EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BETWEEN
LIN TV CORP.
AND
SUNRISE TELEVISION CORP.
DATED AS OF FEBRUARY 19, 2002
TABLE OF CONTENTS
ARTICLE I
The Merger
Page
----
1.1 The Merger...........................................................1
1.2 Closing..............................................................1
1.3 Effective Time.......................................................1
1.4 Effects of Merger....................................................1
1.5 Certificate of Incorporation and Bylaws..............................2
1.6 Directors and Officers...............................................2
ARTICLE II
Effect of Merger on Capital Stock of Constituent Corporations
2.1 Effect on Outstanding Sunrise Capital Stock..........................2
2.2 Sunrise Stock Options................................................3
2.3 Sunrise Warrants.....................................................4
2.4 Effect on Outstanding LIN Capital Stock..............................5
2.5 Exchange Procedure...................................................5
2.6 No Fractional Shares of LIN Common Stock.............................5
2.7 No Further Ownership Rights in Respect of Sunrise Common Stock.......5
2.8 Lost, Stolen, or Destroyed Certificates..............................6
2.9 Withholding Rights...................................................6
2.10 Tax Consequences.....................................................6
2.11 Stock Transfer Books.................................................6
ARTICLE III
Representations and Warranties of Sunrise
3.1 Organization.........................................................6
3.2 Authorization; Enforceability........................................6
3.3 No-Conflicts.........................................................7
3.4 Consents and Approvals...............................................7
3.5 Capitalization.......................................................8
3.6 Financial Statements; STC SEC Documents..............................9
3.7 Absence of Certain Changes...........................................9
3.8 Voting Requirements..................................................9
3.9 Sunrise FCC Licenses; Operations of Sunrise Licensed Facilities......9
3.10 FCC Qualification...................................................11
3.11 Brokers.............................................................11
3.12 Compliance with Applicable Laws.....................................11
3.13 Absence of Undisclosed Liabilities..................................11
3.14 Litigation..........................................................11
3.15 Transactions with Affiliates........................................11
3.16 Labor Matters.......................................................12
3.17 Employee Arrangements and Benefit Plans.............................12
3.18 Tax Matters.........................................................13
3.19 Intellectual Property...............................................14
3.20 Environmental Matters...............................................15
i
3.21 Material Agreements.................................................16
3.22 Tangible Property...................................................17
3.23 Real Property.......................................................17
3.24 No Other Representations and Warranties.............................17
ARTICLE IV
Representations and Warranties of LIN
4.1 Organization........................................................17
4.2 Authorization; Enforceability.......................................18
4.3 No-Conflicts........................................................18
4.4 Consents and Approvals..............................................18
4.5 Capitalization......................................................19
4.6 Financial Statements; LIN SEC Documents.............................20
4.7 Absence of Certain Changes..........................................20
4.8 Voting Requirements.................................................20
4.9 LIN FCC Licenses; Operations of LIN Licensed Facilities.............20
4.10 FCC Qualifications..................................................22
4.11 Brokers.............................................................22
4.12 Compliance with Applicable Laws.....................................22
4.13 Absence of Undisclosed Liabilities..................................22
4.14 Litigation..........................................................22
4.15 Transactions with Affiliates........................................22
4.16 Labor Matters.......................................................22
4.17 Employee Arrangements and Benefit Plans.............................23
4.18 Tax Matters.........................................................24
4.19 Intellectual Property...............................................24
4.20 Environmental Matters...............................................25
4.21 Real Property.......................................................25
4.22 New LIN Common Stock................................................25
4.23 No Other Representations and Warranties.............................25
ARTICLE V
Certain Covenants
5.1 Access to Information...............................................25
5.2 Confidentiality.....................................................26
5.3 Public Announcements................................................26
5.4 Consents, Approvals, and Filings....................................26
5.5 Indemnification; Insurance..........................................27
5.6 Schedule Updates....................................................27
5.7 Registration Rights.................................................28
ARTICLE VI
Covenants Relating to the Conduct of the Business
6.1 Conduct of the Business.............................................28
6.2 Second Amended and Restated Charter.................................29
6.3 Other Actions.......................................................29
ii
ARTICLE VII
Conditions Precedent
7.1 Conditions to Obligations of Each Party.............................29
7.2 Conditions to Obligations of Sunrise................................30
7.3 Conditions to Obligations of LIN....................................31
ARTICLE VIII
Termination
8.1 Termination.........................................................32
8.2 Effect of Termination...............................................33
ARTICLE IX
Miscellaneous
9.1 Amendments and Waivers..............................................33
9.2 Assignment; Binding Effect..........................................33
9.3 Construction........................................................33
9.4 Counterparts........................................................34
9.5 Entire Agreement....................................................34
9.6 Expenses............................................................34
9.7 Governing Law.......................................................34
9.8 Notices.............................................................34
9.9 No Recourse.........................................................35
9.10 Severability........................................................35
9.11 No Survival.........................................................36
9.12 No Third-Party Beneficiaries........................................36
iii
GLOSSARY OF DEFINED TERMS
Accredited Investor Certification..................................Section 2.5
Agreement.............................................................Preamble
Assumed Stock Options...........................................Section 2.2(a)
Assumed Warrants................................................Section 2.3(a)
Assumed HMTF Warrants...........................................Section 2.3(b)
CERCLA.........................................................Section 3.20(b)
Certificate of Merger..............................................Section 1.3
Certificates.......................................................Section 2.5
Class A Holder.....................................................Section 5.5
Closing............................................................Section 1.2
Closing Date.......................................................Section 1.2
Code..................................................................Recitals
Communications Act.................................................Section 3.4
Credit Agreement................................................Section 7.1(f)
DGCL...............................................................Section 1.1
dollars............................................................Section 9.3
Effective Time.....................................................Section 1.3
Environmental Laws.............................................Section 3.20(b)
Environmental Liabilities......................................Section 3.20(b)
ERISA..........................................................Section 3.17(a)
Exchange Act.......................................................Section 3.4
Exchange Ratio..................................................Section 2.1(d)
FCC................................................................Section 3.4
FCC Order.......................................................Section 7.2(d)
GAAP...............................................................Section 3.6
Governmental Entity................................................Section 3.3
Hazardous Materials............................................Section 3.20(b)
HMTF............................................................Section 2.1(b)
HSR Act............................................................Section 3.4
Indemnified Parties................................................Section 5.5
Intellectual Property..........................................Section 3.19(b)
IRS............................................................Section 3.17(b)
Law................................................................Section 3.3
Liens...........................................................Section 3.5(b)
LIN...................................................................Preamble
LIN Benefit Plans..............................................Section 4.17(a)
LIN Common Stock................................................Section 4.5(a)
LIN Disclosure Letter..............................................Section 4.3
LIN FCC Licenses................................................Section 4.9(a)
LIN Financial Statements...........................................Section 4.6
LIN Licensed Facilities.........................................Section 4.9(a)
LIN LMA Facility................................................Section 4.9(a)
LIN LMA Facility FCC License....................................Section 4.9(a)
LIN Material Adverse Effect........................................Section 4.1
LIN Nonvoting Stock.............................................Section 4.5(a)
LIN Preferred Stock.............................................Section 4.5(a)
LIN SEC Documents..................................................Section 4.6
LIN Significant Subsidiary.........................................Section 4.1
LIN Stockholder Approval...........................................Section 4.8
iv
LIN Voting Stock................................................Section 4.5(a)
LMAs............................................................Section 3.9(b)
LMA Agreement..................................................Section 3.21(b)
LMA Facility FCC License........................................Section 3.9(a)
Material Agreements............................................Section 3.21(b)
Material Breach............................................Section 8.1(b)(iii)
Material Consents..............................................Section 3.21(b)
Merger.............................................................Section 1.1
Merger Consideration............................................Section 2.1(d)
Network Affiliation Agreement..................................Section 3.21(b)
New LIN Class A Common Stock....................................Section 2.1(a)
New LIN Class B Common Stock....................................Section 2.1(c)
New LIN Class C Common Stock.......................................Section 2.4
New LIN Common Stock............................................Section 2.1(c)
New LIN Preferred Stock.........................................Section 4.5(d)
Order..............................................................Section 3.3
Permits...........................................................Section 3.12
Permitted Liens...................................................Section 3.23
person.............................................................Section 9.3
RCRA...........................................................Section 3.20(b)
Representatives....................................................Section 5.1
SAC.............................................................Section 3.5(b)
SAC Voting Stock................................................Section 3.5(b)
SEC................................................................Section 3.1
Second Amended and Restated Charter................................Section 1.5
Securities Act....................................................Section 3.15
Series A 14% Redeemable Preferred Stock.........................Section 3.5(b)
Sports Agreement...............................................Section 3.21(b)
STC.............................................................Section 3.5(b)
STC SEC Documents..................................................Section 3.6
subsidiary.........................................................Section 3.1
Sunrise...............................................................Preamble
Sunrise Benefit Plans..........................................Section 3.17(a)
Sunrise Class A Common Stock....................................Section 2.1(a)
Sunrise Class B Common Stock....................................Section 2.1(b)
Sunrise Common Stock............................................Section 2.1(b)
Sunrise Disclosure Letter..........................................Section 3.3
Sunrise FCC Licenses............................................Section 3.9(a)
Sunrise Financial Statements.......................................Section 3.6
Sunrise Licensed Facilities.....................................Section 3.9(a)
Sunrise LMA Facility............................................Section 3.9(a)
Sunrise Material Adverse Effect....................................Section 3.1
Sunrise Significant Subsidiary.....................................Section 3.1
Sunrise Stock Options..............................................Section 2.2
Sunrise Stockholders Approval......................................Section 3.8
Sunrise Warrant.................................................Section 2.3(a)
Surviving Corporation..............................................Section 1.1
Tax Return.....................................................Section 3.18(b)
Taxes..........................................................Section 3.18(b)
v
AGREEMENT AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
February 19, 2002, is entered into between
LIN TV Corp., a
Delaware corporation
(f/k/a Ranger Equity Holdings Corporation) ("LIN"), and Sunrise Television
Corp., a
Delaware corporation ("Sunrise").
WHEREAS, the Boards of Directors of LIN and Sunrise have, in light of
and subject to the terms and conditions set forth herein, approved this
Agreement and the transactions contemplated hereby (including the Merger), and
declared the Merger advisable and fair to, and in the best interests of, their
respective stockholders;
WHEREAS, for federal income Tax purposes, it is intended that the
Merger will qualify as a tax-free reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, LIN and Sunrise desire to make certain representations,
warranties, covenants, and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
The Merger
1.1 The Merger. At the Effective Time and upon the terms and subject to
the conditions of this Agreement and in accordance with the
Delaware General
Corporation Law (the "DGCL"), Sunrise shall be merged with and into LIN (the
"Merger"). After the Merger, LIN shall continue as the surviving corporation (in
such capacity, the "Surviving Corporation") and the separate corporate existence
of Sunrise shall cease.
1.2 Closing. Subject to the satisfaction or waiver of the conditions
set forth in Article VI, the closing of the Merger (the "Closing") will take
place at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, at 10:00 A.M., local time, on the second business day after the
date on which all of the conditions contained in Article VI have been satisfied
or waived in accordance with this Agreement, or at such other place or at such
other time or date as may be mutually agreed to in writing by LIN and Sunrise.
As used herein, "Closing Date" means the date of the Closing.
1.3 Effective Time. Subject to the provisions of this Agreement, LIN
and Sunrise shall cause the Merger to be consummated by filing an appropriate
Certificate of Merger or other appropriate documents (the "Certificate of
Merger") with the Secretary of State of the State of
Delaware in such form as
required by, and executed in accordance with, the relevant provisions of the
DGCL, as soon as practicable on or after the Closing Date. The Merger shall
become effective upon such filing or at such time thereafter as is provided in
the Certificate of Merger (the "Effective Time").
1.4 Effects of Merger. The Merger shall have the effects set forth in
the DGCL. Without limiting the generality of the preceding sentence, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers,
and franchises of LIN and Sunrise shall vest in the Surviving Corporation, and
all debts, liabilities, and duties of LIN and Sunrise shall become the debts,
liabilities, and duties of the Surviving Corporation.
1.5 Certificate of Incorporation and Bylaws. The Certificate of
Incorporation of LIN in effect immediately prior to the Effective Time shall be
amended and restated as set forth in EXHIBIT A (the "Second Amended and Restated
Charter"), and as so amended and restated, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with its terms and the provisions of the DGCL. The Bylaws of LIN in
effect at the Effective Time shall be the Bylaws of the Surviving Corporation
until thereafter amended in accordance with their terms and as provided by
applicable Law.
1.6 Directors and Officers. Each of the directors of LIN at the
Effective Time and Xxxxxxx X. Xxxxxxxx, Xx., Xxxxxxx Xxxxxxxxxx and up to two
other individuals designated by the Board of Directors of LIN prior to the
Effective Time, shall from and after the Effective Time, be the directors of the
Surviving Corporation and shall hold office in accordance with the Certificate
of Incorporation and Bylaws of the Surviving Corporation until their successors
are duly elected or appointed and qualified or until their earlier death,
resignation, or removal. The officers of LIN at the Effective Time shall be the
officers of the Surviving Corporation and shall hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving Corporation until
their successors are duly elected or appointed and qualified or until their
earlier death, resignation, or removal.
ARTICLE II
Effect of Merger on Capital Stock of Constituent Corporations
2.1 Effect on Outstanding Sunrise Capital Stock.
(a) Each share of Class A common stock, par value $0.01 per
share, of Sunrise ("Sunrise Class A Common Stock"), issued and
outstanding immediately prior to the Effective Time (other than shares
of Sunrise Class A Common Stock held as treasury shares by Sunrise)
shall by virtue of the Merger and without any action on the part of
LIN, Sunrise, or the holder thereof, cease to exist and be converted
into the right to receive 22.4862984 validly issued, fully paid, and
non-assessable shares of Class A common stock, par value $0.01 per
share, of LIN having the rights, powers, privileges, qualifications,
limitations, and restrictions set forth in the Second Amended and
Restated Charter ("New LIN Class A Common Stock").
(b) Each share of Class B common stock, par value $0.01 per
share, of Sunrise ("Sunrise Class B Common Stock" and, together with
the Sunrise Class A Common Stock, the "Sunrise Common Stock"), issued
and outstanding immediately prior to the Effective Time (other than
shares of Sunrise Class B Common Stock held by Hicks, Muse, Xxxx &
Xxxxx Equity Fund III, L.P., HM3 Coinvestors, L.P., or their respective
affiliates (collectively, "HMTF") or as treasury shares by Sunrise)
shall by virtue of the Merger and without any action on the part of
LIN, Sunrise, or the holder thereof, cease to exist and be converted
into the right to receive 22.4862984 validly issued, fully paid, and
non-assessable shares of New LIN Class A Common Stock.
(c) Each share of Class B common stock held by HMTF and issued
and outstanding immediately prior to the Effective Time shall by virtue
of the Merger and without any action on the part of LIN, Sunrise, or
the holder thereof, cease to exist and be converted into the right to
receive 22.4862984 validly issued, fully paid, and non-assessable
shares of Class B common stock, par value $0.01 per share, of LIN
having the rights, powers, privileges, qualifications, limitations, and
restrictions set forth in the Second Amended and Restated Charter ("New
LIN Class B Common Stock" and, together with the New LIN Class A Common
Stock, the "New LIN Common Stock").
2
(d) As used herein, the term (i) "Exchange Ratio" means the
ratio of the New LIN Common Stock to be issued in exchange for each
whole share of Sunrise Common Stock, and (ii) "Merger Consideration"
means the shares of New LIN Common Stock to be issued to the holders of
Sunrise Common Stock in accordance with this Section 2.1 and any cash
in lieu of fractional shares of New LIN Common Stock to be paid in
accordance with Section 2.6.
(e) Each share of Sunrise Common Stock that is held as a
treasury share by Sunrise at the Effective Time shall, by virtue of the
Merger and without any action on the part of Sunrise, be cancelled and
retired and cease to exist, without any conversion thereof.
(f) In the event of (i) any change in the Sunrise Common Stock
between the date hereof and the Effective Time, (ii) any change in the
LIN Common Stock or LIN Preferred Stock prior to the date of the filing
of the Second Amended and Restated Charter, or (iii) any change in the
New LIN Common Stock or New LIN Preferred Stock following the filing of
the Second Amended and Restated Charter until the Effective Time, in
accordance with the terms hereof by reason of any stock dividend,
subdivision, reclassification, recapitalization, stock split or reverse
stock split, combination, or any similar event, the number and class of
shares of New LIN Common Stock to be issued and delivered in the Merger
in exchange for each outstanding share of Sunrise Common Stock as
provided herein shall be appropriately adjusted so as to maintain the
relative proportionate interests of the holders of New LIN Common Stock
and Sunrise Common Stock.
2.2 Sunrise Stock Options.
(a) At the Effective Time, each option to purchase shares of
Sunrise Common Stock ("Sunrise Stock Options") that is issued and
outstanding and unexercised immediately prior to the Effective Time
(other than Sunrise Stock Options held by LIN or its direct or indirect
subsidiaries, or their respective employees) shall be deemed to have
been assumed by LIN, without further action on the part of LIN, the
Surviving Corporation, or the holders thereof, and shall thereafter be
deemed to be an option to acquire shares of New LIN Class A Common
Stock in such amount and at the exercise price provided below and
otherwise having the same terms and conditions as are in effect
immediately prior to the Effective Time (except to the extent that such
terms and conditions may be altered in accordance with their terms as a
result of the transactions contemplated hereby) (such Sunrise Stock
Options assumed by LIN are referred to as the "Assumed Stock Options"):
(i) each Assumed Stock Option shall be deemed to be
exercisable for the number of shares of New LIN Class A Common
Stock equal to the product of (A) the number of shares of
Sunrise Common Stock subject to the original option and (B)
the Exchange Ratio (such product to be rounded to the nearest
whole share);
(ii) in respect of each Assumed Stock Option, the
exercise price per share of New LIN Class A Common Stock shall
be equal to (A) the exercise price per share of Sunrise Common
Stock under the original option divided by (B) the Exchange
Ratio (rounded to the nearest $0.01);
(iii) in accordance with the terms of the Sunrise
2002 Stock Option Plan or the term of the stock option letter
agreement, as the case may be, under which the Sunrise Stock
Options were issued, fractional shares of any Assumed Stock
Options resulting from the adjustments set forth in this
Section 2.2(a) shall be eliminated; and
3
(iv) At the Effective Time, the Surviving Corporation
shall terminate the Sunrise 2002 Stock Option Plan. Nothing in
this Section 2.2(a) shall be construed to prevent the
Surviving Corporation in any way from terminating or freezing
the benefits under any such plans (subject to the rights of
the holders of the Assumed Stock Options thereunder) and
adopting one or more new stock option plans, as approved by
the Board of Directors of the Surviving Corporation after the
Effective Time.
(b) At the Effective Time, each Sunrise Stock Option that is
held by LIN, its direct or indirect subsidiaries, or any of their
respective employees shall be deemed to have been cancelled and
extinguished without any conversion thereof.
2.3 Sunrise Warrants.
(a) At the Effective Time, each warrant to purchase shares of
Sunrise Class B Common Stock ("Sunrise Warrant") that is issued and
outstanding and unexercised immediately prior to the Effective Time
(other than Sunrise Warrants held by HMTF or LIN or its direct or
indirect subsidiaries) shall be deemed to have been assumed by LIN,
without further action on the part of LIN, the Surviving Corporation,
or the holders thereof, and shall thereafter be deemed to be a warrant
to purchase shares of New LIN Class A Common Stock in such amount and
at the exercise price provided below and otherwise having the same
terms and conditions as are in effect immediately prior to the
Effective Time (except to the extent that such terms and conditions may
be altered in accordance with their terms as a result of the
transactions contemplated hereby) (such Sunrise Warrants assumed by LIN
are referred to as the "Assumed Warrants"):
(i) each Assumed Warrant shall be deemed to be
exercisable for the number of shares of New LIN Class A Common
Stock equal to the product of (A) the number of shares of
Sunrise Common Stock subject to the original warrant and (B)
the Exchange Ratio (such product to be rounded to the nearest
whole share); and
(ii) in respect of each Assumed Warrant, the exercise
price per share of New LIN Class A Common Stock shall be equal
to (A) the exercise price per share of Sunrise Common Stock
under the original warrant divided by (B) the Exchange Ratio
(rounded to the nearest $0.01).
(b) At the Effective Time, each Sunrise Warrant that is held
by HMTF and that is issued and outstanding and unexercised immediately
prior to the Effective Time shall be deemed to have been assumed by
LIN, without further action on the part of LIN, the Surviving
Corporation, or the holders thereof, and shall thereafter be deemed to
be a warrant to purchase shares of New LIN Class B Common Stock in such
amount and at the exercise price provided below and otherwise having
the same terms and conditions as are in effect immediately prior to the
Effective Time (except to the extent that such terms and conditions may
be altered in accordance with their terms as a result of the
transactions contemplated hereby) (such Sunrise Warrants assumed by LIN
are referred to as the "Assumed HMTF Warrants"):
(i) each Assumed HMTF Warrant shall be deemed to be
exercisable for the number of shares of New LIN Class B Common
Stock equal to the product of (A) the number of shares of
Sunrise Common Stock subject to the original warrant and (B)
the Exchange Ratio (such product to be rounded to the nearest
whole share); and
4
(ii) in respect of each Assumed HMTF Warrant, the
exercise price per share of New LIN Class B Common Stock shall
be equal to (A) the exercise price per share of Sunrise Common
Stock under the original warrant divided by (B) the Exchange
Ratio (rounded to the nearest $0.01).
(c) At the Effective Time, each Sunrise Warrant that is held
by LIN or its direct or indirect subsidiaries shall be deemed to have
been cancelled and extinguished without any conversion thereof.
2.4 Effect on Outstanding LIN Capital Stock. Each share of (i) New LIN
Class A Common Stock, (ii) New LIN Class B Common Stock, and (iii) Class C
common stock, par value $0.01 per share, of LIN having the rights, powers,
privileges, qualifications, limitations, and restrictions set forth in the
Second Amended and Restated Charter ("New LIN Class C Common Stock"), in each
case issued and outstanding immediately prior to the Effective Time shall remain
outstanding and shall be unaffected by the Merger.
2.5 Exchange Procedure. As soon as practicable after the Effective
Time, each holder of a certificate or certificates that immediately prior to the
Effective Time represented outstanding shares of Sunrise Common Stock
("Certificates") shall, upon surrender of such Certificate, together with a duly
executed certification of such holder's status as an accredited investor (as
defined in Regulation D of the Securities Act) in substantially the same form as
EXHIBIT B attached hereto (the "Accredited Investor Certification") to the
Surviving Corporation, be entitled to receive in exchange therefor the Merger
Consideration in respect of the shares represented by such surrendered
Certificate. As soon as practicable after the surrender of any Certificate and
the Accredited Investor Certification (but in no event later than two business
days thereafter), the Surviving Corporation shall deliver to the holder thereof
the Merger Consideration in respect of the shares represented by such
surrendered Certificate. Until surrendered as contemplated by this Section 2.5,
each Certificate (other than certificates representing treasury shares to be
cancelled in accordance with the terms hereof), shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration in respect of the shares represented by such
Certificate.
2.6 No Fractional Shares of New LIN Common Stock. No certificates or
scrip of shares of New LIN Common Stock representing fractional shares of New
LIN Common Stock shall be issued upon the surrender for exchange of Certificates
and such fractional share interests will not entitle the owner thereof to vote
or to have any rights of a stockholder of LIN or a holder of shares of New LIN
Common Stock. Notwithstanding any other provision of this Agreement to the
contrary, each holder of Sunrise Common Stock converted pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of New
LIN Common Stock (after taking into account all of the shares represented by all
Certificates delivered by such holder) shall receive, in lieu thereof, a cash
payment (without interest thereon) representing such holder's proportionate
interest in such New LIN Common Stock.
2.7 No Further Ownership Rights in Respect of Sunrise Common Stock. The
Merger Consideration paid upon the surrender for exchange of Certificates in
accordance with this Article II shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to the shares of Sunrise Common Stock
formerly represented by such Certificates.
2.8 Lost, Stolen, or Destroyed Certificates. If any Certificate shall
have been lost, stolen, or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen, or destroyed,
and, if required by the Surviving Corporation, the giving of an indemnity in
favor of the Surviving Corporation in respect of such Certificate, the Surviving
Corporation will deliver in
5
exchange therefor the Merger Consideration in respect of the shares of Sunrise
Common Stock formerly represented by such lost, stolen, or destroyed
Certificate.
2.9 Withholding Rights. The Surviving Corporation shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable pursuant to
this Agreement to any holder of shares of Sunrise Common Stock such amounts as
it is required to deduct and withhold in respect of the making of such payment
under the Code, the rules and regulations thereunder, or any provision of a Tax
Law. To the extent that amounts are so withheld by the Surviving Corporation,
such withheld amounts shall be treated for all purposes as having been paid to
the holder of Sunrise Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation.
2.10 Tax Consequences. It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of Section 368(a) of
the Code. Each party hereto shall use its best efforts to cause the Merger to be
so qualified, shall report the transactions contemplated hereby in a manner
consistent with such reorganization treatment and will not take any position
inconsistent therewith in any Tax Return, refund claim, litigation, or otherwise
unless required to do so by applicable Law.
2.11 Stock Transfer Books. The stock transfer books of Sunrise shall be
closed immediately upon the Effective Time and there shall be no further
registration of transfers of shares of Sunrise Common Stock thereafter on the
records of Sunrise. From and after the Effective Time, any Certificates
presented to the Surviving Corporation for any reason shall be cancelled and
exchanged for the Merger Consideration in respect of the shares of Sunrise
Common Stock formerly represented thereby.
ARTICLE III
Representations and Warranties of Sunrise
Sunrise hereby represents and warrants to LIN, as follows:
3.1 Organization. Each of Sunrise and the Sunrise Significant
Subsidiaries is a corporation duly organized, validly existing, and in good
standing under the Laws of the jurisdiction in which it is organized and has the
requisite corporate power and authority to carry on its business as now being
conducted. Each of Sunrise and the Sunrise Significant Subsidiaries is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its assets or
properties makes such qualification necessary, except where the failure to be so
qualified could not reasonably be expected to have a material adverse effect on
the business, properties, results of operations, or condition (financial or
otherwise) of Sunrise and its subsidiaries, considered as a whole (other than as
a result of changes in general economic conditions or in economic conditions
generally affecting the television or broadcasting industry) (a "Sunrise
Material Adverse Effect"). Sunrise has delivered to LIN complete and correct
copies of its Certificate of Incorporation and Bylaws, as amended to the date
hereof. As used herein, (i) "Sunrise Significant Subsidiary" means any
subsidiary of Sunrise that would constitute a "significant subsidiary" within
the meaning of Rule 1-02 of Regulation S-X of the Securities and Exchange
Commission (the "SEC"), and (ii) "subsidiary" means, in respect of any specified
person, any other entity at least a majority of the equity interests of which is
beneficially owned, directly or indirectly, by the specified person. The Sunrise
Disclosure Letter lists each subsidiary of Sunrise and its respective
jurisdiction of incorporation and indicates whether such subsidiary is a Sunrise
Significant Subsidiary.
3.2 Authorization; Enforceability. Sunrise has the requisite corporate
power and authority to enter into this Agreement and, subject to the Sunrise
Stockholders Approval, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Sunrise and the
6
consummation by Sunrise of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Sunrise, subject to
the Sunrise Stockholders Approval. This Agreement has been duly executed and
delivered by Sunrise and, assuming this Agreement constitutes the valid and
binding agreement of LIN, constitutes a valid and binding obligation of Sunrise,
enforceable against it in accordance with its terms except that the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, or similar Laws now or hereafter in effect relating to creditor's
rights generally, and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
3.3 No-Conflicts. Except as disclosed in writing by Sunrise to LIN in a
disclosure letter (the "Sunrise Disclosure Letter") and subject to receipt of
the Sunrise Stockholders Approval, the execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, (i) conflict with the
Certificate of Incorporation or Bylaws of Sunrise or the comparable documents of
any Sunrise Significant Subsidiary, (ii) subject to the governmental filings and
other matters referred to in Section 3.4, conflict with, result in a breach of
or default (with or without notice, lapse of time, or both) under, or give rise
to a right of termination, cancellation, or acceleration of any obligation or
loss of a material benefit under, or require the consent of any person under,
any indenture, loan or credit agreement, note, or bond or other agreement,
permit, concession, franchise, license, or similar instrument or undertaking to
which Sunrise or any Sunrise Significant Subsidiary is a party or by which
Sunrise or any Sunrise Significant Subsidiary or any of their respective assets
or properties is bound or affected, (iii) result in an obligation by Sunrise,
the Surviving Corporation, LIN, or any of their respective subsidiaries to
redeem, repurchase, or retire (or offer to redeem, repurchase, or retire) any
indebtedness of Sunrise or any of its subsidiaries outstanding as of the date
hereof or equity security of Sunrise or any of its subsidiaries outstanding as
of the date hereof, or (iv) subject to the governmental filings and other
matters referred to in Section 3.4, contravene any domestic or foreign law,
statute, constitution, treaty, ordinance, rule, or regulation ("Law"), or any
order, judgment, decree, writ, award, or injunction ("Order") of any federal,
state, local or foreign court, tribunal, arbitrator or governmental,
administrative or regulatory agency, authority or body or any instrumentality or
political subdivision thereof ("Governmental Entity") currently in effect,
except, in the cases of the foregoing clauses (ii) through (iv), for such
conflicts, breaches, defaults, or other consequences that, individually or in
the aggregate, could not reasonably be expected to have a Sunrise Material
Adverse Effect or to materially hinder Sunrise's ability to consummate the
transactions contemplated hereby.
3.4 Consents and Approvals. Except as disclosed in the Sunrise
Disclosure Letter, no consent, approval, or authorization of, or declaration or
filing with, or notice to, any Governmental Entity that has not been received or
made, is required by or in respect of Sunrise or any Sunrise Significant
Subsidiary in connection with the execution and delivery of this Agreement by
Sunrise or the consummation by Sunrise of the transactions contemplated hereby,
except for (i) the filing of pre-merger notification and report forms under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), in respect of the Merger and the termination or earlier expiration of the
applicable waiting period thereunder, (ii) such filings with and approvals
required by the Federal Communications Commission or any successor entity (the
"FCC") under the Communications Act of 1934, as amended, and the rules,
regulations, and policies of the FCC promulgated thereunder (collectively, the
"Communications Act") including those required in connection with the transfer
of control of Sunrise FCC Licenses for the operation of the Sunrise Licensed
Facilities, (iii) the filing of the Certificate of Merger with and acceptance by
the Secretary of State of the State of
Delaware, and (iv) such reports or
filings under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or state securities Laws, as may be required in connection with this
Agreement and the transactions contemplated hereby, and (v) such consents,
approvals, authorizations, declarations, filings, or notices that could not
reasonably be expected to have a Sunrise Material Adverse Effect.
7
3.5 Capitalization.
(a) The total number of shares of capital stock of all classes
that Sunrise has authority to issue is 2,502,000 shares of capital
stock, consisting of (i) 1,250,000 shares of Sunrise Class A Common
Stock, and (ii) 1,252,000 shares of Sunrise Class B Common Stock. At
the close of business on the date hereof, (A) one share of Sunrise
Class A Common Stock was issued and outstanding, (B) 891,499 shares of
Sunrise Class B Common Stock were issued and outstanding, (C) 168,816
shares of Sunrise Class B Common Stock were reserved for issuance
pursuant to the outstanding Sunrise Warrants, (D) 61,912 shares of
Sunrise Class B Common Stock were reserved for issuance pursuant to
options to purchase Sunrise Class B Common Stock granted under the
Sunrise 2002 Stock Option Plan, of which stock options to purchase
6,000 shares of Sunrise Class B Common Stock have been granted, (E)
1,000 shares of Sunrise Class B Common Stock were reserved for issuance
pursuant to options to purchase 1,000 shares of Sunrise Class B Common
Stock granted to Xxxx X. Xxxxxx pursuant to that Non-Qualified Stock
Option Agreement for Non-Employee Directors dated August 30, 2000, (F)
1,000 shares of Sunrise Class B Common Stock were reserved for issuance
pursuant to options to purchase 1,000 shares of Sunrise Class B Common
Stock granted to Xxxxxxx Xxxxxxxxxx pursuant to that Non-Qualified
Stock Option Agreement for Non-Employee Directors dated August 30,
2000, and (G) 1,124,227 shares of Sunrise Class A Common Stock were
reserved for issuance upon conversion of shares of Sunrise Class B
Common Stock. Except as set forth above or as disclosed in the Sunrise
Disclosure Letter, at the close of business on the date hereof, no
shares of capital stock or other equity securities of Sunrise were
authorized, issued, reserved for issuance, or outstanding.
(b) All outstanding shares of Sunrise Common Stock are, and
all shares that may be issued upon the exercise of outstanding Sunrise
Stock Options and Sunrise Warrants will be, when issued, duly
authorized, validly issued, fully paid and non-assessable, and not
subject to preemptive rights. Except as disclosed in the Sunrise
Disclosure Letter, no bonds, debentures, notes, or other indebtedness
of Sunrise or any subsidiary of Sunrise having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) on any matters on which the stockholders of Sunrise or any
subsidiary of Sunrise may vote are issued or outstanding. All the
outstanding shares of capital stock or other equity interests of each
subsidiary of Sunrise have been validly issued and are fully paid and
non-assessable and (except for the shares of (i) the 14% Redeemable
Preferred Stock, par value $0.01 per share (the "Series A 14%
Redeemable Preferred Stock"), of STC Broadcasting, Inc., a
Delaware
corporation ("STC"), and (ii) 10 shares of voting stock, par value
$0.01 per share ("SAC Voting Stock"), of Xxxxx Acquisition Company, a
Delaware corporation ("SAC"), which are owned by Xxxxx Broadcasting
Partners, L.P.) are owned by Sunrise, by one or more direct or indirect
wholly-owned subsidiaries of Sunrise or by Sunrise and one or more of
such subsidiaries, free and clear of all liens, charges, claims,
pledges, encumbrances, and security interests of any kind or nature
whatsoever (collectively, "Liens"), except for Liens arising out of the
Credit Agreement.
(c) Except as set forth in Sections 3.5(a) and 3.5(b), the
Sunrise Disclosure Letter, or the STC SEC Documents, and except for
certain provisions of the Certificate of Incorporation of Sunrise
relating to "alien ownership" of the Sunrise Common Stock, neither
Sunrise nor any subsidiary of Sunrise has any outstanding option,
warrant, subscription, or other right, agreement, or commitment that
either (i) obligates Sunrise or any subsidiary of Sunrise to issue,
sell, or transfer, repurchase, redeem, or otherwise acquire or vote any
shares of the capital stock of Sunrise or any Sunrise Significant
Subsidiary, or (ii) restricts the transfer of Sunrise Common Stock.
Since the close of business on February 8, 2002 to the date hereof,
neither Sunrise nor any subsidiary of Sunrise has issued any capital
stock or securities or other rights convertible into or
8
exercisable or exchangeable for shares of such capital stock. To the
knowledge of Sunrise, there is not any stockholder agreement among the
stockholders of Sunrise relating to the voting or restricting the
transfer of capital stock of Sunrise. Except for the capital stock of
its subsidiaries, Sunrise does not own, directly or indirectly, any
capital stock or other ownership interest in any person.
3.6 Financial Statements; STC SEC Documents. Sunrise has previously
provided to LIN true, correct, and complete copies of the audited consolidated
balance sheet of Sunrise and its subsidiaries as at and for the fiscal years
ended December 31, 2001, and December 31, 2000, and the related consolidated
statements of operations, cash flows, and stockholders' equity for the periods
ended December 31, 2001, December 31, 2000, and December 31, 1999, together with
the notes thereto (the "Sunrise Financial Statements"). The Financial Statements
have been prepared in accordance with U.S. generally accepted accounting
principles consistently applied ("GAAP") and fairly present the consolidated
financial condition, assets and liabilities, the results of operations, cash
flows, and changes in stockholders' equity of Sunrise and its subsidiaries as of
the dates, and for the periods, indicated therein. Since January 1, 1999, STC
has filed with the SEC all reports and other statements that it is required to
file under Sections 13 and 15(d) of the Exchange Act (the "STC SEC Documents").
As of their respective dates, each such report or other statement comprising the
STC SEC Documents complied in all material respects with the rules and
regulations promulgated by the SEC and did not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
3.7 Absence of Certain Changes. Except as disclosed in the Sunrise
Financial Statements, the STC SEC Documents, or the Sunrise Disclosure Letter,
since the date of the most recent Sunrise Financial Statements, Sunrise and its
subsidiaries have conducted their businesses only in the ordinary course, and
there has not been (i) any change that could reasonably be expected to have a
Sunrise Material Adverse Effect (including as a result of the consummation of
the Merger), (ii) any change in accounting methods, principles, or practices by
Sunrise or any of its subsidiaries materially affecting its assets, liabilities,
or business, except insofar as may have been required by a change in generally
accepted accounting principles, (iii) any declaration, setting aside, or payment
of any dividend or other distribution (whether in cash, stock, or property) in
respect of any of the outstanding capital stock of Sunrise, or (iv) any granting
by Sunrise or any of its subsidiaries to any director, officer, or other
employee or independent contractor of Sunrise or any of its subsidiaries of any
increase in compensation, except in the ordinary course of businesses consistent
with past practice or as was required under employment agreements in effect as
of the date of the most recent Sunrise Financial Statements.
3.8 Voting Requirements. The affirmative votes of (i) the holders of a
majority of the outstanding shares of Sunrise Class A Common Stock and (ii) the
holders of a majority of the outstanding shares of Sunrise Class B Common Stock,
each voting as a separate class as provided in Sunrise's Certificate of
Incorporation, in respect of the adoption of this Agreement are the only votes
of the holders of any class or series of Sunrise's capital stock necessary by
Law to approve and adopt this Agreement and the transactions contemplated hereby
(collectively, the "Sunrise Stockholders Approval").
3.9 Sunrise FCC Licenses; Operations of Sunrise Licensed Facilities.
(a) The Sunrise Disclosure Letter lists the television
broadcast stations for which Sunrise or one of its subsidiaries hold
licenses from the FCC, each of which is owned or operated by Sunrise
and its subsidiaries (collectively, the "Sunrise Licensed Facilities"),
in material compliance with the terms of the licenses issued by the FCC
to Sunrise or one of its subsidiaries (the "Sunrise FCC Licenses"), and
in material compliance with the Communications Act, except
9
where the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Sunrise Material Adverse Effect. The
Sunrise Disclosure Letter lists each television broadcast station that
is not a Sunrise Licensed Facility and for which Sunrise or any of its
subsidiaries provides programming and advertising services pursuant to
a local marketing agreement, time brokerage agreement, or other similar
agreement (each, a "Sunrise LMA Facility") and, to the knowledge of
Sunrise, each Sunrise LMA Facility has been operated in material
compliance with the terms of the licenses issued by the FCC to the
owner of such Sunrise LMA Facility (each, an "LMA Facility FCC
License"). Sunrise has, and its subsidiaries have, and, to the
knowledge of Sunrise, any licensee of a Sunrise LMA Facility has,
timely filed or made all applications, reports, and other disclosures
required by the FCC to be made in respect of the Sunrise Licensed
Facilities and have timely paid all FCC regulatory fees in respect
thereof, except where the failure to do so could not, individually or
in the aggregate, reasonably be expected to have a Sunrise Material
Adverse Effect.
(b) The Sunrise Disclosure Letter lists all of the Sunrise FCC
Licenses and, to the knowledge of Sunrise, all LMA Facility FCC
Licenses. The Sunrise Disclosure Schedule sets forth a true and
complete list of any and all material pending applications filed with
the FCC by Sunrise, its subsidiaries and, to the knowledge of Sunrise,
any holder of an LMA Facility FCC License. Sunrise or one of its
subsidiaries is the authorized legal holder of, each of the Sunrise FCC
Licenses which constitute all of the licenses issued by the FCC that
are necessary or used in the operation of the businesses of the Sunrise
Licensed Facilities as presently operated. The Sunrise Disclosure
Letter lists all local marketing agreements, time brokerage agreements,
and other similar agreements for the provision of programming or
advertising services ("LMAs"). To the knowledge of Sunrise, the
third-parties with which Sunrise or its subsidiaries have entered into
LMAs in respect of the Sunrise LMA Facilities have, and are the
authorized legal holders of, the LMA Facility FCC License which, to the
knowledge of Sunrise, constitute all of the licenses issued by the FCC
that are necessary or used in the operation of the business of the
respective Sunrise LMA Facility to which such local marketing agreement
relates. All Sunrise FCC Licenses and, to the knowledge of Sunrise, LMA
Facility FCC Licenses are validly held and are in full force and
effect, unimpaired by any act or omission of Sunrise, each of its
subsidiaries (or, to Sunrise's knowledge, their respective
predecessors), or their respective officers, employees, or agents,
except where such impairments could not, individually or in the
aggregate, reasonably be expected to have a Sunrise Material Adverse
Effect.
(c) As of the date hereof, except as set forth in the Sunrise
Disclosure Letter, no application, action, or proceeding is pending for
the renewal of any Sunrise FCC License or, to the knowledge of Sunrise,
LMA Facility FCC License as to which any petition to deny has been
filed and, to Sunrise's knowledge, there is not now before the FCC any
material investigation, proceeding, notice of violation, or order of
forfeiture relating to any Sunrise Licensed Facility or Sunrise LMA
Facility that, if adversely determined, could reasonably be expected to
have a Sunrise Material Adverse Effect, and Sunrise is not aware of any
basis that could reasonably be expected to cause the FCC not to renew
any of the Sunrise FCC Licenses or the LMA Facility FCC Licenses (other
than proceedings to amend FCC rules or the Communications Act of
general applicability to the television or broadcast industry). There
is not now pending and, to Sunrise's knowledge, there is not
threatened, any action by or before the FCC to revoke, suspend, cancel,
rescind, or modify in any material respect any of the Sunrise FCC
Licenses or, to the knowledge of Sunrise, any of the LMA Facility FCC
Licenses that, if adversely determined, could reasonably be expected to
have a Sunrise Material Adverse Effect (other than proceedings to amend
FCC rules or the Communications Act of general applicability to the
television or broadcast industry).
10
3.10 FCC Qualification. Sunrise and its subsidiaries are qualified
under the Communications Act to be the transferors of control of the Sunrise FCC
Licenses. Except as disclosed in the Sunrise Disclosure Letter, Sunrise is not
aware of any facts or circumstances relating to the FCC qualifications of
Sunrise or any of its subsidiaries that could reasonably be expected to prevent
the FCC from granting the FCC Form 315 Transfer of Control Application to be
filed in respect of the Merger.
3.11 Brokers. Except as disclosed in the Sunrise Disclosure Letter, all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out by or on behalf of Sunrise directly with LIN without the
intervention of any person on behalf of Sunrise in such a manner as to give rise
to any valid claim by any person against Sunrise, LIN, the Surviving
Corporation, or any of their respective subsidiaries for a finder's fee,
brokerage commission, or similar payment.
3.12 Compliance with Applicable Laws. Each of Sunrise and its
subsidiaries has in effect all federal, state, local, and foreign governmental
approvals, authorizations, certificates, filings, franchises, concessions,
licenses, notices, permits, and rights (collectively, "Permits") necessary for
it to own, lease, or operate its assets and properties and to carry on its
business as now conducted, other than such Permits the absence of which could
not, individually or in the aggregate, reasonably be expected to have a Sunrise
Material Adverse Effect, and there has occurred no default under any such Permit
other than such defaults that, individually or in the aggregate, could not
reasonably be expected to have a Sunrise Material Adverse Effect. Except as
disclosed in the Sunrise Disclosure Letter or the STC SEC Documents, Sunrise and
its subsidiaries are in compliance with all applicable Laws and Orders of any
Governmental Entity, except for such noncompliance that, individually or in the
aggregate, could not reasonably be expected to have a Sunrise Material Adverse
Effect.
3.13 Absence of Undisclosed Liabilities. Except as disclosed in the
Sunrise Financial Statements, the Sunrise Disclosure Letter, or the STC SEC
Documents and except for liabilities contemplated by this Agreement or
liabilities incurred in the ordinary course of business since the date of the
most recent Sunrise Financial Statement, Sunrise and its subsidiaries do not
have any material indebtedness, obligations, or liabilities of any kind (whether
accrued, absolute, contingent, or otherwise) required by GAAP to be reflected on
a consolidated balance sheet of Sunrise and its consolidated subsidiaries or in
the notes, exhibits, or schedules thereto or that could reasonably be expected
to have a Sunrise Material Adverse Effect.
3.14 Litigation. Except as disclosed in the Sunrise Financial
Statements, the STC SEC Documents, or the Sunrise Disclosure Letter, to the date
hereof, there is no litigation, administrative action, arbitration, or other
proceeding pending against Sunrise or any of its subsidiaries or, to the
knowledge of Sunrise, threatened that, individually or in the aggregate, could
reasonably be expected to (i) have a Sunrise Material Adverse Effect or (ii)
prevent or significantly delay the consummation of the transactions contemplated
hereby. Except as set forth in the Sunrise Financial Statements, the Sunrise
Disclosure Letter, or the STC SEC Documents, to the date hereof, there is no
Order of any Governmental Entity outstanding against Sunrise or any of its
subsidiaries that, individually or in the aggregate, could reasonably be
expected to have any effect referred to in clauses (i) and (ii) of this Section
3.14.
3.15 Transactions with Affiliates. Other than the transactions
contemplated hereby, or except as disclosed in the Sunrise Financial Statements,
the STC SEC Documents, or in the Sunrise Disclosure Letter, there have been no
transactions, agreements, arrangements, or understandings between Sunrise or its
subsidiaries, on the one hand, and Sunrise's affiliates (other than subsidiaries
of Sunrise) or any other person, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act of 1934, as
amended (the "Securities Act").
11
3.16 Labor Matters. Except as set forth in the Sunrise Disclosure
Letter or in the STC SEC Documents, (i) neither Sunrise nor any of its
subsidiaries is a party to any collective bargaining agreement, and no employees
of Sunrise or any of its subsidiaries are represented by any labor organization,
(ii) to the knowledge of Sunrise, there are no material representation or
certification proceedings, or petitions seeking such representation proceeding,
pending or threatened to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority, and (iii) to the
knowledge of Sunrise, there are no material organizing activities involving
Sunrise or any of its subsidiaries in respect of any group of employees of
Sunrise or its subsidiaries.
3.17 Employee Arrangements and Benefit Plans.
(a) The Sunrise Disclosure Letter sets forth a complete and
correct list of (i) all "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including multiemployer plans within the meaning of
Section 3(37) of ERISA, (ii) all bonus, incentive compensation,
deferred compensation, stock award, stock option, stock purchase,
salary continuation, vacation, sick leave, disability, death benefit,
hospitalization, medical, employee loan, education assistance and leave
of absence plans, programs, policies, agreements, arrangements, or
payroll practices, (iii) all collective bargaining or employee leasing
agreements or arrangements, and (iv) all employment, severance,
termination, compensation, change in control, retention, and
indemnification agreements or arrangements, other than any agreement or
arrangement that (A) provides for average annual remuneration
(excluding benefits but including bonuses, incentive payments, and
completion or other similar payments) of $150,000 or less, (B) has an
unexpired term of or can be terminated (before, on, or after a change
in control) in less than one year from the date hereof without
additional cost or penalty, or (C) relates to an agreement or
arrangement for on-air talent entered into in the ordinary course of
business consistent with past practices; in each case, that Sunrise or
any of its subsidiaries has any obligation or liability (contingent or
otherwise) (collectively, the "Sunrise Benefit Plans").
(b) Except as set forth in the STC SEC Documents or in the
Sunrise Disclosure Letter and except as could not, individually or in
the aggregate, reasonably be expected to have a Sunrise Material
Adverse Effect: (i) each Sunrise Benefit Plan has been administered and
is in compliance with the terms of such plan and all applicable Laws;
(ii) no "reportable event" (as such term is used in Section 4043 of
ERISA) (other than those events for which the 30-day notice has been
waived pursuant to the regulations), "prohibited transaction" (as such
term is used in Section 406 of ERISA or Section 4975 of the Code), or
"accumulated funding deficiency" (as such term is used in Section 412
or 4971 of the Code) has heretofore occurred in respect of any Sunrise
Benefit Plan; and (iii) each Sunrise Benefit Plan intended to qualify
under Section 401(a) of the Code has received a favorable determination
from the United States Internal Revenue Service ("IRS") regarding its
qualified status and no notice has been received from the IRS in
respect of the revocation of such qualification.
(c) To the date hereof, there is no litigation or
administrative or other proceeding (including an audit) involving any
Sunrise Benefit Plan nor has Sunrise or any of its subsidiaries
received notice that any such proceeding is threatened, in each case
where an adverse determination could reasonably be expected to have a
Sunrise Material Adverse Effect. Except as set forth in the Sunrise
Disclosure Letter, to the date hereof, neither Sunrise nor any of its
subsidiaries has contributed to any "multiemployer plan" (within the
meaning of Section 3(37) of ERISA) and neither Sunrise nor any of its
subsidiaries has incurred, nor, to the best of Sunrise's knowledge, is
reasonably likely to incur any withdrawal liability that remains
unsatisfied in an amount that could reasonably be expected to have a
Sunrise Material Adverse Effect. The
12
termination of, or withdrawal from, any Sunrise Benefit Plan or
multiemployer plan to which Sunrise or its subsidiaries contributes, on
or prior to the Closing Date, will not subject Sunrise or any of its
subsidiaries to any liability under Title IV of ERISA that could
reasonably be expected to have a Sunrise Material Adverse Effect.
Sunrise and its subsidiaries have not incurred any liability to the
PBGC (other than PBGC premium payments) or otherwise under Title IV of
ERISA in respect of any Sunrise Benefit Plan (other than any
multiemployer plan set forth in the Sunrise Disclosure Letter) that
could reasonably be expected to have a Sunrise Material Adverse Effect.
(d) Except as disclosed in the Sunrise Disclosure Letter or
the STC SEC Documents, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will either alone or in combination with another event (i) result in
any payment becoming due, or increase the amount of any compensation
due, to any current or former director, officer, employee, or
independent contractor of Sunrise or any of its subsidiaries, (ii)
increase any benefits otherwise payable under any Sunrise Benefit Plan,
or (iii) result in the acceleration of the time of payment or vesting
of any such compensation or benefits. Except as disclosed in the
Sunrise Disclosure Letter, Sunrise and its subsidiaries have no
obligation or accrued liability in respect of post-retirement health or
life benefits for their employees, except for coverage required by
applicable Law.
3.18 Tax Matters.
(a) Except as set forth in the Sunrise Financial Statements,
the Sunrise Disclosure Letter, or the STC SEC Documents, (i) Sunrise
and each of its subsidiaries have timely filed with the appropriate
taxing authorities all material Tax Returns required to be filed
through the date hereof and will timely file any such material Tax
Returns required to be filed on or prior to the Closing Date (except
those under valid extension) and all such Tax Returns are and will be
true and correct in all material respects, (ii) all Taxes of Sunrise
and each of its subsidiaries shown to be due on the Tax Returns
described in clause (i) above have been or will be timely paid or
adequately reserved for in accordance with GAAP (except to the extent
such Taxes are being contested in good faith), (iii) no material
deficiencies for any Taxes have been proposed, asserted, or assessed
against Sunrise or any of its subsidiaries that have not been fully
paid or adequately provided for in the appropriate financial statements
of Sunrise and its subsidiaries, and no power of attorney in respect of
any Taxes has been executed or filed with any taxing authority and no
material issues relating to Taxes have been raised in writing by any
Governmental Entity during any presently pending audit or examination,
(iv) Sunrise and its subsidiaries are not now subject to audit by any
taxing authority and no waivers of statutes of limitation in respect of
the Tax Returns have been given by or requested in writing from Sunrise
or any of its subsidiaries, (v) there are no material liens for Taxes
(other than for Taxes not yet due and payable) on any assets of Sunrise
or any of its subsidiaries, (vi) neither Sunrise nor any of its
subsidiaries is a party to or bound by (nor will any of them become a
party to or bound by) any tax indemnity, tax sharing, tax allocation
agreement, or similar agreement, arrangement, or practice in respect of
Taxes, (vii) neither Sunrise nor any of its subsidiaries has ever been
a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code, other than the affiliated group of which
Sunrise is the common parent, (viii) neither Sunrise nor any of its
subsidiaries has filed a consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any
corresponding provision of state or local Law) or agreed to have
Section 341(f)(2) of the Code (or any corresponding provisions of state
or local Law) apply to any disposition of any asset owned by Sunrise or
any of its subsidiaries, as the case may be, (ix) neither Sunrise nor
any of its subsidiaries has agreed to make, nor is any required to
make, any adjustment under Section 481(a) of the Code or any similar
provision of state, local, or foreign Law by reason of a
13
change in accounting method or otherwise, (x) Sunrise and its
subsidiaries have complied in all material respects with all applicable
Laws relating to withholding of Taxes, and (xi) no property owned by
Sunrise or any of its subsidiaries (A) is property required to be
treated as being owned by another person pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and
in effect immediately prior to the enactment of the Tax Reform Act of
1986; (B) constitutes "tax exempt use property" within the meaning of
Section 168(h)(l) of the Code; or (C) is tax exempt bond financed
property within the meaning of Section 168(g) of the Code.
(b) As used herein, (i) "Tax Return" means any return, report,
claim for refund, estimate, information return or statement, or other
similar document relating to or required to be filed with any
Governmental Entity in respect of Taxes, including any schedule or
attachment thereto, and including any amendment thereof, and (ii)
"Taxes" means all federal, state, local, and foreign taxes, duties,
levies, or similar charges of any kind, including those measured by or
referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property, or
windfall profits taxes, customs, duties, or similar fees, assessments,
or charges of any kind whatsoever, together with any interest and any
penalties, additions to tax, or additional amounts imposed by any
Governmental Entity.
(c) Neither Sunrise nor any of its subsidiaries will
constitute either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code)
in a distribution qualifying for tax-free treatment under Section 355
of the Code (i) in the two years prior to the date of the Merger or
(ii) in a distribution that could otherwise constitute part of a "plan"
or "series of related transactions" (within the meaning of Section
355(e) of the Code) in conjunction with the transactions contemplated
by this Agreement.
3.19 Intellectual Property.
(a) Except as set forth in the Sunrise Disclosure Letter and
except to the extent that the inaccuracy of any of the following (or
the circumstances giving rise to such inaccuracy), individually or in
the aggregate, could not reasonably be expected to have a Sunrise
Material Adverse Effect: (i) Sunrise and each of its subsidiaries owns,
or is licensed to use (in each case, free and clear of any Liens), all
Intellectual Property used in or necessary for the conduct of their
respective businesses as currently conducted; (ii) the use of any
Intellectual Property by Sunrise and its subsidiaries does not infringe
on or otherwise violate the rights of any person and is in accordance
with any applicable license pursuant to which Sunrise or any of its
subsidiaries acquired the right to use any Intellectual Property; (iii)
to the knowledge of Sunrise, no person is challenging, infringing, on
or otherwise violating any right of Sunrise or any of its subsidiaries
in respect of any Intellectual Property owned by and/or licensed to
Sunrise or its subsidiaries; and (iv) neither Sunrise nor any of its
subsidiaries has received any written notice of any pending claim in
respect of any Intellectual Property used by Sunrise and its
subsidiaries and to its knowledge no Intellectual Property owned and/or
licensed by Sunrise or its subsidiaries is being used or enforced in a
manner that would result in the abandonment, cancellation, or
unenforceability of such Intellectual Property.
(b) As used herein, "Intellectual Property" means (i)
trademarks, service marks, brand names, and other indications of
origin, the goodwill associated with the foregoing and registrations in
any jurisdiction of, and applications in any jurisdiction to register,
the foregoing, including any extension, modification, or renewal of any
such registration or application; inventions, discoveries, and ideas,
whether patentable or not, in any jurisdiction; (ii) patents,
14
applications for patents (including divisions, continuations,
continuations in part, and renewal applications), and any renewals,
extensions, or reissues thereof, in any jurisdiction; (iii) nonpublic
information, trade secrets, and confidential information and rights in
any jurisdiction to limit the use or disclosure thereof by any person;
(iv) writings and other works, whether copyrightable or not, in any
jurisdiction; (v) registrations or applications for registration of
copyrights in any jurisdiction, and any renewals or extensions thereof;
(vi) inventions, discoveries and ideas, whether patentable or not in
any jurisdiction; (vii) any similar intellectual property or
proprietary rights; and (viii) any claims or causes of action arising
out of or relating to any infringement or misappropriation of any of
the foregoing.
3.20 Environmental Matters.
(a) Except as disclosed in the STC SEC Documents or in the
Sunrise Disclosure Letter and except as could not reasonably be
expected to have a Sunrise Material Adverse Effect: (i) the operations
of Sunrise and its subsidiaries have been and are in compliance with
all Environmental Laws and with all Permits required by Environmental
Laws; (ii) there are no pending or, to the knowledge of Sunrise,
threatened, actions, suits, claims, investigations, or other
proceedings under or pursuant to Environmental Laws against Sunrise or
its subsidiaries or involving any real property currently or, to the
knowledge of Sunrise, formerly owned, operated, used, or leased by
Sunrise or its subsidiaries; (iii) Sunrise and its subsidiaries are not
subject to any Environmental Liabilities, and, to the knowledge of
Sunrise, no facts, circumstances, or conditions relating to, arising
from, associated with, or attributable to any real property currently
or, to the knowledge of Sunrise, formerly owned, operated, used, or
leased by Sunrise or its subsidiaries or operations thereon that could
reasonably be expected to result in Environmental Liabilities; (iv) all
real property owned and to the knowledge of Sunrise all real property
operated, used, or leased by Sunrise or its subsidiaries is free of
contamination from Hazardous Material in violation of the Environmental
Laws; and (v) there is not now, nor, to the knowledge of Sunrise, has
there been in the past, on, in or under any real property owned,
leased, used, or operated by Sunrise or any of its predecessors (A) any
underground storage tanks, above-ground storage tanks, dikes, or
impoundments containing Hazardous Materials, (B) any
asbestos-containing materials, (C) any polychlorinated biphenyls, or
(D) any radioactive substances.
(b) As used herein, (i) "Environmental Laws" means any and all
applicable federal, state, local, or municipal Laws, Orders, and any
other requirements of any Governmental Entity, any and all common law
requirements, rules and bases of liability regulating, relating to or
imposing liability or standards of conduct concerning pollution or
protection of the environment or natural resources, as currently in
effect and includes, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et
seq., the Hazardous Materials Transportation Act 49 U.S.C. Section 1801
et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
Section 6901 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et
seq., the Clean Air Act, 33 U.S.C. Section 2601 et seq., the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C., Section 136 et
seq., and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et
seq., as such Laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous state or
local Laws; (ii) "Environmental Liabilities" in respect of any person
means any and all liabilities of or relating to such person or any of
its subsidiaries (including any entity that is, in whole or in part, a
predecessor of such person or any of such subsidiaries), whether vested
or unvested, contingent or fixed, actual or potential, known or
unknown, that (A) arise under or relate to matters covered by
Environmental Laws and (B) relate to actions occurring or conditions
existing on or prior to the Closing Date; and (iii) "Hazardous
Materials" means any substances, materials or wastes,
15
defined, listed, classified, or regulated as hazardous, toxic,
pollutants, contaminants, or words of similar meaning or under any
Environmental Laws, including petroleum, petroleum products, friable
asbestos, urea formaldehyde, and polychlorinated biphenyls.
3.21 Material Agreements.
(a) Except as disclosed in the Sunrise Disclosure Letter or
the Sunrise Financial Statements, from and after the date of filing of
the STC SEC Documents to the date hereof, neither Sunrise nor any of
its subsidiaries has entered into any contract, agreement, or other
document or instrument that would be required to be filed with the SEC
or any material amendment, modification, or waiver under any contract,
agreement, or other document or instrument (other than any such
amendments, modifications, or waivers entered into after the date
hereof, in connection with the transactions contemplated hereby) that
was previously filed with the SEC or would be required to be so filed.
(b) Except as filed as an exhibit to the STC SEC Documents or
as set forth in the Sunrise Disclosure Letter or the Sunrise Financial
Statements, to the date hereof, neither Sunrise nor any of its
subsidiaries is a party to or has entered into or made any material
amendment or modification to or granted any material waiver under any
of the following (collectively, the "Material Agreements"): (i) any
network affiliation agreement for any Sunrise Licensed Facility or
Sunrise LMA Facility ("Network Affiliation Agreement"); (ii) any
material sports broadcasting agreement ("Sports Agreement"); (iii) any
main transmitter site or main studio lease for any Sunrise Licensed
Facility or Sunrise LMA Facility; (iv) any agreement pursuant to which
Sunrise or any of its subsidiaries agrees to provide programming to a
Sunrise Licensed Facility or a Sunrise LMA Facility or any other
television station, whether broadcast, cable, or otherwise, or pursuant
to which Sunrise or any of its subsidiaries has either a contingent
programming obligation or the right to purchase the assets of a Sunrise
LMA Facility or any shares of capital stock of any corporation holding
any assets relating to a Sunrise LMA Facility ("LMA Agreement"); or (v)
any partnership or joint venture agreement obligating Sunrise or any of
its subsidiaries to contribute cash in excess of $200,000 per year.
(c) Each of the Material Agreements is valid and enforceable
against Sunrise or one of its subsidiaries, as the case may be, in
accordance with its terms, and there is no default under any Material
Agreements either by Sunrise or any of its subsidiaries which is a
party to such Material Agreements or, to the knowledge of Sunrise, by
any other party thereto, and no event has occurred that with the lapse
of time or the giving of notice or both would constitute a default
thereunder by Sunrise or, to the knowledge of Sunrise, any other party
thereto, in any such case in which such default or event could
reasonably be expected to have a Sunrise Material Adverse Effect. In
addition, neither Sunrise nor any subsidiary of Sunrise is in material
breach of any Network Affiliation Agreement, Sports Agreement, or LMA
Agreement (including any breach that would give rise to a right to
terminate any such agreement). To the date hereof, neither Sunrise nor
any subsidiary of Sunrise has received any written notice (or to the
knowledge of Sunrise any other notice) of default or termination under
any Material Agreement, and to the knowledge of Sunrise, there exists
no basis for any assertion of a right of default or termination under
such Material Agreements. Neither Sunrise nor any of its subsidiaries
has received any written notice (or, to the knowledge of Sunrise, any
other notice) of the exercise of a put option or other right pursuant
to which Sunrise or any of its subsidiaries would be obligated to
purchase capital stock or assets relating to any Sunrise LMA Facility,
or the owner or licensee thereof, as applicable. As used herein,
"Material Consents" means consents under (i) each Network Affiliation
Agreement, (ii) the Lease Agreement dated February 1, 1999, between
Toledo Telecasting, Inc. and Raycom America, Inc. (succeeded by STC)
(lease for WUPW-TV studio),
16
and (iii) the Lease Agreement dated March 23, 2001, between Xxxx
Properties, Inc. and STC (lease for KACB-TV studio).
3.22 Tangible Property. All of the assets of Sunrise and the Sunrise
Significant Subsidiaries are in good operating condition, reasonable wear and
tear excepted, and usable in the ordinary course of business, except where the
failure to be in such condition or so usable could not, individually or in the
aggregate, reasonably be expected to have a Sunrise Material Adverse Effect.
Sunrise owns all personal property reflected in the Sunrise Financial Statements
and all personal property acquired after the date of the most recent Sunrise
Financial Statements (other than such personal property assets sold, consumed,
expended, or otherwise disposed of in the ordinary course of business), free and
clear of all Liens other than Permitted Liens, and except for such matters that,
individually or in the aggregate, could not reasonably be expected to have a
Sunrise Material Adverse Effect.
3.23 Real Property. The Sunrise Disclosure Letter contains a list of
the material real property owned or leased by Sunrise or its subsidiaries.
Sunrise or one of its subsidiaries has good and marketable title in fee simple
to all real property owned by any of them and a good leasehold interest in the
real property leased by any of them, free and clear of all Liens other than (i)
liens for current taxes, payment of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount, or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto or
affected thereby, or materially impair Sunrise's business operations, (iii) as
disclosed in the STC SEC Documents, (iv) those reflected or reserved against in
the Sunrise Financial Statements, and (v) Liens arising under the Credit
Agreement (the items described in clauses (i)-(v) above are referred to as
"Permitted Liens"), and except for such matters that, individually or in the
aggregate, could not reasonably be expected to have a Sunrise Material Adverse
Effect. Sunrise has made available to LIN prior to the date hereof true, correct
and complete copies of all leases, subleases, and other agreements under which
Sunrise or any of its subsidiaries occupies, or has the right to use or occupy
any real property (including all amendments, modifications, or supplements
thereto).
3.24 No Other Representations and Warranties. Except for the
representations and warranties made by Sunrise as expressly set forth in this
Agreement or in any certificate or document delivered pursuant this Agreement,
neither Sunrise nor any of its affiliates has made and shall not be construed as
having made to LIN or any of its affiliates any representation or warranty of
any kind.
ARTICLE IV
Representations and Warranties of XXX
XXX represents and warrants to Sunrise as follows:
4.1 Organization. Each of LIN and the LIN Significant Subsidiaries is a
corporation or a limited liability company duly organized, validly existing, and
in good standing under the Laws of the jurisdiction in which it is incorporated
or formed, as applicable, and has the requisite corporate or limited liability
company power and authority to carry on its business as now being conducted.
Each of LIN and the LIN Significant Subsidiaries is duly qualified to do
business and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its assets or properties makes such
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to have a material adverse effect on the business,
properties, results of operations, or condition (financial or otherwise) of LIN
and its subsidiaries, considered as a whole (other than as a result of changes
in general economic conditions or in economic conditions generally affecting the
television or broadcasting industry) (a "LIN Material Adverse Effect"). LIN has
delivered to Sunrise complete and correct copies of its Certificate of
Incorporation and Bylaws, as amended to the date hereof. As used
17
herein, "LIN Significant Subsidiary" means any subsidiary of LIN that would
constitute a "significant subsidiary" within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
4.2 Authorization; Enforceability. LIN has the requisite corporate
power and authority to enter into this Agreement and, subject to the LIN
Stockholders Approval, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by LIN and the consummation by LIN of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of LIN, subject to the LIN Stockholders Approval.
This Agreement has been duly executed and delivered by LIN and, assuming this
Agreement constitutes the valid and binding agreement of Sunrise, constitutes a
valid and binding obligation of LIN, enforceable against it in accordance with
its terms except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, or similar Laws now or hereafter in
effect relating to creditor's rights generally, and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
4.3 No-Conflicts. Except as disclosed in writing by LIN to Sunrise in a
disclosure letter prior to or as of the date hereof (the "LIN Disclosure
Letter") and subject to receipt of the LIN Stockholders Approval and the filing
of the Second Amended and Restated Charter with the Secretary of State of
Delaware, the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, (i) conflict with the Certificate of Incorporation
or Bylaws of LIN or the comparable documents of any subsidiary of LIN, (ii)
subject to the governmental filings and other matters referred to in Section
4.4, conflict with, result in a breach of or default (with or without notice,
lapse of time, or both) under, or give rise to a right of termination,
cancellation, or acceleration of any obligation or loss of a material benefit
under, or require the consent of any person under, any indenture, loan or credit
7agreement, note, or bond, or other agreement, permit, concession, franchise,
license, or similar instrument or undertaking to which LIN or any or its
subsidiaries is a party or by which LIN or any of its subsidiaries or any of
their respective assets or properties is bound or affected, (iii) result in an
obligation by LIN, the Surviving Corporation, Sunrise, or any of their
respective subsidiaries to redeem, repurchase, or retire (or offer to redeem,
repurchase, or retire) any indebtedness of LIN or any of its subsidiaries
outstanding as of the date hereof or equity security of LIN or any of its
subsidiaries outstanding as of the date hereof, or (iv) subject to the
governmental filings and other matters referred to in Section 4.4, contravene
any Law or Order of any Governmental Entity currently in effect, except, in the
cases of the clauses (ii) through (iv), for such conflicts, breaches, defaults,
or other consequences that, individually or in the aggregate, could not
reasonably be expected to have a LIN Material Adverse Effect or to materially
hinder LIN's ability to consummate the transactions contemplated hereby.
4.4 Consents and Approvals. Except as disclosed in the LIN Disclosure
Letter, no consent, approval, or authorization of, or declaration or filing
with, or notice to, any Governmental Entity that has not been received or made,
is required by or in respect of LIN or any of its Subsidiaries in connection
with the execution and delivery of this Agreement by LIN or the consummation by
LIN of the transactions contemplated hereby, except for (i) the filing of
pre-merger notification and report forms under the HSR Act in respect of the
Merger and the termination or earlier expiration of the applicable waiting
period thereunder, (ii) such filings with and approvals required by the FCC
under the Communications Act, including those required in connection with the
transfer of control of Sunrise FCC Licenses for the operation of the Sunrise
Licensed Facilities, (iii) the filing of the Certificate of Merger with and
acceptance by the Secretary of State of the State of
Delaware, and appropriate
documents with the relevant authorities of other states in which LIN is
qualified to do business, (iv) such reports or other filings under the Exchange
Act or state securities Laws as may be required in connection with this
Agreement and the transactions contemplated hereby, (v) the filing of the Second
Amended and Restated Charter with and acceptance by the Secretary of State of
the State of
Delaware, and (vi) such consents,
18
approvals, authorizations, declarations, filings, or notices that could not
reasonably be expected to have a LIN Material Adverse Effect.
4.5 Capitalization.
(a) As of the date hereof (and, in any event, without giving
effect to the Second Amended and Restated Charter), the total number of
shares of capital stock of all classes that LIN has authority to issue
is 1,205,000,000 shares of capital stock, consisting of (i) 650,000,000
shares of Class A voting common stock, par value $0.01 per share ("LIN
Voting Stock"), (ii) 550,000,000 shares of Class B Nonvoting common
stock, par value $0.01 per share ("LIN Nonvoting Stock" and, together
with the LIN Voting Stock, the "LIN Common Stock"), and (iii) 5,000,000
shares of preferred stock, par value $0.01 per share ("LIN Preferred
Stock"). At the close of business on the date hereof, (A) 1,000,000
shares of LIN Voting Stock were issued and outstanding, (B) 538,451,532
shares of LIN Nonvoting Stock were issued and outstanding, and (C) no
shares of LIN Preferred Stock were issued and outstanding.
(b) All outstanding shares of LIN capital stock are duly
authorized, validly issued, fully paid and non-assessable, and not
subject to preemptive rights. Except as disclosed in the LIN Disclosure
Letter, no bonds, debentures, notes, or other indebtedness of LIN or
any subsidiary of LIN having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters
on which the stockholders of LIN or any subsidiary of XXX xxx vote are
issued or outstanding. All the outstanding shares of capital stock or
other equity interests of each subsidiary of LIN have been validly
issued and are fully paid and non-assessable and, except as disclosed
in the LIN Disclosure Letter, are owned by LIN, by one or more direct
or indirect wholly-owned subsidiaries of LIN or by LIN and one or more
of such subsidiaries, free and clear of all Liens.
(c) Except as set forth in Sections 4.5(a) and 4.5(b), the LIN
Disclosure Letter, or the LIN SEC Documents, and except for certain
provisions of the Certificate of Incorporation of LIN relating to
"alien ownership" of the LIN capital stock, neither LIN nor any
subsidiary of LIN has any outstanding option, warrant, subscription, or
other right, agreement, or commitment that either (i) obligates LIN or
any subsidiary of LIN to issue, sell, or transfer, repurchase, redeem,
or otherwise acquire or vote any shares of the capital stock of LIN or
any subsidiary of LIN, or (ii) restricts the transfer of LIN capital
stock. Since the close of business on February 8, 2002 to the date
hereof (except as disclosed in the LIN Disclosure Letter), neither LIN
nor any subsidiary of LIN has issued any capital stock or securities or
other rights convertible into or exercisable or exchangeable for shares
of such capital stock.
(d) Upon consummation of the transactions contemplated hereby
(including the filing of the Second Amended and Restated Charter), the
total number of shares of capital stock of all classes that LIN will
have authority to issue will be 605,000,000 shares of capital stock,
consisting of (i) 600,000,000 shares of New LIN Common Stock, and (ii)
5,000,000 shares of preferred stock, par value $0.01 per share ("New
LIN Preferred Stock"). Upon consummation of the transactions
contemplated hereby (including the filing of the Second Amended and
Restated Charter), but without giving effect to the sale and issuance
of shares of New LIN Class A Common Stock in connection with the
initial public offering of shares of New LIN Class A Common Stock
contemplated by the registration statement on Form S-1 filed by LIN on
the date hereof, the exercise of any option or warrant issued and
outstanding on the date hereof, or any shares of the capital stock of
LIN in connection with the Exchange Agreement, dated on or about the
date hereof, among Hicks, Muse, Xxxx & Xxxxx Equity Fund III, L.P., HM3
Coinvestors, L.P., and LIN, (i) 138,915,126 shares of New LIN Class A
Common Stock will be issued and
19
outstanding, (ii) 420,582,894 shares of New LIN Class B Common Stock
will be issued and outstanding, (iii) two shares of New LIN Class C
Common Stock will be issued and outstanding, and (iv) no shares of New
LIN Preferred Stock will be issued and outstanding. Each share of
capital stock of LIN that will be outstanding immediately after the
consummation of the transactions contemplated hereby will be duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights.
4.6 Financial Statements; LIN SEC Documents. LIN has previously
provided to Sunrise true, correct, and complete copies of the audited
consolidated balance sheet of LIN and its subsidiaries as at and for the fiscal
years ended December 31, 2001, and December 31, 2000, and the related
consolidated statements of operations, cash flows, and stockholders' equity for
the periods ended December 31, 2001, December 31, 2000, and December 31, 1999,
together with the notes thereto (the "LIN Financial Statements"). The Financial
Statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition, assets and liabilities, the results of
operations, cash flows, and changes in stockholders' equity of LIN and its
subsidiaries as of the dates, and for the periods, indicated therein. Since
September 2, 1998, LIN Holdings Corp. has filed with the SEC all reports and
other statements that it is required to file under Sections 13 and 15(d) of the
Exchange Act (the "LIN SEC Documents"). As of their respective dates, each such
report or other statement comprising the LIN SEC Documents complied in all
material respects with the rules and regulations promulgated by the SEC and did
not contain any untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.7 Absence of Certain Changes. Except as disclosed in the LIN
Financial Statements, the LIN SEC Documents, or the LIN Disclosure Letter, since
the date of the most recent LIN Financial Statements, LIN and its subsidiaries
have conducted their businesses only in the ordinary course, and there has not
been (i) any change that could reasonably be expected to have a LIN Material
Adverse Effect (including as a result of the consummation of the Merger), (ii)
any change in accounting methods, principles, or practices by LIN or any of its
subsidiaries materially affecting its assets, liabilities, or business, except
insofar as may have been required by a change in generally accepted accounting
principles, (iii) any declaration, setting aside, or payment of any dividend or
other distribution (whether in cash, stock, or property) in respect of any of
the outstanding capital stock of LIN, or (iv) any granting by LIN or any of its
subsidiaries to any director, officer, or other employee or independent
contractor of LIN or any of its subsidiaries of any increase in compensation,
except in the ordinary course of businesses consistent with past practice or as
was required under employment agreements in effect as of the date of the most
recent LIN Financial Statements.
4.8 Voting Requirements. The affirmative votes of (i) the holders of a
majority of the outstanding shares of LIN Class A Common Stock and the holders
of a majority of the outstanding shares of LIN Class B Common Stock, each voting
as a separate class, in respect of the approval and adoption of the Amended and
Restated Charter, (ii) the holders of a majority of the outstanding shares of
LIN Class A Common Stock and the holders of a majority of the outstanding shares
of LIN Class B Common Stock, each voting as a separate class, in respect of the
approval and adoption of this Agreement (including the Merger), and (iii) the
holders of a majority of the outstanding shares of LIN Class B Common Stock in
respect of the approval of the issuance of New LIN Common Stock to the Sunrise
stockholders in the Merger, are the only votes of the holders of any class or
series of LIN's capital stock necessary to approve the transactions contemplated
by this Agreement (collectively, the "LIN Stockholder Approval").
20
4.9 LIN FCC Licenses; Operations of LIN Licensed Facilities.
(a) The LIN Disclosure Letter lists the television broadcast
stations for which LIN or one of its subsidiaries hold licenses from
the FCC, each of which is owned or operated by LIN or one of its
subsidiaries (collectively, the "LIN Licensed Facilities"), in material
compliance with the terms of the licenses issued by the FCC to LIN or
one of its subsidiaries (the "LIN FCC Licenses"), and in material
compliance with the Communications Act, except where the failure to do
so could not, individually or in the aggregate, reasonably be expected
to have a LIN Material Adverse Effect. The LIN Disclosure Letter lists
each television broadcast station that is not a LIN Licensed Facility
and for which LIN or any of its subsidiaries provides programming and
advertising services pursuant to an LMA (each, a "LIN LMA Facility"),
and to the knowledge of LIN, has been operated in material compliance
with the terms of the licenses issued by the FCC to the owner of such
LIN LMA Facility (each, an "LIN LMA Facility FCC License"). LIN has,
and its subsidiaries have, and, to the knowledge of LIN, any licensee
of a LIN LMA Facility has, timely filed or made all applications,
reports and other disclosures required by the FCC to be made in respect
of the LIN Licensed Facilities and have timely paid all FCC regulatory
fees in respect thereof, except where the failure to do so could not,
individually or in the aggregate, reasonably be expected to have a LIN
Material Adverse Effect.
(b) The LIN Disclosure Letter lists all of the LIN FCC
Licenses and, to the knowledge of LIN, all LIN LMA Facility FCC
Licenses. The LIN Disclosure Schedule sets forth a true and complete
list of any and all material pending applications filed with the FCC by
LIN, its subsidiaries and, to the knowledge of LIN, any holder of a LIN
LMA Facility FCC License. LIN or one of its subsidiaries has, and is
the authorized legal holder of, each of the LIN FCC Licenses which
constitute all of the licenses issued by the FCC that are necessary or
used in the operation of the businesses of the LIN Licensed Facilities
as presently operated. The LIN Disclosure Letter lists all LMAs and, to
the knowledge of LIN, the third parties with which LIN or its
subsidiaries have entered into LMAs in respect of the LIN LMA
Facilities have, and are the authorized legal holders of, the LIN LMA
Facility FCC License which, to the knowledge of LIN, constitute all of
the licenses issued by the FCC that are necessary or used in the
operation of the business of the respective LIN LMA Facility to which
such local marketing agreement relates. All LIN FCC Licenses and, to
the knowledge of XXX, XXX LMA Facility FCC Licenses are validly held
and are in full force and effect, unimpaired by any act or omission of
LIN, each of its subsidiaries (or, to LIN's knowledge, their respective
predecessors), or their respective officers, employees, or agents,
except where such impairments could not, individually or in the
aggregate, reasonably be expected to have a LIN Material Adverse
Effect. For purposes of this Agreement, the Management Services
Agreement dated as of January 7, 2002, among Sunrise, STC, STC License
Company, and LIN Television Corporation shall not be deemed to
constitute an LMA.
(c) Except as set forth in the LIN Disclosure Letter, no
application, action, or proceeding is pending for the renewal of any
LIN FCC License or, to the knowledge of XXX, XXX LMA Facility FCC
License as to which any petition to deny has been filed and, to LIN's
knowledge, there is not now before the FCC any material investigation,
proceeding, notice of violation, or order of forfeiture relating to any
LIN Licensed Facility or LIN LMA Facility that, if adversely
determined, could reasonably be expected to have a LIN Material Adverse
Effect, and LIN is not aware of any basis that could reasonably be
expected to cause the FCC not to renew any of the LIN FCC Licenses or
the LIN LMA Facility FCC Licenses (other than proceedings to amend FCC
rules or the Communications Act of general applicability to the
television broadcast industry). There is not now pending and, to LIN's
knowledge, there is not threatened, any action by or before the FCC to
revoke, suspend, cancel, rescind, or modify in any material respect any
of the LIN FCC Licenses or to the knowledge of LIN, any of the LIN LMA
Facility FCC Licenses
21
that, if adversely determined, could reasonably be expected to have a
LIN Material Adverse Effect (other than proceedings to amend FCC rules
or the Communications Act of general applicability to the television
broadcast industry).
4.10 FCC Qualification. Except as set forth in the LIN Disclosure
Letter, LIN is qualified under the Communications Act to be the transferees of
control of the Sunrise FCC Licenses. Except as disclosed in the LIN Disclosure
Letter, LIN is not aware of any facts or circumstances relating to the FCC
qualifications of LIN or any of its subsidiaries that could reasonably be
expected to prevent the FCC from granting the FCC Form 315 Transfer of Control
Application to be filed in respect of the Merger.
4.11 Brokers. Except as set forth in the LIN Disclosure Letter, all
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out by LIN directly with Sunrise without the intervention of
any person on behalf of LIN in such a manner as to give rise to any valid claim
by any person against LIN, Sunrise, the Surviving Corporation or any of their
respective subsidiaries for a finder's fee, brokerage commission, or similar
payment.
4.12 Compliance with Applicable Laws. Except as disclosed in the LIN
Disclosure Letter, each of LIN and its subsidiaries has in effect all Permits
necessary for it to own, lease, or operate its assets and properties and to
carry on its business as now conducted, other than such Permits the absence of
which could not, individually or in the aggregate, reasonably be expected to
have a LIN Material Adverse Effect, and there has occurred no default under any
such Permit other than such defaults which, individually or in the aggregate,
could not reasonably be expected to have a LIN Material Adverse Effect. Except
as disclosed in the LIN Disclosure Letter or the LIN SEC Documents, LIN and its
subsidiaries are in compliance with all applicable Laws or Orders of any
Governmental Entity, except for such noncompliance which, individually or in the
aggregate, could not reasonably be expected to have a LIN Material Adverse
Effect.
4.13 Absence of Undisclosed Liabilities. Except as disclosed in the LIN
Financial Statements or the LIN SEC Documents and except for liabilities
contemplated by this Agreement or liabilities incurred in the ordinary course of
business since the date of the most recent LIN Financial Statements, LIN and its
subsidiaries do not have any material indebtedness, obligations, or liabilities
of any kind (whether accrued, absolute, contingent, or otherwise) required by
GAAP to be reflected on a consolidated balance sheet of LIN and its consolidated
subsidiaries or in the notes, exhibits, or schedules thereto or that could
reasonably be expected to have a LIN Material Adverse Effect.
4.14 Litigation. Except as disclosed in the LIN Financial Statements or
the LIN SEC Documents, to the date hereof, there is no litigation,
administrative action, arbitration, or other proceeding pending against LIN or
any of its subsidiaries or, to the knowledge of LIN, threatened that,
individually or in the aggregate, could reasonably be expected to (i) have a LIN
Material Adverse Effect or (ii) prevent, or significantly delay the consummation
of the transactions contemplated hereby. Except as set forth in the LIN
Financial Statements or the LIN SEC Documents, to the date hereof, there is no
Order of any Governmental Entity outstanding against LIN or any of its
subsidiaries that, individually or in the aggregate, could reasonably be
expected to have any effect referred to in clauses (i) and (ii) of this Section
4.14.
4.15 Transactions with Affiliates. Other than the transactions
contemplated hereby or except to the extent disclosed in the LIN Financial
Statements, the LIN SEC Documents, or the LIN Disclosure Letter, there have been
no transactions, agreements, arrangements, or understandings between LIN or its
subsidiaries, on the one hand, and LIN's affiliates (other than subsidiaries of
LIN) or any other person, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act.
22
4.16 Labor Matters. Except as set forth in the LIN Disclosure Letter or
in the LIN SEC Documents, (i) neither LIN nor any of its subsidiaries is a party
to any collective bargaining agreement, and no employees of LIN or any of its
subsidiaries are represented by any labor organization, (ii) to the knowledge of
LIN, there are no material representation or certification proceedings, or
petitions seeking such representation proceeding, pending or threatened to be
brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority, and (iii) to the knowledge of LIN, there are no
material organizing activities involving LIN or any of its subsidiaries in
respect of any group of employees of LIN or its subsidiaries.
4.17 Employee Arrangements and Benefit Plans.
(a) The LIN Disclosure Letter sets forth a complete and
correct list of (i) all "employee benefit plans" within the meaning of
Section 3(3) of ERISA, including multiemployer plans within the meaning
of Section 3(37) of ERISA, (ii) all bonus, incentive compensation,
deferred compensation, stock award, stock option, stock purchase,
salary continuation, vacation, sick leave, disability, death benefit,
hospitalization, medical, employee loan, education assistance and leave
of absence plans, programs, policies, agreements, arrangements, or
payroll practices, (iii) all collective bargaining or employee leasing
agreements or arrangements, and (iv) all employment, severance,
termination, compensation, change in control, retention, and
indemnification agreements or arrangements, other than any agreement or
arrangement that (A) provides for average annual remuneration
(excluding benefits but including bonuses, incentive payments, and
completion or other similar payments) of $150,000 or less, (B) has an
unexpired term of or can be terminated (before, on, or after a change
in control) in less than one year from the date hereof without
additional cost or penalty, or (C) relates to an agreement or
arrangement for on-air talent entered into in the ordinary course of
business consistent with past practices, in each case, that LIN or any
of its subsidiaries has any obligation or liability (contingent or
otherwise) (collectively, the "LIN Benefit Plans").
(b) To the date hereof, there is no litigation or
administrative or other proceeding (including an audit) involving any
LIN Benefit Plan nor has LIN or its subsidiaries received notice that
any such proceeding is threatened, in each case where an adverse
determination could reasonably be expected to have a LIN Material
Adverse Effect. Neither LIN nor any of its subsidiaries has incurred,
nor, to the best of LIN's knowledge, is reasonably likely to incur any
withdrawal liability in respect of any "multiemployer plan" (within the
meaning of Section 3(37) of ERISA) that remains unsatisfied in an
amount that could reasonably be expected to have a LIN Material Adverse
Effect. The termination of, or withdrawal from, any LIN Benefit Plan or
multiemployer plan to which LIN or its subsidiaries contributes, on or
prior to the Closing Date, will not subject LIN or any of its
subsidiaries to any liability under Title IV of ERISA that could
reasonably be expected to have a LIN Material Adverse Effect. LIN and
its subsidiaries have not incurred any liability to the PBGC (other
than PBGC premium payments) or otherwise under Title IV of ERISA in
respect of any LIN Benefit Plan (other than any multiemployer plan set
forth in the LIN Disclosure Letter) that could reasonably be expected
to have a LIN Material Adverse Effect.
(d) Except as disclosed in the LIN Disclosure Letter or the
LIN SEC Documents, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
either alone or in combination with another event (i) result in any
payment becoming due, or increase the amount of any compensation due,
to any current or former director, officer, employee, or independent
contractor of LIN or any of its subsidiaries, (ii) increase any
benefits otherwise payable under any LIN Benefit Plan, or (iii) result
in the acceleration of the time of payment or vesting of any such
compensation or benefits. Except as
23
disclosed in the LIN Disclosure Letter, LIN and its subsidiaries have
no obligation or accrued liability in respect of post-retirement health
or life benefits for their employees, except for coverage required by
applicable Law.
4.18 Tax Matters. Except as set forth in the LIN Financial Statements,
the LIN Disclosure Letter, or the LIN SEC Documents, (i) LIN and each of its
subsidiaries have timely filed with the appropriate taxing authorities all
material Tax Returns required to be filed through the date hereof and will
timely file any such material Tax Returns required to be filed on or prior to
the Closing Date (except those under valid extension) and all such Tax Returns
are and will be true and correct in all material respects, (ii) all Taxes of LIN
and each of its subsidiaries shown to be due on the Tax Returns described in
clause (i) above have been or will be timely paid or adequately reserved for in
accordance with GAAP (except to the extent that such Taxes are being contested
in good faith), (iii) no material deficiencies for any Taxes have been proposed,
asserted, or assessed against LIN or any of its subsidiaries that have not been
fully paid or adequately provided for in the appropriate financial statements of
LIN and its subsidiaries, and no power of attorney in respect of any Taxes has
been executed or filed with any taxing authority and no material issues relating
to Taxes have been raised in writing by any Governmental Entity during any
presently pending audit or examination, (iv) LIN and its subsidiaries are not
now subject to audit by any taxing authority and no waivers of statutes of
limitation in respect of the Tax Returns have been given by or requested in
writing from LIN or any of its subsidiaries, (v) there are no material liens for
Taxes (other than for Taxes not yet due and payable) on any assets of LIN or any
of its subsidiaries, (vi) neither LIN nor any of its subsidiaries is a party to
or bound by (nor will any of them become a party to or bound by) any tax
indemnity, tax sharing, tax allocation agreement, or similar agreement,
arrangement, or practice in respect of Taxes, (vii) neither LIN nor any of its
subsidiaries has ever been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code, other than the affiliated group
of which LIN is the common parent, (viii) neither LIN nor any of its
subsidiaries has filed a consent pursuant to the collapsible corporation
provisions of Section 341(f) of the Code (or any corresponding provision of
state or local Law) or agreed to have Section 341(f)(2) of the Code (or any
corresponding provisions of state or local Law) apply to any disposition of any
asset owned by LIN or any of its subsidiaries, as the case may be, (ix) neither
LIN nor any of its subsidiaries has agreed to make, nor is any required to make,
any adjustment under Section 481(a) of the Code or any similar provision of
state, local, or foreign Law by reason of a change in accounting method or
otherwise, (x) LIN and its subsidiaries have complied in all material respects
with all applicable Laws relating to withholding of Taxes, and (xi) no property
owned by LIN or any of its subsidiaries: (A) is property required to be treated
as being owned by another person pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986; (B) constitutes "tax exempt use
property" within the meaning of Section 168(h)(l) of the Code; or (C) is tax
exempt bond financed property within the meaning of Section 168(g) of the Code.
4.19 Intellectual Property. Except as set forth in the LIN Disclosure
Letter or the LIN SEC Documents and except to the extent that the inaccuracy of
any of the following (or the circumstances giving rise to such inaccuracy),
individually or in the aggregate, could not reasonably be expected to have a LIN
Material Adverse Effect: (i) LIN and each of its subsidiaries owns, or is
licensed to use (in each case, free and clear of any Liens), all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted; (ii) the use of any Intellectual Property by LIN and its subsidiaries
does not infringe on or otherwise violate the rights of any person and is in
accordance with any applicable license pursuant to which LIN or any subsidiary
acquired the right to use any Intellectual Property; and (iii) to the knowledge
of LIN, no person is challenging, infringing on, or otherwise violating any
right of LIN or any of its subsidiaries in respect of any Intellectual Property
owned by and/or licensed to LIN or its subsidiaries; (iv) neither LIN nor any of
its subsidiaries has received any written notice of any pending claim in respect
of any Intellectual Property used by LIN and its subsidiaries and to its
knowledge no Intellectual Property owned and/or licensed by LIN or its
subsidiaries is being used or enforced in a
24
manner that would result in the abandonment, cancellation, or unenforceability
of such Intellectual Property.
4.20 Environmental Matters. Except as disclosed in the LIN SEC
Documents or in the LIN Disclosure Letter and except as could not reasonably be
expected to have a LIN Material Adverse Effect (i) the operations of LIN and its
subsidiaries have been and are in compliance with all Environmental Laws and
with all Permits required by Environmental Laws, (ii) there are no pending or,
to the knowledge of LIN, threatened, actions, suits, claims, investigations, or
other proceedings under or pursuant to Environmental Laws against LIN or its
subsidiaries or involving any real property currently or, to the knowledge of
LIN, formerly owned, operated, used, or leased by LIN or its subsidiaries, (iii)
LIN and its subsidiaries are not subject to any Environmental Liabilities, and,
to the knowledge of LIN, no facts, circumstances, or conditions relating to,
arising from, associated with, or attributable to any real property currently
or, to the knowledge of LIN, formerly owned, operated, used, or leased by LIN or
its subsidiaries or operations thereon that could reasonably be expected to
result in Environmental Liabilities, (iv) all real property owned and to the
knowledge of LIN all real property operated, used, or leased by LIN or its
subsidiaries is free of contamination from Hazardous Material in violation of
the Environmental Laws, and (v) there is not now, nor, to the knowledge of LIN,
has there been in the past, on, in or under any real property owned, leased,
used, or operated by LIN or any of its predecessors (A) any underground storage
tanks, above-ground storage tanks, dikes, or impoundments containing Hazardous
Materials, (B) any asbestos-containing materials, (C) any polychlorinated
biphenyls, or (D) any radioactive substances.
4.21 Real Property. The LIN Disclosure Letter contains a list of the
material real property owned or leased by LIN or its subsidiaries. LIN or one of
its subsidiaries has good and marketable title in fee simple to all real
property owned by any of them and a good leasehold interest in the real property
leased by any of them, free and clear of all Liens other than (i) liens for
current taxes, payment of which are not yet delinquent, (ii) such imperfections
in title and easements and encumbrances, if any, as are not substantial in
character, amount, or extent and do not materially detract from the value, or
interfere with the present use of the property subject thereto or affected
thereby, or materially impair LIN's business operations, (iii) as disclosed in
the LIN SEC Documents, (iv) those reflected or reserved against in the LIN
Financial Statements, and (v) Liens arising under the senior credit facility of
LIN Holdings Corp. and LIN Television Corporation, and except for such matters
that, individually or in the aggregate, could not reasonably be expected to have
a LIN Material Adverse Effect.
4.22 New LIN Common Stock. The shares of New LIN Common Stock to be
issued in connection with the Merger will be, upon issuance, duly authorized,
validly issued, fully paid, and nonassessable. The shares of New LIN Common
Stock to be issued upon the exercise of the Assumed Stock Options and Assumed
Warrants will, on the Closing Date, be validly reserved for issuance and, upon
exercise of the Assumed Stock Options and/or Assumed Warrants, as the case may
be, and delivery of the exercise price thereof in accordance with the terms of
the 2002 Sunrise Stock Option Plan, the Sunrise Warrants, or agreements pursuant
to which such Assumed Stock Option or Assumed Warrants were issued, will be duly
authorized, validly issued, fully paid and nonassessable.
4.23 No Other Representations and Warranties. Except for the
representations and warranties made by LIN as expressly set forth in this
Agreement or in any certificate or document delivered pursuant this Agreement,
neither LIN nor any of its affiliates has made and shall not be construed as
having made to Sunrise or any of its affiliates any representation or warranty
of any kind.
25
ARTICLE V
Certain Covenants
5.1 Access to Information. Upon reasonable notice, each of LIN and
Sunrise shall, and shall cause each of its respective subsidiaries to, afford to
the other parties hereto and to their respective officers, employees, counsel,
financial advisors, and other representatives ("Representatives") reasonable
access during normal business hours during the period prior to the Effective
Time to all its properties, books, contracts, commitments, personnel, and
records and, during such period, each of LIN and Sunrise shall, and shall cause
each of its respective subsidiaries to, furnish as promptly as practicable to
the other party hereto such information concerning its business, properties,
financial condition, operations, and personnel as such party may from time to
time reasonably request.
5.2 Confidentiality. Until the earlier to occur of (i) two years after
the date hereof and (ii) the Effective Time, each of LIN and Sunrise will not,
and will cause its Representatives not to, disclose any nonpublic information
obtained from Sunrise or LIN, as the case may be, to any other person (other
than to its Representatives in connection with the evaluation of the
transactions contemplated hereby), in whole or in part, except as required by
applicable Law or the rules and regulations of any national stock exchange to
the extent applicable to them. Prior to the Effective Time, neither party hereto
will use any of such nonpublic information to directly or indirectly divert or
attempt to divert any business, customer, or employee of the other.
5.3 Public Announcements. Each of LIN and Sunrise will consult with the
other before issuing, and will provide each other the opportunity to review and
comment upon, any press release or other public statements in respect of the
transactions contemplated hereby (including the Merger), and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable Law, court process, or by obligations
pursuant to rules and regulations of any national securities exchange to the
extent applicable to them.
5.4 Consents, Approvals, and Filings. LIN and Sunrise will make and
cause their respective subsidiaries and, to the extent necessary, their other
affiliates to make all necessary filings, including those required under the HSR
Act, the Securities Act, the Exchange Act, and the Communications Act (including
filing an application with the FCC for the transfer of control of the Sunrise
FCC Licenses, which the parties shall file as soon as reasonably practicable
after the date hereof), in order to facilitate the prompt consummation of the
Merger and the other transactions contemplated hereby. In addition, each of LIN
and Sunrise will use its best efforts, and will cooperate fully and in good
faith with each other, to (i) comply as promptly as practicable with all
governmental requirements applicable to the Merger and the other transactions
contemplated hereby, and (ii) obtain as promptly as practicable all necessary
Permits, Orders, or other consents of Governmental Entities and consents of all
third parties necessary for the consummation of the Merger and the other
transactions contemplated hereby, including the consent of the FCC to the
transfer of control of the Sunrise FCC Licenses. Each of LIN and Sunrise shall
use its best efforts to promptly provide such information and communications to
Governmental Entities as such Governmental Entities may reasonably request. Each
of the parties hereto shall provide to the other party copies of all
applications in advance of filing or submission of such applications to
Governmental Entities in connection with this Agreement and shall make such
revisions thereto as reasonably requested by the other party. Each of the
parties hereto shall provide to the other party the opportunity to participate
in all meetings and material conversations with Governmental Entities in respect
of the matters contemplated hereby.
5.5 Indemnification; Insurance. From and after the Effective Time, the
Surviving Corporation shall, to the fullest extent permitted by applicable Law,
indemnify, defend, and hold harmless each person who is now, or has been at any
time prior to the date hereof, or who becomes prior to the
26
Effective Time, a director, officer, holder of Sunrise Class A Common Stock
("Class A Holder"), or employee of Sunrise or any of its subsidiaries
(collectively, the "Indemnified Parties") against all losses, expenses
(including, reasonable attorneys' fees and expenses), claims, damages, or
liabilities or, subject to the proviso of the next succeeding sentence, amounts
paid in settlement, arising out of actions or omissions occurring at, or prior
to the Effective Time and whether asserted or claimed prior to, at, or after the
Effective Time that (i) in respect of any Indemnified Party (other than in his
capacity as a Class A Holder), are in whole or in part (A) based on or arising
out of the fact that such person is or was a director, officer, or employee of
Sunrise or one of its subsidiaries or (B) based on, arising out of, or
pertaining to the transactions contemplated hereby and (ii) in respect of any
Indemnified Party in his capacity as a Class A Holder, solely based on, arising
out of, or pertaining to the transactions contemplated hereby. The provisions
contained in the Second Amended and Restated Charter and the articles or
certificates of incorporation and bylaws of each of Sunrise's subsidiaries in
respect of indemnification shall not be amended, repealed, or otherwise modified
in any manner that would adversely affect the rights thereunder of any
Indemnified Party. For a period of six years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the policies of
directors' and officers' liability insurance maintained by Sunrise for the
benefit of those persons who are covered by such policies at the Effective Time
(or the Surviving Corporation may substitute therefor policies of at least the
same coverage in respect of matters occurring prior to the Effective Time), to
the extent that such liability insurance can be maintained annually at a cost to
the Surviving Corporation not greater than 250% of the premium for Sunrise's
current directors' and officers' liability insurance; provided, however, that if
such insurance cannot be so maintained or obtained at such costs, the Surviving
Corporation shall maintain or obtain as much of such insurance as can be so
maintained or obtained at a cost equal to 250% of the current annual premiums of
Sunrise for such insurance. Notwithstanding any other provision of this
Agreement to the contrary, the obligations of the Surviving Corporation
contained in this Section 5.5 shall be binding upon the successors and assigns
of the Surviving Corporation. If the Surviving Corporation or any successors or
assigns shall consolidate with or merge into any other person and shall not be
the continuing or surviving person of such consolidation or merger or shall
transfer all or substantially all of its assets to any person, then and in each
case, proper provision shall be made so that the successors and assigns of the
Surviving Corporation shall assume the obligations set forth in this Section
5.5. The obligations of the Surviving Corporation under this Section 5.5 shall
survive the consummation of the Merger and shall not be terminated or modified
in such a manner as to adversely affect any Indemnified Party to whom this
Section 5.5 applies without the prior written consent of such affected
Indemnified Party. This Section 5.5 is intended to be for the benefit of, and
shall be enforceable by, each Indemnified Party and their respective heirs and
representatives.
5.6 Schedule Updates. During the period from the date hereof until the
Effective Time, each of LIN and Sunrise shall promptly notify the other in
writing of: (i) the discovery by such party (or any of its subsidiaries) of any
event, condition, fact, or circumstance that occurred or existed on or prior to
date hereof and that caused or constitutes a breach of any representation or
warranty made by such party in this Agreement; (ii) any event, condition, fact,
or circumstance that occurs, arises, or exists after the date hereof and that
would cause or constitute a breach of any representation or warranty made by the
such party in this Agreement if (A) such representation or warranty had been
made as of the time of the occurrence, existence, or discovery of such event,
condition, fact, or circumstance or (B) such event, condition, fact, or
circumstance had occurred, arisen, or existed on or prior to date hereof; and
(iii) any breach of any covenant or obligation by such party. During the period
from the date hereof until the Effective Time, each party shall promptly notify
the other in writing of the of the occurrence of (y) any fact or condition
arising under this Section 5.5(a)(i) through (iii) or (z) any event that may
make the satisfaction of the conditions set forth in Article VII impossible or
unlikely; provided, however, that any such notice under this Section 5.6 shall
not be deemed to amend, supplement, or otherwise modify the representations,
warranties, covenants, or obligations of such party under this Agreement.
Notwithstanding any other provision of this Agreement to the contrary, in the
event that (i) LIN shall
27
update the LIN Disclosure Letter in respect of the consummation of the
transactions contemplated by the Asset Purchase Agreement, dated as of January
25, 2002, between LIN Television Corporation and Super Towers, Inc. relating to
LIN's sale of WNAC-TV, such updates shall not be deemed to constitute a breach
of any representation or warranty of LIN contained in Article IV, or (ii)
Sunrise shall update the Sunrise Disclosure Letter in respect of the
consummation of the transactions contemplated by the Asset Purchase Agreement
dated as of February 8, 2002, among STC, STC License Company, and Xxxxx
Television of North Dakota, Inc., and Xxxxx Television of North Dakota License
Holdings, Inc. or any subsequent agreement relating to Sunrise's sale of
KVLY-TV, KRYR-TV, KMOT-TV, KUMV-TV, and KQCD-TV, such updates shall not be
deemed to constitute a breach of any representation or warranty of Sunrise
contained in Article III.
5.7 Registration Rights. At the Closing, LIN shall enter into the
Registration Rights Agreement in substantially the form attached hereto as
EXHIBIT C, pursuant to which LIN will grant to the former stockholders of
Sunrise certain registration rights in respect of the shares of New LIN Common
Stock that such former stockholders will receive in the Merger. This Section 5.7
is intended to be for the benefit of, and shall be enforceable by, each the
former stockholders of Sunrise and their respective heirs and representatives.
ARTICLE VI
Covenants Relating to the Conduct of the Sunrise Business
6.1 Conduct of the Business.
(a) Except as expressly contemplated by this Agreement, during
the period from the date hereof to the Effective Time, Sunrise shall,
and shall cause its subsidiaries to, act and carry on their respective
businesses in the ordinary course of business and, to the extent
consistent therewith, use reasonable efforts to preserve intact their
current business organizations, keep available the services of their
current officers and employees and preserve the goodwill of those
engaged in material business relationships with them.
(b) Without limiting the generality of Section 6.1(a), during
the period from the date hereof to the Effective Time and except as
contemplated by this Agreement or as set forth in the Sunrise
Disclosure Letter, Sunrise shall not, and shall not permit any of its
subsidiaries to, without the prior consent of LIN (which shall not be
unreasonably conditioned, delayed, or withheld):
(i) (A) declare, set aside, or pay any dividends on,
or make any other distributions (whether in cash, stock, or
property) in respect of, any of its or its subsidiaries'
outstanding capital stock (except dividends and distributions
by a direct or indirect wholly-owned subsidiary of Sunrise to
its parent and other than dividends or distributions in
respect of the Series A 14% Redeemable Preferred Stock or the
Series B 14% Redeemable Preferred Stock, par value $0.01 per
share, of STC), (B) split, combine, or reclassify any of its
outstanding capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of, or in
substitution for shares of its outstanding capital stock, (C)
except in connection with the termination of the employment of
any employees, purchase, redeem, or otherwise acquire any
shares of outstanding capital stock or any rights, warrants,
or options to acquire any such shares, or (D) issue, sell,
grant, pledge, or otherwise encumber any shares of its capital
stock, any other equity securities or any securities
convertible into, or any rights, warrants, or options to
acquire, any such shares, equity securities, or convertible
securities (other than (1) upon the exercise of Sunrise Stock
Options outstanding on the date hereof, (2) pursuant to
28
employment agreements or other contractual arrangements in
effect on the date hereof, and (3) issuances of stock of any
direct or indirect wholly-owned subsidiary of Sunrise to its
parent);
(ii) amend its Certificate of Incorporation, Bylaws,
or other comparable charter or organizational documents;
(iii) acquire any business (including the assets
thereof) or any corporation, partnership, joint venture,
association, or other business organization or division
thereof;
(iv) sell, mortgage, or otherwise encumber or subject
to any Lien or otherwise dispose of any of its assets or
properties that are material to Sunrise and its subsidiaries,
taken as whole other than to LIN and its subsidiaries, other
than as contemplated by Section 7.1(e);
(v) (A) other than working capital borrowings in the
ordinary course of business and consistent with past
practices, incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, other than
indebtedness owing to or guarantees of indebtedness owing to
Sunrise or any of its direct or indirect wholly-owned
subsidiaries, or (B) make any material loans or advances to
any other person, other than to Sunrise or any of its direct
or indirect wholly-owned subsidiaries and other than routine
advances to employees consistent with past practices;
(vi) consummate or enter into any agreement or plan
that contemplates the merger, interest exchange, conversion,
combination or sale of the capital stock, of Sunrise or any of
its subsidiaries with or into any other person, other than as
contemplated hereby;
(vii) in respect of the Asset Purchase Agreement
dated as of February 8, 2002, among STC, STC License Company,
Xxxxx Television of North Dakota, Inc., and Xxxxx Television
of North Dakota License Holdings, Inc. decrease the amount of
cash consideration provided therein or extend the timing of
payment thereof; or
(viii) authorize any of, or commit or agree to take
any of, the foregoing actions.
(c) Notwithstanding any other provision of this Section 6.1 to
the contrary, in no event shall Sunrise be deemed to have breached this
Section 6.1 as a result of any act or failure to act taken or not taken
by the LIN Television Corporation on behalf of Sunrise or its
subsidiaries, pursuant to the Management Services Agreement dated as of
January 7, 2002, among, Sunrise, STC, STC License Company, and LIN
Television Corporation.
6.2 Second Amended and Restated Charter. Prior to the Effective Time,
LIN shall file or cause to be filed the Second Amended and Restated Charter with
the Secretary of State of the State of Delaware.
6.3 Other Actions. From and after the date hereof, neither LIN nor
Sunrise shall, and neither of them shall permit any of their respective
subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the conditions of the Merger set forth in Article
VII not being satisfied.
29
ARTICLE VII
Conditions Precedent
7.1 Conditions to Obligations of Each Party. The respective obligation
of each party hereto to effect the Merger is subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(a) Stockholder Approval. The Sunrise Stockholders Approval
and LIN Stockholders Approval shall have been obtained in accordance
with the requirements of the DGCL.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated
or shall have otherwise expired.
(c) Required Consents. All required consents, approvals,
permits, and authorizations to the consummation of the Merger shall be
obtained from each Governmental Entity (other than the FCC) and other
third person whose consent, approval, permission, or authorization is
required, unless the failure to obtain such consent, approval,
permission, or authorization could not reasonably be expected to have a
Sunrise Material Adverse Effect, or to materially and adversely affect
the validity or enforceability of this Agreement or the Merger;
provided, however, that all Material Consents shall be obtained.
(d) No Injunction. No injunction, restraining order, or decree
of any Governmental Entity of competent jurisdiction shall be in effect
that restrains or prohibits the transactions contemplated hereby.
(e) Sale of North Dakota Stations. The transactions
contemplated by the Asset Purchase Agreement dated as of February 8,
2002, among STC and STC License Company, as sellers, and Xxxxx
Television of North Dakota, Inc. and Xxxxx Television of North Dakota
License Holdings, Inc., as purchasers, shall have been consummated.
(f) Payoff of Credit Agreement. All indebtedness under the
Amended and Restated Credit Agreement dated as of June 2, 1998, among
Sunrise, STC, JPMorgan Chase Bank, as administrative agent, Bank of
America, N.A., as documentation agent, and Citicorp USA, Inc., as
syndication agent, as amended (the "Credit Agreement"), shall be
discharged in full.
7.2 Conditions to the Obligations of Sunrise. The obligation of Sunrise
to effect the Merger is further subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of LIN contained in this Agreement shall have been true and
correct as of the date hereof and shall be true and correct at and as
of the Closing Date as though made at and as of such time (except to
the extent that any such representations and warranties expressly
relate only to an earlier time, in which case they shall have been true
and correct at such earlier time); provided, however, that this
condition shall be deemed to have been satisfied unless the individual
or aggregate impact of all inaccuracies of such representations and
warranties (without regard to any materiality or LIN Material Adverse
Effect qualifier(s) contained therein) could reasonably be expected to
have a material adverse effect on the business, properties, results of
operations, or condition (financial or otherwise) of LIN and its
subsidiaries, considered as a whole, and except to the extent that any
inaccuracies of such representations and warranties are a result of
changes in the United States financial markets generally or in
national, regional, or local economic conditions generally, or are
30
a result of matters arising after the date hereof that affect the
television or broadcast industry generally. LIN shall have delivered to
Sunrise a certificate dated as of the Closing Date, signed by a senior
executive officer of LIN, to the effect set forth in this Section
7.2(a).
(b) Performance of Obligations of LIN. LIN shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date
and Sunrise shall have received a certificate signed by a senior
executive officers of LIN to such effect.
(c) Opinion of Financial Advisor. The Board of Directors of
Sunrise shall have received the opinion of BNY Capital Markets, Inc. to
the effect that the Merger is fair, from a financial point of view, to
the holders of Sunrise Common Stock.
(d) FCC Order. The FCC shall have issued an order approving
the transfers of control pursuant to the Merger of the Sunrise FCC
Licenses for the operation of the Sunrise Licensed Facilities (the "FCC
Order").
(e) FCC Opinion. LIN shall have delivered to Sunrise an
opinion of LIN counsel, dated as of the Closing Date, in a form
reasonably acceptable to Sunrise, to the effect that, to the counsel's
knowledge, (i) the LIN FCC Licenses are in full force and effect and
are for the full term customarily issued to television stations
licensed to the states where they are located, (ii) LIN or one of its
subsidiaries is the holder thereof, (iii) based upon counsel's
knowledge and information in routinely available FCC records related to
the LIN Licensed Facilities there is no circumstance that would cause
such LIN FCC Licenses, subject to the filing of timely license renewals
and payment of any applicable filing and regulatory fees, to not be
renewed in the ordinary course, and (iv) there is no pending
proceedings or challenges effecting or challenging the validity of any
LIN FCC License or the transfer of control contemplated by this
Agreement (other than proceedings applicable to the broadcast industry
generally).
7.3 Conditions to Obligations of LIN. The obligations of LIN to effect
the Merger is further subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of Sunrise contained in this Agreement shall have been true
and correct as of the date hereof and shall be true and correct at and
as of the Closing Date as though made at and as of such time (except to
the extent that any such representations and warranties expressly
relate only to an earlier time, in which case they shall have been true
and correct at such earlier time); provided, however, that this
condition shall be deemed to have been satisfied unless the individual
or aggregate impact of all inaccuracies of such representations and
warranties (without regard to any materiality or Sunrise Material
Adverse Effect qualifier(s) contained therein) could reasonably be
expected to have a material adverse effect on the business, properties,
results of operations, or condition (financial or otherwise) of Sunrise
(or, after the Effective Time, the Surviving Corporation) and its
subsidiaries, considered as a whole, and except to the extent that any
inaccuracies of such representations and warranties are a result of
changes in the United States financial markets generally or in
national, regional, or local economic conditions generally, or are a
result of matters arising after the date hereof that affect the
television or broadcast industry generally. Sunrise shall have
delivered to LIN a certificate dated as of the Closing Date, signed by
a senior executive officer of Sunrise, to the effect set forth in this
Section 7.3(a).
(b) Performance of Obligations of Sunrise. Sunrise shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to
31
the Closing Date, and LIN shall have received a certificate signed by a
senior executive officer of Sunrise to such effect.
(c) Opinion of Financial Advisor. The Board of Directors of
LIN shall have received the opinion of Xxxxxx Xxxxxxx to the effect
that the Merger is fair, from a financial point of view, to the
stockholders of LIN.
(d) FCC Order. The FCC shall have issued the FCC Order without
the imposition of any conditions or restrictions that could reasonably
be expected to have a Sunrise Material Adverse Effect or a material
adverse effect on the business, properties, results of operations, or
condition (financial or otherwise) of the Surviving Corporation, and
which FCC Order has not been reversed, stayed, enjoined, set aside, or
suspended and in respect of which no timely request for stay, petition
for reconsideration, or appeal has been filed and as to which the time
for the filing of any such appeal or request for reconsideration or for
any sua sponte action by the FCC in respect of the FCC Order has
expired, or, in the event that such a filing or review sua sponte has
occurred, as to which such filing or review shall have been disposed of
favorably to the grant of the FCC Order and the time for seeking
further relief in respect thereof shall have expired without any
request for such further relief having been filed or review initiated.
(e) FCC Opinion. Sunrise shall have delivered to LIN an
opinion of Sunrise counsel, dated as of the Closing Date, in a form
reasonably acceptable to LIN, to the effect that, to counsel's
knowledge, (i) the Sunrise FCC Licenses are in full force and effect
and are for the full term customarily issued to television stations
licensed to the states where they are located, (ii) Sunrise or one of
its subsidiaries is the holder thereof, (iii) based upon counsel's
knowledge and information in routinely available FCC records related to
the Sunrise Licensed Facilities there is no circumstance that would
cause such Sunrise FCC Licenses, subject to the filing of timely
license renewals and payment of any applicable filing and regulatory
fees, to not be renewed in the ordinary course, and (iv) there is no
pending proceedings or challenges effecting or challenging the validity
of any Sunrise FCC License or the transfer of control contemplated by
this Agreement (other than proceedings applicable to the broadcast
industry generally).
(f) Termination of Advisory Agreements. Sunrise shall have
delivered to LIN evidence of the termination of (i) the Monitoring and
Oversight Agreement dated as of February 28, 1997, among Sunrise, STC,
and Xxxxx, Muse & Co. Partners, L.P., as amended by the First Amendment
to Monitoring and Oversight Agreement dated as of January 7, 2002,
among Sunrise, STC, and Xxxxx, Muse & Co. Partners, L.P., and (ii) the
Financial Advisory Agreement dated as of February 28, 1997, among
Sunrise, STC, and Xxxxx, Muse & Co. Partners L.P.
ARTICLE VIII
Termination
8.1 Termination. This Agreement may be terminated and the Merger
abandoned as follows:
(a) at any time prior to the Effective Time, whether before or
after receipt of the LIN Stockholders Approval or the Sunrise
Stockholders Approval, by mutual written consent of LIN and Sunrise;
(b) at any time prior to the Effective Time, whether before or
after receipt of the LIN Stockholders Approval or the Sunrise
Stockholders Approval:
32
(i) by LIN or Sunrise if the Merger shall not have
been consummated on or before February 19, 2003, unless the
failure to consummate the Merger is the result of a willful
and material breach of this Agreement by the party seeking to
terminate this Agreement;
(ii) by LIN or Sunrise if any Governmental Entity
shall have issued an Order or taken any other action
permanently enjoining, restraining, or otherwise prohibiting
the Merger and such Order or other action shall have become
final and nonappealable;
(iii) by LIN or Sunrise in the event of a breach by
the other party of any representation, warranty, covenant, or
other agreement contained herein that (A) would give rise to
the failure of a condition set forth in Section 7.2(a) or
7.2(b) or Section 7.3(a) or 7.3(b), as applicable, and (B)
cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party of such breach
(a "Material Breach"), provided, however, that the terminating
party is not then in Material Breach of any representation,
warranty, covenant, or other agreement contained herein; and
8.2 Effect of Termination. Except for this Section 8.2 and Sections
3.11, 4.11, 5.2, and 9.5 which shall survive any termination of this Agreement,
upon the termination of this Agreement pursuant to Section 8.1, this Agreement
shall become null and void and of no further force and effect and all
obligations of the parties hereto shall terminate and there shall be no
liability or obligation of any party hereto.
ARTICLE IX
Miscellaneous
9.1 Amendments and Waivers. Any provision of this Agreement may be
amended or waived prior to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by LIN and Sunrise
or in the case of a waiver, by the party against whom the waiver is to be
effective; provided, however, that after obtaining the Sunrise Stockholders
Approval, no such amendment or waiver shall, without again obtaining the Sunrise
Stockholders Approval, alter or change (i) the amount or kind of consideration
to be received in exchange for any shares of capital stock of Sunrise, (ii) any
term of the Second Amended and Restated Charter, or (iii) any of the terms or
conditions of this Agreement if such alteration or change would adversely affect
the holders of capital stock of Sunrise. No failure or delay by any party hereto
in exercising any right, power, or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege.
9.2 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such assignment that is
not consented to shall be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by,
the parties and their respective successors and assigns.
9.3 Construction. The headings used in this Agreement have been
inserted for convenience and do not constitute matter to be construed or
interpreted in connection with this Agreement. Unless the context of this
Agreement otherwise requires, (i) words of any gender are deemed to include each
other gender; (ii) words using the singular or plural number also include the
plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby," "hereto," and derivative or similar words refer to this entire
Agreement; (iv) the terms "Article" or "Section" refer to the specified Article
or Section of this Agreement; (v) all references to "dollars" or "$" refer to
currency of the United States of America;
33
(vi) "person" means any natural person, corporation, limited liability company,
general partnership, limited partnership, or other entity, enterprise,
authority, or business organization; (vii) the term "or" is not exclusive; and
(viii) "include," "including," and their derivatives mean "including without
limitation."
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the
other parties.
9.5 Entire Agreement. Except for the documents executed by LIN and
Sunrise pursuant hereto, this Agreement supersedes all prior discussions and
agreements between the parties hereto in respect of the subject matter hereof,
and this Agreement (including the exhibits hereto and other documents delivered
in connection herewith) contains the sole and entire agreement between the
parties hereto in respect of the subject matter hereof.
9.6 Expenses. Except as provided in Section 8.2, whether or not the
Merger is consummated, each of LIN and Sunrise will pay its own costs and
expenses incident to preparing for, entering into, and carrying out this
Agreement and the consummation of the transactions contemplated hereby;
provided, however, that the fees and expenses incurred in connection with (i)
the filings and registrations with the Department of Justice and the Federal
Trade Commission pursuant to the HSR Act and (ii) the filings with the FCC under
the Communications Act, shall be borne equally by LIN and Sunrise. In the event
of any lawsuit or other judicial proceeding brought by either party to enforce
any provision of this Agreement, the losing party in such proceeding shall
reimburse the prevailing party's fees and expenses incurred in connection
therewith, including the fees and expenses of its attorneys.
9.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
9.8 Notices. Any notice, request, demand, or other communication
required or permitted to be given hereunder by any party hereto to any other
party shall be in writing and delivered (i) in person, (ii) by a nationally
recognized overnight courier service requiring acknowledgment of receipt of
delivery, (iii) by United States certified mail, postage prepaid and return
receipt requested, or (iv) by facsimile, as follows:
If to LIN, to:
LIN TV Corp.
One Richmond Square, Suite 230E
Providence, Rhode Island 02906
Attention: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
with copies to (which shall not constitute notice):
LIN Television Corporation
Four Richmond Square
Providence, Rhode Island 02906
Attention: General Counsel
Facsimile: (000) 000-0000
34
-and-
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx Xx.
Facsimile: (000) 000-0000
If to Sunrise, to the independent directors of Sunrise's board
of directors:
Dr. Xxxxxxx Xxxxxxxxxx
University of Texas at Austin
X.X. Xxx X
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
-and-
Xxxxxxx X. Xxxxxxxx, Xx.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
with a copy to (which shall not constitute notice):
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
Notice shall be deemed given, received, and effective on: (i) if given
by personal delivery or courier service, the date of actual receipt by the
receiving party, or if delivery is refused on the date delivery was first
attempted; (ii) if given by certified mail, the third day after being so mailed
if posted with the United States Postal Service; and (iii) if given by
facsimile, the date on which the facsimile is transmitted if confirmed by
transmission report during the transmitter's normal business hours, or at the
beginning of the next business day after transmission if confirmed at any time
other than the transmitter's normal business hours. Any person entitled to
notice may change any address or facsimile number to which notice is to be given
to it by giving notice of such change of address or facsimile number as provided
in this Section 9.8.
9.9 No Recourse. No past, present, or future director, officer,
employee, stockholder, incorporator, or partner, as such, of LIN, Sunrise, or
the Surviving Corporation shall have any liability for any obligations of LIN,
Sunrise, or the Surviving Corporation under this Agreement or for any claim
based on, in respect of or by reason of such obligations or their creation.
9.10 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under any present or future Law, and if the
rights or obligations of LIN or Sunrise under this Agreement will not be
materially and adversely affected thereby: (i) such provision will be fully
severable; (ii) this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part hereof;
and (iii) the remaining provisions of this Agreement will
35
remain in full force and effect and will not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom.
9.11 No Survival. The representations and warranties of LIN and Sunrise
made in this Agreement, or in any certificate, respectively, delivered by any of
them pursuant to this Agreement, will not survive the Closing.
9.12 No Third-Party Beneficiaries. Except as otherwise expressly
provided in Sections 5.5 and 5.7, the terms and provisions of this Agreement are
intended solely for the benefit of the parties hereto (including their
respective Boards of Directors), and their respective successors or assigns, and
it is not the intention of the parties to confer third-party beneficiary rights
upon any other person.
* * * * *
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
36
EXECUTION COPY
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of LIN and Sunrise effective as of the date
first written above.
LIN TV CORP.
By: /s/ XXXX X. XXXXXXX
----------------------------------
Xxxx X. Xxxxxxx
Chairman of the Board,
President and Chief Executive
Officer
SUNRISE TELEVISION CORP.
By: /s/ XXXXX X. XXXX
----------------------------------
Xxxxx X. Xxxx
Executive Vice President and
Chief Financial Officer
