Exhibit 2.2
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ASSET EXCHANGE AGREEMENT
Dated as of August 21, 1998
Among
TRIBUNE BROADCASTING COMPANY,
WGNX INC.,
XXXXXXXX CORPORATION
and
KCPQ ACQUISITION CORP.
- 1 -
TABLE OF CONTENTS
ARTICLE I
EXCHANGE OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . -7-
1.1. Transfer of Tribune Station Asset . . . . . . . . . . . . . . -7-
1.2. Excluded Tribune Assets . . . . . . . . . . . . . . . . . . . -8-
1.3. Transfer of Xxxxx Station Assets . . . . . . . . . . . . . . -9-
1.4. Excluded Xxxxxxxx Assets . . . . . . . . . . . . . . . . . . -11-
1.5. Assumption of Tribune Station Liabilities . . . . . . . . . . -12-
1.6. Assumption of Xxxxx Station Liabilities . . . . . . . . . . . -14-
1.7. Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . -14-
1.8. Calculation of Estimated Tribune Station Working
Capital Amount and Estimated Xxxxx Station Working
Capital Amount; Adjustment. . . . . . . . . . . . . . . . . . -15-
1.9. Closing Date Deliveries . . . . . . . . . . . . . . . . . . . -15-
1.10. Closing Date Balance Sheets; Adjustment . . . . . . . . . . . -16-
1.11. Further Assurances. . . . . . . . . . . . . . . . . . . . . . -18-
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TRIBUNE AND THE TRIBUNE SUB . . . -19-
2.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . -19-
2.2. Subsidiaries and Investments. . . . . . . . . . . . . . . . . -19-
2.3. Authority of Tribune and the Tribune Sub. . . . . . . . . . . -20-
2.4. Financial Statements. . . . . . . . . . . . . . . . . . . . . -20-
2.5. Operations Since Balance Sheet Date . . . . . . . . . . . . . -21-
2.6. No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . -22-
2.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
2.8. Availability of Assets and Legality of Use. . . . . . . . . . -22-
2.9. Governmental Permits. . . . . . . . . . . . . . . . . . . . . -22-
2.10. Real Property . . . . . . . . . . . . . . . . . . . . . . . . -23-
2.11. Real Property Leases. . . . . . . . . . . . . . . . . . . . . -24-
2.12. Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . -24-
2.13. Personal Property . . . . . . . . . . . . . . . . . . . . . . -24-
2.14. Personal Property Leases. . . . . . . . . . . . . . . . . . . -24-
2.15. Intellectual Property . . . . . . . . . . . . . . . . . . . . -24-
2.16. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . -25-
2.17. Title to Assets . . . . . . . . . . . . . . . . . . . . . . . -25-
2.18. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
2.19. Employee Relations. . . . . . . . . . . . . . . . . . . . . . -25-
2.20. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
2.21. Status of Contracts . . . . . . . . . . . . . . . . . . . . . -26-
2.22. No Violation, Litigation or Regulatory Action . . . . . . . . -27-
2.23. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
2.24. Environmental Protection. . . . . . . . . . . . . . . . . . . -28-
2.25. No Finder . . . . . . . . . . . . . . . . . . . . . . . . . . -28-
2.26. Status of Tribune and the Tribune Sub . . . . . . . . . . . . -28-
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND THE XXXXXXXX SUB . . -29-
3.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . -29-
3.2. Subsidiaries and Investments. . . . . . . . . . . . . . . . . -29-
3.3. Authority of the Xxxxxxxx and the Xxxxxxxx Subs . . . . . . . -29-
3.4. Title to Assets . . . . . . . . . . . . . . . . . . . . . . . -30-
3.5. No Finder . . . . . . . . . . . . . . . . . . . . . . . . . . -30-
3.6. Status of Xxxxxxxx and the Xxxxxxxx Sub . . . . . . . . . . . -30-
ARTICLE IV
ACTION PRIOR TO THE CLOSING DATE. . . . . . . . . . . . . . . . . . -31-
4.1. Investigation of the Tribune Station Business and the Xxxxx
Station Business. . . . . . . . . . . . . . . . . . . . . . . -31-
4.2. Preserve Accuracy of Representations and Warranties . . . . . -31-
4.3. FCC Consent; Improvements Act Approval; Other
Consents and Approvals. . . . . . . . . . . . . . . . . . . . -32-
4.4. Operations of the Tribune Station Prior to the
Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . -33-
4.5. Operations of the Xxxxx Station Prior to the Closing Date . . -34-
4.6. Public Announcement . . . . . . . . . . . . . . . . . . . . . -34-
4.7. Interim Financial Statements. . . . . . . . . . . . . . . . . -35-
4.8. Rights of Xxxxxxxx Under Xxxxx Merger Agreement . . . . . . . -35-
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . -35-
5.1. Taxes; Sales, Use and Transfer Taxes; Title Insurance . . . . -35-
5.2. Employees; Employee Benefit Plans . . . . . . . . . . . . . . -36-
5.3. Control of Operations Prior to Closing Date . . . . . . . . . -37-
5.4. Closing of Xxxxx Merger . . . . . . . . . . . . . . . . . . . -38-
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIBUNE AND THE TRIBUNE SUB. -38-
6.1. No Misrepresentation or Breach of Covenants and Warranties. . -38-
6.2. No Restraint or Litigation. . . . . . . . . . . . . . . . . . -39-
6.3. FCC Order . . . . . . . . . . . . . . . . . . . . . . . . . . -39-
6.4. No Material Adverse Change. . . . . . . . . . . . . . . . . . -39-
6.5. Xxxxx Merger. . . . . . . . . . . . . . . . . . . . . . . . . -40-
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXXXX AND THE XXXXXXXX
SUBS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
7.1. No Restraint or Litigation. . . . . . . . . . . . . . . . . . -40-
7.2. FCC Order . . . . . . . . . . . . . . . . . . . . . . . . . . -40-
7.3. Lease Extension . . . . . . . . . . . . . . . . . . . . . . . -40-
7.4. Transmission Interruption . . . . . . . . . . . . . . . . . . -40-
7.5. Xxxxx Merger. . . . . . . . . . . . . . . . . . . . . . . . . -40-
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ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . -41-
8.1. Indemnification by Tribune. . . . . . . . . . . . . . . . . . -41-
8.2. Indemnification by Xxxxxxxx . . . . . . . . . . . . . . . . . -42-
8.3. Notice of Claims. . . . . . . . . . . . . . . . . . . . . . . -43-
8.4. Third Party Claims. . . . . . . . . . . . . . . . . . . . . . -44-
8.5. No Effect on Adjustment . . . . . . . . . . . . . . . . . . . -45-
8.6. Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . . -45-
ARTICLE IX
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . -46-
9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . -46-
ARTICLE X
GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . -46-
10.1. Survival of Representations, Warranties and Obligations . . -46-
10.2. Confidential Nature of Information. . . . . . . . . . . . . -46-
10.3. Governing Law; Venue. . . . . . . . . . . . . . . . . . . . -47-
10.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . -47-
10.5. Successors and Assigns. . . . . . . . . . . . . . . . . . . -48-
10.6. Access to Records after Closing . . . . . . . . . . . . . . -48-
10.7. Entire Agreement; Amendments. . . . . . . . . . . . . . . . -49-
10.8. Interpretation. . . . . . . . . . . . . . . . . . . . . . . -49-
10.9. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . -49-
10.10. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . -49-
10.11. Partial Invalidity. . . . . . . . . . . . . . . . . . . . . -50-
10.12. Execution in Counterparts . . . . . . . . . . . . . . . . . -50-
10.13. Definitions . . . . . . . . . . . . . . . . . . . . . . . . -50-
10.14. Exchange Groups . . . . . . . . . . . . . . . . . . . . . . -55-
10.15. Allocation Schedule . . . . . . . . . . . . . . . . . . . . -56-
10.16. Board Approval. . . . . . . . . . . . . . . . . . . . . . . -56-
Exhibit Description
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A Undertaking and Assumption Relating to the Tribune Station
B Undertaking and Assumption Relating to the Xxxxx Station
C Xxxx of Sale and Assignment Relating to the Tribune Station
D Xxxx of Sale and Assignment Relating to the Xxxxx Station
E Opinion of Counsel for Xxxxxxxx and the Xxxxxxxx Sub
F Opinion of Counsel for Tribune and the Tribune Subs
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Schedule Description
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2.3 -- Tribune Conflicts; Consents
2.4 -- Tribune Station Financial Statements
2.5(A)(B) -- Tribune Station Changes in Operations
2.6 -- Tribune Station Undisclosed Liabilities
2.8 -- Tribune Station Unavailable Assets
2.9(A)(1),
(A)(2),(B) -- Tribune Station Governmental Permits
2.10 -- Tribune Station Real Property
2.11 -- Tribune Station Real Property Leases
2.13 -- Tribune Station Personal Property
2.14 -- Tribune Station Personal Property Leases
2.15 -- Tribune Station Intellectual Property
2.18 -- Tribune Station Employees
2.19(A)(B) -- Tribune Station Employee Relations
2.20 -- Tribune Station Contracts
2.21 -- Status of Tribune Station Contracts
2.22 -- Tribune Station Legal Proceedings
2.24 -- Tribune Station Environmental matters
3.3 -- Exchange Party Conflicts; Consents
4.4(b) -- Conduct of Tribune Station Business
-- Conduct of Exchange Station Business
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ASSET EXCHANGE AGREEMENT
ASSET EXCHANGE AGREEMENT, dated as of August 21, 1998 (this
"Agreement"), among Tribune Broadcasting Company, a Delaware corporation
("Tribune"), WGNX Inc., a Delaware corporation and a wholly-owned subsidiary of
Tribune (the "Tribune Sub"), and Xxxxxxxx Corporation, an Iowa corporation
("Meredith"), and KCPQ Acquisition Corp., a Washington corporation and a
wholly-owned subsidiary of Meredith (the "Meredith Sub").
W I T N E S S E T H :
WHEREAS, the Tribune Sub is engaged in the business of owning and
operating Television Broadcast Station WGNX-TV, Channel 46, in Atlanta, Georgia
(the "Tribune Station");
WHEREAS, Xxxxxxxx and Xxxxxxxx Sub have entered into the Agreement
and Plan of Merger dated as of August 21, 1998 (the "Xxxxx Merger Agreement")
with Xxxxx Television Co., a Washington limited partnership ("KTC"), X.X. Xxxxx
L.L.C., a Delaware limited liability company, X.X. Xxxxx L.L.C., a Delaware
limited liability company, and Xxxxxx X. Xxxxx, a natural person (X.X. Xxxxx,
L.L.C., X.X. Xxxxx, L.L.C. and Xxxxxx X. Xxxxx being referred to collectively
herein as the "Partners");
WHEREAS, upon consummation of the merger (the "Xxxxx Merger") of KTC
with and into Xxxxxxxx Sub pursuant to the Xxxxx Merger Agreement, Meredith Sub
will own and have the right to operate Television Broadcast Station KCPQ-TV,
Channel 13, in Seattle, Washington (the "Xxxxx Station");
WHEREAS, Tribune and Meredith desire that the Tribune Sub transfer to
the Xxxxxxxx Sub substantially all of the assets, properties and business
relating to the Tribune Station in exchange for the transfer by the Xxxxxxxx
Sub to the Tribune Sub of substantially all of the assets, properties and
business relating to the Xxxxx Station owned by the Xxxxxxxx Sub, all on the
terms and subject to the conditions set forth herein; and
WHEREAS, pursuant to the like-kind exchange rules under Treasury
Regulation Section 1.1031(j)-1 covering exchanges of multiple properties,
Tribune and the Tribune Sub desire to structure the transactions contemplated
by this Agreement as like-kind exchanges and Xxxxxxxx and the Xxxxxxxx Sub have
agreed to cooperate therewith.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed among Tribune, the
Tribune Sub, Xxxxxxxx and the Xxxxxxxx Sub as follows:
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ARTICLE I
EXCHANGE OF ASSETS
1.1. Transfer of Tribune Station Assets. Upon the terms and subject
to the conditions of this Agreement, on the Closing Date, the Tribune Sub shall
transfer, assign, convey and deliver to the Xxxxxxxx Sub, and the Xxxxxxxx Sub
shall receive from the Tribune Sub, free and clear of all Encumbrances (except
for Permitted Encumbrances), all of the assets, properties and business
(excepting only the Excluded Tribune Assets) of every kind and description,
wherever located, real, personal or mixed, tangible or intangible, owned or
held by Tribune or the Tribune Sub relating to the Tribune Station and the
business of the Tribune Station (the "Tribune Station Business") as the same
shall exist on the Closing Date (herein collectively referred to as the
"Tribune Station Assets"), including, without limitation, all right, title and
interest of Tribune and the Tribune Sub in, to and under:
(a) All accounts receivable generated by the Tribune Station
Business for periods prior to the Closing Date;
(b) The broadcast licenses for the Tribune Station (including the
right to use the call letters "WGNX") issued by the FCC and all other
assignable Tribune Station Governmental Permits listed in Schedule 2.9(A)(1);
(c) The real property described in Schedule 2.10 and any option,
right or contract to purchase real property described in Schedule 2.10;
(d) The real property leases and leasehold improvements listed or
described in Schedule 2.11;
(e) All machinery, equipment (including computers and office
equipment), auxiliary and translator facilities, transmitting towers,
transmitters, broadcast equipment, antennae, supplies, inventory (including all
films, programs, records, tapes, recordings, compact discs, cassettes, spare
parts and equipment), advertising and promotional materials, engineering plans,
records and data, vehicles, furniture and other personal property owned by
Tribune and the Tribune Sub used in or relating to the Tribune Station,
including, without limitation, the items listed or referred to in Schedule
2.13;
(f) The personal property leases and the personal property leased
thereunder listed in Schedule 2.14;
(g) The trademarks, trade names, service marks and copyrights (and
all goodwill associated therewith), registered or unregistered, owned by
Tribune or the Tribune Sub relating solely to the Tribune Station or the
Tribune Station Business, and the applications for registration thereof and the
patents and applications therefor and the licenses relating to any of the
foregoing including, without limitation, the items listed in Schedule 2.15;
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(h) (i) All contracts for the sale of broadcast time for
advertising or other purposes made in the ordinary course of the Tribune
Station Business and consistent with past practice, (ii) the contracts,
agreements or understandings listed or described in Schedule 2.20 and
designated on such Schedule as an "Assumed Contract" and (iii) any other
contract, agreement or understanding (evidenced in writing) in respect of the
Tribune Station Business which (A) is of the general nature described in
subsection (b), (c) or (h) of Section 2.20 but which, by virtue of its specific
terms, is not required to be listed in Schedule 2.20 or (B) is entered into
after the date hereof consistent with the provisions of Section 4.4 of this
Agreement;
(i) All advertising customer lists, mailing lists, processes, trade
secrets, know-how and other proprietary or confidential information exclusively
used in or relating to the Tribune Station Business;
(j) All rights, claims or causes of action of Tribune or the Tribune
Sub against third parties arising under warranties from manufacturers, vendors
and others in connection with the Tribune Station Assets;
(k) All prepaid rentals and other prepaid expenses (except for
prepaid insurance) arising from payments made in the ordinary course of the
operation of the Tribune Station Business prior to the Closing Date for goods
or services where such goods or services have not been received at the Closing
Date;
(l) All jingles, slogans, commercials and other promotional
materials used in or relating primarily to the Tribune Station or the Tribune
Station Business;
(m) All books and records (including all computer programs used
primarily in connection with the operation of the Tribune Station Business or
the Tribune Station) of Tribune and the Tribune Sub relating to the assets,
properties, business and operations of the Tribune Station Business or the
Tribune Station including, without limitation, all files, logs, programming
information and studies, technical information and engineering data, news and
advertising studies or consulting reports and sales correspondence, but
excluding any books and records (including computer programs) relating
primarily to a business of Tribune unrelated to the Tribune Station Business or
the Tribune Station;
(n) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of the Tribune Sub; and
(o) All other assets or properties not referred to above which are
reflected on the Tribune Station Closing Date Balance Sheet or the Tribune
Station Balance Sheet, except (i) any such assets or properties disposed of
after the Balance Sheet Date in the ordinary course of the Tribune Station
Business and (ii) Excluded Tribune Assets.
1.2. Excluded Tribune Assets. Notwithstanding the foregoing, the
Tribune Station Assets shall not include the following (herein referred to as
the "Excluded Tribune Assets"):
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(a) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of Tribune;
(b) All claims, rights and interests of Tribune or the Tribune Sub
in and to any refunds for federal, state or local franchise, income or other
Taxes or fees of any nature whatsoever for periods prior to the Closing Date;
(c) Any rights, claims or causes of action of Tribune or the Tribune
Sub against third parties relating to the assets, properties, business or
operations of the Tribune Station Business arising out of transactions
occurring prior to the Closing Date, except to the extent and only to the
extent any such claims relate to the Tribune Station Assets;
(d) All bonds held, contracts or policies of insurance and prepaid
insurance with respect to such contracts or policies;
(e) Tribune's and the Tribune Sub's corporate seal, corporate minute
books, stock record books, corporate records relating to incorporation,
corporate Tax returns and related documents and supporting work papers and any
other records and returns relating to Taxes, assessments and similar
governmental levies (other than real and personal property Taxes, assessments
and levies imposed on the Tribune Station Assets);
(f) All records prepared in connection with the transfer of the
Tribune Station, including bids received from others and analyses relating to
the Tribune Station and the Tribune Station Assets;
(g) The contracts, agreements or understandings of Tribune and the
Tribune Sub listed in Schedule 2.20 and designated on such Schedule as a
"Contract Not Assumed";
(h) Any trade name, trademarks, service marks or logos using or
incorporating the names "Tribune", "Tribune Broadcasting", "TBC" or any
variation or derivative thereof;
(i) All records and documents relating to Excluded Tribune Assets or
to liabilities other than Assumed Tribune Station Liabilities;
(j) Tribune's employee benefit agreements, plans or arrangements
listed in Schedule 2.20;
(k) The licenses and permits issued by the FCC listed on Schedule
2.9(A)(2); and
(l) Any rights of Tribune or the Tribune Sub under or pursuant to
this Agreement or the other agreements with Xxxxxxxx or the Xxxxxxxx Sub
contemplated hereby.
1.3. Transfer of Xxxxx Station Assets. Upon the terms and subject
to the conditions of this Agreement, on the Closing Date, the Xxxxxxxx Sub
shall transfer, assign, convey and deliver to the Tribune Sub, and the Tribune
Sub shall receive from the Xxxxxxxx Sub, free and clear of all Encumbrances
- 9 -
(except for Permitted Encumbrances), all of the assets, properties and business
(excepting only the Excluded Xxxxxxxx Assets) of every kind and description,
wherever located, real, personal or mixed, tangible or intangible, owned or
held by Xxxxxxxx or the Xxxxxxxx Sub relating to the Xxxxx Station and the
business of the Xxxxx Station (the "Xxxxx Station Business") as the same shall
exist on the Closing Date (herein collectively called the "Xxxxx Station
Assets"), including, without limitation, any right, title and interest of
Xxxxxxxx and the Xxxxxxxx Sub in, to and under:
(a) All accounts receivable generated by the Xxxxx Station Business
for periods prior to the Closing Date;
(b) The broadcast licenses for the Xxxxx Station (including the
right to use the call letters "KCPQ") issued by the FCC and all other
assignable permits, licenses, franchises, privileges, immunities and other
authorizations (the "Xxxxx Station Governmental Permits") listed in Section
3.11 of the KTC Disclosure Schedule attached to the Xxxxx Merger Agreement (the
"Xxxxx Disclosure Schedule");
(c) The real property described in Section 3.13 of the Xxxxx
Disclosure Schedule and any option, right or contract to purchase real property
described in Section 3.12 of the Xxxxx Disclosure Schedule;
(d) The real property leases and leasehold improvements listed or
described in Section 3.13 of the Xxxxx Disclosure Schedule;
(e) All machinery, equipment (including computers and office
equipment), auxiliary and translator facilities, transmitting towers,
transmitters, broadcast equipment, antennae, supplies, inventory (including all
films, programs, records, tapes, recordings, compact discs, cassettes, spare
parts and equipment), advertising and promotional materials, engineering plans,
records and data, vehicles, furniture and other personal property owned by
Xxxxxxxx and the Xxxxxxxx Sub used in or relating to the Xxxxx Station,
including, without limitation, the items listed or referred to in Section 3.16
of the Xxxxx Disclosure Schedule;
(f) The personal property leases and the personal property leased
thereunder listed in Section 3.17 of the Xxxxx Disclosure Schedule;
(g) The trademarks, trade names, service marks and copyrights (and
all goodwill associated therewith), registered or unregistered, owned by the
Xxxxxxxx or the Xxxxxxxx Sub relating solely to the Xxxxx Station or the Xxxxx
Station Business, and the applications for registration thereof and the patents
and applications therefor and the licenses relating to any of the foregoing
including, without limitation, the items listed in Section 3.18 of the Xxxxx
Disclosure Schedule;
(h) (i) All contracts for the sale of broadcast time for
advertising or other purposes relating to the Xxxxx Station Business, (ii) the
contracts, agreements or understandings listed or described in Section 3.13 of
the Xxxxx Disclosure Schedule and (iii) any other contract, agreement or
understanding (evidenced in writing) in respect of the Xxxxx Station Business;
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(i) All advertising customer lists, mailing lists, processes, trade
secrets, know-how and other proprietary or confidential information exclusively
used in or relating to the Xxxxx Station Business;
(j) All rights, claims or causes of action of Xxxxxxxx or the
Xxxxxxxx Sub against third parties arising under warranties from manufacturers,
vendors and others in connection with the Xxxxx Station Assets;
(k) All prepaid rentals and other prepaid expenses (except for
prepaid insurance) arising from payments made in the ordinary course of the
operation of the Xxxxx Station Business prior to the Closing Date for goods or
services where such goods or services have not been received at the Closing
Date;
(l) All jingles, slogans, commercials and other promotional
materials used in or relating primarily to the Xxxxx Station or the Xxxxx
Station Business;
(m) All books and records (including all computer programs used
primarily in connection with the operation of the Xxxxx Station Business or the
Xxxxx Station) of Xxxxxxxx and the Xxxxxxxx Sub relating to the assets,
properties, business and operations of the Xxxxx Station Business or the Xxxxx
Station including, without limitation, all files, logs, programming information
and studies, technical information and engineering data, news and advertising
studies or consulting reports and sales correspondence, but excluding any books
and records (including computer programs) relating primarily to a business of
Xxxxxxxx unrelated to the Xxxxx Station Business or the Xxxxx Station;
(n) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of the Xxxxxxxx Sub;
(o) All rights arising under the Xxxxx Merger Agreement after the
consummation of the Xxxxx Merger, including without limitation those rights
arising under Sections 6.02, 6.09, Article VIII, Article X and Article XI of
the Xxxxx Merger Agreement; and
(p) All other assets or properties not referred to above which are
reflected on the Xxxxx Station Closing Date Balance Sheet or the balance sheet
included in Section 3.06 of the Xxxxx Disclosure Schedule for the period ending
June 30, 1998 (the "Xxxxx Station Balance Sheet"), except (i) any such assets
or properties disposed of after the Balance Sheet Date in the ordinary course
of the Xxxxx Station Business and (ii) Excluded Xxxxxxxx Assets.
1.4. Excluded Xxxxxxxx Assets. Notwithstanding the foregoing, the
Xxxxx Station Assets shall not include the following (herein referred to as the
"Excluded Xxxxxxxx Assets"):
(a) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of Xxxxxxxx;
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(b) Meredith's and the Xxxxxxxx Sub's corporate seal, corporate
minute books, stock record books, corporate records relating to incorporation,
corporate Tax returns and related documents and supporting work papers and any
other records and returns relating to Taxes, assessments and similar
governmental levies (other than real and personal property Taxes, assessments
and levies imposed on the Xxxxx Station Assets);
(c) All records prepared in connection with the transfer of the
Xxxxx Station, including bids received from others and analyses relating to the
Xxxxx Station and the Xxxxx Station Assets;
(d) Any trade name, trademarks, service marks or logos using or
incorporating the name "Xxxxxxxx", "Xxxxxxxx Broadcasting" "Xxxxxxxx
Television", "Xxxxxxxx" or any variation or derivative thereof;
(e) All records and documents relating to Excluded Xxxxxxxx Assets
or to liabilities other than Assumed Xxxxx Station Liabilities;
(f) All of Meredith's and the Xxxxxxxx Sub's rights under Sections
2.08 and 2.10 of the Xxxxx Merger Agreement; and
(g) Any rights of Xxxxxxxx or the Xxxxxxxx Sub under or pursuant to
this Agreement or the other agreements with Tribune or the Tribune Sub
contemplated hereby.
1.5. Assumption of Tribune Station Liabilities. (a) On the
Closing Date, the Xxxxxxxx Sub shall deliver to the Tribune Sub an undertaking
and assumption, in the forms of Exhibit A, pursuant to which the Xxxxxxxx Sub
shall assume and be obligated for, and shall agree to pay, perform and
discharge in accordance with their terms, the following obligations and
liabilities of the Tribune Sub (except to the extent such obligations and
liabilities constitute Excluded Tribune Station Liabilities):
(i) All current liabilities of the Tribune Sub reflected on the
Tribune Station Closing Date Balance Sheet, including, without limitation,
accounts payable, accrued equipment rentals, accrued salary, payroll and
wages, accrued sick pay, accrued accounting fees and expenses, accrued
excise, withholding, unemployment, social security, payroll, property,
sales and use Taxes;
(ii) All liabilities of the Tribune Sub arising after the Closing
Date (other than any liability or obligation for breach or default which
occurred prior to the Closing) under (A) the Tribune Station Agreements
and (B) the leases, contracts and other agreements entered into by the
Tribune Sub with respect to the Tribune Station Business after the date
hereof consistent with the terms of Section 4.4 of this Agreement;
All of the foregoing to be assumed by the Xxxxxxxx Sub hereunder are
referred to herein as the "Assumed Tribune Station Liabilities."
- 12 -
(b) Xxxxxxxx and the Xxxxxxxx Sub shall not assume or be obligated
for any of, and Tribune and the Tribune Sub shall solely retain, pay, perform,
defend and discharge all of, their respective liabilities or obligations of any
and every kind whatsoever, direct or indirect, known or unknown, absolute or
contingent, not expressly assumed by the Xxxxxxxx Sub under Section 1.5(a) and,
notwithstanding anything to the contrary in Section 1.5(a), none of the
following (herein referred to as "Excluded Tribune Station Liabilities") shall
be "Assumed Tribune Station Liabilities" for purposes of this Agreement:
(i) any foreign, federal, state, county or local income Taxes which
arise from the operation of the Tribune Station or the Tribune Station
Business or the ownership of the Tribune Station Assets prior to the
Closing Date;
(ii) any liability or obligation of the Tribune Sub in respect of
indebtedness for borrowed money or any intercompany payable of the Tribune
Sub or any of its Affiliates;
(iii) all liabilities and obligations related to, associated with or
arising out of (A) the occupancy, operation, use or control of any of the
real property listed or described in Schedule 2.10 or Schedule 2.11 prior
to the Closing Date or (B) the operation of the Tribune Station Business
prior to the Closing Date, in each case incurred or imposed as a
requirement of any environmental, health or safety Requirements of Law
existing prior to the Closing Date, including, without limitation, any
Release or storage of any Contaminants on, at or from (1) any such real
property (including, without limitation, all facilities, improvements,
structures and equipment thereon, surface water thereon or adjacent
thereto and soil or groundwater thereunder) or any conditions whatsoever
on, under or in such real property or (2) any real property or facility
owned by a third party at which Contaminants generated by the Tribune
Station Business were sent prior to the Closing Date;
(iv) any costs and expenses incurred by Tribune or the Tribune Sub
incident to their negotiation and preparation of this Agreement and their
performance and compliance with the agreements and conditions contained
herein;
(v) any liabilities or obligations, whenever arising, related to,
associated with or arising out of the employee benefit agreements, plans
or arrangements listed in Schedule 2.20;
(vi) any liabilities in respect of the claims, suits, proceedings or
investigations arising from pre-Closing operations of the Tribune Station,
including, without limitation, those described in Schedule 2.22; or
(vii) any of Tribune's or the Tribune Sub's liabilities or
obligations under this Agreement or the Tribune Ancillary Agreements.
- 13 -
1.6. Assumption of Xxxxx Station Liabilities. (a) On the Closing
Date, the Tribune Sub shall deliver to the Xxxxxxxx Sub an undertaking and
assumption, in the form of Exhibit B, pursuant to which the Tribune Sub shall
assume and be obligated for, and shall agree to pay, perform and discharge in
accordance with their terms, all obligations and liabilities of the Xxxxxxxx
Sub and all liabilities and obligations of Xxxxxxxx with respect to the Xxxxx
Station, the Xxxxx Station Business and, to the extent provided below, the
Xxxxx Merger Agreement(except to the extent such obligations and liabilities
constitute Excluded Xxxxx Station Liabilities) including without limitation:
(i) All current liabilities of the Xxxxxxxx Sub reflected on the
Closing Date Xxxxx Station Balance Sheet, including, without limitation,
accounts payable, accrued equipment rentals, accrued salary, payroll and
wages, accrued sick pay, accrued accounting fees and expenses, accrued
excise, withholding, unemployment, social security, payroll, property,
sales and use Taxes; and
(ii) All obligations of Xxxxxxxx and the Xxxxxxxx Sub arising under
the Xxxxx Merger Agreement after the consummation of the Xxxxx Merger,
including, without limitation, those obligations arising under Sections
6.02, 6.06, 6.09, Article VII, Article VIII and Article X of the Xxxxx
Merger Agreement, but excluding (A) the obligations of Xxxxxxxx pursuant
to Article X of the Xxxxx Merger Agreement to the extent such obligations
relate to the representations and warranties of Xxxxxxxx and the Xxxxxxxx
Sub contained in the Xxxxx Merger Agreement and the covenants and
agreements of Xxxxxxxx and the Xxxxxxxx Sub contained in the Xxxxx Merger
Agreement to be performed prior to the consummation of the Xxxxx Merger
and (B) the obligations of Xxxxxxxx pursuant to Sections 2.08 and 2.10 of
the Xxxxx Merger Agreement.
All of the foregoing to be assumed by the Tribune hereunder are
referred to herein as the "Assumed Xxxxx Station Liabilities."
(b) The Tribune Sub shall not assume or be obligated for any, and
Xxxxxxxx and the Xxxxxxxx Sub shall solely retain, pay, perform, defend and
discharge all of the following (herein referred to as "Excluded Xxxxx Station
Liabilities"):
(i) any costs and expenses incurred by the Xxxxxxxx or the Xxxxxxxx
Sub incident to their negotiation and preparation of this Agreement and
their performance and compliance with the agreements and conditions
contained herein;
(ii) any of the Meredith's or the Xxxxxxxx Sub's liabilities or
obligations under this Agreement or the Xxxxxxxx Ancillary Agreements.
1.7. Closing Date. The exchange of the Tribune Station Assets and
the Xxxxx Station Assets provided for in Section 1.1 (the "Closing") shall be
consummated on a date, at a time and in a place agreed upon by Tribune and
Xxxxxxxx, occurring within 10 days after the conditions set forth in Articles
VI and VII are satisfied or, if permissible, waived or such other date, as may
be agreed upon by Tribune and Xxxxxxxx (such date and time being hereinafter
called the "Closing Date"). Notwithstanding the foregoing, it is the intention
and understanding of the parties that the Closing shall occur immediately upon
consummation of the Xxxxx Merger.
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1.8. Calculation of Estimated Tribune Station Working Capital Amount
and Estimated Xxxxx Station Working Capital Amount; Adjustment. At least three
business days prior to the Closing Date, (i) Tribune shall deliver to Xxxxxxxx
a certificate executed on behalf of Tribune by its President or any Vice
President, dated the date of its delivery, setting forth Tribune's best
estimate of the Closing Date Tribune Station Working Capital Amount (the
"Estimated Closing Date Tribune Station Working Capital Amount") which Tribune
anticipates based upon the most recent available financial statements of the
Tribune Station will be reflected on the Tribune Station Closing Date Balance
Sheet prepared in the manner contemplated by Section 1.10 and (ii) Xxxxxxxx
shall deliver to Tribune a certificate executed on behalf of Xxxxxxxx by its
President or any Vice President, dated the date of its delivery, attaching an
estimate of the Closing Date Xxxxx Station Working Capital Amount (the
"Estimated Closing Date Xxxxx Station Working Capital Amount")(it being
understood that the Estimated Closing Date Xxxxx Station Working Capital Amount
shall be the Closing Working Capital Estimate (as defined and determined in
accordance with the Xxxxx Merger Agreement)). If either the Estimated Closing
Date Tribune Station Working Capital Amount or the Estimated Closing Date Xxxxx
Station Working Capital Amount is not equal to at least $4,000,000, any party
having a working capital amount of less than $4,000,000 shall pay to the other
party cash at the Closing in an amount equal to the difference between such
party's working capital amount and $4,000,000. To the extent that either party
has an Estimated Closing Tribune Station Working Capital Amount or Estimated
Closing Date Xxxxx Station Working Capital Amount, as the case may be, in
excess of $4,000,000, the other party shall pay such party cash at the Closing
in the amount that when added to such party's working capital amount is equal
to the first party's working capital amount; provided, that if each party has a
working capital amount in excess of $4,000,000, the party with the lessor
working capital amount shall pay to the other party cash at the Closing in the
amount that when added to such party's working capital amount is equal to the
other party's working capital amount.
1.9. Closing Date Deliveries. (a) On the Closing Date, Tribune
shall deliver or cause to be delivered to the Xxxxxxxx Sub (i) a xxxx of sale
and assignment, in the form of Exhibit C, of all of the Tribune Station Assets
(other than the real property described in Schedule 2.10), (ii) special
warranty deeds conveying to the Xxxxxxxx Subs the real property described in
Schedule 2.10, (iii) all of the documents and instruments required to be
delivered by Tribune and the Tribune Sub pursuant to Article VII, (iv) payment
by wire transfer of immediately available funds of $10,000,000, (v) a copy of
the certificate of incorporation of Tribune and the Tribune Sub certified as of
a recent date by the Secretary of State of the State of Delaware, (vi)
certificates of good standing of Tribune and the Tribune Sub issued as of a
recent date by the Secretary of State of the State of Delaware and a
certificate of good standing of the Tribune Sub issued as of a recent date by
the Secretary of State of the State of Georgia, (vii) certificates of the
secretary or assistant secretary of Tribune and the Tribune Sub as to their
respective bylaws, the resolutions of their respective boards of directors and
stockholders (if applicable) authorizing the execution and delivery of this
Agreement and the transactions contemplated hereby and the incumbency and
signatures of their respective officers executing this Agreement and any
Tribune Ancillary Agreement, (viii) an assignment, in recordable form, with
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respect to each of the leases of real estate described in Schedule 2.11, (ix)
the undertakings and assumptions described in Section 1.5(a), (x) a
certification of non-foreign status, in form and substance reasonably
satisfactory to Xxxxxxxx, in accordance with Treas. Reg. Section 1.1445-2(b)
and (xi) an opinion of Sidley & Austin, counsel to Tribune and the Tribune Sub,
in form and substance reasonably satisfactory to Xxxxxxxx and its counsel, to
the effect set forth in Exhibit F.
(b) On the Closing Date, Xxxxxxxx shall deliver or cause to be
delivered to the Tribune Sub (i) a xxxx of sale and assignment, in the form of
Exhibit D, of all of the Xxxxx Station Assets (other than the real property
described in Section 3.13 of the Xxxxx Disclosure Schedule), (ii) special
warranty deeds conveying to the Tribune Subs the real property described in
Section 3.13 of the Xxxxx Disclosure Schedule, (iv) all of the documents and
instruments required to be delivered by Xxxxxxxx and the Xxxxxxxx Sub pursuant
to Article VI, (iii) a copy of the charters of Xxxxxxxx and the Xxxxxxxx Sub
certified as of a recent date by the secretary of state of their respective
state of incorporation, (iv) certificates of good standing of Xxxxxxxx and the
Xxxxxxxx Sub issued as of a recent date by the secretary of state of the state
of their respective incorporation, (v) certificates of the secretary or
assistant secretary of Xxxxxxxx and the Xxxxxxxx Sub as to their respective
bylaws, the resolutions of their respective boards of directors and
stockholders (if applicable) authorizing the execution and delivery of this
Agreement and the transactions contemplated hereby and the incumbency and
signatures of their respective officers executing this Agreement and any
Xxxxxxxx Ancillary Agreement, (vi) an assignment, in recordable form, with
respect to each of the leases of real estate described in Section 3.13 of the
Xxxxx Disclosure Schedule, (vii) the undertakings and assumptions described in
Section 1.6(a), (viii) a certification of non-foreign status, in form and
substance reasonably satisfactory to Tribune, in accordance with Treas. Reg.
Section 1.1445-2(b) and (ix) an opinion of counsel to Xxxxxxxx and the Xxxxxxxx
Sub reasonably satisfactory to Tribune, to the effect set forth on Exhibit E.
1.10. Closing Date Balance Sheets; Adjustment. (a) Promptly after
the Closing Date and in any event within 60 days of Closing, Tribune shall
prepare a balance sheet of the Tribune Sub (the "Initial Tribune Station
Balance Sheet") and Xxxxxxxx shall provide a balance sheet of the Xxxxxxxx Sub
(the "Initial Xxxxx Station Balance Sheet") as of 12:01 a.m. on the Closing
Date (or, in the case of the Initial Xxxxx Station Balance Sheet, the effective
time of the Xxxxx Merger, if different). The Initial Tribune Station Balance
Sheet and the Initial Xxxxx Station Balance Sheet shall be prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the Tribune Station Balance Sheet and the Xxxxx Station Balance
Sheet, respectively. Notwithstanding the foregoing, it is the understanding of
the parties that the Initial Xxxxx Station Balance Sheet shall be the balance
sheet supplied by the Partners to Xxxxxxxx pursuant to Section 2.10(c) of the
Xxxxx Merger Agreement.
(b) During the preparation of such balance sheets and the period of
any dispute within the contemplation of this Section 1.10, Tribune and the
Xxxxxxxx shall each (i) provide the other and the other's authorized
representatives with full access to the books, records, facilities and
- 16 -
employees of the Tribune Station Business and the Xxxxx Station Business, as
the case may be, (ii) provide the other as promptly as practicable after the
Closing Date with normal month-end financial information for the period ending
on 12:01 a.m. of the Closing Date, and (iii) cooperate fully with the other and
the other's authorized representatives, including the provision on a timely
basis of all information necessary or useful in preparing such balance sheet.
(c) Tribune shall deliver copies of the Initial Tribune Station
Balance Sheet to Xxxxxxxx promptly after they have been prepared, together with
Tribune's calculation of the Closing Date Tribune Station Working Capital
Amount based on such balance sheets. Xxxxxxxx shall deliver a copy of the
Initial Xxxxx Station Balance Sheet to Tribune promptly after they have been
prepared, together with Meredith's calculation of the Closing Date Xxxxx
Station Working Capital Amount based on such balance sheets. After receipt
thereof, Tribune and Xxxxxxxx shall each have 20 business days to review such
balance sheets and calculations, together with the work papers used in the
preparation thereof. Each of Tribune and Xxxxxxxx and their respective
authorized representatives shall have full access to all relevant books and
records and employees of the other to the extent reasonably required to
complete such review. In the event Xxxxxxxx does not object to the contents of
the Initial Tribune Station Balance Sheet and related calculation within 20
business days after its receipt thereof, such balance sheets shall become the
"Tribune Station Closing Date Balance Sheet" for all purposes of this Agreement
and shall provide the basis for the determination of the Closing Date Tribune
Station Working Capital Amount. In the event that Tribune does not object to
the contents of the Initial Xxxxx Station Balance Sheet and related calculation
within 10 business days after its receipt thereof, such balance sheets shall
become the "Xxxxx Station Closing Date Balance Sheets" for all purposes of this
Agreement and shall provide the basis for the determination of the Closing Date
Xxxxx Station Working Capital Amount. In the event that either Tribune or
Xxxxxxxx objects to the balance sheets and calculation delivered by the other
party by written notice to the other party specifying the objections in
reasonable detail and the basis therefor, within such time period and in the
further event that the other party does not agree with such objections, Tribune
and Xxxxxxxx, within 10 days following such notice of objection (the
"Resolution Period"), shall attempt to resolve their differences and any
resolution by them (evidenced in writing) as to any disputed amounts shall be
final, binding and conclusive. If at the conclusion of the Resolution Period
any amounts remain in dispute, then the amounts so in dispute shall be
submitted to a firm of nationally recognized independent public accountants
(the "Neutral Auditors") selected by Tribune and Xxxxxxxx within 10 days after
the expiration of the Resolution Period. If Tribune and Xxxxxxxx are unable to
agree on the Neutral Auditors, then a nationally recognized accounting firm
will be selected by lot from two names submitted by Tribune and two names
submitted by Xxxxxxxx, none of which shall be employed by Tribune or the
Tribune Sub and the Xxxxxxxx or the Xxxxxxxx Subs or any of their respective
Affiliates. The Neutral Auditors shall act as an arbitrator to determine and
resolve, based solely on presentations by Tribune and Xxxxxxxx, and not by
independent review, only those issues still in dispute. The Neutral Auditors'
determination shall be made within 30 days of their selection, shall be set
forth in a written statement delivered to Tribune and Xxxxxxxx and shall be
final, binding and conclusive. The balance sheets finally determined in
- 17 -
accordance with this Section shall be the "Tribune Station Closing Date Balance
Sheet" and the "Xxxxx Station Closing Date Balance Sheet" for all purposes of
this Agreement and shall provide the basis for the determination of the Closing
Date Tribune Station Working Capital Amount and the Closing Date Xxxxx Station
Working Capital Amount. Tribune and Xxxxxxxx agree to execute, if requested by
the Neutral Auditors, a reasonable engagement letter. All fees and
disbursements of the Neutral Auditors shall be paid one-half by Tribune and
one-half by Xxxxxxxx.
(d) If, upon the final determination thereof, the Closing Date
Tribune Station Working Capital Amount is less than the Estimated Closing Date
Tribune Station Working Capital Amount, Tribune shall pay to Xxxxxxxx xxxx in
the amount of such deficiency and if the Closing Date Tribune Station Working
Capital Amount is greater than the Estimated Closing Date Tribune Station
Working Capital Amount, Xxxxxxxx shall pay to Tribune cash in the amount of
such excess. If, upon the final determination thereof, the Closing Date Xxxxx
Station Working Capital Amount is less than the Estimated Closing Date Xxxxx
Station Working Capital Amount, Xxxxxxxx shall pay to Tribune cash in the
amount of such deficiency and if the Closing Date Xxxxx Station Working Capital
Amount is greater than the Estimated Closing Date Xxxxx Station Working Capital
Amount, Tribune shall pay to Xxxxxxxx xxxx in the amount of such excess. All
amounts due and owing pursuant to this Section 1.10(d) shall be paid within 10
days after final determination of the Closing Date Tribune Station Working
Capital Amount and the Closing Date Xxxxx Station Working Capital Amount, by
wire transfer of immediately available funds, plus interest on such amounts
from the Closing Date to but excluding the date of payment at a rate per annum
equal to the corporate base rate of interest announced on the Closing Date by
The First National Bank of Chicago.
1.11. Further Assurances. (a) On the Closing Date, Tribune shall
and shall cause the Tribune Sub to (i) deliver to Xxxxxxxx such other bills of
sale, deeds, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as Xxxxxxxx xxx reasonably request or as
may be otherwise reasonably necessary to vest in the Xxxxxxxx Sub all the
right, title and interest of Tribune and the Tribune Sub in, to or under any or
all of the Tribune Station Assets and (ii) take all steps as may be reasonably
necessary to put the Xxxxxxxx Sub in actual possession and control of all the
Tribune Station Assets. From time to time following the Closing, Tribune shall
execute and deliver, or cause to be executed and delivered, to the Xxxxxxxx Sub
such other instruments of conveyance and transfer as the Xxxxxxxx xxx
reasonably request or as may be otherwise necessary to more effectively convey
and transfer to, and vest in, the Xxxxxxxx Sub and put the Xxxxxxxx Sub in
possession of, any part of the Tribune Station Assets, and, in the case of
licenses, certificates, approvals, authorizations, agreements, contracts,
leases, easements and other commitments included in the Tribune Station Assets
which cannot be transferred or assigned effectively without the consent of
third parties, which consent has not been obtained prior to the Closing, to
cooperate with Xxxxxxxx at its reasonable request in endeavoring to obtain such
consent. Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any license, certificate,
approval, authorization, agreement, contract, lease, easement or other
commitment included in the Tribune Station Assets if an attempted assignment
thereof without the consent of a third party thereto would constitute a breach
thereof.
- 18 -
(b) On the Closing Date, Xxxxxxxx shall and shall cause the Xxxxxxxx
Sub to (i) deliver to Tribune such other bills of sale, deeds, endorsements,
assignments and other good and sufficient instruments of conveyance and
transfer as Tribune may reasonably request or as may be otherwise reasonably
necessary to vest in the Tribune Sub all the right, title and interest of the
Xxxxxxxx and the Xxxxxxxx Sub in, to or under any or all of the Xxxxx Station
Assets and (ii) take all steps as may be reasonably necessary to put the
Tribune Sub in actual possession and control of all the Xxxxx Station Assets.
From time to time following the Closing, Xxxxxxxx shall execute and deliver, or
cause to be executed and delivered, to the Tribune Sub such other instruments
of conveyance and transfer as Tribune may reasonably request or as may be
otherwise necessary to more effectively convey and transfer to, and vest in,
the Tribune Sub and put the Tribune Sub in possession of, any part of the Xxxxx
Station Assets, and, in the case of licenses, certificates, approvals,
authorizations, agreements, contracts, leases, easements and other commitments
included in the Xxxxx Station Assets which cannot be transferred or assigned
effectively without the consent of third parties which consent has not been
obtained prior to the Closing, to cooperate with Tribune at its reasonable
request in endeavoring to obtain such consent. Notwithstanding anything in
this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any license, certificate, approval, authorization,
agreement, contract, lease, easement or other commitment included in the Xxxxx
Station Assets if an attempted assignment thereof without the consent of a
third party thereto would constitute a breach thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TRIBUNE AND THE TRIBUNE SUB
As an inducement to Xxxxxxxx and the Xxxxxxxx Sub to enter into this
Agreement and to consummate the transactions contemplated hereby, Tribune the
Tribune Sub represent and warrant to Xxxxxxxx and the Xxxxxxxx Subs and agree
as follows:
2.1. Organization. Tribune and the Tribune Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Tribune Sub has requisite corporate power and authority
to own or lease and to operate the Tribune Station, to use the Tribune Station
Assets and to carry on the Tribune Station Business as now conducted by it.
2.2. Subsidiaries and Investments. Other than the Tribune Sub,
Tribune does not, directly or indirectly (a) own, of record or beneficially,
any outstanding voting securities or other equity interests in any corporation,
partnership, joint venture or other entity which is primarily involved in or
relates primarily to the Tribune Station Business or (b)otherwise control any
such corporation, partnership, joint venture or other entity which is involved
primarily in or relates primarily to the Tribune Station Business.
- 19 -
2.3. Authority of Tribune and the Tribune Sub. (a) Each of Tribune
and the Tribune Sub has requisite corporate power and authority to execute and
deliver this Agreement and all of the other agreements and instruments to be
executed and delivered by Tribune or the Tribune Sub pursuant hereto
(collectively, the "Tribune Ancillary Agreements"), to consummate the
transactions contemplated hereby and thereby and to comply with the terms,
conditions and provisions hereof and thereof.
(b) The execution, delivery and performance of this Agreement and
the Tribune Ancillary Agreements by Tribune and the Tribune Sub (to the extent
a party thereto) have been duly authorized and approved by all necessary action
of Tribune and the Tribune Sub and do not require any further authorization or
consent of Tribune or the Tribune Sub, or their respective stockholders. This
Agreement is, and each Tribune Ancillary Agreement when executed and delivered
by Tribune or the Tribune Sub and the other parties thereto will be, a legal,
valid and binding agreement of Tribune and the Tribune Sub (to the extent a
party thereto) enforceable in accordance with its respective terms, except in
each case as such enforceability may be limited by bankruptcy, moratorium,
insolvency, reorganization or other similar laws affecting or limiting the
enforcement of creditors' rights generally and except as such enforceability is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Except as set forth in Schedule2.3, neither the execution and
delivery by Tribune or the Tribune Sub of this Agreement and the Tribune
Ancillary Agreements or the consummation by Tribune and the Tribune Sub of any
of the transactions contemplated hereby or thereby nor compliance by Tribune
and the Tribune Sub with or fulfillment by Tribune and the Tribune Sub of the
terms, conditions and provisions hereof or thereof will:
(A) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of
rights under, or result in the creation or imposition of any Encumbrance upon
any of the Tribune Station Assets under, the certificate of incorporation or
bylaws of Tribune or the Tribune Sub, any Tribune Station Agreement, any
Tribune Station Governmental Permit or any judgment, order, award or decree to
which Tribune or the Tribune Sub is a party or any of the Tribune Station
Assets is subject or by which Tribune or the Tribune Sub is bound, or any
statute, other law or regulatory provision affecting Tribune or the Tribune Sub
or the Tribune Station Assets; or
(B) require the approval, consent, authorization or act of, or the
making by Tribune or the Tribune Sub of any declaration, filing or registration
with, any third party or any foreign, federal, state or local court,
governmental or regulatory authority or body, except for such of the foregoing
as are necessary pursuant to the Improvements Act or the Communications Act.
2.4. Financial Statements. Schedule 2.4 contains (a) the unaudited
balance sheets of the business of the Tribune Station as of December 29, 1996
and December 28, 1997, respectively, and the related statements of income for
the years then ended and (b) the unaudited balance sheet (the "Tribune Station
- 20 -
Balance Sheet") of the business of the Tribune Station as of June 28, 1998 (the
"Balance Sheet Date") and the related statement of income for the six months
then ended. Except as set forth in Schedule 2.4, such balance sheets and
statements of income have been prepared in accordance with generally accepted
accounting principles consistently applied and present fairly the financial
position and results of operations of the Tribune Station Business in all
material respects as of their respective dates and for the respective periods
covered thereby subject to the absence of footnotes and normal year-end
adjustments.
2.5. Operations Since Balance Sheet Date. (a) Except as set forth
in Schedule 2.5(A), to the best of Tribune's knowledge, during the period from
the Balance Sheet Date to the date hereof, inclusive, there has been:
(i) no material adverse change in the financial condition or the
results of operations of the Tribune Station or its business from that
reflected on the financial statements set forth in Schedule 2.4, other
than any change or effect affecting the U.S. economy or the U.S.
broadcasting industry in general; or
(ii) no damage, destruction, loss or claim (whether or not covered
by insurance) or condemnation or other taking which materially adversely
affects the Tribune Station Assets, the Tribune Station or its business.
(b) Except as set forth in Schedule 2.5(B) hereto, since the Balance
Sheet Date the business of the Tribune Station has been conducted only in the
ordinary course and in conformity with past practice. Without limiting the
generality of the foregoing, since the Balance Sheet Date, except as set forth
in such Schedule, neither Tribune or the Tribune Sub has, in respect solely of
the Tribune Station:
(i) sold, leased, transferred or otherwise disposed of (including
any transfers to any Affiliate of Tribune), or mortgaged or pledged, or
imposed or suffered to be imposed any Encumbrance (other than Permitted
Encumbrances) on, any of the Tribune Station Assets, other than personal
property having a value, in the aggregate, of less than $50,000 sold or
otherwise disposed of for fair value in the ordinary course of the Tribune
Station Business consistent with past practice;
(ii) canceled without fair consideration therefor any debts owed to
or claims held by Tribune or the Tribune Sub relating to the Tribune
Station (including the settlement of any claims or litigation) or waived
any right of significant value to Tribune or the Tribune Sub relating to
the Tribune Station, other than in the ordinary course of the Tribune
Station Business consistent with past practice;
(iii) created, incurred, guaranteed or assumed, or agreed to create,
incur, guarantee or assume, any indebtedness for borrowed money or entered
into any capitalized leases;
(iv) accelerated collection of notes or accounts receivable
generated by the Tribune Station Business to a date prior to the date such
collection would have occurred in the ordinary course of the Tribune
Station Business;
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(v) delayed payment of any account payable or other liability of the
Tribune Station Business beyond its due date or the date when such
liability would have been paid in the ordinary course of the Tribune
Station Business consistent with past practice;
(vi) granted or instituted any increase in any rate of salary or
compensation or any profit sharing, bonus, incentive, deferred
compensation, insurance, pension, retirement, medical, hospital,
disability, welfare or other employee benefit plan other than in the
ordinary course of the Tribune Station Business consistent with past
practices; or
(vii) entered into any agreement or made any commitment to take any
action described in subparagraphs (i) through (vi) above.
2.6. No Undisclosed Liabilities. Except as set forth in Schedule
2.6, to the best of Tribune's knowledge, neither Tribune nor the Tribune Sub is
subject, with respect to the Tribune Station Business, to any liability
(including, without limitation, unasserted claims, whether known or unknown),
whether absolute, contingent, accrued or otherwise, which is not shown or
reserved for in the Tribune Station Balance Sheet, other than
liabilities of the same nature as those set forth in the Tribune Station
Balance Sheet and the notes thereto and incurred in the ordinary course of the
Tribune Station Business after the Balance Sheet Date.
2.7. Taxes. Each of Tribune and the Tribune Sub has, in respect of
the Tribune Station Business, either filed or obtained extensions for filings
pursuant to established procedures all foreign, federal, state, county or local
income, excise, property, sales, use, franchise or other Tax returns and
reports which are required to have been filed by it under applicable law on or
prior to the date of this Agreement and has paid or made provision for the
payment of all Taxes which have become due pursuant to such returns or pursuant
to any assessments which have become payable and which are not being contested
in good faith by appropriate proceedings. All monies required to be withheld
by the Tribune Sub from employees of the Tribune Station Business for income
Taxes, social security and other payroll Taxes have been collected or withheld,
and either paid to the respective Governmental Bodies, set aside in accounts
for such purpose, or accrued, reserved against and entered upon the books of
the Tribune Sub.
2.8. Availability of Assets and Legality of Use. Except as set
forth in Schedule 2.8 and except for the Excluded Tribune Assets, the Tribune
Station Assets constitute all the assets used in the conduct of the Tribune
Station Business and are in good and serviceable condition (subject to normal
wear and tear).
2.9. Governmental Permits. (a) The Tribune Sub owns, holds, or
possesses the Tribune Station FCC Authorizations and all other governmental
licenses, franchises, permits, privileges, immunities, approvals and other
authorizations which are necessary to entitle it to own or lease, operate and
use the Tribune Station Assets and the Tribune Station and to carry on and
conduct the Tribune Station Business as currently conducted (herein
- 22 -
collectively referred to as "Tribune Station Governmental Permits"), except for
such Tribune Station Governmental Permits which the failure to so own, hold or
possess would not have a material adverse effect on the operations and
financial condition of the Tribune Stations, individually and taken as a whole.
Schedule 2.9(A)(1) sets forth a list and brief description of each such Tribune
Station Governmental Permit held by the Tribune Sub as of the date of this
Agreement, except for such incidental licenses, permits and other
authorizations which would be readily obtainable by any qualified applicant
without undue burden in the event of any lapse, termination, cancellation or
forfeiture thereof. Schedule 2.9(A)(2) sets forth a list of licenses and
permits issued to the Tribune Sub by the FCC that are not used in connection
with the operation of the Tribune Station.
(b) Except as set forth in Schedule 2.9(B), the Tribune Sub has
fulfilled and performed in all material respects its obligations under each of
such Tribune Station Governmental Permits, and no event has occurred or
condition or state of facts exists which constitutes or, after notice or lapse
of time or both, would constitute a material breach or material default under
any such Tribune Station Governmental Permit. No notice of cancellation, of
default or of any dispute concerning any Tribune Station Governmental Permit,
or of any event, condition or state of facts described in the preceding
sentence, has been received by Tribune. Except as set forth in Schedule
2.9(B), each of the Tribune Station Governmental Permits is valid, subsisting
and in full force and effect, and, subject to the receipt of the FCC Order, to
the best knowledge of Tribune, may be assigned and transferred to the Xxxxxxxx
Sub in accordance with this Agreement and at the time of assignment to the
Xxxxxxxx Sub will be in full force and effect, in each case without (a) the
occurrence of any breach, default or forfeiture of rights thereunder or (b) the
consent, approval, or act of, or the making of any filing with, any
Governmental Body or other party (other than the FCC as contemplated by Section
4.3). The Tribune Station is being operated in all material respects in
accordance with the Tribune Station FCC Authorizations and in compliance in all
material respects with the Communications Act, the rules and regulations
thereunder, and all other laws and regulations, federal, state and local,
applicable to the Tribune Station. Tribune has not received any notice of any
violations of the Tribune Station FCC Authorizations, the Communications Act
and the rules and regulations thereunder. There is no action by or before the
FCC currently pending or, to the best knowledge of Tribune, threatened to
revoke, cancel, rescind, modify or refuse to renew in the ordinary course any
of the Tribune Station FCC Authorizations.
2.10. Real Property. Schedule 2.10 contains a brief description of
each parcel of real property owned by Tribune or the Tribune Sub (exclusively
or otherwise) and used in or relating to the Tribune Station Business (showing
the record title holder, legal description, location and any indebtedness
secured by a mortgage or other lien thereon) and of each option, right or
contract to purchase held by Tribune or the Tribune Sub to acquire any real
property for use in connection with the Tribune Station Business.
- 23 -
2.11. Real Property Leases. Schedule 2.11 sets forth a list and
brief description of each lease or similar agreement (showing the rental,
expiration date, renewal and the location of the real property covered by such
lease or other agreement) under which Tribune or the Tribune Sub is lessee of,
or holds or operates, any real property owned by any third party and used in or
relating to the Tribune Station Business.
2.12. Condemnation. (a) Neither the whole nor any part of any real
property owned by Tribune or the Tribune Sub nor, to Tribune's knowledge, any
property leased by Tribune or the Tribune Sub, in connection with the Tribune
Station Business is subject to any pending suit for condemnation or other
taking by any public authority and (b) to the best knowledge of Tribune, no
such condemnation or other taking is threatened.
2.13. Personal Property. Schedule 2.13 contains a list as of
December 28, 1997 of all machinery, equipment, vehicles, furniture and other
personal property owned by Tribune or the Tribune Sub having an original cost
of $10,000 or more and used in or relating to the Tribune Station Business.
2.14. Personal Property Leases. Schedule 2.14 contains a brief
description of each lease or other agreement or right, whether written or oral
(including in each case the rental, the expiration date thereof and a brief
description of the property covered), under which a Tribune Sub is lessee of,
or holds or operates, any machinery, equipment, vehicle or other tangible
personal property owned by a third party and used in or relating to the Tribune
Station Business and which is not terminable by the Tribune Sub without penalty
on 30 days' notice or less and which provides for annual rentals in excess of
$10,000.
2.15. Intellectual Property. Schedule 2.15 contains a list of: (i)
all trademarks, service marks, trade names and copyrights used solely in
connection with the Tribune Station Business for which registrations have been
issued to Tribune or the Tribune Sub or applications for registrations have
been made by Tribune or the Tribune Sub and (ii) all licenses, agreements or
other arrangements under which Tribune or the Tribune Sub, solely in connection
with the Tribune Station Business, has the right to use any trademark, service
xxxx, trade name or copyright (other than such as are included in the Tribune
Station Agreements). Neither, Tribune nor the Tribune Sub owns, or has applied
for, any patents, in connection with the Tribune Station Business. To the best
knowledge of Tribune, no proceedings have been instituted, are pending or are
threatened which challenge the validity of the ownership or use by Tribune or
the Tribune Sub of any trademarks, trade names, copyrights or patents related
to the Tribune Station Business. Except as set forth in Schedule2.15, neither
Tribune nor the Tribune Sub has licensed anyone to use any trademarks, trade
names or copyrights of Tribune or the Tribune Sub related to the Tribune
Station Business. Except as set forth in Schedule 2.15, and other than as are
included in the Tribune Station Agreements, the Tribune Sub owns, or has the
royalty-free right to use, all trademarks, service marks, trade names,
copyrights or patents used in the operation of the Tribune Station Business.
Except as set forth in Schedule 2.15, no trademark, service xxxx, trade name or
copyright listed in Schedule 2.15 is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting the use thereof by the
Tribune Sub or restricting the licensing thereof by the Tribune Sub to any
person.
- 24 -
2.16. Accounts Receivable. All accounts receivable of the Tribune
Sub relating to the Tribune Station Business have arisen from bona fide
transactions by the Tribune Sub in the ordinary course of the Tribune Station
Business and, to the best knowledge of Tribune, constitute only valid claims
which are not subject to counterclaims or setoffs.
2.17. Title to Assets. The Tribune Sub has good and marketable
title to all of the tangible personal properties included in the Tribune
Station Assets, free and clear of all Encumbrances, except for Permitted
Encumbrances. Upon delivery to the Xxxxxxxx Sub on the Closing Date of the
documents contemplated by Section 1.9(a), the Tribune Sub will thereby transfer
to the Xxxxxxxx Sub good and marketable title to the Tribune Station Assets,
subject to no Encumbrances, except for Permitted Encumbrances.
2.18. Employees. Schedule 2.18 contains: (a) a list of all
individuals employed by the Tribune Sub in connection with the Tribune Station
Business as of August 19, 1998; and (b) the then current rate of compensation
provided by the Tribune Sub to such employees.
2.19. Employee Relations. (a) Except as set forth in Schedule
2.19(A), the Tribune Sub has complied in respect of the Tribune Station
Business in all material respects with all applicable laws, rules and
regulations which relate to prices, wages, hours, discrimination in employment
and collective bargaining and to the operation of the Tribune Station Business
and is not liable for any arrears of wages or any Taxes or penalties for
failure to comply with any of the foregoing.
(b) Except as set forth in Schedule 2.19(B), as of the date of this
Agreement, there is no (i) unfair labor practice charge or complaint against
Tribune or the Tribune Sub in respect of the Tribune Station Business pending
before the National Labor Relations Board, any state labor relations board or
any court or tribunal and, to the best knowledge of Tribune, none is or has
been threatened, or (ii) strike, dispute, request for representation, slowdown
or stoppage pending against the Tribune Sub in respect of the Tribune Station
Business and, to the best knowledge of Tribune, none is or has been threatened.
2.20. Contracts. Except as set forth in Schedule 2.20 or any other
Schedule hereto, as of the date of this Agreement, neither Tribune nor the
Tribune Sub is, with respect to the Tribune Station Business, a party to or
bound by:
(a) Any contract for the purchase or sale of real property;
(b) Any contract for the purchase, rental or use of any films,
recordings, television programming or programming services which is not
terminable by Tribune or the Tribune Sub without penalty on 30 days' notice or
less or which provides for performance over a period of more than 90 days or
which involves the payment after the date hereof of more than $20,000;
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(c) Any contract for the purchase of merchandise, supplies or
personal property or for the receipt of services (other than services referred
to in clause (b) above) which is not terminable by Tribune or the Tribune Sub
on 30 days' notice or less or which provides for performance over a period of
more than 90 days or which involves the payment after the date hereof of more
than $20,000;
(d) Any contract for the sale of broadcast time for advertising or
other purposes which was not made in the ordinary course of the Tribune Station
Business and consistent with past practice;
(e) Any guarantee of the obligations of the Tribune Station's
customers, suppliers, or employees;
(f) Any sales agency, advertising representative or advertising or
public relations contract which is not terminable by Tribune or the Tribune Sub
without penalty on 30 days' notice or less or which provides for payments over
a period of more than 90 days or which involves the payment after the date
hereof of more than $20,000;
(g) Any barter agreement or other agreement with advertisers for
broadcasting or commercial time on the Tribune Station in exchange for goods or
services;
(h) Any employee collective bargaining agreement, employment
agreement (other than employment agreements terminable without premium or
penalty on notice of 30 days or less under which the only monetary obligation
is to make current wage or salary payments and provide current fringe
benefits), consulting, advisory or service agreement, deferred compensation
agreement or covenant not to compete;
(i) Any employees' pension, profit-sharing, stock option, bonus,
incentive, stock purchase, welfare, life insurance, hospital or medical benefit
plan or other employee benefit agreement or plan; or
(j) Any other contract, agreement, commitment, understanding or
instrument which is material to the Tribune Station Business.
Schedule 2.20 also indicates whether each contract, agreement or other
instrument listed therein is to be deemed an "Assumed Contract" or a "Contract
Not Assumed" for purposes of this Agreement.
2.21. Status of Contracts. Except as set forth in Schedule 2.21 or
in any other Schedule hereto, each of the leases, contracts and other
agreements listed in Schedules 2.11, 2.14, 2.15 and 2.20 (provided, in the case
of Schedule 2.20, such contract or other agreement is designated therein as an
"Assumed Contract"), but excluding the contracts and other agreements
designated in Schedule 2.20 as a "Contract Not Assumed," (the "Tribune Station
Agreements") constitutes a valid and binding obligation of Tribune or the
Tribune Sub and, to the best knowledge of Tribune, the other parties thereto
(subject to bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights generally) and is
- 26 -
in full force and effect (subject to bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting the enforcement of creditors'
rights generally) and (except as set forth in Schedule 2.3 and except for those
Tribune Station Agreements which by their terms will expire prior to the
Closing Date or will be otherwise terminated prior to the Closing Date in
accordance with the provisions hereof) may be transferred to the Xxxxxxxx Sub
pursuant to this Agreement and will be in full force and effect at the time of
such transfer, in each case without breaching the terms thereof or resulting in
the forfeiture or impairment of any rights thereunder and without the consent,
approval or act of, or the making of any filing with, any other party. Tribune
and the Tribune Sub have fulfilled and performed in all material respects their
respective obligations under each of the Tribune Station Agreements to which
they are a party, and neither Tribune nor the Tribune Sub is in, or alleged to
be in, breach or default under any of the Tribune Station Agreements and, to
the best knowledge of Tribune, no other party to any of the Tribune Station
Agreements has breached or defaulted thereunder, and no event has occurred and
no condition or state of facts exists which, with the passage of time or the
giving of notice or both, would constitute such a default or breach by the
Tribune Sub or, to the best knowledge of Tribune, by any such other party.
Complete and correct copies of each of the Tribune Station Agreements, together
with all amendments thereto, have heretofore been delivered or made available
to Xxxxxxxx by Tribune.
2.22. No Violation, Litigation or Regulatory Action. Except as set
forth in Schedule 2.22 :
(a) Each of Tribune and the Tribune Sub has complied in all material
respects with all laws, regulations, rules, writs, injunctions, ordinances,
franchises, decrees or orders of any court or of any foreign, federal, state,
municipal or other Governmental Body which are applicable to the Tribune
Station Assets, the Tribune Stations or the Tribune Station Business, except
where the failure to comply would not have a material adverse effect on the
operating and financial condition of the Tribune Station Business, individually
and taken as a whole;
(b) There are no lawsuits, suits or proceedings pending or, to the
best knowledge of Tribune, threatened against Tribune or the Tribune Sub in
respect of the Tribune Station Assets, the Tribune Station or the Tribune
Station Business; and
(c) To the best knowledge of Tribune, there are no claims or
investigations pending or threatened against Tribune or the Tribune Sub in
respect of the Tribune Station Assets, the Tribune Station or the Tribune
Station Business; and
(d) There is no action, suit or proceeding pending or, to the best
knowledge of Tribune, threatened which questions the legality or propriety of
the transactions contemplated by this Agreement.
- 27 -
2.23. Insurance. The Tribune Sub maintains in respect of the
Tribune Station Assets, the Tribune Station and the Tribune Station Business
policies of fire and extended coverage and casualty, liability and other forms
of insurance in such amounts and against such risks and losses as are in the
judgment of Tribune prudent for the Tribune Station Business. All such
policies are currently in full force and effect and the Tribune Sub shall keep
such insurance policies or comparable insurance policies in full force and
effect through the Closing Date.
2.24. Environmental Protection. (a) Except as set forth in
Schedule 2.24, to the best knowledge of Tribune, neither the Tribune Station or
the Tribune Station Business nor any of the present properties, assets or
operations relating thereto are subject to any order from or agreement with any
Governmental Body or private party respecting (i) any environmental, health or
safety Requirements of Law, (ii) any Remedial Action or (iii) any Liabilities
and Costs arising from the Release or threatened Release of a Contaminant into
the environment.
(b) Except as set forth in Schedule 2.24, there is not now, nor has
there ever been on or in the Tribune Station Assets or, to the knowledge of
Tribune, the past properties of the Tribune Station Business:
(i) any Release of any Contaminant on, in, under or from such
properties;
(ii) any underground storage tanks or surface impoundments;
(iii) any asbestos containing material; or
(iv) any polychlorinated biphenyls (PCB) used in hydraulic oils,
electrical transformers or other equipment.
(c) Except as set forth in Schedule 2.24, Tribune has not received
in respect of the Tribune Station Assets, the Tribune Station or the Tribune
Station Business any notice or claim to the effect that it is or may be liable
to any Person as a result of the Release or threatened Release of a Contaminant
into the environment.
(d) Except as set forth in Schedule 2.24, to the best knowledge of
Tribune, none of the Tribune Station Assets or present or past operations of
the Tribune Station is the subject of any investigation by any Governmental
Body evaluating whether any Remedial Action is needed to respond to a Release
or threatened Release of a Contaminant into the environment.
2.25. No Finder. Neither Tribune, the Tribune Sub nor any party
acting on their behalf has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary, except for Xxxxxxx Xxxxx &
Co., for or on account of the transactions contemplated by this Agreement.
2.26. Status of Tribune and the Tribune Sub. Each of Tribune and
the Tribune Sub is, or on the Closing Date will be, legally qualified to own,
operate and control the Xxxxx Station pursuant to the Communications Act and
the rules, regulations and policies of the FCC.
- 28 -
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND
THE XXXXXXXX SUB
As an inducement to Tribune and the Tribune Sub to enter into this
Agreement and to consummate the transactions contemplated hereby, Xxxxxxxx and
the Xxxxxxxx Sub represent and warrant to Tribune and the Tribune Sub and agree
as follows:
3.1. Organization. Each of Xxxxxxxx and the Xxxxxxxx Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation.
3.2. Subsidiaries and Investments. Other than the Xxxxxxxx Sub,
Xxxxxxxx does not, directly or indirectly (a) own, of record or beneficially,
any outstanding voting securities or other equity interests in any corporation,
partnership, joint venture or other entity which is primarily involved in or
relates primarily to the Xxxxx Station Business or (b) otherwise control any
such corporation, partnership, joint venture or other entity which is involved
primarily in or relates primarily to the Xxxxx Station Business.
3.3. Authority of the Xxxxxxxx and the Xxxxxxxx Subs. (a) Each of
Xxxxxxxx and the Xxxxxxxx Sub has requisite corporate power and authority to
execute and deliver this Agreement and all of the other agreements and
instruments to be executed and delivered by Xxxxxxxx or the Xxxxxxxx Sub
pursuant hereto (collectively, the "Xxxxxxxx Ancillary Agreements") and the
Xxxxx Merger Agreement, to consummate the transactions contemplated hereby and
thereby and to comply with the terms, conditions and provisions hereof and
thereof.
(b) The execution, delivery and performance of this Agreement, the
Xxxxx Merger Agreement and the Xxxxxxxx Ancillary Agreements by Xxxxxxxx and
the Xxxxxxxx Sub (to the extent a party thereto) have been duly authorized and
approved by all necessary action of Xxxxxxxx and the Xxxxxxxx Sub and do not
require any further authorization or consent of Xxxxxxxx or the Xxxxxxxx Sub,
or their respective stockholders. Each of this Agreement and the Xxxxx Merger
Agreement is, and each Xxxxxxxx Ancillary Agreement when executed and delivered
by Xxxxxxxx or the Xxxxxxxx Sub and the other parties thereto will be, a legal,
valid and binding agreement of Xxxxxxxx and the Xxxxxxxx Sub (to the extent a
party thereto) enforceable in accordance with its respective terms, except in
each case as such enforceability may be limited by bankruptcy, moratorium,
insolvency, reorganization or other similar laws affecting or limiting the
enforcement of creditors' rights generally and except as such enforceability is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Except as set forth in Schedule 3.3 and except as results from
conditions, circumstances and legal relationships, unrelated to Xxxxxxxx or the
Xxxxxxxx Sub, in existence prior to the consummation of the Xxxxx Merger,
neither the execution and delivery by Xxxxxxxx or the Xxxxxxxx Sub of this
Agreement, the Xxxxx Merger Agreement and the Xxxxxxxx Ancillary Agreements or
- 29 -
the consummation by Xxxxxxxx and the Xxxxxxxx Sub of any of the transactions
contemplated hereby or thereby nor compliance by Xxxxxxxx and the Xxxxxxxx Sub
with or fulfillment by Xxxxxxxx and the Xxxxxxxx Sub of the terms, conditions
and provisions hereof or thereof will:
(A) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of
rights under, or result in the creation or imposition of any Encumbrance upon
any of the Xxxxx Station Assets under, the charter or bylaws of Xxxxxxxx or the
Xxxxxxxx Sub, any Xxxxx Station Agreement, any Xxxxx Station Governmental
Permit or any judgment, order, award or decree (i) to which Xxxxxxxx or the
Xxxxxxxx Sub is a party or any of the Xxxxx Station Assets is subject or by
which Xxxxxxxx or the Xxxxxxxx Sub is bound, or any statute, other law or
regulatory provision affecting or which will, after consummation of the Xxxxx
Merger, affect Xxxxxxxx, and the Xxxxxxxx Sub or the Xxxxx Station Assets or
(ii) to which, upon consummation of the Xxxxx Merger, Xxxxxxxx or the Xxxxxxxx
Sub will be a party or by which Xxxxxxxx or the Xxxxxxxx Sub will be bound; or
(B) require the approval, consent, authorization or act of, or the
making by Xxxxxxxx or the Xxxxxxxx Sub of any declaration, filing or
registration with, any third party or any foreign, federal, state or local
court, governmental or regulatory authority or body, except for such of the
foregoing as are necessary pursuant to the Improvements Act, the Communications
Act or pursuant to any contract, agreement or instrument of KTC.
3.4. Title to Assets. On the Closing Date, the Xxxxxxxx Sub will
have good and marketable title to all of the tangible personal properties
included in the Xxxxx Station Assets, free and clear of all Encumbrances,
except for Permitted Encumbrances, and subject to any Encumbrances or other
conditions in existence immediately prior to the consummation of the Xxxxx
Merger. Upon delivery to the Tribune Sub on the Closing Date of the documents
contemplated by Section 1.9(b), the Xxxxxxxx Sub will thereby transfer to the
Tribune Sub good and marketable title to the Xxxxx Station Assets, subject to
no Encumbrances, except for Permitted Encumbrances, and subject to any
Encumbrance or other conditions in existence immediately prior to the
consummation of the Xxxxx Merger.
3.5. No Finder. Neither Xxxxxxxx, the Xxxxxxxx Sub nor any party
acting on their behalf has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
3.6. Status of Xxxxxxxx and the Xxxxxxxx Sub. Xxxxxxxx and the
Xxxxxxxx Sub are legally qualified to purchase, own operate and control the
Tribune Station pursuant to the Communications Act and the rules, regulations
and policies of the FCC.
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ARTICLE IV
ACTION PRIOR TO THE CLOSING DATE
The respective parties hereto covenant and agree to take the
following actions between the date hereof and the Closing Date:
4.1. Investigation of the Tribune Station Business and the Xxxxx
Station Business. Upon the request of Xxxxxxxx, with respect to the Tribune
Station Business, or Tribune, with respect to the Xxxxx Station Business (the
"Investigating Party"), the other party hereto (the "Investigated Party") shall
and shall cause its subsidiaries party hereto to afford to the officers,
employees and authorized representatives of the Investigating Party (including,
without limitation, independent public accountants, attorneys and consultants)
reasonable access during normal business hours, and upon not less than 24-hours
prior notice, to the offices, properties, employees and business and financial
records (including computer files, retrieval programs and similar
documentation) of the Tribune Station Business or the Xxxxx Station Business,
as the case may be, to the extent the Investigating Party shall reasonably deem
necessary or desirable and shall furnish to the Investigating Party or its
authorized representatives such additional information concerning the Tribune
Station Business or the Xxxxx Station Business, as the case may be, as shall be
reasonably requested; provided, however, that the Investigated Party shall not
be required to violate any obligation of confidentially to which it is subject
in discharging its obligations pursuant to this Section 4.1; and provided,
further; that during the period from the date hereof until the consummation of
the Xxxxx Merger Meredith's obligations pursuant to this Section 4.1 shall be
limited to using commercially reasonable efforts to cause KTC to provide
Tribune with access as provided above, provided that, in the event that KTC
does not grant Tribune access as provided in this Section 4.1, Xxxxxxxx agrees
to exercise its rights under the Xxxxx Merger Agreement to perform such
investigation of the Xxxxx Station as Tribune shall reasonably request, at
Tribune's cost, and to provide Tribune with the results of such investigation.
Each Investigating Party agrees that any such investigation shall be conducted
in such a manner as not to interfere unreasonably with the operations of the
Investigated Party.
4.2. Preserve Accuracy of Representations and Warranties. Each of
the parties hereto shall refrain from taking any action which would render any
representation or warranty contained in Article II or III of this Agreement
inaccurate as of the Closing Date and Xxxxxxxx shall refrain from taking any
action which would render any representation or warranty contained in the Xxxxx
Merger Agreement inaccurate. Each party shall promptly notify the other of any
action, suit or proceeding that shall be instituted or threatened against such
party to restrain, prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement or the Xxxxx Merger Agreement.
Tribune shall promptly notify Xxxxxxxx, and Xxxxxxxx shall promptly notify
Tribune, of any lawsuit, claim, proceeding or investigation that may be
threatened, brought, asserted or commenced which would have been listed in
Schedule 2.22 or which would constitute a breach of Section 5.05 of the Xxxxx
Merger Agreement, as the case may be, if such lawsuit, claim, proceeding or
investigation had arisen prior to the date hereof.
- 31 -
4.3. FCC Consent; Improvements Act Approval; Other Consents and
Approvals. (a) As promptly as practicable after the date hereof but in any
event no later than 5 business days thereafter, the Tribune Sub and the
Xxxxxxxx Sub shall file with the FCC applications requesting its consent to the
assignment of the Tribune Station FCC Authorizations (and any extensions or
renewals thereof) to the Xxxxxxxx Sub from the Tribune Sub and its consent to
the assignment of the Xxxxx Station FCC Authorizations (and any extensions or
renewals thereof) to Tribune from the Xxxxxxxx Sub or from KTC, as applicable.
Tribune and Xxxxxxxx will cooperate in the preparation of such applications
(including the furnishing to each other of copies of such applications prior to
filing) and will diligently take, or cooperate in the taking of, all necessary,
desirable and proper steps, provide any additional information reasonably
required and otherwise use their best efforts to obtain promptly the requested
consent and approval of the FCC. Any fees assessed by the FCC incident to the
filing or grant of such applications shall be borne equally by Tribune and
Xxxxxxxx, with each party responsible for one-half of any such fees so
assessed. Each of Tribune and Xxxxxxxx shall make available to the other,
promptly after the filing thereof, copies of all reports filed by it or its
Affiliates on or prior to the Closing Date with the FCC in respect of the
Tribune Stations or the Xxxxx Stations, as the case may be.
(b) As promptly as practicable after the date hereof but in any
event no later than 20 days thereafter, Tribune and Xxxxxxxx shall file with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice the notifications and other information required to be filed by such
commission or department under the Improvements Act, or any rules and
regulations promulgated thereunder, with respect to the transactions
contemplated hereby. Each of Tribune and Xxxxxxxx covenants to file as
promptly as practicable such additional information as may be requested to be
filed by such commission or department. Each of Tribune and the Xxxxxxxx
warrants that all such filings by it will be, as of the date filed, true and
accurate in all material respects and in accordance with the requirements of
the Improvements Act and any such rules and regulations. Each of Tribune and
Xxxxxxxx agrees to make available to the other such other information as may be
required by such commission or department to be filed as additional information
requested by such agencies under the Improvements Act and such rules and
regulations. Tribune and Xxxxxxxx shall bear equally the cost of any filing
fees payable under the Improvements Act in connection with the notifications
and information described in this Section 4.3(b) and any such notification
filed by Xxxxxxxx in connection with the Xxxxx Merger, with each party
responsible for one-half of any such fees.
(c) Tribune and Xxxxxxxx shall each use their reasonable efforts to
obtain all consents and amendments from the parties to the Tribune Station
Agreements and the contracts and agreements included in the Xxxxx Station
Assets (the "Xxxxx Station Agreements"), respectively, and all consents,
amendments or permits from Governmental Bodies, which are required by the terms
thereof or this Agreement for the consummation of the transactions contemplated
by this Agreement; provided, however, that neither Tribune nor Xxxxxxxx shall
have any obligation to offer or pay any consideration in order to obtain any
such consents or amendments.
- 32 -
4.4. Operations of the Tribune Station Prior to the Closing Date.
(a) Except as approved by Xxxxxxxx pursuant to Section 4.4(b) below, the
Tribune Sub shall operate and carry on the Tribune Station Business only in the
ordinary course consistent with past practices and shall continue to promote
and conduct advertising on behalf of the Tribune Station at levels
substantially consistent with past practice. Consistent with the foregoing, the
Tribune Sub shall keep and maintain the Tribune Station Assets in good
operating condition and repair (wear and tear in ordinary usage excepted) and
shall use their best efforts consistent with good business practice to retain
the Tribune Station's libraries of films and other programming, to maintain the
business organization of the Tribune Station intact and to preserve the
goodwill of the suppliers, contractors, licensors, employees, customers,
distributors and others having business relations with the Tribune Station
Business.
(b) Notwithstanding Section 4.4(a), except as expressly contemplated
by this Agreement, except as set forth in Schedule 4.4(b) or except with the
express prior written approval of Xxxxxxxx, the Tribune Subs shall not, in
respect of the Tribune Station:
(i) make any material change in the Tribune Station Business or the
operations of the Tribune Station;
(ii) make any capital expenditure, or enter into any contract or
commitment therefor, in excess of $25,000 in the aggregate;
(iii) enter into any contract, agreement, undertaking or commitment
(or any extension or renewal thereof) which would have been required to be
set forth in Schedule 2.20 if in effect on the date hereof, other than
leases, contracts or other agreements that are entered into by the Tribune
Sub in the ordinary course of the Tribune Station Business and that do not
give rise to a liability in excess of $25,000 in the aggregate annually;
(iv) amend or consent to the amendment of any contract, agreement,
undertaking or commitment listed in Schedule 2.20, the effect of which is
to cause the terms of such contract, agreement, undertaking or commitment
to be materially less favorable to the Tribune Subs or Xxxxxxxx and the
Xxxxxxxx Sub than prior to such amendment or consent to amendment;
(v) sell, lease, transfer or otherwise dispose of or mortgage or
pledge, or impose or suffer to be imposed any Encumbrance on, any of the
Tribune Station Assets, other than (A) personal property sold or otherwise
disposed of for fair value in the ordinary course of the Tribune Station
Business consistent with past practice, (B) minor amounts of personal
property which are replaced due to defect or obsolescence with personal
property of substantially the same nature and of equal or greater quality
in the ordinary course of the Tribune Station Business consistent with
past practice and (C) Permitted Encumbrances;
(vi) create, incur, guarantee or assume, or agree to create, incur,
guarantee or assume, any indebtedness for borrowed money in respect of the
Tribune Station Business or enter into any capitalized leases;
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(vii) make any change in the compensation of the employees of the
Tribune Station Business, other than changes made in accordance with
normal compensation practices in the ordinary course of the Tribune
Station Business consistent with past practice;
(viii) make any change in the accounting policies applied in the
preparation of the financial statements contained in Schedule 2.4;
(ix) cancel or agree to cancel without fair consideration therefor
any debts owed to or claims held by the Tribune Subs in respect of the
Tribune Station Business (including the settlement of any claims or
litigation), other than in the ordinary course of the Tribune Station
Business consistent with past practice;
(x) accelerate collection of any notes or accounts receivable
generated by the Tribune Station Business to a date prior to the date such
collection would have occurred in the ordinary course of the Tribune
Station Business consistent with past practice;
(xi) delay payment of any account payable or other liability of the
Tribune Station Business beyond its due date or the date when such
liability would have been paid in the ordinary course of the Tribune
Station Business consistent with past practice;
(xii) institute any increase in any profit sharing, bonus,
incentive, deferred compensation, insurance, pension, retirement, medical,
hospital, disability, welfare or other employee benefit plan with respect
to employees of the Tribune Station Business other than (A) as required by
law and (B) changes made in the ordinary course of the Tribune Station
Business consistent with past practice; or
(xiii) agree or commit to do or authorize any of the foregoing.
4.5. Operations of the Xxxxx Station Prior to the Closing Date.
Xxxxxxxx will use its best efforts to cause KTC to comply with its covenants
and agreements contained in Section 6.01 of the Xxxxx Merger Agreement,
including, upon consultation and with the written agreement of Tribune,
commencing a legal or equitable action to enforce its rights thereunder;
provided, however, that Tribune shall be responsible for all costs and expenses
incurred by Xxxxxxxx in connection with its enforcement of such rights. After
the consummation of the Xxxxx Merger, Xxxxxxxx and the Xxxxxxxx Sub shall
comply with the covenants and agreements contained in Section 6.01 of the Xxxxx
Merger Agreement as if all references therein to KTC were references to
Xxxxxxxx and the Xxxxxxxx Sub.
4.6. Public Announcement. Neither Tribune nor Xxxxxxxx, nor any of
their Affiliates shall, without the approval of the other, make any press
release or other public announcement concerning the transactions contemplated
by this Agreement, except as and to the extent that any such party shall be so
obligated by law or by the rules, regulations or policies of any national
securities exchange or association, in which case the other party shall be
advised and the parties shall use their best efforts to cause a mutually
agreeable release or announcement to be issued.
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4.7. Interim Financial Statements. Tribune shall promptly deliver
to Xxxxxxxx copies of any monthly, quarterly or annual financial statements
relating solely to the Tribune Station Business. Such financial statements
shall fairly present the financial position and results of operations of the
Tribune Station Business as at the dates and for the periods indicated, and
shall be prepared on a basis consistent and in accordance with the basis upon
which the financial statements included in Schedule 2.4 were prepared.
Xxxxxxxx shall promptly deliver to Tribune copies of any monthly, quarterly or
annual financial statements relating to the Xxxxx Station Business received by
it from KTC pursuant to the Xxxxx Merger Agreement.
4.8. Rights of Xxxxxxxx Under Xxxxx Merger Agreement. Xxxxxxxx
agrees that, from the date hereof until the Closing Date, it will use its best
efforts to enforce all rights of Xxxxxxxx and Xxxxxxxx Sub under the Xxxxx
Merger Agreement including, upon consultation with and the written agreement
of Tribune, commencing a legal or equitable action to enforce its rights
thereunder; provided, however, that Tribune shall be responsible for all costs
and expenses incurred by Xxxxxxxx in connection with its enforcement of such
rights. Xxxxxxxx will not waive any right or consent to any action under the
Xxxxx Merger Agreement without the written consent of Tribune. Xxxxxxxx shall
promptly notify Tribune of any breach by KTC or the Partners of the
representations and warranties or covenants and agreements contained in the
Xxxxx Merger Agreement of which Xxxxxxxx becomes aware. Xxxxxxxx shall
promptly deliver all correspondence and other information received by Xxxxxxxx
from KTC or the Partners relating to the Xxxxx Station Business or the Xxxxx
Merger Agreement. Xxxxxxxx and Tribune agree that in the event that the Xxxxx
Merger Agreement is terminated, each party may incur damages and to the extent
that such damages arise from a breach for which KTC or the Partners are liable
pursuant to Section 11.02(a) of the Xxxxx Merger Agreement, Xxxxxxxx shall, at
the request of Tribune, enforce its rights thereunder for the benefit of
Tribune, in addition to Xxxxxxxx, with Tribune bearing the cost of such
enforcement pro rata based on the amount of damages claimed by each party.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Taxes; Sales, Use and Transfer Taxes; Title Insurance. (a)
Tribune shall be liable for and shall pay all Taxes (whether assessed or
unassessed) applicable to (i) the Tribune Station Business or the Tribune
Station Assets, in each case attributable to periods (or portions thereof)
ending on or prior to the Closing Date, except to the extent such Taxes are
reflected in the Closing Date Tribune Station Working Capital Amount, (ii) the
Xxxxx Station Business or the Xxxxx Station Assets(except for periods, or
portions thereof, after the consummation of the Xxxxx Merger and prior the
Closing Date) and (iii) Taxes reflected in the Closing Date Xxxxx Station
Working Capital Amount. Xxxxxxxx shall be liable for and shall pay all Taxes
(whether assessed or unassessed) applicable to (i) the Xxxxx Station Business
or the Xxxxx Station Assets, in each case attributable to periods (or portions
thereof) after the consummation of the Xxxxx Merger ending on or prior to the
Closing Date, except to the extent that such Taxes are reflected in the Closing
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Date Xxxxx Station Working Capital Amount or are described in Section 8.02(a)
of the Xxxxx Merger Agreement, (ii) the Tribune Station Business or the Tribune
Station Assets, in each case attributable to periods (or portions thereof)
beginning after the Closing Date and (iii) Taxes reflected in the Closing Date
Tribune Station Working Capital Amount. For purposes of this Section 5.1(a),
any period beginning before and ending after the Closing Date shall be treated
as two partial periods, one ending on the Closing Date and the other beginning
after the Closing Date; provided, however, that Taxes imposed on a periodic
basis shall be allocated on a daily basis.
(b) Any sales, use or other transfer Taxes payable by reason of
transfer and conveyance of the Tribune Station Assets or the Xxxxx Station
Assets hereunder and any documentary stamp or transfer Taxes payable by reason
of the real estate or interests therein included in the Tribune Station Assets
or the Xxxxx Station Assets, including those incurred in connection with the
consummation of the Xxxxx Merger, shall be paid 50% by Tribune and 50% by
Xxxxxxxx. All fees relating to any filing with any Governmental Body required
for transfer and conveyance of the Tribune Station Assets and the Xxxxx Station
Assets hereunder or in connection with the consummation of the Xxxxx Merger,
other than amounts (including Taxes) owing to any Governmental Body as of the
date hereof or with respect to events occurring prior to the date hereof, shall
be paid one-half by Tribune and one-half by Xxxxxxxx.
(c) Tribune or Xxxxxxxx, as the case may be, shall provide
reimbursement for any Tax paid by the other party all or a portion of which is
the responsibility of Tribune or Xxxxxxxx, as the case may be, in accordance
with the terms of this Section 5.1. Within a reasonable time prior to the
payment of any said Tax, the party paying such Tax shall give notice to the
other party of the Tax payable and the portion which is the liability of each
party, although failure to do so will not relieve the other party from its
liability hereunder.
5.2. Employees; Employee Benefit Plans. (a) Not less than 60 days
prior to Closing, Xxxxxxxx shall furnish Tribune with a schedule identifying
each employee listed on Schedule 2.18 to whom Xxxxxxxx intends to extend
employment as of Closing.
(b) Notwithstanding the foregoing provisions of this Section 5.2,
nothing contained in this Agreement shall be construed to create any obligation
on the part of Tribune to retain or on the part of Xxxxxxxx to employ or retain
any employees of the Xxxxx Station Business ("Xxxxx Station Employees") or the
Tribune Station Business ("Tribune Station Employees"), as the case may be, on
or after the Closing Date and any employees so employed or retained shall be so
employed or retained on an "at will" basis only, unless Tribune or Xxxxxxxx, as
the case may be, shall otherwise expressly agree in writing.
(c) (i) Tribune shall not assume any obligations under any employee
benefit plan maintained, or contributed to, by Meredith, KTC or any of their
Affiliates ("Xxxxxxxx Plans") or any other obligations of Xxxxxxxx or any of
their Affiliates to Xxxxx Station Employees. Xxxxxxxx shall not assume any
obligations under any employee benefit plan maintained, or contributed to, by
Tribune or any of its Affiliates ("Tribune Plans") or any other obligations of
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Tribune or any of its Affiliates to Tribune Station Employees. Without
limiting the foregoing, Tribune and the Xxxxxxxx each shall provide
continuation coverage to each individual who under the terms of its respective
health plan is entitled to continuation rights pursuant to Section 4980B of the
Code or Part 6 of Subtitle I of ERISA.
(ii) Each Tribune Station Employee who becomes employed by the
Xxxxxxxx Sub and each Xxxxx Station Employee who becomes employed by the
Tribune Sub, in either case as of the Closing Date or within four weeks
thereafter (a "Continuing Employee"), shall participate in any group medical,
dental and life insurance plans for which such employee becomes eligible on the
first day of the first month following the Closing Date, without any evidence
of insurability, and without application of any pre-existing condition
limitations. All claims arising prior to the Closing Date under Tribune Plans
shall be counted under Xxxxxxxx Plans, and all claims arising prior to the
Closing Date under Xxxxxxxx Plans shall be counted under Tribune Plans, for
purposes of deductibles, out-of-pocket maximums, benefit maximums, and all
other similar limitations for calendar year in which the Closing Date occurs.
Tribune shall take into account the service of Continuing Employees with the
Xxxxxxxx Sub prior to the Closing Date and Xxxxxxxx shall take into account the
service of Continuing Employees with the Tribune Sub prior to the Closing Date,
in each case for purposes of determining such employees' eligibility for
holidays, sick days and vacation benefits. Each Xxxxxxxx Plan and Tribune Plan
that includes a qualified cash or deferred arrangement (within the meaning of
Section 401(k) of the Code) shall accept the rollover of distributions from any
Tribune Plan or Xxxxxxxx Plan, as the case may be, directed by Continuing
Employees. Except as otherwise set forth herein, Tribune and Xxxxxxxx, each in
its sole discretion, may modify or terminate any of its respective employee
benefit plans, programs, policies or arrangements at any time after the Closing
Date for any reason.
(iii) Tribune and Xxxxxxxx each shall bear the cost and expense of
any workers' compensation claim asserted and arising out of an injury sustained
by any of its respective employees prior to the Closing Date.
(d) Notwithstanding anything in Sections 5.2(a), (b) and (c) to the
contrary, Tribune shall honor the covenants of Xxxxxxxx set forth in Article
VII of the Xxxxx Merger Agreement, as if Tribune, rather than Xxxxxxxx, were
the "Purchaser" thereunder.
5.3. Control of Operations Prior to Closing Date. Notwithstanding
anything contained herein to the contrary, the Closing shall not be consummated
prior to the grant by the FCC of the FCC Order. Tribune and Xxxxxxxx
acknowledge and agree that at all times commencing on the date hereof and
ending on the Closing Date, (i) neither Xxxxxxxx, the Xxxxxxxx Sub nor any of
their employees, agents or representatives, directly or indirectly, shall, or
have any right to, control, direct or otherwise supervise, or attempt to
control, direct or otherwise supervise any of the management or operations of
the Tribune Stations, it being understood that the operation, management,
control and supervision of all programs, equipment, operations and other
activities of the Tribune Stations shall be the sole responsibility, and at all
times prior to the Closing Date remain within the complete control and
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discretion, of the Tribune Subs, subject to the terms of Section 4.4 of this
Agreement and (ii) neither Tribune, the Tribune Subs nor any of their
employees, agents or representatives, directly or indirectly, shall, or have
any right to, control, direct or otherwise supervise, or attempt to control,
direct or otherwise supervise any of the management or operations of the Xxxxx
Station, it being understood that the operation, management, control and
supervision of all programs, equipment, operations and other activities of the
Xxxxx Station shall be the sole responsibility, and at all times prior to the
Closing Date remain within the complete control and discretion of KTC prior to
the consummation of the Xxxxx Merger and the Xxxxxxxx Sub, subject to the terms
of Section 6.01 of the Xxxxx Merger Agreement and the Xxxxxxxx Sub from the
consummation of the Xxxxx Merger to the Closing Date.
5.4. Closing of Xxxxx Merger. The parties agree that if the
consummation of the Xxxxx Merger does not occur contemporaneously with the
Closing, Xxxxxxxx, the Xxxxxxxx Sub, Tribune and the Tribune Sub shall enter
into time brokerage agreements pursuant to which Xxxxxxxx or the Xxxxxxxx Sub
will provide programming for, and be entitled to all the revenues of, the
Tribune Station, and Tribune or the Tribune Sub will provide programming for,
and be entitled to the revenues of, the Xxxxx Station, such agreements each to
provide for reimbursement of reasonable operating expenses but without payment
of additional consideration, and such agreements to commence on a date
designated by Xxxxxxxx after expiration or termination of any applicable
waiting period under the Improvements Act and to terminate on the earlier of
(A) the Closing hereunder or (B) any date designated by Xxxxxxxx that is not
earlier than 180 days after the earlier of the consummation of the Xxxxx Merger
or the date Xxxxxxxx delivers the Postponement Notice (as defined in the Xxxxx
Merger Agreement); and if such agreements are terminated by Xxxxxxxx prior to
Closing hereunder, then this Agreement shall simultaneously terminate with
respect to the Tribune Station but shall continue in effect with respect to the
Xxxxx Station, and at Closing Tribune shall pay to Xxxxxxxx in cash an amount
equal to the KTC Purchase Price (as defined in the Xxxxx Merger Agreement).
The closing conditions contained in Sections 6.1 and 6.4 shall not apply to any
Closing hereunder occurring after the effectiveness of the time brokerage
agreements referred to above.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIBUNE AND
THE TRIBUNE SUB
The obligations of Tribune and the Tribune Sub under this Agreement
shall, at the option of Tribune and the Tribune Sub, be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
6.1. No Misrepresentation or Breach of Covenants and Warranties.
There shall have been no material breach by Xxxxxxxx or the Xxxxxxxx Sub in the
performance of any of their respective covenants and agreements contained
herein; each of the representations and warranties of Xxxxxxxx and the Xxxxxxxx
Sub contained or referred to herein shall be true and correct in all material
respects on the Closing Date as though made on the Closing Date (except to the
- 38 -
extent that they expressly speak as of a specific date or time other than the
Closing Date, in which case they need only have been true and correct in all
material respects as of such specified date or time), except for changes
therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by Tribune or any transaction
explicitly permitted by this Agreement; and there shall have been delivered to
Tribune a certificate or certificates to such effect, dated as of the Closing
Date, signed on behalf of Xxxxxxxx and the Xxxxxxxx Sub by its President or any
Vice President.
6.2. No Restraint or Litigation. (a) Any applicable waiting period
under the Improvements Act shall have expired or have been terminated and there
shall not be in effect any order of a court of competent jurisdiction, which,
in any case, restrains or prohibits the transactions contemplated hereby.
6.3. FCC Order. The FCC shall have issued the FCC Order and any
condition or action required to be satisfied or taken to legally effect the
assignment of the Xxxxx Station FCC Authorizations to the Tribune Sub in
compliance with the FCC Order shall have been so satisfied or taken (provided,
that in no event shall the foregoing require the satisfaction of any condition
or the taking of any action that could under the terms of the FCC Order be so
satisfied or taken subsequent to the Closing); provided, that in the event that
a petition to deny or other material objection has been filed with the FCC with
respect to the application for transfer of control of the Xxxxx Station FCC
Authorizations to the Tribune Sub and there exists a significant risk that the
FCC Order will not become Final, the FCC Order shall have become Final Order.
As used in this Agreement, the term "FCC Order" means an order or decision of
the FCC that grants, without material adverse condition, all consents or
approvals required under the Communications Act for the assignment of the Xxxxx
Station FCC Authorizations to the Tribune Sub or the Tribune Station FCC
Authorizations to the Xxxxxxxx Sub, as the case may be, and the other
transactions contemplated by this Agreement. For purposes of this Agreement,
the term "Final" shall mean that action shall have been taken by the FCC
(including action duly taken by the FCC's staff, pursuant to delegated
authority) which shall not have been reversed, stayed, enjoined, set aside,
annulled or suspended; with respect to which no timely request for stay,
petition for rehearing, appeal or certiorari or sua sponte action of the FCC
with comparable effect shall be pending; and as to which the time for filing
any such request, petition, appeal, certiorari or for the taking of any sua
sponte action by the FCC shall have expired or otherwise terminated. The
following shall be deemed not to be material adverse conditions for purposes of
the definition of FCC Order: (i) a condition by the FCC that the Closing not
occur until the grant of applications for renewal of the FCC License for the
Xxxxx Station or (ii) a condition by the FCC that Tribune, the Tribune Sub or
any of their Affiliates divest itself of any media property at the Closing or
at any future date if ownership of which, in combination with the ownership of
the Xxxxx Station, violates the rules, regulations or policies of the FCC.
6.4. No Material Adverse Change. Since the date of this Agreement,
there shall have been no damage, destruction, loss or claim (whether or not
covered by insurance) or condemnation or other taking which materially
adversely affects the Xxxxx Station or its business, taken as a whole.
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6.5. Xxxxx Merger. The acquisition by Xxxxxxxx of the Xxxxx Station
pursuant to the Xxxxx Merger shall have been consummated.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXXXX
AND THE XXXXXXXX SUBS
The obligations of Xxxxxxxx and the Xxxxxxxx Sub under this Agreement
shall, at the option of Xxxxxxxx and the Xxxxxxxx Sub, be subject to the
satisfaction on or prior to the Closing Date, of the following conditions:
7.1. No Restraint or Litigation. Any applicable waiting period
under the Improvements Act shall have expired or been terminated and there
shall not be in effect any order of a court of competent jurisdiction, which,
in any case, restrains or prohibits the transactions contemplated hereby.
7.2. FCC Order. The FCC shall have issued the FCC Order and any
condition or action required to be satisfied or taken to legally effect the
assignment of the Tribune Station FCC Authorizations to the Xxxxxxxx Sub in
compliance with the FCC Order shall have been so satisfied or taken (provided,
that in no event shall the foregoing require the satisfaction of any condition
or the taking of any action that could under the terms of the FCC Order be so
satisfied or taken subsequent to the Closing); provided, that in the event that
a petition to deny or other material objection has been filed with the FCC with
respect to the application for transfer of control of the Tribune Station FCC
Authorizations to the Xxxxxxxx Sub and there exists a significant risk that the
FCC Order will not become Final, the FCC Order shall have become Final Order.
The following shall be deemed not to be material adverse conditions for
purposes of the definition of FCC Order: (i) a condition by the FCC that the
Closing not occur until the grant of applications for renewal of the FCC
License for the Tribune Station or (ii) a condition by the FCC that Xxxxxxxx,
the Xxxxxxxx Sub or any of their Affiliates divest itself of any media property
at the Closing or at any future date if ownership of which, in combination with
the ownership of the Tribune Station, violates the rules, regulations or
policies of the FCC.
7.3. Lease Extension. The Tribune Sub shall have entered into an
extension for not less than 5 years of the lease for the main tower of the
Tribune Station containing terms and conditions (other than rental rates) that
are substantially similar to the existing lease and at market rental rates.
7.4. Transmission Interruption. There shall not have occurred any
damage or destruction of property or other circumstances causing the regular
broadcast transmission of the Tribune Station in the normal and usual manner to
be interrupted for a period that is in excess of 7 days and is continuing.
7.5. Xxxxx Merger. The acquisition by Xxxxxxxx of the Xxxxx Station
pursuant to the Xxxxx Merger shall have been consummated.
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ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification by Tribune. Tribune agrees to indemnify and
hold harmless the Xxxxxxxx and the Xxxxxxxx Sub from and against any and all
Loss and Expense incurred by Xxxxxxxx or the Xxxxxxxx Sub in connection with or
arising from:
(i) any breach by Tribune or the Tribune Sub of, or any other
failure of Tribune or the Tribune Sub to perform, any of their respective
covenants, agreements or obligations in this Agreement or in any Tribune
Ancillary Agreement;
(ii) any breach of any warranty or the inaccuracy of any
representation of Tribune or the Tribune Sub contained or referred to in
this Agreement or any certificate delivered by or on behalf of Tribune or
Tribune Sub pursuant hereto;
(iii) the failure of Tribune and the Tribune Sub to perform any
Excluded Tribune Station Liabilities;
(iv) (A) the occupancy, operation, use or control of any of the real
property listed on Schedule 2.10 or Schedule 2.11 prior to the Closing
Date or (B) the operation of the Tribune Station Business prior to the
Closing Date, in each case incurred or imposed as a requirement of or in
connection with the compliance with any environmental, health or safety
Requirements of Law, including, without limitation, any Release or storage
of any Contaminant on, at or from (1) any such real property (including,
without limitation, all facilities, improvements, structures, and
equipment thereon, surface water thereon or adjacent thereto and soil or
groundwater thereunder) or any conditions whatsoever on, under or in such
real property or (2) any real property or facility owned by a third party
at which Contaminants generated by the Tribune Station Business were sent
prior to the Closing Date; and
(v) the failure of Tribune and the Tribune Subs to perform any of
the Assumed Xxxxx Station Liabilities;
provided, however, that, except as set forth below, Tribune shall not be
required to indemnify and hold harmless pursuant to clause (ii) with respect to
Loss and Expense incurred by Xxxxxxxx or the Xxxxxxxx Sub until, and then only
to the extent that, the aggregate amount of such Loss and Expense exceeds
$1,000,000 and, provided, further, that the aggregate amount that Tribune shall
be required to indemnify and hold harmless pursuant to clause (ii) with respect
to Loss and Expense incurred by the Xxxxxxxx or the Xxxxxxxx Sub shall not
exceed $25,000,000. Notwithstanding the foregoing, the limitation contained in
the first proviso above shall not apply to any Loss or Expense resulting from
the failure of any representation and warranty of Tribune or the Tribune Sub
contained herein to be true and correct in all material respects as of the
Closing Date (except to the extent that they expressly speak as of a specific
date or time, in which case they need only have been true and correct as of
- 41 -
such specified date or time) to the extent that Xxxxxxxx gives written notice
to Tribune of such breach prior to the Closing. The indemnification provided
for in this Section 8.1 shall terminate on the twelve-month anniversary of the
Closing Date (and no claims shall be made by Xxxxxxxx or the Xxxxxxxx Sub under
this Section 8.1 thereafter), except that the indemnification by Tribune shall
continue in any event as to:
(A) any breach of any warranty or the inaccuracy of any
representation of Tribune or the Tribune Subs contained or referred to in
Section 2.3, 2.17 or 2.24, as to all of which no time limitation shall
apply other than the full period of any applicable statute of limitations;
(B) the covenants of Tribune or the Tribune Subs set forth in
Section 5.1, 10.2 or 10.10, as to all of which no time limitation shall
apply other than the full period of any applicable statute of limitations;
(C) any Loss or Expense incurred by Xxxxxxxx or the Xxxxxxxx Sub in
connection with or arising out of the failure of Tribune and the Tribune
Sub to perform any Excluded Tribune Station Liability or any Assumed Xxxxx
Station Liability, as to which no time limitation shall apply;
(D) any Loss or Expense incurred by Xxxxxxxx or the Xxxxxxxx Sub in
connection with or arising from the matters described in clause (iv) of
this Section 8.1, as to which no time limitation shall apply other than
the full period of any applicable statute of limitations; and
(E) any Loss or Expense of which Xxxxxxxx or the Xxxxxxxx Sub has
notified Tribune in accordance with the requirements of Section 8.3 on or
prior to the date such indemnification would otherwise terminate in
accordance with this Section 8.1, as to which the obligation of Tribune
shall continue until the liability of Tribune shall have been determined
pursuant to this Article VIII, and Tribune shall have reimbursed Xxxxxxxx
or the Xxxxxxxx Sub for the full amount of such Loss and Expense in
accordance with this Article VIII.
8.2. Indemnification by Xxxxxxxx. Xxxxxxxx agrees to indemnify and
hold harmless Tribune and the Tribune Subs from and against any and all Loss
and Expense incurred by Tribune or the Tribune Subs in connection with or
arising from:
(i) any breach by Xxxxxxxx or the Xxxxxxxx Sub of, or any other
failure of Xxxxxxxx or the Xxxxxxxx Sub to perform, any of their
respective covenants, agreements or obligations in this Agreement or in
any Xxxxxxxx Ancillary Agreement;
(ii) any breach of any warranty or the inaccuracy of any representation
of Xxxxxxxx or the Xxxxxxxx Sub contained or referred to in this Agreement
or any certificate delivered by or on behalf of Xxxxxxxx or the Xxxxxxxx
Sub pursuant hereto;
(iii) the failure of Xxxxxxxx and the Xxxxxxxx Sub to perform any
Excluded Xxxxx Station Liabilities;
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(iv) the failure of Xxxxxxxx and the Xxxxxxxx Sub to perform any of the
Assumed Tribune Station Liabilities;
provided, however, that Xxxxxxxx shall not be required to indemnify and hold
harmless pursuant to clause (ii) with respect to Loss and Expense incurred by
Tribune or the Tribune Sub until, and then only to the extent that, the
aggregate amount of such Loss and Expense exceeds $1,000,000 and, provided,
further, that the aggregate amount that Xxxxxxxx shall be required to indemnify
and hold harmless pursuant to clause (ii) with respect to Loss and Expense
incurred by Tribune or the Tribune Sub shall not exceed $25,000,000. The
indemnification provided for in this Section 8.2 shall terminate on the twelve-
month anniversary of the Closing Date (and no claims shall be made by Tribune
or the Tribune Sub under this Section 8.2 thereafter), except that the
indemnification by Xxxxxxxx or the Xxxxxxxx Subs shall continue in any event as
to:
(A) any breach of any warranty or the inaccuracy of any
representation of Xxxxxxxx or the Xxxxxxxx Sub contained or referred to in
Sections 3.3 or 3.4, as to all of which no time limitation shall apply
other than the full period of any applicable statute of limitations;
(B) the covenants of the Xxxxxxxx or the Xxxxxxxx Sub set forth in
Section 5.1, 10.2 or 10.10, as to all of which no time limitation shall
apply other than the full period of any applicable statute of limitations;
(C) any Loss or Expense incurred by Tribune or the Tribune Sub in
connection with or arising out of the failure of Xxxxxxxx and the Xxxxxxxx
Sub to perform any Excluded Xxxxx Station Liability or any Assumed Tribune
Station Liabilities, as to which no time limitation shall apply;
(D) any Loss or Expense of which Tribune or the Tribune Subs has
notified Xxxxxxxx in accordance with the requirements of Section 8.3 on or
prior to the date such indemnification would otherwise terminate in
accordance with this Section 8.1, as to which the obligation of Xxxxxxxx
shall continue until the liability of Xxxxxxxx shall have been determined
pursuant to this Article VIII, and Xxxxxxxx shall have reimbursed Tribune
or the Tribune Sub for the full amount of such Loss and Expense in
accordance with this Article VIII.
8.3. Notice of Claims. (a) If Tribune and the Tribune Subs (the
"Tribune Entities") or Xxxxxxxx and the Xxxxxxxx Subs (the "Xxxxxxxx Entities")
believes that they have suffered or incurred any Loss or incurred any Expense,
the Tribune Entities or the Xxxxxxxx Entities shall so notify the other
promptly in writing describing such Loss or Expense, the amount thereof, if
known, and the method of computation of such Loss or Expense, all with
reasonable particularity and containing a reference to the provisions of this
Agreement or other agreement, instrument or certificate delivered pursuant
hereto in respect of which such Loss or Expense shall have occurred.
- 43 -
If any action at law or suit in equity is instituted by or against a
third party with respect to which the Tribune Entities or the Xxxxxxxx Entities
intend to claim any liability or expense as Loss or Expense under this Article
VIII, the Tribune Entities or the Xxxxxxxx Entities, as the case may be, shall
promptly notify the indemnifying party of such action or suit. The failure of
any party to give any notice required by this Section 8.3 shall not affect any
of such party's rights under this Article VIII except to the extent such
failure is actually prejudicial to the rights or obligations of the other
party.
(b) The amount to which an indemnified person shall be entitled
under this Article VIII shall be determined: (i) by written agreement between
Tribune and Xxxxxxxx, (ii) by a final judgment or decree of any court of
competent jurisdiction or (iii) by any other means to which Tribune and
Xxxxxxxx shall agree. The judgment or decree of a court shall be deemed final
when the time for appeal, if any, shall have expired and no appeal shall have
been taken or when all appeals taken have been finally determined. The
indemnified party shall have the burden of proof in establishing the amount of
the Loss and Expense suffered by it.
8.4. Third Party Claims. (a) Subject to paragraph (b) of this
Section 8.4, the party to be indemnified under this Article VIII shall have the
right to conduct and control, through counsel of its choosing, any third party
claim, action or suit, and the party indemnified may compromise or settle the
same, provided that the indemnified party shall give the indemnifying party
advance notice of any proposed compromise or settlement. The indemnified party
shall permit the indemnifying party to participate in the defense of any such
action or suit through counsel chosen by it, provided that the fees and
expenses of such counsel shall be borne by the indemnifying party. Subject to
paragraph (b) of this Section 8.4, any compromise or settlement with respect to
a claim for money damages effected after the indemnifying party by notice to
the indemnified party shall have disapproved such compromise or settlement
shall discharge the indemnifying party from liability with respect to the
subject matter thereof, and no amount in respect thereof shall be claimed as
Loss or Expense under this Article VIII.
(b) If the remedy sought in any action or suit referred to in
paragraph (a) of this Section 8.4 is solely money damages and will have no
continuing effect on the business of the indemnified party, the indemnifying
party shall have 15 business days after receipt of the notice referred to in
Section 8.3(a) to notify the indemnified party that it elects to conduct and
control such action or suit. If the indemnifying party does not give the
foregoing notice, the indemnified party shall have the right to defend,
contest, settle or compromise such action or suit in the exercise of its
exclusive discretion, and the indemnifying party shall, upon request from the
indemnified party, promptly pay to the indemnified party in accordance with the
other terms of this Article VIII the amount of any Loss resulting from its
liability to the third party claimant and all related Expense. If the
indemnifying party gives the foregoing notice, the indemnifying party shall
have the right to undertake, conduct and control, through counsel of its own
choosing and at the sole expense of the indemnifying party, the conduct and
settlement of such action or suit, and the indemnified party shall cooperate
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with the indemnifying party in connection therewith; provided that (x) the
indemnifying party shall not thereby permit to exist any lien, encumbrance or
other adverse charge upon any asset of the indemnified party; (y) the
indemnifying party shall permit the indemnified party to participate in such
conduct or settlement through counsel chosen by the indemnified party, but the
fees and expenses of such counsel shall be borne by the indemnified party
except as provided in clause (z) below; and (z) the indemnifying party shall
agree promptly to reimburse to the extent required under this Article VIII the
indemnified party for the full amount of any Loss resulting from such action or
suit and all related Expense incurred by the indemnified party, except fees and
expenses of counsel for the indemnified party incurred after the assumption of
the conduct and control of such action or suit by the indemnifying party. So
long as the indemnifying party is contesting any such action or suit in good
faith, the indemnified party shall not pay or settle any such action or suit.
Notwithstanding the foregoing, the indemnified party shall have the right to
pay or settle any such action or suit, provided that in such event the
indemnified party shall waive any right to indemnity therefor by the
indemnifying party, and no amount in respect thereof shall be claimed as Loss
or Expense under this Article VIII.
8.5. No Effect on Adjustment. Nothing contained in this Article
VIII shall affect the adjustment provided for in Section 1.10 and the full
amount of the adjustment payment which Tribune or Xxxxxxxx, as the case may be,
may be entitled to receive thereunder.
8.6. Exclusive Remedy. Any other provisions of this Agreement to
the contrary notwithstanding, from and after the Closing, the sole and
exclusive liability and responsibility of the Tribune Entities to the Xxxxxxxx
Entities, or of the Xxxxxxxx Entities to the Tribune Entities, under or in
connection with this Agreement or the transactions contemplated hereby
(including, without limitation, for any breach or inaccuracy of any
representation or warranty or for any breach of any covenants or for any other
reason), and the sole and exclusive remedy of the Tribune Entities and the
Xxxxxxxx Entities vis-a-vis each other with respect to any of the foregoing,
shall be as set forth in this Article VIII; provided, however, that each party
hereto shall retain all non-monetary equitable remedies available to it in
respect of any breach or alleged breach by any other party of any covenant or
other agreement of such other party contained in or made pursuant to this
Agreement and required to be performed after the Closing Date. To the extent
that a party hereto has any Loss or Expenses for which it may assert any other
right to indemnification, contribution or recovery from the other party hereto
(whether under this Agreement, under common law or any statute or otherwise),
such party with such Loss or Expense hereby waives, releases and agrees not to
assert such right. In furtherance and not in limitation of the foregoing, the
Tribune Entities and the Xxxxxxxx entities agree that their respective rights
and obligations in respect of environmental matters as provided herein shall
supersede any such rights and obligations any of them may have under existing
or future law.
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ARTICLE IX
TERMINATION
9.1. Termination. (a) Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated at any time prior
to the Closing: (i) by the mutual consent of Tribune and Xxxxxxxx; (ii) by
Tribune or Xxxxxxxx if the Xxxxx Merger Agreement shall be terminated; or (iii)
by Tribune or Xxxxxxxx if the Closing shall not have occurred on or before the
later of May 21, 1999 and the date that is 15 days after termination of the
time brokerage agreements referred to in Section 5.4 (or such later date as may
be mutually agreed to by Tribune and Xxxxxxxx).
(b) In the event that this Agreement shall be terminated pursuant to
this Article IX, all further obligations of the parties under this Agreement
(other than Sections 10.2 and 10.10) shall be terminated without further
liability of any party to the other; provided that nothing herein shall relieve
any party from liability for its breach of this Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1. Survival of Representations, Warranties and Obligations. All
representations, warranties, covenants and obligations contained in this
Agreement shall survive the consummation of the transactions contemplated by
this Agreement; provided, however, that, except as otherwise provided in
Article VIII, the representations and warranties contained in Articles II and
III of this Agreement (other than the representations and warranties contained
in Sections 2.3, 2.17, 2.24, 3.3, or 3.4) shall terminate on the twelve-month
anniversary of the Closing Date. Except as otherwise provided herein, no claim
shall be made for the breach of any representation or warranty contained in
Article II or III after the date on which such representations and warranties
terminate as set forth in this Section.
10.2. Confidential Nature of Information. Each party agrees that it
will treat in confidence all documents, materials and other information which
it shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated
hereby (whether obtained before or after the date of this Agreement), the
investigation provided for herein and the preparation of this Agreement and
other related documents, and, in the event the transactions contemplated hereby
shall not be consummated, each party will return to the other party all copies
of nonpublic documents and materials which have been furnished in connection
therewith. The obligation of each party to treat such documents, materials and
other information in confidence shall not apply to any information which (a)
such party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is known to the public and did not
become so known through any violation of a legal obligation, (c) became known
to the public through no fault of such party, (d) is later lawfully acquired by
such party from other sources or (e) such party is required to disclose any
- 46 -
such information pursuant to judicial order or, in the opinion of counsel,
pursuant to applicable law. Without limiting the right of either party to
pursue all other legal and equitable rights available to it for violation of
this Section 10.2 by the other party, it is agreed that other remedies cannot
fully compensate the aggrieved party for such a violation of this Section 10.2
and that the aggrieved party shall be entitled to injunctive relief to prevent
a violation or continuing violation hereof.
10.3. Governing Law; Venue. This Agreement and the transactions
contemplated hereby shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to its choice of law rules.
10.4. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
when delivered personally or by messenger or 72 hours after having been sent by
registered or certified mail or when delivered by private courier addressed as
follows:
If to Tribune or the Tribune Subs, to:
Tribune Broadcasting Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
with copies to:
Tribune Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
If to the Exchange Party or the Exchange Party
Subs, to:
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxx
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with copies to:
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
and:
Wiley, Rein & Fielding
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxx
or to such other address as such party may indicate by a notice delivered to
the other parties hereto.
10.5. Successors and Assigns. (a) The rights of any party under
this Agreement shall not be assignable by such party hereto prior to the
Closing without the written consent of the other parties hereto.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns. Nothing in this
Agreement, expressed or implied, is intended or shall be construed to confer
upon any person other than the parties and successors and assigns permitted by
this Section 10.5 any right, remedy or claim under or by reason of this
Agreement.
10.6. Access to Records after Closing. For a period of six years
after the Closing Date (i) Tribune and its representatives shall have
reasonable access to all of the books and records of the Tribune Station
Business transferred to Xxxxxxxx hereunder to the extent that such access may
reasonably be required by Tribune in connection with matters relating to or
affected by the operations of the Tribune Station Business prior to the Closing
Date and (ii) Xxxxxxxx and its representatives shall have reasonable access to
all of the books and records of the Xxxxx Station Business transferred to the
Tribune Sub hereunder to the extent that such access may reasonably be required
by Xxxxxxxx in connection with matters relating to or affected by the
operations of the Tribune Station Business prior to the Closing Date. Such
access shall be afforded by Tribune or Xxxxxxxx, as the case may be, upon
receipt of reasonable advance notice and during normal business hours. Tribune
or Xxxxxxxx, as the case may be, shall be solely responsible for any costs or
expenses incurred by it pursuant to this Section 10.6. If Tribune or Xxxxxxxx,
as the case may be, shall desire to dispose of any of such books and records
prior to the expiration of such six-year period, it shall, prior to such
disposition, give the other party a reasonable opportunity, at the other
party's expense, to segregate and remove such books and records as the other
party may select.
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For a period of six years after the Closing Date, (i) Tribune and its
representatives shall have reasonable access to all of the books and records
relating to the Xxxxx Station Business which Xxxxxxxx or any of its Affiliates
may retain after the Closing Date and (ii) Xxxxxxxx and its representatives
shall have reasonable access to all of the books and records relating to the
Tribune Station Business which Tribune or any of its Affiliates may retain
after the Closing Date. Such access shall be afforded by Tribune or Xxxxxxxx,
as the case may be, and its Affiliates upon receipt of reasonable advance
notice and during normal business hours. Tribune or Xxxxxxxx, as the case may
be, shall be solely responsible for any costs and expenses incurred by it
pursuant to this Section 10.6. If Tribune or Xxxxxxxx, as the case may be, or
any of its Affiliates shall desire to dispose of any of such books and records
prior to the expiration of such six-year period, Tribune or Xxxxxxxx, as the
case may be, shall, prior to such disposition, give the other party a
reasonable opportunity, at the other party's expense, to segregate and remove
such books and records as the other party may select.
10.7. Entire Agreement; Amendments. This Agreement and the Exhibits
and Schedules referred to herein and the documents delivered pursuant hereto
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements,
understandings or intents between or among any of the parties hereto. The
parties hereto, by mutual agreement in writing, may amend, modify and
supplement this Agreement.
10.8. Interpretation. Article titles and headings to sections
herein are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein.
10.9. Waivers. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party or
parties entitled to the benefit thereof. The failure of any party hereto to
enforce at any time any provision of this Agreement shall not be construed to
be a waiver of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Agreement shall
be held to constitute a waiver of any other or subsequent breach.
10.10. Expenses. The Tribune Entities and the Xxxxxxxx Entities
will each pay all of their own respective costs and expenses incident to their
negotiation and preparation of this Agreement and to their performance and
compliance with all agreements and conditions contained herein on their part to
be performed or complied with, including the fees, expenses and disbursements
of their counsel and accountants.
- 49 -
10.11. Partial Invalidity. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
10.12. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement,
and shall become binding when one or more counterparts have been signed by each
of the parties and delivered to each of Tribune and Xxxxxxxx.
10.13. Definitions. As used in this Agreement, the following terms
have the meanings specified or referred to in this Section 10.13:
"Affiliate" means, with respect to any person, any other person which
directly or indirectly controls, is controlled by or is under common control
with such person.
"Assumed Xxxxx Station Liabilities" has the meaning specified in
Section 1.6(a).
"Assumed Tribune Station Liabilities" has the meaning specified in
Section 1.5(a).
"Closing" has the meaning specified in Section 1.7.
"Closing Date" has the meaning specified in Section 1.7.
"Closing Date Xxxxx Station Working Capital Amount" means the
following:
(a) all cash and cash equivalents (including any marketable
securities or certificates of deposit) reflected on the Xxxxx Station Closing
Date Balance Sheet; plus
(b) all accounts receivable generated by the Xxxxx Station Business,
less the allowance for doubtful accounts, reflected on the Xxxxx Station
Closing Date Balance Sheet; plus
(c) the amount of inventory (exclusive of any amounts relating to
programming or broadcast rights) reflected on the Xxxxx Station Closing Date
Balance Sheet; plus
(d) the amount of other current assets (exclusive of any amounts
relating to programming or broadcast rights) reflected on the Xxxxx Station
Closing Date Balance Sheet; minus
- 50 -
(e) the amount of accounts payable and accrued equipment rentals of
the Xxxxx Station reflected on the Xxxxx Station Closing Date Balance Sheet;
minus
(f) the amount of accrued salary, payroll and wages and accrued sick
pay reflected on the Xxxxx Station Closing Date Balance Sheet; minus
(g) the amount of any accrued accounting fees or expenses reflected
on the Xxxxx Station Closing Date Balance Sheet; minus
(h) the amount of any other accrued current liabilities reflected on
the Xxxxx Station Closing Date Balance Sheet; minus
(i) the amount of any accrued Taxes reflected on the Xxxxx Station
Closing Date Balance Sheet (other than federal, state and local income Taxes).
It is expressly understood and agreed that, notwithstanding the foregoing, for
purposes of calculating the Closing Date Xxxxx Station Working Capital Amount
there shall not be included in the assets of the Xxxxxxxx Sub as of the Closing
Date any amounts in respect of Excluded Xxxxxxxx Assets or amounts relating to
the programming or broadcast contracts and there shall not be included in the
liabilities of the Xxxxxxxx Sub as of the Closing Date any amounts in respect
of Excluded Xxxxx Station Liabilities or amounts relating to programming or
broadcast contracts; provided, however, that the calculation of the Closing
Date Xxxxx Station Working Capital Amount shall, for all other amounts, be made
in accordance with generally accepted accounting principles consistently
applied.
"Closing Date Tribune Station Working Capital Amount" means the
following:
(a) all cash and cash equivalents (including any marketable
securities or certificates of deposit) reflected on the Tribune Station Closing
Date Balance Sheet; plus
(b) all accounts receivable generated by the Tribune Station
Business, less the allowance for doubtful accounts, reflected on the Tribune
Station Closing Date Balance Sheets; plus
(c) the amount of inventory (exclusive of any amounts relating to
programming or broadcast rights) reflected on the Tribune Station Closing Date
Balance Sheets; plus
(d) the amount of other current assets (exclusive of any amounts
relating to programming or broadcast rights) reflected on the Tribune Station
Closing Date Balance Sheets; minus
(e) the amount of accounts payable and accrued equipment rentals of
the Tribune Stations reflected on the Tribune Station Closing Date Balance
Sheets; minus
- 51 -
(f) the amount of accrued salary, payroll and wages and accrued sick
pay reflected on the Tribune Station Closing Date Balance Sheets; minus
(g) the amount of any accrued accounting fees or expenses reflected
on the Tribune Station Closing Date Balance Sheets; minus
(h) the amount of any other accrued current liabilities reflected on
the Tribune Station Closing Date Balance Sheets; minus
(i) the amount of any accrued Taxes reflected on the Tribune Station
Closing Date Balance Sheets (other than federal, state and local income Taxes).
It is expressly understood and agreed that, notwithstanding the foregoing, for
purposes of calculating the Tribune Station Closing Date Working Capital Amount
there shall not be included in the assets of the Tribune Subs as of the Closing
Date any amounts in respect of Excluded Tribune Assets or amounts relating to
programming or broadcast contracts and there shall not be included in the
liabilities of the Tribune Subs as of the Closing Date any amounts in respect
of Excluded Tribune Station Liabilities or amounts relating to programming or
broadcast contracts provided; provided, however, that the calculation of the
Closing Date Tribune Station Working Capital Amount shall, for all other
amounts, be made in accordance with generally accepted accounting principles
consistently applied.
"Code" means the Internal Revenue Code of 1986, as amended.
"Communications Act" means the Communications Act of 1934, as
amended.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention
agreement, defect in title, covenant or other restrictions of any kind.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Closing Date Xxxxx Station Working Capital Amount" has the
meaning specified in Section 1.8.
"Estimated Closing Date Tribune Station Working Capital Amount" has
the meaning specified in Section 1.8.
"Excluded Xxxxx Station Liabilities" has the meaning specified in
Section 1.6(b).
"Excluded Xxxxxxxx Assets" has the meaning specified in Section 1.4.
- 52 -
"Excluded Tribune Assets" has the meaning specified in Section 1.2.
"Excluded Tribune Station Liabilities" has the meaning specified in
Section 1.5(b).
"Expense" means any and all expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs, witness
fees, and reasonable fees and disbursements of legal counsel, investigators,
expert witnesses, consultants, accountants and other professionals).
"FCC" means the Federal Communications Commission.
"Governmental Body" means any foreign, federal, state, local or other
governmental authority or regulatory body.
"Improvements Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Initial Xxxxx Station Balance Sheet" has the meaning specified in
Section 1.10(a).
"Initial Tribune Station Balance Sheets" has the meaning specified in
Section 1.10(a).
"Xxxxx Station" has the meaning specified in the second recital
hereof.
"Xxxxx Station Assets" has the meaning specified in Section 1.3.
"Xxxxx Station Business" has the meaning specified in Section 1.3.
"Xxxxx Station Closing Date Balance Sheet" has the meaning specified
in Section 1.10(c).
"Xxxxx Station FCC Authorizations" means those Xxxxx Station
Governmental Permits issued by the FCC.
"Liabilities and Costs" means all liabilities, investigations,
responsibilities, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including, without limitation, attorney,
expert and consulting fees and expenses, costs of investigation and feasibility
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future.
"Loss" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges.
"Xxxxxxxx" has the meaning specified in the introductory paragraph
hereof.
- 53 -
"Xxxxxxxx Ancillary Agreements" has the meaning specified in Section
3.3(a).
"Xxxxxxxx Deposit Amount" has the meaning specified in Section 1.11.
"Xxxxxxxx Deposit Breach" has the meaning specified in Section 1.11.
"Xxxxxxxx Entities" has the meaning specified in Section 8.3.
"Xxxxxxxx Sub" has the meaning specified in the introductory
paragraph hereof.
"Permitted Encumbrance" means (a) liens for Taxes, assessments or
other governmental charges which are not yet due and payable (b) easements,
servitudes, rights-of-way, covenants, consents, conditions, reservations,
encroachments, minor defects or irregularities in title, variations and other
restrictions affecting the use of any real property listed as included in the
Tribune Station Assets or the Xxxxx Station Assets, as the case may be, or the
leased real property included in the Tribune Station Assets or the Xxxxx
Station Assets, as the case may be, which in the aggregate do not materially
impair the use of such Tribune Station Asset or Xxxxx Station Asset, as the
case may be, for the purposes for which it is or may reasonably be expected to
be held and (c) the personal property leases included in the Tribune Station
Assets or the Xxxxx Station Assets, as the case may be, and the intellectual
property licenses included in the Tribune Station Assets or the Xxxxx Station
Assets, as the case may be.
"Person" means any person, employee, individual, corporation,
partnership, trust, or any other non-governmental entity or any governmental or
regulatory authority or body.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water,
groundwater or property.
"Remedial Action" means actions required to (a) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment: or
(c) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Requirements of Law" means any foreign, federal, state or local law,
rule or regulation, Tribune Station Governmental Permit or Xxxxx Station
Governmental Permit, as the case may be, or other binding determination of any
Governmental Body.
"Resolution Period" has the meaning specified in Section 1.10(c).
- 54 -
"Tax" means any federal, state, local or foreign net income,
alternative or add-on minimum, gross income, gross receipts, property, sales,
use, transfer, gains, license, excise, employment, payroll, withholding or
minimum tax, or any other tax custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any Governmental Body.
"Tribune" has the meaning specified in the introductory paragraph
hereof.
"Tribune Ancillary Agreements" has the meaning specified in Section
2.3.
"Tribune Deposit Amount" has the meaning specified in Section 1.11.
"Tribune Deposit Breach" has the meaning specified in Section 1.11.
"Tribune Entities" has the meaning specified in Section 8.3.
"Tribune Station" has the meaning specified in the first recital
hereof.
"Tribune Station Agreements" has the meaning specified in Section
2.21.
"Tribune Station Assets" has the meaning specified in Section 1.1.
"Tribune Station Balance Sheet" has the meaning specified in Section
2.4.
"Tribune Station Business" has the meaning specified in Section 1.1.
"Tribune Station Closing Date Balance Sheet" has the meaning
specified in Section 1.10(c).
"Tribune Station Governmental Permits" has the meaning specified in
Section 2.9(a).
"Tribune Station FCC Authorizations" means those Tribune Station
Governmental Permits issued by the FCC other than those listed on Schedule
2.9(A)(2).
"Tribune Sub" has the meaning specified in the introductory paragraph
hereof.
10.14. Exchange Groups. No earlier than 60 days prior to the
Closing Date, Tribune and Xxxxxxxx shall prepare a schedule (the "Exchange
Group Schedule"), in accordance with the like-kind exchange rules covering
exchanges of multiple properties under Treas. Reg. Section 1.1031(j)-1, which
divides the Tribune Station Assets and the Xxxxx Station Assets, by owners,
types and estimated values of assets as of the Closing Date, into "exchange
- 55 -
groups" as required by such regulation. For book and tax purposes, Tribune and
the Tribune Subs, and Xxxxxxxx and the Xxxxxxxx Subs, shall report the exchange
of assets pursuant to this Agreement consistently with the Exchange Group
Schedule.
10.15. Allocation Schedule. Tribune shall have the right to
coordinate Meredith's allocation of the KTC Purchase Price (as such term is
defined in the Xxxxx Merger Agreement) pursuant to Section 8.08 of the Xxxxx
Merger Agreement. In no event shall Xxxxxxxx deliver the proposed allocation
or agree to a final allocation without the prior written consent of Tribune.
10.16. Board Approval. Notwithstanding anything herein to the
contrary, the execution and delivery of this Agreement by the parties hereto is
subject to the approval of this Agreement by the Board of Directors of Tribune.
Tribune hereby covenants to promptly and in any case no later than 10:00 A.M.
local time on Monday, August 24, 1998, convene a meeting of its Board of
Directors to consider this Agreement and to promptly notify Xxxxxxxx of the
outcome of such meeting. In the event (i) the Board of Directors of Tribune
disapproves this Agreement prior to 4:00 p.m. Eastern Time on Monday, August
24, 1998 and Tribune so notifies Xxxxxxxx or (ii) notice of an approval of this
Agreement by the Board of Directors of Tribune is not delivered to Xxxxxxxx by
4:00 p.m. Eastern Time on Monday, August 24, 1998 and Xxxxxxxx elects to
terminate this Agreement and delivers written notice thereof to Tribune by 5:00
p.m. Eastern Time on Monday, August 24, 1998, then in either such case this
Agreement shall thereupon terminate without liability on the part of any party
(except for breach of its obligations under this Section 10.16).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
TRIBUNE BROADCASTING COMPANY
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Its: Vice President
--------------------------------
WGNX INC.
By: /s/ Crane Kenney
--------------------------------
Its: Secretary
--------------------------------
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MEREDITH CORPORATION
By: /s/ John P. Loughlin
--------------------------------
Its: President, Meredith Broadcasting
--------------------------------
KCPQ ACQUISITION CORP.
By: /s/ Stephen M. Lacy
--------------------------------
Its: Vice President
--------------------------------
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