EXHIBIT 99.7
THIS WARRANT, AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT, HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), NOR PURSUANT TO THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE. THIS
WARRANT, AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT, MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE ASSIGNED, EXCEPT
UPON DELIVERY TO SUNRISE TELEVISION CORP. (THE "ISSUER") OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION UNDER THE
SECURITIES ACT IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE ISSUER
OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY SUCH TRANSFER WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OR APPLICABLE
STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
STOCK PURCHASE WARRANT
Date of Issuance: January 7, 2002 Certificate No. W-7
For value received, SUNRISE TELEVISION CORP., a Delaware corporation
("Holdings"), hereby grants to LIN TELEVISION CORPORATION, a Delaware
corporation ("Purchaser"), and its assigns and transferees, the right, subject
to Section 1(a) hereof, to purchase from Holdings the Warrant Shares (as defined
herein) at a price per share of $56.65 (subject to adjustment as provided
herein, the "Exercise Price"). Certain capitalized terms used herein are defined
in Section 2 hereof.
This Warrant is subject to the following provisions:
1. Exercise of Warrant.
(a) Exercise Period. The purchase rights represented by this
Warrant may only be exercised by the Registered Holder in accordance with
Section 1(b)(i) below at any time during the first Exit Event Period occurring
after the date hereof (but in any event prior the expiration of such Exit Event
Period); provided that if the Management Services Agreement is terminated by
Holdings and STC for Cause, or by Purchaser without Good Reason, during any
period set forth in the table below, then Purchaser shall immediately forfeit
its right to purchase the number of Warrant Shares set forth opposite such
period in the table set forth below (subject to adjustment as provided herein):
Period Number of Warrant Shares Forfeited
------ ----------------------------------
From January 7, 2002 through and including
April 6, 2002 139,780
From April 7, 2002 through and including
July 6, 2002 128,136
From July 7, 2002 through and including October 6, 2002 116,493
From October 7, 2002 through and including January 6, 104,849
2003
From January 7, 2003 through and including
April 6, 2003 93,205
From April 7, 2003 through and including
July 6, 2003 81,562
From July 7, 2003 through and including
October 6, 2003 69,918
From October 7, 2003 through and including
January 6, 2004 58,274
From January 7, 2004 through and including
April 6, 2004 46,631
From April 7, 2004 through and including
July 6, 2004 34,989
From July 7, 2004 through and including
October 6, 2004 23,343
From October 7, 2004 through and including
January 6, 2005 11,700
and in any such event, this Warrant shall be deemed automatically modified to
reduce the number of Warrant Shares available for exercise hereunder in
accordance with the foregoing; and provided further, that in the event that the
Management Services Agreement is terminated by any party thereto pursuant to
Section 8.1(h) thereof, then on such termination date any Warrant Shares that
are then available for exercise hereunder shall be automatically forfeited, this
Warrant shall be deemed automatically modified to reduce the number of Warrant
Shares
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available for exercise hereunder to zero (0) and the Registered Holder shall
immediately return this Warrant to Holdings.
(b) Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised pursuant
to Section 1(a) when all of the following items have been delivered to Holdings
(the "Exercise Time"):
(1) a completed Exercise Agreement, in the form, set forth in
Exhibit A hereto, executed by the Registered Holder;
(2) this Warrant;
(3) the aggregate Exercise Price (payable in the manner
provided in subsection (viii) below); and
(4) such documentation as is described in Section 1(b)(vii)
below.
(ii) Certificates for Warrant Shares purchased upon exercise of
this Warrant shall be delivered by Holdings to the Registered Holder within ten
(10) business days after the date of the Exercise Time together with any cash
payable in lieu of a fraction of a share pursuant to Section 10 hereof.
(iii) The Warrant Shares issuable upon the exercise of this
Warrant shall be deemed to have been issued to the Registered Holder at the
Exercise Time, and the Registered Holder shall be deemed for all purposes to
have become the record holder of such Warrant Shares at the Exercise Time.
(iv) The issuance of certificates for Warrant Shares upon
exercise of this Warrant shall be made without charge to the Registered Holder
for any issuance tax in respect thereof or other cost incurred by Holdings in
connection with such exercise and the related issuance of Warrant Shares;
provided, that Holdings shall not be required to pay any taxes in respect of the
Warrant and Warrant Shares with respect to any permitted transfer of the Warrant
which taxes shall be paid by the transferee prior to the issuance of the Warrant
Shares.
(v) Holdings shall give to the Registered Holder not less than
ten (10) business days prior written notice (an "Exit Event Notice") of the
occurrence of an Exit Event (or, if the Exit Event is of the type specified in
clause (iii) of the definition thereof, within ten (10) business days after
Holdings receives notice of such event). Upon exercise of this Warrant during an
Exit Event Period, such exercise shall be conditioned upon the consummation of
such Exit Event, and such exercise shall not be deemed to be effective until
immediately prior to the consummation of such Exit Event; provided, that in the
event that such Exit Event is not consummated, such exercise will be deemed
ineffective.
(vi) Holdings shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of this Warrant, the maximum number of Warrant Shares
issuable upon the exercise of
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this Warrant. All Warrant Shares which are so issuable shall, when issued, be
duly and validly issued, fully paid and nonassessable and free of preemptive
rights, liens or charges in respect thereof.
(vii) Upon exercise of this Warrant, Holdings may require
customary representations and warranties from the Registered Holder or an
opinion of counsel reasonably satisfactory to Holdings to assure that the
issuance and sale of the Warrant Shares shall not require registration or
qualification under the Securities Act or any state securities law.
(viii) The aggregate Exercise Price shall be paid by the
Registered Holder by certified or official bank check or by wire transfer of
immediately available funds to an account designated by Holdings for this
purpose; provided, however, that in its sole discretion, the Registered Holder
may elect to pay the aggregate Exercise Price by the surrender of Warrant Shares
(which surrender shall consist of Warrant Shares for which this Warrant is being
exercised), and without the payment of the aggregate Exercise Price in cash, in
return for the delivery to the Registered Holder of such number of Warrant
Shares (rounded to the nearest whole share) equal to the product of (1) the
number of Warrant Shares for which this Warrant is being exercised (as if the
Exercise Price were being paid in cash) and (2) the Cashless Exercise Ratio.
2. Definitions. The following terms have the meanings set forth below:
"Affiliate" has the meaning ascribed thereto in the Management
Services Agreement.
"Cause" has the meaning ascribed thereto in the Management
Services Agreement.
"Cashless Exercise Ratio" means a fraction, the numerator of
which is the excess of the Fair Market Value of the Warrant Shares on
the date of exercise over the Exercise Price on the date of exercise
and denominator of which is the Fair Market Value of the Warrant Shares
on the date of exercise.
"Class A Common Stock" means the Class A Common Stock of
Holdings, par value $.01 per share.
"Class B Common Stock" means the Class B Common Stock of
Holdings, par value $.01 per share.
"Common Stock" means a collective reference to Class A Common
Stock and Class B Common Stock.
"Communications Act" shall have the meaning ascribed to it in
Section 10(e).
"Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of July 2, 1998, among Holdings, STC, the
lenders from time to time party thereto and JPMorgan Chase Bank, as
administrative agent (as the same may from time
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to time be amended, amended and restated, replaced, supplemented or
otherwise modified).
"DOJ" shall have the meaning ascribed to it in Section 10(e).
"Exercise Time" shall have the meaning ascribed to it in
Section 1(b).
"Exit Event" means the occurrence of (i) a Sale of Holdings,
(ii) an Initial Public Offering or (iii) the exercise of any other
warrant issued by Holdings in accordance with the terms of such warrant
at a time when this Warrant is not otherwise exercisable.
"Exit Event Notice" shall have the meaning ascribed to it in
Section 1(b).
"Exit Event Period" means, (i) with respect to a proposed Exit
Event of the type specified in clause (i) or (ii) of the definition
thereof, the period beginning on the date the Exit Event Notice is
given and ending on the date which is the tenth (10th) business day
thereafter and (ii) with respect to an Exit Event of the type specified
in clause (iii) of the definition thereof, the period beginning on the
date the Exit Event Notice is given in respect of such Exit Event and
ending on the fifth (5th) anniversary thereafter.
"Extraordinary Event" shall have the meaning ascribed to it in
Section 4(b).
"Fair Market Value" means, (a) for the purposes of any
determination being made in connection with an Initial Public Offering
involving Common Stock, the initial price to the public for a share of
such Common Stock being sold in such Initial Public Offering, (b) for
the purposes of any determination being made in connection with an
Initial Public Offering involving any capital stock other than Common
Stock, the fair market value of one share of Common Stock as determined
in good faith by the Board of Directors of Holdings (taking into
consideration the initial price to the public for a share of such
capital stock being sold in such Initial Public Offering) and (c) for
other purposes, the fair market value of one share of Common Stock as
determined in good faith by Holdings' Board of Directors.
"FCC" shall have the meaning ascribed to it in Section 10(e).
"FTC" shall have the meaning ascribed to it in Section 10(e).
"Independent Third Party" means any Person who, immediately
prior to the contemplated transaction, does not own in excess of five
percent (5%) of Holdings' capital stock on a fully-diluted basis (a "5%
Owner"), who is not controlling, controlled by or under common control
with any such 5% Owner and who is not the spouse or descendent (by
birth or adoption) of any such 5% Owner or a trust for the benefit of
such 5% Owner or such other Person. For purposes of this Warrant, LIN
Holdings Corp. or any of its Subsidiaries shall be considered an
"Independent Third Party".
"Initial Public Offering" means Holdings' first underwritten
public offering of any series of Holdings' capital stock which has the
unlimited right to participate in dividends and distributions upon the
liquidation of Holdings.
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"Licenses" shall have the meaning ascribed to it in Section
10(j).
"Management Services Agreement" means that certain Management
Services Agreement, dated as of the date hereof, by and among Holdings,
STC and Purchaser, as the same may from time to time be amended,
restated, supplement or otherwise modified.
"Material Adverse Effect" shall have the meaning ascribed to
it in Section 10(a).
"Person" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization
or government or department or agency thereof.
"Registered Holder" means the holder of this Warrant as
reflected in the records of Holdings maintained pursuant to Section 7.
"Sale of Holdings" means the sale of Holdings to an
Independent Third Party or group (within the meaning of Section 13(d)
of the Securities Exchange Act of 1934, as amended) of Independent
Third Parties, pursuant to which such party or parties acquire (i)
capital stock of Holdings possessing the voting power under normal
circumstances to elect a majority of Holdings' board of directors
(whether by merger, consolidation, sale, transfer or exchange of
Holdings' capital stock) or (ii) all or substantially all of Holdings'
assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended.
"STC" means STC Broadcasting, Inc.
"Subsidiary" has the meaning ascribed thereto in the
Management Services Agreement.
"Warrant Shares" means 139,780 shares of Class B Common Stock
issuable upon exercise of this Warrant, subject to adjustment or
forfeiture as provided herein.
3. No Voting Rights. This Warrant shall not entitle the holder hereof
to any voting rights or other rights as a stockholder of Holdings.
4. Adjustment to Warrant Shares.
(a) Subdivision or Combination of Common Stock. If Holdings at
any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the number of shares issuable upon exercise of this Warrant will be
proportionately increased and if Holdings at any time combines (by reverse stock
split, recapitalization or otherwise) its outstanding shares of Common Stock
into a smaller number of shares, the number of shares issuable upon exercise of
this Warrant will be proportionately decreased, and in either case the Exercise
Price shall be proportionately adjusted.
(b) Consolidation, Merger, etc. If any consolidation or merger of
Holdings with another Person or the sale of all or substantially all of its
assets to another Person (each an "Extraordinary Event") shall
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be effected, then, as a condition of such Extraordinary Event, Holdings shall
cause lawful and adequate provision to be made whereby the Registered Holder of
this Warrant shall thereafter have the right to purchase and receive, upon
exercise hereof and the payment of the exercise price, in lieu of the shares of
Common Stock of Holdings immediately theretofore purchasable and receivable upon
the exercise of this Warrant, such shares of stock, securities or property
(including cash) as may be issued or payable with respect to or in exchange for
a number of shares of Common Stock of Holdings immediately theretofore
purchasable and receivable upon the exercise of this Warrant had such
Extraordinary Event not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of the Registered Holder
of this Warrant to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the number of shares purchasable upon
the exercise of this Warrant) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or property thereafter
deliverable upon the exercise hereof. The foregoing provisions shall similarly
apply to successive Extraordinary Events. Holdings shall not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor Person (if other than Holdings) resulting from such consolidation or
merger or the Person purchasing such assets shall assume by written instrument
executed and mailed to the Registered Holder at the last address of the
Registered Holder appearing on the books of Holdings, the obligation to deliver
to the Registered Holder such shares of stock, securities or property as, in
accordance with the foregoing provisions, such Registered Holder may be entitled
to purchase or receive.
(c) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired, the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or on or after the record date
fixed for the determination of eligible stockholders shall have become entitled
to receive, other or additional stock or other securities or property (other
than cash) of Holdings by way of dividend, then and in each case this Warrant
shall represent the right to acquire, in addition to the number of shares of the
security receivable upon exercise of this Warrant and without payment of any
additional consideration therefor, the amount of such other or additional stock
or other securities or property (other than cash) of Holdings that the
Registered Holder would hold on the date of such exercise had it been the holder
of record of the security receivable upon exercise of this Warrant on the date
hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 4.
(d) Certain Offerings. If Holdings shall issue to any Person any
shares of Common Stock, or any rights, options or warrants entitling such Person
to subscribe for or purchase shares of Common Stock (or securities convertible
or exchangeable into Common Stock), at a price per share of Common Stock (or
having a conversion or exchange price per share of Common Stock, if a security
convertible or exchangeable into Common Stock) less than the Fair Market Value
per share of Common Stock on the record date for such issuance (or the date of
such issuance, if there is no record date, the Exercise Price to be in effect on
and after such record date (or issuance date, as the case may be) shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date (or issuance date, as the case may be) by a fraction (i) the
numerator of which shall be the number of shares of Common Stock outstanding on
such record date (or issuance date, as the case may be) plus the number of
shares of Common Stock which the aggregate offering price of the total number of
shares of such Common Stock so to be offered (or the aggregate initial exchange
or conversion price of the exchangeable or convertible securities so to be
offered) would purchase at such Fair Market Value on such record date (or
issuance date, as the case may be) and (ii) the denominator of which shall be
the number of shares of Common Stock outstanding on such record date (or
issuance date, as the case may be) plus the number of additional shares of
Common Stock to be offered for subscription or purchase (or into which the
convertible securities to be offered are initially exchangeable or convertible).
In case such subscription price may be paid in part or in whole in a form other
than cash, the fair value of such consideration shall be determined by the Board
of Directors of Holdings in good faith as set forth in a duly adopted board
resolution certified by the Company's Secretary or Assistant Secretary. Such
adjustments shall be made successively whenever such an issuance occurs; and in
the event that such rights, options, warrants or
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convertible or exchangeable securities are not so issued or expire or cease to
be convertible or exchangeable before they are exercised, converted or exchanged
(as the case may be), then the Exercise Price shall again be adjusted to the
Exercise Price that would then be in effect if such issuance had not occurred,
but such subsequent adjustment shall not affect the number of Warrant Shares
issued upon any exercise of the Warrant prior to the date such subsequent
adjustment is made. No adjustment shall be made pursuant to this Section 4(d) in
connection with (i) the issuance of options pursuant to Holdings' 2002 Stock
Option Plan and the subsequent exercise of such options, (ii) the issuance of
shares of Common Stock or options to purchase Common Stock to officers,
directors or employees of, or consultants to, Holdings pursuant to a stock
grant, stock option plan, purchase plan or other employee stock incentive
program or agreement approved by the Board of Directors of Holdings or (iii) for
any issuance of any rights, options, warrants or convertible or exchangeable
securities issued in connection with any Indebtedness permitted to be incurred
by Holdings pursuant to the Credit Agreement.
(e) No Impairment. Holdings will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by Holdings, but will at all times in good faith
assist in carrying out all the provisions of this Section 4 and in taking all
such action as may be necessary or appropriate in order to protect the rights of
the Registered Holder of this Warrant against impairment or dilution in value.
(f) Notice of Adjustment. Upon any adjustment or other change
relating to (i) the securities purchasable upon the exercise of this Warrant or
(ii) the Exercise Price, then, and in each such case, Holdings shall give
written notice thereof, by first class mail, postage prepaid, addressed to the
Registered Holder at the address of such Registered Holder as shown on the books
of Holdings, which notice shall state the increase or decrease in the number or
other denominations of securities purchasable upon the exercise of this Warrant
and the Exercise Price thereof setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
5. Replacement. Upon receipt of evidence satisfactory to Holdings (an
affidavit of the Registered Holder shall be satisfactory) of the ownership and
the loss, theft, destruction or mutilation of any certificate evidencing this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to Holdings or, in the case of any such
mutilation upon surrender of such certificate, Holdings shall, at the expense of
the Registered Holder, execute and deliver in lieu of such certificate a new
certificate of like kind representing the same rights represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
6. Notices.
(a) Except as otherwise expressly provided herein, all notices
and deliveries referred to in this Warrant shall be in writing, shall be
delivered personally, sent by registered or certified mail, return receipt
requested and postage prepaid, or sent via nationally recognized overnight
courier or via facsimile and shall be deemed to have been given when so
delivered (or when received, if delivered by any other method) if sent (i) to
Holdings, at its principal executive offices and (ii) to the Registered Holder,
at such holder's address as it appears in the records of Holdings (unless
otherwise indicated by the Registered Holder).
(b) In case:
(i) Holdings shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right, or
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(ii) of any capital reorganization of Holdings, any
reclassification of the capital stock of Holdings, any consolidation or merger
of Holdings with or into another Person, or any conveyance of all or
substantially all of the assets of Holdings to another Person, or
(iii) of any voluntary dissolution, liquidation or winding-up
of Holdings,
then, and in each such case, Holdings shall mail or cause to be mailed to the
Registered Holder a notice specifying, as the case may be, (A) the date on which
a record is to be taken for the purpose of such dividend, distribution or right
and stating the amount and character of such dividend, distribution or right or
(B) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place and
the time, if any, is to be fixed, as of which the holders of record of the
Common Stock (or such stock or securities at the time receivable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up. Such notice shall be
delivered at least ten (10) business days prior to the date therein specified.
7. Warrant Register. Holdings shall maintain at its principal executive
offices books for the registration and the registration of transfer of the
Warrant. Upon any transfer of the Warrant (in whole or in part), the Registered
Holder shall deliver to Holdings a Transfer Agreement substantially in the form
set forth in Exhibit B hereto. Holdings, at its expense, shall issue to or on
the order of the Registered Holder a new warrant or warrants of like kind in the
name of the Registered Holder or its transferee, as applicable. Holdings may
deem and treat the Registered Holder as the absolute owner hereof
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for all purposes and shall not be affected by any notice to the
contrary.
8. Fractions of Shares. Holdings may, but shall not be required to,
issue a fraction of a Warrant Share upon the exercise of this Warrant. As to any
fraction of a share which Holdings elects not to issue, Holdings shall make a
cash payment in respect of such fraction in an amount equal to the same fraction
of the Fair Market Value of a Warrant Share on the date of such exercise as
determined by the Board of Directors of Holdings in its reasonable discretion.
9. Amendments.
(a) No waiver, amendment or modification hereof, other than
adjustments to the number of Warrant Shares or the Exercise Price as provided
herein, shall be effective except pursuant to a writing executed by Holdings and
acknowledged by the Registered Holder.
(b) No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
10. Representations and Warranties.
(a) Holdings and each of its Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing, as foreign corporations in each
jurisdiction in which
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their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to so qualify
or have such power or authority would not, singularly or in the aggregate, have
a material adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of Holdings and its Subsidiaries taken as a
whole (a "Material Adverse Effect").
(b) The authorized capital stock of Holdings consists of:
1,250,000 shares of Class A common stock, $0.01 par value per share, of which 1
share is issued and outstanding; 1,252,000 shares of Class B common stock, $0.01
par value per share, of which 891,499 shares are issued and outstanding. All of
the outstanding shares of capital stock of Holdings have been duly and validly
authorized and issued, are fully paid and non-assessable. The authorized capital
stock of STC consists of 1,000 shares of common stock, $0.01 par value per
share, all of which are issued and outstanding; and 1,000,000 shares of
preferred stock, $0.01 par value per share, of which (i) 597,000 shares are
designated as 14% Redeemable Preferred Stock, 300,000 of which are issued and
outstanding and (ii) 100,000 shares are designated as Preferred Stock, Series B,
of which 25,000 shares are issued and outstanding. All of the outstanding shares
of capital stock of STC have been duly and validly authorized and issued, are
fully paid and non-assessable. All of the outstanding shares of common stock of
STC and all of the outstanding shares of Preferred Stock, Series B of STC are
owned by Holdings.
(c) Holdings has all requisite corporate power and authority to
execute and deliver this Warrant and to perform its obligations hereunder.
(d) This Warrant has been duly authorized, executed and delivered
by Holdings and constitutes the valid and legally binding agreement of Holdings,
enforceable against Holdings in accordance with its terms, except (i) to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law) and (ii) to the extent that the
enforceability of rights to indemnification and contribution thereunder may be
limited by federal or state securities laws or regulations or the public policy
underlying such laws or regulations.
(e) The execution, delivery and performance by Holdings of this
Warrant and compliance by Holdings with the terms hereof and the consummation by
Holdings of the transactions contemplated hereby do not and will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of Holdings or any of its
Subsidiaries pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which Holdings or any of
its Subsidiaries is a party or by which Holdings or any of its Subsidiaries is
subject, except for any such conflict, breach, violation, default, lien, charge
or encumbrance that could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect; nor will such actions result in any
violation of the provisions of the charter or bylaws of Holdings or any of its
Subsidiaries; or any statute or any order, rule or regulation (including the
Communications Act of 1934, as amended (the "Communications Act"), and the rules
and regulations of the Federal Communications Commission (the "FCC") thereunder)
of any court or arbitrator or governmental agency or body (including the FCC)
having jurisdiction over Holdings or any of its Subsidiaries or any of their
properties or assets, except for any such conflict, breach, violation, default,
lien, charge or encumbrance that could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and no consent,
approval, authorization or order of, or filing or registration with, any such
court or arbitrator or governmental agency or body (including the FCC, the
Federal Trade Commission (the "FTC") and the Department of Justice (the "DOJ"))
is required for the execution, delivery and performance by Holdings of this
Warrant and compliance by Holdings with the terms hereof and the consummation of
the transactions contemplated hereby, except for such consents, approvals,
authorizations, filings, registrations or qualifications (i) that have been
obtained or made prior to the date hereof and (ii) that from time to time,
Holdings or its Subsidiaries may be required to obtain from or make with the FCC
in the ordinary course of business.
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(f) The audited financial statements (including the related
notes) for the year ended December 31, 2000, previously delivered to the
Registered Holder have been prepared in conformity with generally accepted
accounting principles consistently applied throughout the periods covered
thereby and fairly present in all material respects the financial condition and
the results of operations and cash flows of the entities purported to be covered
thereby for the respective periods indicated except as otherwise disclosed
therein. The unaudited financial statements for the eleven months ended November
30, 2001, previously delivered to the Registered Holder, fairly present in all
material respects the financial condition and the results of operations and cash
flows of the entities purported to be covered thereby for the respective periods
indicated except as otherwise disclosed therein.
(g) There are no legal or governmental proceedings (including
before or by the FCC, the FTC or the DOJ) pending to which Holdings or any of
its Subsidiaries is a party or of which any property or assets of Holdings or
any of its Subsidiaries or Affiliates is the subject which, singularly or in the
aggregate, if determined adversely to Holdings or any of its Subsidiaries or
Affiliates, could reasonably be expected to have a Material Adverse Effect; and
to the best knowledge of Holdings no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(h) No injunction, restraining order or order of any nature by
any federal or state court of competent jurisdiction has been issued with
respect to Holdings or any of its Subsidiaries which would prevent or suspend
the issuance or sale of this Warrant or the Warrant Shares; no action, suit or
proceeding is pending against or, to the best knowledge of Holdings, threatened
against or affecting Holdings or any of its Subsidiaries before any court or
arbitrator or any governmental agency, body or official, domestic or foreign,
which could reasonably be expected to interfere with or adversely affect the
issuance of this Warrant or the Warrant Shares or in any manner draw into
question the validity or enforceability of this Warrant or any action taken or
to be taken pursuant hereto.
(i) Neither Holdings nor any of its Subsidiaries is (i) in
violation of its charter or bylaws, (ii) in default in any material respect and
no events has occurred which, with notice or lapse of time or both, would
constitute such a default in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is
subject, other than any default or other event that could not reasonably be
expected to have a Material Adverse Effect or (iii) in violation in any material
respect of any applicable law, ordinance, court decree, governmental rule or
regulation (including the Communications Act and the rules and regulations of
the FCC thereunder) to which it or its property or assets may be subject, other
than any violation that could not reasonably be expected to have a Material
Adverse Effect.
(j) Holdings and each of its Subsidiaries possess all material
license, orders, certificates, authorizations, approvals and permits issued by,
and have made all declarations and filings with, the appropriate federal, state
or foreign regulatory agencies or bodies (including the FCC and the DOJ) that
are necessary for the ownership of their respective properties or the conduct of
their respective businesses, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse Effect,
and neither Holdings nor any of its Subsidiaries has received notification of
any revocation or modification of any such license, certificate, authorization
or permit that is generally renewable in the ordinary course or has any reason
to believe that any such license, certificate, authorization or permit will not
be renewed in the ordinary course. The licenses issued with respect to Holdings
and its Subsidiaries' television broadcast station by the FCC (the "Licenses")
are validly issued and in full force and effect with no restrictions or
qualifications (other than standard restrictions or qualifications usually on
similar license) that would, singly or in the aggregate, have a Material Adverse
Effect. No event has occurred that permits, or with notice or lapse of time or
both would permit, and no legal governmental proceeding has been instituted or
threatened that could cause, the revocation or termination of any of the
Licenses or that might result in any other impairment or modification of the
rights of Holdings or any Subsidiary thereof that in any such case would,
-11-
singly or in the aggregate, have a Material Adverse Effect. Holdings has no
reason to believe that any License issued by the FCC will not be renewed in the
ordinary course.
(k) Holdings and each of its Subsidiaries have insurance covering
their respective properties , operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are in
Holdings' opinion adequate to protect Holdings and its Subsidiaries and their
respective businesses.
(l) Holdings and each of its Subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses and know-how (including trade secrets and other unpatented
or unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and to the knowledge
of Holdings, the conduct of their respective businesses does not conflict in any
material respect with, and Holdings and its Subsidiaries have not received any
notice of any claim of conflict with, any such rights of others that, in either
case, would reasonably be expected to have a Material Adverse Effect;
(m) Holdings and each of its Subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or otherwise
use, all items of real and personal property which are material to the business
of Holdings and its Subsidiaries, taken as a whole, in each case free and clear
of all liens, encumbrances and defects other than (i) liens and encumbrances
permitted under the Credit Agreement and (ii) liens, encumbrances and defects
that do not materially interfere with the use made and proposed to be made of
such property by Holdings and its Subsidiaries or could not reasonably be
expected to have a Material Adverse Effect.
(n) No labor disturbance by or dispute with the employees of
Holdings or any of its Subsidiaries exists or, to the best knowledge of
Holdings, is imminent, which could reasonably be expected to have a Material
Adverse Effect.
(o) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release or
threatened release of any kind of toxic or other wastes or other hazardous
substances by, due to or caused by Holdings or any of its Subsidiaries (or, to
the best knowledge of Holdings, any other entity (including any predecessor) for
whose acts or omissions Holdings or any of its Subsidiaries is or could
reasonably be expected to be liable) upon any property now or previously owned
or leased by Holdings or any of its Subsidiaries, or upon any other property, in
violation of any statute or any ordinance, rule, regulation, order, judgment,
decree or permit, which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or permit,
give rise to any liability, except for any violation or liability which would
not have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; and there has been no disposal,
discharge, emission or other release of any kind onto such property or into the
environment surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which Holdings or any of its Subsidiaries
has knowledge, except for any such disposal, discharge, emission or other
release of any kind which would not have, singularly or in the aggregate with
all such disposal, discharge, emission and other release, a Material Adverse
Effect.
(p) Except as described on Schedule 10(p) hereto, as of the date
hereof there are no outstanding subscriptions, rights, warrants, calls or
options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of, any shares
of capital stock of or other equity or other ownership interest in Holdings or
any of its Subsidiaries. As of the date hereof, the Warrant Shares constitute
twelve and one-half percent (12.5%) of the Common Stock of Holdings, on a
fully-diluted basis.
-12-
(q) Since December 31, 2001, (i) neither Holdings nor any of its
Subsidiaries has incurred any liability or obligation, direct or contingent,
other than in the ordinary course of business, which would, singly or in the
aggregate, have a Material Adverse Effect and (ii) neither Holdings nor any of
its Subsidiaries has entered into any material transaction other than in the
ordinary course of business other than the transactions contemplated by the
Management Services Agreement.
11. Survival. The representations, warranties and covenants made by
Holdings in this Warrant shall survive the execution and delivery of this
Warrant and any exercise, conversion or transfer of this Warrant in accordance
with its terms.
12. Additional Terms; Descriptive Headings; Governing Law. The
definitions of Section 2 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." All references to Sections shall be deemed
references to Sections of this Warrant, unless the context shall otherwise
require. The terms "this Warrant", "hereof", "hereunder" and similar expressions
refer to this Warrant as a whole and not to any particular Section or other
portion hereof and include any amendments, modifications or supplements hereto.
The conjunction "or" shall be understood in its inclusive sense (and/or). The
descriptive headings of the several Sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant. THE
PROVISIONS OF THIS WARRANT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW
YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF
LAW OF THE STATE OF
NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD RESULT IN THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
[Signature Page Follows]
-13-
IN WITNESS WHEREOF, Holdings has caused this Warrant to be signed and
attested by its duly authorized officers and to be dated the date hereof.
SUNRISE TELEVISION CORP.
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President and
Chief Financial Officer
-14-
Exhibit A
to
Stock Purchase Warrant
EXERCISE AGREEMENT
To: Dated:
------------------------------ -----------------------------
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W- ), hereby agrees to subscribe for the purchase of
_________ Warrant Shares covered by such Warrant.
Signature:
--------------------------
Name:
-------------------------------
Address:
----------------------------
Exhibit B
to
Stock Purchase Warrant
FORM OF TRANSFER AGREEMENT
FOR VALUE RECEIVED, ______________________________ hereby sells,
assigns and transfers unto
Name
---------------------------------------------------------------------------
(please typewrite or print in block letters)
Address ________________________________________ its right to purchase
_____________ shares of Common Stock represented by this Warrant and does hereby
irrevocably constitute and appoint Attorney, to transfer the same on the books
of Holdings, with full power of substitution in the premises.
Date:
---------------------------
Signature:
-------------------------
Name:
------------------------------
Address:
---------------------------
Schedule 10(p)
to
Stock Purchase Warrant
[ ] Option to purchase 1,000 shares of Common Stock granted to Xxxx
Xxxxxx;
[ ] Option to purchase 1,000 shares of Common Stock granted to Xxxxxxx
Xxxxxxxxxx;
[ ] Warrants to purchase up to 8,192.22 shares of Common Stock granted to
X.X. Xxxxxx Partners (BHCA), L.P. (f/k/a Chase Equity Associates,
L.P.);
[ ] Warrants to purchase up to 714.352 shares of Common Stock granted to
HM3 Coinvestors, L.P.;
[ ] Warrants to purchase up to 20,130.148 shares of Common Stock granted
to Hicks, Muse, Xxxx & Xxxxx Equity Fund III, L.P.
