endorsed (with the instrument of transfer form attached hereto as
Exhibit 2 duly executed). Each Holder of this Warrant Certificate, by taking or
holding the same, consents and agrees that this Warrant Certificate, when
endorsed in blank, shall be deemed negotiable; provided, however, that the last
Holder of this Warrant Certificate as registered on the books of the Company may
be treated by the Company and all other persons dealing with this Warrant
Certificate as the absolute owner of the Warrants for any purposes and as the
person entitled to exercise the rights represented by this Warrant Certificate
or to transfer the Warrants on the books of the Company, any notice to the
contrary notwithstanding, unless and until such Holder seeks to transfer
registered ownership of the Warrants on the books of the Company and such
transfer is effected.
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9. Miscellaneous.
(a) Replacement. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement or bond reasonably satisfactory in form and
amount to the Company or, in the case of mutilation, on surrender and
cancellation of this Warrant Certificate, the Company, at its expense, will
execute and deliver, in lieu of this Warrant Certificate, a new warrant
certificate of like tenor.
(b) Notice of Capital Changes. In case:
(i) the Company shall declare any dividend or
distribution payable to the holders of shares of Common Stock;
(ii) there shall be any capital reorganization or
reclassification of the capital of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its
assets to, another corporation or business organization;
(iii) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company; or
(iv) the Company shall propose to commence an initial
public offering;
then, in any one or more of said cases, the Company shall give the Holder hereof
written notice of such event, in the manner set forth in Section 9(d) below, at
least 90 days prior to the date on which a record shall be taken for such
dividend or distribution or for determining shareholders entitled to vote upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or the date when any such transaction shall take place,
as the case may be.
(d) Notice. Any notice to be given to either party under this
Warrant Certificate shall be in writing and shall be deemed to have been given
to the Company or the Holder hereof, as the case may be, when delivered in hand
or when sent by first class mail, postage prepaid, addressed, if to the Company,
at its principal office and, if to the Holder hereof, at its address as set
forth in the Company's books and records or at such other address as the Holder
hereof may have provided to the Company in writing.
(e) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, 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 to be observed or performed hereunder by the
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Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant Certificate.
(f) Governing Law. This Warrant Certificate shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
This Warrant Certificate has been executed as of this 19th day of May,
1997.
RADIO ONE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
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EXHIBIT 1
NOTICE OF EXERCISE
TO: _____________
[Collective Exercise]
The undersigned, constituting the Requisite Holders, hereby elect to
exercise all of the Warrants contemplated by a certain Warrantholders' Agreement
dated as of June 6, 1995, as amended.
[Individual Exercise]
1. The undersigned hereby elects to purchase ___________ shares of the
__________ Common Stock of ___________________ pursuant to the terms of the
attached Warrant.
2. Please issue a certificate or certificates representing said shares
____________ of Common Stock in the name of the undersigned or in such other
name as is specified below:
_____________________________________________
(Name)
_____________________________________________
_____________________________________________
(Address)
3. The undersigned represents that the aforesaid shares of Common Stock
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.
Dated:
______________________________
Signature
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EXHIBIT 2
FORM OF ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers
unto ___________________ the rights represented by the within Warrant
Certificate to purchase [_____________] shares of Common Stock of Radio One,
Inc. to which the within Warrant Certificate relates and appoints
_______________________ to transfer such rights on the books of Radio One, Inc.
with full power of substitution in the premises.
Dated:
______________________________
Signature
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