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EXHIBIT 10.22
FORM OF CONTRIBUTION AND ASSUMPTION AGREEMENT
This Contribution and Assumption Agreement (this "Agreement"), dated as
of ________ __, 1998, is made by and between Pulitzer Publishing Company, a
Delaware corporation (the "Company"), and Pulitzer Inc., a Delaware corporation
and wholly owned subsidiary of the Company ("Newco"). Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
ascribed thereto in the Agreement and Plan of Merger, dated as of May 25, 1998,
among the Company, Newco and Hearst-Argyle Television, Inc., a Delaware
corporation ("Acquiror") to which a form of this Agreement is annexed as Exhibit
C (the "Merger Agreement").
RECITALS
WHEREAS, pursuant to the Merger Agreement, the Company has agreed to
contribute to Newco and/or its wholly-owned Subsidiaries (collectively, the
"Newco Group") all of the assets of the Company, except those specifically
identified in Section 2.02(a) of the Merger Agreement, pursuant to the terms of
this Agreement, as a step in a series of transactions as a result of which (i)
Acquiror will acquire Broadcasting and the Broadcasting Assets by means of a
merger of the Company with and into Acquiror, and (ii) the Newco Group will
conduct the businesses previously conducted by the Company and its Subsidiaries
(other than the operations of Broadcasting).
NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth below, the parties hereto agree as follows:
ARTICLE I
CONTRIBUTION AND ASSUMPTION
1.01 CONTRIBUTION OF ASSETS.
(a) Subject to Section 1.01(b), effective immediately prior to
the Distribution (the "Time of Contribution") the Company hereby contributes,
grants, conveys, assigns, transfers and delivers to the Newco Group, without
recourse (the "Contribution"), all of the Company's right, title and interest in
and to the following (collectively, the "Contributed Assets"): (i) any and all
assets of the Company, whether tangible or intangible and whether fixed,
contingent or otherwise, including, without limitation, the capital stock or
other equity interests of all its Subsidiaries, (ii) the name "Pulitzer" or any
part thereof whether alone or in combination with one or more other words (iii)
all real property, furniture, fixtures, equipment, tools, vehicles, supplies,
buildings, improvements, accounts receivable, notes, prepaid expenses,
securities,
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patents, trademarks, trade names, copyrights, Licenses, leases and contract
rights, and (iv) all other tangible or intangible assets of the Company wherever
located.
(b) Notwithstanding Section 1.01(a), the Company hereby retains
and does not contribute, grant, convey, assign, transfer or deliver to the Newco
Group (i) the issued and outstanding capital stock of PBC or the Broadcasting
Subsidiaries; (ii) the Broadcasting Assets; and (iii) the Company's rights
created pursuant to the Merger Agreement, this Agreement and the Transaction
Agreements.
(c) Notwithstanding anything contained in this Agreement or in
the Merger Agreement to the contrary, the Newco Group acknowledges and agrees
that the Company makes and has made no warranty, either express or implied,
including without limitation warranties of merchantability or fitness for a
particular purpose, with respect to any Contributed Assets.
1.02 ASSUMPTION OF LIABILITIES.
(a) Subject to Sections 1.02(b) and 1.07 hereof, effective as of
the Time of Contribution, the Newco Group, in partial consideration for the
Contribution, hereby unconditionally assumes and agrees to pay, satisfy and
discharge any and all liabilities of the Company of every kind whatsoever,
whether absolute, known, unknown, fixed, contingent or otherwise, that exist as
of the date hereof or exist as of, or otherwise relate to any period ending on
or prior to the Effective Time (the "Assumed Liabilities").
(b) Notwithstanding Section 1.02(a), the Company hereby retains,
and the Newco Group does not assume and will have no liability with respect to
the following (collectively, the "Retained Liabilities"): (i) the New Company
Debt; (ii) any liabilities associated with the radio and/or television business
operations of Broadcasting or the Broadcasting Assets except as otherwise
specifically provided in the Merger Agreement, including Sections 6.06(g), 6.09,
6.11, 6.25 and 6.28 thereof; and (iii) the Company's obligations created
pursuant to the Merger Agreement, this Agreement and the Transaction Agreements.
(c) It is expressly agreed by the parties hereto that all of the
obligations of Newco under the Merger Agreement this Agreement and the
Transaction Agreements shall be treated as Assumed Liabilities and not as
Retained Liabilities under this Agreement.
1.03 ISSUANCE OF NEWCO STOCK. In partial consideration for the
Contribution, at the Time of Contribution Newco shall issue and deliver to the
Company at the Company's request prior to the Distribution the following:
(i) such number of newly issued shares of Newco Common Stock as
will be required for the Distribution; and
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(ii) such number of newly issued shares of Newco Class B Common
Stock as will be required for the Distribution.
1.04 TRANSFER AND ASSUMPTION DOCUMENTATION. In furtherance of the
contribution, grant, conveyance, assignment, transfer and delivery of the
Contributed Assets and the assumption of the Assumed Liabilities set forth in
this Article I, at the Time of Contribution or as promptly as practicable
thereafter, (i) the Company shall execute and deliver, and cause its
Subsidiaries to execute and deliver, such deeds, bills of sale, stock powers,
certificates of title, assignments of leases and contracts and other instruments
of contribution, grant, conveyance, assignment, transfer and delivery necessary
to evidence such contribution, grant, conveyance, assignment, transfer and
delivery and (ii) the Newco Group shall execute and deliver such instruments of
assumption as and to the extent necessary to evidence such assumption.
1.05 NONASSIGNABLE CONTRACTS. Anything contained herein to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
lease, license agreement, contract, agreement, sales order, purchase order, open
bid or other commitment or asset (each an "Applicable Asset") if an assignment
or attempted assignment of the same, without the consent of the other party or
parties thereto, would constitute a breach thereof or in any way impair the
rights of the Company or the Newco Group thereunder. The Company shall, prior to
the Time of Contribution, use reasonable best efforts (it being understood that
such efforts shall not include any requirement of the Company to expend money or
offer or grant any financial accommodation) as requested by the Newco Group, and
the Newco Group shall cooperate in all reasonable respects with the Company, to
obtain all consents and waivers and to resolve all impracticalities of
assignments or transfers necessary to convey the Contributed Assets to the Newco
Group. If any such consent is not obtained or if any attempted assignment would
be ineffective or would impair the Newco Group's rights with respect to any
Applicable Asset so that the Newco Group would not receive all such rights, then
(x) the Company shall use reasonable best efforts (it being understood that such
efforts shall not include any requirement of the Company to expend money or
offer or grant any financial accommodation) to provide or cause to be provided
to the Newco Group, to the extent permitted by law, the benefits of any such
Applicable Asset and the Company shall promptly pay or cause to be paid to the
Newco Group when received all moneys received by the Company with respect to any
such Applicable Asset and (y) in consideration thereof the Newco Group shall
pay, perform and discharge on behalf of the Company all of the Company's debts,
liabilities, obligations and commitments thereunder in a timely manner and in
accordance with the terms thereof. In addition, the Company shall take such
other actions (at Newco's expense) as may reasonably be requested by Newco in
order to place Newco, insofar as reasonably possible, in the same position as if
such Applicable Asset had been transferred as contemplated hereby and so all the
benefits and burdens related thereto, including possession, use, risk of loss,
potential for gain and dominion, control and command, shall inure to Newco. If
and when such consents and proposals are obtained,
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the transfer of the Applicable Asset shall be effected in accordance with the
terms of this Agreement.
1.06 EMPLOYEE BENEFITS. All Company Employee Plans are subject to the
terms of SECTION 6.11 of the Merger Agreement, and all obligations of Newco
under such Section shall be treated as Assumed Liabilities and not as Retained
Liabilities under this Agreement.
1.07 EMPLOYEE STOCK OPTIONS. All plans and arrangements with respect to
the Company's employee stock options and restricted stock awards in place as of
the date hereof and all options and awards outstanding thereunder as of the date
hereof are subject to the terms of SECTION 6.12 of the Merger Agreement.
1.08 FURTHER ASSURANCES. Each of the parties hereto promptly shall
execute such documents and other instruments and take such further actions as
may be reasonably required or desirable to carry out the provisions hereof and
to consummate the transactions contemplated hereby.
1.09 TAX MATTERS. Notwithstanding anything to the contrary in this
Agreement, liabilities of the parties for Taxes are subject to the terms of
Section 6.09 of the Merger Agreement, and all obligations of Newco under Section
6.09 of the Merger Agreement shall be treated as Assumed Liabilities and not as
Retained Liabilities under this Agreement. The Contribution and the Merger are
intended to qualify as tax-free reorganizations within the meaning of Sections
368(a)(1)(D) and 368(a)(1)(A) of the Code, respectively, and the Distribution is
intended to be subject to Section 355(a) of the Code.
1.10 COOPERATION. The parties shall cooperate with each other in all
reasonable respects in order to ensure the smooth transfer of the Contributed
Assets, the Assumed Liabilities and the businesses related thereto, including,
without limitation, entering into any service or other sharing agreements that
may be reasonably necessary.
1.11 OTHER MATTERS. After the Effective Time and except as otherwise
provided herein or in the Merger Agreement, neither the Surviving Corporation
nor any of its Subsidiaries shall have any liability to the Newco Group in
respect of any intra-company contract, commitment or account in existence
immediately prior to the Effective Time among the Company, Newco and/or any of
their respective Subsidiaries.
ARTICLE I
INDEMNIFICATION
2.01 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify,
defend and hold harmless the Newco Group and their respective
successors-in-interest and each of their respective past and present officers
and directors against
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any losses, claims, damages or liabilities, joint or several, arising out of or
in connection with the Retained Liabilities, the Retained Assets or the
operations of Broadcasting, except as otherwise provided in the Merger
Agreement, including Sections 6.06(g), 6.09, 6.11, 6.25 and 6.28. The Company
shall reimburse the Newco group, each of its Subsidiaries, each of their
respective successors-in-interest, and each of their respective past and present
officers and directors for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, damage or liability referred to in the preceding sentence.
2.02 INDEMNIFICATION BY NEWCO. Newco shall indemnify, defend and hold
harmless the Company, PBC and each of the Broadcasting Subsidiaries and their
respective successors-in-interest, and each of their respective past and present
officers and directors against any losses, claims, damages or liabilities, joint
or several, arising out of or in connection with the Assumed Liabilities, the
Contributed Assets or the operations of any of the businesses contributed to the
Newco Group, except as otherwise provided in the Merger Agreement, including
SECTIONS 6.06(F), 6.09, and 6.25 thereof. Newco shall reimburse the Company, PBC
and each of the Broadcasting Subsidiaries, each of their respective
successors-in-interest and each of their past and present respective officers
and directors for any legal or any other expenses reasonably incurred by any of
them in connection with investigating or defending any such loss, claim, damage
or liability referred to in the preceding sentence.
2.03 NOTIFICATION OF CLAIMS. For the purpose of this Article II, the
term "Indemnifying Party" shall mean the party having an obligation hereunder to
indemnify the other party pursuant to this Article II, and the term "Indemnified
Party" shall mean the party having the right to be indemnified pursuant to this
Article II. Whenever any claim shall arise for indemnification under this
Article II, the Indemnified Party shall promptly notify the Indemnifying Party
in writing of such claim and, when known, the facts constituting the basis for
such claim (in reasonable detail). Failure by the Indemnified Party to so notify
the Indemnifying Party shall not relieve the Indemnifying Party of any liability
hereunder except to the extent that such failure materially prejudices the
Indemnifying Party.
2.04 INDEMNIFICATION PROCEDURES.
(a) After receipt of the notice of claim required by Section
2.03, if the Indemnifying Party undertakes to defend any such claim, then the
Indemnifying Party shall be entitled, if it so elects, to take control of the
defense and investigation with respect to such claim and to employ and engage
attorneys of its own choice, reasonably acceptable to the Indemnified Party, to
handle and defend the same, at the Indemnifying Party's cost, risk and expense,
upon written notice to the Indemnified Party of such election, which notice
acknowledges the Indemnifying Party's obligation to provide indemnification
hereunder. The Indemnifying Party shall not settle any third-party claim that is
the subject of indemnification without the written consent of the Indemnified
Party, which consent shall not be unreasonably withheld; provided, however, that
the Indemnifying Party may settle a claim without the Indemnified
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Party's consent if such settlement (i) makes no admission or acknowledgement of
liability or culpability with respect to the Indemnified Party, (ii) includes a
complete release of the Indemnified Party, and (iii) does not require the
Indemnified Party to make any payment or forego or take any action or otherwise
materially adversely affect the Indemnified Party. The Indemnified Party shall
cooperate in all reasonable respects with the Indemnifying Party and its
attorneys in the investigation, trial and defense of any lawsuit or action with
respect to such claim and any appeal arising therefrom (including the filing in
the Indemnified Party's name of appropriate cross-claims and counterclaims). The
Indemnified Party may, at its own cost and expense, participate in any
investigation, trial and defense of such lawsuit or action controlled by the
Indemnifying Party and any appeal arising therefrom.
(b) If, after receipt of a notice of claim pursuant to Section
2.03, the Indemnifying Party does not undertake to defend any such claim, the
Indemnified Party may, but shall have no obligation to, contest any lawsuit or
action with respect to such claim and the Indemnifying Party shall be bound by
the result obtained with respect thereto by the Indemnified Party (including,
without limitation, the settlement thereof without the consent of the
Indemnifying Party). If there are one or more legal defenses available to the
Indemnified Party that conflict with those available to the Indemnifying Party
or there is otherwise an actual or potential conflict of interest, the
Indemnified Party shall have the right, at the expense of the Indemnifying
Party, to assume the defense of the lawsuit or action; provided, however, that
the Indemnified Party may not settle such lawsuit or action without the consent
of the Indemnifying Party, which consent shall not be unreasonably withheld or
delayed.
2.05 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The parties hereto
irrevocably: (a) agree that any suit, action or other legal proceeding arising
out of this Agreement may be brought in the courts of the State of New York or
the courts of the United States located in New York County, New York, (b)
consent to the jurisdiction of each court in any such suit, action or
proceeding, (c) waive any objection which they, or any of them, may have to the
laying of venue of any such suit, action or proceeding in any of such courts,
and (d) waives the right to a trial by jury in any suit, action or other legal
proceeding. Each of the Company and Newco agrees that service of any and all
process which may be served in any such suit, action or other proceeding may be
made by written notice in accordance with the provisions of this Agreement, and
that such service of process on the Company or Newco (as the case may be) or
with respect to Newco, its successors or assigns and, to the extent permitted by
applicable law, shall be taken and held to be valid personal service.
2.06 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify
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this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
2.07 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any right preclude other or further exercises
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
ARTICLE I
MISCELLANEOUS
3.01 ENTIRE AGREEMENT. This Agreement, together with the Merger
Agreement, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof.
3.02 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under principles of conflicts of laws applicable
thereto.
3.03 DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
3.04 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by telecopy with confirmation of transmission, by express or overnight mail
delivered by a nationally recognized air courier (delivery charges prepaid), or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:
If to the Company (prior to the Merger) or Newco:
Pulitzer Publishing Company
Pulitzer Inc.
000 Xxxxx Xxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
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with a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Company (after the Merger):
Hearst-Argyle Television, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by telecopy or by air courier shall
be deemed effective on the first business day at the place at which such notice
or communication is received following the day on which such notice or
communication was sent. Any notice or communication sent by registered or
certified mail shall be deemed effective on the fifth business day at the place
from which such notice or communication was mailed following the day on which
such notice or communication was mailed.
3.05 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement, except
as provided in Sections
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3.07 and 3.08 and except for Article II (which are intended to be for the
benefit of the Persons provided for therein and may be enforced by such
Persons).
3.06 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
3.07 PERSONAL LIABILITY. This Agreement shall not create or be deemed
to create or permit any personal liability or obligation on the part of any
direct or indirect stockholder of any party hereto or any officer, director,
employee, agent, representative or investor of any party hereto.
3.08 BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, including the Surviving Corporation in the
Merger. This Agreement may not be assigned by any party hereto and any purported
assignment in violation hereof shall be null and void.
3.09 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
3.10 LEGAL FEES, COSTS. If any party hereto institutes any action or
proceeding, whether before a court or arbitrator, to enforce any provision of
this Agreement, the prevailing party therein shall be entitled to receive from
the losing party reasonable attorneys' fees and costs incurred in such action or
proceeding, whether or not such action or proceeding is prosecuted to judgment.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and
year first above written.
PULITZER PUBLISHING COMPANY
By:
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Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
PULITZER INC.
By:
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Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and Chief
Executive Officer
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