1
EXHIBIT 10.2
================================================================================
CONTRIBUTION AGREEMENT
Among
The Times Mirror Company,
Candle Holdings Corporation,
Fortify Holdings Corporation,
Xxxxxxx Xxxxxx & Company, Incorporated,
Xxxxx-Year Book, Inc.,
Newsday, Inc.,
The Hartford Courant Company,
The Baltimore Sun Company,
Xxxxxxxx Trust Xx. 0,
Xxxxxxxx Xxxxx Xx. 0,
and
TMCT, LLC
Dated August 8, 1997
================================================================================
2
TABLE OF CONTENTS
RECITALS.................................................................................1
1. DEFINITIONS...........................................................................1
2. THE CLOSING...........................................................................2
3. CONTRIBUTION OF ASSETS................................................................2
3.1 Contribution of Securities Assets by Trust 1.................................2
3.2 Contribution of Securities Assets by Trust 2.................................2
3.3 Contribution of Cash Asset and Real Estate Assets by the TMC Members.........2
3.4 Securities Assets Contributed Ex-Dividend....................................3
3.5 No Liabilities...............................................................3
4. VALUE OF ASSETS.......................................................................3
4.1 Trust 1 Securities Assets....................................................3
4.2 Trust 2 Securities Assets....................................................3
4.3 Real Estate Assets...........................................................3
4.4 Cash Asset...................................................................3
4.5 Instruments of Conveyance and Transfer.......................................4
4.6 Taxes........................................................................4
5. LEASE OF REAL ESTATE ASSETS...........................................................4
5.1 Leaseback....................................................................4
6. REPRESENTATIONS AND WARRANTIES RELATING TO THE TMC MEMBERS............................4
6.1 Organization, Corporate Power and Authority..................................4
6.2 Authorization of Agreements..................................................4
6.3 No Conflicts.................................................................5
6.4 Effect of Agreement..........................................................5
6.5 Assets; Real Property........................................................5
6.6 Commissions..................................................................7
7. REPRESENTATIONS AND WARRANTIES OF TRUST 1.............................................7
7.1 Authorization of Agreement...................................................7
7.2 No Conflicts.................................................................8
7.3 Effect of Agreement..........................................................8
7.4 Title to Trust 1's Securities Assets.........................................8
7.5 Commissions..................................................................8
7.6 Investment Company...........................................................8
7.7 No Registration; Investment Intent...........................................9
7.8 Issuance of Preferred Stock..................................................9
8. REPRESENTATIONS AND WARRANTIES OF TRUST 2.............................................9
8.1 Authorization of Agreement...................................................9
8.2 No Conflicts................................................................10
8.3 Effect of Agreement.........................................................10
8.4 Title to Trust 2's Securities Assets........................................10
i
3
8.5 Commissions.................................................................10
8.6 Investment Company..........................................................10
8.7 No Registration; Investment Intent..........................................10
8.8 Issuance of Preferred Stock.................................................11
9. REPRESENTATIONS AND WARRANTIES OF LLC................................................11
9.1 Organization, Corporate Power and Authority.................................11
9.2 Authorization of Agreements.................................................11
9.3 No Conflicts................................................................11
9.4 Effect of Agreement.........................................................12
9.5 Commissions.................................................................12
9.6 Issuance of Preferred Stock.................................................12
10. CONDITIONS..........................................................................12
10.1 Conditions to Obligations of the Parties...................................12
10.1.1 Execution of the LLC and Registration Rights Agreements...........12
10.1.2 Consummation of Merger............................................12
10.2 Conditions to Obligations of the TMC Members...............................12
10.2.1 Opinion...........................................................12
10.2.2 Board Approval....................................................12
10.3 Conditions to Obligations of the Trusts....................................13
10.3.1 Opinion...........................................................13
11. TERMINATION.........................................................................13
11.1 Termination by Mutual Consent..............................................13
11.2 Termination by TMC or the Trusts...........................................13
11.2.1 TMC Termination...................................................13
11.2.2 Trust Termination.................................................13
12. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATIONS.......................................13
12.1 Survival of Representations................................................13
12.2 Agreements to Indemnify....................................................14
12.2.1 Trust 1 Indemnity.................................................14
12.2.2 Trust 2 Indemnity.................................................14
12.2.3 TMC Indemnity.....................................................14
12.2.4 LLC Indemnity.....................................................14
12.2.5 Indemnification Threshold.........................................14
12.2.6 Subrogation.......................................................15
12.3 Conditions of Indemnification..............................................15
12.3.1 Notice............................................................15
12.3.2 Failure to Assume Defense.........................................15
12.3.3 Claim Adverse to Indemnifying Party...............................15
12.3.4 Cooperation.......................................................16
12.4 Damages....................................................................16
12.4.1 Costs of Remediation and Removal of Hazardous Substances..........16
13. COVENANTS...........................................................................16
13.1 Cooperation................................................................16
13.2 Tax Cooperation............................................................16
14. MISCELLANEOUS.......................................................................17
ii
4
14.1 Waivers....................................................................17
14.2 Entire Agreement...........................................................17
14.3 Binding Effect, Benefits...................................................17
14.4 Assignability..............................................................17
14.5 Notices....................................................................17
14.6 Governing Law; Jurisdiction................................................18
14.7 Attorneys' Fees............................................................18
14.8 Rules of Construction......................................................18
14.8.1 Headings..........................................................19
14.8.2 Tense and Case....................................................19
14.8.3 Severability......................................................19
14.9 Counterparts...............................................................19
14.10 Expenses..................................................................19
14.11 Construction of Agreement.................................................19
14.12 Consent to Jurisdiction and Forum Selection...............................19
iii
5
Exhibits
Exhibit A LLC Agreement
Schedules
---------
Schedule 3.1 Securities Assets of Trust 1
Schedule 3.2 Securities Assets of Trust 2
Schedule 3.3.1 Real Estate Assets of TMC
Schedule 3.3.2 Real Estate Assets of TMC Operating Companies
Schedule 4.1 Trust 1 Gross Asset Values
Schedule 4.2 Trust 2 Gross Asset Values
Schedule 4.3.1 Appraised Value of Real Estate Assets of TMC
Schedule 4.3.2 Appraised Value of Real Estate Assets of TMC Operating
Companies
Schedule 6.5.1 Title to Real Estate Assets
iv
6
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (together with the exhibits and schedules
hereto, the "Agreement") is entered into as of August 8, 1997 by and among (i)
The Times Mirror Company, a Delaware corporation ("TMC"); (ii) Candle Holdings
Corporation, a Delaware corporation ("Sub 1"); (iii) Fortify Holdings
Corporation, a Delaware corporation ("Sub 2"); (iv) Xxxxxxx Xxxxxx & Company,
Incorporated, a New York corporation; (v) Xxxxx-Year Book, Inc., a Missouri
corporation; (vi) Newsday, Inc., a New York corporation; (vii) The Hartford
Courant Company, a Connecticut corporation; (viii) The Baltimore Sun Company, a
Maryland corporation (collectively with the companies listed in (iv) through
(vii), the "TMC Operating Companies" and collectively with TMC, Sub 1 and Sub 2,
the "TMC Members"); (ix) Xxxxxxxx Trust No. 1 ("Trust 1"); (x) Xxxxxxxx Trust
Xx. 0 ("Xxxxx 0," and together with Trust 1, the "Trusts") and (xi) TMCT, LLC, a
Delaware limited liability company ("LLC"), with reference to the following
facts:
RECITALS
A. The Trusts and the TMC Members intend to form the LLC pursuant to the
Limited Liability Company Agreement of LLC substantially in the form attached
hereto as Exhibit A (the "LLC Agreement").
B. Under the LLC Agreement, TMC is obligated to contribute to LLC, as a
capital contribution, cash in the amount of $247,265,700.50 million (the "TMC
Cash Asset"), and a portion of the assets referred to herein as the Real Estate
Assets, the TMC Operating Companies are to contribute to LLC, as a capital
contribution, the remainder of the Real Estate Assets, and Sub 1 and Sub 2 are
obligated to contribute to LLC, as a capital contribution, cash in the amount of
$1 million each (collectively, the "Subs Cash Asset" and collectively with the
TMC Cash Asset, the "Cash Asset").
C. Under the LLC Agreement, the Trusts are obligated to contribute to
LLC, as a capital contribution, certain assets referred to herein as the
Securities Assets.
NOW, therefore, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
1. DEFINITIONS.
Unless otherwise indicated herein, capitalized terms used herein shall
have their respective meanings set forth in the LLC Agreement. In addition, the
following terms shall have the following meanings when used in this Agreement:
"Assets" shall mean the Cash Asset, the Real Estate Assets and the
Securities Assets.
"Cash Asset" shall have the meaning set forth in the Recitals hereto.
"Closing" shall have the meaning set forth in Section 2.
"Encumbrance" shall mean all title defects, objections, liens,
mortgages, pledges, charges, security interests, encumbrances, leases, options
to purchase, rights of first refusal, material restrictions or adverse claims of
any nature whatsoever.
"Indemnified Party" shall mean, with respect to any Losses, the party
seeking indemnity hereunder.
1
7
"Indemnifying Party" shall mean, with respect to any Losses, the party
from whom indemnity is being sought hereunder.
"Lease Agreement" shall mean the leases described in Section 5.1 hereof.
"Losses" shall mean any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, remedies and penalties (including,
without limitation, interest, penalties, settlement costs and any legal,
accounting or other fees and expenses for investigating and/or defending any
claims or threatened actions) incurred by the Indemnified Party.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, prospects, condition (financial or otherwise) or results of
operations of the person or entity to which reference is made. If such person or
entity has subsidiaries, such determination shall be made on a consolidated
basis.
"Merger Agreement" shall mean that certain Agreement and Plan of Merger,
dated as of August 8, 1997, by and among TMC, Chandis Acquisition Corporation,
Chandis Securities Company ("CSC") and the shareholders of CSC.
"Real Estate Assets" shall mean the real property described on Schedules
3.3.1 and 3.3.2 hereof, all buildings, fixtures and improvements of every nature
thereon, and all easements, claims and other rights appurtenant thereto.
"Securities Assets" shall mean the Trust 1 Securities Assets and the
Trust 2 Securities Assets.
"Trust 1 Securities Assets" shall have the meaning set forth in Section
3.1.
"Trust 2 Securities Assets" shall have the meaning set forth in Section
3.2.
2. THE CLOSING. Upon the satisfaction or waiver of all conditions set
forth in Article 10 of this Agreement, the closing (the "Closing") of the
contribution of assets to the LLC contemplated hereby shall take place at the
offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 X. Xxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, at 5:00 p.m. on August 8, 1997, or such other place, time
and date as TMC, Trust 1 and Trust 2 may mutually select.
3. CONTRIBUTION OF ASSETS.
3.1 CONTRIBUTION OF SECURITIES ASSETS BY TRUST 1. Subject to the terms
and conditions of this Agreement, at the Closing, Trust 1 shall convey,
transfer, assign and deliver to LLC, as a contribution, all of such Trust's
right, title and interest in and to the securities set forth on Schedule 3.l
(the "Trust 1 Securities Assets").
3.2 CONTRIBUTION OF SECURITIES ASSETS BY TRUST 2. Subject to the terms
and conditions of this Agreement, at the Closing, Trust 2 shall convey,
transfer, assign and deliver to LLC, as a contribution, all of such Trust's
right, title and interest in and to the securities set forth on Schedule 3.1
(the "Trust 2 Securities Assets").
3.3 CONTRIBUTION OF CASH ASSET AND REAL ESTATE ASSETS BY THE TMC
MEMBERS. Subject to the terms and conditions of this Agreement, at the Closing,
(i) TMC shall convey, transfer, assign and deliver to LLC, as a contribution,
all of TMC's right, title and interest in and to the TMC Cash Asset and to the
portion of the Real Estate Assets indicated on Schedule 3.3.1; (ii) the TMC
Operating Companies shall convey, transfer, assign and deliver to LLC, as a
contribution, all of their right, title and interest in and to the portion of
the Real Estate
2
8
Assets indicated on Schedule 3.3.2; and (iii) each of Sub 1 and Sub 2 shall
contribute, convey, transfer, assign and deliver to LLC its respective portion
of the Subs Cash Asset.
3.4 SECURITIES ASSETS CONTRIBUTED EX-DIVIDEND. Anything herein to the
contrary notwithstanding, it is agreed by the parties that any and all dividends
paid on the Trust 1 Securities Assets and the Trust 2 Securities Assets on or
prior to September 10, 1997 shall belong and be paid to Trust 1 and Trust 2,
respectively, and not to LLC.
3.5 NO LIABILITIES. In no event shall LLC assume any liabilities of
Trust 1, Trust 2 or the TMC Members in connection with contribution of Assets
and the transactions contemplated hereby.
4. VALUE OF ASSETS.
4.1 TRUST 1 SECURITIES ASSETS. The parties agree that, as of the
Closing, the Gross Asset Values (as defined in the LLC Agreement) of the assets
constituting the Trust 1 Securities Assets shall be as set forth on Schedule
4.1, and Trust 1 shall be deemed to have contributed the sum of $420,292,274,
the aggregate amount of such Gross Asset Values, to the capital of LLC in
satisfaction of its capital contribution obligations under the LLC Agreement.
4.2 TRUST 2 SECURITIES ASSETS. The parties agree that, as of the
Closing, the Gross Asset Values of the assets constituting the Trust 2
Securities Assets shall be as set forth on Schedule 4.2, and Trust 2 shall be
deemed to have contributed the sum of $54,823,426.50, the aggregate amount of
such Gross Asset Values, to the capital of LLC in satisfaction of its capital
contribution obligations under the LLC Agreement.
4.3 REAL ESTATE ASSETS.
4.3.1 The parties agree that, as of the Closing, the Gross Asset
Value of each Real Estate Asset contributed by TMC shall be as set forth on
Schedule 4.3.1, and TMC shall be deemed to have contributed the sum of
$32,800,000, the aggregate amount of such Gross Asset Values, to the capital of
LLC in (when considered together with the Cash Asset) satisfaction of its
capital contribution obligations under the LLC Agreement.
4.3.2 The parties agree that, as of the Closing, the Gross Asset
Value of each Real Estate Asset contributed by the TMC Operating Companies shall
be as set forth on Schedule 4.3.2, and the TMC Operating Companies shall be
deemed to have contributed the sum of $193,050,000, the aggregate amount of such
Gross Asset Values, to the capital of LLC in satisfaction of their capital
contribution obligations under the LLC Agreement.
4.4 CASH ASSET. The parties agree that, as of the Closing, the Gross
Asset Value of the Cash Asset shall be the amount of the Cash Asset, and TMC
shall be deemed to have contributed an amount equal to the Gross Asset Value of
the TMC Cash Asset, and each of Sub 1 and Sub 2 shall be deemed to have
contributed $1,000,000, to the capital of LLC in satisfaction of their
respective capital contribution obligations under the LLC Agreement.
4.5 INSTRUMENTS OF CONVEYANCE AND TRANSFER. At the Closing, the Trusts,
TMC, the TMC Operating Companies, Sub 1 and Sub 2 shall execute and deliver to
LLC any and all such documents as may be reasonably requested by any other party
in order to effect the transfers and otherwise carry out the transactions
contemplated herein, including without limitation, deeds, in the form previously
provided to LLC, contributing the Real Estate Assets, and stock powers executed
in blank with respect to the Securities Assets contributed.
3
9
4.6 TAXES. The parties hereto shall cooperate in preparing and filing
tax returns relating to the transactions contemplated hereby, TMC shall pay any
and all real estate, transfer or use taxes due with regard to, the contribution
of the Real Estate Assets to the LLC and the lease of the Real Estate Asset by
LLC to TMC. All real estate taxes relating to the Real Estate Assets shall be
pro-rated between LLC and the TMC Members.
5. LEASE OF REAL ESTATE ASSETS.
5.1 LEASEBACK. Subject to the terms and conditions of this Agreement, at
the Closing, LLC shall lease each of the Real Estate Assets described in
Schedule 3.3 to TMC. The lease shall be in substantially the form previously
provided to the parties hereto with the initial monthly rent as set forth
therein. The lease shall be fully executed by the parties thereto prior to the
contribution of the Real Estate Assets to the LLC. The term of such lease shall
commence concurrently with the contribution of the Real Estate Assets to the
LLC.
6. REPRESENTATIONS AND WARRANTIES RELATING TO THE TMC MEMBERS.
As an inducement for each of the Trusts and LLC to enter into this
Agreement, TMC represents and warrants to each of the Trusts and LLC that each
of the following statements is true and correct as of the date hereof:
6.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Each of the TMC Members
is a corporation duly organized, validly existing and in good standing under the
laws of its state of organization, has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business as
now conducted, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the failure to so qualify
would have a Material Adverse Effect upon TMC. All of the outstanding stock of
the TMC Operating Companies, Sub 1 and Sub 2 is owned, directly or indirectly,
beneficially and of record, by TMC.
6.2 AUTHORIZATION OF AGREEMENTS. Each of the TMC Members has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby and all corporate action other than approval of the Board of Directors of
TMC necessary for such execution, delivery, performance and consummation has
been duly taken.
6.3 NO CONFLICTS. The execution and delivery by any of the TMC Members
of this Agreement does not, and the performance and consummation of the
transactions contemplated hereby will not, result in or give rise to (with or
without the giving of notice or the lapse of time, or both) any conflict with,
breach or violation of, or default, termination, forfeiture or acceleration of
obligations under, any terms or provisions of (i) its certificate of
incorporation or bylaws, (ii) any statute, rule, regulation or any judicial,
governmental, regulatory or administrative decree, order or judgment applicable
to it or its assets, or (iii) any agreement, lease or other instrument to which
it is a party or by which it or any of its assets may be bound (other than, in
the case of items (ii) and (iii) immediately above, such breaches, violations,
defaults, terminations, forfeitures or accelerations as would not have a
Material Adverse Effect upon TMC).
6.4 EFFECT OF AGREEMENT. This Agreement, upon approval of the Board of
Directors of TMC, shall be the legal, valid and binding obligation of each of
the TMC Members, enforceable against each of them in accordance with the terms
hereof, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and subject to general equitable principles.
4
10
6.5 ASSETS; REAL PROPERTY.
6.5.1 TITLE TO REAL ESTATE ASSETS. Upon due recordation in the
appropriate recording offices of the deeds transferring the Real Estate Assets
to LLC, as contemplated by Section 3.3 hereof, LLC will have good and marketable
fee simple absolute title to each of the Real Estate Assets (other than
easements and appurtenant rights which are not held in fee simple absolute),
free and clear of all Encumbrances, subject only to the "Permitted Exceptions."
As such term is used herein, the "Permitted Exceptions" are those exceptions
shown on Schedule B of the preliminary title reports described on Schedule 3.3.1
and Schedule 3.3.2 for each property constituting a Real Estate Asset, other
than those exceptions identified on Schedule 6.5.1, (provided that any exception
deleted by the title company in the final title policy shall be deleted from
Schedule 6.5.1) and any assessments imposed on the real property owned by The
Times Mirror Company by the Downtown Center Business Improvement District of the
City of Los Angeles and the Lease Agreements. Notwithstanding the foregoing, the
representations and warranties contained herein shall exclude any issue or
matter insured against by title insurance insuring the interest of the LLC in
the Real Estate Assets by the title company.
6.5.2 ENVIRONMENTAL.
6.5.2.1 No portion of the Real Estate Assets is currently
being used or has been used in any manner at any previous time for the
storage, disposal, treatment, processing, production, refinement,
generation or other handling of waste, contamination, oils or petroleum
products, PCBs, asbestos, or any other waste, compound, substance or
material the use, release, disposal, presence or storage of which is
restricted, or regulated, or required to be reported, or could give rise
to liability or an obligation to xxxxx or remediate, under any
Environmental Protection Laws (hereinafter "Hazardous Substances").
6.5.2.2 There is not present at, under, in or emanating
from, any of the Real Estate Assets, any Hazardous Substances in soil,
ground water, improvements or otherwise.
6.5.2.3 No condition exists on or with respect to any of
the Real Estate Assets that violates any federal, state, local or other
law (including the common law), regulation, code, order, or rule (an
"Environmental Protection Law") or requires reporting to any
governmental authority or that may give rise to liability under any
Environmental Protection Law.
6.5.2.4 No portion of the Real Estate Assets contains
underground tanks of any type, or any materials containing PCBs or any
asbestos.
6.5.2.5 No portion of the Real Estate Assets contains any
above-ground, surface or sub-surface conditions that constitute, or that
through the passage of time may constitute if not abated, a public or
private nuisance or a trespass.
6.5.2.6 No portion of the Real Estate Assets has been
designated, listed or identified in any manner by the United States
Environmental Protection Agency (the "EPA") or any other federal, state
or local agency or governmental entity or under or pursuant to any
Environmental Protection Law, as a site which has been reported to have
had or which has had a release of Hazardous Substances or as a hazardous
waste or hazardous substance disposal or removal site, Superfund or
clean-up site or candidate for investigation or remediation or removal
or closure pursuant to any Environmental Protection Law.
5
11
6.5.2.7 Neither TMC nor any of its affiliates has received
at any time prior to the date hereof a summons, citation, notice,
directive, letter or other communication, written or oral (an
"Environmental Notice"), from the EPA or any other federal, state, local
or other governmental agency or instrumentality related to any of the
Real Estate Assets, including, without limitation, actual or possible
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
dumping or disposing of Hazardous Substances, and there exist no facts
that would be the basis for TMC or any of its affiliates receiving any
such Environmental Notice.
6.5.3 COMPLIANCE WITH LAWS. Each Real Estate Asset complies with,
and is currently operated in accordance with, all applicable ordinances, laws,
rules, regulations, statutes, codes and orders affecting such Real Estate Asset
or the possession, use, occupancy or operation thereof promulgated by any
federal, state, local or other governmental agency or instrumentality
(including, without limiting the generality of the foregoing, the Americans With
Disabilities Act, health and safety codes, and all applicable zoning ordinances)
and any and all liens, encumbrances, agreements, covenants, conditions and
restrictions affecting the Real Estate Asset or the owner or occupant thereof.
Neither TMC nor any affiliate has received any notice from any governmental
agency or instrumentality requiring any repairs or changes to any Real Estate
Asset, except for notices which have been fully complied with.
6.5.4 CONDITION OF PROPERTY. All improvements on each Real Estate
Asset are in good condition, reasonable wear and tear excepted, and there are no
material defects in any such improvements which would be likely to preclude the
use of the improvements for the uses for which they are now being put. There are
no defects in any such improvements which would pose an unreasonable risk to the
life or health of any person.
6.5.5. APPRAISALS. TMC has heretofore provided Trust 1 and Trust
2 with true, correct and complete copies of appraisals, as of December 31, 1996,
of each of the Real Estate Assets prepared for TMC by Valuation Research
Corporation (the "Appraisals"), except for the Property located on Xxxxxxx
Street in Baltimore, Maryland and set forth on Schedule 3.3.2. The facts upon
which the Appraisals were based are accurate in all material respects, the
persons preparing the Appraisals have not informed TMC, either orally or in
writing, that they have modified their conclusions contained therein, and no
event has occurred since the date of the Appraisals which would materially
affect the conclusions contained therein. Schedules 3.3.1 and 3.3.2 show the
common description for each Real Estate Asset and the corresponding preliminary
title report number and Appraisal Number for such Real Estate Asset. The
preliminary title reports contain the accurate legal description of each Real
Estate Asset.
6.5.6. TAXES AND ASSESSMENTS. All taxes, assessments, charges and
impositions (collectively, "Real Estate Impositions") which now constitute or
may constitute a lien on any of the Real Estate Assets have been paid before
delinquency, except those Real Estate Impositions which are not yet payable.
6.5.7. EASEMENTS. The exercise of the right to use or maintain
any easement on or against any of the Real Estate Assets in accordance with the
terms of such easement, will not damage any of the improvements, including
lawns, shrubbery and trees, on or of any of the Real Estate Assets, and shall
not interfere with the use or occupancy of any of the Real Estate Assets.
6.5.8. CONTIGUITY; SUBDIVISION. Each of the parcels and property
identified on Schedule 3.3 was created in compliance with any subdivision laws
and all other statutes, ordinances, rules and regulations relating to the
creation of parcels of real property. The parcels and property which constitute
any single Real Estate Asset identified on Schedules 3.3.1 and 3.3.2 are
contiguous, and there are no gaps in the ownership, rights or interests between
any such parcels and properties.
6
12
6.5.9. SURVIVAL DESPITE KNOWLEDGE AND INVESTIGATION. The
representations and warranties contained in this Section 6.5 shall survive and
continue to be enforceable notwithstanding any investigation, and any knowledge
of inaccuracy, by LLC or the Trusts, it being agreed that the Trusts and LLC are
entitled to be indemnified pursuant to Section 12 hereof against any Losses
resulting from an inaccuracy in the representations and warranties contained in
this Section 6.5 regardless of whether any or all of them has knowledge that
such representations and warranties are inaccurate. The parties hereto
acknowledge that they are aware that certain of the representations and
warranties made by TMC herein are inaccurate and that such representations and
warranties are not intended to attempt to represent that certain statements are
in fact true, but rather are intended to clarify that LLC is entitled to be
indemnified against any Losses resulting from any inaccuracies in such
representations and warranties.
6.6 COMMISSIONS. Except for fees or expenses payable to any broker or
finder retained by TMC and set forth in the Merger Agreement, none of the TMC
Members nor any of their respective directors, officers, employees or agents is
obligated for the payment of fees or expenses of any broker or finder in
connection with the origin, negotiation or execution of this Agreement or in
connection with the transactions contemplated hereby.
7. REPRESENTATIONS AND WARRANTIES OF TRUST 1.
As an inducement for the TMC Members, Trust 2 and LLC to enter into this
Agreement, Trust 1 represents and warrants to the TMC Members, Trust 2 and LLC
that each of the following statements is true and correct as of the date hereof:
7.1 AUTHORIZATION OF AGREEMENT. (i) Trust 1 has not been revoked,
modified, or amended in any manner which would cause the representations and
warranties made by Trust 1 herein to be untrue or incorrect or cause this
Agreement to be unenforceable against Trust 1; (ii) each trustee (a "Trustee")
of Trust 1 has accepted appointment as a Trustee of Trust 1 under the
declaration of trust relating to Trust 1 (the "Declaration"), and, by the terms
of Trust 1, is qualified and possesses the necessary trust powers to act, and
does act as a Trustee pursuant to such Declaration; (iii) the Trustees who have
executed and delivered this Agreement on behalf of Trust 1 possess the full
power and authority to execute and deliver the Agreement and to consummate the
transactions contemplated hereby, and, in so doing, are properly acting and
exercising their powers under such Declaration; (iv) the Trustees who have
executed and delivered this Agreement on behalf of Trust 1 constitute all of the
currently acting Trustees of Trust 1, and the signature of such Trustees is all
that is required for the execution and delivery of this Agreement and to
authorize the consummation of the Transactions; and (v) no other signature or
other proceedings on the part of Trust 1 or any of its Trustees or beneficiaries
is necessary to approve this Agreement or to authorize the execution and
delivery, and the performance of the terms, hereof and thereof.
7.2 NO CONFLICTS. The execution and delivery by Trust 1 of this
Agreement does not, and the performance and consummation of the transactions
contemplated hereby will not, result in or give rise to (with or without the
giving of notice or the lapse of time, or both) any conflict with, breach or
violation of, or default, termination, forfeiture or acceleration of obligations
under, any terms or provisions of (i) its declaration of trust, (ii) any
statute, rule, regulation or any judicial, governmental, regulatory or
administrative decree, order or judgment applicable to it or its assets, or
(iii) any material agreement, lease or other instrument to which it is a party
or by which it or any of its assets may be bound (other than, in the case of
items (ii) and (iii) immediately above, such breaches, violations, defaults,
terminations, forfeitures or accelerations as would not have a Material Adverse
Effect upon Trust 1).
7.3 EFFECT OF AGREEMENT. This Agreement is Trust 1's legal, valid and
binding obligation, enforceable against it in accordance with the terms hereof,
except as such
7
13
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and subject to
general equitable principles.
7.4 TITLE TO TRUST 1'S SECURITIES ASSETS. Trust 1 has good and valid
title to all of the Trust 1 Securities Assets, free and clear of all
Encumbrances.
7.5 COMMISSIONS. Except for fees and expenses payable to any broker or
finder retained by the "Company" or the "Shareholders" (as such terms are used
in the Merger Agreement) as set forth in the Merger Agreement, neither Trust 1
nor any of its respective trustees or agents is obligated for the payment of
fees or expenses of any broker or finder in connection with the origin,
negotiation or execution of this Agreement or in connection with the
transactions contemplated hereby.
7.6 INVESTMENT COMPANY. Trust 1 is not an investment company as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
7.7 NO REGISTRATION; INVESTMENT INTENT. (i) Trust 1 understands that the
interest in the LLC are being offered and sold without registration under the
Securities Act of 1933, as amended (the "Act"), based upon an exemption provided
under the Act and without qualification or registration under the securities
laws of California, in reliance upon the representations and warranties made by
the parties hereto, and the interests in the LLC may not be re-sold,
transferred, assigned or otherwise disposed of other than pursuant to an
effective registration statement or pursuant to an exemption from such
registration requirements; (ii) Trust 1 agrees that it shall not sell, transfer,
assign, pledge or otherwise dispose of any interests in the LLC unless (a)
pursuant to an effective registration statement or (b) Trust 1 delivers to LLC
an opinion of counsel, reasonably acceptable to LLC, that such sale, transfer,
assignment, pledge or other disposition is exempt from registration under the
Act; (iii) Trust 1 understands that it may be deemed an "affiliate" of the
Company, as such term is used for purposes of Rules 144 and 145 under the Act,
in which case any disposition of its interests in the LLC by Trust 1 may be
subject to the requirements of such rules; (iv) Trust 1 is acquiring the
interests in the LLC for investment purposes for its own account and without a
view to distribution or resale thereof (except in compliance with applicable
law); (v) Trust 1 acknowledges that it has had the right to ask questions of and
receive answers from the parties hereto and its officers and representatives and
from the Company and its officers and representatives to obtain such information
concerning the parties hereto, and the LLC and the transactions contemplated
hereby as Trust 1 deems necessary prior to making an investment decision with
respect to the transactions contemplated hereby, including with respect to the
interests in the LLC. Trust 1 has such knowledge and experience in financial and
business matters so as to enable Trust 1 to evaluate the merits and risks of an
investment in the interests in the LLC. Trust 1 is able to bear the economic
risk of the investment in the interests in the LLC; and (vi) Trust 1 is
domiciled in the State of California, and files income tax returns as a person
or entity that is domiciled in that State.
7.8 ISSUANCE OF PREFERRED STOCK. Trust 1 in its capacity as a holder of
the Series A Preferred Stock approves the issuance of the Preferred Stock,
Series C-1 and Preferred Stock, Series C-2 of the TMC.
8. REPRESENTATIONS AND WARRANTIES OF TRUST 2.
As an inducement for the TMC Members, Trust 1 and LLC to enter into this
Agreement, Trust 2 represents and warrants to the TMC Members, Trust 1 and LLC
that each of the following statements is true and correct as of the date hereof:
8.1 AUTHORIZATION OF AGREEMENT. (i) Trust 2 has not been revoked,
modified, or amended in any manner which would cause the representations and
warranties made by Trust 2
8
14
herein to be untrue or incorrect or cause this Agreement to be unenforceable
against Trust 2; (ii) each trustee (a "Trustee") of Trust 2 has accepted
appointment as a Trustee of Trust 2 under the declaration of trust relating to
Trust 2 (the "Declaration"), and, by the terms of Trust 2, is qualified and
possesses the necessary trust powers to act, an does act as a Trustee pursuant
to such Declaration; (iii) the Trustees who have executed and delivered this
Agreement on behalf of Trust 2 possess the full power and authority to execute
and deliver the Agreement and to consummate the transactions contemplated
hereby, and, in so doing, are properly acting and exercising their powers under
such Declaration; (iv) the Trustees who have executed and delivered this
Agreement on behalf of Trust 2 constitute all of the currently acting Trustees
of Trust 2, and the signature of such Trustees is all that is required for the
execution and delivery of this Agreement and to authorize the consummation of
the Transactions; and (v) no other signature or other proceedings on the part of
Trust 2 or any of its Trustees or beneficiaries is necessary to approve this
Agreement or to authorize the execution and delivery, and the performance of the
terms, hereof and thereof.
8.2 NO CONFLICTS. The execution and delivery by Trust 2 of this
Agreement does not, and the performance and consummation of the transactions
contemplated hereby will not, result in or give rise to (with or without the
giving of notice or the lapse of time, or both) any conflict with, breach or
violation of, or default, termination, forfeiture or acceleration of obligations
under, any terms or provisions of (i) its declaration of trust, (ii) any
statute, rule, regulation or any judicial, governmental, regulatory or
administrative decree, order or judgment applicable to it or its assets, or
(iii) any agreement, lease or other instrument to which it is a party or by
which it or any of its assets may be bound (other than, in the case of items
(ii) and (iii) immediately above, such breaches, violations, defaults,
terminations, forfeitures or accelerations as would not have a Material Adverse
Effect upon Trust 2).
8.3 EFFECT OF AGREEMENT. This Agreement is Trust 2's legal, valid and
binding obligation, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to general equitable principles.
8.4 TITLE TO TRUST 2'S SECURITIES ASSETS. Trust 2 has good and valid
title to all of the Trust 2 Securities Assets, free and clear of all
Encumbrances.
8.5 COMMISSIONS. Except for fees and expenses payable to any broker or
finder retained by the "Company" or the "Shareholders" (as such terms are used
in the Merger Agreement as set forth in the Merger Agreement), neither Trust 2
nor any of its respective trustees or agents is obligated for the payment of
fees or expenses of any broker or finder in connection with the origin,
negotiation or execution of this Agreement or in connection with the
transactions contemplated hereby.
8.6 INVESTMENT COMPANY. Trust 2 is not an investment company as such
term is defined in the Investment Company Act.
8.7 NO REGISTRATION; INVESTMENT INTENT. (i) Trust 2 understands that the
interest in the LLC are being offered and sold without registration under the
Securities Act of 1933, as amended (the "Act"), based upon an exemption provided
under the Act and without qualification or registration under the securities
laws of California, in reliance upon the representations and warranties made by
the parties hereto, and the interests in the LLC may not be re-sold,
transferred, assigned or otherwise disposed of other than pursuant to an
effective registration statement or pursuant to an exemption from such
registration requirements; (ii) Trust 2 agrees that it shall not sell, transfer,
assign, pledge or otherwise dispose of any interests in the LLC unless (a)
pursuant to an effective registration statement or (b) Trust 2 delivers to LLC
an opinion of counsel, reasonably acceptable to LLC, that such sale, transfer,
assignment, pledge or
9
15
other disposition is exempt from registration under the
Act; (iii) Trust 2 understands that it may be deemed an "affiliate" of the
Company, as such term is used for purposes of Rules 144 and 145 under the Act,
in which case any disposition of its interests in the LLC by Trust 2 may be
subject to the requirements of such rules; (iv) Trust 2 is acquiring the
interests in the LLC for investment purposes for its own account and without a
view to distribution or resale thereof (except in compliance with applicable
law); (v) Trust 2 acknowledges that it has had the right to ask questions of and
receive answers from the parties hereto and its officers and representatives and
from the Company and its officers and representatives to obtain such information
concerning the parties hereto, and the LLC and the transactions contemplated
hereby as Trust 2 deems necessary prior to making an investment decision with
respect to the transactions contemplated hereby, including with respect to the
interests in the LLC. Trust 2 has such knowledge and experience in financial and
business matters so as to enable Trust 2 to evaluate the merits and risks of an
investment in the interests in the LLC. Trust 2 is able to bear the economic
risk of the investment in the interests in the LLC; and (vi) Trust 2 is
domiciled in the State of California, and files income tax returns as a person
or entity that is domiciled in that State.
8.8 ISSUANCE OF PREFERRED STOCK. Trust 2 in its capacity as a holder of
the Series A Preferred Stock approves the issuance of the Preferred Stock,
Series C-1 and Preferred Stock, Series C-2 of the TMC.
9. REPRESENTATIONS AND WARRANTIES OF LLC.
As an inducement for the TMC Members and the Trusts to enter into this
Agreement, LLC represents and warrants to the TMC Members and the Trusts that
each of the following statements is true and correct as of the date hereof:
9.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. LLC is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, has all requisite power and authority to own,
operate and lease its properties and carry on its business as now, or
anticipated to be, conducted, and is duly qualified to do business and is in
good standing as a foreign limited liability company in each jurisdiction in
which the failure to so qualify would have a Material Adverse Effect upon LLC.
9.2 AUTHORIZATION OF AGREEMENTS. LLC has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby and all action necessary
for such execution, delivery, performance and consummation has been duly taken.
9.3 NO CONFLICTS. The execution and delivery by LLC of this Agreement
does not, and the performance and consummation of the transactions contemplated
hereby will not, result in or give rise to (with or without the giving of notice
or the lapse of time, or both) any conflict with, breach or violation of, or
default, termination, forfeiture or acceleration of obligations under, any terms
or provisions of (i) its Certificate of Formation or the LLC Agreement, (ii) any
statute, rule, regulation or any judicial, governmental, regulatory or
administrative decree, order or judgment applicable to it or its assets, or
(iii) any agreement, lease or other instrument to which it is a party or by
which it or any of its assets may be bound (other than, in the case of items
(ii) and (iii) immediately above, such breaches, violations, defaults,
terminations, forfeitures or accelerations as would not have a Material Adverse
Effect upon LLC).
9.4 EFFECT OF AGREEMENT. This Agreement is the legal, valid and binding
obligation of LLC, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to general equitable principles.
10
16
9.5 COMMISSIONS. Neither LLC nor any of its managers, members, employees
or agents have employed, or incurred any liability to, any broker, finder or
agent for any brokerage fees, finder's fees, commissions or other amounts with
respect to the transactions contemplated hereby.
9.6 ISSUANCE OF PREFERRED STOCK. LLC in its capacity as a holder of the
Series A Preferred Stock hereby approves the issuance of the Preferred Stock,
Series C-1 and Preferred Stock, Series C-2 of TMC.
10. CONDITIONS.
10.1 CONDITIONS TO OBLIGATIONS OF THE PARTIES. The obligations of each
of the parties hereto to consummate the transactions contemplated hereby are
subject to the satisfaction or waiver of the following conditions:
10.1.1 EXECUTION OF THE LLC AND REGISTRATION RIGHTS AGREEMENTS.
The LLC Agreement shall have been executed and delivered by all the parties
hereto. The Registration Rights Agreement shall have been executed and delivered
by TMC, Trust 2 and the other parties thereto.
10.1.2 Consummation of Merger. The merger of Chandis Securities
Company with and into Chandis Acquisition Corporation shall have been
consummated and the Certificate of Merger therefor shall have been filed with
the Secretary of State of the State of Delaware.
10.2 CONDITIONS TO OBLIGATIONS OF THE TMC MEMBERS. The obligations of
the TMC Members to consummate the transactions contemplated hereby are subject
to the satisfaction or waiver of the following conditions:
10.2.1 OPINION. The TMC Members shall have received an opinion of
Irell & Xxxxxxx LLP, counsel to the Trusts, substantially in the form previously
provided to Irell & Xxxxxxx LLP.
10.2.2 BOARD APPROVAL. The Board of Directors of TMC shall have
approved this Agreement, the LLC Agreement and the Merger Agreement and the
transactions contemplated thereby. TMC shall have received a fairness opinion of
Xxxxxxx, Xxxxx & Co. in form and substance reasonably satisfactory to the Board
of Directors of TMC.
10.3 CONDITIONS TO OBLIGATIONS OF THE TRUSTS. The obligations of the
Trusts to consummate the transactions contemplated hereby are subject to the
satisfaction or waiver of the following condition:
10.3.1 OPINION. The Trusts shall have received an opinion of
Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel to the TMC members, substantially in the
form previously provided to Xxxxxx, Xxxx & Xxxxxxxx LLP.
11. TERMINATION
11.1 TERMINATION BY MUTUAL CONSENT. At any time prior to the Closing,
this Agreement may be terminated by written consent of TMC, Trust 1 and Trust 2.
11.2 TERMINATION BY TMC OR THE TRUSTS.
11.2.1 TMC TERMINATION. TMC may terminate this Agreement at any
time prior to the Closing by delivery of written notice to Trust 1 and Trust 2,
if: (1) any court having
11
17
competent jurisdiction or other governmental body shall have issued an order,
decree or ruling or taken any other action which prevents, restrains, or enjoins
the transactions contemplated hereby and such order, decree or ruling shall have
become non-appealable; (2) either of Trust 1 or Trust 2 has breached or violated
this Agreement in any material respect; or (3) the Closing has not occurred by
11:59 p.m. Los Angeles time on August 10, 1997.
11.2.2 TRUST TERMINATION. Trust 1 or Trust 2 may terminate this
Agreement at any time prior to the Closing by delivery of written notice to TMC
if: (1) any court having competent jurisdiction or other governmental body shall
have issued an order, decree or ruling or taken any other action which prevents,
restrains, or enjoins the transactions contemplated hereby and such order,
decree or ruling shall have become non-appealable; (2) any TMC Member has
breached or violated this Agreement in any material respect; or (3) the Closing
has not occurred by 11:59 p.m. Los Angeles time on August 10, 1997.
12. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATIONS.
12.1 SURVIVAL OF REPRESENTATIONS. All representations, warranties,
covenants and agreements of TMC, the Trusts and LLC in this Agreement shall
survive the execution, delivery and performance of this Agreement in accordance
with this Article 12. The representations and warranties of TMC, the Trusts and
LLC set forth in this Agreement, and their indemnity obligations under this
Article 12, shall terminate on the second anniversary hereof (except to the
extent that claims have been made or notice of a claim has been provided prior
thereto) (the "Indemnity Termination Date"); provided, however, that all
representations and warranties and indemnity obligations by the Trusts relating
to the Securities Assets (including the representations and warranties set forth
in Sections 7.4 and 8.4) shall continue as long as LLC owns any of the
Securities Assets, and thereafter to the extent that LLC may have any
liabilities or potential liability relating thereto, and all representations and
warranties and indemnity obligations by TMC relating to the Real Estate Assets
(including the representations and warranties set forth in Section 6.5 and the
liabilities set forth under Section 11 of the Lease Agreement) shall continue so
long as LLC owns any of the Real Estate Assets, and thereafter to the extent
that LLC or any member of LLC may have any liability or potential liability
relating thereto.
12.2 AGREEMENTS TO INDEMNIFY.
12.2.1 TRUST 1 INDEMNITY. Subject to the terms and conditions of
this Section 12, Trust 1 hereby agrees to indemnify, defend and hold the
TMC Members, Trust 2 and LLC harmless from and against all Losses
incurred by the TMC Members, Trust 2 and LLC and their respective
employees, directors, officers, shareholders, beneficiaries, members,
managers, trustees and agents resulting from a breach of any
representation, warranty or covenant of Trust 1 made in this Agreement.
12.2.2 TRUST 2 INDEMNITY. Subject to the terms and conditions of
this Section 12, Trust 2 hereby agrees to indemnify, defend and hold the
TMC Members, Trust 1 and LLC harmless from and against all Losses
incurred by the TMC Members, Trust 1 and LLC and their respective
employees, directors, officers, shareholders, beneficiaries, members,
managers and agents resulting from a breach of any representation,
warranty or covenant of Trust 2 made in this Agreement.
12.2.3 TMC INDEMNITY. Subject to the terms and conditions of this
Section 12, TMC hereby agrees to indemnify, defend and hold LLC and the
Trusts harmless from and against all Losses incurred by LLC and the
Trusts and their respective employees, members, managers, beneficiaries,
trustees and agents resulting from: (i) a breach of any representation,
warranty or covenant of the TMC Members made in this Agreement and
12
18
(ii) any Environmental Protection Laws or Hazardous Substances, to the
extent such Losses relate to facts or circumstances which existed at or
with respect to the Real Estate Assets on or prior to the date hereof.
Notwithstanding anything to the contrary contained in this Agreement,
including without limitation any representations and warranties of TMC
contained herein, TMC shall have no liability for, and no obligation to
indemnify, defend and hold LLC and the Trusts harmless from, any matter
insured against by title insurance insuring the interest of the LLC in
the Real Estate Assets.
12.2.4 LLC INDEMNITY. Subject to the terms and conditions of this
Section 12, LLC hereby agrees to indemnify, defend and hold the TMC
Members and the Trusts harmless from and against all Losses incurred by
the TMC Members and the Trusts and their respective employees,
directors, officers, shareholders, beneficiaries, trustees and agents
resulting from a breach of any representation, warranty or covenant of
LLC made in this Agreement.
12.2.5 INDEMNIFICATION THRESHOLD. No claim for indemnification
will be made by any party hereunder unless the aggregate of all Losses
incurred by such party otherwise indemnified against hereunder exceeds
$250,000 and only to the extent of any such Losses in excess of
$250,000.
12.2.6 SUBROGATION. If the Indemnifying Party makes any payment
under this Section 12 in respect of any Losses, the Indemnifying Party
shall be subrogated, to the extent of such payment, to the rights of the
Indemnified Party against any insurer or third party with respect to
such Losses; provided, however, that the Indemnifying Party shall not
have any rights of subrogation with respect to the other party hereto or
any of its affiliates or any of its or its affiliates' officers,
directors, agents or employees.
12.3 CONDITIONS OF INDEMNIFICATION. If any claim is asserted or action
commenced against an Indemnified Party by a third party, the respective
obligations and liabilities of the Indemnifying Party to the Indemnified Party
under Section 12.2 shall be subject to the following terms and conditions:
12.3.1 NOTICE. Within 15 days after receipt of notice of
commencement of any action or the assertion of any claim by a third
party (but in any event at least ten days preceding the date on which an
answer or other pleading must be served in order to prevent a judgment
by default in favor of the party asserting the claim), the Indemnified
Party shall give the Indemnifying Party written notice thereof together
with a copy of such claim, process or other legal pleading, and the
Indemnifying Party shall have the right to undertake the defense thereof
by representatives of its own choosing that are reasonably satisfactory
to the Indemnified Party. Any failure of an Indemnified Party to provide
timely notice to the Indemnifying Party of the commencement of any
action or the assertion of any claim shall not relieve an Indemnifying
Party of any liability hereunder (including liability for pre-notice
defense and investigation costs) except to the extent that the
Indemnifying Party was actually prejudiced by such failure.
12.3.2 FAILURE TO ASSUME DEFENSE. If the Indemnifying Party, by
the tenth day after receipt of notice of any such claim (or, if earlier,
by the fifth day preceding the day on which an answer or other pleading
must be served in order to prevent judgment by default in favor of the
person asserting such claim), does not elect to defend against such
claim, the Indemnified Party will (upon further notice to the
Indemnifying Party) have the right to undertake the defense, compromise
or settlement of such claim on behalf of and for the account and risk of
the Indemnifying Party; provided, however, that the Indemnified Party
shall not settle or compromise such claim without the Indemnifying
Party's consent, which consent shall not be unreasonably withheld; and
provided further
13
19
that, the Indemnifying Party shall have the right to assume the defense
of such claim with counsel of its own choosing at any time prior to
settlement, compromise or final determination thereof.
12.3.3 CLAIM ADVERSE TO INDEMNIFYING PARTY. Notwithstanding
anything to the contrary in this Section 12.3, if there is a reasonable
probability that a claim may materially adversely affect the
Indemnifying Party other than as a result of money damages or other
money payments, the Indemnifying Party shall have the right, at its own
cost and expense, to compromise or settle such claim, but the
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, settle or compromise any claim or consent to the
entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified
Party a release from all liability in respect of such claim.
12.3.4 COOPERATION. In connection with any such indemnification,
the Indemnified Party will cooperate in all reasonable requests of the
Indemnifying Party.
12.4 DAMAGES. Notwithstanding anything to the contrary elsewhere in this
Agreement or the LLC Agreement, no party (or its affiliates) shall, in any
event, be liable to any other party (or its affiliates) for any consequential
damages, including, but not limited to, loss of revenue or income, cost of
capital, or loss of business reputation or opportunity relating to the breach or
alleged breach of this Agreement; provided, however, that notwithstanding the
foregoing, TMC may be liable for the extent of the loss of market value of or
income on the Real Estate Assets, relating to the breach of any representation
or warranty set forth in Section 6.5 herein. Each party agrees that it will not
seek punitive damages as to any matter under, relating to or arising out of the
transactions contemplated hereby.
12.4.1 COSTS OF REMEDIATION AND REMOVAL OF HAZARDOUS SUBSTANCES.
In addition to its obligations under Section 12.2.3, TMC shall be
obligated to pay all costs of remediation, monitoring, removal or
abatement of Hazardous Substances on or with respect to any of the Real
Estate Assets if such remediation, monitoring, removal or abatement (a)
is required by any Environmental Protection Law or any order or decree
of any court or governmental body, (b) is reasonably necessary to
protect LLC or any of its Members against potential liability to third
parties, (c) is reasonably necessary to protect the marketability of
value of the Real Estate Asset in question; or (d) to the extent
required under the Lease.
13. COVENANTS.
13.1 COOPERATION. Each party hereto agrees to execute any and all
further documents and writings and perform such other reasonable actions which
may be or become necessary or expedient to effectuate and carry out the
transactions contemplated hereby, including, without limitation, taking such
actions and executing such instruments as may reasonably be required to
consummate the contributions contemplated hereby (but which shall not include
any obligation to make payments).
13.2 TAX COOPERATION. The parties shall, and shall cause their
respective affiliates to, cooperate with each other in the preparation of all
tax returns, to the extent related to the transactions contemplated hereby, and
shall provide, or cause to be provided, to such other party any records and
other information reasonably requested by such party in connection therewith as
well as access to, and the cooperation of, the auditors of such other party and
its affiliates. The parties shall, and shall cause their respective affiliates
to, cooperate with the other party in connection with any tax investigation, tax
audit or other tax proceeding relating to the
14
20
transactions contemplated hereby. Any information obtained pursuant to
this Section 13.2 relating to taxes shall be kept confidential by the
other party.
14. MISCELLANEOUS.
14.1 WAIVERS. Any party may, by written notice to the other parties, (a)
extend the time for the performance of any of the obligations or other actions
of the other parties under this Agreement; (b) waive any inaccuracies in the
representations or warranties of the other parties contained in this Agreement
or in any document delivered pursuant to this Agreement; (c) waive compliance
with any of the conditions or covenants of the other contained in this
Agreement; or (d) waive performance of any of the obligations of the others
under this Agreement. With regard to any power, remedy or right provided herein
or otherwise available to any party hereunder, (i) no waiver or extension of
time will be effective unless expressly contained in a writing signed by the
waiving party, and (ii) no alteration, modification or impairment will be
implied by reason of any previous waiver, extension of time, or delay or
omission in exercise of rights or other indulgence.
14.2 ENTIRE AGREEMENT. This Agreement, the LLC Agreement, the Lease
Agreement and the exhibits and schedules hereto and thereto and the documents
referred to herein and therein constitute the final, exclusive and complete
understanding of the parties with respect to the subject matter hereof and
supersede any and all prior agreements, understandings and discussions with
respect thereto. No variation or modification of this Agreement or the LLC
Agreement and no waiver of any provision or condition hereof or thereof, or
granting of any consent contemplated hereby or thereby, shall be valid unless in
writing and signed by the party against whom enforcement of any such variation,
modification, waiver or consent is sought.
14.3 BINDING EFFECT, BENEFITS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective permitted
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective permitted
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
14.4 ASSIGNABILITY. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party without the prior written
consent of all parties, except that TMC may assign this Agreement, or its rights
hereunder, to any affiliate of TMC. No assignment shall relieve the assignor of
its obligations hereunder without the consent of the other parties.
14.5 NOTICES. Unless otherwise provided, all notices or other
communications required or permitted to be given to the parties hereto shall be
in writing and shall be deemed to have been given if personally delivered,
including personal delivery by facsimile, provided that the sender receives
telephonic or electronic confirmation that the facsimile was received by the
recipient and that such facsimile is followed the same day by mailing by
certified or registered mail, return receipt requested, first class postage
prepaid (a "Mailing"), upon receipt of courier delivery or the third day
following a Mailing, addressed as follows (or at such other address as the
addressed party may have substituted by notice pursuant to this Section 14.5):
(a) If to LLC: c/o The Times Mirror Company,
Managing Member
Times Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: General Counsel
15
21
(b) If to TMC: Times Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
With a copy to: Xxxxx X. Xxxxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
(c) If to the Trust: 000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
and
Xxxxxxx Xxxxxxxxx, Xx., Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
With a copy to: Xxxxx X. Xxxxx, Esq.
Irell & Xxxxxxx LLP
1800 Avenue of the Stars
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
14.6 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of California as applied
to contracts between California residents made and to be performed entirely
within the State of California.
14.7 ATTORNEYS' FEES. If either party to this Agreement shall bring any
action, suit, counterclaim, appeal or arbitration for any relief against the
other to enforce the terms hereof or to declare rights hereunder (collectively,
an "Action"), the losing party shall pay to the prevailing party a reasonable
sum for attorneys' fees and costs incurred in bringing and prosecuting such
Action and/or enforcing any judgment, order, ruling, or award. For the purposes
of this paragraph, attorneys' fees shall include, without limitation, fees
incurred in discovery, postjudgment motions and collection actions, and
bankruptcy litigation. "Prevailing party" within the meaning of this paragraph
includes, without limitation, a party who agrees to dismiss an Action on the
other party's payment of the sums allegedly due or performance of the covenants
allegedly breached, or who obtains substantially the relief sought by it.
14.8 RULES OF CONSTRUCTION.
14.8.1 HEADINGS. The section headings in this Agreement are
inserted only as a matter of convenience, and in no way define, limit,
or extend or interpret the scope of this Agreement or of any particular
section.
14.8.2 TENSE AND CASE. Throughout this Agreement, as the context
may require, references to any word used in one tense or case shall
include all other appropriate tenses or cases.
14.8.3 SEVERABILITY. The validity, legality or enforceability of
the remainder of this Agreement will not be affected even if one or more
of the provisions of this Agreement will be held to be invalid, illegal
or unenforceable in any respect.
16
22
14.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall constitute one agreement.
14.10 EXPENSES. Except as otherwise set forth herein, each party shall
bear its own expenses in connection with this Agreement and the transactions
contemplated hereby.
14.11 CONSTRUCTION OF AGREEMENT. No party hereto, nor its respective
counsel, shall be deemed the drafter of this Agreement for purposes of
construing the provisions of this Agreement, and all provisions of this
Agreement shall be construed in accordance with their fair meaning, and not
strictly for or against any party hereto.
14.12 CONSENT TO JURISDICTION AND FORUM SELECTION. The parties hereto
agree that all actions or proceedings arising in connection with this Agreement
shall be tried and litigated exclusively in the State and Federal courts located
in the County of Los Angeles, State of California. The aforementioned choice of
venue is intended by the parties to be mandatory and not permissive in nature,
thereby precluding the possibility of litigation between the parties with
respect to or arising out of this Agreement in any jurisdiction other than that
specified in this paragraph. Each party hereby waives any right it may have to
assert the doctrine of forum non conveniens or similar doctrine or to object to
venue with respect to any proceeding brought in accordance with this paragraph,
and stipulates that the State and Federal courts located in the County of Los
Angeles, State of California shall have in personal jurisdiction and venue over
each of them for the purpose of litigating any dispute, controversy, or
proceeding arising out of or related to this Agreement. Each party hereby
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this paragraph by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices as set forth in this Agreement.
17
23
IN WITNESS WHEREOF, this Contribution Agreement has been duly executed
and delivered by the duly authorized officers of the parties hereto as of the
date first above written.
THE TIMES MIRROR COMPANY
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------------
Title: Senior Vice President and
Chief Financial Officer
--------------------------------
CANDLE HOLDINGS CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------------
Title: President
--------------------------------
FORTIFY HOLDINGS CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------------
Title: President
--------------------------------
TMCT, LLC
By: THE TIMES MIRROR COMPANY, its
Managing Member
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------------
Title: Senior Vice President and
Chief Financial Officer
--------------------------------
XXXXXXX XXXXXX & COMPANY, INCORPORATED
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Assistant Secretary
--------------------------------
18
24
XXXXX-YEAR BOOK, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Assistant Secretary
--------------------------------
NEWSDAY, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Assistant Secretary
--------------------------------
THE HARTFORD COURANT COMPANY
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Assistant Secretary
--------------------------------
THE BALTIMORE SUN COMPANY
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Assistant Secretary
--------------------------------
19
25
XXXXXXXX TRUST NO. 1
By: /s/ Xxxxxxxxx Xxxxxxx Xxxxxxx
------------------------------------
Xxxxxxxxx Xxxxxxx Xxxxxxx, as trustee of
Xxxxxxxx Trust No. 1 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx, as trustee of Xxxxxxxx
Trust No. 1 under Trust Agreement dated
June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxxx, Xx.
------------------------------------
Xxxxxxx Xxxxxxxxx, Xx., as trustee of
Xxxxxxxx Trust No. 1 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxxx, as trustee of
Xxxxxxxx Trust No. 1 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxxxxx Frost, as trustee of
Xxxxxxxx Trust No. 1 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx, as trustee of Xxxxxxxx
Trust No. 1 under Trust Agreement dated
June 26, 1935
By: /s/ Xxxx X. Xxxx
------------------------------------
Xxxx X. Xxxx, as trustee of Xxxxxxxx Trust
No. 1 under Trust Agreement dated June 26,
1935
20
26
XXXXXXXX TRUST NO. 2
By: /s/ Xxxxxxxxx Xxxxxxx Xxxxxxx
------------------------------------
Xxxxxxxxx Xxxxxxx Xxxxxxx, as trustee of
Xxxxxxxx Trust No. 2 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx, as trustee of Xxxxxxxx
Trust No. 2 under Trust Agreement dated
June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxxx, Xx.
------------------------------------
Xxxxxxx Xxxxxxxxx, Xx., as trustee of
Xxxxxxxx Trust No. 2 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxxx, as trustee of
Xxxxxxxx Trust No. 2 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxxxxx Frost, as trustee of
Xxxxxxxx Trust No. 2 under Trust Agreement
dated June 26, 1935
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx, as trustee of Xxxxxxxx
Trust No. 2 under Trust Agreement dated
June 26, 1935
By: /s/ Xxxx X. Xxxx
------------------------------------
Xxxx X. Xxxx, as trustee of Xxxxxxxx Trust
No. 2 under Trust Agreement dated June 26,
1935
21
