SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SOFTKEY INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of issuer)
COMMON STOCK, PAR VALUE OF $.01 PER SHARE
- --------------------------------------------------------------------------------
(Title of class of securities)
98136310
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(CUSIP number)
Stanley J. Gradowski
Vice President and
Secretary
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
(312) 222-9100
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(Name, address and telephone number of person authorized to receive notices
and communications)
December 22, 1995
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
|_|.
Check the following box if a fee is being paid with the statement |X|.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7):
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
(Continued on following pages)
<PAGE>
CUSIP No. 98136310 13D Page 2 of 10 Pages
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Tribune Company IRS No. 36-1880355
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS
WC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER*
NUMBER OF
2,830,188
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
9 SOLE DISPOSITIVE POWER*
EACH
2,830,188
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON*
2,830,188
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.1%
14 TYPE OF REPORTING PERSON
CO
* The beneficial ownership numbers disclosed herein assume the
conversion into common stock of SoftKey International Inc.
(the "Company") of all of the Company's 5 1/2% Senior
Convertible/Exchangeable Notes due 2000 (the "Notes") held by
Tribune Company. Conversion of the Notes, however, is subject
to the applicable waiting period imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
<PAGE>
CUSIP No. 98136310 13D Page 3 of 10 Pages
Item 1. Security and Issuer.
The title and class of equity securities to which this
statement relates is the common stock, par value $.01 per share (the "Common
Stock"), of SoftKey International Inc., a Delaware corporation (the "Company").
The Company's principal executive offices are located at One Athenaeum Street,
Cambridge, Massachusetts 02142. Although Tribune Company, a Delaware corporation
("Tribune"), has not acquired any shares of Common Stock, Tribune may be deemed
to be the beneficial owner of the shares of Common Stock reported in Item 5 by
virtue of its acquisition of beneficial ownership of an aggregate principal
amount of $150,000,000 of the Company's 5-1/2% Senior Convertible/Exchangeable
Notes due 2000 (the "Notes").
Item 2. Identity and Background.
(a)-(e) This statement is being filed by Tribune, an
information and entertainment company. Through its subsidiaries, Tribune is
engaged in the publishing of newspapers, books and information in print and
digital formats and the broadcasting, production and syndication of information
and entertainment in metropolitan areas in the United States. The principal
business and office address of Tribune is 435 North Michigan Avenue, Chicago,
Illinois 60611.
The following individuals are the executive officers and
directors of Tribune (with asterisks indicating the directors):
Present
Principal Occupation Name and
Name or Employment1 Business Address2
Charles T. Brumback* Chairman and Former Tribune Company
Chief Executive Officer 435 N. Michigan Ave.
Chicago, IL 60611
John W. Madigan* President and Chief Tribune Company
Executive Officer 435 N. Michigan Ave.
Chicago, IL 60611
James C. Dowdle* Executive Vice Tribune Company
President/Media 435 N. Michigan Ave.
Operations Chicago, IL 60611
Stanton R. Cook* Former Chairman Tribune Company
and Chief Executive 435 N. Michigan Ave.
Officer Chicago IL 60611
Diego E. Hernandez* President, Marine 8350 N.W. 52nd Terrace
Technology Group, Inc. Suite 400
(technical consulting Miami, FL 33166
services)
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1 Unless otherwise indicated, each occupation set forth opposite an
individuals's name refers to such individuals's positions with Tribune.
Description of the principal business of Tribune and its subsidiaries has been
omitted from the table.
2 Unless otherwise noted, all addresses are business addresses.
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CUSIP No. 98136310 13D Page 4 of 10 Pages
Present
Principal Occupation Name and
Name or Employment Business Address
Robert E. La Blanc* President, Robert E. R.E. La Blanc Associates, Inc.
La Blanc Associates, 323 Highland Avenue
Inc. (consultants in Ridgewood, NJ 07450
information technology)
Andrew J. McKenna* Chairman, President Schwarz Paper Company
and Chief Executive 8838 N. Austin
Officer, Schwarz Paper Morton Grove, IL 60053
Company (paper converter)
Nancy Hicks Maynard* President, Maynard Maynard Partners, Inc.
Partners, Inc. (consultants 15960 Broadway Terrace
in news media economics) Oakland, CA 94618
Kristie Miller* Author, Journalist, 5907 Frazier Lane
the Daily News McLean, VA 22101
Inc. of LaSalle, Illinois
(newspaper)
Newton N. Minow* Counsel, Sidley & Sidley & Austin
Austin (law firm) One First National Plaza
Chicago, IL 60603
James J. O'Connor* Chairman, Chief Unicom Corporation
Executive Officer, P.O. Box A3005
Unicom Corporation Chicago, IL 60690
(holding company)
and Commonwealth
Edison Company
(electric utility)
Donald H. Rumsfeld* Corporation Director 400 N. Michigan Ave.
Suite 405
Chicago, IL 60611
Arnold R. Weber* Chancellor, Civic Committee
Northwestern University One First National Plaza
and President, Civic 215 S. Clark Street
Committee of Commercial Suite 3115
Club of Chicago Chicago, IL 60603
Donald C. Grenesko Senior Vice President Tribune Company
and Chief Financial 435 N. Michigan Ave.
Officer Chicago, IL 60611
David D. Hiller Senior Vice President/ Tribune Company
Development 435 N. Michigan Ave.
Chicago, IL 60611
<PAGE>
CUSIP No. 98136310 13D Page 5 of 10 Pages
Present
Principal Occupation Name and
Name or Employment Business Address
John S. Kazik Senior Vice President/ Tribune Company
Information Systems 435 N. Michigan Ave.
Chicago, IL 60611
John T. Sloan Senior Vice President/ Tribune Company
Administration 435 N. Michigan Ave.
Chicago, IL 60611
Ruthellyn Musil Vice President/ Tribune Company
Corporate Relations 435 N. Michigan Ave.
Chicago, IL 60611
Robert D. Bosau Executive Vice President, Tribune New Media
Tribune New Media Company
Two Prudential Plaza Suite 1200
Company Chicago, IL 60601
Joseph D. Cantrell Executive Vice President, Tribune Publishing
Tribune Publishing Company
Company 435 N. Michigan Ave.
Chicago, IL 60611
Dennis FitzSimons Executive Vice President, Tribune Broadcasting
Tribune Broadcasting Company
Company 435 N. Michigan Ave.
Chicago, IL 60611
Neither Tribune nor, to the knowledge of Tribune, any of the
executive officers and directors identified above, during the last five years,
(i) has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violation with respect to such laws.
(f) Tribune is a Delaware corporation. Each of the executive
officers and directors identified under Item 2(a)-(e) is a citizen of the United
States of America.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the Securities Purchase Agreement dated as of
November 30, 1995, including exhibits attached thereto (the "Securities Purchase
Agreement," a copy of which was filed as Exhibit 99.3 to Tribune's Current
Report on Form 8-K dated December 14, 1995 and is incorporated herein by
reference), between the Company and Tribune, on December 22, 1995, the Company
issued to Tribune, and Tribune acquired from the Company, the Notes for an
aggregate purchase price of $150,000,000 (the "Purchase Price").
The funds used by Tribune to pay the Purchase Price were
obtained by Tribune from its general working capital resources and through
commercial paper borrowings of approximately $150,000,000. The commercial paper
was placed through the Placement Agency Agreement dated as of November 6, 1987
between Tribune and Merrill Lynch Money Markets Inc., a Delaware corporation,
and the Letter Agreement dated as of March 8, 1990 between Tribune and Goldman
Sachs Money Markets Inc., which agreements are included as Exhibits 5 and 6,
respectively, and incorporated herein by reference.
<PAGE>
CUSIP No. 98136310 13D Page 6 of 10 Pages
Item 4. Purpose of Transaction.
On December 22, 1995, Tribune acquired the Notes pursuant to
the Securities Purchase Agreement for investment purposes. Under the Indenture
dated as of December 22, 1995 between the Company and State Street Bank and
Trust Company (the "Indenture") relating to the Notes (a form of which Indenture
is included as an exhibit to the Securities Purchase Agreement), Tribune may, at
any time at its option, convert all or a portion of the Notes into Common Stock
or exchange all or a portion of the Notes for shares of the Company's 5-1/2%
Series C Convertible Preferred Stock (the "Preferred Stock") which itself may be
converted into Common Stock; provided, however, that, in each case, any such
conversion into Common Stock will be subject to the applicable waiting period of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). Tribune may sell all or a portion of the Notes, its shares of Preferred
Stock or its shares of Common Stock in the open market or in privately
negotiated transactions, subject to the terms of the Securities Purchase
Agreement, the Registration Rights Agreement (as defined herein), the Company's
business or financial condition and to other factors and conditions Tribune
deems appropriate. Tribune or any of the other persons identified in Item 2 may
from time to time acquire additional shares of Common Stock in the open market
or in privately negotiated transactions, subject to the Standstill Agreement (as
defined herein), the availability of shares at prices deemed favorable and to
the factors and conditions referred to above.
Pursuant to the terms of the Standstill Agreement dated as of
December 22, 1995 between Tribune and the Company (the "Standstill Agreement," a
copy of which is attached hereto as Exhibit 2 and incorporated herein by
reference), Tribune has agreed to refrain from acquiring more than 20% (or such
greater number that may result from the conversion of the Notes and the
consummation of the transactions contemplated by the Plan of Merger (as defined
in Item 6)) of the Company's outstanding Voting Securities (as defined in the
Standstill Agreement), subject to qualifications contained therein, including
contingencies involving the change of control of the Company. In addition, the
Company agreed, immediately following the closing of the transactions
contemplated by the Securities Purchase Agreement, to take all necessary actions
to increase the size of the Company's Board of Directors ("Board") by one member
and to fill the vacancy created thereby with an individual designated by
Tribune. If at any time, following the closing of the Mergers (as defined in
Item 6), the Company's Board consists of at least 10 members, the Company has
agreed to increase further the size of the Board by one member and to fill the
vacancy created thereby with a second individual designated by Tribune.
Pursuant to the terms of the Securities Resale Registration
Rights Agreement dated as of December 22, 1995 between the Company and Tribune
(the "Registration Rights Agreement," a copy of which is attached hereto as
Exhibit 3 and incorporated herein by reference), the Company has agreed to use
its best efforts to file a registration statement on or prior to the 90th day
after December 22, 1995 which shall provide for resales of the Notes, shares of
the Preferred Stock and shares of the Common Stock (subject to certain
qualifications contained in the Registration Rights Agreement).
Other than as set forth in this Item, Item 5, Item 6 or the
Standstill Agreement, no person identified in Item 2 has any present plans or
proposals which relate to or would result in (a) the acquisition by any person
of additional securities of the Company, or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or of any
of its subsidiaries; (d) any change in the present Board or management of the
Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Company by any
person; (h) causing a class of securities of the Company to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or (j) any action similar to any of those
enumerated in (a)-(i) above.
<PAGE>
CUSIP No. 98136310 13D Page 7 of 10 Pages
Item 5. Interest in Securities of the Issuer.
(a) On December 22, 1995, Tribune purchased the Notes from the
Company pursuant to the Securities Purchase Agreement. Any $1,000 in principal
amount of the Notes may be converted into such number of fully paid, duly
authorized and non-assessable shares of Common Stock as is equal to (i) $1,000
divided by (ii) the "Conversion Price," which initially is $53.00 (subject to
certain antidilution adjustments).
Cash will be paid in lieu of fractional shares.
In the alternative, any $1,000 in principal amount of the
Notes may be exchanged into such number of fully paid, duly authorized and
nonassessable shares of Preferred Stock as is equal to (i) $1,000 divided by
(ii) the "Exchange Price," which initially is $1,000 (subject to certain
antidilution adjustments). Each share of Preferred Stock may be converted into
such number of fully paid, duly authorized and non-assessable shares of Common
Stock as is equal to (i) 1,000 divided by (ii) the "Preferred Stock Conversion
Price," which initially is $53.00 (subject to certain antidilution adjustments).
Cash will be paid in lieu of fractional shares.
In each case, conversion into the Common Stock will be subject
to the applicable waiting period under the HSR Act.
Assuming conversion of the full principal amount of the Notes
beneficially owned by Tribune at the initial Conversion Price of $53.00, or the
exchange of the full principal amount of the Notes beneficially owned by Tribune
at the initial Exchange Price of $1,000 followed by the conversion of all shares
of Preferred Stock then beneficially owned by Tribune at the initial Preferred
Stock Conversion Price of $53.00, Tribune has the sole voting power and sole
dispositive power over 2,830,188 shares of Common Stock. At the initial
Conversion Price and the initial Preferred Stock Conversion Price, the Notes
represent approximately 10.1% of the outstanding shares of Company Common Stock
(such percentage being calculated based on the representation of the Company to
Tribune that on November 30, 1995 there were 25,152,779 shares of Common Stock
issued and outstanding). Except as set forth in this Item 5(a), neither Tribune,
nor, to the knowledge of Tribune, any executive officer or director of Tribune
identified in Item 2 above, beneficially owns any shares of Common Stock.
(b) The information contained in Item 5(a) is incorporated
herein by reference.
(c) The information contained in Item 5(a) is incorporated
herein by reference. Except as set forth in this Item 5(c), neither Tribune nor,
to the knowledge of Tribune, any of the executive officers or directors of
Tribune identified in Item 2 above has effected transactions in the Common Stock
in the last 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangement, Understanding or
Relationships with Respect to Securities of the Issuer.
The information set forth under Items 3, 4 and 5 of this
statement is incorporated herein by reference.
On November 30, 1995, Tribune entered into an Agreement and
Plan of Merger ("Plan of Merger") by and among the Company, Cubsco I Inc., a
California corporation and a wholly owned subsidiary of the Company, Cubsco II
Inc., a Delaware corporation and a wholly owned subsidiary of the Company,
Compton's NewMedia, Inc., a California corporation and a wholly owned subsidiary
of Tribune, and Compton's Learning Company, a Delaware corporation and a wholly
owned subsidiary of Tribune. The Plan of Merger provides for the merger of
Cubsco I Inc. with and into Compton's NewMedia, Inc. with Compton's NewMedia,
Inc. being the surviving corporation and the merger of Cubsco II Inc. with and
into Compton's Learning Company with Compton's Learning Company being the
surviving corporation (the "Mergers"). Following the Mergers, the surviving
corporations would be wholly owned subsidiaries of the Company. Upon the closing
of the Mergers (assuming they close on the same day), Tribune will have the
right to receive an aggregate number of shares,
<PAGE>
CUSIP No. 98136310 13D Page 8 of 10 Pages
rounded up to the nearest whole share, of Common Stock, equal to the number
obtained by dividing $106,500,000 by the volume-weighted average of the closing
prices for Common Stock as quoted over the Nasdaq National Market for the 10
full trading days ending on the second full trading day prior to the closing of
the Mergers (the "Merger Exchange Price"). Furthermore, in payment for certain
intercompany debt, Tribune may receive an additional aggregate number of shares
of Common Stock equal to the number obtained by dividing an amount up to
$17,000,000 by the Merger Exchange Price. A copy of the Plan of Merger was filed
as Exhibit 99.2 to Tribune's Current Report on Form 8-K dated December 14, 1995
and is incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
Exhibit Number Description
EX-99.1 Securities Purchase Agreement dated as of November 30,
1995 between Tribune Company and SoftKey International
Inc. (including exhibits attached thereto)(incorporated
by reference to Exhibit 99.3 to Tribune Company's
Current Report on Form 8-K dated December 14, 1995)
EX-99.2 Securities Resale Registration Rights Agreement dated
as of December 22, 1995 between Tribune Company and
SoftKey International Inc.
EX-99.3 Standstill Agreement dated as of December 22, 1995
between Tribune Company and SoftKey International Inc.
EX-99.4 Agreement and Plan of Merger dated as of November 30,
1995 by and among SoftKey International Inc., Cubsco I
Inc., Cubsco II Inc., Tribune Company, Compton's
NewMedia, Inc. and Compton's Learning Company
(incorporated by reference to Exhibit 99.2 to Tribune
Company's Current Report on Form 8-K dated December 14,
1995)
EX-99.5 Placement Agency Agreement dated as of November 6, 1987
between Tribune Company and Merrill Lynch Money
Markets Inc.
EX-99.6 Letter Agreement dated as of March 8, 1990 between
Tribune Company and Goldman Sachs Money Markets Inc.
<PAGE>
CUSIP No. 98136310 13D Page 9 of 10 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
December 28, 1995
TRIBUNE COMPANY
By: /s/ R. Mark Mallory
-------------------
R. Mark Mallory
Vice President and
Controller
<PAGE>
CUSIP No. 98136310 13D Page 10 of 10 Pages
Exhibit Index
Exhibit Number Description
EX-99.1 Securities Purchase Agreement dated as of November 30,
1995 between Tribune Company and SoftKey International
Inc. (including exhibits attached thereto)(incorporated
by reference to Exhibit 99.3 to Tribune Company's
Current Report on Form 8-K dated December 14, 1995)
EX-99.2 Securities Resale Registration Rights Agreement dated
as of December 22, 1995 between Tribune Company and
SoftKey International Inc.
EX-99.3 Standstill Agreement dated as of December 22, 1995
between Tribune Company and SoftKey International Inc.
EX-99.4 Agreement and Plan of Merger dated as of November 30,
1995 by and among SoftKey International Inc., Cubsco I
Inc., Cubsco II Inc., Tribune Company, Compton's
NewMedia, Inc. and Compton's Learning Company
(incorporated by reference to Exhibit 99.2 to Tribune
Company's Current Report on Form 8-K dated December 14,
1995)
EX-99.5 Placement Agency Agreement dated as of November 6, 1987
between Tribune Company and Merrill Lynch Money
Markets Inc.
EX-99.6 Letter Agreement dated as of March 8, 1990 between
Tribune Company and Goldman Sachs Money Markets Inc.
Exhibit 99.2
SECURITIES RESALE REGISTRATION RIGHTS AGREEMENT
Dated as of December 22, 1995
by and among
TRIBUNE COMPANY
and
SOFTKEY INTERNATIONAL INC.
<PAGE>
SECURITIES RESALE REGISTRATION RIGHTS AGREEMENT
This SECURITIES RESALE REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made and entered into as of December 22, 1995 by and among
SOFTKEY INTERNATIONAL INC., a Delaware corporation (the "Company"), and TRIBUNE
COMPANY, a Delaware corporation (the "Purchaser"), which Purchaser (i) has
agreed to purchase from the Company $150,000,000 principal amount of 5 1/2%
Senior Convertible/ Exchangeable Notes due 2000 (the "Notes") pursuant to the
Purchase Agreement (as defined below) and (ii) will acquire shares of Common
Stock (as defined below) pursuant to the Merger Agreement (as defined below).
This Agreement is made pursuant to (i) the Securities Purchase
Agreement dated as of November 30, 1995 (the "Purchase Agreement") by and among
the Company and the Purchaser and (ii) the Agreement and Plan of Merger dated as
of November 30, 1995 providing for two separate reverse subsidiary mergers of
wholly owned subsidiaries of the Company with and into wholly owned subsidiaries
of the Purchaser (the "Merger Agreement"). In order to induce the Purchaser to
purchase the Notes, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is
provided for in the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: Securities Act of 1933, as amended.
Agreement: As defined in the preamble hereto.
Broker-Dealer: Any broker or dealer registered under
the Exchange Act (as hereinafter defined).
Certificate of Designation: The Certificate of
Designation for the Preferred Shares.
Closing Date: The earliest to occur of (a) the closing
of the transactions contemplated by the Merger Agreement and (b)
the purchase and sale of the Notes to the Purchaser.
Commission: Securities and Exchange Commission.
Common Stock: Common Stock of the Company, par value
$.01 per share.
Company: As defined in the preamble hereto.
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<PAGE>
Effectiveness Target Date: As defined in Section 3
-------------------------
hereof.
Exchange Act: Securities Exchange Act of 1934, as
amended.
Exempt Resales: Any transaction exempt from the registration
requirements of the Act in which the Purchaser sells the Notes, including
without limitation sales (i) to "qualified institutional buyers," as such term
is defined in Rule 144A under the Act ("QIBs"), (ii) to institutional
"accredited investors," as such term is defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Act ("Accredited Institutions") and (iii) outside
the United States, to certain persons in offshore transactions in reliance on
Regulation S under the Act.
Holder: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 6(a) hereof.
Indenture: The Indenture by and among the Company and State
Street Bank and Trust Company, as trustee (the "Trustee"), pursuant to which the
Notes are to be issued, as such Indenture as amended, modified or supplemented
from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and
the Notes.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation,
trust, unincorporated organization or a government, agency or
political subdivision thereof.
Preferred Shares: The Company's 5 1/2% Series C
Convertible Preferred Stock into which the Notes are exchangeable
at the option of the Holders thereof.
Prospectus: The prospectus included in the Registration
Statement, as amended or supplemented including without limitation by any
post-effective amendments thereto, and all material incorporated by reference
into such prospectus.
Purchase Agreement: As defined in the preamble hereto.
Purchaser: As defined in the preamble hereto.
Registrable Securities: As defined in Section 3(a)(i)
hereto.
Registration Statement: The continuous registration
statement of the Company which is filed pursuant to Rule 415
under the Act, including the Prospectus included therein, all
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<PAGE>
amendments and supplements thereto (including any post-effective amendments) and
all exhibits and material incorporated by reference therein.
Shelf Filing Deadline: As defined in Section 3 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C.
Section 77aaa-77bbbb), as amended and in effect on the date of
the Indenture.
Transfer Restricted Securities: Each Note, each Preferred
Share and each share of Common Stock (i) issuable upon conversion of the Notes
or Preferred Shares and (ii) issuable to Purchaser under the Merger Agreement
held by the Purchaser or, except in the case of shares of Common Stock issuable
to Purchaser under the Merger Agreement, its transferee until the date on which
such Note, Preferred Share or share of Common Stock, as the case may be, has
been registered under the Act and disposed of in accordance with an effective
Registration Statement.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities: The securities
entitled to the benefits of this Agreement are the Transfer
Restricted Securities and, more particularly, the Registrable
Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities of record.
SECTION 3. REGISTRATION
(a) Shelf Registration. The Company hereby agrees to:
(i) use its best efforts to file or cause to be filed the
Registration Statement on or prior to the 90th day after the Closing
Date (the "Shelf Filing Deadline"), which Registration Statement shall
provide for resales of all Transfer Restricted Securities except (A)
Transfer Restricted Securities held by transferees of any Holder who or
which becomes a Holder after the Registration Statement is declared
effective and (B) Transfer Restricted Securities held by the transferee
of any Holder who or which holds less than $5,000,000 in principal
amount of the Notes or the equivalent (on an "as exchanged" or "as
converted" basis) in
-3-
<PAGE>
Preferred Shares or shares of Common Stock (such Transfer Restricted
Securities being hereinafter referred to as the "Registrable
Securities"), provided that the Holders thereof shall have provided the
information required pursuant to Section 3(b) hereof; and
(ii) use all reasonable efforts to cause the Registration
Statement to be declared effective by the Commission as promptly as
practicable after the Closing Date (the "Effectiveness Target Date").
Subject to any notice by the Company in accordance with Section 4(b) hereof of
the existence of any fact or event of the kind described in Section 4(b)(iii)(D)
hereof, the Company shall use all reasonable efforts to keep the Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Sections 4(a) and (b) hereof to the extent necessary to ensure
that it is available for resales of Transfer Restricted Securities by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 3(a) and to ensure that the Registration Statement conforms to the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time thereunder for a period of at
least three years following the Closing Date.
(b) Certificated Securities; Provision by Holders of Certain
Information in Connection with the Registration Statement. No Holder of
Registrable Securities may include any of its Transfer Restricted Securities in
the Registration Statement pursuant to this Agreement unless (i) such Holder
holds such Transfer Restricted Securities in the form of physical certificates
and (ii) until such Holder furnishes to the Company in writing, within 20
business days after receipt of a request therefor, such information as the
Company may reasonably request for use in connection with the Registration
Statement or any Prospectus or preliminary Prospectus included therein. In
connection with all such requests for information from Holders of Registrable
Securities, the Company shall notify such Holders of the requirements set forth
in the preceding sentence. Each Holder as to which the Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
SECTION 4. REGISTRATION PROCEDURES
(a) In connection with the Registration Statement, the Company
shall comply with all the provisions of Section 4(b) below and shall use all
reasonable efforts to effect such registration to permit the resale of the
Registrable Securities
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<PAGE>
being sold in accordance with the intended method or methods of
distribution thereof.
(b) In connection with the Registration Statement and any
Prospectus required by this Agreement, the Company shall:
(i) subject to Section 4(b)(xv) hereof, use all reasonable
efforts to keep the Registration Statement continuously effective and
provide all requisite financial statements for the period specified in
Section 3 of this Agreement; upon the occurrence of any event that
would cause the Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resales of Registrable Securities during
the period required by this Agreement, the Company shall file promptly
an appropriate amendment to the Registration Statement correcting any
such misstatement or omission, and, in the case of either clause (A) or
(B), except as set forth in Section 4(b)(xv) below, use all reasonable
efforts to cause such amendment to be declared effective and the
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 hereof, or such shorter period
as will terminate when all Registrable Securities covered by the
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented, cause the Prospectus to be filed pursuant to Rule 424
under the Act and to comply fully with the applicable provisions of
Rules 424 and 430A under the Act in a timely manner; and comply with
the provisions of the Act with respect to the disposition of all
securities covered by the Registration Statement during the applicable
period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in the Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement has been filed,
and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement under the Act or
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of the suspension by any state securities commission of the
qualification of the Registrable Securities for offering or sale in any
jurisdiction or of the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event (including without limitation pending negotiations
relating to, or the consummation of, a transaction or the occurrence of
any other event which would require additional disclosure of material,
nonpublic information by the Company in the Registration Statement as
to which the Company has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with
Commission requirements) that makes untrue any statement of a material
fact made in the Registration Statement, the Prospectus, any amendment
or supplement thereto or any document incorporated by reference
therein, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Registrable Securities under state
securities or Blue Sky laws, the Company shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time;
(iv) furnish to each of the selling Holders, upon request, and
to each of the underwriter(s), if any, before filing with the
Commission, copies of the Registration Statement or any Prospectus
included therein and any amendments or supplements thereto (including
all documents incorporated by reference prior to the effectiveness of
the Registration Statement), which documents, other than documents
incorporated by reference, will be subject to the review of such
Holders and underwriter(s), if any, for a period of at least five
business days, and the Company shall not file the Registration
Statement or Prospectus or any amendment or supplement to the
Registration Statement or Prospectus to which a selling Holder of
Registrable Securities covered by the Registration Statement or the
underwriter(s), if any, shall reasonably object within five business
days after the receipt thereof; a selling Holder or underwriter(s), if
any, shall be deemed to have reasonably objected to such filing only if
the Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement
or omission;
(v) if practicable, promptly prior to the filing of any
document that is to be incorporated by reference into the Registration
Statement or Prospectus subsequent to the effectiveness thereof, and in
any event no later than the
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date such document is filed with the Commission, provide copies of such
document to the selling Holders, if requested, and to the
underwriter(s), if any, make representatives of the Company available
for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the
filing thereof as such selling Holders or underwriter(s), if any,
reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter(s) participating in any disposition
pursuant to the Registration Statement and any attorney or accountant
retained by such selling Holders or any of the underwriter(s), all
financial and other records, pertinent corporate documents and
properties of the Company and cause the officers, directors and
employees of the Company to supply all information reasonably requested
by any such Holder, underwriters, attorney or accountant in connection
with the Registration Statement subsequent to the filing thereof and
prior to its effectiveness;
(vii) if requested by any selling Holders or the underwriters,
if any, promptly incorporate in the Registration Statement or any
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriters,
if any, may reasonably request to have included therein, including,
without limitation, information relating to the "Plan of Distribution"
of the Registrable Securities, information with respect to the
principal amount or number of shares of Registrable Securities being
sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Registrable Securities to be
sold in such offering and make all required filings of any such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
(viii) cause the Notes or Preferred Shares covered by the
Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Notes, in the case of the Notes, or a majority of
the Preferred Shares, in the case of the Preferred Shares, or the
underwriter(s) for any Underwritten Offering of such Notes or Preferred
Shares, if any;
(ix) [Intentionally omitted]
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of each
Prospectus (including each preliminary prospectus intended for public
distribution) and any amendment or
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supplement thereto as such Persons reasonably may request; the Company
hereby consents to the use of each Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by any Prospectus or any
amendment or supplement thereto;
(xi) enter into such customary agreements (including an
underwriting agreement), and make such customary representations and
warranties, and, subject to Section 4(b)(xv) hereof, take all such
other customary actions in connection therewith in order to expedite or
facilitate the disposition of the Registrable Securities pursuant to
the Registration Statement contemplated by this Agreement, all to such
extent as may be requested by the Purchaser or by any Holder of
Registrable Securities or underwriter in connection with any sale or
resale pursuant to the Registration Statement contemplated by this
Agreement; and whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration,
the Company shall:
(A) furnish to the Purchaser, each selling Holder and
each underwriter, if any (including any Broker- Dealer who may
be deemed to be an underwriter), officers' certificates, legal
opinions and comfort letters, in such substance and scope as
they may request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date
of the effectiveness of the Registration Statement;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, indemnification provisions
and procedures substantially in the form of those set forth in
Section 6 hereof with respect to all parties required to be
indemnified pursuant to said Section 6; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company pursuant to this clause
(xi), if any.
(xii) prior to any public offering of Registrable Securities,
cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration and
qualification of the Registrable Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request; and do any and all other acts or
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things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; provided, however, that the Company shall not be required to
register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to service of
process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xiii) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in
such names as the Holders or the underwriter(s), if any, may request at
least two business days prior to any sale of Registrable Securities
made by such underwriter(s);
(xiv) use all reasonable efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Registrable Securities, subject to the proviso contained in clause
(xii) above;
(xv) as soon as reasonably practicable after the occurrence of
any fact or event of the kind described in clause (b)(iii)(D) above,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary, in light of the
circumstances in which it was made, to make the statements therein not
misleading, provided, however, that notwithstanding anything to the
contrary herein, the Company shall not be required to prepare and file
such a supplement or post-effective amendment or document if the fact
no longer exists; and provided further however, that, in the event of a
material business transaction (including without limitation pending
negotiations relating to such transaction) which based upon the advice
of outside counsel reasonably acceptable to the Purchaser, would
require disclosure by the Company in the Registration Statement of
material, nonpublic information which the Company has a bona fide
business purpose for not disclosing, then for so long as such
circumstances and such business purpose continue to exist (provided
that such period may not exceed 120 days in any calendar year), the
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<PAGE>
Company shall not be required to prepare and file a
supplement or post-effective amendment hereunder;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with The Depositary Trust Company;
(xvii) cooperate in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD, and use all reasonable efforts to cause the Registration
Statement to become effective and be approved by such governmental
agencies or authorities as may be necessary to enable the Holders
selling Registrable Securities to consummate the disposition of such
Transfer Restricted Securities;
(xviii) otherwise use its reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm commitment or best
efforts Underwritten Offering or (B) if not sold to underwriters in
such an offering, beginning with the first month of the Company's first
fiscal quarter, as applicable, commencing after the effective date of
the Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the Registration Statement, and, in
connection therewith: cooperate with the Trustee and the Holders of
Notes to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the
TIA; and execute and use all reasonable efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and
all other forms and documents required to be filed with the Commission
to enable such Indenture to be so qualified in a timely manner;
(xx) cause all Registrable Securities covered by the
Registration Statement to be listed on any securities exchange on which
similar securities issued by the Company are then listed if requested
by the Holders of a majority in aggregate principal amount of Notes,
the Holders of a
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<PAGE>
majority of shares of the Preferred Shares, or the managing
underwriter(s), if any; and
(xxi) provide promptly to each Holder upon request any
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence of
any fact or event of the kind described in Section 4(b)(iii)(D) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the applicable Registration Statement until such Holder's receipt of the
copies of a supplemented or amended Prospectus as contemplated by Section
4(b)(xv) hereof, or until it is advised in writing (the "Advice) by the Company
that the use of the Prospectus may be resumed, and, has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the expense of the Company) all copies, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities that was current at the time of receipt of such notice.
In the event the Company shall give any such notice, the time period regarding
the effectiveness of the Registration Statement set forth in Section 3 hereof
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 4(b)(iii)(D) hereof to and
including the date when each selling Holder covered by the Registration
Statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4(b)(xv) hereof or shall have received the
Advice.
Each Holder, by acquisition of a Transfer Restricted Security,
agrees that, to the extent that (A) such Holder is deemed to be an "affiliate"
of the Company for purposes of the Securities Act or Accounting Series 130 and
135 of the Commission and (B) (i) the Company has entered into a business
combination transaction intended to be accounted for as a pooling of interests
and (ii) such accounting treatment requires affiliates of the Company to not
dispose of or otherwise reduce such affiliate's risk with respect to any Common
Stock of the Company during the period beginning 30 days prior to the effective
date of the transaction and until after such time as results covering at least
30 days of combined operations of the combined entity have been published, such
Holder shall deliver to the Company an "affiliate letter" in reasonable and
customary form and reasonably satisfactory to the Company.
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<PAGE>
SECTION 5. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company regardless of
whether the Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel that may be required by the rules and regulations of the NASD); (ii)
all fees and expenses associated with compliance with federal securities and
state Blue Sky or securities laws; (iii) all expenses of printing (including
printing of any certificates evidencing the Notes and Preferred Shares and
printing of Prospectuses), messenger and delivery services and telephone
charges; (iv) all fees and disbursements of counsel for the Company and, as
provided for in Section 5(b) below, the Holders of Registrable Securities; (v)
all application and filing fees in connection with listing any securities on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such performance).
The Company will, in any event, bear its own internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with the Registration Statement required by
this Agreement, the Company agrees to reimburse the Purchaser and the Holders of
Transfer Restricted Securities being registered pursuant to the Registration
Statement for the reasonable fees and disbursements of not more than one
counsel, who shall be Sidley & Austin or such other counsel as may be chosen by
the Holders of a majority in principal amount or a majority of the shares of the
Registrable Securities for whose benefit the Registration Statement is being
prepared.
SECTION 6. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i)each
Holder and (ii) each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) any Holder (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Holder"), to the fullest extent lawful, from and against any and
all
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<PAGE>
losses, claims, damages, liabilities, judgments, costs and expenses ("Losses")
(including, without limitation and as incurred, reimbursement of all costs of
investigating, preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
Prospectus (or any amendment or supplement thereto) or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such Losses are
caused by an untrue statement or omission or alleged untrue statement or
omission that is made in reliance upon and in conformity with information
relating to any of the Holders furnished in writing to the Company by any of the
Holders for use therein. The Company shall notify the Holders promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the matters
addressed by this Agreement which involves the Company or any Indemnified
Holder.
(b) In case any action or proceeding (including, without
limitation, any governmental or regulatory investigation or proceeding) shall be
brought or asserted against any of the Indemnified Holders with respect to which
indemnity may be sought against the Company, such Indemnified Holder (or the
Indemnified Holder controlled by such controlling person) shall promptly notify
the Company in writing (provided that the failure to give such notice shall not
relieve the Company of its obligations pursuant to this Agreement). Any
Indemnified Holder shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Holder, provided, however,
that the fees and expenses of such counsel shall be at the expense of the
Company if (i) the Company has failed to assume the defense and employ counsel
reasonably satisfactory to the Holders or (ii) the named parties to any such
action (including impleaded parties) include such Indemnified Holder and the
Company and such Indemnified Holder shall have reasonably concluded that there
may be one or more legal defenses available to it that are different from or in
addition to those available to the Company; provided further that the Company
shall not in such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel, which firm shall be designated by the
Holders, in connection with any action in the same jurisdiction, in addition to
any local counsel. The Company shall not be liable for any settlement of any
such action or proceeding effected with its prior written consent, which consent
shall not be unreasonably withheld or delayed, and the Company agrees to
indemnify and hold harmless any Indemnified Holder from and against any Loss by
reason of any settlement of
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any action effected with its written consent. The Company shall not, without the
prior written consent of each Indemnified Holder, settle or compromise or
consent to the entry of a judgment in or otherwise seek to terminate any pending
or threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Holder is a party thereto) unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Holder from all liability arising out of such action, claim, litigation or
proceeding.
(c) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company, its
directors, its officers, and any person controlling (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company, and the
respective officers, directors, partners, employees, representatives and agents
of each such person, to the same extent as the foregoing indemnity from the
Company to each of the Indemnified Holders, but only with respect to claims and
actions based on information relating to such Holder furnished in writing by
such Holder for use in the Registration Statement or any Prospectus. In case any
action or proceeding shall be brought against any of the Company or its
directors or officers or any such controlling person in respect of which
indemnity may be sought against a Holder of Transfer Restricted Securities, such
Holder shall have the rights and duties given the Company, and each of the
Company or its directors or officers of such controlling person shall have the
rights and duties given to each Holder by the proceeding paragraph. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the proceeds received by such Holder upon the sale of the
securities registered pursuant to provisions hereof giving rise to such
indemnification obligation.
(d) If the indemnification provided for in this Section 6 is
unavailable to a party entitled to indemnification in respect of any Losses
referred to herein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other hand from their sale of Transfer Restricted
Securities or (ii) if such allocation is not permitted by applicable law, the
relative fault of the Company on the one hand and of the indemnified Holder on
the other in connection with the statements or omissions which resulted in the
Losses as well as any relevant equitable considerations. The relative fault of
the Company on the one hand and of the Indemnified Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to
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information supplied by the Company or by the Indemnified Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The indemnity and contribution
obligations of each indemnifying party set forth herein shall be in addition to
any liability or obligation such indemnifying party may otherwise have to any
indemnified party.
The Company and each Holder of Transfer Restricted Securities
agree that it would not be just and equitable if contribution pursuant to this
Section 6(d) were determined by pro rata allocation (even if Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, none of the Holders (and their
related Indemnified Holders) shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the total proceeds received by such
Holder with respect to the Notes exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 6(d) are several in proportion to the respective principal amount of
Notes held by each of the Holders hereunder and not joint.
SECTION 7. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchase of such Transfer Restricted
Securities from such Holder or beneficial owner, any information required to be
supplied to a Holder by Rule 144A(d)(4) under the Act in order to permit offers
and sales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in
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any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such
underwriting arrangements.
SECTION 9. SELECTION OF UNDERWRITERS
The Holders of Registrable Securities covered by the Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount or a
majority of the shares of the Registrable Securities included in such offering;
provided that such investment bankers and managers must be reasonably
satisfactory to the Company.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or
after the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount or a majority of the shares of Transfer Restricted Securities.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier or
courier guaranteeing overnight deliver;
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(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to
the Registrar under the Indenture; and
(ii) if to the Company:
SoftKey International Inc.
One Athenaeum Street
Cambridge, Massachusetts 02142
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Attention: Louis A. Goodman
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day, if timely delivered to a courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall, to the
extent provided for herein, inure to the benefit of and be binding upon the
successors and assigns of each of the parties, including without limitation and
without the need for an express assignment, subsequent Holders of Transfer
Restricted Securities; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder unless and
to the extent such successor or assign acquired Transfer Restricted Securities
from such Holder.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
-17-
<PAGE>
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and the remaining
provisions contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement, together with the other
Transaction Documents (as defined in the Purchase Agreement) and the Merger
Agreement, is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein or therein with respect to the
registration rights granted by the Company with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
-18-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
SOFTKEY INTERNATIONAL INC.
By: /s/ R. Scott Murray
Name: R. Scott Murray
Title: Chief Financial
Officer
TRIBUNE COMPANY
By: /s/ Donald C. Grenesko
Name: Donald Grenesko
Title: Sr. Vice President/
C.F.O.
-19-
Exhibit 99.3
STANDSTILL AGREEMENT
STANDSTILL AGREEMENT (this "Agreement") dated as of December
22, 1995 by and between Tribune Company, a Delaware corporation ("Stockholder"),
and SoftKey International Inc., a Delaware corporation ("Issuer").
On November 30, 1995, Stockholder and Issuer: (a) executed
and delivered a Securities Purchase Agreement (the "Purchase Agreement")
providing for the issuance and sale by Issuer, and the purchase by Stockholder,
of $150,000,000 principal amount of 5-1/2% Senior Convertible/Exchangeable Notes
due 2000 (the "Notes"), which may be (i) exchanged for Issuer's 5-1/2% Series C
Convertible Preferred Stock (the "Preferred Stock") which may be converted into
shares of common stock, par value $.01 per share, of Issuer (the "Common
Stock"), or (ii) converted directly into shares of Common Stock; and (b)
together with certain wholly owned subsidiaries, executed and delivered an
Agreement and Plan of Merger (the "Merger Agreement") providing for two separate
re verse subsidiary mergers of wholly owned subsidiaries of Issuer with and into
wholly owned subsidiaries of Stockholder in which Issuer will issue to
Stockholder, and Stockholder will receive from Issuer, shares of Common Stock.
This Agreement is the Standstill Agreement referenced in the
Merger Agreement and sets forth certain terms and conditions upon which the
Issuer will issue and deliver to Stock holder, and Stockholder (a) will receive
and accept from Issuer, (b) owns and holds, and (c) will own and hold, the
shares of Common Stock acquired by Stockholder, or any shares of Common Stock
which Stockholder has the right to acquire, pursuant to the Purchase Agreement
and the Merger Agreement (the "Shares").
In consideration of the mutual agreements contained in the
Purchase Agreement, the Merger Agreement and herein, and for other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties agree as follows:
1. Stockholder's Representations and Warranties.
Stockholder represents and warrants to Issuer as follows:
(a) Stockholder is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware;
(b) Stockholder (i) has the full power and
authority to execute and deliver this Agreement, perform its obligations
hereunder and consummate the transactions contemplated hereby and (ii) has taken
all necessary action to
<PAGE>
authorize the execution, delivery and performance by Stockholder
of this Agreement;
(c) this Agreement has been duly and validly
authorized, executed and delivered by Stockholder and constitutes
the valid and binding obligation of Stockholder, enforceable in
accordance with its terms;
(d) Stockholder (or any direct or indirect
subsidiary of Stockholder and all persons controlling, controlled by or under
common control with Stockholder ("Affiliates"), as the case may be), is, or upon
issuance to it by Issuer will be, the sole beneficial holder of all the Shares,
and Stockholder and Affiliates have not granted or permitted to exist any liens,
claims, options, proxies, voting agreements, charges or encumbrances of
whatever nature affecting the Shares;
(e) the Notes and Shares owned and held by Stock
holder and Affiliates as of the date hereof constitute all of the
securities of Issuer owned by Stockholder and Affiliates;
(f) Stockholder (or Affiliates, as the case may
be) is not acquiring the Notes and Shares owned and held by Stockholder and is
not acquiring the Shares which may be acquired after the date hereof with the
intent or objective of obtaining control of the business, operations or affairs
of Issuer; and
(g) except as set forth in the Purchase Agreement
and the Merger Agreement, neither Stockholder nor any Affiliate has outstanding
any option, warrant or other right to acquire, directly or indirectly, any
securities of Issuer or any securities which are convertible into or
exchangeable or exercisable for any securities of Issuer, nor is Stockholder or
any Affiliate subject to any agreement (whether written or in the nature of an
informal understanding or arrangement) which allows or obligates the Stockholder
or any such Affiliate to vote or acquire any securities of the Issuer.
2. Issuer's Representations and Warranties. Issuer
represents and warrants to Stockholder as follows:
(a) Issuer is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware;
(b) Issuer (i) has the full power and authority
to execute and deliver this Agreement, perform its obligations hereunder and
consummate the transactions contemplated hereby and (ii) has taken all necessary
action to authorize the execution, delivery and performance by Issuer of this
Agreement; and
(c) this Agreement has been duly and validly
authorized, executed and delivered by Issuer and constitutes the
<PAGE>
valid and binding obligation of Issuer, enforceable in accordance
with its terms.
3. Covenants of Stockholder. Stockholder covenants with Issuer
that, without the consent of Issuer, for a period commencing on the date hereof
and continuing through the fifth anniversary of the date hereof Stockholder and
Affiliates, singly or as part of a group, directly or indirectly, through one or
more intermediaries or otherwise, will not:
(a) purchase, acquire or own, or offer, propose
or agree to purchase, acquire or own, directly or indirectly, any securities of
Issuer which are entitled to vote generally in the election of directors (other
than upon occurrence of a contingency) ("Voting Securities"), any option,
warrant or other right to acquire, directly or indirectly, any Voting Securities
or any securities which are convertible into or exchangeable or exercisable for
Voting Securities, if, immediately after such purchase or acquisition,
Stockholder and Affiliates would beneficially own, in the aggregate, Voting
Securities representing an amount (the "Threshold Amount") which exceeds the
greater of 20% of Issuer's outstanding Voting Securities or such percentage of
the Issuer's outstanding Voting Securities which the sum of the Shares issued in
connection with the Merger Agreement and the Shares issuable upon the conversion
of the Notes issued in connection with the Purchase Agreement (taking into
account any Voting Securities into which such Notes (or any Preferred Stock for
which such Notes are exchanged) may from time to time be convertible as a result
of application of the anti-dilution provisions applicable to the Notes or the
Preferred Stock) would constitute on a fully diluted basis on the date of the
later of the closings of the transactions contemplated by the Merger Agreement
and the Purchase Agreement; provided, however, that notwithstanding anything to
the contrary contained herein, the foregoing restriction shall not be deemed to
be violated or applicable if Stockholder is not otherwise in breach of this
Agreement and (i) the percentage of the outstanding Voting Securities
beneficially owned, in the aggregate, by Stockholder and Affiliates is increased
as a result of a recapitalization of Issuer, a repurchase of securities by
Issuer or any other action taken solely by Issuer, (ii) a benefit plan
maintained for employees of Stockholder and Affiliates acquires up to 1% (in the
aggregate) of the outstanding Common Stock solely for purposes of investment, or
(iii) Issuer breaches its obligation under Section 4(b) hereof; and provided,
further, that so long as Stockholder is not otherwise in breach of this
Agreement, (i) if a third party (which term for purposes of this Agreement shall
include any group as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended) makes a tender or exchange offer which, if consummated,
would result in such third party owning at least a majority of the Voting
Securities and Issuer's Board of Directors does not oppose such tender or
exchange offer at the time at which it is required by applicable securities laws
to make a recommendation regarding such tender or exchange offer
<PAGE>
to Issuer's stockholders, then Stockholder may make and consummate a tender or
exchange offer for a number of Voting Securities equal to or greater than the
number of Voting Securities which such third party seeks to purchase pursuant
to such tender or exchange offer, (ii) if a third party acquires beneficial
ownership of at least 30% of the outstanding Voting Securities, and Stockholder
is prohibited by the terms of this Agreement from acquiring more than 30% of the
outstanding Voting Securities, then Stockholder may purchase up to the same
number of Voting Securities as such third party or may make and consummate a
tender or exchange offer for all outstanding Voting Securities, and (iii) if
Issuer's Board of Directors approves a definitive written agreement with respect
to a business combination or other extraordinary transaction involving Issuer
as a result of which more than 50% of the assets of Issuer would be transferred
or a Change of Control (as defined below) would occur, then Stockholder may
make and consummate a tender or exchange offer for all outstanding Voting
Securities, and if Stockholder is permitted to make and consummate a tender or
exchange offer pursuant hereto, none of the restrictions contained in this
Section 3 (with the exception of Section 3(f) and the application of Section
3(g) to Section 3(f)) shall apply to Stockholder's activities with regard to any
stockholder vote or proposal in connection therewith or in connection with any
alternative transaction or action proposed in response thereto; "Change of
Control" shall mean any transaction as a result of which (i) the owners of a
majority of the Voting Securities of Issuer immediately prior to consummation of
the transaction will not continue to own upon completion of the transaction (A)
a majority of the Voting Securities of Issuer or (B) a majority of the Voting
Securities of any other person into or for the securities of which the Voting
Securities of Issuer will be converted or exchanged as a result of the
transaction or (ii) as a result of which any third party is entitled to elect a
majority of the members of the Board of Directors of Issuer;
(b) solicit, or encourage any other person to
solicit, "proxies" or become a "participant" or otherwise engage in any
"solicitation" (as such terms are defined or used in Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) in opposition
to a recommendation of a majority of the directors of Issuer with respect to any
matter; seek to advise or influence any person (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to the voting of any securities of
the Issuer; or execute any written consent in lieu of a meeting of holders of
securities of Issuer or any class thereof; provided, however, that if
Stockholder is entitled to elect directors of Issuer pursuant to Section 3.3 of
the Certificate of Designation of the Preferred Stock (the "Certificate of
Designation"), nothing in this Section 3(b) shall be construed to prohibit
Stockholder from soliciting proxies for the election of such directors from the
holders of Defaulted Parity Stock (as defined in the Certificate of
Designation);
<PAGE>
(c) initiate, propose or otherwise solicit
stockholders for the approval of one or more stockholder proposals with respect
to Issuer, as described in Rule 14a-8 under the Exchange Act;
(d) acquire control of Issuer or directly or
indirectly participate in or encourage the formation of any "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) owning or seeking to acquire
beneficial ownership of securities of the Issuer or affect control of Issuer;
(e) otherwise act, directly or indirectly, alone
or in concert with others, to seek to control or influence in any manner the
management, business, operations, board of directors, policies or affairs of
Issuer, or propose or seek to effect any form of business combination
transaction with Issuer or any affiliate thereof or any restructuring,
recapitalization or other similar transaction with respect to Issuer;
(f) deposit any of the Shares into a voting
trust, or subject any of the Shares to any agreement or arrangement with respect
to the voting of the Shares or any agreement having similar effect to any of the
foregoing in this Section 3(f); or
(g) (i) encourage any person, firm, corporation,
group or other entity to engage in any of the actions covered by clauses (a)
through (e) of this Section 3 or make any public arrangement (or make other
communication with or to Issuer or otherwise which, in the opinion of counsel to
Issuer, would require public announcement) with respect to any matter set forth
in clause (a) through (f) of this Section 3;
provided, however, that actions taken by any representative of Stockholder on
the Board of Directors of Issuer, acting solely in his or her capacity as such a
director, shall not violate this Section 3. Stockholder further covenants to
cause the termination or resignation of any director being removed from the
Board of Directors of Issuer in accordance with Section 4(b) hereof.
4. Covenants of Issuer. Issuer covenants with
Stockholder that:
(a) prior to (i) the closing of the transactions
contemplated by the Purchase Agreement and the Merger Agreement, whichever
occurs earlier (the "First Closing"), or, if later, (ii) any other event or
transaction which would result in Stockholder beneficially owning 15% or more of
the outstanding Voting Securities, the Board of Directors of Issuer shall
approve any and all agreements, events or transactions for purposes of Section
203 of the Delaware General Corporation Law ("Section 203") in order that the
restrictions contained in Section 203 shall not be applicable to Stockholder and
Affiliates;
<PAGE>
(b) Immediately after the First Closing, and so
long as Stockholder shall not be in breach of any of its obligations hereunder,
the Board of Directors of Issuer shall take all necessary actions to increase
the size of such Board by one and to fill the vacancy created thereby with an
individual designated in writing by Stockholder and reasonably acceptable to
Issuer, and, if at any time Issuer's Board of Directors shall consist of 10 or
more members and the transactions contemplated by both the Purchase Agreement
and the Merger Agreement shall have been consummated, then Issuer's Board of
Directors shall take all necessary actions to increase further the size of the
Board by one and to fill the additional vacancy created thereby with a second
individual designated in writing by Stockholder and reasonably acceptable to
Issuer, and Issuer shall thereafter take such action as necessary or appropriate
to include such individuals among Issuer's nominees for director, shall
recommend to its stockholders a vote in favor of such individuals at any annual
or special meeting of stockholders called to vote upon the election or removal
of any directors, and shall cause all shares of capital stock of Issuer over
which Issuer exercises direct or indirect voting power to be voted in favor of
the election of the individuals designated in writing hereunder by Stockholder;
provided, however, that at such time as Stockholder has the right to designate
two directors and Stockholder beneficially owns fewer than 5,000,000 but at
least the lesser of (i) 2,800,000 shares of Common Stock (including, for
purposes of this calculation, the number of shares of Common Stock into which
the Notes and Preferred Stock beneficially owned by Stockholder are then
convertible) and (ii) 75% of the sum of any Shares issued in connection with the
Merger Agreement and the Shares issuable upon the conversion of any Notes issued
in connection with the Purchase Agreement (taking into account any Voting
Securities into which such Notes (or any Preferred Stock for which such Notes
are exchanged) may from time to time be convertible as a result of the
application of the anti-dilution provisions applicable to the Notes or the
Preferred Stock) (the lesser of the foregoing clauses (i) and (ii) being
referred to herein as the "Lesser Amount"), then one of Stockholder's nominees
shall be re moved from Issuer's Board of Directors and Issuer's obligations
under this Section 4(b) shall only apply in respect of the election of one
nominee of Stockholder, and at such time as Stockholder owns fewer shares of
Common Stock than the Lesser Amount, Stockholder's remaining or, as the case may
be, sole nominee shall be removed from Issuer's Board of Directors and Issuer
shall be relieved of its obligations under this Section 4(b); and
(c) Issuer will not, for so long as this
Agreement is effective, enter into or adopt any plans, agreements, arrangements
or understandings which have the effect of materially impeding, preventing or
prohibiting Stockholder from beneficially owning, in the aggregate, the
Threshold Amount.
<PAGE>
5. Specific Performance. Issuer and Stockholder each
acknowledge and agree that in the event of any breach of this Agreement, the
non-breaching party would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that Issuer and Stockholder, in
addition to any other remedy to which they may be entitled at law or in equity,
shall be entitled to compel specific performance of this Agreement in any action
instituted in the federal courts located in the State of Delaware, or, in the
event said courts would not have jurisdiction for such action, in any court of
the United States or any state having subject matter jurisdiction. Issuer and
Stockholder each consent to personal jurisdiction in any such action brought in
the federal courts located in the State of Delaware and to service of process
upon it in the manner set forth in Section 7(g) hereof and addressed to the
General Counsel of the recipient at the address set forth in Section 7(g).
6. Expenses. All fees and expenses incurred by
Stockholder will be borne by Stockholder, and all fees and expenses incurred by
Issuer in connection with this Agreement will be borne by Issuer.
7. Miscellaneous.
(a) This Agreement, together with the Purchase
Agreement, the Merger Agreement and the other agreements contemplated hereby and
thereby, constitute the entire agreement, and supersede all prior agreements and
understandings, whether oral or written, among the parties hereto, with respect
to the subject matter hereof. This Agreement may not be amended orally, but only
by an instrument in writing signed by each of the parties to this Agreement.
(b) This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their heirs, legal representatives,
successors and assigns.
(c) Section headings contained in this Agreement
are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
(d) All representations, warranties and covenants
shall survive the execution and delivery hereof.
(e) This Agreement may be executed in any number
of counterparts, each of which shall, when executed, be deemed to be an original
and all of which shall be deemed to be one and the same instrument.
(f) This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without reference to the conflict of laws principles thereof.
<PAGE>
(g) All notices and other communications under
this Agreement shall be in writing and delivery thereof shall be deemed to have
been made either (i) if mailed, when received, or (ii) when transmitted by hand
delivery, telegram, telex, FedEx or other overnight courier service, telecopier
or facsimile transmission (in either case, if confirmed), to the party entitled
to receive the same at the address or facsimile number set forth in the Merger
Agreement (as the same may be amended or modified in accordance with the terms
thereof).
(h) Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(i) This Agreement shall terminate and be of no
further effect if the Purchase Agreement and the Merger Agreement shall have
each been terminated in accordance with their respective terms.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby,
each of Stockholder and Issuer has executed or caused this Agreement to be
executed as of the date first above written.
TRIBUNE COMPANY
By /s/ Donald C. Grenesko
Name: Donald Greneskso
Title: Sr. Vice President/
C.F.O.
SOFTKEY INTERNATIONAL INC.
By /s/ R. Scott Murray
Name: R. Scott Murray
Title: Chief Financial
Officer
Exhibit 99.5
<PAGE>
PLACEMENT AGENCY AGREEMENT
PLACEMENT AGENCY AGREEMENT dated as of November 6, 1987
between TRIBUNE COMPANY, a Delaware corporation (the "Company"), and MERRILL
LYNCH MONEY MARKETS INC., a Delaware corporation ("Merrill Lynch").
W I T N E S S E T H:
WHEREAS, the Company has requested Merrill Lynch to act as the
agent of the Company for the private placement to accredited investors of the
Company's unsecured notes with maturities of up to 270 days from date of issue
substantially in the form of Exhibit A hereto (the "Notes").
WHEREAS, it is contemplated that the maximum aggregate face
amount of the Notes to be outstanding at any one time will be $450,000,000.
WHEREAS, Merrill Lynch has indicated its willingness to act as
the agent of the Company in the private placement of the Notes, subject to the
satisfactory completion of such investigation and inquiry into the Company's
business as Merrill Lynch deems appropriate under the circumstances.
NOW THEREFORE, in consideration of the premises, the parties
agree as follows:
1. Appointment as Placement Agent. (a) The Company appoints
Merrill Lynch its placement agent for the Notes and acknowledges that Merrill
Lynch shall have the right to assist the Company in the placement of the Notes
during the term of this Agreement. The Company agrees that during the period
Merrill Lynch is acting as the Company's placement agent hereunder, the Company
shall not directly contact or solicit potential investors to purchase the Notes.
(b) In soliciting purchases of the Notes in
accordance with clause (a) of this Section 1, Merrill Lynch shall act solely as
agent for the Company and not as principal. Merrill Lynch shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by Merrill Lynch and accepted by the
Company. Merrill Lynch shall not have any liability to the Company in the event
any such purchase is not consummated for any reason. Merrill Lynch shall not
have any obligation to purchase, as principal, Notes from the Company under any
circumstances.
(c) The Company and Merrill Lynch agree that any
Notes the placement of which Merrill Lynch arranges shall be placed by Merrill
Lynch in reliance on the representations, warranties, covenants and agreements
of the Company contained herein and on the terms and conditions and in the
manner provided herein.
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<PAGE>
(d) Upon receipt of instructions from the
Company, Merrill Lynch will use its best efforts to solicit purchases of such
principal amount of the Notes as the Company and Merrill Lynch shall agree upon
from time to time during the term of this Agreement. Unless otherwise instructed
by the Company, Merrill Lynch will communicate to the Company, orally or in
writing, each offer to purchase Notes, other than those rejected by Merrill
Lynch. Merrill Lynch shall have the right, in its discretion reasonably
exercised, to reject any proposed purchase of Notes, in whole or in part.
(e) The Company may instruct Merrill Lynch to
suspend solicitation of purchases of Notes at any time. Upon receipt of such
instructions, Merrill Lynch will forthwith suspend solicitations until such time
as the Company has advised it that solicitation of purchases may be resumed.
2. Offers and Sales of the Notes. The offer and sale of the
Notes by the Company is to be effected pursuant to the exemption from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
provided by Section 4(2) thereof, which exempts transactions by an issuer not
involving any public offering. Offers and sales of the Notes by the Company will
be made in accordance with the general provisions of Rule 506 under the Act,
provided that the Company need not file Form D as required by Rule 503 under the
Act. Merrill Lynch and the Company hereby establish the following procedures in
connection with the offer and sale or resale of the Notes:
(a) Offers and sales of the Notes will be made
only to institutional purchasers which qualify as accredited investors (as
defined in Rule 501(a) under the Act) (each such institutional purchaser being
hereinafter called an "accredited investor"). No Notes will be offered to
natural persons.
(b) The Notes will be offered only by approaching
prospective purchasers on an individual basis. The Notes will not be offered or
sold by any means of general solicitation or general advertising.
(c) In the case of a non-bank purchaser acting as
a fiduciary for one or more third parties, each such third party will, in the
judgment of Merrill Lynch, after due inquiry, be an accredited investor.
(d) No sale of the Notes to any one purchaser
will be for less than $200,000 face amount and no Note will be issued in a
smaller face amount. If the purchaser is a non-bank fiduciary acting on behalf
of others, each person for whom it is acting must purchase at least $200,000
face amount of the Notes.
(e) Each Note shall contain the legend set forth
on the form of such Note attached as Exhibit A hereto stating in effect that
such Note has not been registered under the Act and
-2-
<PAGE>
that any resale or other transfer of such Note or any interest therein shall be
made only to or through Merrill Lynch to an institutional investor approved as
an accredited investor by Merrill Lynch. The purpose of this requirement is to
ensure that Notes are resold or otherwise transferred only to accredited
investors and not in a manner that might call into question the non-public
offering character of the offer and sale of the Notes. Merrill Lynch agrees that
(i) it will not effect or approve any such resale except to itself or to an
accredited investor and (ii) each such resale shall be made in accordance with
the provisions of this Section 2.
(f) Each purchaser of the Notes will have made
available to it a Private Placement Memorandum together with any supplements to
such Private Placement Memorandum which may have been prepared which describes
(A) the Notes, (B) the proposed use of proceeds of sale of the Notes, (C) the
business of the Company and any material change therein or in the financial
condition of the Company not disclosed in the documents described below, (D)
such summary financial information concerning the Company as the Company and
Merrill Lynch consider appropriate and (E) the restrictions on resale. The
Private Placement Memorandum will contain a statement expressly offering an
opportunity for each prospective purchaser to ask questions of, and receive
answers from, the Company and Merrill Lynch concerning the offering of the Notes
and to obtain additional relevant information which the Company or Merrill Lynch
possesses or can acquire without unreasonable effort or expense. The Private
Placement Memorandum will state that all periodic reports and reports on Form
8-K filed by the Company pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), are incorporated by reference therein. All
documents incorporated by reference into the Private Placement Memorandum will
be provided without charge to each prospective purchaser of Notes who requests
them. The Private Placement Memorandum and such incorporated documents are
herein referred to as the "Disclosure Documents."
(g) The Company agrees to cooperate with Merrill
Lynch in the preparation of the Private Placement Memorandum and in amending it
as from time to time may be necessary. Accordingly, the Company agrees to
furnish Merrill Lynch with such number of copies of the most recent Annual
Reports of the Company on Form 10-K filed with the Securities and Exchange
Commission (the "SEC"), each definitive proxy statement, each report on Form
10-Q and each report on Form 8-K deemed by the Company to be material to
investors in the Notes filed by the Company with the SEC since the filing of the
most recent Form 10- K, as Merrill Lynch may require in connection with the
preparation of the Private Placement Memorandum. As long as any of the Notes are
outstanding, the Company will provide Merrill Lynch with copies of all interim,
quarterly and annual reports, proxy statements and registration statements which
the Company files with the SEC, as well as such other material information in
such quantities as Merrill Lynch may reasonably request.
-3-
<PAGE>
(h) The Company will immediately inform Merrill
Lynch in writing of any material adverse changes in or affecting the business,
earnings, affairs or business prospects of the Company which (i) make or might
make any statement in the Disclosure Documents false or misleading in any
material respect or (ii) are not disclosed in such documents. In such event,
Merrill Lynch shall not thereafter attempt to offer or place any of the Notes
until the Company shall have prepared and furnished to Merrill Lynch, in such
numbers as Merrill Lynch may require, supplements to, or amendments of, the
Private Placement Memorandum reflecting any such material changes. Prior to any
offer or sale of Notes, Merrill Lynch shall, with the cooperation of the
Company, have the right to make such reasonable due diligence investigation of
the business of the Company as is usual in the course of continuous offerings of
debt instruments.
Merrill Lynch shall not be liable or responsible to the
Company for any losses, damages or liabilities suffered or incurred by the
Company, including any losses, damages or liabilities under the Act, arising
from or relating to any resale or transfer of a Note other than to or through
Merrill Lynch or approved by Merrill Lynch as contemplated by paragraph (e) of
this Section 2.
3. Representations and Warranties. The Company
represents and warrants to Merrill Lynch as of the date hereof
and as of each date contemplated by Section 4 hereof that:
(a) The Disclosure Documents do not and will not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they are made, not misleading.
(b) The financial statements included in the
Disclosure Documents, if any, are and will be in accordance with the related
books and records of the Company, and are and will be complete and correct and
fairly present in accordance with generally accepted accounting principles the
financial position of the Company and its consolidated subsidiaries as at the
dates set forth therein and the results of their operations for the periods set
forth therein. Except as set forth in the Disclosure Documents, said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a basis which is consistent in all material respects
during the periods involved. The supporting schedules, if any, included in the
financial statements present fairly the information required to be stated
therein as of the dates or for the periods indicated.
(c) Since the respective dates as of which
information is given in the Disclosure Documents, except as may otherwise be
stated or contemplated therein or in any amendment or supplement thereto, there
has not been any material adverse
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<PAGE>
change in the condition, financial or otherwise, of the Company and its
subsidiaries taken as a whole, or in the earnings, affairs or business prospects
of the Company and its subsidiaries taken as a whole, whether or not arising in
the ordinary course of business.
(d) The Company (i) has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and (ii) has the requisite corporate power and
authority to execute and deliver the Notes and perform its obligations
thereunder and to own its properties and conduct its business as described in
the Disclosure Documents.
(e) The Company is not in violation of its
charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement or lease to which the Company is a party or
by which it may be bound, and the execution and delivery of this Agreement and
the Notes and the incurrence of the obligations and consummation of the
transactions herein contemplated will not conflict with, or constitute a breach
of or default under, the charter or by-laws of the Company or any material
contract, indenture, mortgage, loan agreement or lease, to which the Company is
a party or by which it may be bound, or any law, administrative regulation or
court decree.
(f) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting generally the enforcement of creditors'
rights or by general equitable principles.
(g) The Notes have been duly authorized for
issuance, offer and sale as contemplated by this Agreement and, when issued and
delivered against payment of the purchase price therefor, will constitute legal,
valid and binding obligations of the Company enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting generally the
enforcement of creditors' rights or by general equitable principles.
(h) Assuming compliance with Section 5(b) hereof,
no consent, approval, authorization, order, registration or qualification of or
with any court or any regulatory authority or other governmental agency or body
(including the SEC) is required for the issuance, offer or sale of the Notes by
the Company in accordance with the terms of this Agreement or for the
consummation of the transactions contemplated by this Agreement or the Notes.
-5-
<PAGE>
(i) There are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries is the
subject, other than as set forth in the Disclosure Documents and other than
legal or governmental proceedings which in each case will not have a material
adverse effect on the business, financial condition, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a whole; and
to the best of its knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(j) The Company is not an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(k) The offer, issuance, sale and delivery of the
Notes in accordance with the terms of this Agreement will constitute exempted
transactions under the Act pursuant to Section 4(2) thereof, and registration of
the Notes under the Act will not be required in connection with any such offer,
issuance, sale or delivery of the Notes.
(l) The Notes, when issued, will rank pari passu
with all other unsecured and unsubordinated indebtedness of the
Company.
4. Additional Representation and Warranty. Each
--------------------------------------
acceptance by the Company of an offer for the purchase of Notes
shall be deemed an affirmation by the Company that its
representations and warranties set forth in Section 3 hereof are
true and correct at the time of such acceptance, and an
undertaking that such representations and warranties will be true
and correct at the time of delivery to the purchaser or its agent
of the Note or Notes relating to such acceptance, as though made
at and as of such time (it being understood that insofar as such
representations and warranties relate to the Private Placement
Memorandum, such representations and warranties shall relate to
the Private Placement Memorandum delivered to prospective
purchasers of Notes at the time of such acceptance and at the
time of such delivery of the Note or Notes relating to such
acceptance, respectively).
5. Covenants. (a) The Company agrees that no future offer and
sale of debt securities of the Company of any class will be made if, as a result
of the doctrine of "integration" referred to in Rule 502 of Regulation D under
the Act, Securities Act Release No. 6389 (March 8, 1982), Securities Act
Releases Nos. 4434 (December 6, 1961), 4552 (November 6, 1962) and 4708 (July 9,
1964), and various "no-action" letters made available by the SEC, such offer and
sale would call into question the entitlement of the Notes to the exemption from
the registration requirements of the Act provided by Section 4(2) thereof.
-6-
<PAGE>
(b) The Company will endeavor, in cooperation
with Merrill Lynch, to qualify the Notes for offer and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Company and Merrill Lynch shall mutually agree, and will maintain such
qualifications in effect for as long as may be required for the distribution of
the Notes. The Company will file such statements and reports as may be required
by the laws of each jurisdiction in which the Notes have been qualified as above
provided. If requested by the Company, Merrill Lynch will deliver to the Company
prior to the first offer of Notes a copy of a Blue Sky Law Survey prepared by
Seward & Kissel, counsel to Merrill Lynch in this transaction, with respect to
the offer and sale of the Notes.
(c) The Company will use the net proceeds of sale
of the Notes for general corporate purposes including the possible repurchase of
outstanding capital stock of the Company. Until the Company notifies Merrill
Lynch to the contrary, Merrill Lynch will not purchase and hold the notes as
principal (other than on an "intra-day" basis). The Company will not use the
proceeds of Notes purchased and held by Merrill Lynch, as principal, for the
purchase or carrying of securities.
(d) Pursuant to a certain issuing and paying
agency agreement dated as of November 22, 1985 between the Company and Morgan
Guaranty Trust Company of New York (the "Issuing and Paying Agent"), the Company
will maintain a bank account at the issuing and Paying Agent into which all of
the proceeds of the sale of the Notes will be deposited by the Issuing and
Paying Agent. Only (i) the proceeds of sale of the Notes and (ii) such funds as,
together with the proceeds of the Notes, shall be necessary to make all payments
in respect of the Notes, shall be deposited in such account, which shall be
maintained at the Issuing and Paying Agent separate and apart from any other
account into which the Issuing and Paying Agent may be authorized by the Company
to deposit proceeds of sale of other commercial paper notes or other notes which
the Company may offer, either publicly or privately, in the United States or to
United States residents. Appropriate corporate controls will be instituted and
maintained to assure that the proceeds from the sale of the Notes will be used
for purposes which will not impair the availability of the exemption under
Section 4(2) of the Act for the offer, issuance, sale and delivery of the Notes.
6. Conditions Precedent to Placement of the Notes. (a) Prior
to the initial placement of Notes hereunder, the Company shall cause to be
delivered to Merrill Lynch (i) the written opinion of counsel to the Company in
substantially the form of Exhibit B hereto, (ii) a certificate of the Secretary
or other appropriate officer of the Company certifying true copies of the
resolutions of the Company approving this Agreement, the Notes and the
transactions contemplated hereby and certifying the incumbency, authority and
true signatures of the officers of the Company authorized to sign this Agreement
and the Notes, (iii) a
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<PAGE>
certificate of the Treasurer, Chief Financial Officer or other appropriate
officer of the Company certifying that the representations and warranties set
forth in Section 3 hereof are true and correct, and (iv) an original executed
copy, photocopy or conformed copy of the Issuing and Paying Agency Agreement,
which shall be in form and substance acceptable to Merrill Lynch. Merrill Lynch
may deliver a copy of the opinion referred to in clause (i) above to any
purchaser of a Note who requests such copy.
(b) Prior to the initial placement of any Notes
hereunder, such Notes shall have been rated at least "A-2" by Standard & Poor's
Corporation and at least "P-2" by Moody's Investors Service, Inc. and upon each
subsequent placement of Notes hereunder such ratings shall be in full force and
effect. Such ratings were obtained by the Company with the understanding that
the agencies providing such ratings would continue to monitor the credit of the
Company and make future adjustments in such ratings to the extent warranted.
7. Delivery of and Payment for the Notes. Delivery of the
Notes shall be made by the Company through the Issuing and Paying Agent to
Merrill Lynch for the account of any purchaser only against payment therefor in
immediately available funds. In the event that a customer shall either fail to
accept delivery of or make payment for a Note on the date fixed for settlement,
Merrill Lynch shall promptly notify the Company, and, if Merrill Lynch has
theretofore paid the Company for such Note, the Company will promptly return
such funds to Merrill Lynch against its return of the Note to the Company. If
such failure occurred for any reason other than the failure by Merrill Lynch in
the performance of its obligations hereunder, the Company will reimburse Merrill
Lynch on an equitable basis for Merrill Lynch's loss of the use of the funds for
the period such funds were credited to the Company's account. If such failure
occurred solely as a result of the failure by Merrill Lynch in the performance
of its obligations hereunder, Merrill Lynch will reimburse the Company on an
equitable basis for the Company's loss of the use of the funds with respect to
the date fixed for settlement.
8. Indemnification and Contribution. (a) The Company
--------------------------------
agrees to indemnify and hold harmless Merrill Lynch and each person who controls
Merrill Lynch within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
Merrill Lynch or they may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Documents, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be
-8-
<PAGE>
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, for any legal or other expenses
reasonable incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of Merrill Lynch specifically for use in connection
with the preparation thereof. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Merrill Lynch agrees to indemnify and hold harmless the
Company and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to Merrill Lynch, but only with reference to written information
relating to the offering by Merrill Lynch of the Notes furnished to the Company
by or on behalf of Merrill Lynch specifically for use in the preparation of the
Disclosure Documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which Merrill Lynch may otherwise
have. The Company acknowledges that the statements set forth (i) under the
heading "Plan of Distribution" and (ii) under the heading "Private Placement"
(except for the first paragraph, the second sentence of the third paragraph, the
second sentence of the fifth paragraph and the sixth paragraph), in the Private
Placement Memorandum constitute the only information furnished in writing by or
on behalf of Merrill Lynch for inclusion in the Disclosure Documents referred to
in the foregoing indemnity, and Merrill Lynch, as agent, confirms that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified
-9-
<PAGE>
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by Merrill Lynch in the case of paragraph (a) of this
Section 8, representing the indemnified parties under such paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
paragraph (a) of this Section 8 is due in accordance with its terms but is for
any reason held by a court to be unavailable from the Company on grounds of
policy or otherwise, the Company and Merrill Lynch shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which the Company and Merrill Lynch may be subject in such proportion so that
Merrill Lynch is responsible for that portion represented by the percentage that
the aggregate commissions received by Merrill Lynch pursuant to Section 9(a) in
connection with the Notes from which such losses, claims, damages and
liabilities arise, bears to the aggregate principal amount of the Notes sold and
the Company is responsible for the balance; provided, however, that (y) in no
case shall Merrill Lynch be responsible for any amount in excess of the
commissions received by Merrill Lynch in connection with the Notes from which
such losses, claims, damages and liabilities arise and (z) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls Merrill Lynch within the meaning of the Act or the Exchange Act shall
have the same rights to contribution as Merrill Lynch and each person who
controls the
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<PAGE>
Company within the meaning of either the Act or the Exchange Act shall have the
same rights to contribution as the Company, subject in each case to clause (y)
of this paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this paragraph (d), notify such party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this paragraph (d).
The obligations under this Section 8 shall survive any
termination of this Agreement, in whole or in part.
9. Fees and Expenses. (a) As compensation for the
services of Merrill Lynch hereunder, the Company shall pay it, on
a discount basis, a commission for the sale of each Note at such
rate as shall be agreed upon from time to time by the Company and
Merrill Lynch.
(b) The Company will pay all of its costs and
expenses incident to the placement and issuance of the Notes, and will reimburse
Merrill Lynch for one-half of the fees and disbursements of Seward & Kissel,
counsel to Merrill Lynch in this transaction, relating to the preparation of a
legal opinion regarding the availability of an exemption for the offer, issuance
and sale of the Notes under Section 4(2) of the Act, provided that the Company
shall not be liable for more than $2,000 in respect of the fee portion of such
reimbursement.
10. Notices. Unless otherwise indicated, all notices required
under the terms and provisions hereof shall be in writing, either delivered by
hand, by mail (postage prepaid), or by telex, telecopier or telegram, and any
such notice shall be effective when received at the address specified below.
If to the Company:
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. David J. Granat
Telephone No. (312) 222-3897
Facsimile No. (312) 222-4206
If to Merrill Lynch:
Merrill Lynch Money Markets Inc.
5500 Sears Tower
Chicago, Illinois 60602
Attention: Mr. Thomas R. Williams
Telephone No. (312) 993-2482
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<PAGE>
Facsimile No. (312) 993-1120
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 10 to the other party
hereto.
11. Governing Law. This Agreement shall be governed
by and construed in accordance with, the laws of the State of New
York.
12. Amendment and Termination; Successors; Counterparts. (a)
The terms of this Agreement shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by written instrument signed by
both parties hereto. Either party to this Agreement may terminate this Agreement
upon at least 30 days' written notice to each other party hereto, provided that
such termination shall not affect the obligations of the parties hereunder with
respect to Notes outstanding at the time of such termination and actions or
events occurring prior to such termination or with respect to Section 8 or
Section 9 hereof.
(b) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns.
(c) This Agreement may be executed in several
counterparts, each of which shall be deemed an original hereof.
13. Captions. The captions in this Agreement are for
convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
14. Effective Date. This Agreement shall be effective
as of the date and year first above written.
15. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
TRIBUNE COMPANY
By /s/ David J. Granat
Authorized Signatory
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<PAGE>
MERRILL LYNCH MONEY MARKETS INC.
By /s/ Thomas K. Wittin Jr.
Authorized Signatory
-13-
<PAGE>
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND SALES THEREOF MAY BE MADE ONLY TO INSTITUTIONAL INVESTORS APPROVED AS
ACCREDITED INVESTORS BY MERRILL LYNCH MONEY MARKETS INC. BY ITS ACCEPTANCE OF
THIS NOTE, THE PURCHASER REPRESENTS THAT THIS NOTE IS BEING ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, ANY PUBLIC
DISTRIBUTION THEREOF AND THAT ANY RESALE OF THIS NOTE WILL BE MADE ONLY TO OR
THROUGH MERRILL LYNCH MONEY MARKETS INC. TO AN INSTITUTIONAL INVESTOR APPROVED
BY MERRILL LYNCH MONEY MARKETS INC. AS AN ACCREDITED INVESTOR.
TRIBUNE COMPANY
__________, 19__ No.____________
For value received, TRIBUNE COMPANY promises to pay to the
order of BEARER on___________the sum of_________________ dollars at the office
of Morgan Guaranty Trust Company of New York, [address].
TRIBUNE COMPANY
By______________________
Authorized Signatory
Countersigned for authentication only:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Issuing and Paying Agent
By______________________
Authorized Signatory
This Note is not valid for any purpose unless countersigned by
Morgan Guaranty Trust Company of New York, as Issuing and Paying Agent.
<PAGE>
EXHIBIT B
[Letterhead of________________,
counsel to the Company]
_______________, 1987
Merrill Lynch Money Markets Inc.
Merrill Lynch World Headquarters
World Financial Center - North Tower
250 Vesey Street - 23rd Floor
New York, New York 10281-1218
Dear Sirs:
[We] [I] have acted as counsel to Tribune Company (the
"Company") in connection with the proposed issuance of and offering to certain
institutional investors of the Company's unsecured promissory notes (the
"Notes") in the United States.
[We] [I] have examined the Placement Agency Agreement dated as
of November 6, 1987 (the "Placement Agency Agreement") between the Company and
Merrill Lynch Money Markets Inc. ("Merrill Lynch"), the Issuing and Paying
Agency Agreement dated as of November 22, 1985 (the "Issuing and Paying Agency
Agreement") between the Company and Morgan Guaranty Trust Company of New York,
the form of the Notes and such other documents, corporate records, certificates
of public officials and other instruments and Company officer certificates as
[we] [I] have deemed appropriate, and such questions of law as [we] [I] have
considered relevant for purposes of this opinion. As to questions of fact
material to such opinion, [we] [I] have, when relevant facts were not
independently established by [us] [me], relied upon such certificates.
In considering the above documents, [we] [I] have assumed the
genuineness of all signatures thereon or on the originals thereof and the
conformity to original documents of all copies or specimen documents.
Unless otherwise defined herein, capitalized terms used herein
have the meanings assigned to such terms in the Placement Agency Agreement.
Based upon and subject to the foregoing, and based upon the
facts and the law as of the date hereof, [we are] [I am] of the opinion that:
1. The Company (i) has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Delaware and (ii)
has the requisite corporate power and authority to
execute and deliver the Placement Agency
<PAGE>
Agreement, the Issuing and Paying Agency Agreement
and the Notes and perform its obligations thereunder
and to own its properties and conduct its business as
described in the Disclosure Documents.
2. The Company is not in violation of its articles of
incorporation or, to the best of [our] [my] actual
knowledge after due inquiry, in default in the
performance or observance of any material
obligation, agreement, covenant or condition
contained in any material contract, indenture,
mortgage, loan agreement or lease known to [us]
[me], to which the Company is a party or by which
it may be bound. The execution and delivery of
the Placement Agency Agreement and the Notes and
the incurrence of the obligations and consummation
of the transactions therein contemplated will not
conflict with, or constitute a breach of or
default under, the articles of incorporation or
by-laws of the Company or, to the best of [our]
[my] actual knowledge after due inquiry, any
material contract, indenture, mortgage, loan
agreement, or lease known to [us] [me], to which
the Company is a party or by which it may be
bound, of which [we] [I] have knowledge, or any
law, administrative regulation, or, to the best of
[our] [my] actual knowledge after due inquiry, any
court decree.
3. The Placement Agency Agreement and the Issuing and
Paying Agency Agreement have each been duly
authorized, executed and delivered by the Company
and each constitutes the legal, valid and binding
obligation of the Company enforceable in
accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency
or other similar laws relating to or affecting
generally the enforcement of creditors' rights or
by general equitable principles.
4. The Notes have been duly authorized for issuance,
offer and sale as contemplated by the Placement
Agency Agreement and when issued and delivered
against payment of the purchase price therefor,
will constitute legal, valid and binding
obligations of the Company enforceable in
accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency
or other similar laws relating to or affecting
generally the enforcement of creditors' rights or
by general equitable principles.
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<PAGE>
5. No consent, approval, authorization, order,
registration or qualification of or with any court
or any regulatory authority or other governmental
agency or body (including the Securities and
Exchange Commission) is required for the issuance,
offer or sale of the Notes by the Company in
accordance with the terms of the Placement Agency
Agreement or for the consummation of the
transactions contemplated by the Placement Agency
Agreement or the Notes, provided that no opinion
is expressed with respect to the availability of
an exemption for the issuance, offer and sale of
the Notes under Section 4(2) of the Securities Act
of 1933.
6. There are no legal or governmental proceedings
pending to which the Company is a party or of
which any property of the Company is the subject,
other than as set forth in the Disclosure
Documents and other than legal or governmental
proceedings which in each case will not have a
material adverse effect on the business, financial
condition, shareholders' equity or results of
operations of the Company and its subsidiaries
taken as a whole and to the best of my knowledge,
no such proceedings are threatened or contemplated
by governmental authorities or threatened by
others.
7. The Company is not an "investment company" or a
company "controlled" by an "investment company"
within the meaning of the Investment Company Act
of 1940, as amended.
8. The Notes rank at least pari passu with all other
unsecured and unsubordinated indebtedness of the
Company.
[We are members] [I am a member] of the Bar of the State of
_______ only and do not purport to be [an] expert[s] in, or to express any
opinion concerning the laws of any jurisdiction other than the State of
_________and the federal laws of the United States. To the extent that the
opinions herein involve the laws of the State of New York, we have assumed that
the laws of the State of __________ are the same as those of the State of New
York.
Very truly yours,
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Exhibit 99.6
<PAGE>
-1-
Tribune Company
March 8, 1990
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Dear Sirs:
This letter will confirm the agreement between Tribune Company
(the "Company") and Goldman Sachs Money Markets Inc. ("GSMMI") with respect to
the offer and sale by GSMMI of short-term promissory notes ("Notes") proposed to
be issued from time to time by the Company in transactions not involving a
public offering within the meaning of Section 4(2) of the Securities Act of 1933
(the "1933 Act") and Rule 506 thereunder. The Company understands that this
letter does not constitute a commitment or obligation, expressed or implied, on
the part of GSMMI to purchase any Notes from the Company, or to offer or sell
any Notes.
1. The Notes will be issuable in denominations of not less
than $250,000, will not be exchangeable for smaller denominations, will be
payable to Bearer and will have maturities not exceeding 270 days from the date
of issue. The Notes will be issued through Morgan Guaranty Trust Company in
accordance with an issuing agency agreement between the Company and such bank
dated November 22, 1985, a copy of which has been furnished to GSMMI. The
Company will not amend such agreement without first informing GSMMI, and will
promptly furnish to GSMMI a copy of any amendment to such agreement.
2. The Company hereby confirms to GSMMI that within the
preceding six months neither the Company nor any person acting on behalf of the
Company other than GSMMI or Merrill Lynch Money Markets Inc. ("Merrill") has
offered or sold any Notes, or any substantially similar security of the Company,
to, or solicited offers to buy any thereof from, any person other than GSMMI or
Merrill. The Company also agrees that, as long as the Notes are being offered
for sale by GSMMI as contemplated hereby and until at least six months after the
offer of Notes hereunder has been terminated, neither the Company nor any person
other than GSMMI or Merrill will offer the Notes or any substantially similar
security of the Company for sale to, or solicit offers to, or solicit offers to
buy any thereof from
<PAGE>
-2-
Tribune Company
being understood that this agreement is made with a view to bringing the offer
and sale of the Notes within the exemption provided by Section 4(2) of the
Securities Act of 1933 and Rule 506 thereunder. Further, both the Company and
GSMMI agree that neither the Company nor any person acting on its behalf, nor
GSMMI, will offer or sell, or solicit offers to buy, the Notes by any form of
general solicitation or general advertising, within the meaning of Rule 502(c)
under the 1933 Act or otherwise. The Company also confirms that it has entered
into an agreement with Merrill which contains provisions relating to the manner
of offering the Notes which are substantially similar to the provisions
contained in this agreement.
3. (a) GSMMI proposes to maintain a list of prospective
purchasers of the Notes to whom GSMMI may make offers and sales of Notes (the
"Investor List"). It is contemplated that GSMMI will include on such Investor
List (i) investors who may purchase Notes for their own accounts, (ii) investors
who may purchase Notes as fiduciary or agent for the accounts of others and
(iii) investors for whose accounts Notes may be purchased by others as fiduciary
or agent.
(b) An investor will be included on the Investor List only if
believed by GSMMI to be a sophisticated institutional investor which (A) is an
"accredited investor" as that term is defined in Rule 501(a) under the 1933 Act
("Accredited Investor") or, if the potential investor is a fiduciary or agent
(other than a U.S. bank or savings and loan association) who will be purchasing
Notes for one or more accounts, each such account will be an Accredited
Investor, and (B) either (i) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investing in Notes or (ii) is represented by a fiduciary or agent with sole
investment discretion having such knowledge and experience. Not more than 300
investors may at any time be on the Investor List, but for this purpose any one
investor and its fiduciary or agent, if any, may be counted as a single
investor. Subject to the limitations set forth above, an investor may be added
to the Investor List at any time. An investor may be deleted, however, only if
no offer or sale of Notes to it has been made during the preceding six months.
(c) GSMMI will offer and sell Notes only to investors which at
the time are on the Investor List and are believed by GSMMI to meet the
requirements set forth above for inclusion thereon.
4. (a) GSMMI will furnish to each purchaser of Notes (or to
the fiduciary or agent acting for such purchaser), at or before the time of the
sale of Notes to such purchaser, an Offering Memorandum in form and substance
satisfactory to the Company and GSMMI. The Offering Memorandum at any time may
consist of an annual Offering Memorandum and one or more supplemental Memoranda
and will, among other things:
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Tribune Company
(i) Include summary financial and other
information derived from the Company's
latest Annual Report on Form 10-K and
from any subsequent reports by it on
Forms 10-Q or 8-K or materials mailed by
it to its public stockholders; and
incorporate by reference such Form 10-K
report and any such subsequent 10-Q or
8-K reports;
(ii) Include a statement to the effect that
copies of reports filed by the Company
with the Securities and Exchange
Commission or mailed by it to its public
stockholders, as well as such additional
information, if any, as an investor in
Notes may reasonably request, may be
obtained through GSMMI;
(iii) Set forth on the first page of the annual
Offering Memorandum, with a reference
thereto on the first page of each
supplemental Memorandum, statements
substantially as follows:
PRIVATE PLACEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND SALES THEREOF MAY BE MADE
ONLY TO INSTITUTIONAL INVESTORS APPROVED AS
ACCREDITED INVESTORS BY MERRILL LYNCH MONEY MARKETS
INC. OR GOLDMAN SACHS MONEY MARKETS INC. (EACH AN
"AUTHORIZED ENTITY"). BY ITS ACCEPTANCE OF THIS NOTE
THE PURCHASER REPRESENTS THAT THIS NOTE IS BEING
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
FOR SALE IN CONNECTION WITH, ANY PUBLIC DISTRIBUTION
THEREOF AND THAT ANY RESALE OF THIS NOTE WILL BE MADE
ONLY TO OR THROUGH AN AUTHORIZED ENTITY TO AN
INSTITUTIONAL INVESTOR APPROVED BY SUCH AUTHORIZED
ENTITY AS AN ACCREDITED INVESTOR.
Each purchaser of a Note will be deemed to have
represented and agreed as follows: (1) the purchaser
understands that the Notes are being issued only in
transactions not involving any
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Tribune Company
public offering within the meaning of the Securities
Act of 1933; (2) the purchaser is a sophisticated
institutional investor who (A) is an "Accredited
Investor" as that term is defined in Rule 501(a)
under the Securities Act of 1933 (or is a fiduciary
or agent (other than a U.S. bank or savings and loan
association) which is purchasing the Note for the
account of an Accredited Investor) and (B) has such
knowledge and experience (or is a fiduciary or agent
with sole investment discretion having such knowledge
and experience) in financial and business matters
that it (or such fiduciary or agent) is capable of
evaluating the merits and risks of investing in such
Note; (3) such Note is being purchased for the
purchaser's own account (or for the account of one or
more other institutional investors for which it is
acting as duly authorized fiduciary or agent), for
investment and not with a view to public
distribution; (4) if in the future the purchaser (or
any such other investor or any other fiduciary or
agent representing such investor) decides to sell
such Note prior to maturity, it will be sold only to
Goldman Sachs Money Markets Inc. ("GSMMI") or Merrill
Lynch Capital Markets Inc. ("Merrill") or through
GSMMI or Merrill and only in a transaction exempt
from registration under such Act; (5) the purchaser
understands that, although GSMMI and Merrill may
repurchase Notes, GSMMI and Merrill are not obligated
to do so, and accordingly the purchaser (or any such
other investor) should be prepared to hold such Note
until maturity; and (6) the purchaser understands
that such Note will bear a legend substantially as
set forth in capital letters above.
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Tribune Company
(b) The Company agrees to furnish promptly to GSMMI three
copies of all reports filed with the Securities and Exchange Commission, all
documents filed with any stock exchange, all documents mailed to the Company's
public shareholders, all press releases (issued by its corporate headquarters)
and such other publicly distributed documents as GSMMI may reasonably request in
order for GSMMI to prepare from time to time offering memoranda for distribution
to purchasers of Notes and in order for GSMMI to evaluate at any time the
ability of the Company to pay the Notes as they mature. The Company also agrees
to furnish to GSMMI such additional information concerning the Company as GSMMI
may reasonably request.
(c) If at any time any event or other development occurs as a
result of which the Offering Memorandum (including any documents incorporated by
reference therein) includes an untrue statement of material fact or omits to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading, the Company will promptly notify GSMMI thereof, and GSMMI will not
thereafter use such Offering Memorandum or offer or sell Notes until an
appropriately revised Offering Memorandum is available. Each sale of a Note by
the Company to GSMMI shall constitute a representation by the Company that the
Offering Memorandum (including any documents incorporated by reference therein)
at such time does not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
5. Each Note will bear a legend substantially as set forth in
capital letters under "Private Placement" in paragraph 4(a) (iii) above.
6. The Company and GSMMI agree that not later than 15 days
after the first sale of any Note as contemplated by this agreement, the Company
will timely file with the Securities and Exchange Commission five copies of a
notice on Form D (one of which will be manually signed by a person duly
authorized by the Company), in accordance with the requirements of Rule 503
under the 1933 Act. The Company will also timely file such amendments to its
notice on Form D as may be required by Rule 503. The Company will furnish to
GSMMI evidence of each such filing (including a copy thereof). GSMMI will advise
the Company promptly after the first sale of any Note hereunder has been
confirmed by GSMMI to the purchaser, and GSMMI will also furnish to the Company
any information which GSMMI may have that may be necessary to permit the Company
to prepare such notice on Form D.
7. The Company agrees promptly from time to time to take such
action as GSMMI may reasonably request to qualify the Notes for offering and
sale under the securities laws of such jurisdictions as GSMMI may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in
<PAGE>
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Tribune Company
such jurisdictions for as long as may be necessary to complete the transactions
contemplated hereby, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction other than consent to service of process
under such state securities laws. The Company also agrees to reimburse GSMMI for
any reasonable fees or costs incurred in so qualifying the Notes.
8. This agreement will continue in effect until terminated as
provided in this paragraph. This agreement may be terminated by the Company by
giving written notice of its election to do so to GSMMI; or by GSMMI by giving
written notice of its election to do so to the Company. This agreement shall
terminate at the close of business on the first business day following the
receipt of such notice by the party to whom such notice was given; provided,
however, that the provisions of the first two sentences of paragraph 2,
paragraph 4(c) (except that the provisions of the first sentence thereof shall
survive only until no Notes sold to or through GSMMI remain outstanding), and 6
and 7 shall continue in effect subsequent to any such termination for a period
of six months from the last maturity of a Note sold to or through GSMMI.
9. This agreement and each Note shall be governed by, and
construed in accordance with, the laws of the State of New York.
----------------------------
<PAGE>
-7-
If the foregoing is in accordance with your understanding
please confirm the same by signing and returning a copy hereof.
Yours very truly,
GOLDMAN SACHS MONEY MARKETS INC.
By_/s/ Richard B. Davis
Title:
Confirmed as of the
above date:
TRIBUNE COMPANY
By /s/ David J. Granat
Title: Treasurer
