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EXHIBIT 10.11
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as
of February 28, 1997, is entered into among SUNRISE TELEVISION CORP., a
Delaware corporation ("Holdings"), STC BROADCASTING, INC., a Delaware
corporation ("STC") and the Purchasers listed on the signature pages hereof.
WHEREAS, Holdings is the parent company of STC Broadcasting,
Inc. ("Broadcasting");
WHEREAS, STC and its Subsidiary, Xxxxx Acquisition Company,
are acquiring certain commercial television broadcast station assets (the
"Acquisition");
WHEREAS, in order to finance a portion of the purchase price
for the Acquisition, STC is willing to issue and sell up to $30 million
liquidation preference of its 14% Redeemable Preferred Stock, par value $.01
per share, ("Redeemable Preferred Stock"), upon the terms and conditions set
forth herein;
WHEREAS, each Purchaser is willing to purchase the number of
shares of Redeemable Preferred Stock set forth on the signature pages hereof
upon the terms and conditions set forth herein; and
WHEREAS, upon consummation of the transactions contemplated
hereby, there will be issued and outstanding 300,000 shares of Redeemable
Preferred Stock, having an aggregate liquidation preference of $30 million, and
in connection therewith Holdings will have issued certain warrants (the
"Warrants") to purchase shares of its common stock, par value $0.01 per share
(the "Common Stock") to the Purchasers as described in Section 1.1(b) below.
NOW, THEREFORE, in consideration of the premises, mutual
covenants and agreements hereinafter contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
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ARTICLE I
PURCHASE AND SALE OF SECURITIES
1.1. Commitments to Purchase.
(a) STC agrees to sell and, subject to the terms and
conditions set forth herein and in reliance on the representations and
warranties of STC contained herein, each Purchaser agrees to purchase the
number of shares of Redeemable Preferred Stock set forth below such Purchaser's
name on the signature pages hereto, for the cash purchase price of $96.50 per
share.
(b) As an inducement to the Purchasers to enter into this
Agreement, Holdings agrees that, concurrently with the consummation of the
transactions contemplated hereby, it shall issue to each Purchaser, for no
additional consideration, Warrants to purchase Common Stock in accordance with
Schedule I hereto (it being agreed by the parties hereto that of the cash
purchase price being paid for the Redeemable Preferred Stock, an amount equal
to $.01 per Warrant will be deemed to have been paid to Holdings in
consideration for the Warrants to be issued hereunder). The Purchasers
acknowledge and agree that at no time will any Warrant be exercisable for
shares of Common Stock that are not Vested Warrant Shares, as defined in the
Warrant.
(c) STC and Holdings, jointly and severally, agree to pay
to the Purchasers, in such proportions as they agree among themselves, a
funding fee in the amount of $450,000 payable at Closing.
1.2. Closing.
(a) The purchase and sale of the Redeemable Preferred
Stock will take place at a closing (the "Closing") at the offices of Xxxxxxx
Xxxxxxx & Xxxxxxxx at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
a.m., New York City time, on February 28, 1997, or on such other date, or at
such other place and time as the parties shall agree.
(b) At the Closing, (i) STC shall deliver to each
Purchaser, against payment of the purchase price therefor in cash by wire
transfer to an account designated by STC, certificates for the shares of
Redeemable Preferred Stock to be purchased by the Purchaser, registered in the
name of the Purchaser or in such other name as the Purchaser may
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designate and (ii) Holdings shall deliver to the Purchaser certificates for the
Warrants being issued pursuant to Section 1.1(b), registered in the name of the
Purchaser or in such other name as the Purchaser may designate.
1.3. Definitions. As used in this Agreement, and
unless the context otherwise requires a different meaning, the following terms
have the meanings indicated:
"Account Manager" means each Purchaser, if any, duly
authorized to act as attorney-in-fact on behalf of any Person in purchasing, in
the name of and using funds provided by such Person, the number of shares of
Redeemable Preferred Stock set forth below such Account Manager's name on the
signature pages hereof.
"Acquisition Agreements" mean the Asset Purchase Agreements,
each dated as of November 4, 1996, between STC and the parties thereto and
between Xxxxx Acquisition Company (a subsidiary of STC) and the parties
thereto, each as may be amended to the Closing Date.
"Agreement" means this Agreement, as the same may be amended
prior to the Closing Date.
"Acquisition" has the meaning given such term in the recitals
to this Agreement.
"Charter Amendments" means, collectively, (i) the Amended and
Restated Certificate of Incorporation of STC, to be filed with the Secretary of
State of Delaware on or prior to the Closing Date in substantially the form
attached hereto as Exhibit A, and (ii) the Certificate of Designation of the
Redeemable Preferred Stock of STC to be filed with the Secretary of State of
the State of Delaware in substantially the form attached hereto as Exhibit B.
"Closing" has the meaning set forth in Section 1.2 of this
Agreement.
"Closing Date" means the date on which the Closing occurs.
"Commission" means the Securities and Exchange Commission or
any successor thereof.
"Common Stock" means, collectively, Holdings' common stock,
par value $.01 per share.
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"Credit Agreement" means the Credit Agreement to be entered
into as of the Closing Date, among Broadcasting, the banks or other lending
institutions which are named therein, NationsBank of Texas, N.A., as
documentation agent, and The Chase Manhattan Bank, as administrative agent.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Debentures" means STC's 14% Subordinated Exchange
Debentures due 2008 to be issued pursuant to the Exchange Indenture.
"Exchange Indenture" means the indenture to be entered into
between STC and a trustee to be determined prior to the issuance of the
Exchange Debentures, in substantially the form attached hereto as Exhibit C.
"Holdings" has the meaning given such term in the recitals to
this Agreement.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind.
"Purchaser" means (i) each Person indicated as such on the
signature pages of this Agreement and (ii) each Person, if any, on whose behalf
a Purchaser executes this Agreement and on whose behalf funds are used for any
purchase hereunder.
"Redeemable Preferred Stock" means the 14% Redeemable
Preferred Stock, par value $.01 per share, of STC.
"Securities" means the shares of Redeemable Preferred Stock
and Warrants being issued and sold pursuant to this Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"STC" has the meaning given such term in the recitals to this
Agreement.
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"Warrants" have the meaning given such term in the recitals to
this Agreement. Each Warrant shall be substantially in the form attached
hereto as Exhibit D.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND STC
To induce the Purchasers to purchase the Redeemable Preferred
Stock as herein provided, Holdings and STC, jointly and severally, make the
following representations and warranties to the Purchasers, each and all of
which shall be true and correct as of the date of execution and delivery of
this Agreement and shall survive the execution and delivery of this Agreement:
2.1. Corporate Existence. Each of Holdings and STC is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its organization and has all requisite corporate power and
authority to own its assets and carry on its business as now being conducted.
2.2. Issuance of Securities. (a) Upon filing of the
Charter Amendments with the Secretary of State of the State of Delaware, and
immediately after the consummation of the transactions contemplated hereby,
there will be 600,000 shares of Redeemable Preferred Stock authorized, of which
300,000 shares initially will be issued and outstanding. The shares of
Redeemable Preferred Stock to be issued and sold pursuant to this Agreement,
upon payment of the purchase price therefor in accordance with this Agreement,
will be duly authorized, validly issued, fully paid and non-assessable and will
not have been issued in violation of any preemptive rights. The Redeemable
Preferred Stock will be exchangeable, at STC's option, for the Exchange
Debentures.
(b) The Warrants have been duly authorized and, when
issued and delivered against payment therefor as provided in this Agreement,
will be duly executed, legal and binding obligations of Holdings. The shares
of Common Stock issuable upon exercise of the Warrants have been duly reserved
for issuance, and upon exercise of the Warrants in accordance with their terms,
upon payment of the purchase price therefor in accordance with this Agreement,
will be duly authorized, validly issued, fully paid and non-assessable and will
not have been issued in violation of any preemptive rights.
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2.3. Authorization. Each of Holdings and STC has all
requisite corporate power and authority to enter into this Agreement, to issue
and sell the Securities to be sold by it to the Purchasers and to perform its
obligations hereunder. The execution and delivery of this Agreement has been
duly authorized by all necessary corporate action on the part of each of
Holdings and STC, and this Agreement has been duly executed and delivered by
Holdings.
2.4. No Conflict. The execution and delivery by Holdings
and STC of this Agreement will not (i) violate or conflict with the provisions
of their respective certificates of incorporation or bylaws as the same will be
in effect upon the consummation of the transactions contemplated hereby or (ii)
result in the breach of, or constitute a default under any applicable law or
any order applicable to or binding upon Holdings or STC or any material
contract to which either of them is a party or by which any of their respective
assets or properties are bound.
2.5. No Consents. No consent, approval, authorization or
order of any court or governmental agency or body is required for the
performance by Holdings and STC of their obligations under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
To induce Holdings and STC to enter into the transactions
contemplated hereby, each Purchaser, severally and not jointly, makes the
following representations and warranties to Holdings and STC, each and all of
which shall be true and correct as of the date of execution and delivery of
this Agreement and shall survive the execution and delivery of this Agreement.
3.1. Investment Intent. Each Purchaser represents that it
is purchasing the Securities solely for its own account (or, if such Purchaser
is an Account Manager, on behalf of managed accounts which are purchasing
solely for their own accounts), not as nominee or agent for any other person,
and with no present intention of distributing or reselling such Securities or
any part thereof in any transaction that would be in violation of the
securities laws of the United States of America or any State thereof. The
Purchaser is not a "broker" or a "dealer" as those terms
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are defined in the Securities Exchange Act of 1934, as amended.
3.2. Investigation. Each Purchaser (for itself and, if
such Purchaser is purchasing as an Account Manager, on behalf of its managed
accounts) acknowledges that it has been afforded the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of Holdings concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the Securities.
Each Purchaser (for itself and, if such Purchaser is purchasing as an Account
Manager, on behalf of its managed accounts) further represents and warrants to
Holdings that it or its agents have received all documents and information
relating to an investment in the Securities requested by or on behalf of such
Purchaser.
3.3. Private Placement. Each Purchaser represents and
warrants that it is aware that:
(i) the Securities have not been registered under
the Securities Act or any securities or "Blue Sky" laws of any state
in reliance on applicable exemptions;
(ii) the offering of the Securities is intended to
be exempt from registration under the Securities Act by virtue of the
provisions of either Section 4(2) of the Securities Act or Rule 506 of
Regulation D;
(iii) none of the Securities may be offered, sold,
transferred, pledged, hypothecated, or otherwise assigned unless they
are registered under the Securities Act or an exemption from such
registration is available, in each case in accordance with any
applicable securities or "Blue Sky" laws of any state;
(iv) the certificates representing the Securities
and each certificate issued to any subsequent transferee of the
Securities shall bear a legend in substantially the following form
(unless transferred in the manner described in the following legend):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), NOR PURSUANT TO THE
SECURITIES OR "BLUE SKY" LAWS
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OF ANY STATE. THIS SECURITY MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED,
EXCEPT PURSUANT TO (A) A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE.
; and
(v) each Purchaser must bear the economic risk of
the investment in the Securities for an indefinite period of time.
3.4. Authority of Account Managers. Each Purchaser, if it
is an Account Manager, represents that it is duly authorized by the Purchaser
on whose behalf it is acting to execute this Agreement and purchase the
Securities listed on the signature pages hereof.
3.5. Authorization. Each Purchaser represents that the
execution, delivery and performance of this Agreement are within its powers
(corporate or otherwise) and have been duly authorized by all requisite action
(corporate or otherwise) on the part of such Purchaser, and this Agreement has
been duly executed and delivered by it.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Conditions Precedent to Obligation of the Purchasers.
The obligation of the Purchasers to purchase, at the Closing, the Securities to
be purchased hereunder is subject to the satisfaction of the following
conditions at or before the Closing:
(a) Credit Agreement. The Credit Agreement shall have
been duly executed and delivered by the parties thereto and the conditions
precedent to the initial loans under the Credit Agreement shall have been
satisfied or waived.
(b) Charter Amendments. The Charter Amendments shall
have been validly authorized and executed by STC and duly filed with the
Secretary of State of the State of Delaware.
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(c) Acquisition. The conditions precedent to the
Acquisition pursuant to the Acquisition Agreement shall have been satisfied or
waived and concurrently with the purchase of the Securities the Acquisition
shall be consummated.
(d) Representations and Warranties. The representations
and warranties of Holdings and STC contained in this Agreement shall be true
and correct in all material respects at and as of the Closing Date as if made
at and as of such time.
4.2. Conditions Precedent to Obligation of Holdings and
STC. The obligations of Holdings and STC to issue and sell the Securities to
be sold by them pursuant to this Agreement are subject to the satisfaction of
the following conditions at or before the Closing:
(a) Credit Agreement. The Credit Agreement shall have
been duly executed and delivered by the parties thereto and the conditions
precedent to the initial loans under the Credit Agreement shall have been
satisfied or waived.
(b) Acquisition. The conditions precedent to the closing
of the Acquisition pursuant to the Acquisition Agreement shall have been
satisfied or waived.
(c) Representations and Warranties. The representations
and warranties of each Purchaser contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date as if made at
and as of such time.
ARTICLE V
REPURCHASE RIGHT
5.1. Repurchase of Redeemable Preferred Stock. At any
time and from time to time after the date hereof but prior to March 1, 1998,
STC shall have the option, upon not less than three Business Days' prior
written notice to the Purchasers, to repurchase, pro rata between the
Purchasers, all the issued and outstanding shares of Redeemable Preferred Stock
at the time held by the Purchasers for a purchase price in cash equal to $96.50
per share of Redeemable Preferred Stock, plus an amount in cash equal to all
accrued and unpaid dividends on the Redeemable Preferred Stock to the
repurchase date. To implement the foregoing,
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each certificate for the Redeemable Preferred Stock shall bear a legend
substantially to the following effect:
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A REPURCHASE OPTION
IN FAVOR OF THE ISSUER GRANTED PURSUANT TO A SECURITIES
PURCHASE AGREEMENT DATED AS OF FEBRUARY 28, 1997, A COPY OF
WHICH IS AVAILABLE AT THE EXECUTIVE OFFICES OF THE ISSUER.
No transfer or purported transfer of the Redeemable Preferred Stock shall be
valid unless the proposed transferee shall have acknowledged in writing that
the shares of Redeemable Preferred Stock to be acquired by it will be acquired
subject to the foregoing repurchase option.
ARTICLE VI
REGISTRATION RIGHTS
Holdings and STC hereby grant the Purchasers the registration
rights set forth on Exhibit E hereto, which are made a part hereof for all
purposes.
ARTICLE VII
COSTS AND EXPENSES
Holdings and STC agree to pay all reasonable costs and
expenses incurred by them in connection with negotiation, preparation,
execution and delivery of this Agreement, any amendment or supplement or
modification hereof and any and all other documents furnished pursuant hereto
or in connection herewith or therewith, and all reasonable costs and expenses
incurred by it in connection with the administration of this Agreement. STC
and Holdings agree to pay all reasonable fees (not to exceed $50,000) and
out-of-pocket expenses of one firm of attorneys chosen by the Purchasers, as a
group, to represent them in connection with the purchase of the Securities and
any waiver, amendment or modification of any provision of this Agreement with
respect to an obligation of, or requested by, Holdings and STC.
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ARTICLE VIII
MISCELLANEOUS
8.1. Notices. Any notices or other communications
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows (or at such
other address as may be substituted by notice given as herein provided):
If to Holdings or STC:
0000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: 813/821-8092
Copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: 214/746-7777
If to any Purchaser, at its address listed on the signature
pages hereof or such other address as such Purchaser may
provide by notice to Holdings.
Any notice or communication hereunder shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
receipt is acknowledged, if telecopied; and five calendar days after mailing if
sent by registered or certified mail (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
Failure to mail a notice or communication to any Purchaser or
any defect in it shall not affect its sufficiency with respect to other
Purchasers.
8.2. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE
A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER THAN CHOICE OF LAW RULES) OF
SAID STATE.
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8.3. Successors and Assigns. This Agreement shall be
binding upon the parties hereto and their respective successors and assigns.
8.4. Duplicate Originals. All parties may sign any number
of copies of this Agreement. Each signed copy shall be an original, but all of
them together shall represent the same agreement.
8.5. Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and the remaining provisions shall not in any way be
affected or impaired thereby.
8.6. No Waivers. No failure or delay on the part of any
party hereto in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies provided for herein
are cumulative and are not exclusive of any remedies that may be available to
the parties hereto at law or in equity or otherwise.
[Remainder of Page Left Blank Intentionally].
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SIGNATURES TO AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the date first written above.
SUNRISE TELEVISION CORP.
By: /s/ XXXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxxx X. Xxxxxxxxx,
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Title: Vice President and
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Assistant Secretary
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STC BROADCASTING, INC.
By: /s/ XXXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxxx X. Xxxxxxxxx,
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Title: Vice President and
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Assistant Secretary
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SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE
ACCEPTED AND AGREED:
HICKS, MUSE, XXXX & XXXXX EQUITY FUND III, L.P.
By: HM3/GP Partners III, L.P.,
its general partner
By: Xxxxx Muse GP Partners III, L.P.,
its general partner
By: Xxxxx, Muse Fund III, Incorporated,
its General Partner
By: /s/ XXXXXXXX X. XXXXXX, XX.
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Xxxxxxxx X. Xxxxxx, Xx.,
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Executive Vice President
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Number of Shares of Redeemable Preferred Stock: 250,000
Cash Purchase Price/Share: $96.50
Aggregate Cash Purchase Price: $24,125,000
Date: February 28, 1997
Address: c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE
ACCEPTED AND AGREED:
CHASE EQUITY ASSOCIATES, L.P.
By:
It: General Partner
By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
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Title: General Partner
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Number of Shares of Redeemable Preferred Stock: 50,000
Cash Purchase Price/Share: $96.50
Aggregate Cash Purchase Price: $4,825,000
Date: February 28, 1997
Address:
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Attention:
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Telephone:
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Telecopy:
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