ASSET EXCHANGE AGREEMENT
Dated as of August 21, 1998
Among
TRIBUNE BROADCASTING COMPANY,
WGNX INC.,
XXXXXXXX CORPORATION
and
KCPQ ACQUISITION CORP.
TABLE OF CONTENTS
ARTICLE I
EXCHANGE OF ASSETS..................................................-2-
1.1. Transfer of Tribune Station Asset............................-2-
1.2. Excluded Tribune Assets......................................-4-
1.3. Transfer of Xxxxx Station Assets.............................-5-
1.4. Excluded Xxxxxxxx Assets.....................................-8-
1.5. Assumption of Tribune Station Liabilities....................-8-
1.6. Assumption of Xxxxx Station Liabilities.....................-10-
1.7. Closing Date................................................-12-
1.8. Calculation of Estimated Tribune Station Working
Capital Amount and Estimated Xxxxx Station Working
Capital Amount; Adjustment..............................-12-
1.9. Closing Date Deliveries.....................................-13-
1.10. Closing Date Balance Sheets; Adjustment.....................-14-
1.11. Further Assurances..........................................-16-
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TRIBUNE AND THE TRIBUNE
SUB................................................................-18-
2.1. Organization................................................-18-
2.2. Subsidiaries and Investments................................-18-
2.3. Authority of Tribune and the Tribune Sub....................-18-
2.4. Financial Statements........................................-20-
2.5. Operations Since Balance Sheet Date.........................-20-
2.6. No Undisclosed Liabilities..................................-21-
2.7. Taxes.......................................................-22-
2.8. Availability of Assets and Legality of Use..................-22-
2.9. Governmental Permits........................................-22-
2.10. Real Property...............................................-23-
2.11. Real Property Leases........................................-23-
2.12. Condemnation................................................-24-
2.13. Personal Property...........................................-24-
2.14. Personal Property Leases....................................-24-
2.15. Intellectual Property.......................................-24-
2.16. Accounts Receivable.........................................-25-
2.17. Title to Assets.............................................-25-
2.18. Employees...................................................-25-
2.19. Employee Relations..........................................-25-
2.20. Contracts...................................................-26-
2.21. Status of Contracts.........................................-27-
2.22. No Violation, Litigation or Regulatory Action...............-28-
2.23. Insurance...................................................-28-
2.24. Environmental Protection....................................-28-
2.25. No Finder...................................................-29-
2.26. Status of Tribune and the Tribune Sub.......................-29-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND
THE XXXXXXXX SUB...................................................-30-
3.1. Organization................................................-30-
3.2. Subsidiaries and Investments................................-30-
3.3. Authority of the Xxxxxxxx and the Xxxxxxxx Subs
.........................................................-30-
3.4. Title to Assets.............................................-31-
3.5. No Finder...................................................-32-
3.6. Status of Xxxxxxxx and the Xxxxxxxx Sub.....................-32-
ARTICLE IV
ACTION PRIOR TO THE CLOSING DATE...................................-32-
4.1. Investigation of the Tribune Station Business and the
Xxxxx Station Business..................................-32-
4.2. Preserve Accuracy of Representations and Warranties
.........................................................-33-
4.3. FCC Consent; Improvements Act Approval; Other
Consents and Approvals..................................-33-
4.4. Operations of the Tribune Station Prior to the
Closing Date............................................-35-
4.5. Operations of the Xxxxx Station Prior to the Closing
Date....................................................-37-
4.6. Public Announcement.........................................-37-
4.7. Interim Financial Statements................................-37-
4.8. Rights of Xxxxxxxx Under Xxxxx Merger Agreement.............-37-
ARTICLE V
ADDITIONAL AGREEMENTS..............................................-38-
5.1. Taxes; Sales, Use and Transfer Taxes; Title
Insurance...............................................-38-
5.2. Employees; Employee Benefit Plans...........................-39-
5.3. Control of Operations Prior to Closing Date.................-41-
5.4. Closing of Xxxxx Merger.....................................-41-
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIBUNE AND
THE TRIBUNE SUB....................................................-42-
6.1. No Misrepresentation or Breach of Covenants and
Warranties..............................................-42-
6.2. No Restraint or Litigation..................................-42-
6.3. FCC Order...................................................-43-
6.4. No Material Adverse Change..................................-43-
6.5. Xxxxx Merger................................................-43-
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXXXX
AND THE XXXXXXXX SUBS..............................................-44-
7.1. No Restraint or Litigation..................................-44-
7.2. FCC Order...................................................-44-
7.3. Lease Extension.............................................-44-
7.4. Transmission Interruption...................................-44-
7.5. Xxxxx Merger................................................-45-
ARTICLE VIII
INDEMNIFICATION....................................................-45-
8.1. Indemnification by Tribune..................................-45-
8.2. Indemnification by Xxxxxxxx.................................-47-
8.3. Notice of Claims............................................-48-
8.4. Third Party Claims..........................................-49-
8.5. No Effect on Adjustment.....................................-50-
8.6. Exclusive Remedy............................................-50-
ARTICLE IX
TERMINATION........................................................-51-
9.1. Termination.................................................-51-
ARTICLE X
GENERAL PROVISIONS.................................................-51-
10.1. Survival of Representations, Warranties and
Obligations............................................-52-
10.2. Confidential Nature of Information.........................-52-
10.3. Governing Law; Venue.......................................-53-
10.4. Notices....................................................-53-
10.5. Successors and Assigns.....................................-54-
10.6. Access to Records after Closing............................-54-
10.7. Entire Agreement; Amendments...............................-55-
10.8. Interpretation.............................................-55-
10.9. Waivers....................................................-55-
10.10. Expenses...................................................-56-
10.11. Partial Invalidity.........................................-56-
10.12. Execution in Counterparts..................................-56-
10.13. Definitions................................................-56-
10.14. Exchange Groups............................................-63-
10.15. Allocation Schedule........................................-63-
10.16. Board Approval.............................................-63-
Exhibit Description
------- -----------
A Undertaking and Assumption Relating to the Tribune
Station
B Undertaking and Assumption Relating to the Xxxxx
Station
C Xxxx of Sale and Assignment Relating to the Tribune
Station
D Xxxx of Sale and Assignment Relating to the Xxxxx
Station
E Opinion of Counsel for Xxxxxxxx and the Xxxxxxxx Sub
F Opinion of Counsel for Tribune and the Tribune Subs
Schedule Description
-------- -----------
2.3 -- Tribune Conflicts; Consents
2.4 -- Tribune Station Financial Statements
2.5(A)(B) -- Tribune Station Changes in Operations
2.6 -- Tribune Station Undisclosed Liabilities
2.8 -- Tribune Station Unavailable Assets
2.9(A)(1),
(A)(2),(B) -- Tribune Station Governmental Permits
2.10 -- Tribune Station Real Property
2.11 -- Tribune Station Real Property Leases
2.13 -- Tribune Station Personal Property
2.14 -- Tribune Station Personal Property Leases
2.15 -- Tribune Station Intellectual Property
2.18 -- Tribune Station Employees
2.19(A)(B) -- Tribune Station Employee Relations
2.20 -- Tribune Station Contracts
2.21 -- Status of Tribune Station Contracts
2.22 -- Tribune Station Legal Proceedings
2.24 -- Tribune Station Environmental matters
3.3 -- Exchange Party Conflicts; Consents
4.4(b) -- Conduct of Tribune Station Business
-- Conduct of Exchange Station Business
ASSET EXCHANGE AGREEMENT
ASSET EXCHANGE AGREEMENT, dated as of August 21, 1998 (this
"Agreement"), among Tribune Broadcasting Company, a Delaware corporation
("Tribune"), WGNX Inc., a Delaware corporation and a wholly-owned subsidiary of
Tribune (the "Tribune Sub"), and Xxxxxxxx Corporation, an Iowa corporation
("Meredith"), and KCPQ Acquisition Corp., a Washington corporation and a
wholly-owned subsidiary of Meredith (the "Meredith Sub").
W I T N E S S E T H :
---------------------
WHEREAS, the Tribune Sub is engaged in the business of owning
and operating Television Broadcast Station WGNX-TV, Channel 46, in Atlanta,
Georgia (the "Tribune Station");
WHEREAS, Xxxxxxxx and Xxxxxxxx Sub have entered into the
Agreement and Plan of Merger dated as of August 21, 1998 (the "Xxxxx Merger
Agreement") with Xxxxx Television Co., a Washington limited partnership ("KTC"),
X.X. Xxxxx L.L.C., a Delaware limited liability company, X.X. Xxxxx L.L.C., a
Delaware limited liability company, and Xxxxxx X. Xxxxx, a natural person (X.X.
Xxxxx, L.L.C., X.X. Xxxxx, L.L.C. and Xxxxxx X. Xxxxx being referred to
collectively herein as the "Partners");
WHEREAS, upon consummation of the merger (the "Xxxxx Merger")
of KTC with and into Xxxxxxxx Sub pursuant to the Xxxxx Merger Agreement,
Meredith Sub will own and have the right to operate Television Broadcast Station
KCPQ-TV, Channel 13, in Seattle, Washington (the "Xxxxx Station");
WHEREAS, Tribune and Meredith desire that the Tribune Sub
transfer to the Xxxxxxxx Sub substantially all of the assets, properties and
business relating to the Tribune Station in exchange for the transfer by the
Xxxxxxxx Sub to the Tribune Sub of substantially all of the assets, properties
and business relating to the Xxxxx Station owned by the Xxxxxxxx Sub, all on the
terms and subject to the conditions set forth herein; and
WHEREAS, pursuant to the like-kind exchange rules under
Treasury Regulation Section 1.1031(j)-1 covering exchanges of multiple
properties, Tribune and the Tribune Sub desire to structure the transactions
contemplated by this Agreement as like-kind exchanges and Xxxxxxxx and the
Xxxxxxxx Sub have agreed to cooperate therewith.
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed among Tribune, the Tribune
Sub, Xxxxxxxx and the Xxxxxxxx Sub as follows:
ARTICLE I
EXCHANGE OF ASSETS
------------------
1.1. Transfer of Tribune Station Assets. Upon the terms and
subject to the conditions of this Agreement, on the Closing Date, the Tribune
Sub shall transfer, assign, convey and deliver to the Xxxxxxxx Sub, and the
Xxxxxxxx Sub shall receive from the Tribune Sub, free and clear of all
Encumbrances (except for Permitted Encumbrances), all of the assets, properties
and business (excepting only the Excluded Tribune Assets) of every kind and
description, wherever located, real, personal or mixed, tangible or intangible,
owned or held by Tribune or the Tribune Sub relating to the Tribune Station and
the business of the Tribune Station (the "Tribune Station Business") as the same
shall exist on the Closing Date (herein collectively referred to as the "Tribune
Station Assets"), including, without limitation, all right, title and interest
of Tribune and the Tribune Sub in, to and under:
(a) All accounts receivable generated by the Tribune Station
Business for periods prior to the Closing Date;
(b) The broadcast licenses for the Tribune Station (including
the right to use the call letters "WGNX") issued by the FCC and all other
assignable Tribune Station Governmental Permits listed in Schedule 2.9(A)(1);
(c) The real property described in Schedule 2.10 and any
option, right or contract to purchase real property described in Schedule 2.10;
(d) The real property leases and leasehold improvements listed
or described in Schedule 2.11;
(e) All machinery, equipment (including computers and office
equipment), auxiliary and translator facilities, transmitting towers,
transmitters, broadcast equipment, antennae, supplies, inventory (including all
films, programs, records, tapes, recordings, compact discs, cassettes, spare
parts and equipment), advertising and promotional materials, engineering plans,
records and data, vehicles, furniture and other personal
-2-
property owned by Tribune and the Tribune Sub used in or relating to the Tribune
Station, including, without limitation, the items listed or referred to in
Schedule 2.13;
(f) The personal property leases and the personal property
leased thereunder listed in Schedule 2.14;
(g) The trademarks, trade names, service marks and copyrights
(and all goodwill associated therewith), registered or unregistered, owned by
Tribune or the Tribune Sub relating solely to the Tribune Station or the Tribune
Station Business, and the applications for registration thereof and the patents
and applications therefor and the licenses relating to any of the foregoing
including, without limitation, the items listed in Schedule 2.15;
(h) (i) All contracts for the sale of broadcast time for
advertising or other purposes made in the ordinary course of the Tribune Station
Business and consistent with past practice, (ii) the contracts, agreements or
understandings listed or described in Schedule 2.20 and designated on such
Schedule as an "Assumed Contract" and (iii) any other contract, agreement or
understanding (evidenced in writing) in respect of the Tribune Station Business
which (A) is of the general nature described in subsection (b), (c) or (h) of
Section 2.20 but which, by virtue of its specific terms, is not required to be
listed in Schedule 2.20 or (B) is entered into after the date hereof consistent
with the provisions of Section 4.4 of this Agreement;
(i) All advertising customer lists, mailing lists, processes,
trade secrets, know-how and other proprietary or confidential information
exclusively used in or relating to the Tribune Station Business;
(j) All rights, claims or causes of action of Tribune or the
Tribune Sub against third parties arising under warranties from manufacturers,
vendors and others in connection with the Tribune Station Assets;
(k) All prepaid rentals and other prepaid expenses (except for
prepaid insurance) arising from payments made in the ordinary course of the
operation of the Tribune Station Business prior to the Closing Date for goods or
services where such goods or services have not been received at the Closing
Date;
(l) All jingles, slogans, commercials and other promotional
materials used in or relating primarily to the Tribune Station or the Tribune
Station Business;
-3-
(m) All books and records (including all computer programs
used primarily in connection with the operation of the Tribune Station Business
or the Tribune Station) of Tribune and the Tribune Sub relating to the assets,
properties, business and operations of the Tribune Station Business or the
Tribune Station including, without limitation, all files, logs, programming
information and studies, technical information and engineering data, news and
advertising studies or consulting reports and sales correspondence, but
excluding any books and records (including computer programs) relating primarily
to a business of Tribune unrelated to the Tribune Station Business or the
Tribune Station;
(n) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of the Tribune Sub; and
(o) All other assets or properties not referred to above which
are reflected on the Tribune Station Closing Date Balance Sheet or the Tribune
Station Balance Sheet, except (i) any such assets or properties disposed of
after the Balance Sheet Date in the ordinary course of the Tribune Station
Business and (ii) Excluded Tribune Assets.
1.2. Excluded Tribune Assets. Notwithstanding the foregoing,
the Tribune Station Assets shall not include the following (herein referred to
as the "Excluded Tribune Assets"):
(a) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of Tribune;
(b) All claims, rights and interests of Tribune or the Tribune
Sub in and to any refunds for federal, state or local franchise, income or other
Taxes or fees of any nature whatsoever for periods prior to the Closing Date;
(c) Any rights, claims or causes of action of Tribune or the
Tribune Sub against third parties relating to the assets, properties, business
or operations of the Tribune Station Business arising out of transactions
occurring prior to the Closing Date, except to the extent and only to the extent
any such claims relate to the Tribune Station Assets;
(d) All bonds held, contracts or policies of insurance and
prepaid insurance with respect to such contracts or policies;
(e) Tribune's and the Tribune Sub's corporate seal, corporate
minute books, stock record books, corporate records
-4-
relating to incorporation, corporate Tax returns and related documents and
supporting work papers and any other records and returns relating to Taxes,
assessments and similar governmental levies (other than real and personal
property Taxes, assessments and levies imposed on the Tribune Station Assets);
(f) All records prepared in connection with the transfer of
the Tribune Station, including bids received from others and analyses relating
to the Tribune Station and the Tribune Station Assets;
(g) The contracts, agreements or understandings of Tribune and
the Tribune Sub listed in Schedule 2.20 and designated on such Schedule as a
"Contract Not Assumed";
(h) Any trade name, trademarks, service marks or logos using
or incorporating the names "Tribune", "Tribune Broadcasting", "TBC" or any
variation or derivative thereof;
(i) All records and documents relating to Excluded Tribune
Assets or to liabilities other than Assumed Tribune Station Liabilities;
(j) Tribune's employee benefit agreements, plans or
arrangements listed in Schedule 2.20;
(k) The licenses and permits issued by the FCC listed on
Schedule 2.9(A)(2); and
(l) Any rights of Tribune or the Tribune Sub under or pursuant
to this Agreement or the other agreements with Xxxxxxxx or the Xxxxxxxx Sub
contemplated hereby.
1.3. Transfer of Xxxxx Station Assets. Upon the terms and
subject to the conditions of this Agreement, on the Closing Date, the Xxxxxxxx
Sub shall transfer, assign, convey and deliver to the Tribune Sub, and the
Tribune Sub shall receive from the Xxxxxxxx Sub, free and clear of all
Encumbrances (except for Permitted Encumbrances), all of the assets, properties
and business (excepting only the Excluded Xxxxxxxx Assets) of every kind and
description, wherever located, real, personal or mixed, tangible or intangible,
owned or held by Xxxxxxxx or the Xxxxxxxx Sub relating to the Xxxxx Station and
the business of the Xxxxx Station (the "Xxxxx Station Business") as the same
shall exist on the Closing Date (herein collectively called the "Xxxxx Station
Assets"), including, without limitation, any right, title and interest of
Xxxxxxxx and the Xxxxxxxx Sub in, to and under:
-5-
(a) All accounts receivable generated by the Xxxxx Station
Business for periods prior to the Closing Date;
(b) The broadcast licenses for the Xxxxx Station (including
the right to use the call letters "KCPQ") issued by the FCC and all other
assignable permits, licenses, franchises, privileges, immunities and other
authorizations (the "Xxxxx Station Governmental Permits") listed in Section 3.11
of the KTC Disclosure Schedule attached to the Xxxxx Merger Agreement (the
"Xxxxx Disclosure Schedule");
(c) The real property described in Section 3.13 of the Xxxxx
Disclosure Schedule and any option, right or contract to purchase real property
described in Section 3.12 of the Xxxxx Disclosure Schedule;
(d) The real property leases and leasehold improvements listed
or described in Section 3.13 of the Xxxxx Disclosure Schedule;
(e) All machinery, equipment (including computers and office
equipment), auxiliary and translator facilities, transmitting towers,
transmitters, broadcast equipment, antennae, supplies, inventory (including all
films, programs, records, tapes, recordings, compact discs, cassettes, spare
parts and equipment), advertising and promotional materials, engineering plans,
records and data, vehicles, furniture and other personal property owned by
Xxxxxxxx and the Xxxxxxxx Sub used in or relating to the Xxxxx Station,
including, without limitation, the items listed or referred to in Section 3.16
of the Xxxxx Disclosure Schedule;
(f) The personal property leases and the personal property
leased thereunder listed in Section 3.17 of the Xxxxx Disclosure Schedule;
(g) The trademarks, trade names, service marks and copyrights
(and all goodwill associated therewith), registered or unregistered, owned by
the Xxxxxxxx or the Xxxxxxxx Sub relating solely to the Xxxxx Station or the
Xxxxx Station Business, and the applications for registration thereof and the
patents and applications therefor and the licenses relating to any of the
foregoing including, without limitation, the items listed in Section 3.18 of the
Xxxxx Disclosure Schedule;
(h) (i) All contracts for the sale of broadcast time for
advertising or other purposes relating to the Xxxxx Station Business, (ii) the
contracts, agreements or understandings listed
-6-
or described in Section 3.13 of the Xxxxx Disclosure Schedule and (iii) any
other contract, agreement or understanding (evidenced in writing) in respect of
the Xxxxx Station Business;
(i) All advertising customer lists, mailing lists, processes,
trade secrets, know-how and other proprietary or confidential information
exclusively used in or relating to the Xxxxx Station Business;
(j) All rights, claims or causes of action of Xxxxxxxx or the
Xxxxxxxx Sub against third parties arising under warranties from manufacturers,
vendors and others in connection with the Xxxxx Station Assets;
(k) All prepaid rentals and other prepaid expenses (except for
prepaid insurance) arising from payments made in the ordinary course of the
operation of the Xxxxx Station Business prior to the Closing Date for goods or
services where such goods or services have not been received at the Closing
Date;
(l) All jingles, slogans, commercials and other promotional
materials used in or relating primarily to the Xxxxx Station or the Xxxxx
Station Business;
(m) All books and records (including all computer programs
used primarily in connection with the operation of the Xxxxx Station Business or
the Xxxxx Station) of Xxxxxxxx and the Xxxxxxxx Sub relating to the assets,
properties, business and operations of the Xxxxx Station Business or the Xxxxx
Station including, without limitation, all files, logs, programming information
and studies, technical information and engineering data, news and advertising
studies or consulting reports and sales correspondence, but excluding any books
and records (including computer programs) relating primarily to a business of
Xxxxxxxx unrelated to the Xxxxx Station Business or the Xxxxx Station;
(n) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of the Xxxxxxxx Sub;
(o) All rights arising under the Xxxxx Merger Agreement after
the consummation of the Xxxxx Merger, including without limitation those rights
arising under Sections 6.02, 6.09, Article VIII, Article X and Article XI of the
Xxxxx Merger Agreement; and
-7-
(p) All other assets or properties not referred to above which
are reflected on the Xxxxx Station Closing Date Balance Sheet or the balance
sheet included in Section 3.06 of the Xxxxx Disclosure Schedule for the period
ending June 30, 1998 (the "Xxxxx Station Balance Sheet"), except (i) any such
assets or properties disposed of after the Balance Sheet Date in the ordinary
course of the Xxxxx Station Business and (ii) Excluded Xxxxxxxx Assets.
1.4. Excluded Xxxxxxxx Assets. Notwithstanding the foregoing,
the Xxxxx Station Assets shall not include the following (herein referred to as
the "Excluded Xxxxxxxx Assets"):
(a) All cash and cash equivalents (including any marketable
securities or certificates of deposit) of Xxxxxxxx;
(b) Meredith's and the Xxxxxxxx Sub's corporate seal,
corporate minute books, stock record books, corporate records relating to
incorporation, corporate Tax returns and related documents and supporting work
papers and any other records and returns relating to Taxes, assessments and
similar governmental levies (other than real and personal property Taxes,
assessments and levies imposed on the Xxxxx Station Assets);
(c) All records prepared in connection with the transfer of
the Xxxxx Station, including bids received from others and analyses relating to
the Xxxxx Station and the Xxxxx Station Assets;
(d) Any trade name, trademarks, service marks or logos using
or incorporating the name "Xxxxxxxx", "Xxxxxxxx Broadcasting" "Xxxxxxxx
Television", "Xxxxxxxx" or any variation or derivative thereof;
(e) All records and documents relating to Excluded Xxxxxxxx
Assets or to liabilities other than Assumed Xxxxx Station Liabilities;
(f) All of Meredith's and the Xxxxxxxx Sub's rights under
Sections 2.08 and 2.10 of the Xxxxx Merger Agreement; and
(g) Any rights of Xxxxxxxx or the Xxxxxxxx Sub under or
pursuant to this Agreement or the other agreements with Tribune or the Tribune
Sub contemplated hereby.
1.5. Assumption of Tribune Station Liabilities. (a)
On the Closing Date, the Xxxxxxxx Sub shall deliver to the
Tribune Sub an undertaking and assumption, in the forms of
-8-
Exhibit A, pursuant to which the Xxxxxxxx Sub shall assume and be obligated for,
and shall agree to pay, perform and discharge in accordance with their terms,
the following obligations and liabilities of the Tribune Sub (except to the
extent such obligations and liabilities constitute Excluded Tribune Station
Liabilities):
(i) All current liabilities of the Tribune Sub reflected on
the Tribune Station Closing Date Balance Sheet, including, without
limitation, accounts payable, accrued equipment rentals, accrued
salary, payroll and wages, accrued sick pay, accrued accounting fees
and expenses, accrued excise, withholding, unemployment, social
security, payroll, property, sales and use Taxes;
(ii) All liabilities of the Tribune Sub arising after the
Closing Date (other than any liability or obligation for breach or
default which occurred prior to the Closing) under (A) the Tribune
Station Agreements and (B) the leases, contracts and other agreements
entered into by the Tribune Sub with respect to the Tribune Station
Business after the date hereof consistent with the terms of Section 4.4
of this Agreement;
All of the foregoing to be assumed by the Xxxxxxxx Sub
hereunder are referred to herein as the "Assumed Tribune Station Liabilities."
(b) Xxxxxxxx and the Xxxxxxxx Sub shall not assume or be
obligated for any of, and Tribune and the Tribune Sub shall solely retain, pay,
perform, defend and discharge all of, their respective liabilities or
obligations of any and every kind whatsoever, direct or indirect, known or
unknown, absolute or contingent, not expressly assumed by the Xxxxxxxx Sub under
Section 1.5(a) and, notwithstanding anything to the contrary in Section 1.5(a),
none of the following (herein referred to as "Excluded Tribune Station
Liabilities") shall be "Assumed Tribune Station Liabilities" for purposes of
this Agreement:
(i) any foreign, federal, state, county or local income Taxes
which arise from the operation of the Tribune Station or the Tribune
Station Business or the ownership of the Tribune Station Assets prior
to the Closing Date;
-9-
(ii) any liability or obligation of the Tribune Sub in respect
of indebtedness for borrowed money or any intercompany payable of the
Tribune Sub or any of its Affiliates;
(iii) all liabilities and obligations related to, associated
with or arising out of (A) the occupancy, operation, use or control of
any of the real property listed or described in Schedule 2.10 or
Schedule 2.11 prior to the Closing Date or (B) the operation of the
Tribune Station Business prior to the Closing Date, in each case
incurred or imposed as a requirement of any environmental, health or
safety Requirements of Law existing prior to the Closing Date,
including, without limitation, any Release or storage of any
Contaminants on, at or from (1) any such real property (including,
without limitation, all facilities, improvements, structures and
equipment thereon, surface water thereon or adjacent thereto and soil
or groundwater thereunder) or any conditions whatsoever on, under or in
such real property or (2) any real property or facility owned by a
third party at which Contaminants generated by the Tribune Station
Business were sent prior to the Closing Date;
(iv) any costs and expenses incurred by Tribune or the Tribune
Sub incident to their negotiation and preparation of this Agreement and
their performance and compliance with the agreements and conditions
contained herein;
(v) any liabilities or obligations, whenever arising, related
to, associated with or arising out of the employee benefit agreements,
plans or arrangements listed in Schedule 2.20;
(vi) any liabilities in respect of the claims, suits,
proceedings or investigations arising from pre-Closing operations of
the Tribune Station, including, without limitation, those described in
Schedule 2.22; or
(vii) any of Tribune's or the Tribune Sub's liabilities or
obligations under this Agreement or the Tribune Ancillary Agreements.
1.6. Assumption of Xxxxx Station Liabilities. (a)
On the Closing Date, the Tribune Sub shall deliver to the
-10-
Xxxxxxxx Sub an undertaking and assumption, in the form of Exhibit B, pursuant
to which the Tribune Sub shall assume and be obligated for, and shall agree to
pay, perform and discharge in accordance with their terms, all obligations and
liabilities of the Xxxxxxxx Sub and all liabilities and obligations of Xxxxxxxx
with respect to the Xxxxx Station, the Xxxxx Station Business and, to the extent
provided below, the Xxxxx Merger Agreement(except to the extent such obligations
and liabilities constitute Excluded Xxxxx Station Liabilities) including without
limitation:
(i) All current liabilities of the Xxxxxxxx Sub reflected on
the Closing Date Xxxxx Station Balance Sheet, including, without
limitation, accounts payable, accrued equipment rentals, accrued
salary, payroll and wages, accrued sick pay, accrued accounting fees
and expenses, accrued excise, withholding, unemployment, social
security, payroll, property, sales and use Taxes; and
(ii) All obligations of Xxxxxxxx and the Xxxxxxxx Sub arising
under the Xxxxx Merger Agreement after the consummation of the Xxxxx
Merger, including, without limitation, those obligations arising under
Sections 6.02, 6.06, 6.09, Article VII, Article VIII and Article X of
the Xxxxx Merger Agreement, but excluding (A) the obligations of
Xxxxxxxx pursuant to Article X of the Xxxxx Merger Agreement to the
extent such obligations relate to the representations and warranties of
Xxxxxxxx and the Xxxxxxxx Sub contained in the Xxxxx Merger Agreement
and the covenants and agreements of Xxxxxxxx and the Xxxxxxxx Sub
contained in the Xxxxx Merger Agreement to be performed prior to the
consummation of the Xxxxx Merger and (B) the obligations of Xxxxxxxx
pursuant to Sections 2.08 and 2.10 of the Xxxxx Merger Agreement.
All of the foregoing to be assumed by the Tribune
hereunder are referred to herein as the "Assumed Xxxxx Station
Liabilities."
(b) The Tribune Sub shall not assume or be obligated for any,
and Xxxxxxxx and the Xxxxxxxx Sub shall solely retain, pay, perform, defend and
discharge all of the following (herein referred to as "Excluded Xxxxx Station
Liabilities"):
(i) any costs and expenses incurred by the Xxxxxxxx or the
Xxxxxxxx Sub incident to their negotiation and preparation of this
Agreement and their
-11-
performance and compliance with the agreements and
conditions contained herein;
(ii) any of the Meredith's or the Xxxxxxxx Sub's liabilities
or obligations under this Agreement or the Xxxxxxxx Ancillary
Agreements.
1.7. Closing Date. The exchange of the Tribune Station Assets
and the Xxxxx Station Assets provided for in Section 1.1 (the "Closing") shall
be consummated on a date, at a time and in a place agreed upon by Tribune and
Xxxxxxxx, occurring within 10 days after the conditions set forth in Articles VI
and VII are satisfied or, if permissible, waived or such other date, as may be
agreed upon by Tribune and Xxxxxxxx (such date and time being hereinafter called
the "Closing Date"). Notwithstanding the foregoing, it is the intention and
understanding of the parties that the Closing shall occur immediately upon
consummation of the Xxxxx Merger.
1.8. Calculation of Estimated Tribune Station Working Capital
Amount and Estimated Xxxxx Station Working Capital Amount; Adjustment. At least
three business days prior to the Closing Date, (i) Tribune shall deliver to
Xxxxxxxx a certificate executed on behalf of Tribune by its President or any
Vice President, dated the date of its delivery, setting forth Tribune's best
estimate of the Closing Date Tribune Station Working Capital Amount (the
"Estimated Closing Date Tribune Station Working Capital Amount") which Tribune
anticipates based upon the most recent available financial statements of the
Tribune Station will be reflected on the Tribune Station Closing Date Balance
Sheet prepared in the manner contemplated by Section 1.10 and (ii) Xxxxxxxx
shall deliver to Tribune a certificate executed on behalf of Xxxxxxxx by its
President or any Vice President, dated the date of its delivery, attaching an
estimate of the Closing Date Xxxxx Station Working Capital Amount (the
"Estimated Closing Date Xxxxx Station Working Capital Amount")(it being
understood that the Estimated Closing Date Xxxxx Station Working Capital Amount
shall be the Closing Working Capital Estimate (as defined and determined in
accordance with the Xxxxx Merger Agreement)). If either the Estimated Closing
Date Tribune Station Working Capital Amount or the Estimated Closing Date Xxxxx
Station Working Capital Amount is not equal to at least $4,000,000, any party
having a working capital amount of less than $4,000,000 shall pay to the other
party cash at the Closing in an amount equal to the difference between such
party's working capital amount and $4,000,000. To the extent that either party
has an Estimated Closing Tribune Station Working Capital Amount or Estimated
Closing Date Xxxxx Station Working Capital
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Amount, as the case may be, in excess of $4,000,000, the other party shall pay
such party cash at the Closing in the amount that when added to such party's
working capital amount is equal to the first party's working capital amount;
provided, that if each party has a working capital amount in excess of
$4,000,000, the party with the lessor working capital amount shall pay to the
other party cash at the Closing in the amount that when added to such party's
working capital amount is equal to the other party's working capital amount.
1.9. Closing Date Deliveries. (a) On the Closing Date, Tribune
shall deliver or cause to be delivered to the Xxxxxxxx Sub (i) a xxxx of sale
and assignment, in the form of Exhibit C, of all of the Tribune Station Assets
(other than the real property described in Schedule 2.10), (ii) special warranty
deeds conveying to the Xxxxxxxx Subs the real property described in Schedule
2.10, (iii) all of the documents and instruments required to be delivered by
Tribune and the Tribune Sub pursuant to Article VII, (iv) payment by wire
transfer of immediately available funds of $10,000,000, (v) a copy of the
certificate of incorporation of Tribune and the Tribune Sub certified as of a
recent date by the Secretary of State of the State of Delaware, (vi)
certificates of good standing of Tribune and the Tribune Sub issued as of a
recent date by the Secretary of State of the State of Delaware and a certificate
of good standing of the Tribune Sub issued as of a recent date by the Secretary
of State of the State of Georgia, (vii) certificates of the secretary or
assistant secretary of Tribune and the Tribune Sub as to their respective
bylaws, the resolutions of their respective boards of directors and stockholders
(if applicable) authorizing the execution and delivery of this Agreement and the
transactions contemplated hereby and the incumbency and signatures of their
respective officers executing this Agreement and any Tribune Ancillary
Agreement, (viii) an assignment, in recordable form, with respect to each of the
leases of real estate described in Schedule 2.11, (ix) the undertakings and
assumptions described in Section 1.5(a), (x) a certification of non-foreign
status, in form and substance reasonably satisfactory to Xxxxxxxx, in accordance
with Treas. Reg. ss. 1.1445-2(b) and (xi) an opinion of Sidley & Austin, counsel
to Tribune and the Tribune Sub, in form and substance reasonably satisfactory to
Xxxxxxxx and its counsel, to the effect set forth in Exhibit F.
(b) On the Closing Date, Xxxxxxxx shall deliver or cause to be
delivered to the Tribune Sub (i) a xxxx of sale and assignment, in the form of
Exhibit D, of all of the Xxxxx Station Assets (other than the real property
described in Section 3.13 of the Xxxxx Disclosure Schedule), (ii) special
warranty deeds
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conveying to the Tribune Subs the real property described in Section 3.13 of the
Xxxxx Disclosure Schedule, (iv) all of the documents and instruments required to
be delivered by Xxxxxxxx and the Xxxxxxxx Sub pursuant to Article VI, (iii) a
copy of the charters of Xxxxxxxx and the Xxxxxxxx Sub certified as of a recent
date by the secretary of state of their respective state of incorporation, (iv)
certificates of good standing of Xxxxxxxx and the Xxxxxxxx Sub issued as of a
recent date by the secretary of state of the state of their respective
incorporation, (v) certificates of the secretary or assistant secretary of
Xxxxxxxx and the Xxxxxxxx Sub as to their respective bylaws, the resolutions of
their respective boards of directors and stockholders (if applicable)
authorizing the execution and delivery of this Agreement and the transactions
contemplated hereby and the incumbency and signatures of their respective
officers executing this Agreement and any Xxxxxxxx Ancillary Agreement, (vi) an
assignment, in recordable form, with respect to each of the leases of real
estate described in Section 3.13 of the Xxxxx Disclosure Schedule, (vii) the
undertakings and assumptions described in Section 1.6(a), (viii) a certification
of non-foreign status, in form and substance reasonably satisfactory to Tribune,
in accordance with Treas. Reg. ss. 1.1445- 2(b) and (ix) an opinion of counsel
to Xxxxxxxx and the Xxxxxxxx Sub reasonably satisfactory to Tribune, to the
effect set forth on Exhibit E.
1.10. Closing Date Balance Sheets; Adjustment. (a)
Promptly after the Closing Date and in any event within 60 days of Closing,
Tribune shall prepare a balance sheet of the Tribune Sub (the "Initial Tribune
Station Balance Sheet") and Xxxxxxxx shall provide a balance sheet of the
Xxxxxxxx Sub (the "Initial Xxxxx Station Balance Sheet") as of 12:01 a.m. on the
Closing Date (or, in the case of the Initial Xxxxx Station Balance Sheet, the
effective time of the Xxxxx Merger, if different). The Initial Tribune Station
Balance Sheet and the Initial Xxxxx Station Balance Sheet shall be prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the Tribune Station Balance Sheet and the Xxxxx Station Balance
Sheet, respectively. Notwithstanding the foregoing, it is the understanding of
the parties that the Initial Xxxxx Station Balance Sheet shall be the balance
sheet supplied by the Partners to Xxxxxxxx pursuant to Section 2.10(c) of the
Xxxxx Merger Agreement.
(b) During the preparation of such balance sheets and the
period of any dispute within the contemplation of this Section 1.10, Tribune and
the Xxxxxxxx shall each (i) provide the other and the other's authorized
representatives with full access
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to the books, records, facilities and employees of the Tribune Station Business
and the Xxxxx Station Business, as the case may be, (ii) provide the other as
promptly as practicable after the Closing Date with normal month-end financial
information for the period ending on 12:01 a.m. of the Closing Date, and (iii)
cooperate fully with the other and the other's authorized representatives,
including the provision on a timely basis of all information necessary or useful
in preparing such balance sheet.
(c) Tribune shall deliver copies of the Initial Tribune
Station Balance Sheet to Xxxxxxxx promptly after they have been prepared,
together with Tribune's calculation of the Closing Date Tribune Station Working
Capital Amount based on such balance sheets. Xxxxxxxx shall deliver a copy of
the Initial Xxxxx Station Balance Sheet to Tribune promptly after they have been
prepared, together with Meredith's calculation of the Closing Date Xxxxx Station
Working Capital Amount based on such balance sheets. After receipt thereof,
Tribune and Xxxxxxxx shall each have 20 business days to review such balance
sheets and calculations, together with the work papers used in the preparation
thereof. Each of Tribune and Xxxxxxxx and their respective authorized
representatives shall have full access to all relevant books and records and
employees of the other to the extent reasonably required to complete such
review. In the event Xxxxxxxx does not object to the contents of the Initial
Tribune Station Balance Sheet and related calculation within 20 business days
after its receipt thereof, such balance sheets shall become the "Tribune Station
Closing Date Balance Sheet" for all purposes of this Agreement and shall provide
the basis for the determination of the Closing Date Tribune Station Working
Capital Amount. In the event that Tribune does not object to the contents of the
Initial Xxxxx Station Balance Sheet and related calculation within 10 business
days after its receipt thereof, such balance sheets shall become the "Xxxxx
Station Closing Date Balance Sheets" for all purposes of this Agreement and
shall provide the basis for the determination of the Closing Date Xxxxx Station
Working Capital Amount. In the event that either Tribune or Xxxxxxxx objects to
the balance sheets and calculation delivered by the other party by written
notice to the other party specifying the objections in reasonable detail and the
basis therefor, within such time period and in the further event that the other
party does not agree with such objections, Tribune and Xxxxxxxx, within 10 days
following such notice of objection (the "Resolution Period"), shall attempt to
resolve their differences and any resolution by them (evidenced in writing) as
to any disputed amounts shall be final, binding and conclusive. If at the
conclusion of the Resolution Period any amounts remain in dispute, then the
amounts so in dispute shall be submitted to a
-15-
firm of nationally recognized independent public accountants (the "Neutral
Auditors") selected by Tribune and Xxxxxxxx within 10 days after the expiration
of the Resolution Period. If Tribune and Xxxxxxxx are unable to agree on the
Neutral Auditors, then a nationally recognized accounting firm will be selected
by lot from two names submitted by Tribune and two names submitted by Xxxxxxxx,
none of which shall be employed by Tribune or the Tribune Sub and the Xxxxxxxx
or the Xxxxxxxx Subs or any of their respective Affiliates. The Neutral Auditors
shall act as an arbitrator to determine and resolve, based solely on
presentations by Tribune and Xxxxxxxx, and not by independent review, only those
issues still in dispute. The Neutral Auditors' determination shall be made
within 30 days of their selection, shall be set forth in a written statement
delivered to Tribune and Xxxxxxxx and shall be final, binding and conclusive.
The balance sheets finally determined in accordance with this Section shall be
the "Tribune Station Closing Date Balance Sheet" and the "Xxxxx Station Closing
Date Balance Sheet" for all purposes of this Agreement and shall provide the
basis for the determination of the Closing Date Tribune Station Working Capital
Amount and the Closing Date Xxxxx Station Working Capital Amount. Tribune and
Xxxxxxxx agree to execute, if requested by the Neutral Auditors, a reasonable
engagement letter. All fees and disbursements of the Neutral Auditors shall be
paid one-half by Tribune and one-half by Xxxxxxxx.
(d) If, upon the final determination thereof, the Closing Date
Tribune Station Working Capital Amount is less than the Estimated Closing Date
Tribune Station Working Capital Amount, Tribune shall pay to Xxxxxxxx xxxx in
the amount of such deficiency and if the Closing Date Tribune Station Working
Capital Amount is greater than the Estimated Closing Date Tribune Station
Working Capital Amount, Xxxxxxxx shall pay to Tribune cash in the amount of such
excess. If, upon the final determination thereof, the Closing Date Xxxxx Station
Working Capital Amount is less than the Estimated Closing Date Xxxxx Station
Working Capital Amount, Xxxxxxxx shall pay to Tribune cash in the amount of such
deficiency and if the Closing Date Xxxxx Station Working Capital Amount is
greater than the Estimated Closing Date Xxxxx Station Working Capital Amount,
Tribune shall pay to Xxxxxxxx xxxx in the amount of such excess. All amounts due
and owing pursuant to this Section 1.10(d) shall be paid within 10 days after
final determination of the Closing Date Tribune Station Working Capital Amount
and the Closing Date Xxxxx Station Working Capital Amount, by wire transfer of
immediately available funds, plus interest on such amounts from the Closing Date
to but excluding the date of payment at a rate
-16-
per annum equal to the corporate base rate of interest announced on the Closing
Date by The First National Bank of Chicago.
1.11. Further Assurances. (a) On the Closing Date, Tribune
shall and shall cause the Tribune Sub to (i) deliver to Xxxxxxxx such other
bills of sale, deeds, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as Xxxxxxxx xxx reasonably request or as
may be otherwise reasonably necessary to vest in the Xxxxxxxx Sub all the right,
title and interest of Tribune and the Tribune Sub in, to or under any or all of
the Tribune Station Assets and (ii) take all steps as may be reasonably
necessary to put the Xxxxxxxx Sub in actual possession and control of all the
Tribune Station Assets. From time to time following the Closing, Tribune shall
execute and deliver, or cause to be executed and delivered, to the Xxxxxxxx Sub
such other instruments of conveyance and transfer as the Xxxxxxxx xxx reasonably
request or as may be otherwise necessary to more effectively convey and transfer
to, and vest in, the Xxxxxxxx Sub and put the Xxxxxxxx Sub in possession of, any
part of the Tribune Station Assets, and, in the case of licenses, certificates,
approvals, authorizations, agreements, contracts, leases, easements and other
commitments included in the Tribune Station Assets which cannot be transferred
or assigned effectively without the consent of third parties, which consent has
not been obtained prior to the Closing, to cooperate with Xxxxxxxx at its
reasonable request in endeavoring to obtain such consent. Notwithstanding
anything in this Agreement to the contrary, this Agreement shall not constitute
an agreement to assign any license, certificate, approval, authorization,
agreement, contract, lease, easement or other commitment included in the Tribune
Station Assets if an attempted assignment thereof without the consent of a third
party thereto would constitute a breach thereof.
(b) On the Closing Date, Xxxxxxxx shall and shall cause the
Xxxxxxxx Sub to (i) deliver to Tribune such other bills of sale, deeds,
endorsements, assignments and other good and sufficient instruments of
conveyance and transfer as Tribune may reasonably request or as may be otherwise
reasonably necessary to vest in the Tribune Sub all the right, title and
interest of the Xxxxxxxx and the Xxxxxxxx Sub in, to or under any or all of the
Xxxxx Station Assets and (ii) take all steps as may be reasonably necessary to
put the Tribune Sub in actual possession and control of all the Xxxxx Station
Assets. From time to time following the Closing, Xxxxxxxx shall execute and
deliver, or cause to be executed and delivered, to the Tribune Sub such other
instruments of conveyance and transfer as Tribune may reasonably request or as
may be otherwise necessary to more effectively convey and
-17-
transfer to, and vest in, the Tribune Sub and put the Tribune Sub in possession
of, any part of the Xxxxx Station Assets, and, in the case of licenses,
certificates, approvals, authorizations, agreements, contracts, leases,
easements and other commitments included in the Xxxxx Station Assets which
cannot be transferred or assigned effectively without the consent of third
parties which consent has not been obtained prior to the Closing, to cooperate
with Tribune at its reasonable request in endeavoring to obtain such consent.
Notwithstanding anything in this Agreement to the contrary, this Agreement shall
not constitute an agreement to assign any license, certificate, approval,
authorization, agreement, contract, lease, easement or other commitment included
in the Xxxxx Station Assets if an attempted assignment thereof without the
consent of a third party thereto would constitute a breach thereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TRIBUNE AND THE TRIBUNE SUB
-------------------------------------------------------------
As an inducement to Xxxxxxxx and the Xxxxxxxx Sub to enter
into this Agreement and to consummate the transactions contemplated hereby,
Tribune the Tribune Sub represent and warrant to Xxxxxxxx and the Xxxxxxxx Subs
and agree as follows:
2.1. Organization. Tribune and the Tribune Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Tribune Sub has requisite corporate power and
authority to own or lease and to operate the Tribune Station, to use the Tribune
Station Assets and to carry on the Tribune Station Business as now conducted by
it.
2.2. Subsidiaries and Investments. Other than the Tribune Sub,
Tribune does not, directly or indirectly (a) own, of record or beneficially, any
outstanding voting securities or other equity interests in any corporation,
partnership, joint venture or other entity which is primarily involved in or
relates primarily to the Tribune Station Business or (b) otherwise control any
such corporation, partnership, joint venture or other entity which is involved
primarily in or relates primarily to the Tribune Station Business.
2.3. Authority of Tribune and the Tribune Sub. (a) Each of
Tribune and the Tribune Sub has requisite corporate power and authority to
execute and deliver this Agreement and all of the other agreements and
instruments to be executed and delivered
-18-
by Tribune or the Tribune Sub pursuant hereto (collectively, the "Tribune
Ancillary Agreements"), to consummate the transactions contemplated hereby and
thereby and to comply with the terms, conditions and provisions hereof and
thereof.
(b) The execution, delivery and performance of this Agreement
and the Tribune Ancillary Agreements by Tribune and the Tribune Sub (to the
extent a party thereto) have been duly authorized and approved by all necessary
action of Tribune and the Tribune Sub and do not require any further
authorization or consent of Tribune or the Tribune Sub, or their respective
stockholders. This Agreement is, and each Tribune Ancillary Agreement when
executed and delivered by Tribune or the Tribune Sub and the other parties
thereto will be, a legal, valid and binding agreement of Tribune and the Tribune
Sub (to the extent a party thereto) enforceable in accordance with its
respective terms, except in each case as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws
affecting or limiting the enforcement of creditors' rights generally and except
as such enforceability is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(c) Except as set forth in Schedule 2.3, neither the execution
and delivery by Tribune or the Tribune Sub of this Agreement and the Tribune
Ancillary Agreements or the consummation by Tribune and the Tribune Sub of any
of the transactions contemplated hereby or thereby nor compliance by Tribune and
the Tribune Sub with or fulfillment by Tribune and the Tribune Sub of the terms,
conditions and provisions hereof or thereof will:
(A) conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of rights
under, or result in the creation or imposition of any Encumbrance upon any of
the Tribune Station Assets under, the certificate of incorporation or bylaws of
Tribune or the Tribune Sub, any Tribune Station Agreement, any Tribune Station
Governmental Permit or any judgment, order, award or decree to which Tribune or
the Tribune Sub is a party or any of the Tribune Station Assets is subject or by
which Tribune or the Tribune Sub is bound, or any statute, other law or
regulatory provision affecting Tribune or the Tribune Sub or the Tribune Station
Assets; or
-19-
(B) require the approval, consent, authorization or act of, or
the making by Tribune or the Tribune Sub of any declaration, filing or
registration with, any third party or any foreign, federal, state or local
court, governmental or regulatory authority or body, except for such of the
foregoing as are necessary pursuant to the Improvements Act or the
Communications Act.
2.4. Financial Statements. Schedule 2.4 contains (a) the
unaudited balance sheets of the business of the Tribune Station as of December
29, 1996 and December 28, 1997, respectively, and the related statements of
income for the years then ended and (b) the unaudited balance sheet (the
"Tribune Station Balance Sheet") of the business of the Tribune Station as of
June 28, 1998 (the "Balance Sheet Date") and the related statement of income for
the six months then ended. Except as set forth in Schedule 2.4, such balance
sheets and statements of income have been prepared in accordance with generally
accepted accounting principles consistently applied and present fairly the
financial position and results of operations of the Tribune Station Business in
all material respects as of their respective dates and for the respective
periods covered thereby subject to the absence of footnotes and normal year-end
adjustments.
2.5. Operations Since Balance Sheet Date. (a) Except as set
forth in Schedule 2.5(A), to the best of Tribune's knowledge, during the period
from the Balance Sheet Date to the date hereof, inclusive, there has been:
(i) no material adverse change in the financial condition or
the results of operations of the Tribune Station or its business from
that reflected on the financial statements set forth in Schedule 2.4,
other than any change or effect affecting the U.S. economy or the U.S.
broadcasting industry in general; or
(ii) no damage, destruction, loss or claim (whether or not
covered by insurance) or condemnation or other taking which materially
adversely affects the Tribune Station Assets, the Tribune Station or
its business.
(b) Except as set forth in Schedule 2.5(B) hereto, since the
Balance Sheet Date the business of the Tribune Station has been conducted only
in the ordinary course and in conformity with past practice. Without limiting
the generality of the foregoing, since the Balance Sheet Date, except as set
forth in
-20-
such Schedule, neither Tribune or the Tribune Sub has, in respect solely of the
Tribune Station:
(i) sold, leased, transferred or otherwise disposed of
(including any transfers to any Affiliate of Tribune), or mortgaged or
pledged, or imposed or suffered to be imposed any Encumbrance (other
than Permitted Encumbrances) on, any of the Tribune Station Assets,
other than personal property having a value, in the aggregate, of less
than $50,000 sold or otherwise disposed of for fair value in the
ordinary course of the Tribune Station Business consistent with past
practice;
(ii) canceled without fair consideration therefor any debts
owed to or claims held by Tribune or the Tribune Sub relating to the
Tribune Station (including the settlement of any claims or litigation)
or waived any right of significant value to Tribune or the Tribune Sub
relating to the Tribune Station, other than in the ordinary course of
the Tribune Station Business consistent with past practice;
(iii) created, incurred, guaranteed or assumed, or agreed to
create, incur, guarantee or assume, any indebtedness for borrowed money
or entered into any capitalized leases;
(iv) accelerated collection of notes or accounts receivable
generated by the Tribune Station Business to a date prior to the date
such collection would have occurred in the ordinary course of the
Tribune Station Business;
(v) delayed payment of any account payable or other liability
of the Tribune Station Business beyond its due date or the date when
such liability would have been paid in the ordinary course of the
Tribune Station Business consistent with past practice;
(vi) granted or instituted any increase in any rate of salary
or compensation or any profit sharing, bonus, incentive, deferred
compensation, insurance, pension, retirement, medical, hospital,
disability, welfare or other employee benefit plan other than in the
ordinary course of the Tribune Station Business consistent with past
practices; or
-21-
(vii) entered into any agreement or made any commitment to take
any action described in subparagraphs (i) through (vi) above.
2.6. No Undisclosed Liabilities. Except as set forth in
Schedule 2.6, to the best of Tribune's knowledge, neither Tribune nor the
Tribune Sub is subject, with respect to the Tribune Station Business, to any
liability (including, without limitation, unasserted claims, whether known or
unknown), whether absolute, contingent, accrued or otherwise, which is not shown
or reserved for in the Tribune Station Balance Sheet, other than liabilities of
the same nature as those set forth in the Tribune Station Balance Sheet and the
notes thereto and incurred in the ordinary course of the Tribune Station
Business after the Balance Sheet Date.
2.7. Taxes. Each of Tribune and the Tribune Sub has, in
respect of the Tribune Station Business, either filed or obtained extensions for
filings pursuant to established procedures all foreign, federal, state, county
or local income, excise, property, sales, use, franchise or other Tax returns
and reports which are required to have been filed by it under applicable law on
or prior to the date of this Agreement and has paid or made provision for the
payment of all Taxes which have become due pursuant to such returns or pursuant
to any assessments which have become payable and which are not being contested
in good faith by appropriate proceedings. All monies required to be withheld by
the Tribune Sub from employees of the Tribune Station Business for income Taxes,
social security and other payroll Taxes have been collected or withheld, and
either paid to the respective Governmental Bodies, set aside in accounts for
such purpose, or accrued, reserved against and entered upon the books of the
Tribune Sub.
2.8. Availability of Assets and Legality of Use. Except as set
forth in Schedule 2.8 and except for the Excluded Tribune Assets, the Tribune
Station Assets constitute all the assets used in the conduct of the Tribune
Station Business and are in good and serviceable condition (subject to normal
wear and tear).
2.9. Governmental Permits. (a) The Tribune Sub owns, holds, or
possesses the Tribune Station FCC Authorizations and all other governmental
licenses, franchises, permits, privileges, immunities, approvals and other
authorizations which are necessary to entitle it to own or lease, operate and
use the Tribune Station Assets and the Tribune Station and to carry on and
conduct the Tribune Station Business as currently conducted
-22-
(herein collectively referred to as "Tribune Station Governmental Permits"),
except for such Tribune Station Governmental Permits which the failure to so
own, hold or possess would not have a material adverse effect on the operations
and financial condition of the Tribune Stations, individually and taken as a
whole. Schedule 2.9(A)(1) sets forth a list and brief description of each such
Tribune Station Governmental Permit held by the Tribune Sub as of the date of
this Agreement, except for such incidental licenses, permits and other
authorizations which would be readily obtainable by any qualified applicant
without undue burden in the event of any lapse, termination, cancellation or
forfeiture thereof. Schedule 2.9(A)(2) sets forth a list of licenses and permits
issued to the Tribune Sub by the FCC that are not used in connection with the
operation of the Tribune Station.
(b) Except as set forth in Schedule 2.9(B), the Tribune Sub
has fulfilled and performed in all material respects its obligations under each
of such Tribune Station Governmental Permits, and no event has occurred or
condition or state of facts exists which constitutes or, after notice or lapse
of time or both, would constitute a material breach or material default under
any such Tribune Station Governmental Permit. No notice of cancellation, of
default or of any dispute concerning any Tribune Station Governmental Permit, or
of any event, condition or state of facts described in the preceding sentence,
has been received by Tribune. Except as set forth in Schedule 2.9(B), each of
the Tribune Station Governmental Permits is valid, subsisting and in full force
and effect, and, subject to the receipt of the FCC Order, to the best knowledge
of Tribune, may be assigned and transferred to the Xxxxxxxx Sub in accordance
with this Agreement and at the time of assignment to the Xxxxxxxx Sub will be in
full force and effect, in each case without (a) the occurrence of any breach,
default or forfeiture of rights thereunder or (b) the consent, approval, or act
of, or the making of any filing with, any Governmental Body or other party
(other than the FCC as contemplated by Section 4.3). The Tribune Station is
being operated in all material respects in accordance with the Tribune Station
FCC Authorizations and in compliance in all material respects with the
Communications Act, the rules and regulations thereunder, and all other laws and
regulations, federal, state and local, applicable to the Tribune Station.
Tribune has not received any notice of any violations of the Tribune Station FCC
Authorizations, the Communications Act and the rules and regulations thereunder.
There is no action by or before the FCC currently pending or, to the best
knowledge of Tribune, threatened to revoke, cancel, rescind, modify or refuse to
renew in the ordinary course any of the Tribune Station FCC Authorizations.
2.10. Real Property. Schedule 2.10 contains a brief
description of each parcel of real property owned by Tribune or the Tribune Sub
(exclusively or otherwise) and used in or relating to the Tribune Station
Business (showing the record
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title holder, legal description, location and any indebtedness secured by a
mortgage or other lien thereon) and of each option, right or contract to
purchase held by Tribune or the Tribune Sub to acquire any real property for use
in connection with the Tribune Station Business.
2.11. Real Property Leases. Schedule 2.11 sets forth a list
and brief description of each lease or similar agreement (showing the rental,
expiration date, renewal and the location of the real property covered by such
lease or other agreement) under which Tribune or the Tribune Sub is lessee of,
or holds or operates, any real property owned by any third party and used in or
relating to the Tribune Station Business.
2.12. Condemnation. (a) Neither the whole nor any part of any
real property owned by Tribune or the Tribune Sub nor, to Tribune's knowledge,
any property leased by Tribune or the Tribune Sub, in connection with the
Tribune Station Business is subject to any pending suit for condemnation or
other taking by any public authority and (b) to the best knowledge of Tribune,
no such condemnation or other taking is threatened.
2.13. Personal Property. Schedule 2.13 contains a list as of
December 28, 1997 of all machinery, equipment, vehicles, furniture and other
personal property owned by Tribune or the Tribune Sub having an original cost of
$10,000 or more and used in or relating to the Tribune Station Business.
2.14. Personal Property Leases. Schedule 2.14 contains a brief
description of each lease or other agreement or right, whether written or oral
(including in each case the rental, the expiration date thereof and a brief
description of the property covered), under which a Tribune Sub is lessee of, or
holds or operates, any machinery, equipment, vehicle or other tangible personal
property owned by a third party and used in or relating to the Tribune Station
Business and which is not terminable by the Tribune Sub without penalty on 30
days' notice or less and which provides for annual rentals in excess of $10,000.
2.15. Intellectual Property. Schedule 2.15 contains a list of:
(i) all trademarks, service marks, trade names and copyrights used solely in
connection with the Tribune Station Business for which registrations have been
issued to Tribune or the Tribune Sub or applications for registrations have been
made by Tribune or the Tribune Sub and (ii) all licenses, agreements or other
arrangements under which Tribune or the Tribune Sub, solely in connection with
the Tribune Station Business, has the right to use any trademark, service xxxx,
trade name or copyright (other than such as are included in the Tribune Station
-24-
Agreements). Neither, Tribune nor the Tribune Sub owns, or has applied for, any
patents, in connection with the Tribune Station Business. To the best knowledge
of Tribune, no proceedings have been instituted, are pending or are threatened
which challenge the validity of the ownership or use by Tribune or the Tribune
Sub of any trademarks, trade names, copyrights or patents related to the Tribune
Station Business. Except as set forth in Schedule 2.15, neither Tribune nor the
Tribune Sub has licensed anyone to use any trademarks, trade names or copyrights
of Tribune or the Tribune Sub related to the Tribune Station Business. Except as
set forth in Schedule 2.15, and other than as are included in the Tribune
Station Agreements, the Tribune Sub owns, or has the royalty-free right to use,
all trademarks, service marks, trade names, copyrights or patents used in the
operation of the Tribune Station Business. Except as set forth in Schedule 2.15,
no trademark, service xxxx, trade name or copyright listed in Schedule 2.15 is
subject to any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof by the Tribune Sub or restricting the licensing
thereof by the Tribune Sub to any person.
2.16. Accounts Receivable. All accounts receivable of the
Tribune Sub relating to the Tribune Station Business have arisen from bona fide
transactions by the Tribune Sub in the ordinary course of the Tribune Station
Business and, to the best knowledge of Tribune, constitute only valid claims
which are not subject to counterclaims or setoffs.
2.17. Title to Assets. The Tribune Sub has good and marketable
title to all of the tangible personal properties included in the Tribune Station
Assets, free and clear of all Encumbrances, except for Permitted Encumbrances.
Upon delivery to the Xxxxxxxx Sub on the Closing Date of the documents
contemplated by Section 1.9(a), the Tribune Sub will thereby transfer to the
Xxxxxxxx Sub good and marketable title to the Tribune Station Assets, subject to
no Encumbrances, except for Permitted Encumbrances.
2.18. Employees. Schedule 2.18 contains: (a) a list of all
individuals employed by the Tribune Sub in connection with the Tribune Station
Business as of August 19, 1998; and (b) the then current rate of compensation
provided by the Tribune Sub to such employees.
2.19. Employee Relations. (a) Except as set forth in Schedule
2.19(A), the Tribune Sub has complied in respect of the Tribune Station Business
in all material respects with all applicable laws, rules and regulations which
relate to prices, wages, hours, discrimination in employment and collective
bargaining and to the operation of the Tribune Station Business
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and is not liable for any arrears of wages or any Taxes or
penalties for failure to comply with any of the foregoing.
(b) Except as set forth in Schedule 2.19(B), as of the date of
this Agreement, there is no (i) unfair labor practice charge or complaint
against Tribune or the Tribune Sub in respect of the Tribune Station Business
pending before the National Labor Relations Board, any state labor relations
board or any court or tribunal and, to the best knowledge of Tribune, none is or
has been threatened, or (ii) strike, dispute, request for representation,
slowdown or stoppage pending against the Tribune Sub in respect of the Tribune
Station Business and, to the best knowledge of Tribune, none is or has been
threatened.
2.20. Contracts. Except as set forth in Schedule 2.20 or any
other Schedule hereto, as of the date of this Agreement, neither Tribune nor the
Tribune Sub is, with respect to the Tribune Station Business, a party to or
bound by:
(a) Any contract for the purchase or sale of real property;
(b) Any contract for the purchase, rental or use of any films,
recordings, television programming or programming services which is not
terminable by Tribune or the Tribune Sub without penalty on 30 days' notice or
less or which provides for performance over a period of more than 90 days or
which involves the payment after the date hereof of more than $20,000;
(c) Any contract for the purchase of merchandise, supplies or
personal property or for the receipt of services (other than services referred
to in clause (b) above) which is not terminable by Tribune or the Tribune Sub on
30 days' notice or less or which provides for performance over a period of more
than 90 days or which involves the payment after the date hereof of more than
$20,000;
(d) Any contract for the sale of broadcast time for
advertising or other purposes which was not made in the ordinary course of the
Tribune Station Business and consistent with past practice;
(e) Any guarantee of the obligations of the Tribune Station's
customers, suppliers, or employees;
(f) Any sales agency, advertising representative or
advertising or public relations contract which is not terminable by Tribune or
the Tribune Sub without penalty on 30 days' notice or less or which provides for
payments over a period of more than
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90 days or which involves the payment after the date hereof of more than
$20,000;
(g) Any barter agreement or other agreement with advertisers
for broadcasting or commercial time on the Tribune Station in exchange for goods
or services;
(h) Any employee collective bargaining agreement, employment
agreement (other than employment agreements terminable without premium or
penalty on notice of 30 days or less under which the only monetary obligation is
to make current wage or salary payments and provide current fringe benefits),
consulting, advisory or service agreement, deferred compensation agreement or
covenant not to compete;
(i) Any employees' pension, profit-sharing, stock option,
bonus, incentive, stock purchase, welfare, life insurance, hospital or medical
benefit plan or other employee benefit agreement or plan; or
(j) Any other contract, agreement, commitment, understanding
or instrument which is material to the Tribune Station Business.
Schedule 2.20 also indicates whether each contract, agreement or other
instrument listed therein is to be deemed an "Assumed Contract" or a "Contract
Not Assumed" for purposes of this Agreement.
2.21. Status of Contracts. Except as set forth in Schedule
2.21 or in any other Schedule hereto, each of the leases, contracts and other
agreements listed in Schedules 2.11, 2.14, 2.15 and 2.20 (provided, in the case
of Schedule 2.20, such contract or other agreement is designated therein as an
"Assumed Contract"), but excluding the contracts and other agreements designated
in Schedule 2.20 as a "Contract Not Assumed," (the "Tribune Station Agreements")
constitutes a valid and binding obligation of Tribune or the Tribune Sub and, to
the best knowledge of Tribune, the other parties thereto (subject to bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting the
enforcement of creditors' rights generally) and is in full force and effect
(subject to bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights generally) and
(except as set forth in Schedule 2.3 and except for those Tribune Station
Agreements which by their terms will expire prior to the Closing Date or will be
otherwise terminated prior to the Closing Date in accordance with the provisions
hereof) may be transferred to the Xxxxxxxx Sub pursuant to this Agreement and
will be in full force and effect at the time of
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such transfer, in each case without breaching the terms thereof or resulting in
the forfeiture or impairment of any rights thereunder and without the consent,
approval or act of, or the making of any filing with, any other party. Tribune
and the Tribune Sub have fulfilled and performed in all material respects their
respective obligations under each of the Tribune Station Agreements to which
they are a party, and neither Tribune nor the Tribune Sub is in, or alleged to
be in, breach or default under any of the Tribune Station Agreements and, to the
best knowledge of Tribune, no other party to any of the Tribune Station
Agreements has breached or defaulted thereunder, and no event has occurred and
no condition or state of facts exists which, with the passage of time or the
giving of notice or both, would constitute such a default or breach by the
Tribune Sub or, to the best knowledge of Tribune, by any such other party.
Complete and correct copies of each of the Tribune Station Agreements, together
with all amendments thereto, have heretofore been delivered or made available to
Xxxxxxxx by Tribune.
2.22. No Violation, Litigation or Regulatory Action. Except as
set forth in Schedule 2.22:
(a) Each of Tribune and the Tribune Sub has complied in all
material respects with all laws, regulations, rules, writs, injunctions,
ordinances, franchises, decrees or orders of any court or of any foreign,
federal, state, municipal or other Governmental Body which are applicable to the
Tribune Station Assets, the Tribune Stations or the Tribune Station Business,
except where the failure to comply would not have a material adverse effect on
the operating and financial condition of the Tribune Station Business,
individually and taken as a whole;
(b) There are no lawsuits, suits or proceedings pending or, to
the best knowledge of Tribune, threatened against Tribune or the Tribune Sub in
respect of the Tribune Station Assets, the Tribune Station or the Tribune
Station Business; and
(c) To the best knowledge of Tribune, there are no claims or
investigations pending or threatened against Tribune or the Tribune Sub in
respect of the Tribune Station Assets, the Tribune Station or the Tribune
Station Business; and
(d) There is no action, suit or proceeding pending or, to the
best knowledge of Tribune, threatened which questions the legality or propriety
of the transactions contemplated by this Agreement.
2.23. Insurance. The Tribune Sub maintains in respect
of the Tribune Station Assets, the Tribune Station and the
Tribune Station Business policies of fire and extended coverage
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and casualty, liability and other forms of insurance in such amounts and against
such risks and losses as are in the judgment of Tribune prudent for the Tribune
Station Business. All such policies are currently in full force and effect and
the Tribune Sub shall keep such insurance policies or comparable insurance
policies in full force and effect through the Closing Date.
2.24. Environmental Protection. (a) Except as set forth in
Schedule 2.24, to the best knowledge of Tribune, neither the Tribune Station or
the Tribune Station Business nor any of the present properties, assets or
operations relating thereto are subject to any order from or agreement with any
Governmental Body or private party respecting (i) any environmental, health or
safety Requirements of Law, (ii) any Remedial Action or (iii) any Liabilities
and Costs arising from the Release or threatened Release of a Contaminant into
the environment.
(b) Except as set forth in Schedule 2.24, there is not now,
nor has there ever been on or in the Tribune Station Assets or, to the knowledge
of Tribune, the past properties of the Tribune Station Business:
(i) any Release of any Contaminant on, in, under
or from such properties;
(ii) any underground storage tanks or surface impoundments;
(iii) any asbestos containing material; or
(iv) any polychlorinated biphenyls (PCB) used in hydraulic
oils, electrical transformers or other equipment.
(c) Except as set forth in Schedule 2.24, Tribune has not
received in respect of the Tribune Station Assets, the Tribune Station or the
Tribune Station Business any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(d) Except as set forth in Schedule 2.24, to the best
knowledge of Tribune, none of the Tribune Station Assets or present or past
operations of the Tribune Station is the subject of any investigation by any
Governmental Body evaluating whether any Remedial Action is needed to respond to
a Release or threatened Release of a Contaminant into the environment.
2.25. No Finder. Neither Tribune, the Tribune Sub nor
any party acting on their behalf has paid or become obligated to
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pay any fee or commission to any broker, finder or intermediary, except for
Xxxxxxx Xxxxx & Co., for or on account of the transactions contemplated by this
Agreement.
2.26. Status of Tribune and the Tribune Sub. Each of Tribune
and the Tribune Sub is, or on the Closing Date will be, legally qualified to
own, operate and control the Xxxxx Station pursuant to the Communications Act
and the rules, regulations and policies of the FCC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX AND
----------------------------------------------
THE XXXXXXXX SUB
----------------
As an inducement to Tribune and the Tribune Sub to enter into
this Agreement and to consummate the transactions contemplated hereby, Xxxxxxxx
and the Xxxxxxxx Sub represent and warrant to Tribune and the Tribune Sub and
agree as follows:
3.1. Organization. Each of Xxxxxxxx and the Xxxxxxxx Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation.
3.2. Subsidiaries and Investments. Other than the Xxxxxxxx
Sub, Xxxxxxxx does not, directly or indirectly (a) own, of record or
beneficially, any outstanding voting securities or other equity interests in any
corporation, partnership, joint venture or other entity which is primarily
involved in or relates primarily to the Xxxxx Station Business or (b) otherwise
control any such corporation, partnership, joint venture or other entity which
is involved primarily in or relates primarily to the Xxxxx Station Business.
3.3. Authority of the Xxxxxxxx and the Xxxxxxxx Subs. (a) Each
of Xxxxxxxx and the Xxxxxxxx Sub has requisite corporate power and authority to
execute and deliver this Agreement and all of the other agreements and
instruments to be executed and delivered by Xxxxxxxx or the Xxxxxxxx Sub
pursuant hereto (collectively, the "Xxxxxxxx Ancillary Agreements") and the
Xxxxx Merger Agreement, to consummate the transactions contemplated hereby and
thereby and to comply with the terms, conditions and provisions hereof and
thereof.
(b) The execution, delivery and performance of this Agreement,
the Xxxxx Merger Agreement and the Xxxxxxxx Ancillary Agreements by Xxxxxxxx and
the Xxxxxxxx Sub (to the extent a party thereto) have been duly authorized and
approved by all necessary action of Xxxxxxxx and the Xxxxxxxx Sub and do not
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require any further authorization or consent of Xxxxxxxx or the Xxxxxxxx Sub, or
their respective stockholders. Each of this Agreement and the Xxxxx Merger
Agreement is, and each Xxxxxxxx Ancillary Agreement when executed and delivered
by Xxxxxxxx or the Xxxxxxxx Sub and the other parties thereto will be, a legal,
valid and binding agreement of Xxxxxxxx and the Xxxxxxxx Sub (to the extent a
party thereto) enforceable in accordance with its respective terms, except in
each case as such enforceability may be limited by bankruptcy, moratorium,
insolvency, reorganization or other similar laws affecting or limiting the
enforcement of creditors' rights generally and except as such enforceability is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Except as set forth in Schedule 3.3 and except as results
from conditions, circumstances and legal relationships, unrelated to Xxxxxxxx or
the Xxxxxxxx Sub, in existence prior to the consummation of the Xxxxx Merger,
neither the execution and delivery by Xxxxxxxx or the Xxxxxxxx Sub of this
Agreement, the Xxxxx Merger Agreement and the Xxxxxxxx Ancillary Agreements or
the consummation by Xxxxxxxx and the Xxxxxxxx Sub of any of the transactions
contemplated hereby or thereby nor compliance by Xxxxxxxx and the Xxxxxxxx Sub
with or fulfillment by Xxxxxxxx and the Xxxxxxxx Sub of the terms, conditions
and provisions hereof or thereof will:
(A) conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of rights
under, or result in the creation or imposition of any Encumbrance upon any of
the Xxxxx Station Assets under, the charter or bylaws of Xxxxxxxx or the
Xxxxxxxx Sub, any Xxxxx Station Agreement, any Xxxxx Station Governmental Permit
or any judgment, order, award or decree (i) to which Xxxxxxxx or the Xxxxxxxx
Sub is a party or any of the Xxxxx Station Assets is subject or by which
Xxxxxxxx or the Xxxxxxxx Sub is bound, or any statute, other law or regulatory
provision affecting or which will, after consummation of the Xxxxx Merger,
affect Xxxxxxxx, and the Xxxxxxxx Sub or the Xxxxx Station Assets or (ii) to
which, upon consummation of the Xxxxx Merger, Xxxxxxxx or the Xxxxxxxx Sub will
be a party or by which Xxxxxxxx or the Xxxxxxxx Sub will be bound; or
(B) require the approval, consent, authorization or act of, or
the making by Xxxxxxxx or the Xxxxxxxx Sub of any declaration, filing or
registration with, any third party or any foreign, federal, state or local
court, governmental or regulatory authority or body, except for such of the
foregoing as are necessary pursuant to the Improvements Act, the
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Communications Act or pursuant to any contract, agreement or instrument of KTC.
3.4. Title to Assets. On the Closing Date, the Xxxxxxxx Sub
will have good and marketable title to all of the tangible personal properties
included in the Xxxxx Station Assets, free and clear of all Encumbrances, except
for Permitted Encumbrances, and subject to any Encumbrances or other conditions
in existence immediately prior to the consummation of the Xxxxx Merger. Upon
delivery to the Tribune Sub on the Closing Date of the documents contemplated by
Section 1.9(b), the Xxxxxxxx Sub will thereby transfer to the Tribune Sub good
and marketable title to the Xxxxx Station Assets, subject to no Encumbrances,
except for Permitted Encumbrances, and subject to any Encumbrance or other
conditions in existence immediately prior to the consummation of the Xxxxx
Merger.
3.5. No Finder. Neither Xxxxxxxx, the Xxxxxxxx Sub nor any
party acting on their behalf has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
3.6. Status of Xxxxxxxx and the Xxxxxxxx Sub. Xxxxxxxx and the
Xxxxxxxx Sub are legally qualified to purchase, own operate and control the
Tribune Station pursuant to the Communications Act and the rules, regulations
and policies of the FCC.
ARTICLE IV
ACTION PRIOR TO THE CLOSING DATE
--------------------------------
The respective parties hereto covenant and agree to take the
following actions between the date hereof and the Closing Date:
4.1. Investigation of the Tribune Station Business and the
Xxxxx Station Business. Upon the request of Xxxxxxxx, with respect to the
Tribune Station Business, or Tribune, with respect to the Xxxxx Station Business
(the "Investigating Party"), the other party hereto (the "Investigated Party")
shall and shall cause its subsidiaries party hereto to afford to the officers,
employees and authorized representatives of the Investigating Party (including,
without limitation, independent public accountants, attorneys and consultants)
reasonable access during normal business hours, and upon not less than 24-hours
prior notice, to the offices, properties, employees
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and business and financial records (including computer files, retrieval programs
and similar documentation) of the Tribune Station Business or the Xxxxx Station
Business, as the case may be, to the extent the Investigating Party shall
reasonably deem necessary or desirable and shall furnish to the Investigating
Party or its authorized representatives such additional information concerning
the Tribune Station Business or the Xxxxx Station Business, as the case may be,
as shall be reasonably requested; provided, however, that the Investigated Party
shall not be required to violate any obligation of confidentially to which it is
subject in discharging its obligations pursuant to this Section 4.1; and
provided, further; that during the period from the date hereof until the
consummation of the Xxxxx Merger Meredith's obligations pursuant to this Section
4.1 shall be limited to using commercially reasonable efforts to cause KTC to
provide Tribune with access as provided above, provided that, in the event that
KTC does not grant Tribune access as provided in this Section 4.1, Xxxxxxxx
agrees to exercise its rights under the Xxxxx Merger Agreement to perform such
investigation of the Xxxxx Station as Tribune shall reasonably request, at
Tribune's cost, and to provide Tribune with the results of such investigation.
Each Investigating Party agrees that any such investigation shall be conducted
in such a manner as not to interfere unreasonably with the operations of the
Investigated Party.
4.2. Preserve Accuracy of Representations and Warranties. Each
of the parties hereto shall refrain from taking any action which would render
any representation or warranty contained in Article II or III of this Agreement
inaccurate as of the Closing Date and Xxxxxxxx shall refrain from taking any
action which would render any representation or warranty contained in the Xxxxx
Merger Agreement inaccurate. Each party shall promptly notify the other of any
action, suit or proceeding that shall be instituted or threatened against such
party to restrain, prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement or the Xxxxx Merger Agreement.
Tribune shall promptly notify Xxxxxxxx, and Xxxxxxxx shall promptly notify
Tribune, of any lawsuit, claim, proceeding or investigation that may be
threatened, brought, asserted or commenced which would have been listed in
Schedule 2.22 or which would constitute a breach of Section 5.05 of the Xxxxx
Merger Agreement, as the case may be, if such lawsuit, claim, proceeding or
investigation had arisen prior to the date hereof.
4.3. FCC Consent; Improvements Act Approval; Other Consents
and Approvals. (a) As promptly as practicable after the date hereof but in any
event no later than 5 business days thereafter, the Tribune Sub and the Xxxxxxxx
Sub shall file with the FCC applications requesting its consent to the
assignment of
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the Tribune Station FCC Authorizations (and any extensions or renewals thereof)
to the Xxxxxxxx Sub from the Tribune Sub and its consent to the assignment of
the Xxxxx Station FCC Authorizations (and any extensions or renewals thereof) to
Tribune from the Xxxxxxxx Sub or from KTC, as applicable. Tribune and Xxxxxxxx
will cooperate in the preparation of such applications (including the furnishing
to each other of copies of such applications prior to filing) and will
diligently take, or cooperate in the taking of, all necessary, desirable and
proper steps, provide any additional information reasonably required and
otherwise use their best efforts to obtain promptly the requested consent and
approval of the FCC. Any fees assessed by the FCC incident to the filing or
grant of such applications shall be borne equally by Tribune and Xxxxxxxx, with
each party responsible for one-half of any such fees so assessed. Each of
Tribune and Xxxxxxxx shall make available to the other, promptly after the
filing thereof, copies of all reports filed by it or its Affiliates on or prior
to the Closing Date with the FCC in respect of the Tribune Stations or the Xxxxx
Stations, as the case may be.
(b) As promptly as practicable after the date hereof but in
any event no later than 20 days thereafter, Tribune and Xxxxxxxx shall file with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice the notifications and other information required to be filed by such
commission or department under the Improvements Act, or any rules and
regulations promulgated thereunder, with respect to the transactions
contemplated hereby. Each of Tribune and Xxxxxxxx covenants to file as promptly
as practicable such additional information as may be requested to be filed by
such commission or department. Each of Tribune and the Xxxxxxxx warrants that
all such filings by it will be, as of the date filed, true and accurate in all
material respects and in accordance with the requirements of the Improvements
Act and any such rules and regulations. Each of Tribune and Xxxxxxxx agrees to
make available to the other such other information as may be required by such
commission or department to be filed as additional information requested by such
agencies under the Improvements Act and such rules and regulations. Tribune and
Xxxxxxxx shall bear equally the cost of any filing fees payable under the
Improvements Act in connection with the notifications and information described
in this Section 4.3(b) and any such notification filed by Xxxxxxxx in connection
with the Xxxxx Merger, with each party responsible for one-half of any such
fees.
(c) Tribune and Xxxxxxxx shall each use their reasonable
efforts to obtain all consents and amendments from the parties to the Tribune
Station Agreements and the contracts and
-34-
agreements included in the Xxxxx Station Assets (the "Xxxxx Station
Agreements"), respectively, and all consents, amendments or permits from
Governmental Bodies, which are required by the terms thereof or this Agreement
for the consummation of the transactions contemplated by this Agreement;
provided, however, that neither Tribune nor Xxxxxxxx shall have any obligation
to offer or pay any consideration in order to obtain any such consents or
amendments.
4.4. Operations of the Tribune Station Prior to the Closing
Date. (a) Except as approved by Xxxxxxxx pursuant to Section 4.4(b) below, the
Tribune Sub shall operate and carry on the Tribune Station Business only in the
ordinary course consistent with past practices and shall continue to promote and
conduct advertising on behalf of the Tribune Station at levels substantially
consistent with past practice. Consistent with the foregoing, the Tribune Sub
shall keep and maintain the Tribune Station Assets in good operating condition
and repair (wear and tear in ordinary usage excepted) and shall use their best
efforts consistent with good business practice to retain the Tribune Station's
libraries of films and other programming, to maintain the business organization
of the Tribune Station intact and to preserve the goodwill of the suppliers,
contractors, licensors, employees, customers, distributors and others having
business relations with the Tribune Station Business.
(b) Notwithstanding Section 4.4(a), except as expressly
contemplated by this Agreement, except as set forth in Schedule 4.4(b) or except
with the express prior written approval of Xxxxxxxx, the Tribune Subs shall not,
in respect of the Tribune Station:
(i) make any material change in the Tribune
Station Business or the operations of the Tribune
Station;
(ii) make any capital expenditure, or enter into any contract
or commitment therefor, in excess of $25,000 in the aggregate;
(iii) enter into any contract, agreement, undertaking or
commitment (or any extension or renewal thereof) which would have been
required to be set forth in Schedule 2.20 if in effect on the date
hereof, other than leases, contracts or other agreements that are
entered into by the Tribune Sub in the ordinary course of the Tribune
Station Business and that do not give rise to a liability in excess of
$25,000 in the aggregate annually;
-35-
(iv) amend or consent to the amendment of any contract,
agreement, undertaking or commitment listed in Schedule 2.20, the
effect of which is to cause the terms of such contract, agreement,
undertaking or commitment to be materially less favorable to the
Tribune Subs or Xxxxxxxx and the Xxxxxxxx Sub than prior to such
amendment or consent to amendment;
(v) sell, lease, transfer or otherwise dispose of or mortgage
or pledge, or impose or suffer to be imposed any Encumbrance on, any of
the Tribune Station Assets, other than (A) personal property sold or
otherwise disposed of for fair value in the ordinary course of the
Tribune Station Business consistent with past practice, (B) minor
amounts of personal property which are replaced due to defect or
obsolescence with personal property of substantially the same nature
and of equal or greater quality in the ordinary course of the Tribune
Station Business consistent with past practice and (C) Permitted
Encumbrances;
(vi) create, incur, guarantee or assume, or agree to create,
incur, guarantee or assume, any indebtedness for borrowed money in
respect of the Tribune Station Business or enter into any capitalized
leases;
(vii) make any change in the compensation of the employees of
the Tribune Station Business, other than changes made in accordance
with normal compensation practices in the ordinary course of the
Tribune Station Business consistent with past practice;
(viii) make any change in the accounting policies applied in
the preparation of the financial statements contained in Schedule 2.4;
(ix) cancel or agree to cancel without fair consideration
therefor any debts owed to or claims held by the Tribune Subs in
respect of the Tribune Station Business (including the settlement of
any claims or litigation), other than in the ordinary course of the
Tribune Station Business consistent with past practice;
(x) accelerate collection of any notes or accounts receivable
generated by the Tribune Station Business to a date prior to the date
such collection would have occurred in the ordinary course of the
Tribune Station Business consistent with past practice;
-36-
(xi) delay payment of any account payable or other liability
of the Tribune Station Business beyond its due date or the date when
such liability would have been paid in the ordinary course of the
Tribune Station Business consistent with past practice;
(xii) institute any increase in any profit sharing, bonus,
incentive, deferred compensation, insurance, pension, retirement,
medical, hospital, disability, welfare or other employee benefit plan
with respect to employees of the Tribune Station Business other than
(A) as required by law and (B) changes made in the ordinary course of
the Tribune Station Business consistent with past practice; or
(xiii) agree or commit to do or authorize any of the
foregoing.
4.5. Operations of the Xxxxx Station Prior to the Closing
Date. Xxxxxxxx will use its best efforts to cause KTC to comply with its
covenants and agreements contained in Section 6.01 of the Xxxxx Merger
Agreement, including, upon consultation and with the written agreement of
Tribune, commencing a legal or equitable action to enforce its rights
thereunder; provided, however, that Tribune shall be responsible for all costs
and expenses incurred by Xxxxxxxx in connection with its enforcement of such
rights. After the consummation of the Xxxxx Merger, Xxxxxxxx and the Xxxxxxxx
Sub shall comply with the covenants and agreements contained in Section 6.01 of
the Xxxxx Merger Agreement as if all references therein to KTC were references
to Xxxxxxxx and the Xxxxxxxx Sub.
4.6. Public Announcement. Neither Tribune nor Xxxxxxxx, nor
any of their Affiliates shall, without the approval of the other, make any press
release or other public announcement concerning the transactions contemplated by
this Agreement, except as and to the extent that any such party shall be so
obligated by law or by the rules, regulations or policies of any national
securities exchange or association, in which case the other party shall be
advised and the parties shall use their best efforts to cause a mutually
agreeable release or announcement to be issued.
4.7. Interim Financial Statements. Tribune shall promptly
deliver to Xxxxxxxx copies of any monthly, quarterly or annual financial
statements relating solely to the Tribune Station Business. Such financial
statements shall fairly present the financial position and results of operations
of the Tribune Station Business as at the dates and for the periods indicated,
and shall be prepared on a basis consistent and in accordance
-37-
with the basis upon which the financial statements included in Schedule 2.4 were
prepared. Xxxxxxxx shall promptly deliver to Tribune copies of any monthly,
quarterly or annual financial statements relating to the Xxxxx Station Business
received by it from KTC pursuant to the Xxxxx Merger Agreement.
4.8. Rights of Xxxxxxxx Under Xxxxx Merger Agreement. Xxxxxxxx
agrees that, from the date hereof until the Closing Date, it will use its best
efforts to enforce all rights of Xxxxxxxx and Xxxxxxxx Sub under the Xxxxx
Merger Agreement including, upon consultation with and the written agreement of
Tribune, commencing a legal or equitable action to enforce its rights
thereunder; provided, however, that Tribune shall be responsible for all costs
and expenses incurred by Xxxxxxxx in connection with its enforcement of such
rights. Xxxxxxxx will not waive any right or consent to any action under the
Xxxxx Merger Agreement without the written consent of Tribune. Xxxxxxxx shall
promptly notify Tribune of any breach by KTC or the Partners of the
representations and warranties or covenants and agreements contained in the
Xxxxx Merger Agreement of which Xxxxxxxx becomes aware. Xxxxxxxx shall promptly
deliver all correspondence and other information received by Xxxxxxxx from KTC
or the Partners relating to the Xxxxx Station Business or the Xxxxx Merger
Agreement. Xxxxxxxx and Tribune agree that in the event that the Xxxxx Merger
Agreement is terminated, each party may incur damages and to the extent that
such damages arise from a breach for which KTC or the Partners are liable
pursuant to Section 11.02(a) of the Xxxxx Merger Agreement, Xxxxxxxx shall, at
the request of Tribune, enforce its rights thereunder for the benefit of
Tribune, in addition to Xxxxxxxx, with Tribune bearing the cost of such
enforcement pro rata based on the amount of damages claimed by each party.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
5.1. Taxes; Sales, Use and Transfer Taxes; Title Insurance.
(a) Tribune shall be liable for and shall pay all Taxes (whether assessed or
unassessed) applicable to (i) the Tribune Station Business or the Tribune
Station Assets, in each case attributable to periods (or portions thereof)
ending on or prior to the Closing Date, except to the extent such Taxes are
reflected in the Closing Date Tribune Station Working Capital Amount, (ii) the
Xxxxx Station Business or the Xxxxx Station Assets (except for periods, or
portions thereof, after the consummation of the Xxxxx Merger and prior the
Closing Date) and (iii) Taxes reflected in the Closing Date Xxxxx Station
Working Capital Amount. Xxxxxxxx shall be liable for and shall pay all
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Taxes (whether assessed or unassessed) applicable to (i) the Xxxxx Station
Business or the Xxxxx Station Assets, in each case attributable to periods (or
portions thereof) after the consummation of the Xxxxx Merger ending on or prior
to the Closing Date, except to the extent that such Taxes are reflected in the
Closing Date Xxxxx Station Working Capital Amount or are described in Section
8.02(a) of the Xxxxx Merger Agreement, (ii) the Tribune Station Business or the
Tribune Station Assets, in each case attributable to periods (or portions
thereof) beginning after the Closing Date and (iii) Taxes reflected in the
Closing Date Tribune Station Working Capital Amount. For purposes of this
Section 5.1(a), any period beginning before and ending after the Closing Date
shall be treated as two partial periods, one ending on the Closing Date and the
other beginning after the Closing Date; provided, however, that Taxes imposed on
a periodic basis shall be allocated on a daily basis.
(b) Any sales, use or other transfer Taxes payable by reason
of transfer and conveyance of the Tribune Station Assets or the Xxxxx Station
Assets hereunder and any documentary stamp or transfer Taxes payable by reason
of the real estate or interests therein included in the Tribune Station Assets
or the Xxxxx Station Assets, including those incurred in connection with the
consummation of the Xxxxx Merger, shall be paid 50% by Tribune and 50% by
Xxxxxxxx. All fees relating to any filing with any Governmental Body required
for transfer and conveyance of the Tribune Station Assets and the Xxxxx Station
Assets hereunder or in connection with the consummation of the Xxxxx Merger,
other than amounts (including Taxes) owing to any Governmental Body as of the
date hereof or with respect to events occurring prior to the date hereof, shall
be paid one-half by Tribune and one-half by Xxxxxxxx.
(c) Tribune or Xxxxxxxx, as the case may be, shall provide
reimbursement for any Tax paid by the other party all or a portion of which is
the responsibility of Tribune or Xxxxxxxx, as the case may be, in accordance
with the terms of this Section 5.1. Within a reasonable time prior to the
payment of any said Tax, the party paying such Tax shall give notice to the
other party of the Tax payable and the portion which is the liability of each
party, although failure to do so will not relieve the other party from its
liability hereunder.
5.2. Employees; Employee Benefit Plans. (a) Not less than 60
days prior to Closing, Xxxxxxxx shall furnish Tribune with a schedule
identifying each employee listed on Schedule 2.18 to whom Xxxxxxxx intends to
extend employment as of Closing.
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(b) Notwithstanding the foregoing provisions of this Section
5.2, nothing contained in this Agreement shall be construed to create any
obligation on the part of Tribune to retain or on the part of Xxxxxxxx to employ
or retain any employees of the Xxxxx Station Business ("Xxxxx Station
Employees") or the Tribune Station Business ("Tribune Station Employees"), as
the case may be, on or after the Closing Date and any employees so employed or
retained shall be so employed or retained on an "at will" basis only, unless
Tribune or Xxxxxxxx, as the case may be, shall otherwise expressly agree in
writing.
(c) (i) Tribune shall not assume any obligations under any
employee benefit plan maintained, or contributed to, by Meredith, KTC or any of
their Affiliates ("Xxxxxxxx Plans") or any other obligations of Xxxxxxxx or any
of their Affiliates to Xxxxx Station Employees. Xxxxxxxx shall not assume any
obligations under any employee benefit plan maintained, or contributed to, by
Tribune or any of its Affiliates ("Tribune Plans") or any other obligations of
Tribune or any of its Affiliates to Tribune Station Employees. Without limiting
the foregoing, Tribune and the Xxxxxxxx each shall provide continuation coverage
to each individual who under the terms of its respective health plan is entitled
to continuation rights pursuant to Section 4980B of the Code or Part 6 of
Subtitle I of ERISA.
(ii) Each Tribune Station Employee who becomes employed by the
Xxxxxxxx Sub and each Xxxxx Station Employee who becomes employed by the Tribune
Sub, in either case as of the Closing Date or within four weeks thereafter (a
"Continuing Employee"), shall participate in any group medical, dental and life
insurance plans for which such employee becomes eligible on the first day of the
first month following the Closing Date, without any evidence of insurability,
and without application of any pre-existing condition limitations. All claims
arising prior to the Closing Date under Tribune Plans shall be counted under
Xxxxxxxx Plans, and all claims arising prior to the Closing Date under Xxxxxxxx
Plans shall be counted under Tribune Plans, for purposes of deductibles,
out-of-pocket maximums, benefit maximums, and all other similar limitations for
calendar year in which the Closing Date occurs. Tribune shall take into account
the service of Continuing Employees with the Xxxxxxxx Sub prior to the Closing
Date and Xxxxxxxx shall take into account the service of Continuing Employees
with the Tribune Sub prior to the Closing Date, in each case for purposes of
determining such employees' eligibility for holidays, sick days and vacation
benefits. Each Xxxxxxxx Plan and Tribune Plan that includes a qualified cash or
deferred arrangement (within the meaning of Section 401(k) of the Code) shall
accept the rollover of distributions from any Tribune Plan or Xxxxxxxx Plan, as
the case
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may be, directed by Continuing Employees. Except as otherwise set forth herein,
Tribune and Xxxxxxxx, each in its sole discretion, may modify or terminate any
of its respective employee benefit plans, programs, policies or arrangements at
any time after the Closing Date for any reason.
(iii) Tribune and Xxxxxxxx each shall bear the cost and
expense of any workers' compensation claim asserted and arising out of an injury
sustained by any of its respective employees prior to the Closing Date.
(d) Notwithstanding anything in Sections 5.2(a), (b) and (c)
to the contrary, Tribune shall honor the covenants of Xxxxxxxx set forth in
Article VII of the Xxxxx Merger Agreement, as if Tribune, rather than Xxxxxxxx,
were the "Purchaser" thereunder.
5.3. Control of Operations Prior to Closing Date.
Notwithstanding anything contained herein to the contrary, the Closing shall not
be consummated prior to the grant by the FCC of the FCC Order. Tribune and
Xxxxxxxx acknowledge and agree that at all times commencing on the date hereof
and ending on the Closing Date, (i) neither Xxxxxxxx, the Xxxxxxxx Sub nor any
of their employees, agents or representatives, directly or indirectly, shall, or
have any right to, control, direct or otherwise supervise, or attempt to
control, direct or otherwise supervise any of the management or operations of
the Tribune Stations, it being understood that the operation, management,
control and supervision of all programs, equipment, operations and other
activities of the Tribune Stations shall be the sole responsibility, and at all
times prior to the Closing Date remain within the complete control and
discretion, of the Tribune Subs, subject to the terms of Section 4.4 of this
Agreement and (ii) neither Tribune, the Tribune Subs nor any of their employees,
agents or representatives, directly or indirectly, shall, or have any right to,
control, direct or otherwise supervise, or attempt to control, direct or
otherwise supervise any of the management or operations of the Xxxxx Station, it
being understood that the operation, management, control and supervision of all
programs, equipment, operations and other activities of the Xxxxx Station shall
be the sole responsibility, and at all times prior to the Closing Date remain
within the complete control and discretion of KTC prior to the consummation of
the Xxxxx Merger and the Xxxxxxxx Sub, subject to the terms of Section 6.01 of
the Xxxxx Merger Agreement and the Xxxxxxxx Sub from the consummation of the
Xxxxx Merger to the Closing Date.
5.4. Closing of Xxxxx Merger. The parties agree that
if the consummation of the Xxxxx Merger does not occur
contemporaneously with the Closing, Xxxxxxxx, the Xxxxxxxx Sub,
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Tribune and the Tribune Sub shall enter into time brokerage agreements pursuant
to which Xxxxxxxx or the Xxxxxxxx Sub will provide programming for, and be
entitled to all the revenues of, the Tribune Station, and Tribune or the Tribune
Sub will provide programming for, and be entitled to the revenues of, the Xxxxx
Station, such agreements each to provide for reimbursement of reasonable
operating expenses but without payment of additional consideration, and such
agreements to commence on a date designated by Xxxxxxxx after expiration or
termination of any applicable waiting period under the Improvements Act and to
terminate on the earlier of (A) the Closing hereunder or (B) any date designated
by Xxxxxxxx that is not earlier than 180 days after the earlier of the
consummation of the Xxxxx Merger or the date Xxxxxxxx delivers the Postponement
Notice (as defined in the Xxxxx Merger Agreement); and if such agreements are
terminated by Xxxxxxxx prior to Closing hereunder, then this Agreement shall
simultaneously terminate with respect to the Tribune Station but shall continue
in effect with respect to the Xxxxx Station, and at Closing Tribune shall pay to
Xxxxxxxx in cash an amount equal to the KTC Purchase Price (as defined in the
Xxxxx Merger Agreement). The closing conditions contained in Sections 6.1 and
6.4 shall not apply to any Closing hereunder occurring after the effectiveness
of the time brokerage agreements referred to above.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIBUNE AND
--------------------------------------------------
THE TRIBUNE SUB
---------------
The obligations of Tribune and the Tribune Sub under this
Agreement shall, at the option of Tribune and the Tribune Sub, be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
6.1. No Misrepresentation or Breach of Covenants and
Warranties. There shall have been no material breach by Xxxxxxxx or the Xxxxxxxx
Sub in the performance of any of their respective covenants and agreements
contained herein; each of the representations and warranties of Xxxxxxxx and the
Xxxxxxxx Sub contained or referred to herein shall be true and correct in all
material respects on the Closing Date as though made on the Closing Date (except
to the extent that they expressly speak as of a specific date or time other than
the Closing Date, in which case they need only have been true and correct in all
material respects as of such specified date or time), except for changes therein
specifically permitted by this Agreement or resulting from any transaction
expressly consented to in writing by Tribune or any transaction explicitly
permitted by this Agreement; and there shall have been delivered to Tribune a
certificate or
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certificates to such effect, dated as of the Closing Date, signed on behalf of
Xxxxxxxx and the Xxxxxxxx Sub by its President or any Vice President.
6.2. No Restraint or Litigation. (a) Any applicable waiting
period under the Improvements Act shall have expired or have been terminated and
there shall not be in effect any order of a court of competent jurisdiction,
which, in any case, restrains or prohibits the transactions contemplated hereby.
6.3. FCC Order. The FCC shall have issued the FCC Order and
any condition or action required to be satisfied or taken to legally effect the
assignment of the Xxxxx Station FCC Authorizations to the Tribune Sub in
compliance with the FCC Order shall have been so satisfied or taken (provided,
that in no event shall the foregoing require the satisfaction of any condition
or the taking of any action that could under the terms of the FCC Order be so
satisfied or taken subsequent to the Closing); provided, that in the event that
a petition to deny or other material objection has been filed with the FCC with
respect to the application for transfer of control of the Xxxxx Station FCC
Authorizations to the Tribune Sub and there exists a significant risk that the
FCC Order will not become Final, the FCC Order shall have become Final Order. As
used in this Agreement, the term "FCC Order" means an order or decision of the
FCC that grants, without material adverse condition, all consents or approvals
required under the Communications Act for the assignment of the Xxxxx Station
FCC Authorizations to the Tribune Sub or the Tribune Station FCC Authorizations
to the Xxxxxxxx Sub, as the case may be, and the other transactions contemplated
by this Agreement. For purposes of this Agreement, the term "Final" shall mean
that action shall have been taken by the FCC (including action duly taken by the
FCC's staff, pursuant to delegated authority) which shall not have been
reversed, stayed, enjoined, set aside, annulled or suspended; with respect to
which no timely request for stay, petition for rehearing, appeal or certiorari
or sua sponte action of the FCC with comparable effect shall be pending; and as
to which the time for filing any such request, petition, appeal, certiorari or
for the taking of any sua sponte action by the FCC shall have expired or
otherwise terminated. The following shall be deemed not to be material adverse
conditions for purposes of the definition of FCC Order: (i) a condition by the
FCC that the Closing not occur until the grant of applications for renewal of
the FCC License for the Xxxxx Station or (ii) a condition by the FCC that
Tribune, the Tribune Sub or any of their Affiliates divest itself of any media
property at the Closing or at any future date if ownership of which, in
combination with the ownership of the Xxxxx Station, violates the rules,
regulations or policies of the FCC.
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6.4. No Material Adverse Change. Since the date of this
Agreement, there shall have been no damage, destruction, loss or claim (whether
or not covered by insurance) or condemnation or other taking which materially
adversely affects the Xxxxx Station or its business, taken as a whole.
6.5. Xxxxx Merger. The acquisition by Xxxxxxxx of the
Xxxxx Station pursuant to the Xxxxx Merger shall have been
consummated.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXXXX
-----------------------------------------------
AND THE XXXXXXXX SUBS
---------------------
The obligations of Xxxxxxxx and the Xxxxxxxx Sub under this
Agreement shall, at the option of Xxxxxxxx and the Xxxxxxxx Sub, be subject to
the satisfaction on or prior to the Closing Date, of the following conditions:
7.1. No Restraint or Litigation. Any applicable waiting period
under the Improvements Act shall have expired or been terminated and there shall
not be in effect any order of a court of competent jurisdiction, which, in any
case, restrains or prohibits the transactions contemplated hereby.
7.2. FCC Order. The FCC shall have issued the FCC Order and
any condition or action required to be satisfied or taken to legally effect the
assignment of the Tribune Station FCC Authorizations to the Xxxxxxxx Sub in
compliance with the FCC Order shall have been so satisfied or taken (provided,
that in no event shall the foregoing require the satisfaction of any condition
or the taking of any action that could under the terms of the FCC Order be so
satisfied or taken subsequent to the Closing); provided, that in the event that
a petition to deny or other material objection has been filed with the FCC with
respect to the application for transfer of control of the Tribune Station FCC
Authorizations to the Xxxxxxxx Sub and there exists a significant risk that the
FCC Order will not become Final, the FCC Order shall have become Final Order.
The following shall be deemed not to be material adverse conditions for purposes
of the definition of FCC Order: (i) a condition by the FCC that the Closing not
occur until the grant of applications for renewal of the FCC License for the
Tribune Station or (ii) a condition by the FCC that Xxxxxxxx, the Xxxxxxxx Sub
or any of their Affiliates divest itself of any media property at the Closing or
at any future date if ownership of which, in combination with the ownership of
the Tribune Station, violates the rules, regulations or policies of the FCC.
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7.3. Lease Extension. The Tribune Sub shall have entered into
an extension for not less than 5 years of the lease for the main tower of the
Tribune Station containing terms and conditions (other than rental rates) that
are substantially similar to the existing lease and at market rental rates.
7.4. Transmission Interruption. There shall not have occurred
any damage or destruction of property or other circumstances causing the regular
broadcast transmission of the Tribune Station in the normal and usual manner to
be interrupted for a period that is in excess of 7 days and is continuing.
7.5. Xxxxx Merger. The acquisition by Xxxxxxxx of
the Xxxxx Station pursuant to the Xxxxx Merger shall have been
consummated.
ARTICLE VIII
INDEMNIFICATION
---------------
8.1. Indemnification by Tribune. Tribune agrees to indemnify
and hold harmless the Xxxxxxxx and the Xxxxxxxx Sub from and against any and all
Loss and Expense incurred by Xxxxxxxx or the Xxxxxxxx Sub in connection with or
arising from:
(i) any breach by Tribune or the Tribune Sub of, or any other
failure of Tribune or the Tribune Sub to perform, any of their
respective covenants, agreements or obligations in this Agreement or in
any Tribune Ancillary Agreement;
(ii) any breach of any warranty or the inaccuracy of any
representation of Tribune or the Tribune Sub contained or referred to
in this Agreement or any certificate delivered by or on behalf of
Tribune or Tribune Sub pursuant hereto;
(iii) the failure of Tribune and the Tribune Sub to perform any
Excluded Tribune Station Liabilities;
(iv) (A) the occupancy, operation, use or control of any of the
real property listed on Schedule 2.10 or Schedule 2.11 prior to the
Closing Date or (B) the operation of the Tribune Station Business prior
to the Closing Date, in each case incurred or imposed as a requirement
of or in connection with the compliance with any environmental, health
or safety Requirements of Law, including, without limitation, any
Release or storage of any Contaminant on, at or from (1) any such
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real property (including, without limitation, all facilities,
improvements, structures, and equipment thereon, surface water thereon
or adjacent thereto and soil or groundwater thereunder) or any
conditions whatsoever on, under or in such real property or (2) any
real property or facility owned by a third party at which Contaminants
generated by the Tribune Station Business were sent prior to the
Closing Date; and
(v) the failure of Tribune and the Tribune Subs to perform any
of the Assumed Xxxxx Station Liabilities;
provided, however, that, except as set forth below, Tribune shall not be
required to indemnify and hold harmless pursuant to clause (ii) with respect to
Loss and Expense incurred by Xxxxxxxx or the Xxxxxxxx Sub until, and then only
to the extent that, the aggregate amount of such Loss and Expense exceeds
$1,000,000 and, provided, further, that the aggregate amount that Tribune shall
be required to indemnify and hold harmless pursuant to clause (ii) with respect
to Loss and Expense incurred by the Xxxxxxxx or the Xxxxxxxx Sub shall not
exceed $25,000,000. Notwithstanding the foregoing, the limitation contained in
the first proviso above shall not apply to any Loss or Expense resulting from
the failure of any representation and warranty of Tribune or the Tribune Sub
contained herein to be true and correct in all material respects as of the
Closing Date (except to the extent that they expressly speak as of a specific
date or time, in which case they need only have been true and correct as of such
specified date or time) to the extent that Xxxxxxxx gives written notice to
Tribune of such breach prior to the Closing. The indemnification provided for in
this Section 8.1 shall terminate on the twelve-month anniversary of the Closing
Date (and no claims shall be made by Xxxxxxxx or the Xxxxxxxx Sub under this
Section 8.1 thereafter), except that the indemnification by Tribune shall
continue in any event as to:
(A) any breach of any warranty or the inaccuracy of any
representation of Tribune or the Tribune Subs contained or referred to
in Section 2.3, 2.17 or 2.24, as to all of which no time limitation
shall apply other than the full period of any applicable statute of
limitations;
(B) the covenants of Tribune or the Tribune Subs set forth in
Section 5.1, 10.2 or 10.10, as to all of which no time limitation shall
apply other than the full period of any applicable statute of
limitations;
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(C) any Loss or Expense incurred by Xxxxxxxx or the Xxxxxxxx
Sub in connection with or arising out of the failure of Tribune and the
Tribune Sub to perform any Excluded Tribune Station Liability or any
Assumed Xxxxx Station Liability, as to which no time limitation shall
apply;
(D) any Loss or Expense incurred by Xxxxxxxx or the Xxxxxxxx
Sub in connection with or arising from the matters described in clause
(iv) of this Section 8.1, as to which no time limitation shall apply
other than the full period of any applicable statute of limitations;
and
(E) any Loss or Expense of which Xxxxxxxx or the Xxxxxxxx Sub
has notified Tribune in accordance with the requirements of Section 8.3
on or prior to the date such indemnification would otherwise terminate
in accordance with this Section 8.1, as to which the obligation of
Tribune shall continue until the liability of Tribune shall have been
determined pursuant to this Article VIII, and Tribune shall have
reimbursed Xxxxxxxx or the Xxxxxxxx Sub for the full amount of such
Loss and Expense in accordance with this Article VIII.
8.2. Indemnification by Xxxxxxxx. Xxxxxxxx agrees to indemnify
and hold harmless Tribune and the Tribune Subs from and against any and all Loss
and Expense incurred by Tribune or the Tribune Subs in connection with or
arising from:
(i) any breach by Xxxxxxxx or the Xxxxxxxx Sub of, or any other failure
of Xxxxxxxx or the Xxxxxxxx Sub to perform, any of their respective
covenants, agreements or obligations in this Agreement or in any
Xxxxxxxx Ancillary Agreement;
(ii) any breach of any warranty or the inaccuracy of any representation
of Xxxxxxxx or the Xxxxxxxx Sub contained or referred to in this
Agreement or any certificate delivered by or on behalf of Xxxxxxxx or
the Xxxxxxxx Sub pursuant hereto;
(iii) the failure of Xxxxxxxx and the Xxxxxxxx Sub to perform any
Excluded Xxxxx Station Liabilities;
(iv) the failure of Xxxxxxxx and the Xxxxxxxx Sub to perform any of the
Assumed Tribune Station Liabilities;
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provided, however, that Xxxxxxxx shall not be required to indemnify and hold
harmless pursuant to clause (ii) with respect to Loss and Expense incurred by
Tribune or the Tribune Sub until, and then only to the extent that, the
aggregate amount of such Loss and Expense exceeds $1,000,000 and, provided,
further, that the aggregate amount that Xxxxxxxx shall be required to indemnify
and hold harmless pursuant to clause (ii) with respect to Loss and Expense
incurred by Tribune or the Tribune Sub shall not exceed $25,000,000. The
indemnification provided for in this Section 8.2 shall terminate on the
twelve-month anniversary of the Closing Date (and no claims shall be made by
Tribune or the Tribune Sub under this Section 8.2 thereafter), except that the
indemnification by Xxxxxxxx or the Xxxxxxxx Subs shall continue in any event as
to:
(A) any breach of any warranty or the inaccuracy of any
representation of Xxxxxxxx or the Xxxxxxxx Sub contained or referred to
in Sections 3.3 or 3.4, as to all of which no time limitation shall
apply other than the full period of any applicable statute of
limitations;
(B) the covenants of the Xxxxxxxx or the Xxxxxxxx Sub set
forth in Section 5.1, 10.2 or 10.10, as to all of which no time
limitation shall apply other than the full period of any applicable
statute of limitations;
(C) any Loss or Expense incurred by Tribune or the Tribune Sub
in connection with or arising out of the failure of Xxxxxxxx and the
Xxxxxxxx Sub to perform any Excluded Xxxxx Station Liability or any
Assumed Tribune Station Liabilities, as to which no time limitation
shall apply;
(D) any Loss or Expense of which Tribune or the Tribune Subs
has notified Xxxxxxxx in accordance with the requirements of Section
8.3 on or prior to the date such indemnification would otherwise
terminate in accordance with this Section 8.1, as to which the
obligation of Xxxxxxxx shall continue until the liability of Xxxxxxxx
shall have been determined pursuant to this Article VIII, and Xxxxxxxx
shall have reimbursed Tribune or the Tribune Sub for the full amount of
such Loss and Expense in accordance with this Article VIII.
8.3. Notice of Claims. (a) If Tribune and the Tribune Subs
(the "Tribune Entities") or Xxxxxxxx and the Xxxxxxxx Subs (the "Xxxxxxxx
Entities") believes that they have suffered or incurred any Loss or incurred any
Expense, the
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Tribune Entities or the Xxxxxxxx Entities shall so notify the other promptly in
writing describing such Loss or Expense, the amount thereof, if known, and the
method of computation of such Loss or Expense, all with reasonable particularity
and containing a reference to the provisions of this Agreement or other
agreement, instrument or certificate delivered pursuant hereto in respect of
which such Loss or Expense shall have occurred.
If any action at law or suit in equity is instituted by or
against a third party with respect to which the Tribune Entities or the Xxxxxxxx
Entities intend to claim any liability or expense as Loss or Expense under this
Article VIII, the Tribune Entities or the Xxxxxxxx Entities, as the case may be,
shall promptly notify the indemnifying party of such action or suit. The failure
of any party to give any notice required by this Section 8.3 shall not affect
any of such party's rights under this Article VIII except to the extent such
failure is actually prejudicial to the rights or obligations of the other party.
(b) The amount to which an indemnified person shall be
entitled under this Article VIII shall be determined: (i) by written agreement
between Tribune and Xxxxxxxx, (ii) by a final judgment or decree of any court of
competent jurisdiction or (iii) by any other means to which Tribune and Xxxxxxxx
shall agree. The judgment or decree of a court shall be deemed final when the
time for appeal, if any, shall have expired and no appeal shall have been taken
or when all appeals taken have been finally determined. The indemnified party
shall have the burden of proof in establishing the amount of the Loss and
Expense suffered by it.
8.4. Third Party Claims. (a) Subject to paragraph (b) of this
Section 8.4, the party to be indemnified under this Article VIII shall have the
right to conduct and control, through counsel of its choosing, any third party
claim, action or suit, and the party indemnified may compromise or settle the
same, provided that the indemnified party shall give the indemnifying party
advance notice of any proposed compromise or settlement. The indemnified party
shall permit the indemnifying party to participate in the defense of any such
action or suit through counsel chosen by it, provided that the fees and expenses
of such counsel shall be borne by the indemnifying party. Subject to paragraph
(b) of this Section 8.4, any compromise or settlement with respect to a claim
for money damages effected after the indemnifying party by notice to the
indemnified party shall have disapproved such compromise or settlement shall
discharge the indemnifying party from liability with respect to the subject
matter thereof, and no amount in
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respect thereof shall be claimed as Loss or Expense under this
Article VIII.
(b) If the remedy sought in any action or suit referred to in
paragraph (a) of this Section 8.4 is solely money damages and will have no
continuing effect on the business of the indemnified party, the indemnifying
party shall have 15 business days after receipt of the notice referred to in
Section 8.3(a) to notify the indemnified party that it elects to conduct and
control such action or suit. If the indemnifying party does not give the
foregoing notice, the indemnified party shall have the right to defend, contest,
settle or compromise such action or suit in the exercise of its exclusive
discretion, and the indemnifying party shall, upon request from the indemnified
party, promptly pay to the indemnified party in accordance with the other terms
of this Article VIII the amount of any Loss resulting from its liability to the
third party claimant and all related Expense. If the indemnifying party gives
the foregoing notice, the indemnifying party shall have the right to undertake,
conduct and control, through counsel of its own choosing and at the sole expense
of the indemnifying party, the conduct and settlement of such action or suit,
and the indemnified party shall cooperate with the indemnifying party in
connection therewith; provided that (x) the indemnifying party shall not thereby
permit to exist any lien, encumbrance or other adverse charge upon any asset of
the indemnified party; (y) the indemnifying party shall permit the indemnified
party to participate in such conduct or settlement through counsel chosen by the
indemnified party, but the fees and expenses of such counsel shall be borne by
the indemnified party except as provided in clause (z) below; and (z) the
indemnifying party shall agree promptly to reimburse to the extent required
under this Article VIII the indemnified party for the full amount of any Loss
resulting from such action or suit and all related Expense incurred by the
indemnified party, except fees and expenses of counsel for the indemnified party
incurred after the assumption of the conduct and control of such action or suit
by the indemnifying party. So long as the indemnifying party is contesting any
such action or suit in good faith, the indemnified party shall not pay or settle
any such action or suit. Notwithstanding the foregoing, the indemnified party
shall have the right to pay or settle any such action or suit, provided that in
such event the indemnified party shall waive any right to indemnity therefor by
the indemnifying party, and no amount in respect thereof shall be claimed as
Loss or Expense under this Article VIII.
8.5. No Effect on Adjustment. Nothing contained in
this Article VIII shall affect the adjustment provided for in
Section 1.10 and the full amount of the adjustment payment which
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Tribune or Xxxxxxxx, as the case may be, may be entitled to receive thereunder.
8.6. Exclusive Remedy. Any other provisions of this Agreement
to the contrary notwithstanding, from and after the Closing, the sole and
exclusive liability and responsibility of the Tribune Entities to the Xxxxxxxx
Entities, or of the Xxxxxxxx Entities to the Tribune Entities, under or in
connection with this Agreement or the transactions contemplated hereby
(including, without limitation, for any breach or inaccuracy of any
representation or warranty or for any breach of any covenants or for any other
reason), and the sole and exclusive remedy of the Tribune Entities and the
Xxxxxxxx Entities vis-a-vis each other with respect to any of the foregoing,
shall be as set forth in this Article VIII; provided, however, that each party
hereto shall retain all non-monetary equitable remedies available to it in
respect of any breach or alleged breach by any other party of any covenant or
other agreement of such other party contained in or made pursuant to this
Agreement and required to be performed after the Closing Date. To the extent
that a party hereto has any Loss or Expenses for which it may assert any other
right to indemnification, contribution or recovery from the other party hereto
(whether under this Agreement, under common law or any statute or otherwise),
such party with such Loss or Expense hereby waives, releases and agrees not to
assert such right. In furtherance and not in limitation of the foregoing, the
Tribune Entities and the Xxxxxxxx entities agree that their respective rights
and obligations in respect of environmental matters as provided herein shall
supersede any such rights and obligations any of them may have under existing or
future law.
ARTICLE IX
TERMINATION
-----------
9.1. Termination. (a) Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated at any time
prior to the Closing: (i) by the mutual consent of Tribune and Xxxxxxxx; (ii) by
Tribune or Xxxxxxxx if the Xxxxx Merger Agreement shall be terminated; or (iii)
by Tribune or Xxxxxxxx if the Closing shall not have occurred on or before the
later of May 21, 1999 and the date that is 15 days after termination of the time
brokerage agreements referred to in Section 5.4 (or such later date as may be
mutually agreed to by Tribune and Xxxxxxxx).
(b) In the event that this Agreement shall be terminated
pursuant to this Article IX, all further obligations of the parties under this
Agreement (other than Sections 10.2 and
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10.10) shall be terminated without further liability of any party to the other;
provided that nothing herein shall relieve any party from liability for its
breach of this Agreement.
ARTICLE X
GENERAL PROVISIONS
------------------
10.1. Survival of Representations, Warranties and Obligations. All
representations, warranties, covenants and obligations contained in this
Agreement shall survive the consummation of the transactions contemplated by
this Agreement; provided, however, that, except as otherwise provided in Article
VIII, the representations and warranties contained in Articles II and III of
this Agreement (other than the representations and warranties contained in
Sections 2.3, 2.17, 2.24, 3.3, or 3.4) shall terminate on the twelve-month
anniversary of the Closing Date. Except as otherwise provided herein, no claim
shall be made for the breach of any representation or warranty contained in
Article II or III after the date on which such representations and warranties
terminate as set forth in this Section.
10.2. Confidential Nature of Information. Each party agrees that it
will treat in confidence all documents, materials and other information which it
shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated hereby
(whether obtained before or after the date of this Agreement), the investigation
provided for herein and the preparation of this Agreement and other related
documents, and, in the event the transactions contemplated hereby shall not be
consummated, each party will return to the other party all copies of nonpublic
documents and materials which have been furnished in connection therewith. The
obligation of each party to treat such documents, materials and other
information in confidence shall not apply to any information which (a) such
party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is known to the public and did not
become so known through any violation of a legal obligation, (c) became known to
the public through no fault of such party, (d) is later lawfully acquired by
such party from other sources or (e) such party is required to disclose any such
information pursuant to judicial order or, in the opinion of counsel, pursuant
to applicable law. Without limiting the right of either party to pursue all
other legal and equitable rights available to it for violation of this Section
10.2 by the other party, it is agreed that other remedies cannot fully
compensate the aggrieved party for such a violation of this Section 10.2 and
that the aggrieved
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party shall be entitled to injunctive relief to prevent a violation or
continuing violation hereof.
10.3. Governing Law; Venue. This Agreement and the transactions
contemplated hereby shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to its choice of law rules.
10.4. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
when delivered personally or by messenger or 72 hours after having been sent by
registered or certified mail or when delivered by private courier addressed as
follows:
If to Tribune or the Tribune Subs, to:
Tribune Broadcasting Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
with copies to:
Tribune Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
If to the Exchange Party or the Exchange Party
Subs, to:
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxx
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with copies to:
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
and:
Wiley, Rein & Fielding
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxx
or to such other address as such party may indicate by a notice delivered to the
other parties hereto.
10.5. Successors and Assigns. (a) The rights of any party under
this Agreement shall not be assignable by such party hereto prior to the Closing
without the written consent of the other parties hereto.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person other than the parties and successors and
assigns permitted by this Section 10.5 any right, remedy or claim under or by
reason of this Agreement.
10.6. Access to Records after Closing. For a period of six years
after the Closing Date (i) Tribune and its representatives shall have reasonable
access to all of the books and records of the Tribune Station Business
transferred to Xxxxxxxx hereunder to the extent that such access may reasonably
be required by Tribune in connection with matters relating to or affected by the
operations of the Tribune Station Business prior to the Closing Date and (ii)
Xxxxxxxx and its representatives shall have reasonable access to all of the
books and records of the Xxxxx Station Business transferred to the Tribune Sub
hereunder to the extent that such access may reasonably be required by Xxxxxxxx
in connection with matters relating to or affected by the operations of the
Tribune Station Business prior to the Closing Date. Such access shall be
afforded by Tribune or Xxxxxxxx, as the case may be, upon receipt of reasonable
advance notice and during normal business hours. Tribune or Xxxxxxxx, as the
case may be, shall be solely responsible for any costs or expenses incurred by
it pursuant to this Section 10.6. If
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Tribune or Xxxxxxxx, as the case may be, shall desire to dispose of any of such
books and records prior to the expiration of such six-year period, it shall,
prior to such disposition, give the other party a reasonable opportunity, at the
other party's expense, to segregate and remove such books and records as the
other party may select.
For a period of six years after the Closing Date, (i) Tribune
and its representatives shall have reasonable access to all of the books and
records relating to the Xxxxx Station Business which Xxxxxxxx or any of its
Affiliates may retain after the Closing Date and (ii) Xxxxxxxx and its
representatives shall have reasonable access to all of the books and records
relating to the Tribune Station Business which Tribune or any of its Affiliates
may retain after the Closing Date. Such access shall be afforded by Tribune or
Xxxxxxxx, as the case may be, and its Affiliates upon receipt of reasonable
advance notice and during normal business hours. Tribune or Xxxxxxxx, as the
case may be, shall be solely responsible for any costs and expenses incurred by
it pursuant to this Section 10.6. If Tribune or Xxxxxxxx, as the case may be, or
any of its Affiliates shall desire to dispose of any of such books and records
prior to the expiration of such six-year period, Tribune or Xxxxxxxx, as the
case may be, shall, prior to such disposition, give the other party a reasonable
opportunity, at the other party's expense, to segregate and remove such books
and records as the other party may select.
10.7. Entire Agreement; Amendments. This Agreement and the Exhibits
and Schedules referred to herein and the documents delivered pursuant hereto
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements,
understandings or intents between or among any of the parties hereto. The
parties hereto, by mutual agreement in writing, may amend, modify and supplement
this Agreement.
10.8. Interpretation. Article titles and headings to sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement. The
Schedules and Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein.
10.9. Waivers. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. The failure of any party hereto to enforce at
any time any provision of this Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity
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of this Agreement or any part hereof or the right of any party thereafter to
enforce each and every such provision. No waiver of any breach of this Agreement
shall be held to constitute a waiver of any other or subsequent breach.
10.10. Expenses. The Tribune Entities and the Xxxxxxxx Entities
will each pay all of their own respective costs and expenses incident to their
negotiation and preparation of this Agreement and to their performance and
compliance with all agreements and conditions contained herein on their part to
be performed or complied with, including the fees, expenses and disbursements of
their counsel and accountants.
10.11. Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
10.12. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement, and
shall become binding when one or more counterparts have been signed by each of
the parties and delivered to each of Tribune and Xxxxxxxx.
10.13. Definitions. As used in this Agreement, the
following terms have the meanings specified or referred to in
this Section 10.13:
"Affiliate" means, with respect to any person, any other
person which directly or indirectly controls, is controlled by or is under
common control with such person.
"Assumed Xxxxx Station Liabilities" has the meaning
specified in Section 1.6(a).
"Assumed Tribune Station Liabilities" has the meaning
specified in Section 1.5(a).
"Closing" has the meaning specified in Section 1.7.
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"Closing Date" has the meaning specified in
Section 1.7.
"Closing Date Xxxxx Station Working Capital Amount"
means the following:
(a) all cash and cash equivalents (including any marketable
securities or certificates of deposit) reflected on the Xxxxx Station Closing
Date Balance Sheet; plus
(b) all accounts receivable generated by the Xxxxx Station
Business, less the allowance for doubtful accounts, reflected on the Xxxxx
Station Closing Date Balance Sheet; plus
(c) the amount of inventory (exclusive of any amounts relating
to programming or broadcast rights) reflected on the Xxxxx Station Closing Date
Balance Sheet; plus
(d) the amount of other current assets (exclusive of any
amounts relating to programming or broadcast rights) reflected on the Xxxxx
Station Closing Date Balance Sheet; minus
(e) the amount of accounts payable and accrued equipment
rentals of the Xxxxx Station reflected on the Xxxxx Station Closing Date Balance
Sheet; minus
(f) the amount of accrued salary, payroll and wages and
accrued sick pay reflected on the Xxxxx Station Closing Date Balance Sheet;
minus
(g) the amount of any accrued accounting fees or expenses
reflected on the Xxxxx Station Closing Date Balance Sheet; minus
(h) the amount of any other accrued current liabilities
reflected on the Xxxxx Station Closing Date Balance Sheet; minus
(i) the amount of any accrued Taxes reflected on the Xxxxx
Station Closing Date Balance Sheet (other than federal, state and local income
Taxes).
It is expressly understood and agreed that, notwithstanding the foregoing, for
purposes of calculating the Closing Date Xxxxx Station Working Capital Amount
there shall not be included in the assets of the Xxxxxxxx Sub as of the Closing
Date any amounts in respect of Excluded Xxxxxxxx Assets or amounts relating to
the programming or broadcast contracts and there shall not be included in the
liabilities of the Xxxxxxxx Sub as of the Closing
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Date any amounts in respect of Excluded Xxxxx Station Liabilities or amounts
relating to programming or broadcast contracts; provided, however, that the
calculation of the Closing Date Xxxxx Station Working Capital Amount shall, for
all other amounts, be made in accordance with generally accepted accounting
principles consistently applied.
"Closing Date Tribune Station Working Capital Amount"
means the following:
(a) all cash and cash equivalents (including any marketable
securities or certificates of deposit) reflected on the Tribune Station Closing
Date Balance Sheet; plus
(b) all accounts receivable generated by the Tribune Station
Business, less the allowance for doubtful accounts, reflected on the Tribune
Station Closing Date Balance Sheets; plus
(c) the amount of inventory (exclusive of any amounts relating
to programming or broadcast rights) reflected on the Tribune Station Closing
Date Balance Sheets; plus
(d) the amount of other current assets (exclusive of any
amounts relating to programming or broadcast rights) reflected on the Tribune
Station Closing Date Balance Sheets; minus
(e) the amount of accounts payable and accrued equipment
rentals of the Tribune Stations reflected on the Tribune Station Closing Date
Balance Sheets; minus
(f) the amount of accrued salary, payroll and wages and
accrued sick pay reflected on the Tribune Station Closing Date Balance Sheets;
minus
(g) the amount of any accrued accounting fees or expenses
reflected on the Tribune Station Closing Date Balance Sheets; minus
(h) the amount of any other accrued current liabilities
reflected on the Tribune Station Closing Date Balance Sheets; minus
(i) the amount of any accrued Taxes reflected on the Tribune
Station Closing Date Balance Sheets (other than federal, state and local income
Taxes).
It is expressly understood and agreed that, notwithstanding the
foregoing, for purposes of calculating the Tribune Station
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Closing Date Working Capital Amount there shall not be included in the assets of
the Tribune Subs as of the Closing Date any amounts in respect of Excluded
Tribune Assets or amounts relating to programming or broadcast contracts and
there shall not be included in the liabilities of the Tribune Subs as of the
Closing Date any amounts in respect of Excluded Tribune Station Liabilities or
amounts relating to programming or broadcast contracts provided; provided,
however, that the calculation of the Closing Date Tribune Station Working
Capital Amount shall, for all other amounts, be made in accordance with
generally accepted accounting principles consistently applied.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Communications Act" means the Communications Act of
1934, as amended.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
"Encumbrance" means any lien, claim, charge, security
interest, mortgage, pledge, easement, conditional sale or other title retention
agreement, defect in title, covenant or other restrictions of any kind.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"Estimated Closing Date Xxxxx Station Working Capital
Amount" has the meaning specified in Section 1.8.
"Estimated Closing Date Tribune Station Working Capital
Amount" has the meaning specified in Section 1.8.
"Excluded Xxxxx Station Liabilities" has the meaning
specified in Section 1.6(b).
"Excluded Xxxxxxxx Assets" has the meaning specified in
Section 1.4.
"Excluded Tribune Assets" has the meaning specified in
Section 1.2.
"Excluded Tribune Station Liabilities" has the meaning
specified in Section 1.5(b).
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"Expense" means any and all expenses incurred in connection
with investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs, witness
fees, and reasonable fees and disbursements of legal counsel, investigators,
expert witnesses, consultants, accountants and other professionals).
"FCC" means the Federal Communications Commission.
"Governmental Body" means any foreign, federal, state, local
or other governmental authority or regulatory body.
"Improvements Act" means the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended.
"Initial Xxxxx Station Balance Sheet" has the meaning
specified in Section 1.10(a).
"Initial Tribune Station Balance Sheets" has the
meaning specified in Section 1.10(a).
"Xxxxx Station" has the meaning specified in the second
recital hereof.
"Xxxxx Station Assets" has the meaning specified in
Section 1.3.
"Xxxxx Station Business" has the meaning specified in
Section 1.3.
"Xxxxx Station Closing Date Balance Sheet" has the
meaning specified in Section 1.10(c).
"Xxxxx Station FCC Authorizations" means those Xxxxx Station
Governmental Permits issued by the FCC.
"Liabilities and Costs" means all liabilities, investigations,
responsibilities, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including, without limitation, attorney,
expert and consulting fees and expenses, costs of investigation and feasibility
studies), fines, penalties and monetary sanctions, interest, direct or indirect,
known or unknown, absolute or contingent, past, present or future.
"Loss" means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines, penalties, damages,
expenses, deficiencies or other charges.
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"Xxxxxxxx" has the meaning specified in the
introductory paragraph hereof.
"Xxxxxxxx Ancillary Agreements" has the meaning
specified in Section 3.3(a).
"Xxxxxxxx Deposit Amount" has the meaning specified in
Section 1.11.
"Xxxxxxxx Deposit Breach" has the meaning specified in
Section 1.11.
"Xxxxxxxx Entities" has the meaning specified in
Section 8.3.
"Xxxxxxxx Sub" has the meaning specified in the
introductory paragraph hereof.
"Permitted Encumbrance" means (a) liens for Taxes, assessments
or other governmental charges which are not yet due and payable (b) easements,
servitudes, rights-of-way, covenants, consents, conditions, reservations,
encroachments, minor defects or irregularities in title, variations and other
restrictions affecting the use of any real property listed as included in the
Tribune Station Assets or the Xxxxx Station Assets, as the case may be, or the
leased real property included in the Tribune Station Assets or the Xxxxx Station
Assets, as the case may be, which in the aggregate do not materially impair the
use of such Tribune Station Asset or Xxxxx Station Asset, as the case may be,
for the purposes for which it is or may reasonably be expected to be held and
(c) the personal property leases included in the Tribune Station Assets or the
Xxxxx Station Assets, as the case may be, and the intellectual property licenses
included in the Tribune Station Assets or the Xxxxx Station Assets, as the case
may be.
"Person" means any person, employee, individual, corporation,
partnership, trust, or any other non-governmental entity or any governmental or
regulatory authority or body.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any property,
including the movement of Contaminants through or in the air, soil, surface
water, groundwater or property.
"Remedial Action" means actions required to (a) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (b) prevent the Release or threat
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of Release or minimize the further Release of Contaminants so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment: or (c) perform pre-remedial studies and
investigations and postremedial monitoring and care.
"Requirements of Law" means any foreign, federal, state or
local law, rule or regulation, Tribune Station Governmental Permit or Xxxxx
Station Governmental Permit, as the case may be, or other binding determination
of any Governmental Body.
"Resolution Period" has the meaning specified in
Section 1.10(c).
"Tax" means any federal, state, local or foreign net income,
alternative or add-on minimum, gross income, gross receipts, property, sales,
use, transfer, gains, license, excise, employment, payroll, withholding or
minimum tax, or any other tax custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any Governmental Body.
"Tribune" has the meaning specified in the introductory
paragraph hereof.
"Tribune Ancillary Agreements" has the meaning
specified in Section 2.3.
"Tribune Deposit Amount" has the meaning specified in
Section 1.11.
"Tribune Deposit Breach" has the meaning specified in
Section 1.11.
"Tribune Entities" has the meaning specified in Section
8.3.
"Tribune Station" has the meaning specified in the
first recital hereof.
"Tribune Station Agreements" has the meaning specified
in Section 2.21.
"Tribune Station Assets" has the meaning specified in
Section 1.1.
"Tribune Station Balance Sheet" has the meaning
specified in Section 2.4.
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"Tribune Station Business" has the meaning specified in
Section 1.1.
"Tribune Station Closing Date Balance Sheet" has the
meaning specified in Section 1.10(c).
"Tribune Station Governmental Permits" has the meaning
specified in Section 2.9(a).
"Tribune Station FCC Authorizations" means those Tribune
Station Governmental Permits issued by the FCC other than those listed on
Schedule 2.9(A)(2).
"Tribune Sub" has the meaning specified in the
introductory paragraph hereof.
10.14. Exchange Groups. No earlier than 60 days prior to the
Closing Date, Tribune and Xxxxxxxx shall prepare a schedule (the "Exchange Group
Schedule"), in accordance with the like-kind exchange rules covering exchanges
of multiple properties under Treas. Reg. ss. 1.1031(j)-1, which divides the
Tribune Station Assets and the Xxxxx Station Assets, by owners, types and
estimated values of assets as of the Closing Date, into "exchange groups" as
required by such regulation. For book and tax purposes, Tribune and the Tribune
Subs, and Xxxxxxxx and the Xxxxxxxx Subs, shall report the exchange of assets
pursuant to this Agreement consistently with the Exchange Group Schedule.
10.15. Allocation Schedule. Tribune shall have the right to
coordinate Meredith's allocation of the KTC Purchase Price (as such term is
defined in the Xxxxx Merger Agreement) pursuant to Section 8.08 of the Xxxxx
Merger Agreement. In no event shall Xxxxxxxx deliver the proposed allocation or
agree to a final allocation without the prior written consent of Tribune.
10.16. Board Approval. Notwithstanding anything herein to the
contrary, the execution and delivery of this Agreement by the parties hereto is
subject to the approval of this Agreement by the Board of Directors of Tribune.
Tribune hereby covenants to promptly and in any case no later than 10:00 A.M.
local time on Monday, August 24, 1998, convene a meeting of its Board of
Directors to consider this Agreement and to promptly notify Xxxxxxxx of the
outcome of such meeting. In the event (i) the Board of Directors of Tribune
disapproves this Agreement prior to 4:00 p.m. Eastern Time on Monday, August 24,
1998 and Tribune so notifies Xxxxxxxx or (ii) notice of an approval of this
Agreement by the Board of Directors of Tribune is not delivered to Xxxxxxxx by
4:00 p.m. Eastern Time on Monday, August 24, 1998 and Meredith elects to
terminate this Agreement and
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delivers written notice thereof to Tribune by 5:00 p.m. Eastern Time on Monday,
August 24, 1998, then in either such case this Agreement shall thereupon
terminate without liability on the part of any party (except for breach of its
obligations under this Section 10.16).
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
TRIBUNE BROADCASTING COMPANY
By: /s/ Gerald W. Agema
Its: Vice President
WGNX INC.
By: /s/ Crane Kenney
Its: Secretary
MEREDITH CORPORATION
By: /s/ John P. Loughlin
Its: President, Meredith
Broadcasting
KCPQ ACQUISITION CORP.
By: /s/ Stephen M. Lacey
Its: Vice President
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Exhibit A
---------
Undertaking and Assumption
--------------------------
Undertaking and Assumption dated __________, 199_ by WGNX
Inc., a Delaware corporation ("WGNX") in favor of each of Meredith Corporation,
an Iowa corporation ("Meredith"), and KCPQ Acquisition Corp., a Washington
corporation ("Meredith Sub").
WITNESSETH:
-----------
WHEREAS, pursuant to the Asset Exchange Agreement dated as of
August 21, 1998 (the "Agreement") among Meredith, the Meredith Sub, Tribune
Broadcasting Company, a Delaware corporation, and WGNX, Meredith Sub is
concurrently herewith assigning, transferring, conveying and delivering to WGNX
the Kelly Station Assets (as defined in the Agreement); and
WHEREAS, in partial consideration for such assignment,
transfer, conveyance and delivery of the Kelly Station Assets, the Agreement
requires WGNX to assume and agree to discharge certain obligations and
liabilities of Meredith and the Meredith Sub;
NOW, THEREFORE, pursuant to the terms of the Agreement and for
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, WGNX hereby assumes and undertakes and agrees to pay, perform,
defend and discharge in accordance with the terms thereof each of the Assumed
Kelly Station Liabilities (as defined in the Agreement).
This Undertaking and Assumption shall inure to the benefit of
and be binding upon the successors and assigns of the Meredith Sub and WGNX.
IN WITNESS WHEREOF, WGNX has caused this Undertaking and
Assumption to be duly executed and delivered as of the date first set forth
above.
WGNX INC.
By: _______________________________
Its: _____________________________
1
Exhibit B
---------
Undertaking and Assumption
--------------------------
Undertaking and Assumption dated __________, 199_ by KCPQ
Acquisition Corp., a Washington corporation ("Meredith Sub"), in favor of WGNX
Inc., a Delaware corporation ("WGNX").
WITNESSETH:
-----------
WHEREAS, pursuant to the Asset Exchange Agreement dated as of
August 21, 1998 (the "Agreement") among Meredith Corporation, an Iowa
corporation, the Meredith Sub, Tribune Broadcasting Company, a Delaware
corporation, and WGNX, WGNX is concurrently herewith assigning, transferring,
conveying and delivering to the Meredith Sub the Tribune Station Assets (as
defined in the Agreement); and
WHEREAS, in partial consideration for such assignment,
transfer, conveyance and delivery of the Tribune Station Assets, the Agreement
requires the Meredith Sub to assume and agree to discharge certain obligations
and liabilities of WGNX;
NOW, THEREFORE, pursuant to the terms of the Agreement and for
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Meredith Sub hereby assumes and undertakes and agrees to pay,
perform, defend and discharge in accordance with the terms thereof each of the
Assumed Tribune Station Liabilities (as defined in the Agreement).
This Undertaking and Assumption shall inure to the benefit of
and be binding upon the successors and assigns of the Meredith Sub and WGNX.
IN WITNESS WHEREOF, the Meredith Sub has caused this
Undertaking and Assumption to be duly executed and delivered as of the date
first set forth above.
KCPQ ACQUISITION CORP.
By: _______________________________
Its: _____________________________
1
Exhibit C
---------
Bill of Sale and Assignment
---------------------------
Pursuant to the Asset Exchange Agreement dated as of August
21, 1998 (the "Agreement"), among Meredith Corporation, an Iowa corporation,
KCPQ Acquisition Corp., a Washington corporation (the "Meredith Sub"), Tribune
Broadcasting Company, a Delaware corporation, and WGNX Inc., a Delaware
corporation ("WGNX"), for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, WGNX does hereby assign, transfer,
convey and deliver unto the Meredith Sub, its successors and assigns, on a going
concern basis, each and all of the Tribune Station Assets (as defined in the
Agreement), intending hereby to convey all of the right, title and interest of
WGNX therein (it being understood, however, that any real property described in
Schedule 2.10 of the Agreement being conveyed by WGNX to the Meredith Sub is
being so conveyed pursuant to separate instruments of conveyance); provided,
however, as to any lease, contract, agreement, instrument, commitment, permit or
other authorization included in the Tribune Station Assets which cannot be sold,
transferred, assigned, conveyed or delivered effectively without the consent of
a third party, which consent has not been obtained, this Bill of Sale and
Assignment shall be of no force or effect until such requisite consent is
obtained, whereupon this instrument shall become of full force and effect with
respect thereto.
WGNX hereby covenants and agrees to and with the Meredith Sub,
its successors and assigns, to do, execute, acknowledge and deliver to, or to
cause to be done, executed, acknowledged and delivered to, the Meredith Sub, its
successors and assigns, all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances that may be reasonably requested
by the Meredith Sub for the better assigning, transferring, conveying,
delivering, assuring and confirming to the Meredith Sub; its successors or
assigns, or for aiding and assisting in collecting or reducing to the Meredith
Sub's possession, any or all of the Tribune Station Assets.
This Bill of Sale and Assignment shall be binding upon the
successors and assigns of WGNX and shall inure to the benefit of the successors
and assigns of the Meredith Sub.
1
IN WITNESS WHEREOF, WGNX has caused this Bill of Sale and
Assignment to be duly executed and delivered this _____ day of _______________,
199_.
WGNX INC.
By: _______________________________
Its: ______________________________
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Exhibit D
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Bill of Sale and Assignment
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Pursuant to the Asset Exchange Agreement dated as of August
21, 1998 (the "Agreement"), among Meredith Corporation, an Iowa corporation,
KCPQ Acquisition Corp., a Washington corporation (the "Meredith Sub"), Tribune
Broadcasting Company, a Delaware corporation, and WGNX Inc., a Delaware
corporation ("WGNX"), for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Meredith Sub does hereby
assign, transfer, convey and deliver unto WGNX, its successors and assigns, on a
going concern basis, each and all of the Kelly Station Assets (as defined in the
Agreement), intending hereby to convey all of the right, title and interest of
the Meredith Sub therein (it being understood, however, that any real property
being conveyed by the Meredith Sub to WGNX is being so conveyed pursuant to
separate instruments of conveyance); provided, however, as to any lease,
contract, agreement, instrument, commitment, permit or other authorization
included in the Kelly Station Assets which cannot be sold, transferred,
assigned, conveyed or delivered effectively without the consent of a third
party, which consent has not been obtained, this Bill of Sale and Assignment
shall be of no force or effect until such requisite consent is obtained,
whereupon this instrument shall become of full force and effect with respect
thereto.
The Meredith Sub hereby covenants and agrees to and with WGNX,
its successors and assigns, to do, execute, acknowledge and deliver to, or to
cause to be done, executed, acknowledged and delivered to, WGNX, its successors
and assigns, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances that may be reasonably requested by WGNX for
the better assigning, transferring, conveying, delivering, assuring and
confirming to WGNX; its successors or assigns, or for aiding and assisting in
collecting or reducing to WGNX's possession, any or all of the Kelly Station
Assets.
This Bill of Sale and Assignment shall be binding upon the
successors and assigns of the Meredith Sub and shall inure to the benefit of the
successors and assigns of WGNX.
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IN WITNESS WHEREOF, the Meredith Sub has caused this Bill of
Sale and Assignment to be duly executed and delivered this _____ day of
_______________, 199_.
KCPQ ACQUISITION CORP.
By: _______________________________
Its: ______________________________
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EXHIBIT E
[Opinion of General Counsel for Meredith and the Meredith Sub]
Ladies and Gentlemen:
Reference is made to the Asset Exchange Agreement dated as of
August 21, 1998 (the "Agreement") among Tribune Broadcasting Company, a Delaware
corporation ("Tribune"), WGNX Inc., a Delaware corporation (the "Tribune Sub"),
Meredith Corporation, an Iowa corporation ("Meredith"), and KCPQ Acquisition
Corp., a Washington corporation (the "Meredith Sub"), relating to the exchange
of Television Broadcast Station WGNX-TV, Channel 46, in Atlanta, Georgia for
Television Broadcast Station KCPQ, Channel 13, in Seattle, Washington. I have
acted as counsel for Meredith and the Meredith Sub in connection with the
Agreement and the transactions contemplated thereby. Terms used herein and not
defined shall have the respective meanings set forth in the Agreement.
Responsive to the requirement of Section 1.9(a) of the
Agreement, I am of the opinion that:
1. Each of Meredith and the Meredith Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and has requisite corporate power and authority to execute
and deliver, and to perform its obligations under the Agreement and the Meredith
Ancillary Agreements to which it is a party and to consummate the transactions
contemplated thereby and to comply with the terms, conditions and provisions
thereof.
2. The Agreement and the Meredith Ancillary Agreements have
been duly authorized, executed and delivered by Meredith and the Meredith Sub
and constitute the legal, valid and binding agreements of Meredith and the
Meredith Sub enforceable against Meredith and the Meredith Sub, except as such
enforceability may be limited by applicable bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of
creditors' rights generally, including fraudulent conveyances, and by the effect
of general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3. Neither the execution and delivery by Meredith and the
Meredith Sub of the Agreement or the Meredith Ancillary Agreements, nor the
performance by each of Meredith and the Meredith Sub of its respective
obligations under the Agreement or the Meredith Ancillary Agreements in
accordance with their respective terms (a) conflict with or result in the breach
of the terms, conditions or provisions of, the charter or bylaws of Meredith or
the Meredith Sub or, to the best of my knowledge, any judgment, order, award or
decree to which Meredith or the Meredith Sub is a party or any of the Kelly
Station Assets is subject or by which Meredith or the Meredith Sub is bound or
(b) requires the further approval, consent or authorization of, or the further
making of any declaration, filing or registration with, any
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federal, state or local court, governmental authority or regulatory body, except
as provided in Schedule 3.3 to the Agreement.
4. Except as set forth in Annex A hereto, to the best of my
knowledge, there is no action, suit, proceeding, claim or investigation pending
or threatened against Meredith or the Meredith Sub before any federal, state or
local court, governmental authority or regulatory body (a) in respect of the
Kelly Station Assets or the Kelly Station Business or (b) which questions the
legality, validity or propriety of the Agreement or the consummation of the
transactions contemplated thereby.
In rendering the opinions expressed above, I have relied, as
to various questions of fact material to such opinions, upon the representations
made in the Agreement and upon certificates of officers of Meredith and the
Meredith Sub. I have also examined originals, or copies of originals certified
to my satisfaction, of such agreements, documents, certificates and other
statements of government officials and corporate officers and other instruments,
have examined such questions of law and have satisfied myself as to such matters
of fact as I have deemed relevant and necessary as a basis for this opinion. I
have assumed the authenticity of all documents submitted to me as originals, the
conformity with the original documents of any copies thereof submitted to us for
my examination and the authenticity of the originals of any such copies, the
genuineness of all signatures and the legal capacity of all natural persons.
I express no opinion herein with respect to the laws of any
jurisdiction other than the laws of the State of Iowa, the State of Washington
and the federal laws of the United States.
Very truly yours,
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EXHIBIT F
[Opinion of Counsel Sidley & Austin]
Ladies and Gentlemen:
Reference is made to the Asset Exchange Agreement dated as of
August 21, 1998 (the "Agreement") among Tribune Broadcasting Company, a Delaware
corporation ("Tribune"), WGNX Inc., a Delaware corporation (the "Tribune Sub"),
Meredith Corporation, an Iowa corporation ("Meredith"), KCPQ Acquisition Corp.,
a Washington corporation (the "Meredith Sub"), relating to the exchange of
Television Broadcast Station WGNX-TV, Channel 46, in Atlanta, Georgia for
Television Broadcast Station KCPQ, Channel 13, in Seattle, Washington. We have
acted as special counsel for Tribune and the Tribune Sub in connection with the
Agreement and the transactions contemplated thereby. Terms used herein and not
defined shall have the respective meanings set forth in the Agreement.
Responsive to the requirement of Section 1.9(b) of the
Agreement, we are of the opinion that:
1. Each of Tribune and the Tribune Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and has requisite corporate power and authority to execute
and deliver, and to perform its obligations under the Agreement and the Tribune
Ancillary Agreements to which it is a party and to consummate the transactions
contemplated thereby and to comply with the terms, conditions and provisions
thereof.
2. The Agreement and the Tribune Ancillary Agreements have
been duly authorized, executed and delivered by Tribune and the Tribune Sub and
constitute the legal, valid and binding agreements of Tribune and the Tribune
Sub enforceable against Tribune and the Tribune Sub, except as such
enforceability may be limited by applicable bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of
creditors' rights generally, including fraudulent conveyances, and by the effect
of general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3. Neither the execution and delivery by Tribune and the
Tribune Sub of the Agreement or the Tribune Ancillary Agreements, nor the
performance by each of Tribune and the Tribune Sub of its respective obligations
under the Agreement or the Tribune Ancillary Agreements in accordance with their
respective terms (a) conflict with or result in the breach of the terms,
conditions or provisions of, the charter or bylaws of Tribune or the Tribune Sub
or, to the best of our knowledge, any judgment, order, award or decree to which
Tribune or the Tribune Sub is a party or any of the Tribune Station Assets is
subject or by which Tribune or the Tribune Sub is bound or (b) requires the
further approval, consent or authorization of, or the further making of any
declaration, filing or registration with, any federal, state or local
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court, governmental authority or regulatory body, except as provided in Schedule
2.3 to the Agreement.
4. Except as set forth in Schedule 2.22 to the Agreement or as
set forth in Attachment A hereto, to the best of our knowledge, there is no
action, suit, proceeding, claim or investigation (a) pending or threatened
against Tribune or the Tribune Sub before any federal, state or local court,
governmental authority or regulatory body (a) in respect of the Tribune Station
Assets or the Tribune Station Business or (b) which questions the legality,
validity or propriety of the Agreement or the consummation of the transactions
contemplated thereby.
In rendering the opinions expressed above, we have relied, as
to various questions of fact material to such opinions, upon the representations
made in the Agreement and upon certificates of officers of Tribune and the
Tribune Sub. We have also examined originals, or copies of originals certified
to our satisfaction, of such agreements, documents, certificates and other
statements of government officials and corporate officers and other instruments,
have examined such questions of law and have satisfied ourselves as to such
matters of fact as we have deemed relevant and necessary as a basis for this
opinion. We have assumed the authenticity of all documents submitted to us as
originals, the conformity with the original documents of any copies thereof
submitted to us for our examination and the authenticity of the originals of any
such copies, the genuineness of all signatures and the legal capacity of all
natural persons.
We express no opinion herein with respect to the laws of any
jurisdiction other than the laws of the General Corporation Law of the State of
Delaware and the federal laws of the United States.
Very truly yours,
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