EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
Dated as of January 23, 1997
BETWEEN
MS FARM JOURNAL CORPORATION
AND
TRIBUNE COMPANY
RELATING TO THE CAPITAL STOCK OF
FARM JOURNAL, INC.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1. Definitions......................................................................... 1
ARTICLE II
PURCHASE AND SALE
2.1. Purchase and Sale of the Company Shares............................................. 5
ARTICLE III
PURCHASE PRICE
3.1. Purchase Price; Calculation of Estimated Purchase Price............................. 5
ARTICLE IV
CLOSING
4.1. Closing Date........................................................................ 5
4.2. Payment of Purchase Price........................................................... 5
4.3. Buyer's Additional Closing Date Deliveries.......................................... 5
4.4. Tribune's Closing Date Deliveries................................................... 6
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TRIBUNE
5.1. Organization of Tribune............................................................. 7
5.2. Organization and Capital Structure of the Company................................... 7
5.3. Subsidiaries........................................................................ 7
5.4. Authority of Tribune................................................................ 8
5.5. Financial Statements................................................................ 9
5.6. Operations Since Balance Sheet Date................................................. 9
5.7. Condition of Assets; Availability of Assets........................................ 10
5.8. Governmental Permits................................................................ 10
5.9. Real Property....................................................................... 10
5.10. Real Property Leases................................................................ 10
5.11. Condemnation........................................................................ 10
5.12. Personal Property Leases............................................................ 11
5.13. Patents and Trademarks.............................................................. 11
5.14. Title to Property................................................................... 12
5.15. No Violation, Litigation or Regulatory Action....................................... 12
5.16. Insurance........................................................................... 12
5.17. Contracts........................................................................... 12
5.18. Status of Contracts................................................................. 13
5.19. Environmental Matters............................................................... 13
5.20. Taxes............................................................................... 14
5.21. Employee Benefits................................................................... 14
5.22. Employee Relations.................................................................. 15
5.23. Directors and Officers.............................................................. 15
5.24. No Finder........................................................................... 15
5.25. Circulation......................................................................... 15
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
6.1. Organization of Buyer..............................................................15
6.2. Authority of Buyer.................................................................15
6.3. Investment Intent..................................................................16
6.4. No Finder..........................................................................16
6.5. HSR Act............................................................................16
ARTICLE VII
ACTION PRIOR TO THE CLOSING DATE
7.1. Investigation......................................................................16
7.2. Preserve Accuracy of Representations and Warranties................................17
7.3. Consents of Third Parties; Governmental Approvals..................................17
7.4. Operations Prior to the Closing Date...............................................17
7.5. Cancellation of Intercompany Debt Owed to Tribune..................................18
7.6. Financing; Superior Proposal.......................................................18
7.7. HSR Act Filing.....................................................................19
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1. Use of Names.......................................................................20
8.2. Employee Matters...................................................................20
8.3. Retired Employees..................................................................20
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
9.1. No Misrepresentation or Breach of Covenants and Warranties.........................20
9.2. Necessary Approvals................................................................21
9.3. Necessary Consents.................................................................21
9.4. Closing Deliveries.................................................................21
9.5. Financing..........................................................................21
9.6 Executive Committee Approval.......................................................21
9.7. HSR Act............................................................................21
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIBUNE
10.1. No Misrepresentation or Breach of Covenants and Warranties.........................22
10.2. Necessary Consents.................................................................22
10.3. Letter of Credit...................................................................22
10.4. Closing Deliveries.................................................................22
10.5. Executive Committee Approval.......................................................22
10.6. HSR Act............................................................................22
ARTICLE XI
TAX MATTERS
11.1. Liability for Taxes................................................................23
11.2. Tax Returns........................................................................24
11.3. Contest Provisions.................................................................25
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11.4. Assistance and Cooperation........................................................26
ARTICLE XII
INDEMNIFICATION
12.1. Indemnification by Tribune........................................................26
12.2. Indemnification by Buyer..........................................................28
12.3. Notice of Claims..................................................................29
12.4. Third Person Claims...............................................................30
12.5. Exclusive Remedy..................................................................31
ARTICLE XIII
TERMINATION
13.1. Termination.......................................................................31
13.2. Notice of Termination.............................................................31
13.3. Non-Solicitation..................................................................31
13.4. Effect of Termination.............................................................32
ARTICLE XIV
GENERAL PROVISIONS
14.1. Survival of Obligations............................................................32
14.2. Confidential Nature of Information.................................................32
14.3. No Public Announcement.............................................................33
14.4. Notices............................................................................33
14.5. Successors and Assigns.............................................................34
14.6. Access to Records after Closing....................................................34
14.7. Entire Agreement; Amendments.......................................................34
14.8. Interpretation.....................................................................34
14.9. Waivers............................................................................35
14.10. Expenses..........................................................................35
14.11. Partial Invalidity................................................................35
14.12. Execution in Counterparts.........................................................35
14.13. Further Assurances................................................................36
14.14. Governing Law.....................................................................36
14.15. Disclaimer of Warranties..........................................................36
14.16. Mediation; Submission to Jurisdiction.............................................36
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of January 23, 1997 ("Agreement")
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between MS Farm Journal Corporation, a Delaware corporation ("Buyer"), and
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Tribune Company, a Delaware corporation ("Tribune").
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WHEREAS, Tribune is the owner of all the outstanding shares of common
stock of Farm Journal, Inc., a Pennsylvania corporation (the "Company");
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WHEREAS, the Company publishes Farm Journal magazine and other
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agricultural magazines and engages in the market research and data service
businesses (collectively, the "Business"); and
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WHEREAS, Tribune desires to sell to Buyer, and Buyer desires to
purchase from Tribune, all of the common stock of the Company, all on the terms
and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between Tribune and Buyer
as follows:
ARTICLE I
DEFINITIONS
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1.1. DEFINITIONS. In this Agreement, the following terms have the
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meanings specified or referred to in this Section 1.1 and shall be equally
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applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement.
"AFFILIATE" means, with respect to any Person, any other Person which
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directly or indirectly controls, is controlled by or is under common control
with such Person.
"BALANCE SHEET" has the meaning specified in Section 5.5.
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"BALANCE SHEET DATE" means December 29, 1996.
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"BUSINESS" has the meaning specified in the third paragraph to this
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Agreement.
"BUYER" has the meaning specified in the first paragraph of this
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Agreement.
"BUYER ANCILLARY AGREEMENTS" means all agreements, instruments and
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documents being or to be executed and delivered by Buyer under this Agreement or
in connection herewith.
"BUYER GROUP MEMBER" means Buyer and its Affiliates, directors,
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officers, employees, agents, attorneys and consultants and their respective
successors and assigns.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act, 42 U.S.C. (S)(S) 9601 et seq., any amendments thereto, any
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successor statutes, and any regulations promulgated thereunder.
"CLOSING" means the closing of the transfer of the Company Shares from
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Tribune to Buyer pursuant to this Agreement.
"CLOSING DATE" has the meaning specified in Section 4.1.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended.
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"COMPANY" has the meaning specified in the second paragraph of this
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Agreement.
"COMPANY AGREEMENTS" has the meaning specified in Section 5.18.
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"COMPANY SHARES" has the meaning specified in Section 2.1.
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"CONTAMINANT" means any waste, pollutant, hazardous, noxious or toxic
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substance or waste, petroleum, petroleum-based substance or waste, special
waste, or any constituent of any such substance or waste, whether solid, liquid
or gas.
"COURT ORDER" means any judgment, order, award or decree of any
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foreign, federal, state, local or other court or tribunal and any award in any
arbitration proceeding.
"ENCUMBRANCE" means any lien, claim, charge, security interest,
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mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, covenant or other restrictions of any kind.
"ENVIRONMENTAL LAW" means all Requirements of Law derived from or
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relating to all federal, state and local laws or regulations relating to or
addressing the environment, health or safety, including but not limited to
CERCLA, OSHA and RCRA and any state equivalent thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"EXCLUDED TAXES" has the meaning set forth in Section 11.1(a).
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"EXECUTIVE COMMITTEE" has the meaning set forth in Section 5.4.
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"EXPENSES" means any and all reasonable expenses incurred in
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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, accountants and other professionals).
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"GOVERNMENTAL BODY" means any foreign, federal, state, local or other
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governmental authority or regulatory body.
"GOVERNMENTAL PERMITS" has the meaning specified in Section 5.8.
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"GUARANTY" has the meaning specified in Section 7.3.
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"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended.
"KNOWLEDGE OF TRIBUNE" means the actual knowledge of the following
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persons: Xxxxxx X. Xxxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxx, Xxxxx Xxxxxxxx, Xxxxxx
XxXxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxx Xxxxxxx
and, solely with respect to Section 5.25, Xxxx X. Xxxxxxxxxxx.
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"LOSSES" means any and all losses, costs, obligations, liabilities,
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settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges.
"OSHA" means the Occupational Safety and Health Act, 29 U.S.C. (S)(S)
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651 et seq., any amendment thereto, any successor statute, and any regulations
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promulgated thereunder.
"PERMITTED ENCUMBRANCES" means (a) liens for taxes and other
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governmental charges and assessments which are not yet due and payable, (b)
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business for
sums not yet due and payable and (c) other liens or imperfections on property
which are not material in amount or do not materially detract from the value of
or materially impair the existing use of the property affected by such lien or
imperfection.
"PERSON" means any individual, corporation, partnership, joint
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venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or Governmental Body.
"PURCHASE PRICE" has the meaning specified in Section 3.1.
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"RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C.
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(S)(S) 6901 et seq., and any successor statute, and any regulations promulgated
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thereunder.
"REAL PROPERTY" has the meaning specified in Schedule 5.6.
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"REAL PROPERTY INDEMNIFICATION AGREEMENT" means the Release and
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Indemnification Agreement dated December 30, 1996 among Xxxxxx Xxxxxx, Xxx X.
Xxxxxx, 000 Xxxxxxxxxx Xxxxxx Partners, a Pennsylvania limited partnership, and
the Company.
"REAL PROPERTY PURCHASERS" means Xxxxxx Xxxxxx, Xxx X. Xxxxxx and 230
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Washington Square Partners, a Pennsylvania limited partnership.
"RELEASE" means any release, spill, emission, leaking, pumping,
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injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or
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outdoor environment or into or out of any real property previously owned by the
Company or any Subsidiary, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or any real property previously owned
by the Company or any Subsidiary.
"REMEDIAL ACTION" means actions required to (i) clean up, remove,
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treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threatened Release or minimize the
further Release of Contaminants or (iii) investigate and determine if a remedial
response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"REQUIREMENTS OF LAW" means any foreign, federal, state and local
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laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued
or promulgated by any Governmental Body.
"RETIRED EMPLOYEES" has the meaning specified in Schedule 5.21(c).
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"STRADDLE PERIOD" shall mean any taxable year or period beginning
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before and ending after the Closing Date.
"SUBSIDIARIES" has the meaning specified in Section 5.3.
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"TAX" (and, with correlative meaning, "Taxes" and "Taxable") shall
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mean any federal, state, local or foreign income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, value added, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, imposed by
any Governmental Body.
"TAX PACKAGE" has the meaning set forth in Section 11.2(c).
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"TAX RETURN" shall mean any return, report or similar statement
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required to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
"TRIBUNE" has the meaning specified in the first paragraph of this
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Agreement.
"TRIBUNE ANCILLARY AGREEMENTS" means all agreements, instruments and
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documents being or to be executed and delivered by Tribune under this Agreement
or in connection herewith.
"TRIBUNE'S GROUP" shall mean any "affiliated group" (as defined in
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Section 1504(a) of the Code without regard to the limitations contained in
Section 1504(b) of the Code) that includes Tribune.
"TRIBUNE GROUP MEMBER" means Tribune and its Affiliates, directors,
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officers, employees, agents, attorneys and consultants and their respective
successors and assigns.
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ARTICLE II
PURCHASE AND SALE
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2.1. PURCHASE AND SALE OF THE COMPANY SHARES. Upon the terms and
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subject to the conditions of this Agreement, on the Closing Date, Tribune shall
sell, transfer, assign, convey and deliver to Buyer, and Buyer shall purchase
from Tribune, all of the issued and outstanding shares of common stock of the
Company (the "Company Shares"), free and clear of all
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Encumbrances.
ARTICLE III
PURCHASE PRICE
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3.1. PURCHASE PRICE; CALCULATION OF ESTIMATED PURCHASE PRICE.
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The purchase price for the Company Shares (the "Purchase Price") shall be
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$17,000,000. The Purchase Price shall be payable in the manner set forth in
Section 4.2.
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ARTICLE IV
CLOSING
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4.1. CLOSING DATE. The Closing shall be consummated at 1:00 P.M.,
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Chicago time, as soon as practicable after the conditions set forth in Articles
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IX and X have been satisfied, at such place as shall be agreed upon by Buyer and
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Tribune. The time and date on which the Closing is actually held is referred to
herein as the "Closing Date."
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4.2. PAYMENT OF PURCHASE PRICE. Subject to fulfillment or waiver of
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the conditions set forth in Article IX, at Closing Buyer shall pay Tribune, by
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wire transfer of immediately available funds to such account specified by
Tribune to Buyer at least two business days prior to the Closing Date, an amount
equal to the Purchase Price.
4.3. BUYER'S ADDITIONAL CLOSING DATE DELIVERIES. Subject to
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fulfillment or waiver of the conditions set forth in Article IX, at Closing
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Buyer shall deliver to Tribune all the following:
(a) Copies of Buyer's Certificate of Incorporation certified as of a
recent date by the Secretary of State of the State of Delaware;
(b) Certificate of good standing of Buyer issued as of a recent date
by the Secretary of State of the Secretary of State of Delaware;
(c) Certificate of the secretary or assistant secretary of Buyer,
dated the Closing Date, in form and substance reasonably satisfactory to
Tribune, as to (i) no amendments to the Certificate of Incorporation of Buyer
since a specified date; (ii) the by-laws of Buyer; (iii) the resolutions of the
Board of Directors of Buyer authorizing the execution and performance of
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this Agreement and the transactions contemplated by this Agreement; and (iv)
incumbency and signatures of the officers of Buyer executing this Agreement and
any Buyer Ancillary Agreement;
(d) Opinion of counsel to Buyer substantially in the form contained in
Exhibit I; and
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(e) The certificate contemplated by Section 10.1, duly executed by the
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President or any Vice President of Buyer.
4.4. TRIBUNE'S CLOSING DATE DELIVERIES. Subject to fulfillment or
---------------------------------
waiver of the conditions set forth in Article X, at Closing Tribune shall
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deliver to Buyer all the following:
(a) Copies of the Restated Certificate of Incorporation of Tribune
certified as of a recent date by the Secretary of State of the State of
Delaware;
(b) Certificate of good standing of Tribune issued as of a recent date
by the Secretary of State of the State of Delaware;
(c) Certificate of the secretary or an assistant secretary of Tribune,
dated the Closing Date, in form and substance reasonably satisfactory to Buyer,
as to (i) no amendments to the Restated Certificate of Incorporation of Tribune
since a specified date; (ii) the by-laws of Tribune; (iii) the resolutions of
the Board of Directors of Tribune authorizing the execution and performance of
this Agreement and the transactions contemplated by this Agreement; and (iv)
incumbency and signatures of the officers of Tribune executing this Agreement
and any Tribune Ancillary Agreement;
(d) Opinion of counsel to Tribune substantially in the form contained
in Exhibit II;
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(e) The certificates representing all of the Company Shares, duly
endorsed to Buyer or accompanied by duly executed stock powers and with all
required stamp taxes affixed thereto;
(f) A signed resignation by each of the directors and officers of the
Company and each Subsidiary;
(g) All consents, waivers or approvals obtained by Tribune or the
Company with respect to the consummation of the transactions contemplated by
this Agreement;
(h) The certificate contemplated by Section 9.1, duly executed by the
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President or any Vice President of Tribune; and
(i) The minute books, stock ledgers and corporate seal of the Company.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TRIBUNE
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As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, Tribune represents and warrants
to Buyer:
5.1. ORGANIZATION OF TRIBUNE. Tribune is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Delaware.
5.2. ORGANIZATION AND CAPITAL STRUCTURE OF THE COMPANY. (a) The
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Company is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania. The Company is duly
qualified to transact business as a foreign corporation and is in good standing
in all jurisdictions which are material to the operation of the Business. The
Company has the power and authority to own or lease and to operate and use its
assets and to carry on the Business as now conducted.
(b) The authorized capital stock of the Company consists solely of 100
shares of Common Stock, $.01 par value per share, of which 100 shares are issued
and outstanding. Except for this Agreement, there are no agreements,
arrangements, options, warrants, calls, rights or commitments of any character
relating to the issuance, sale, purchase or redemption of any shares of capital
stock of the Company. All of the outstanding shares of common stock of the
Company are duly authorized, validly issued, fully paid and nonassessable and
are owned by Tribune of record and beneficially free from all Encumbrances.
(c) True and complete copies of the Amended and Restated Articles of
Incorporation and of the Amended and Restated By-laws of the Company have been
made available to Buyer.
5.3. SUBSIDIARIES. (a) Except as set forth in Schedule 5.3, the
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Company does not, directly or indirectly, own, of record or beneficially, any
outstanding voting securities or other equity interests in any Person.
(b) Schedule 5.3 sets forth the authorized capital stock of each
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corporation listed in Schedule 5.3 (the "Subsidiaries") and indicates the number
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of issued and outstanding shares of capital stock. Except as set forth in
Schedule 5.3, there are no agreements, arrangements, options, warrants, calls,
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rights or commitments of any character relating to the issuance, sale, purchase
or redemption of any shares of capital stock of any of the Subsidiaries. All of
the outstanding shares of capital stock of each of the Subsidiaries are duly
authorized, validly issued, fully paid and nonassessable. All of the
outstanding shares of capital stock of each of the Subsidiaries are owned by the
Company or one of the Subsidiaries of record and beneficially free from all
Encumbrances, except as set forth in Schedule 5.3.
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(c) Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
Each Subsidiary is duly qualified to transact business as a foreign corporation
and is in good standing in each of the jurisdictions listed in Schedule 5.3.
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(d) True and complete copies of the certificate or articles of
incorporation and all amendments thereto and of the By-laws, as amended to date,
of each of the Subsidiaries have been made available to Buyer.
5.4. AUTHORITY OF TRIBUNE. (a) Tribune has the corporate power and
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authority to execute, deliver and perform this Agreement (except with respect to
the consummation of the sale of the Company Shares to Buyer and the Closing,
both of which are subject to the approval of the Board of Directors of Tribune
or the Executive Committee of the Board of Directors of Tribune (the "Executive
Committee")) and all of the Tribune Ancillary Agreements and to consummate the
transactions contemplated hereby and or thereby (except with respect to the
consummation of the sale of the Company Shares to Buyer and the Closing, both of
which are subject to the approval of the Board of Directors of Tribune or the
Executive Committee). The execution, delivery and performance of this Agreement
(except, with respect to the consummation of the sale of the Company Shares to
Buyer and the Closing, both of which are subject to the approval of the Board of
Directors of Tribune or the Executive Committee) and the Tribune Ancillary
Agreements by Tribune have been duly authorized and approved and will not
require any further authorization or consent of Tribune or its stockholders.
This Agreement has been duly authorized, executed and delivered by Tribune
(except with respect to the consummation of the sale of the Company Shares to
Buyer and the Closing, both of which are subject to the approval of the Board of
Directors of Tribune or the Executive Committee) and is the legal, valid and
binding obligation of Tribune enforceable in accordance with its terms (except
with respect to the consummation of the sale of the Company Shares to Buyer and
the Closing, both of which are subject to the approval of the Board of Directors
of Tribune or the Executive Committee), and each of the other Tribune Ancillary
Agreements will have been duly authorized by Tribune and upon execution and
delivery by Tribune will be a legal, valid and binding obligation of Tribune
enforceable in accordance with its terms, in each case subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application
relating to or affecting creditors' rights and to general equity principles.
(b) Except as set forth in Schedule 5.4, neither the execution and
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delivery of this Agreement or any of the Tribune Ancillary Agreements or the
consummation of any of the transactions contemplated hereby or thereby nor
compliance with or fulfillment of the terms, conditions and provisions hereof or
thereof will:
(i) 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 Company Shares or any of the assets of the Company, under
(1) the Restated Certificate of Incorporation or By-laws of Tribune, (2)
any material note, instrument, agreement, mortgage, lease, license,
franchise, permit or other authorization, right, restriction or obligation
to which Tribune or the Company is a party or by which Tribune or the
Company is bound, (3) the Amended and Restated Articles of Incorporation of
the Company, (4) any Company Agreement, (5) any Court Order to which
Tribune or the Company is a party or by which Tribune or the Company is
bound, or (6) any Requirements of Laws affecting Tribune or the Company,
except for such conflicts, breaches, defaults, events or Encumbrances which
would not have a
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material adverse effect on the assets, Business, results of operations or
financial condition of the Company and the Subsidiaries, taken as a whole;
or
(ii) require the approval, consent, authorization or act of, or the
making by Tribune or the Company of any declaration, filing or registration
with, any Person, except for such approvals, consents, authorizations,
acts, declarations, filings or registrations which, if not obtained or
made, would not have a material adverse effect on the assets, Business,
results of operations or financial condition of the Company and the
Subsidiaries, taken as a whole.
5.5. FINANCIAL STATEMENTS. Schedule 5.5(a) contains (a) the unaudited
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consolidated balance sheet of the Company as of December 31, 1995 and the
related consolidated statement of income for the year then ended and (b) the
unaudited consolidated balance sheet (the "Balance Sheet") of the Company as of
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December 29, 1996 (the "Balance Sheet Date") and the related consolidated
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statement of income for the year then ended. Except as set forth in Schedule
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5.5(a), such balance sheets and statements of income have been prepared in
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accordance with generally accepted accounting principles consistently applied
and present fairly, in all material respects, the consolidated financial
position and results of operations of the Company as of their respective dates
and for the respective periods covered thereby subject to the absence of
footnotes. Except as set forth in Schedule 5.S(a) and as reflected on the
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Balance Sheet, there are no material liabilities of the Company or the
Subsidiaries (whether matured or unmatured, contingent or absolute) which would
have been required to be reflected on an audited balance sheet of the Company
and its Subsidiaries, or the footnotes thereto, as of the Balance Sheet Date,
and the only liabilities which have been incurred since such date are
liabilities incurred in the ordinary course of business that are of a nature and
amount consistent with past practices. Schedule 5.5(b) contains the unaudited
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monthly consolidated balance sheet of the Company for each of the periods
indicated thereon. Such monthly balance sheets were based on the books and
records of the Company, prepared in accordance with the internal accounting
policies of the Company, at each respective date and were generated for internal
use only.
5.6. OPERATIONS SINCE BALANCE SHEET DATE. Except as set forth in
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Schedule 5.6, since the Balance Sheet Date, the Company and the Subsidiaries
have conducted the Business only in the ordinary course, and there has been no
material adverse change in the assets, Business, results of operations or
financial condition of the Company and the Subsidiaries, taken as a whole.
5.7. CONDITION OF ASSETS; AVAILABILITY OF ASSETS. (a) The equipment
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and other tangible personal property which is material to the Business of the
Company and the Subsidiaries, taken as a whole, and the buildings and structures
located on any real property currently leased, used or occupied by the Company
or any Subsidiary are in all material respects in serviceable condition.
(b) Except as set forth in Schedule 5.7, the assets owned or leased by
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the Company constitute all the assets and properties used in, or necessary for,
the operation of the Business of the Company.
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5.8. GOVERNMENTAL PERMITS. (a) The Company and the Subsidiaries own,
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hold or possess all licenses, franchises, permits, privileges, immunities,
approvals and other authorizations from each Governmental Body which are
necessary to entitle them to own or lease, operate and use their assets and to
carry on and conduct the Business substantially as currently conducted (herein
collectively called "Governmental Permits"), except for such Governmental
--------------------
Permits as to which the failure to so own, hold or possess would not have a
material adverse effect on the assets, the Business or the operations or
financial condition of the Company and the Subsidiaries, taken as a whole.
(b) To the knowledge of Tribune (i) 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 default under any such Governmental
Permit or which permits or, after notice or lapse of time or both, would permit
revocation or termination of any such Governmental Permit; and (ii) no notice of
cancellation, of default or of any material dispute concerning any Governmental
Permit, or of any event, condition or state of facts described in the preceding
clause, has been received by the Company or any Subsidiary.
5.9. REAL PROPERTY. Neither the Company nor any Subsidiary owns any
-------------
real property or holds an option to acquire any real property.
5.10. REAL PROPERTY LEASES. Schedule 5.10 sets forth a list and brief
--------------------
description of each lease or similar agreement under which the Company or any
Subsidiary is lessee of, or holds or operates, any real property owned by any
third Person.
5.11. CONDEMNATION. As of the date of this Agreement, neither the
------------
whole nor any part of any real property leased, used or occupied by the Company
or any Subsidiary is subject to any pending suit for condemnation or other
taking by any Governmental Body, and, to the knowledge of Tribune, no such
condemnation or other taking is threatened or contemplated.
5.12. PERSONAL PROPERTY LEASES. Schedule 5.12 contains as of the date
------------------------
of this Agreement a brief description of each lease or other agreement or right,
whether written or oral, under which the Company or any Subsidiary is lessee of,
or holds or operates, any machinery, equipment or other tangible personal
property owned by a third Person, except those which are terminable by the
Company or a Subsidiary without penalty on 60 days' or less notice or which
provide for annual rentals of less than $25,000.
5.13. PATENTS AND TRADEMARKS. (a) Schedule 5.13 contains as of the
----------------------
date of this Agreement a list and description of:
(i) all United States and foreign patents and patent applications, all
United States, state and foreign trademarks, service marks and trade names
for which registrations have been issued or applied for, and all other
United States, state and foreign trademarks, service marks and trade names,
owned by the Company or any Subsidiary or in which the Company or any
Subsidiary holds any right, license or interest used in or relating to the
Business (other than such patents, trademarks, service marks and trade
names which have not been used by the Company or any Subsidiary since
January 1, 1995), showing in each case the product, device, process,
service or business covered
-10-
thereby, the registered or other owner, expiration date and number, if any,
and, in the case of any such right, license or interest, a brief
description thereof;
(ii) all United States and foreign copyrights, registered or
unregistered, copyright works and copyright applications owned or
controlled by the Company or any of its subsidiaries (other than copyrights
and copyright works which have not been used by the Company or any
Subsidiary since January 1, 1995) showing in each case: the title to the
copyright or copyright work; the product, work product, device, process,
service, business or publication to which the same relates; the application
and/or registration date, number and country (if any); the registered or
other owner; and each author to any of the foregoing;
(iii) all agreements, commitments, contracts, understandings,
licenses, assignments and indemnities relating or pertaining to any asset,
property or right of the character described in clause (i) and (ii) to
which the Company or any Subsidiary is a party, showing in each case the
parties thereto and the material terms thereof; and
(iv) all licenses or agreements pertaining to know-how, trade
secrets, inventions, disclosures or uses of ideas used in or relating to
the Business to which the Company or any Subsidiary is a party, showing in
each case the parties thereto and the material terms thereof.
(b) Except as set forth in Schedule 5.13, as of the date hereof, no
-------------
proceedings are pending or, to the knowledge of Tribune, threatened against the
Company or any Subsidiary which challenge the validity or ownership of any
patent, trademark, trade name, service xxxx or copyright or the ownership of any
other right or property described in Schedule 5.13, and to the knowledge of
-------------
Tribune there is not any infringing use of any of the same by any other Person.
(c) To the knowledge of Tribune, the operations, activities, products,
equipment, machinery or processes of the Business do not infringe the patents,
trademarks, service marks, trade names, copyrights or other property rights of
any other Person.
5.14. TITLE TO PROPERTY. Except for assets disposed of in the ordinary
-----------------
course of business, either the Company or a Subsidiary has good and marketable
title to each item of equipment and other tangible personal property reflected
on the Balance Sheet, free and clear of all Encumbrances, except for Permitted
Encumbrances.
5.15. NO VIOLATION, LITIGATION OR REGULATORY ACTION. Except as
---------------------------------------------
set forth in Schedule 5.15:
-------------
(i) to the knowledge of Tribune, the Company and the Subsidiaries
have complied with all applicable Requirements of Laws and Court Orders,
except where failure to so comply would not have a material adverse effect
on the assets, Business, results of operations or financial condition of
the Company and the Subsidiaries, taken as a whole;
(ii) as of the date hereof, there are no lawsuits, claims, suits,
proceedings or investigations pending or, to the knowledge of Tribune,
threatened against the Company
-11-
or a Subsidiary which are reasonably expected to have a material adverse
effect on the assets, Business, results of operations or financial
condition of the Company and the Subsidiaries, taken as a whole or involve
a claim in excess of $50,000; and
(iii) as of the date of hereof, there is no action, suit or
proceeding pending or, to the knowledge of Tribune, threatened against
Tribune or the Company which questions the legality or propriety of the
transactions contemplated by this Agreement.
5.16. INSURANCE. Tribune or its Affiliates maintain, with respect to
---------
the Company and the Subsidiaries, 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 its reasonable judgment prudent and shall use
reasonable efforts to keep such insurance or comparable insurance in full force
and effect through the Closing Date.
5.17. CONTRACTS. Except as set forth in Schedule 5.17 or any other
--------- -------------
Schedule hereto, as of the date of this Agreement, neither the Company nor any
Subsidiary is a party to or bound by:
(i) any contract for the purchase or sale of real property;
(ii) any contract for the purchase by the Company or a Subsidiary of
supplies, raw materials or equipment which Tribune reasonably anticipates
will involve the payment of more than $25,000 after the date hereof or
which extends beyond September 30, 1997;
(iii) any purchase order, agreement or commitment obligating the
Company or any of the Subsidiaries, individually or taken together, to
purchase or sell any products, publications or services or to provide any
advertising in the Company's publications and which (A) is not terminable
by the Company or one of the Subsidiaries without payment or penalty upon
60 days' (or less) notice, (B) relates to purchases or sales in an
aggregate amount exceeding $25,000 or (C) is presently expected to result
in a loss upon completion or performance thereof in an amount in excess of
$25,000;
(iv) any agreements or arrangements with the Tribune or any of its
other Affiliates;
(v) any guarantee of the obligations of customers, suppliers,
officers, directors, employees, Affiliates or others; or
(vi) any agreement which provides for the incurrence by the Company or
a Subsidiary of debt for borrowed money.
5.18. STATUS OF CONTRACTS. Except as set forth in Schedule 5.18 or in
------------------- -------------
any other Schedule hereto, each of the leases, contracts and other agreements
listed in Schedules 5.10, 5.12, 5.13 or 5.17 (collectively, the "Company
-------------- ---- ---- ---- -------
Agreements") constitutes a valid and binding obligation of the Company or a
----------
Subsidiary and, to the knowledge of Tribune, the other parties thereto (subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general application relating to or affecting creditors' rights and to general
equity principles) and
-12-
is in full force and effect. Neither the Company nor any Subsidiary is in, or,
to the knowledge of Tribune, alleged to be in, material breach or material
default under, any of the Company Agreements and, to the knowledge of Tribune,
no other party to any of the Company Agreements is in material breach or
material default thereunder, and, to the knowledge of Tribune, 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 Company or, to the knowledge of Tribune, by any such other party.
Complete and correct copies of each of the Company Agreements have heretofore
been made available to Buyer by Tribune.
5.19. ENVIRONMENTAL MATTERS. Except as set forth in Schedule 5.19:
--------------------- -------------
(i) applicable Environmental Laws, except for such noncompliance
which would not have a material adverse effect on the assets, business,
operations or financial condition of the Company and the Subsidiaries,
taken as a whole;
(ii) to the knowledge of Tribune, neither the Company or any
Subsidiary nor any real property previously owned by the Company or any
Subsidiaries is subject to any investigation by, order from or written
agreement with any Person (including without limitation any prior owner or
operator of any real property previously owned by the Company or any
Subsidiary) respecting (A) any Environmental Law, (B) any Remedial Action
or (C) any claim of Losses and Expenses arising from the Release or
threatened Release of a Contaminant into the environment;
(iii) neither the Company nor any Subsidiary is a party to or
otherwise subject to any judicial or administrative proceeding, order,
judgment, decree or settlement alleging or addressing a violation of or
liability under any Environmental Law, which proceeding, order, judgment,
decree or settlement is reasonably expected to have a material adverse
effect on the assets, the Business or the operations or financial condition
of the Company and the Subsidiaries, taken as a whole; and
(iv) to the knowledge of Tribune, since June 30, 1994, neither the
Company nor any Subsidiary has received any written notice or claim to the
effect that it is or may be liable to any Person as a result of the Release
of a Contaminant into the environment from or on any real property owned by
the Company or any Subsidiary or any third party disposal site, which
notice or claim is reasonably expected to have a material adverse effect on
the assets, Business, operations or financial condition of the Company and
the Subsidiaries, taken as whole.
5.20. TAXES. Except as set forth on Schedule 5.20, (i) the Company and
----- -------------
each Subsidiary has filed all material Tax Returns required to have been filed
on or before the date hereof, (ii) all Taxes shown to be due on the Tax Returns
referred to in clause (i) have been timely paid and all such Tax Returns that
have been filed were when filed, and continue to be, true, correct and accurate
in all material respects; (iii) neither the Company nor any Subsidiary has
waived in writing any statute of limitations in respect of Taxes of the Company
or such Subsidiary; (iv) the Tax Returns referred to in clause (i) relating to
federal and state income Taxes have been examined by the Internal Revenue
Service or the appropriate state taxing authority or the period for assessment
of the Taxes in respect of which such Tax Returns were
-13-
required to be filed has expired; (v) no issues that have been raised in writing
by the relevant taxing authority in connection with the examination of the Tax
Returns referred to in clause (i) are currently pending; and (vi) all
deficiencies asserted or assessments made as a result of any examination of the
Tax Returns referred to in clause (i) by a taxing authority have been paid in
full or adequately reserved for. Notwithstanding anything to the contrary in
this Agreement, nothing in this Section 5.20 shall cause Tribune to be liable
------------
for any Taxes for which Tribune is not expressly liable pursuant to Section
-------
11.1(a) (relating to Tax matters).
-------
5.21. EMPLOYEE BENEFITS. (a) Schedule 5.21(a) sets forth a true and
----------------- ----------------
complete list of each "employee pension benefit plan" (as such term is defined
in Section 3(2) of ERISA) and each "employee welfare benefit plan" (as such term
is defined in Section 3(1) of ERISA) covering any employee or former employee of
any Company (the "Welfare Plans") (collectively the "Plans"). Except as
------------- -----
disclosed on Schedule 5.21(a): neither Tribune nor the Company has ever (i)
----------------
maintained any employee pension benefit plan, or (ii) been required to
contribute to any "multiemployer plan'' (as such term is defined in Section
3(37) of ERISA).
(b) Tribune has caused the Company to deliver to Buyer with respect to
each Plan, correct and complete copies, where applicable, of (i) all Plan
documents and amendments, trust agreements and insurance and annuity contracts
and policies, (ii) the most recent IRS determination letter, (iii) the Annual
Reports (Form 5500 Series) and accompanying schedules, as filed, for the most
recently completed Plan year, and (iv) the current summary plan description.
(c) To the knowledge of Tribune, each Plan complies, and has been
administered to comply, in all material respects with all requirements of law
and regulations applicable thereto, and there has been no notice issued by any
governmental authority questioning or challenging such compliance. There are no
actions, suits or claims (other than routine claims for benefits) pending or, to
Tribune's knowledge, threatened involving such Plans or the assets of such Plans
which, in the aggregate, would have a material impact on the financial position
of the Company. Except as disclosed on Section 5.21(c), the Company has no
---------------
obligations under any of the Welfare Plans or otherwise to provide health or
death benefits to or in respect of former employees, except as specifically
required by the continuation requirements of Part 6 of Title I of ERISA.
5.22. EMPLOYEE RELATIONS. (a) The Company and each of the
------------------
Subsidiaries has complied 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 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) As of the date of this Agreement, there is no (i) unfair labor
practice charge or complaint against the Company or any of the Subsidiaries
pending before the National Labor Relations Board, any state labor relations
board or any court or tribunal and, to the knowledge of Tribune, none is or has
been threatened, (ii) employee grievance pending against the Company or any of
the Subsidiaries and, to the knowledge of the Tribune, none is or has been
threatened which, in any such case, if adversely determined in respect of the
Company or any of the Subsidiaries, would have a material adverse effect on the
Business or the results of
-14-
operations, properties or condition (financial or otherwise) of the Company and
the Subsidiaries considered as a whole or (iii) arbitration proceeding arising
out of or under any collective bargaining agreement pending against the Company
or any of the Subsidiaries and, to the knowledge of the Tribune, none is or has
been threatened.
5.23. DIRECTORS AND OFFICERS. Schedule 5.23 sets forth an accurate
---------------------- -------------
and complete list as of the date of this Agreement of:
(i) the names of all directors of the Company and each Subsidiary; and
(ii) the names of all officers of the Company and each Subsidiary.
5.24. NO FINDER. Neither Tribune nor any Person acting on its 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.
5.25. CIRCULATION. The circulation base information, including,
-----------
without limitation, with respect to paid, qualified and non-qualified
circulation, of Farm Journal, Top Producer, the Today magazines and the other
publications of the Company as set forth in the applicable Publisher's
Statements for the year ended December 31, 1996 attached hereto as Schedule 5.25
is accurate in all material respects and since such date there has been no
material decrease in such circulation numbers.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
As an inducement to Tribune to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby represents and
warrants to Tribune:
6.1. ORGANIZATION OF BUYER. Buyer is a corporation, duly organized,
---------------------
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to own or lease and to operate and
use its properties and assets and to carry on its business as now conducted.
6.2. AUTHORITY OF BUYER. (a) Buyer has full power and authority to
------------------
execute, deliver and perform this Agreement and all of the Buyer Ancillary
Agreements and to consummate the transactions contemplated hereby or thereby.
The execution, delivery and performance of this Agreement and the Buyer
Ancillary Agreements by Buyer have been duly authorized and approved by Buyer's
board of directors and stockholders and do not require any further authorization
or consent of Buyer or its stockholders. This Agreement has been duly
authorized, executed and delivered by Buyer and is the legal, valid and binding
agreement of Buyer enforceable in accordance with its terms, and each of the
other Buyer Ancillary Agreements has been duly authorized by Buyer and upon
execution and delivery by Buyer will be a legal, valid and binding obligation of
Buyer enforceable in accordance with its terms, in each case subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general equity
principles.
-15-
(b) Neither the execution and delivery of this Agreement or any of the
Buyer Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will:
(i) 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 (1) the Certificate of Incorporation or By-laws of Buyer, (2)
any material note, instrument, agreement, mortgage, lease, license,
franchise, permit or other authorization, right, restriction or obligation
to which Buyer is a party or any of its properties is subject or by which
Buyer is bound, (3) any Court Order to which Buyer is a party or by which
it is bound or (4) any Requirements of Laws affecting Buyer, except for
such conflicts, breaches, defaults, events or Encumbrances which would not
have a material adverse effect on the assets, business, results of
operations or financial condition of Buyer and its subsidiaries, taken as a
whole, or
(ii) require the approval, consent, authorization or act of, or the
making by Buyer of any declaration, filing or registration with, any
Person, except for such approvals, consents, authorizations, acts,
declarations, filings or registrations which, if not obtained or made,
would not have a material adverse effect on the assets, business, results
of operations or financial condition of Buyer and its subsidiaries, taken
as a whole.
6.3. INVESTMENT INTENT. Buyer is acquiring the Company Shares as an
-----------------
investment for its own account and not with a view to the distribution or sale
thereof. Buyer shall not sell, transfer, assign, pledge or hypothecate any of
the Company Shares in the absence of registration under, or pursuant to an
applicable exemption from, federal and all applicable state securities laws.
6.4. NO FINDER. Neither Buyer nor any Person acting on its 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.
6.5. HSR ACT. The formation of Buyer is not subject to the reporting
-------
requirements of the HSR Act.
ARTICLE VII
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:
7.1. INVESTIGATION. Tribune shall cause the Company to afford to the
-------------
officers, employees and authorized representatives of Buyer (including, without
limitation, independent public accountants and attorneys) reasonable access
during normal business hours upon reasonable advance notice to the offices,
properties, employees and business and financial records (including computer
files, retrieval programs and similar documentation) of the
-16-
Company and the Subsidiaries to the extent Buyer shall reasonably deem necessary
or desirable and shall furnish to Buyer or its authorized representatives such
additional information concerning the Company as shall be reasonably requested;
provided, however, that the Company shall not be required to violate any
-------- -------
obligation of confidentiality to which it is subject in discharging its
obligations pursuant to this Section 7.1. Buyer agrees that such investigation
-----------
shall be conducted in such a manner as not to interfere unreasonably with the
operations of the Company.
7.2. 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 this Agreement inaccurate as of the
Closing Date. 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.
7.3. CONSENTS OF THIRD PARTIES; GOVERNMENTAL APPROVALS. (a) Tribune
-------------------------------------------------
and Buyer will act diligently and reasonably to (i) secure, before the Closing
Dace, the consent., approval or waiver, in form and substance reasonably
satisfactory to Buyer, from any party to any Company Agreement required to be
obtained to satisfy the conditions set forth in Section 9.3 or Section 10.2 and,
----------- ------------
(ii) cause Buyer to be substituted for Tribune or any of its Affiliates,
effective as of the Closing, in respect of all obligations of Tribune or any of
its Affiliates under each of the guaranties set forth in Schedule 7.3 (the
------------
"Guaranties"); provided that neither Tribune nor Buyer shall have any obligation
----------
to offer or pay any consideration in order to obtain any such consents or
approvals.
(b) During the period prior to the Closing Date, Tribune and Buyer
shall act diligently and reasonably, and shall cooperate with each other, to
secure any consents and approvals of any Governmental Body required to be
obtained by them in order to permit the consummation of the transactions
contemplated by this Agreement, or to otherwise satisfy the conditions set forth
in Sections 9.2 and 10.2.
------------ ----
7.4. OPERATIONS PRIOR TO THE CLOSING DATE. (a) Tribune shall cause
------------------------------------
the Company to operate and carry on the Business only in the ordinary course and
substantially as presently operated. Consistent with the foregoing, Tribune
shall cause the Company and the Subsidiaries to use its reasonable efforts
consistent with good business practice to preserve the goodwill of the
suppliers, employees, customers and others having business relations with the
Company and the Subsidiaries.
(b) Notwithstanding Section 7.4(a), except as expressly contemplated
--------------
by this Agreement or except with the express written approval of Buyer (which
Buyer agrees shall not be unreasonably withheld or delayed), from and after the
Balance Sheet Date, Tribune shall cause the Company and the Subsidiaries to not:
(i) make any material change in the Business or the operations of the
Company and the Subsidiaries;
-17-
(ii) enter into any contract, agreement, undertaking or commitment
which would have been required to be set forth in Schedule 5.17 if in
-------------
effect on the date hereof;
(iii) enter into any contract for the purchase of real property or
any option to extend a lease listed in Schedule 5.10;
-------------
(iv) create, incur or assume, or agree to create, incur or assume, any
indebtedness for borrowed money (other than money borrowed from or advances
from Tribune or any of its Affiliates in the ordinary course of business)
or enter into, as lessee, any capitalized lease obligations (as defined in
Statement of Financial Accounting Standards No. 13);
(v) institute any material increase in any profit-sharing, bonus,
incentive, deferred compensation. insurance, pension, retirement, medical,
hospital, disability, welfare or other employee benefit plan with respect
to its employees of the Company or any Subsidiary or declare or pay any
dividend or redeem any capital stock or repay any intercompany
indebtedness; provided, however, that the restrictions set forth in this
-------- -------
clause (v) shall not prohibit the Company from (i) distributing to Tribune
or an Affiliate of Tribune prior to the Closing Date the proceeds from the
sale of the Real Property and (ii) repaying to Tribune or an Affiliate of
Tribune prior to the Closing Date intercompany indebtedness owed to Tribune
or an Affiliate of Tribune in an amount not to exceed actual cash advances
made by Tribune or an Affiliate of Tribune to the Company from and after
January 1, 1997;
(vi) make any material change in the compensation of employees of the
Company or any Subsidiary, other than changes made in accordance with
normal compensation practices and consistent with past compensation
practices; or
(vii) make any material change in the accounting policies applied in
the preparation of the Balance Sheet.
7.5. CANCELLATION OF INTERCOMPANY DEBT OWED TO TRIBUNE. At or prior
-------------------------------------------------
to the Closing Date Tribune shall cancel all intercompany debt owed by the
Company or any Subsidiary to Tribune or any Affiliate of Tribune so that as of
Closing no amounts shall be owed to Tribune or its Affiliates by the Company or
the Subsidiaries.
7.6. FINANCING; SUPERIOR PROPOSAL. (a) From the date of this
----------------------------
Agreement to and including February 19, 1997, Tribune and its officers,
employees, representatives, agents and Affiliates shall not solicit, initiate,
encourage, facilitate, entertain (including by way of furnishing information
relating to the Company) or respond to proposals for (i) the purchase of the
Company Shares by a Person other than Buyer or (ii) the purchase of any material
assets of the Company by a Person other than Buyer.
(b) Commencing on February 19, 1997, Tribune and its officers,
employees, representatives, agents and Affiliates are expressly permitted to
solicit, initiate, encourage, facilitate, entertain (including by way of
furnishing information relating to the Company) and respond to proposals for (i)
the purchase of the Company Shares by a Person other than Buyer or (ii) the
exchange of the Company's assets pursuant to (S)1031 of the Code. If Tribune
receives a
-18-
Superior Proposal (as hereinafter defined), Tribune must deliver a notice
(the "Superior Proposal Notice") to Buyer specifying the material terms and
------------------------
conditions of such Superior Proposal. Tribune may terminate this Agreement
on or after 5:00 p.m., Chicago time, on the third business day after delivering
the Superior Proposal Notice to Buyer unless, prior to such time, Buyer deposits
$170,000 (the "Deposit Amount") in an account designated by Tribune. If the
--------------
Closing occurs, then the Deposit Amount and all earnings thereon shall be
retained by Tribune and applied to the payment of the Purchase Price to be paid
to Tribune by Buyer at Closing. If the Closing does not occur solely because of
(A) the failure of Buyer to satisfy the condition precedent set forth in Section
-------
9.5 on or prior to February 28, 1996 or (B) a material breach by Buyer in the
---
performance of any of its covenants and agreements contained herein or a
material breach of its representations and warranties contained herein (and
provided that Tribune is not in material breach in the performance of any of its
covenants or agreements contained herein or of any of its representations and
warranties contained herein), then Tribune shall retain the Deposit Amount and
all earnings thereon and the retention of the Deposit Amount and all earnings
thereon by Tribune shall be Tribune's sole remedy for any such breach by Buyer;
provided, however, that Tribune shall return to Buyer the Deposit Amount and all
-------- -------
earnings thereon upon (A) the closing of the transaction specified in the
Superior Proposal Notice or (B) the closing of another transaction meeting the
criteria of a Superior Proposal. If the Closing does not occur for any other
reason, then the Deposit Amount and all earnings thereon are to be delivered to
Buyer. For purposes of this Agreement, a "Superior Proposal" means any bona
-----------------
fide written proposal made by a third party to acquire, directly or indirectly,
all of the Company Shares for a purchase price in excess of $18 million or to
exchange substantially all of the assets of the Company for the assets of such
third party pursuant to (S)1031 of the Code on terms which Tribune determines in
its good faith judgment to be more favorable to Tribune than the transaction
contemplated by this Agreement. In determining whether a Superior Proposal is
more favorable to Tribune, Tribune may take into account non-economic factors
and shall not be precluded from accepting a Superior Proposal which contains
economic terms less favorable than the economic terms set forth in this
Agreement if Tribune shall have otherwise determined that the proposal is a
Superior Proposal.
7.7. HSR ACT FILING. Buyer shall determine if a filing by Buyer is
--------------
required under the HSR Act. If such a filing is required, Buyer shall notify
Tribune promptly upon making such a determination. As promptly as practicable
thereafter, Buyer and Tribune 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 under the HSR Act, or any rules and regulations
promulgated thereunder, with respect to the transactions contemplated hereby.
Each party warrants that all such filings by it will be, as of the date filed,
true and accurate and in accordance with the requirements of the HSR Act and any
such rules and regulations. Each of Buyer and Tribune agrees to make available
to the other such information as each of them may reasonably request relative to
its business, assets and property (including, in the case of Tribune, the
Company) as may be required of each of them to file any additional information
requested by such agencies under the HSR Act and any such rules and regulations.
-19-
ARTICLE VIII
ADDITIONAL AGREEMENTS
---------------------
8.1. USE OF NAMES. Tribune is not granting Buyer, the Company or any
-------------
Subsidiary a license to use any of Tribune's tradenames or trademarks of Tribune
or its Affiliates (including, without limitation, "Tribune Company"), and Buyer
---------------
shall not permit the Company or any Subsidiary to use in any manner after the
Closing any names or marks of Tribune or any of Tribune's Affiliates or any word
that is similar in sound or appearance to such names or marks. Buyer
acknowledges that Tribune and its Affiliates would be irreparably harmed by any
breach of this Section 8.1 and that any relief under Article XII will be
----------- -----------
inadequate to compensate Tribune or such Affiliates for any such breach.
Accordingly, Buyer agrees that, in addition to any relief available under
Article XII, Tribune and its Affiliates shall be entitled, without the necessity
-----------
of proving actual damages or posting any bond, to injunctive relief against
Buyer and any involved Affiliates of Buyer in the event of any breach or
threatened breach by Buyer (or its Affiliates) of its covenants and agreements
in this Section 8.1 and Buyer (on behalf of itself and its Affiliates) consents
-----------
to the entry thereof. Notwithstanding any provision of this Agreement, the
Company and the Subsidiaries shall have the right, for a period not exceeding 60
days from the Closing Date, to distribute materials of the Company or any
Subsidiary marked with tradenames or trademarks of Tribune (including describing
the Company or any Subsidiary as a Tribune Company) printed on such materials
prior to the Closing Date, provided that Buyer shall cause the Company or
Subsidiary where feasible to remove such names and marks or to indicate thereon
prior to any use thereof the change in the ownership of the Company and, in any
event, on and after the 60th day after the Closing Date, Buyer shall cause the
Company or Subsidiary to remove such names and marks or to indicate thereon
prior to any use thereof the change in the ownership of the Company and the
Subsidiaries.
8.2. EMPLOYEE MATTERS. Tribune agrees to cause payment of all 401(k)
----------------
contributions for the fiscal year ended December 29, 1996 prior to Closing
(which equals $60,000 as of December 29, 1996 and was included as a liability in
the Balance Sheet).
8.3. RETIRED EMPLOYEES. Buyer agrees to cause the Company to notify
-----------------
Tribune in a reasonable and timely manner upon the Company's receipt of notice
of any claim with respect to the benefits of the Retired Employees described in
Schedule 5.21(c).
----------------
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
--------------------------------------------
The obligations of Buyer under this Agreement shall, at the option of
Buyer, be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
9.1. NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES.
----------------------------------------------------------
There shall have been no material breach by Tribune in the performance of any of
its covenants and agreements herein which shall not have been remedied or cured;
each of the representations and warranties of Tribune contained in this
Agreement shall be true and correct in all material respects on the Closing Date
as though made on the Closing Date (except to the extent that they
-20-
expressly relate to an earlier date), except for changes therein specifically
permitted by this Agreement or resulting from any transaction expressly
consented to in writing by Buyer or any transaction permitted by Section 7.4 or
-----------
7.7 and except for such untruths or inaccuracies as have not had and are not
---
reasonably likely to have a material adverse effect on the assets, prospects,
Business, results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole, or materially adversely affect the ability of
Tribune to consummate the transactions contemplated by this Agreement; and there
shall have been delivered to Buyer a certificate to such effect, dated the
Closing Date, signed on behalf of Tribune by the President or any Vice President
of Tribune.
9.2. NECESSARY APPROVALS. Buyer shall have received all approvals and
-------------------
actions of or by all Governmental Bodies or Persons which are necessary to
consummate the transactions contemplated hereby which are specified in Schedule
--------
9.2 (being those which Buyer is required by applicable law or regulation to have
---
to operate the Business) and the real property leases which are specified in
Schedule 5.4, other than such real property leases relating to office space for
------------
which there is a substantially similar alternative office space readily
available to the Company at a substantially similar rental rate and which would
not require the incurrence by the Company of lease termination, relocation and
other costs which, in the aggregate, would be material to the Company.
9.3. NECESSARY CONSENTS. Tribune shall have received the consents, in
------------------
form and substance reasonably satisfactory to Buyer, which are specified in
Schedule 9.3.
------------
9.4. CLOSING DELIVERIES. Tribune shall have delivered to Buyer the
------------------
Closing Date deliveries set forth in Section. 4.4.
------------
9.5. FINANCING . Buyer shall have obtained an amount of funds from
---------
third parties sufficient to finance the acquisition of the Company Shares from
Tribune.
9.6 EXECUTIVE COMMITTEE APPROVAL. The Executive Committee or the
----------------------------
Board of Directors of Tribune shall have approved this Agreement and the
transactions contemplated hereby.
9.7. HSR ACT. Any applicable waiting period under the HSR Act shall
-------
have expired or been terminated.
Notwithstanding the failure of any one or more of the foregoing
conditions, Buyer may proceed with the Closing without satisfaction, in whole or
in part, of any one or more of such conditions and without written waiver. To
the extent that at the Closing Tribune delivers to Buyer a written notice
specifying in reasonable detail the failure of any of such conditions or the
breach by Tribune of any of the representations or warranties of Tribune herein,
and nevertheless Buyer proceeds with the Closing, Buyer shall be deemed to have
waived for all purposes any rights or remedies it may have against Tribune by
reason of the failure of any such conditions or the breach of any such
representations or warranties to the extent described in such notice.
-21-
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIBUNE
----------------------------------------------
The obligations of Tribune under this Agreement shall, at the option
of Tribune, be subject to the satisfaction, on or prior to the Closing Date, of
the following conditions:
10.1. NO MISREPRESENTATION OR BREACH OF COVENANTS AND WARRANTIES.
----------------------------------------------------------
There shall have been no material breach by Buyer in the performance of any of
its covenants and agreements herein which shall not have been remedied or cured;
each of the representations and warranties of Buyer contained in this Agreement
shall be true and correct on the Closing Date as though made on the Closing
Date, except for changes therein specifically permitted by this Agreement or
resulting from any transaction expressly consented to in writing by Tribune or
any transaction contemplated by this Agreement and except for such untruths or
inaccuracies as have not had and are not reasonably likely to have a material
adverse effect on the assets, business, results of operations or financial
condition of Buyer or materially adversely affect the ability of Buyer to
consummate the transactions contemplated by this Agreement; and there shall have
been delivered to Tribune a certificate to such effect, dated the Closing Date
and signed on behalf of Buyer by the President or any Vice President of Buyer.
10.2. NECESSARY CONSENTS. Tribune shall have received consents, in
------------------
form and substance reasonably satisfactory to Tribune, which are specified in
Schedule 10.2.
-------------
10.3. LETTER OF CREDIT. The stand-by letter of credit delivered to
----------------
Centre Square in connection with the Lease dated July 17, 1995 between the
Company and Centre Square shall have been terminated.
10.4. CLOSING DELIVERIES. Buyer shall have delivered to Tribune the
------------------
Closing Date deliveries set forth in Section 4.3.
-----------
10.5. EXECUTIVE COMMITTEE APPROVAL. The Executive Committee or the
----------------------------
Board of Directors of Tribune shall have approved this Agreement and the
transactions contemplated hereby.
10.6. HSR ACT. Any applicable waiting period under the HSR Act shall
-------
have expired or been terminated or Buyer shall have delivered to Tribune a
certificate, dated the Closing Date, and signed on behalf of Buyer by the
President or any Vice President of Buyer to the effect that the "person" (as
defined in 16 C.F.R. (S) 801.1(a)(1) (1996)) in which Buyer is included prior to
the Closing does not have ``annual net sales" (as defined in 16 C.F.R. (S)
801.11 (1996)) or "total assets" (as defined in 16 C.F.R. (S) 801.11 (1996)) of
$10 million or more.
Notwithstanding the failure of any one or more of the foregoing
conditions, Tribune may proceed with the Closing without satisfaction, in whole
or in part, of any one or more of such conditions and without written waiver.
To the extent that at the Closing Buyer delivers to Tribune a written notice
specifying in reasonable detail the failure of any of such conditions or the
breach by Buyer of any of the representations or warranties of Buyer herein, and
nevertheless Tribune proceeds with the Closing, Tribune shall be deemed to have
waived for all purposes any rights or remedies it may have against Buyer by
reason of the failure of any
-22-
such conditions or the breach of any such representations or warranties to the
extent described in such notice.
ARTICLE XI
TAX MATTERS
-----------
11.1. LIABILITY FOR TAXES. (a) Tribune shall be liable for and pay,
-------------------
and pursuant to Article XII, and subject to the limitations thereof, shall
-----------
indemnify Buyer against all Taxes (i) imposed on the Company or any Subsidiary
pursuant to Treas. Reg. (S) 1.1502-6 or similar provision of state or local law
solely as a result of the Company or such Subsidiary having been a member of the
Tribune's Group, or (ii) imposed on the Company or any Subsidiary, or for which
the Company or any Subsidiary may otherwise be liable, for any taxable year or
period that ends on or before the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period ending on and including the Closing
Date, provided, however, that Tribune shall not be liable for or pay, and shall
-------- -------
not indemnify Buyer against, (A) any Taxes shown as a liability or reserve on
the Balance Sheet, (B) any Taxes that result from any actual or deemed election
under Section 338 of the Code or any similar provisions of state, local or
foreign law as a result of the purchase of the Company Shares or the deemed
purchase of shares of any Subsidiary or that result from the Company or any
Subsidiary engaging in any activity to engage in any transaction that would
cause the purchase of the Company Shares to be treated as a purchase or sale of
assets of the Company or any Subsidiary for federal, state or local Tax
purposes, and (C) any Taxes imposed on the Company or any Subsidiary for which
the Company or any Subsidiary may otherwise be liable, in either case, as a
result of transactions occurring on the Closing Date that are properly allocable
to the portion of the Closing Date after the Closing (Taxes described in this
proviso, hereinafter "Excluded Taxes"). Tribune shall be entitled to any refund
--------------
of (or credit for) Taxes, other than Excluded Taxes, allocable to any taxable
year or period that ends on or before the Closing Date and, with respect to any
Straddle Period, the portion of such Straddle Period ending on and including the
Closing Date.
(b) Buyer shall be liable for and pay, and pursuant to Article XII and
-----------
subject to the limitations thereof shall indemnify Tribune against, (i) all
Taxes imposed on the Company or any Subsidiary, or for which the Company or any
Subsidiary may otherwise be liable, for any taxable year or period that begins
after the Closing Date and, with respect to any Straddle Period, the portion of
such Straddle Period beginning after the Closing Date and (ii) Excluded Taxes.
Buyer shall be entitled to any refund of (or credit for) (i) Taxes allocable to
any taxable year or period that begins after the Closing Date and, with respect
to any Straddle Period, the portion of such Straddle Period beginning after the
Closing Date and (ii) Excluded Taxes.
(c) For purposes of Section 11.1(a) and (b), whenever it is necessary
--------------- ---
to determine the liability for Taxes of the Company or a Subsidiary for a
Straddle Period, the determination of the Taxes of the Company or such
Subsidiary for the portion of the Straddle Period ending on and including, and
the portion of the Straddle Period beginning after, the Closing Date shall be
determined by assuming that the Straddle Period consisted of two taxable years
or periods, one which ended at the close of the Closing Date and the other which
began at the beginning of the day following the Closing Date, and items of
income, gain, deduction, loss
-23-
or credit of the Company or such Subsidiary for the Straddle Period shall be
allocated between such two taxable years or periods on a "closing of the books
basis" by assuming that the books of the Company or such Subsidiary were closed
at the close of the Closing Date and Tribune shall prepare and bear the cost of
its preparing any financial statements required to determine the tax liabilities
of the Company for the period ended on the Closing Date; provided, however, that
-------- -------
(i) transactions occurring on the Closing Date that are properly allocable to
the portion of the Closing Date after the Closing shall be allocated to the
taxable year or period that is deemed to begin at the beginning of the day
following the Closing Date, (ii) exemptions, allowances or deductions that are
calculated on an annual basis, such as the deduction for depreciation, shall be
apportioned between such two taxable years or periods on a daily basis and (iii)
other items of income, gain, deduction, loss or credit for the month in which
the Closing Date occurs shall be allocated between such two taxable years or
periods by allocating an equal amount of such items to each calendar day in such
month, except that extraordinary items described in Treas. Reg. (S)
1.150276(b)(2)(ii)(C) shall be allocated to the day that they are taken into
account. Notwithstanding the foregoing provisions of this Section 11.1(c), if
---------------
the transactions contemplated by this Agreement result in the reassessment of
the value of any property owned by the Company or any Subsidiary for property
Tax purposes, or the imposition of any property Taxes at a rate which is
different than the rate that would have been imposed if such transactions had
not occurred, then (A) the portion of such property Taxes for the portion of the
Straddle Period ending on and including the Closing Date shall be determined on
a daily basis, using the assessed value and Tax rate that would have applied had
such transactions not occurred, and (B) the portion of such property Taxes for
the portion of such Straddle Period beginning after the Closing Date shall be
the total property Taxes for the Straddle Period minus the amount described in
clause (A) of this sentence.
(d) If, as a result of any action, suit, investigation, audit, claim,
assessment or amended Tax Return, there is any change after the Closing Date in
an item of income, gain, loss, deduction, credit or amount of Tax that results
in an increase in a Tax liability for which Tribune would otherwise be liable
pursuant to Section 11.1(a), and such change results in a realized decrease in
---------------
the Tax liability of the Company, any Subsidiary, Buyer or any Affiliate or
successor of any thereof for any taxable year or period beginning after the
Closing Date or for the portion of any Straddle Period beginning after the
Closing Date, Tribune shall not be liable pursuant to Section 11.1(a) with
---------------
respect to such increase to the extent of such realized decrease.
(e) Tribune and Buyer expressly agree that Tribune makes no
representation, warranty or covenant with respect to the amount of, or the
ability to utilize, any net operating loss carryovers, net capital loss
carryovers, credits or similar items of the Company or any Subsidiary at any
time. Without limiting the generality of the foregoing, Tribune shall have no
liability for a reduction in or elimination of any net operating loss carryover,
net capital loss carryover, credits or similar item as a result of income or
gain realized by the Company, any Subsidiary or any Affiliate thereof on or
prior to the Closing Date or as a result of any action, suit, investigation,
audit, claim, assessment or amended Tax Return relating to taxable years or
periods (or portions thereof) that end on or before the Closing Date.
11.2. TAX RETURNS. (a) Tribune shall file or cause to be filed when
-----------
due (taking into account all extensions properly obtained) all Tax Returns that
are required to be filed by or with respect to the Company and each Subsidiary
for taxable years or periods ending on or
-24-
before the Closing Date and Tribune shall remit or cause to be remitted any
Taxes due in respect of such Tax Returns, and Buyer shall file or cause to be
filed when due (taking into account all extensions properly obtained) all Tax
Returns that are required to be filed by or with respect to the Company and each
Subsidiary for taxable years or periods ending after the Closing Date and Buyer
shall remit or cause to be remitted any Taxes due in respect of such Tax
Returns. With respect to any Tax Returns to be filed by Buyer pursuant to the
preceding sentence that relate to taxable years or periods ending on or before
the Closing Date (i) such Tax Returns shall be filed in a manner consistent with
past practice and no position shall be taken, election made or method adopted
that is inconsistent with positions taken, elections made or methods used in
prior periods in filing such Tax Returns (including, without limitation, any
position which would have the effect of accelerating income to periods for which
Tribune is liable or deferring deductions to periods for which Buyer is liable)
and (ii) such Tax Returns shall be submitted to Tribune not later than 30 days
prior to the due date for filing such Tax Returns (or, if such due date is
within 45 days following the Closing Date, as promptly as practicable following
the Closing Date) for review and approval by Tribune, which approval may not be
unreasonably withheld, but may in all cases be withheld if such Tax Returns were
not prepared in accordance with clause (i) of this sentence.
(b) None of Buyer or any Affiliate of Buyer shall (or shall cause or
permit the Company or any Subsidiary to) amend, refile or otherwise modify any
Tax Return relating in whole or in part to the Company or any Subsidiary with
respect to any taxable year or period ending on or before the Closing Date (or
with respect to any Straddle Period) without either (i) the prior written
consent of Tribune, which consent may be withheld in the sole discretion of
Tribune or (ii) in the event that a Governmental Authority requires any such Tax
Return to be amended, refiled or otherwise modified providing prior written
notice to Tribune of any such requirement and affording Tribune any legally
available opportunity to contest such requirement at its sole expense.
(c) Buyer shall provide to Tribune and Tribune's authorized
representatives sufficient access to the Company's books, records, and any
ledgers to enable Tribune to prepare a package of Tax information materials,
including, without limitation, schedules and work papers (the "Tax Package")
-----------
required by Tribune to enable Tribune to prepare and file all Tax Returns
required to be prepared and filed by it pursuant to Section 11.2(a). The Tax
---------------
Package shall be completed in accordance with past practice, including past
practice as to providing such information and as to the method of computation of
separate taxable income or other relevant measure of income of the Company.
11.3. CONTEST PROVISIONS. Buyer shall promptly notify Tribune in
------------------
writing upon receipt by Buyer, any of its Affiliates, the Company or any
Subsidiary of notice of any pending or threatened federal, state, local or
foreign Tax audits, examinations or assessments which might affect the Tax
liabilities for which Tribune may be liable pursuant to Section 11.1(a).
---------------
Tribune shall have the sole right to represent the Company's and each
Subsidiary's interests in any Tax audit or administrative or court proceeding
relating to taxable periods ending on or before the Closing Date or otherwise
relating to Taxes for which Tribune may be liable pursuant to Section 11.1(a),
---------------
and to employ counsel of its choice at its expense. In the case of a Straddle
Period, Buyer shall control any audit, administrative or court proceeding,
-25-
but Tribune shall be entitled to participate at its expense in any Tax audit or
administrative or court proceeding relating (in whole or in part) to Taxes
attributable to the portion of such Straddle Period ending on and including the
Closing Date and, with the written consent of Buyer, and at Tribune's sole
expense, may assume the entire control of such audit or proceeding. None of
Buyer, any of its Affiliates, the Company or any Subsidiary may settle any Tax
claim for any taxable year or period ending on or before the Closing Date (or
for any Straddle Period) which may be the subject of indemnification by Tribune
under Section 11.1(a), or otherwise relating to Taxes which Tribune may be
---------------
liable pursuant to Section 11.1(a), without the prior written consent of
---------------
Tribune, which consent may be withheld in the sole discretion of Tribune.
11.4. ASSISTANCE AND COOPERATION. After the Closing Date, each of
--------------------------
Tribune and Buyer shall (and cause their respective Affiliates to):
(i) assist the other party in preparing any Tax Returns which such
other party is responsible for preparing and filing in accordance with
Section 11.2(a);
---------------
(ii) cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding any Tax Returns of the Company and each
Subsidiary;
(iii) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to
Taxes of the Company and each Subsidiary;
(iv) provide timely notice to the other in writing of any pending or
threatened Tax audits or assessments of the Company and each Subsidiary for
taxable periods for which the other may have a liability under Section
-------
11.1;
----
(v) furnish the other with copies of all correspondence received from
any taxing authority in connection with any Tax audit or information
request with respect to any such taxable period; and
(vi) timely sign and deliver such certificates or forms as may be
necessary or appropriate to establish an exemption from (or otherwise
reduce), or file Tax Returns or other reports with respect to sales,
transfer and similar Taxes; and
(vi) timely provide to the other powers of attorney or similar
authorizations necessary to carry out the purposes of this Section 11.4.
------------
ARTICLE XII
INDEMNIFICATION
---------------
12.1. INDEMNIFICATION BY TRIBUNE. (a) Tribune agrees to indemnify and
--------------------------
hold harmless each Buyer Group Member from and against any and all Losses and
Expense incurred by such Buyer Group Member in connection with or arising from:
(i) any breach by Tribune of any of its covenants in this Agreement;
-26-
(ii) any breach of any warranty or the inaccuracy of any
representation of Tribune contained in this Agreement;
(iii) the obligation of the Company (A) to provide the medical,
hospital or death benefits to the retired former employees of the Company
set forth on Schedule 5.21(c) or (B) to indemnify and hold harmless each
----------------
individual who served as director of the Company on or before the Closing
Date from any claim or liability of any kind; or
(iv) any liability with respect to (A) a violation of any
Environmental Law directly relating to the Real Property which occurs on or
after the closing date of the sale of the Real Property by the Company, (B)
any Remedial Action taken with respect to the Real Property on or after the
closing date of the sale of the Real Property by the Company or (C) any
claim of Losses and Expenses arising on or after the closing date of the
sale of the Real Property by the Company from the Release or threatened
Release of a Contaminant from the Real Property into the environment;
provided, however, that, without limiting Tribune's indemnification obligations
-------- -------
under clauses (iii) and (iv) of this subsection (a) or with respect to claims
for Taxes described in Article XI, Tribune shall not be required to indemnify
----------
and hold harmless pursuant to clauses (i) and (ii) of this subsection (a) with
respect to Loss and Expense incurred by any Buyer Group Member (other than (A)
for breaches of any covenants or any representations and warranties of Tribune
with respect to which Tribune had knowledge as of the Closing or (B) for the
breach by Tribune of Section 8.2) until, and then only to the extent that, the
-----------
aggregate amount of all Loss and Expense exceeds $250,000; provided, further,
-------- -------
that without limiting Tribune's indemnification obligations under clause (iii)
of this subsection (a) or with respect to claims for Taxes described in Article
-------
XI, the aggregate amount that Tribune shall be required to indemnify and hold
--
harmless pursuant to clauses (i), (ii) and (iv) of this subsection (a) with
respect to Loss and Expense incurred by Buyer shall not exceed the Purchase
Price. In the event that Tribune indemnifies Buyer for Loss or Expense pursuant
to this subsection (a), Buyer shall assign to Tribune any and all rights it may
have against any Person with respect to the amount of Loss and Expense for which
Buyer is indemnified by Tribune and will cooperate with Tribune at Tribune's
sole expense if Tribune attempts to recover such Loss and Expense from such
Person.
(b) The indemnification provided for in this Section 12.1 shall
------------
terminate one year after the Closing Date (and no claims shall be made by any
Buyer Group Member under this Section 12.1 thereafter), except that the
------------
indemnification by Tribune shall continue as to:
(i) the covenants of Tribune set forth in Sections 14.2, 14.10 and
------------- ------
14.13, and the indemnification provided for in Section 12.1(a)(iii) above,
----- ---------------------
as to all of which no time limitation shall apply;
(ii) the covenants of Tribune set forth in Article XI and the
-----------
indemnification provided for in Section 12.1(a)(iv) above, all of which
-------------------
shall survive until the expiration of the applicable statute of
limitations; and
(iii) any Loss or Expense of which any Buyer Group Member has
notified Tribune in accordance with the requirements of Section 12.3 on or
-------------
prior to the date such
-27-
indemnification would otherwise terminate in accordance with this Section
-------
12.1, as to which the obligation of Tribune shall continue until the
----
liability of Tribune shall have been determined pursuant to this Article
-------
XII, and Tribune shall have reimbursed all Buyer Group Members for the full
---
amount of such Loss and Expense in accordance with this Article XII.
-----------
(c) Buyer and Tribune agree that, for purposes of computing the amount
of any indemnification payment under this Section 12.1, any such indemnification
------------
payment shall be treated as an adjustment to the Purchase Price for all Tax
purposes.
(d) If Tribune is required to indemnify Buyer pursuant to the
provisions of this Section 12.1, and the cost, expense or liability for which
------- ----
the indemnification is sought under this Section 12.1 has provided the Company
------------
or Buyer, as the case may be, with a realized Tax benefit, Buyer shall use its
reasonable efforts to obtain (or cause the Company to obtain) such Tax benefit
if consistent with the tax policies of Buyer or the Company, as applicable, and
the amount of such Tax benefit actually realized by Buyer or the Company, as the
case may be, shall be taken into account in determining Tribune's liability to
indemnify Buyer under this Section 12.1.
------------
12.2. INDEMNIFICATION BY BUYER. (a) Buyer agrees to indemnify and
------------------------
hold harmless each Tribune Group Member from and against any and all Loss and
Expense incurred by such Tribune Group Member in connection with or arising
from:
(i) any breach by Buyer of any of its covenants or agreements in this
Agreement;
(ii) any breach of any warranty or the inaccuracy of any
representation of Buyer contained in this Agreement (including, without
limitation, the representation contained in the certificate delivered by
Buyer pursuant to Section 10.6);
------------
(iii) any claims by or in respect of any person under any employee
benefit plan, program, agreement or arrangement maintained by the Company
and listed on Schedule 5.21(a); or
----------------
(iv) the failure by Buyer to satisfy its obligations under any
Guaranty;
provided, however, that, except (A) with respect to the matters described in
-------- -------
clauses (iii) or (iv) above, (B) for a breach by Buyer of Section 7.7 and 8.3
-------------------
and (C) for any Taxes for which Buyer is liable pursuant to Article XI (as to
----------
which the limitation set forth in this proviso shall not apply), Buyer shall not
be required to indemnify and hold harmless pursuant to this subsection (a) with
respect to Loss and Expense incurred by any Tribune Group Member until, and then
only to the extent that, the aggregate amount of such Loss and Expense exceeds
$250,000; provided, further, that without limiting Buyer's indemnification
-------- -------
obligations with respect to claims for Taxes described in Article XI, the
aggregate amount that Buyer shall be required to indemnify and hold harmless
pursuant to this subsection (b) with respect to Loss and Expense incurred by
Tribune shall not exceed Purchase Price. In the event that Buyer indemnifies
Tribune for Loss or Expense pursuant to this subsection (b), Tribune shall
assign to Buyer any and all rights it may have against any Person with respect
to the amount of Loss and Expense for which Tribune is
-28-
indemnified by Buyer and will cooperate with Tribune at Buyer's sole expense if
Buyer attempts to recover such Loss and Expense from such Person.
(b) The indemnification provided for in this Section 12.2 shall
------------
terminate one year after the Closing Date (and no claims shall be made by any
Tribune Group Member under this Section 12.2 thereafter), except that the
------------
indemnification by Buyer shall continue as to:
(i) the covenants of Buyer set forth in Sections 7.3, 7.7, 8.1, 8.3,
------------ --- --- ---
14.2, 14.6, 14.10 and 14.13 and the indemnification provided for in
---- ---- ------ -----
Sections 12.2(a)(iii) and (iv) above, as to all of which no time limitation
--------------------- ----
shall apply;
(ii) the covenants of Buyer set forth in Article XI which shall
----------
survive until the expiration of the applicable statute of limitations; and
(iii) any Loss or Expense of which any Tribune Group Member has
notified Buyer in accordance with the requirements of Section 12.3 on or
------------
prior to the date such indemnification would otherwise terminate in
accordance with this Section 12.2, as to which the obligation of Buyer
------------
shall continue until the liability of Buyer shall have been determined
pursuant to this Article XII, and Buyer shall have reimbursed all Tribune
-----------
Group Members for the full amount of such Loss and Expense in accordance
with this Article XII.
-----------
(c) If Buyer is required to indemnify Tribune pursuant to the
provisions of this Section 12.2, and the cost, expense or liability for which
------------
the indemnification is sought under this Section 12.2 has provided Tribune with
------------
a realized Tax benefit, Tribune shall use its reasonable efforts to obtain such
Tax benefit if consistent with the tax policies of Tribune and the amount of
such Tax benefit actually realized by Tribune shall be taken into account in
determining Buyer's liability to indemnify Buyer under this Section 12.2.
------------
12.3. NOTICE OF CLAIMS. (a) Any Buyer Group Member or Tribune Group
----------------
Member (the "Indemnified Party") seeking indemnification hereunder shall give to
-----------------
the party obligated to provide indemnification to such Indemnified Party (the
"Indemnitor") a notice (a "Claim Notice") describing in reasonable detail the
--------- ------------
facts giving rise to any claim for indemnification hereunder and shall include
in such Claim Notice (if then known) the amount or the method of computation of
the amount of such claim, and a reference to the provision of this Agreement or
any other agreement, document or instrument executed hereunder or in connection
herewith upon which such claim is based; provided, that a Claim Notice in
--------
respect of any action at law or suit in equity by or against a third Person as
to which indemnification will be sought shall be given promptly after the action
or suit is commenced; provided, that failure to give such notice shall not
--------
relieve the Indemnitor of its obligations hereunder except to the extent the
Indemnitor shall have been prejudiced by such failure (it being understood that
this proviso does not modify or otherwise affect the time periods specified in
Sections 12.1 and 12.2).
------------- ----
(b) In calculating any Loss or Expense there shall be deducted any
insurance recovery in respect thereof (and no right of subrogation shall accrue
hereunder to any insurer).
(c) After the giving of any Claim Notice pursuant hereto, the amount
of indemnification to which an Indemnified Party shall be entitled under this
Article XII shall be
-----------
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determined: (i) by the written agreement between the Indemnified Party and the
Indemnitor; (ii) by a final judgment or decree of any court of competent
jurisdiction; or (iii) by any other means to which the Indemnified Party and the
Indemnitor 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 shall have been finally determined. The
Indemnified Party shall have the burden of proof in establishing the amount of
Loss and Expense suffered by it.
12.4. THIRD PERSON CLAIMS. (a) Subject to Section 12.4(b), the
------------------- ---------------
Indemnified Party shall have the right to conduct and control, through counsel
of its choosing, the defense, compromise or settlement of any third Person
claim, action or suit against such Indemnified Party as to which indemnification
will be sought by any Indemnified Party from any Indemnitor hereunder, and in
any such case the Indemnitor shall cooperate in connection therewith and shall
furnish such records, information and testimony and attend such conferences,
discovery proceedings, hearings, trials and appeals as may be reasonably
requested by the Indemnified Party in connection therewith; provided, that the
--------
Indemnitor may participate, through counsel chosen by it and at its own expense,
in the defense of any such claim, action or suit as to which the Indemnified
Party has so elected to conduct and control the defense thereof; and provided,
--------
further, that the Indemnified Party shall not, without the written consent of
-------
the Indemnitor, pay, compromise or settle any such claim, action or suit if the
Indemnitor has acknowledged and agreed in writing that the Indemnitor has an
obligation to provide indemnification to the Indemnified Party in respect
thereof (subject to the limitations set forth in Section 12.1 or 12.2, as the
------------ ----
case may be), in which case the Indemnitor shall have the right to conduct and
control the defense of such claim. Notwithstanding the foregoing, if the
Indemnified Party pays, settles or compromises any such claim, action or suit
without seeking the consent of the Indemnitor, the Indemnified Party shall be
deemed to have waived any right to indemnity therefor hereunder.
(b) If (A) any Buyer Group Member is seeking indemnification from any
Tribune Group Member pursuant to Section 12(a)(iv) or (B) if any third Person
-----------------
claim, action or suit against any Indemnified Party is solely for money damages
or, where Tribune is the Indemnitor, will have no continuing effect in any
material respect on the Company, then the Indemnitor shall have the right to
conduct and control, through counsel of its choosing, the defense, compromise or
settlement of any such third Person claim, action or suit against such
Indemnified Party as to which indemnification will be sought by any Indemnified
Party from any Indemnitor hereunder if the Indemnitor has acknowledged and
agreed in writing that, if the same is adversely determined, the Indemnitor has
an obligation to provide indemnification to the Indemnified Party in respect
thereof (subject to the limitations set forth in Section 12.1 or 12.2, as the
------------ ----
case may be), and in any such case the Indemnified Party shall cooperate in
connection therewith and shall furnish such records, information and testimony
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested by the Indemnitor in connection therewith;
provided, that the Indemnified Party may participate, through counsel chosen by
--------
it and at its own expense, in the defense of any such claim, action or suit as
to which the Indemnitor has so elected to conduct and control the defense
thereof. Notwithstanding the foregoing, the Indemnified Party shall have the
right to pay, settle or compromise any such claim, action or suit, provided that
--------
in such event the Indemnified Party shall waive any right to indemnity therefor
hereunder.
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12.5. EXCLUSIVE REMEDY. Except for remedies that cannot be waived as
----------------
a matter of law, if the Closing occurs, this Article XII shall be the exclusive
-----------
remedy for breach of the representations and warranties contained in Article V
---------
or VI or the corresponding certificates delivered pursuant to Section 4.3 and
-- -----------
4.4.
---
ARTICLE XIII
TERMINATION
-----------
13.1. TERMINATION. Anything contained in this Agreement to the
-----------
contrary notwithstanding, this Agreement may be terminated at any time prior to
the Closing Date:
(a) by the mutual consent of Buyer and Tribune;
(b) by Buyer or Tribune if the Closing shall not have occurred on or
before February 28, 1997 (or such later date as may be mutually agreed to by
Buyer and Tribune);
(c) by Buyer in the event of any material breach by Tribune of any of
Tribune's agreements, representations, or warranties contained herein and the
failure of Tribune to cure such breach within 14 days after receipt of notice
from Buyer requesting such breach to be cured;
(d) by Tribune in the event of any material breach by Buyer of any of
Buyer's agreements, representations, or warranties contained herein and the
failure of Buyer to cure such breach within 14 days after receipt of notice from
Tribune requesting such breach to be cured;
(e) by Buyer or Tribune if any court of competent jurisdiction in the
United States or other United States Governmental Body shall have issued an
order, decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby; or
(f) by Tribune in accordance with Section 7.6.
-----------
13.2. NOTICE OF TERMINATION. Any party desiring to terminate this
---------------------
Agreement pursuant to Section 13.1 shall give notice of such termination to
------------
the other party to this Agreement.
13.3. NON-SOLICITATION. If this Agreement is terminated, neither
----------------
Buyer nor any of its Affiliates will, for a period of two years thereafter,
without the prior written approval of Tribune, directly or indirectly solicit,
induce or attempt to persuade any person who is an employee of the Company on
the date hereof or at any time hereafter that precedes such termination, to
terminate his or her employment with the Company. Without limiting the rights of
Tribune to pursue all other legal and equitable rights available for a violation
of this Section 13.3 by Buyer or its Affiliates, it is agreed that other
------------
remedies cannot fully compensate Tribune for such a violation and that Tribune
shall be entitled to injunctive relief to prevent a violation or continuing
violation hereof. It is the intent and understanding of each party hereto that
if, in any action before any court or agency legally empowered to enforce this
Section 13.3, any term,
------------
-31-
restriction, covenant or promise in this Section 13.3 is found to be
------------
unreasonable and for that reason unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make it
enforceable by such court or agency.
13.4. EFFECT OF TERMINATION. In the event that this Agreement shall
---------------------
be terminated pursuant to this Article XIII, all further obligations of the
------------
parties under this Agreement (other than Sections 13.3, 14.2 and 14.10) shall be
------------- ---- -----
terminated without further liability of any party to the other, provided that
nothing herein shall relieve any party from liability for its willful breach of
this Agreement.
ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1. SURVIVAL OF OBLIGATIONS. All of the representations,
-----------------------
warranties, agreements and covenants contained in this Agreement shall survive
the consummation of the transactions contemplated by this Agreement; provided,
--------
however, that the representations and warranties set forth in Article V or VI
------- --------- --
(other than the representations contained in Section 5.20) shall terminate on
------------
the first 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 V or VI (other than the representations contained in
--------- --
Section 5.20) or under any certificate delivered representations and warranties
------------
terminate as set forth in this Section.
14.2. 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 or its Affiliates 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 shall return to the
other party all copies of nonpublic documents and materials which have been
furnished in connection therewith and shall return or destroy all analyses,
compilations, studies or other documents of or prepared by such party from such
information (and confirm to the other party in writing that it has done so).
Such documents, materials and information shall not be communicated to any third
Person (other than to a party's counsel, accountants, financial advisors,
potential investors or lenders). No party shall use any such confidential
information in any manner whatsoever except solely for the purpose of evaluating
the proposed purchase and sale of the Company Shares; provided, however, that
-------- -------
after the Closing Buyer may use or disclose any confidential information of the
Company. The obligation of each party to treat such documents, materials and
other information in confidence shall not apply to any information which (i) is
or becomes available to such party from a source other than such party, (ii) is
or becomes available to the public other than as a result of disclosure by such
party or its agents, (iii) is required to be disclosed under applicable law or
judicial process, but only to the extent it must be disclosed, or (iv) such
party reasonably deems necessary to disclose to obtain any of the consents or
approvals contemplated hereby.
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14.3. NO PUBLIC ANNOUNCEMENT. Neither Buyer nor Tribune 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, 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;
provided that the foregoing shall not preclude communications or disclosures
--------
necessary to implement the provisions of this Agreement or to comply with the
accounting and Securities and Exchange Commission disclosure obligations or the
rules of any stock exchange.
14.4. 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 when sent by registered or certified mail or by
private courier addressed as follows:
If to Buyer, to:
MS Farm Journal Corporation
c/o Xxxxxx Xxxxxx & Co., Inc.
000 Xxxx Xxxxxx - Xxxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Xx.
with a copy to:
L. Xxxxx Xxxxxxxx, Jr.
Xxxxxxx Xxxxxxxx & Kotel
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Tribune, to:
Tribune Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Vice President and
General Counsel
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
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14.5. SUCCESSORS AND ASSIGNS. (a) The rights of either party under
----------------------
this Agreement shall not be assignable by such party hereto prior to the Closing
without the written consent of the other except that Buyer may assign its rights
and obligations to a separate legal entity controlled by Buyer or Buyer's sole
shareholder, provided that in connection with such assignment the assignee
expressly assumes in writing the obligations of Buyer hereunder. Following the
Closing, either party may assign any of its rights hereunder, but no such
assignment shall relieve it of its obligations hereunder.
(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 14.5 and the retirees described in Section 8.2 any right, remedy or
------------ -----------
claim under or by reason of this Agreement.
14.6. ACCESS TO RECORDS AFTER CLOSING . For a period of six years
-------------------------------
after the Closing Date, Tribune and its representatives shall have reasonable
access to all of the books and records of the Company and the Subsidiaries 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 Company and the
Subsidiaries prior to the Closing Date. Such access shall be afforded by Buyer
upon receipt of reasonable advance notice and during normal business hours.
Tribune shall be solely responsible for any costs or expenses incurred by it
pursuant to this Section 14.6. If Buyer, the Company or any Subsidiary shall
------------
desire to dispose of any of such books and records prior to the expiration of
such six-year period, Buyer shall, prior to such disposition, give Tribune a
reasonable opportunity, at Tribune's expense, to segregate and remove such books
and records as Tribune may select. In addition, Tribune shall provide Buyer with
such cooperation and access to records as is necessary or appropriate to enable
Buyer to prepare an audit of the consolidated financial statements of the
Company for the four fiscal years ending with fiscal year 1997.
14.7. 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 letters of intent between or among any of the parties hereto.
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the parties
hereto.
14.8. 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.
Disclosure of any fact or item in any Schedule hereto referenced by a particular
section in this Agreement shall be deemed to have been disclosed with respect to
every other section in this Agreement. Neither the specification of any dollar
amount in any representation or warranty contained in this Agreement nor the
inclusion of any specific item in any Schedule hereto is intended to imply that
such amount, or higher or lower amounts, or the item so included or other items,
are or are not material, and no party shall use the fact of the setting forth of
any such amount or the inclusion of any such item in any dispute or controversy
-34-
between the parties as to whether any obligation, item or matter not described
herein or included in any Schedule is or is not material for purposes of this
agreement. Unless this Agreement specifically provides otherwise, neither the
specification of any item or matter in any representation or warranty contained
in this Agreement nor the inclusion of any specific item in any Schedule hereto
is intended to imply that such item or matter, or other items or matters, are or
are not in the ordinary course of business, and no party shall use the fact of
the setting forth or the inclusion of any such item or matter in any dispute or
controversy between the parties as to whether any obligation, item or matter not
described herein or included in any Schedule is or is not in the ordinary course
of business for purposes of this Agreement. Tribune may, from time to time prior
to or at the Closing, by notice in accordance with the terms of this Agreement,
supplement or amend any Schedule, including one or more supplements or
amendments to correct any matter which would constitute a breach of any
representation, warranty or covenant contained herein. No such supplemental or
amended Schedule shall be deemed to cure any breach for purposes of Section 9.1.
-----------
If, however, the Closing occurs, any such supplement and amendment will be
effective to cure and correct for all other purposes and breach of any
representation, warranty or covenant which would have existed if Tribune had not
made such supplement or amendment, and all references to any schedule hereto
which is supplemented or amended as provided in this Section 14.8 shall for all
------------
purposes after the Closing be deemed to be a reference to such Schedule as so
supplemented or amended.
14.9. 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. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any party,
it is authorized in writing by an authorized representative of such party. 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.
14.10. EXPENSES. Each party hereto will pay all costs and expenses
--------
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel and accountants.
14.11. 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 provision shall be ineffective to
the extent, but only to the extent, of such invalidity, illegality or
unenforceability without invalidating the remainder of such invalid, illegal or
unenforceable provision or provisions or any other provisions hereof, unless
such a construction would be unreasonable.
14.12. 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
-35-
counterparts have been signed by each of the parties hereto and delivered to
each of Tribune and Buyer.
14.13. FURTHER ASSURANCES.
------------------
On and after the Closing Date each party hereto shall take, and Buyer shall
cause the Company to take, such other actions and execute such other documents
and instruments of conveyance and transfer as may be reasonably requested by the
other party hereto from time to time to effectuate or confirm the transfer of
the Company Shares to Buyer in accordance with the terms of this Agreement.
Notwithstanding anything to the contrary herein, Tribune agrees to continue to
provide accounts payable, benefit administration, and payroll processing to the
Company at Tribune's cost until the Company no longer requests such services and
benefits; provided, however, that such period shall not, in any event, extend
beyond 45 days from the date of the Closing.
14.14. GOVERNING LAW.
-------------
This Agreement shall be governed by and construed in accordance with the
internal laws (as opposed to the conflicts of law provisions) of the State of
Illinois.
14.15. DISCLAIMER OF WARRANTIES.
------------------------
Tribune makes no representations or warranties with respect to any
projections, forecasts or forward-looking information provided to Buyer. There
is no assurance that any projected or forecasted results will be achieved.
EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND
WARRANTIES IN THIS AGREEMENT AND THE CERTIFICATE DELIVERED BY TRIBUNE PURSUANT
TO SECTION 4.4, TRIBUNE IS SELLING THE COMPANY SHARES (AND THE BUSINESS AND
-----------
ASSETS OF THE COMPANY REPRESENTED THEREBY) ON AN "AS IS, WHERE IS" BASIS AND
DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS AND GUARANTEES WHETHER EXPRESS
OR IMPLIED. TRIBUNE MAKES NO REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER.
Buyer acknowledges that neither Tribune nor any of its representatives nor any
other Person has made any representation nor warranty, express or implied, as to
the accuracy or completeness of any memoranda, charts, summaries or schedules
heretofore made available by Tribune or its representatives to Buyer or any
other information which is not included in this Agreement or the Schedules
hereto, and neither Tribune nor any of its representatives nor any other Person
will have or be subject to any liability to Buyer, any Affiliate of Buyer or any
other Person resulting from the distribution of any such information to, or use
of any such information by, Buyer, any Affiliate of Buyer or any of their
agents, consultants, accountants, counsel or other representatives.
14.16. MEDIATION; SUBMISSION TO JURISDICTION.
-------------------------------------
If a dispute arises out of or relates to this Agreement or the alleged breach
thereof and if such dispute is not settled by direct discussions between the
parties, the parties agree to attempt to resolve the dispute through nonbinding
mediation administered by the Center for Public Resources, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. The parties agree that if such dispute is not resolved
within 90 days after submission of such dispute to mediation, legal proceedings
may be instituted; provided, that any such legal proceeding must be brought in
--------
the United States District Court for the Northern District of Illinois and Buyer
and Tribune waive any and all objections to jurisdiction that they may have
under the laws of the State of Illinois or the United States.
-36-
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be
executed the day and year first above written
MS FARM JOURNAL CORPORATION
By /s/ X. Xxxx Xxxxxx, III
---------------------------
TRIBUNE COMPANY
By /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
-37-
